Snowdon Resources Corp.: Form 10-K - Filed by newsfilecorp.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Nevada |
N/A |
(State or other jurisdiction of incorporation or
organization) |
(I.R.S. Employer Identification No.)
|
Commission file number 000-52813
SNOWDON RESOURCES
CORPORATION
(Exact name of registrant as specified in its
charter)
789 West Pender Street, Suite 1010 |
|
Vancouver, British Columbia, Canada |
V6C 1H2 |
(Address of principal executive offices) |
(Zip Code) |
Registrants telephone number, including area code: (604)
606-7979
Securities registered pursuant to Section 12(b) of the Exchange
Act:
None |
N/A |
Title of each class |
Name of each exchange on which registered
|
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $0.00001 par value
(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 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 whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrants 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. [ X
]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange
Act.
Large Accelerated Filer |
[ ] |
|
Accelerated Filer |
[ ] |
Non-accelerated Filer |
[ ] |
|
Smaller Reporting Company |
[ X ] |
(Do not check if a smaller reporting company) |
|
|
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). Yes [X ] No [ ]
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter. $484,000 (based on a share price of $0.08,
being the average bid and asked price on October 30, 2009)
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN
BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
16,050,000 common shares issued and outstanding as of August 10, 2010.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980). N/A
2
TABLE OF CONTENTS
3
Forward Looking Statements.
This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors and the risks set out below, any of which may
cause our or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:
- the uncertainty of future revenue and profitability based upon our current
financial condition and history of losses;
- risks related to failure to obtain adequate financing on a timely basis
and on acceptable terms for our planned projects;
- risks relating to the mining of uranium; and
- other risks and uncertainties related to our business strategy.
This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.
Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles. In this annual report, unless otherwise
specified, all dollar amounts are expressed in United States dollars and all
references to common stock refer to the common shares in our capital
stock.
As used in this annual report, the terms we, us, our, the
Company and Snowdon mean Snowdon Resources Corporation, unless the context
clearly requires otherwise.
4
PART I
ITEM 1. |
DESCRIPTION OF BUSINESS
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General
We were incorporated on March 1, 2006 and our fiscal year end
is April 30. Our administrative office is located at 789 West Pender Street,
Suite 1010, Vancouver, British Columbia, Canada V6C 1H2, which is also our
mailing address. Our telephone number is (604) 606-7979, and our registered
statutory office is located at 311 South Division Street, Carson City, Nevada
89703.
We are an exploration stage
mining company. We are in the business of exploration and development of uranium
on our properties. Currently we hold title to twelve claims in Gila County,
Arizona (the CR Claims) and have the right to receive certain royalties in
respect of certain Arizona state leases and claims described below. We acquired
five Gila County claims on April 1, 2006. The claims were re-staked in March,
2008 and increased to a total of twelve. Each claim measures 600 feet by 1,500
feet and covers 20 acres. Total land position is 240 acres.
In July, 2009, we entered into an debt settlement agreement
with Eagle Hill Exploration Corporation and Eagle Hill Arizona Uranium LLC
(together the Vendors) to acquire the following five Arizona
State leases (the Leases) and two additional claims in settlement of certain
debt owed by the Vendors to Snowdon:
Leases |
Arizona |
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State |
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Section |
Permit |
Permit |
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Number
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Date |
Number |
County |
Township |
Range |
Acres |
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2 |
1 Jun 07 |
08-111685 |
Coconino |
38N |
3W |
661.24 |
16 |
1 Jun 07 |
08-111687 |
Mohave |
39N |
4W |
640.00 |
32 |
17 Nov 06 |
08-114280 |
Mohave |
37N |
5W |
640.00 |
32e |
1 Jun 07 |
08-111686 |
Mohave |
38N |
4W |
639.41 |
36 |
14 Dec 06 |
08-111148 |
Mohave |
38N |
6W |
640.00 |
The two Arizona mining claims which we may acquire under the
terms of the agreement dated July 20, 2009 are as follows:
|
Date of |
Coconino |
BLM Serial |
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Claim Name |
Location |
County No. |
No. (AMC #) |
Township |
Range |
Section |
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TR #20 |
19 Feb 08 |
3480264 |
392039 |
39N |
2W |
26 |
TR #21 |
19 Feb 08 |
3480265 |
392040 |
39N |
2W |
26 |
As with our Gila County claims,
the annual maintenance fee on these two additional claims is $140 each, due on
or before September 1. As a condition of the debt settlement agreement we agreed
to grant a 1% royalty interest in the claims and leases to the Vendors up to a
limit of $400,000. On January 1, 2010 we entered into a mineral exploration and
option agreement among the Vendors, Quaterra Alaska Inc. (Quaterra) and
Limestone Resources LLC, pursuant to which the parties granted Quaterra an
option to acquire a 100% interest to the following Arizona State leases
(collectively the Optioned Leases): Nos. 08-111148, 08-111081, 08-111685,
08-111686, 08-111686, 08-111687 and 08-114280. As consideration for the exercise
of the option, Quaterra agreed to pay the Arizona State Land Development fees on
the Optioned Leases for a one year period and perform the required exploration
work to maintain the leases in good standing. As a condition of the agreement,
the parties agreed to grant the following royalties: (i) a royalty of 25% of any
royalties paid to the State of Arizona in connection with any mineral production
from the Optioned Leases to Snowdon (the Snowdon Royalty), (ii) a royalty of
20% of any proceeds received by Snowdon from the Snowdon Royalty less any
royalty payments to the Vendors, and (iii) a 1% net smelter return royalty on
the proceeds of the Snowdon Royalty payable to the Vendors.
Recent Corporate Developments
Since the commencement of our fourth
quarter ended April 30, 2010, we experienced the following significant corporate
developments:
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1. |
On January 1, 2010 we entered into a mineral exploration
and option agreement among the Eagle Hill Exploration Corporation and
Eagle Hill Arizona Uranium LLC (together the Vendors), Quaterra Alaska
Inc. (Quaterra) and Limestone Resources LLC, pursuant to which the
parties granted Quaterra an option to acquire a 100% interest to the
following Arizona State leases |
5
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(collectively the Optioned Leases): Nos. 08-111148,
08-111081, 08-111685, 08-111686, 08-111686, 08-111687 and 08- 114280. As
consideration for the exercise of the option, Quaterra agreed to pay the
Arizona State Land Development fees on the Optioned Leases for a one year
period and perform the required exploration work to maintain the leases in
good standing. As a condition of the agreement, the parties agreed to
grant the following royalties: (i) a royalty of 25% of any royalties paid
to the State of Arizona in connection with any mineral production from the
Optioned Leases to Snowdon (the Snowdon Royalty), (ii) a royalty of 20%
of any proceeds received by Snowdon from the Snowdon Royalty less any
royalty payments to the Vendors, and (iii) a 1% net smelter return royalty
on the proceeds of the Snowdon Royalty payable to the Vendors. |
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2. |
In February, 2010, the parties agreed to terminate the
public relations agreement between Snowdon and Vorticom Inc. whereby
Vorticom agreed to serve as public relations counsel for Snowdon beginning
December 1, 2009 for a twelve month period. As consideration for the
services, the Company had agreed to issue 250,000 restricted shares of
common stock and pay a cash fee of $4,000 per month, and $500 monthly for
media monitoring and live media database. The Company paid a total of
$9,000 up to the date of termination of the contract. No further funds are
owed and the Company issued the 250,000 shares to Vorticom pursuant to
Rule 506 of Regulation D on the basis that the company represented that
they were an accredited investor. |
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3. |
Effective March 31, 2010 Terence Schorn has resigned as a
Director of the Company. There were no disagreements between Mr. Schorn
and the Company relating to the Companys policies, procedures or
practices. |
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4. |
On April 1, 2010, the Company executed an amendment
agreement for office space and administrative support services with a
privately held company controlled by a significant shareholder, effective
April 1, 2010 for a term of three years at a rate of CDN$7,500 per month
plus applicable taxes, and 300,000 shares of restricted common stock of
the Company (issued May 3, 2010). The sole director and officer of Snowdon
is also a director and shareholder of the private company. |
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5. |
In July, 2010 we entered into a letter of intent with a
private an arms length company for the acquisition of six patent
applications and related intellectual property for the processing and
upgrading of heavy crude oil. Under the terms agreed to in the letter of
intent, Snowdon may acquire the intellectual property in consideration of
the issuance of up to 3,000,000 shares of common stock of Snowdon,
together with up to 7,062,250 additional shares of common stock upon the
achievement of certain milestones by the Company. The letter of intent is
subject to a number of conditions including, among other things, the
satisfactory completion of the parties due diligence, completing a
financing in the minimum amount of CDN$1,000,000. and the entry into a
definitive agreement between the parties with the customary
representations and warranties by the parties. There is no assurance that
the transaction will be completed as planned or at all. An independent
third party owns additional related oil and gas technology and Snowdon has
been negotiating for the acquisition of such technology. There is no
assurance that Snowdon will complete the acquisition of the additional
technology. If the transaction completes, Snowdon intends to expand its
business operations to include activities relating to the processing and
upgrading of heavy crude oil and expects to continue with its mineral
exploration activities on its uranium properties. |
Status of Our Proposed Exploration Program
The exploration program for our CR claims is now on hold,
pending improved conditions for fundraising in the equity markets. We have had
to temporarily cease exploration program expenditures on those properties until
there is greater certainty in our view that our cash reserves can be replenished
through further equity offerings.
We have completed the Radon survey on our CR claims. The Radon
survey was more extensive than originally contemplated and allowed us to replace
certain previously planned exploration steps. Those were, establishing a survey
grid, geological mapping of the rock structures, soil sampling and analysis, a
radiometric survey, and a magnetometer survey. Total survey and claim related
expenditures to April 30, 2010 were $90,388.
At present, our property should be considered undeveloped raw
land. Work to date has included the staking of twelve contiguous lode claims,
the required filing with both county and federal agencies and the radon survey
together with related fieldwork and consulting. Maintenance fees due to the BLM
totaling $1,680 for the CR claims as noted above are due on or before September
1 every year. The Use of Proceeds for Drilling and Development were originally
estimated at a combined total of $309,570. Total Development expenditures to
April 30, 2010 were $37,262.
The following is our original plan and milestones for
exploration of the CR claims. When sufficient funds are available for further
exploration work on the CR claims, we will need to take into account the
recommendations of Dr. Wenrich and Dr. Reimer with respect to the initial
drilling locations and the need for additional data, possibly including
groundwater testing. An entirely different type of drilling program (e.g. more
widespread, shallow drilling) than that proposed in item 2 below could result.
This would essentially change the current plan for Phase 2 in its entirety.
6
CR Claims Exploration Plan - Phase 2 (Now deferred and
subject to re-evaluation)
1. |
We intend to submit a Plan of Operation to the Tonto
National Forest Service to conduct a drill program. Approval can take up
to six months. |
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2. |
If our submission is approved, we will proceed with a
reverse circulation drilling program at the locations recommended in the
Radon survey report. This program will consist of 4 vertical holes drilled
to a depth of 300 feet. The cost is estimated to be approximately $25,000
and the time involved is estimated to be 10 days. |
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3. |
As the drill holes are completed, a radiometric,
down-hole probe will be immediately inserted in the holes to measure gamma
ray counts. Cost is estimated to be approximately $6,000. |
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4. |
Administration and supervision by the field geologist
during the drilling program and for the radiometric measurements is
estimated to cost approximately $10,000. |
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5. |
Reclamation work cost is estimated to be approximately
$10,000 and time involved is estimated to be 4 days. A refundable bond
payment for reclamation work will need to be posted and is expected to be
approximately $15,000. |
The BLM regulations provide for three types of operations on
public lands: 1. Casual Use level, 2. Notice level and 3. Plan of Operation
level.
1. Casual Use means activities
ordinarily resulting in no or negligible disturbance of the public lands or
resources. Casual Use operations involve simple prospecting with hand tools such
as picks, shovels, and metal detectors. Small-scale mining devices such as dry
washers having engines with less than 10 brake-horsepower are allowed, provided
they are fed using only hand tools. Casual Use level operations are not required
to file an application to conduct activities or post a financial guarantee.
2. Notice level operations include only
exploration activities in which five or less acres of disturbance are proposed.
Presently, all Notice Level operations require a written notice and must be
bonded for all activities other than reclamation.
3. Plans of Operation activities
include all mining and processing (regardless of the size of the proposed
disturbance), plus all other activities exceeding five acres of proposed public
land disturbance.
Operators are encouraged to conduct a thorough inventory of the
claim to determine the full extent of any existing disturbance and to meet with
field office personnel at the site before developing an estimate. The inventory
should include photographs taken "before" and "after" any mining activity.
If an operator constructs access or uses an existing access way
for an operation and would object to BLM blocking, removing, or claiming that
access, then the operator must post a financial guarantee that covers the
reclamation of the access.
Concurrence by the BLM for occupancy is required whenever
residential occupancy is proposed or when fences, gates, or signs will be used
to restrict public access or when structures that could be used for shelter are
placed on a claim. It is the claimant's responsibility to prepare a complete
notice or plan of operators.
Mining Claims On State Land
The Arizona law authorizing location of claims on State Lands
was repealed in 1998. Acquisition of mineral rights on Arizona trust land can
only be accomplished by application for a prospecting permit, mineral lease, or
lease of common variety materials.
We believe that we are in compliance with all laws and will
continue to comply with the laws in the future. We believe that compliance with
the laws will not adversely affect our business operations.
We are responsible to provide a safe working environment, not
disrupt archaeological sites, and conduct our activities to prevent unnecessary
damage to the property.
We anticipate that we will be able to secure all necessary permits
for exploration and, if development is warranted on the property, file final
plans of operation before we start any mining operations. At this point, a permit
from the BLM would be required. Also, we would be required to comply with the
laws of the state of Arizona and federal regulations.
7
Cost of Compliance With Environmental Laws
We anticipate that:
- no water will be discharged into active stream, creek, river, lake or any
other body of water regulated by environmental law or regulation;
- no endangered species will be disturbed;.
- restoration of the disturbed land will be completed according to law; and
- 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 have no need to discuss
environmental matters, except as they relate to exploration activities. The only
"cost and effect" of compliance with environmental regulations in the State of
Arizona is returning the surface to its previous condition upon abandonment of
the property. We will only be using "non-intrusive" exploration techniques and
will not leave any indication that a sample was taken from the area.
Intellectual Property
We do not currently own any intellectual property.
Employees and Employment Agreements
At present, we have no full-time employees. Our officers and
directors are part-time.
Our officers and directors do not have employment agreements
with us. We presently do not 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. Our officers and directors handle much of our administrative
duties, delegating and managing those where possible through personnel of
Sweetwater Capital Corporation.
ITEM 1A. RISK FACTORS
We lack an operating history and have losses which we
expect to continue into the future. As a result, we may have to suspend or cease
operations.
We were incorporated in March 1, 2006 and we have not started
our proposed business operations or realized any revenues. We have no operating
history upon which an evaluation of our future success or failure can be made.
Our net loss since inception is $679,118. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon;
- our ability to locate a profitable mineral property;
- our ability to generate revenues; and
- our ability to reduce exploration costs.
Based upon current plans, we expect to incur operating losses
in future periods. This will happen because there are expenses associated with
the research and exploration of our mineral properties. As a result, we may not
generate revenues in the future. Failure to generate revenues will cause us to
suspend or cease operations.
We currently do not generate revenues, and as a result,
we face a high risk of business failure.
We have not generated any revenues to date. In order to
generate revenues, we will incur substantial expenses in the evaluation and
development of our properties. We therefore expect to incur significant losses
into the foreseeable future. If we are unable to generate significant revenues
from our activities, our entire business may fail. There is no history upon
which to base any assumption as to the likelihood that we will be successful in
our plan of operation, and we can provide no assurance to investors that we will
generate any operating revenues or achieve profitable operations.
Because the probability of an individual prospect ever
having reserves is extremely remote any funds spent on exploration will probably
be lost.
8
The probability of an individual prospect ever having reserves
is extremely remote. In all probability the property does not contain any
reserves. As such, any funds spent on exploration will probably be lost which
result in a loss of your investment.
We have no history of mineral production or mining operations.
We have never had uranium producing properties. There is no
assurance that commercial quantities of uranium will be discovered, nor is there
any assurance that our exploration program thereon will yield positive results.
Even if commercial quantities of uranium are discovered, there can be no
assurance that any of our property will ever be brought to a stage where uranium
resources can profitably be produced therefrom. Factors which may limit our
ability to produce uranium resources from our properties include, but are not
limited to, the spot price of uranium, availability of additional capital and
financing and the nature of any mineral deposits. We do not have a history of
mining operations and there is no assurance that we will produce revenue,
operate profitably or provide a return on investment in the future.
We rely on our management team, outside contractors,
experts and other advisors and the loss of any of them, if they cannot be
replaced, could have a material adverse effect on our business and financial
performance.
The success of our operations and activities is dependent to a
significant extent on the efforts and abilities of our small senior management
team, as well as outside contractors, experts and other advisors. In making an
investment in our securities, you must be willing to rely to a significant
extent on management's discretion and judgment, as well as the expertise and
competence of outside contractors, experts and other advisors that we hire to
advise us. The loss of one or more member of senior management, key employees or
contractors, if not replaced, could materially adversely affect our operations
and financial performance.
Because we are small and do not have any ore reserves or
much capital, we may have to limit our exploration activity which may result in
a loss of your investment.
Because we are small and do not have ore reserves or much
capital, we must limit our exploration activity. As such we may not be able to
complete an exploration program that is as thorough as we would like. In that
event, an existing ore body may go undiscovered. Without an ore body, we cannot
generate revenues and you will lose your investment.
Because our officers and directors have other outside
business activities and will each only be devoting 25% of their time or
approximately ten hours per week each to our operations, our operations may be
sporadic which may result in periodic interruptions or suspensions of
exploration.
Because our officers and directors, have other outside business
activities and will each only be devoting 25% of their time or ten hours each
per week to our operations, our operations may be sporadic and occur at times
which are convenient to our officers and directors. As a result, exploration of
the property may be periodically interrupted or suspended.
The marketability of uranium is subject to numerous
factors beyond our control.
The price of uranium may experience volatile and significant
price movements over short periods of time. Factors that impact on the price of
uranium include demand for nuclear power, political and economic conditions in
uranium-producing and consuming nations, reprocessing of spent fuel and
re-enrichment of depleted uranium tails or waste, sales of excess civilian and
military inventories (including from dismantling nuclear weapons) by governments
and industry participants and products levels and costs of production. These
factors could negatively impact the price for uranium and lower uranium prices
would negatively impact our future profitability. We do not have a hedging
policy to protect us from a decline in uranium pricing and have no intention to
establish one while we are in the exploratory phases of our operations. In
addition, we may not have the ability to purchase hedging instruments in the
future. Hedging instruments may also not protect us adequately from fluctuations
in the market price of uranium.
There are a limited number of customers available in our
target market.
A small number of electric utilities worldwide buy uranium for
nuclear power plants. Because of the limited market for uranium, a reduction in
demand by electric utilities for newly-produced uranium would adversely affect
our business.
Our expected costs may be greater than we anticipate.
The capital expenditures and time required to develop new mines
or other projects are considerable and changes in costs or construction
schedules can affect project economics. Thus, it is possible that actual costs
and economic returns may differ materially from our best estimates, or that we
could fail to obtain satisfactory resolution of fiscal or tax matters or
government approvals necessary for the development or operation of the project,
in which case the project may not proceed, either on its original timing, or at
all. It is not unusual in the mining industry for new mining operations to
experience unexpected problems during the start-up phase, resulting in delays,
and to require more capital than anticipated. These delays and additional costs
could have a material adverse impact on our future cash flows, earnings, results
of operations and financial condition.
9
We are dependent upon continued public acceptance of
nuclear energy.
Because of unique political, technological and environmental
factors that affect the nuclear industry, the industry is subject to public
opinion risks which could have an adverse impact on the demand for nuclear power
and increase the regulation of the nuclear power industry. An accident at a
nuclear reactor anywhere in the world could impact the continuing acceptance of
nuclear energy and the future prospects for nuclear generation, which may have a
material adverse effect on our business.
We are subject to potential risks and liabilities
associated with pollution of the environment and disposal of waste products from
our mining activities.
All phases of our operations are subject to environmental
regulation in the jurisdictions in which we operate. These regulations mandate,
among other things, the maintenance of air and water quality standards and land
reclamation. They also set forth limitations on the generation, transportation,
storage and disposal of solid and hazardous waste. Environmental legislation is
evolving in a manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. There is no assurance
that future changes in environmental regulation, if any, will not adversely
affect our operations. Environmental hazards may exist on the properties which
are unknown to us at present and which have been caused by previous or existing
owners or operators of the properties.
We are subject to potential risks and liabilities associated
with pollution of the environment and disposal of waste products from our mining
activities. Reclamation costs are uncertain and planned expenditures estimated
by management may differ from the actual expenditures required. The payment of
any liabilities or the costs that we may incur to remedy environmental impacts
would reduce funds otherwise available to us for operations. We might be
required to suspend operations or enter into interim compliance measures pending
completion of the required remedy. The potential financial exposure to us may be
significant. We have not purchased insurance for environmental risks (including
potential liability for pollution or other hazards as a result of the disposal
or waste products occurring from exploration and production) as it is not
generally available at what we believe to be a reasonable price.
Our business could be adversely affected if we fail to
comply with extensive government regulations or fail to obtain, renew or comply
with necessary licenses and permits.
Our mineral exploration and planned development activities are
subject to various laws governing prospecting, mining, development, production,
taxes, labor standards and occupational health, mine safety, toxic substances,
land use, water use, land claims of local people and other matters. Although we
believe our exploration and development activities are currently carried out in
accordance with all applicable laws, rules and regulations, no assurance can be
given that new laws, rules and regulations will not be enacted or that existing
laws, rules and regulations will not be applied in a manner which could limit or
curtail production or development. Amendments to current laws and regulations
governing operations or more stringent implementation thereof could have a
substantial adverse impact on our business and cause increases in exploration
expenses, capital expenditures or production costs or reduction in levels of
production at producing properties or require abandonment or delays in
development of new mining properties. Many of our mineral rights and interests
are subject to government approvals, licenses and permits. Obtaining necessary
permits and licenses can be a complex, time consuming process and we cannot be
certain that we will be able to obtain all required permits on acceptable terms,
in a timely manner or at all. The costs and delays associated with obtaining
necessary permits and complying with these permits and applicable laws and
regulations could stop, delay or restrict us from proceeding with the
development of an exploration project or the development and operation of a
mine. Such approvals, licenses and permits are, as a practical matter, subject
to the discretion of applicable governments or governmental officials. No
assurance can be given that we will be successful in maintaining any or all of
the various approvals, licenses and permits in full force and effect without
modification or revocation. To the extent such approvals are required and not
obtained, we may be curtailed or prohibited from continuing or proceeding with
planned exploration or development of mineral properties. Failure to comply with
applicable laws, regulations and permitting requirements may result in
enforcement actions thereunder, including orders issued by regulatory or
judicial authorities causing operations to cease or be curtailed, and may
include corrective measures requiring capital expenditures, installation of
additional equipment or remedial actions. Parties engaged in mining operations
or in the exploration or development of mineral properties may be required to
compensate those suffering loss or damage by reason of the mining activities and
may have civil or criminal fines or penalties imposed for violations of
applicable laws or regulations.
Our future prospects may be affected by political
decisions about the uranium market.
There can be no assurance that the United States or other
government will not enact legislation restricting to whom we can sell uranium or
that the United States or other government will not increase the supply of
uranium by decommissioning nuclear weapons.
A decline in the price of our common stock could affect
our ability to raise further working capital and adversely impact our
operations.
A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Any reduction in our ability to raise equity
capital in the future could have a significant negative effect on our business
plans and our ability to develop new products. If our stock price declines, we
may not be able to raise additional capital sufficient to acquire new
business.
10
Because we do not intend to pay any cash dividends on our
shares of common stock in the near future, our shareholders will not be able to
receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the
development and expansion of our business. We do not anticipate paying any cash
dividends on our common stock in the near future. The declaration, payment and
amount of any future dividends will be made at the discretion of the board of
directors, and will depend upon, among other things, the results of operations,
cash flows and financial condition, operating and capital requirements, and
other factors as the board of directors considers relevant. There is no
assurance that future dividends will be paid, and if dividends are paid, there
is no assurance with respect to the amount of any such dividend. Unless we pay
dividends, our shareholders will not be able to receive a return on their shares
unless they sell them.
Trading of our stock may be restricted by the SECs
Penny Stock regulations which may limit a stockholders ability to buy and
sell our stock.
The U.S. Securities and Exchange Commission has adopted
regulations which generally define penny stock to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to person other than established
customers and accredited investors. The term accredited investor refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
sales person compensation information, must be given to the customer orally or
in writing prior to effecting the transaction and must be given to the customer
in writing before or with the customers confirmation. In addition, the penny
stock rules require that prior to a transaction in a penny stock not otherwise
exempt from these rules; the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchasers written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for the stock that is subject to these penny
stock rules. Consequently, these penny stock rules may affect the ability of
broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA,
has adopted sales practice requirements which may also limit a stockholders
ability to buy and sell our stock.
In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.
Since our shares are thinly traded, and trading on the
OTC Bulletin Board may be limited and sporadic because it is not an exchange,
stockholders may have difficulty reselling their shares or liquidating their
investments.
Our shares of common stock are currently listed for public
trading on the Pink OTC Markets Inc. The trading price of our shares of common
stock has been subject to wide fluctuations. Trading prices of our shares of
common stock may fluctuate in response to a number of factors, many of which
will be beyond our control. The stock market has generally experienced extreme
price and volume fluctuations that have often been unrelated or disproportionate
to the operating performance of companies with no current business operation.
There can be no assurance that trading prices and price earnings ratios
previously experienced by shares of our common stock will be matched or
maintained. These broad market and industry factors may adversely affect the
market price of the shares of our common stock, regardless of our operating
performance.
In the past, following periods of volatility in the market
price of a company's securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs for us and a diversion of management's attention and resources.
ITEM 1B. |
UNRESOLVED STAFF COMMENTS.
|
Not applicable.
11
Our administrative office is located at 789 West Pender Street,
Suite 1010, Vancouver, British Columbia, Canada V6C 1H2, which is also our
mailing address. Our telephone number is (604) 606-7979, and our registered
statutory office is located at 311 South Division Street, Carson City, Nevada
89703. Our office location is provided under the terms of our agreement with
Sweetwater Capital Corporation pursuant to which we pay $7,500 per month for
rental of our office space and certain office related services including use of
computers, professional services such as bookkeeping, office services and use of
other office equipment. We believe our current premises are adequate for our
current operations and we do not anticipate that we will require any additional
premises in the foreseeable future.
We are an exploration stage
mining company. We are in the business of exploration and development of uranium
on our properties. Currently we hold title to twelve claims in Gila County,
Arizona (the CR Claims) and have the right to receive certain royalties in
respect of certain Arizona state leases and claims described below. We acquired
five Gila County claims on April 1, 2006. The claims were re-staked in March,
2008 and increased to a total of twelve. Each claim measures 600 feet by 1,500
feet and covers 20 acres. Total land position is 240 acres.
Claims
The following is a list of the claims which we currently own,
as filed with Bureau of Land Management, hereinafter the BLM, showing the
claim number, name of claims, date of location and date of expiration for
claims. All of these claims are located in Gila County, Arizona.
BLM Serial |
|
|
|
No. (AMC
#) |
Claim Name |
Date of Location |
Date of Expiration |
|
|
|
|
390227 |
CR # 1 |
February 28, 2008 |
September 1, 2009 |
390228 |
CR # 2 |
February 28, 2008 |
September 1, 2009 |
390229 |
CR # 3 |
February 28, 2008 |
September 1, 2009 |
390230 |
CR # 4 |
February 28, 2008 |
September 1, 2009 |
390231 |
CR # 5 |
February 28, 2008 |
September 1, 2009 |
390232 |
CR # 6 |
February 28, 2008 |
September 1, 2009 |
390233 |
CR # 7 |
February 28, 2008 |
September 1, 2009 |
390234 |
CR # 8 |
February 28, 2008 |
September 1, 2009 |
390235 |
CR # 9 |
February 28, 2008 |
September 1, 2009 |
390236 |
CR # 10 |
February 28, 2008 |
September 1, 2009 |
390237 |
CR # 11 |
February 28, 2008 |
September 1, 2009 |
390238 |
CR # 12 |
February 28, 2008 |
September 1, 2009 |
In order to keep claims in good standing, a claim maintenance
fee in the amount of US$140 per claim must be paid by to the BLM each year on or
before September 1 and there is no grace period. We will not cause the claims to
expire as a result of not paying the required maintenance fees, provided that
mineralized material is found. In the event that our exploration program does
not locate mineralization of interest, we will allow claims to expire and cease
operations related to those claims. In July, 2009, we entered into an debt
settlement agreement with Eagle Hill Exploration Corporation and Eagle Hill
Arizona Uranium LLC (together the Vendors) to acquire the following five
Arizona State leases (the Leases) and two additional claims in settlement of
certain debt owed by the Vendors to Snowdon:
Leases |
Arizona |
|
|
|
|
|
|
State |
|
|
|
|
|
|
Section |
Permit |
Permit |
|
|
|
|
Number
|
Date |
Number |
County |
Township |
Range |
Acres |
|
|
|
|
|
|
|
2 |
1 Jun 07 |
08-111685 |
Coconino |
38N |
3W |
661.24 |
16 |
1 Jun 07 |
08-111687 |
Mohave |
39N |
4W |
640.00 |
32 |
17 Nov 06 |
08-114280 |
Mohave |
37N |
5W |
640.00 |
32e |
1 Jun 07 |
08-111686 |
Mohave |
38N |
4W |
639.41 |
36 |
14 Dec 06 |
08-111148 |
Mohave |
38N |
6W |
640.00 |
The two Arizona mining claims which we may acquire under the
terms of the agreement dated July 20, 2009 are as follows:
12
|
Date of |
Coconino |
BLM Serial |
|
|
|
Claim
Name |
Location |
County No. |
No. (AMC #) |
Township |
Range |
Section |
TR #20 |
19 Feb 08 |
3480264 |
392039 |
39N |
2W |
26 |
TR #21 |
19 Feb 08 |
3480265 |
392040 |
39N |
2W |
26 |
As with our Gila County claims,
the annual maintenance fee on these two additional claims is $140 each, due on
or before September 1. As a condition of the debt settlement agreement we agreed
to grant a 1% royalty interest in the claims and leases to the Vendors up to a
limit of $400,000. On January 1, 2010 we entered into a mineral exploration and
option agreement among the Vendors, Quaterra Alaska Inc. (Quaterra) and
Limestone Resources LLC, pursuant to which the parties granted Quaterra an
option to acquire a 100% interest to the following Arizona State leases
(collectively the Optioned Leases): Nos. 08-111148, 08-111081, 08-111685,
08-111686, 08-111686, 08-111687 and 08-114280. As consideration for the exercise
of the option, Quaterra agreed to pay the Arizona State Land Development fees on
the Optioned Leases for a one year period and perform the required exploration
work to maintain the leases in good standing. As a condition of the agreement,
the parties agreed to grant the following royalties: (i) a royalty of 25% of any
royalties paid to the State of Arizona in connection with any mineral production
from the Optioned Leases to Snowdon (the Snowdon Royalty), (ii) a royalty of
20% of any proceeds received by Snowdon from the Snowdon Royalty less any
royalty payments to the Vendors, and (iii) a 1% net smelter return royalty on
the proceeds of the Snowdon Royalty payable to the Vendors.
History of Previous Work
To date, the only evidence to indicate previous work includes
shallow prospects and cuts. Several roads and clearings may have been part of
exploratory drilling efforts, however this has not been confirmed. Available
literature does indicate that anomalous radioactivity was recognized in the
immediate vicinity during the course of regional stream sediment surveys and
airborne radiometric work conducted by the Atomic Energy Commission and/or
Department of Energy, in the time period between the 1950 to late 1970. A
thorough study of all references related to the CR property has not been
attempted.
Radon Survey
The possibility of using radon measurement as a uranium
prospecting technique was first suggested in 1927. Radon, being a noble gas does
not combine with other element which facilitates its free migration through pore
spaces in rock and soil and its dispersion over considerable distances by
groundwater and surface water. Radon occurs naturally as three isotopes with
mass numbers 222, 220, and 219 which are member of the 238U, 232Th and 235U
decay series. After formation by radioactive decay, a radon atom diffuses
through the enclosing mineral and diffuses through the ground air or groundwater
present in pore spaces. In arid areas with little or no topsoil there is almost
complete continuity between ground and atmospheric air and comes under the
influence of meteorological variables. Low barometric pressure and strong winds
tend to draw ground air out of the pore spaces and fractures of the near surface
layers, thus reducing the radon concentration within them causing an upward
movement of gas from depth. Calm conditions on the other hand reduce the rate of
radon escape to atmosphere and result in a build up within the ground. Rainfall
also restricts the upward flow of radon but has varying effects depending upon
the soil profiles. Where soil is absent the rain water penetrates deeply and
seals off the pore spaces in depth, producing a temporary reduction in near
surface radon concentration. It is therefore emphasized that radon prospecting
is part of a dynamic system depending upon a number of variables and the
interpretation of the data must consider all the radon characteristics and
geological environment of the survey area.
A radon survey was completed for Snowdon Resources Corporation
on the CR Mineral Claims during June, 2008 by GeoXplor Corp., under the
supervision of John Rud, Geologist, M.Sc. The theory of GeoXplor Corps radon
soil surveys are based on the element radon which is a radioactive daughter
product of uranium decay. Radon is produced by the radioactive decay of radium,
a product of uranium and thorium decay in rocks and soils. The magnitude of a
radon anomaly associated with a parent concentration of uranium will be due to
the size and grade of the parent body. The radon survey utilizes a system that
measures the radon by an ion chamber with electrically charged Teflon, called an
electret, located inside an electrically conducting plastic chamber of known air
volume. The electrets serve as a source of high voltage needed for the chamber
to operate as an ion chamber. It also serves as a sensor for the measurement of
ionization in air. The ions produced inside the sensitive volume of the chamber
are collected by the electrets causing a depletion of charge. The measurement of
the depleted charge during the exposure period is a measure of integrated
ionization during the measurement period. The electrets charge is read before
and after the exposure using a specially built non-contact electret voltage
reader.
The CR mineral claim uranium radon survey consisted of 645
stations with 585 filtered radon readings. The mean value was 11.61 dV with a
midrange reading of 17.98 dV. The gridding was completed by Kriging on a point
basis with a standard deviation of 4.92 dV. The grid consisted of 10 lines on
100 meter spacing with station readings on 20 meter intervals for a lineal
distance of 12,000 meters that covered an area of 1.08 square kilometers.
The conclusions of the Radon survey was that the CR mineral
claims are underlain by a red to purple fine grained sandstone and gray
limestone and dolomite of the Horquilla Formation. Available literature
indicates that anomalous radioactivity in the immediate vicinity of the CR
claims was reported by the Atomic Energy Commission, Department of Energy and
Arizona Bureau of Geology Publications.
13
The Radon Survey defined several radon anomalies in the
southern region of the CR mineral claim radon survey grid. The anomalies have a
southeast trend which coincides with the regional trend of the uranium enriched
channels in the nearby Promontory Butte/Mogollon Rim area. Field verification of
the radon anomalies was completed by utilizing a RS230 Spectrometer which
indicated gamma reading of 200 cps (2X background) in the area of the defined
radon anomalies.
Recommendations were made to complete the following drill holes
to determine the size, depth and grade of the uranium channel mineralization.
The recommended drill holes to complete the first phase of a drilling program
were as follows:
Drill Hole
|
UTM East |
UTM North |
|
|
|
DH #1 |
503600 |
94600 |
DH #2 |
503950 |
94500 |
DH #3 |
503440 |
94400 |
DH #4 |
503360 |
94300 |
A subsequent report prepared for us by Dr. Karen Wenrich
recommends that any drilling should not be centered on the above sites, which
were Radon anomalies, surmising that the source of the Radon is displaced from
the anomaly. Reimer discusses both shallow and deeper drilling and recommends
that the results of any first drilling should guide subsequent drilling, as
opposed to committing a drilling program to the four sites noted above. He also
recommends testing groundwater for radon, to help determine sites for additional
drilling. He concludes by stating Using geologic and hydrologic information, it
may be possible to estimate the distance of displacement of the central anomaly.
In any case, further studies should be flexible in modifying the location of
sampling as new data become available.
The recommendations of Wenrich and Reimer suggest that further
fieldwork and sampling is necessary prior to deciding on the type and the
location of an initial drilling phase. However, current economic conditions and
the opportunity to acquire the rights to certain additional properties in two
nearby Arizona counties has led us to re-evaluate and postpone further work on
the CR claims.
Location and Access
The twelve CR Mineral Claims are located approximately 30 miles
east of Payson, Arizona in Township 11 north, Range 13 East, sections 34 &
35, Gila County, Arizona. The Claim Block is situated within the Mogollon Slope
region on the southwestern edge of the Colorado Plateau geologic province in the
east-central Arizona region. The edge of the physiographic Colorado Plateau is a
dissected scarp known as the Mogollon Rim. The Mogollon Rim is both a
structurally and topographically high which creates a regional drainage divide.
The waters to the north traverse to the Colorado River and the waters to the
south flow to the Gila River system. Elevations on the property range from about
6,200 to 6,450 feet.
The CR claims may be accessed from Payson, Arizona by traveling
east on Arizona State highway 260 for approximately 30 miles to the Colcord Road
junction, then travel about 1 mile southeast on Colcord Road to the claim
boundary. There are several dirt roads that traverse the property in a northerly
direction.
The terrain on the property is moderate with south dipping
slopes and pine trees as the predominant vegetation. The property is typically
snow free which provides a 12 month work season. The claims are outlined on the
following topographical and geological maps of the area.
14
Location of CR Mineral Claims
15
Property Geology
The CR Claim block is underlain by the Pennsylvanian Horquilla
Formation which is a carbonate sequence that forms ledges and slopes. The strata
within the Horquilla consist of cyclically interbedded fossiliferous limestone
and minor terrigenous mudstone and siltstone. The Horquilla Formation began with
the eastward transgression of the sea from the Cordilleran geosynclines into a
restricted embayment. Thin sheets of gravel, composed of chert and flint
pebbles, and in some instances contains brachiopods or other marine fossils was
spread over the area followed by layer of mud, silt and carbonate deposits.
The Naco Group (uranium enriched) is predominately a marine
sequence of interbedded limestones and shales that grades laterally in the Lower
Supai Formation of Late PennsylvanianEarly Permian age. It was deposited during
a marine transgression over a karst surface developed on the Mississippian
Redwall Limestone. There are three members in the Naco Group. The lowermost
member is typically a basal reddish-brown cherty mudstone, siltstone, or
conglomerate with the source of material from the solution of the Redwall
Limestone and followed by stratified mudstone, siltstone and sandstone. The
middle member consists of richly fossiliferous resistant limestone and
interbedded with purple shales and siltstones. The upper member consists of a
succession of reddish-brown clastics and interbedded limestone produced by the
interfingering of marine units and continental margin and terrestrial redbeds of
the south-eastward building of the Supai delta.
Mineralization
The origin of the uranium that occurs in the Colcord Road
region are directly related to sandstone lenses of stream origin in beds of late
Paleozoic age coincidental with the evolutionary development of land plants. The
uranium deposits are tabular peneconcordant types that are enveloped in rock
formations with reduced geochemical characteristics. The sandstone is pale gray
and white and contains coalified plant fossils and finely disseminated pyrite.
The associated mudstones are gray or green and also contain disseminated
pyrite.
The uranium deposits are in the sandstone lenses interbedded
with mudstone that formed in intermontane basins on broad alluvial plains or
fans. The host sandstone ranges from fine to coarse grained and in places it is
conglomeratic with a dominantly quartzose composition. The uranium beds have a
gentle dip which may have resulted from either stream gradient or slight
tectonic tilting. The uranium deposits formed at shallow or moderate depths.
Within the Colcord Road area the peneconcordant uranium deposits are associated
with plant debris and are light colored containing pyrite in shale (mudstone).
The clastic rocks have been deposited in fluvial environments and are
stratigraphically controlled. The mineralization is digenetic related to the
migration of ground waters. The source of the uranium is believed to be the
Precambrian rocks to the south. The uranium is associated with copper and not
vanadium. The primary mineralization is characterized by metallic sulfides and
uranium and in most instances it is a uraninite in coalified material.
The uranium mineralization in the Colcord Road area is
estimated to occur about 700 feet above the Redwall Limestone. The uranium beds
seem to be in one prominent zone of conglomerates and related cross-stratified
sandstone and shales laced with carbonized and coalified plant debris within a
fluvial complex. The fluvial complex displays a progressive northward shift of
channel deposits with pebbles grading to inclined siltstones-claystones on the
south sides of channels. Studies have shown the current within the stream
channels was flowing in an easterly direction and are point-bar deposits. The
channel complex is blanketed by a gray-green shale bed that contains abundant
thin carbonized plant remains. The horizons are several feet thick and usually
contain thin coaly units.
Uraninite, a variety of pitchblende, is the only
uranium-bearing mineral reported in the area. The pitchblende occurs as
sperulites and as a replacement of wood fragments. The uraninite occurs in
concentrated layers and is disseminated in the fine-grained, gray siltstone and
the limestone conglomerate. Drill results in the nearby Promontory Butte area
indicate the uranium bearing minerals are concentrated in a horizon that
includes the gray siltstone and the limestone conglomerate and appear to have a
concordant 10 degree dip to the southeast. A large percentage of the uranium
mineralization occurs as a direct replacement of wood fragments. In some
instances, the pitchblende was deposited in a mamillary or nodular form around
the periphery of existing crystals.
ITEM 3. |
LEGAL PROCEEDINGS |
We know of no material, active or pending legal proceedings against
our company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an adverse
party or has a material interest adverse to our interest.
ITEM 4. |
(Removed and Reserved)
|
16
PART II
ITEM 5. |
MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES. |
Our shares may be traded on the Bulletin Board operated by the
Federal Industry Regulatory Authority under the symbol SWDO. The following
table reflects the high and low bid information for our common stock obtained
from the OTC Bulletin Board and reflects inter-dealer prices, without retail
mark-up, markdown or commission, and may not necessarily represent actual
transactions.
The high and low bid prices of our common stock for the periods
indicated below are as follows:
|
|
High Bid |
|
|
Low Bid |
|
2010 |
|
|
|
|
|
|
Fourth Quarter
2/01/10 to 4/30/10 |
$ |
0.30 |
|
$ |
0.10 |
|
Third Quarter 11/01/09 to 1/31/10
|
$ |
0.15 |
|
$ |
0.07 |
|
Second Quarter
8/01/09 to 10/31/09 |
$ |
0.11 |
|
$ |
0.07 |
|
First Quarter 5/01/09 to 7/31/09
|
$ |
0.11 |
|
$ |
0.05 |
|
2009 |
|
|
|
|
|
|
Fourth Quarter 2/01/09 to 4/30/09
|
$ |
0.15 |
|
$ |
0.05 |
|
Third Quarter
11/01/08 to 1/31/09 |
$ |
0.25 |
|
$ |
0.02 |
|
Second Quarter 8/01/08 to
10/31/08 |
$ |
0.00 |
|
$ |
0.00 |
|
First Quarter
5/01/08 to 7/31/08 |
$ |
0.00 |
|
$ |
0.00 |
|
Holders of Record
There are twenty-four holders of record for our common stock as
at August 12, 2010.
Transfer Agent
Our common shares are issued in registered form. Transfer
Online Inc. of 512 SE Salmon Street, Portland OR, Fax: 503.227.6874, is the
registrar and transfer agent for our common shares.
Dividends
We have not declared any cash dividends, nor do we have any
plans to do so. Management anticipates that, for the foreseeable future, all
available cash will be needed to fund our operations.
Recent Sales of Unregistered Securities
Other than as disclosed below, during the year ended April 30,
2010 we had no sales of unregistered securities.
On April 1, 2010, the Company executed an agreement for office
space and administrative support services with a privately held company
controlled by a significant shareholder, effective April 1, 2010 for a term of
three years at a rate of CDN$7,500 per month plus applicable taxes, and 300,000
shares of restricted common stock of the Company (issued May 3, 2010). The
shares were issued pursuant to Regulation S of the Securities Act of 1933 on the
basis that the stockholder represented to us that they were not a US person as
such term is defined in Regulation S.
On November 24, 2009, Snowdon Resources Corporation (Snowdon)
entered into an agreement with Vorticom Inc. whereby Vorticom will serve as
public relations counsel for Snowdon beginning December 1, 2009 for a twelve
month period. As consideration for the services, the Company agreed to issue
250,000 restricted shares of common stock and pay a cash fee of $4,000 per
month, and $500 monthly for media monitoring and live media database. In
February, 2010, the parties agreed to terminate the public relations agreement
between Snowdon and Vorticom Inc. whereby Vorticom agreed to serve as public
relations counsel for Snowdon beginning December 1, 2009 for a twelve month
period. As consideration for the services, the Company had agreed to issue
250,000 restricted shares of common stock and pay a cash fee of $4,000 per
month, and $500 monthly for media monitoring and live media database. The
Company paid a total of $9,000 up to the date of
17
termination of the contract. No further funds are owed and the
Company issued the 250,000 shares to Vorticom pursuant to Rule 506 of Regulation
D on the basis that the company represented that they were an accredited
investor.
Section 15(g) of the Securities Exchange Act of 1934
Our shares are covered by Section 15(g) of the Securities
Exchange Act of 1934, as amended that imposes additional sales practice
requirements on broker/dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouses). For transactions covered by the Rule, the broker/dealer must make a
special suitability determination for the purchase and have received the
purchasers written agreement to the transaction prior to the sale.
Consequently, the Rule may affect the ability of broker/dealers to sell our
securities and also may affect your ability to sell your shares in the secondary
market.
Section 15(g) also imposes additional sales practice
requirements on broker/dealers who sell penny securities. These rules require a
one page summary of certain essential items. The items include the risk of
investing in penny stocks in both public offerings and secondary marketing;
terms important to in understanding of the function of the penny stock market,
such as bid and offer quotes, a dealers spread and broker/dealer
compensation; the broker/dealer compensation, the broker/dealers duties to its
customers, including the disclosures required by any other penny stock
disclosure rules; the customers rights and remedies in causes of fraud in penny
stock transactions; and, the NASDs toll free telephone number and the central
number of the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated persons.
Securities authorized for issuance under equity compensation
plans
The following table summarizes certain information regarding
our equity compensation plan as at December 31, 2009:
Plan Category |
Number of Securities to
be Issued Upon Exercise of Outstanding Options,
Warrants and Rights |
Weighted-Average
Exercise Price of Outstanding Options, Warrants and
Rights |
Number of Securities
Remaining Available for Future Issuance Under Equity
Compensation Plan |
Equity compensation plans approved by security
holders |
Nil
|
Nil
|
Nil
|
Equity compensation plans not approved by
security holders |
Nil
|
Nil
|
10,000,000
|
Total |
Nil |
Nil |
10,000,000
|
We have an equity compensation plan under which our shares of
common stock have been authorized for issuance to our officers, directors,
employees, attorneys, accountants, consultants, or advisors, namely our 2008
Nonqualified Stock Option Plan. The plan provides for the issuance of stock
options for services rendered to us. The board of directors is vested with the
power to determine the terms and conditions of the options.
This equity compensation plan was filed with the SEC on
December 2, 2008 in a registration statement on Form S-8 (SEC file no.
333-155883) and registered 10,000,000 shares of common stock for sale
thereunder. As of the date of this filing, no options have been granted and
10,000,000 options to acquire shares of common stock remain available for future
issuance under this plan.
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
None.
ITEM 6. |
SELECTED FINANCIAL DATA.
|
Not Applicable.
18
ITEM 7. |
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. |
The following discussion should be read in conjunction with our
audited financial statements for the years ended April 30, 2010 and April 30,
2009 and the related notes that appear elsewhere in this Form 10-K. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this Form 10-K, particularly in the section entitled
Risk Factors.
Our consolidated financial statements are prepared in
accordance with United States generally accepted accounting principles.
We are a start-up, exploration stage corporation and have not
yet generated or realized any revenues from our business operations. No revenues
are anticipated until we can locate and begin removing and selling minerals.
Accordingly, we must raise cash from sources other than the sale of minerals
found on our property.
Our CR claims exploration program is presently on hold subject
to a change in market conditions and additional financing. We anticipate that we
are not going to buy or sell any plant or significant equipment during the next
twelve months. We anticipate that will not buy any equipment until have located
a body of ore and we have determined it is economical to extract the ore.
We do not intend to hire any employees at this time. All of the
work on the properties will be conducted by unaffiliated, independent
contractors. 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.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us upon
which to base an evaluation of our performance. We are an exploration stage
corporation and have not generated any revenues from operations. We cannot
guarantee we will be successful in our business operations. Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the exploration of our
properties, and possible cost overruns due to price and cost increases in
services.
We have no assurance that future financing will be available to
us on acceptable terms. If financing is not available on satisfactory terms, we
may be unable to continue, develop or expand our operations. Also, new equity
financing could result in additional dilution to existing shareholders.
Results of Operations
We acquired one property containing five claims. We re-staked
those claims in February, 2008 and added a further seven contiguous claims,
for a total of twelve claims covering 240 acres. We have no revenue and have
incurred a net loss from inception to April 30, 2010 of $657,260 as a result
of staking costs, a mineral claim payment, exploration costs, consulting fees,
accounting and legal expenses, and office and sundry costs.
RESULTS OF OPERATIONS
Our operating results for the years ended April 30, 2010 and
2009 are summarized as follows:
|
Year Ended
April 30, 2010
|
Year Ended
April 30, 2009 |
Percentage
Increase/(Decrease) |
Revenue |
- |
- |
N/A |
Expenses |
$ 377,329 |
$ 193,686 |
195% |
Basic and Diluted Loss Per Common Share |
$ (0.03 ) |
$ (0.01 ) |
200% |
Net Income (loss) |
$ (377,329 ) |
$ (193,686 ) |
195%
|
Revenues
We have had no operating revenues for the years ended April 30,
2010 and 2009. We anticipate that we will not generate any revenues for so long
as we are an exploration stage company.
19
General and Administrative Expenses
The major components of our general and administrative expenses
for the year are outlined in the table below:
|
|
Year Ended April 30, |
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
Consulting fees |
$ |
183,322 |
|
$ |
42,000 |
|
Foreign exchange (gain) loss |
|
(1,352 |
) |
|
3,005 |
|
Mineral property exploration costs |
|
4,053 |
|
|
77,595 |
|
Mineral property investigation costs |
|
20,260 |
|
|
- |
|
Office and sundry |
|
64,475 |
|
|
32,696 |
|
Professional fees |
|
41,876 |
|
|
38,390 |
|
Research costs |
|
64,695 |
|
|
- |
|
Total Expenses |
$ |
377,329 |
|
$ |
193,686 |
|
Our expenses for the fiscal year ended April 30, 2010 were
$377,329, compared to $193,686 for the fiscal year ended April 30, 2009. The
increase in our general and administrative expenses during the fiscal year ended
April 30, 2010 was primarily due to an increase in consulting expenses
associated with financing, strategic planning and business development advice
and investor relations relating to ongoing business activities of the company
and the pursuit of new opportunities for the company, and due to an increase in
professional fees associated with the Companys ongoing reporting obligations
under the Securities Exchange Act of 1934. The increased consulting fees of the
Company during the past fiscal year primarily related to the costs associated
with the negotiation of the acquisition of certain technology for oil upgrading
and other applications with Agosto Corporation Limited. These costs included the
review and registration of various technology patents, the negotiation of terms
for a proposed definitive agreement, due diligence reviews and tax advice (which
resulted in increased professional fees) relating to the proposed
acquisition.
Our cash decreased $247,374 primarily due to the increase in
our expenses as described above. Amounts receivable decreased in 2009 there were
outstanding advances in connection with the state leases and new claims to be
acquired. In the 2010 fiscal year, outstanding receivables consist of payment of
Goods and Services Taxes that are recoverable. Prepaid expenses had a minor
increase from prepayment of consulting fees.
During the year ended April 30, 2010, the Company paid
consulting fees and rent to a major shareholder and to two companies controlled
by two major shareholders, one of whom is also a director and officer, in the
amount of $127,880 (2009 - $67,375). The loan due to a company controlled by a
director of $7,698 (2009 - $Nil) is unsecured with an annual interest rate of 8%
with no specific terms of repayment. Amounts due to a major shareholder and to
two companies controlled by two major shareholder, one of whom is also a
director and officer, and included in accounts payable aggregate $23,000 (2009 -
$Nil).
Liquidity and Capital Resources
As of the date of this report, we have not generated any revenues
from our business operations. Our ability to generate adequate amounts of cash
to meet our needs is entirely dependent on the issuance of shares, debt securities,
or loans. As of April 30, 2010, our total assets were $23,120, and our total
liabilities were $116,217. Cash requirements for the next twelve months, are
estimated to be approximately $361,000. Accordingly, we do not have sufficient
funds for planned operations and we will be required to raise additional funds
for operations after that date. The audited financial statements accompanying
this report have been prepared on a going concern basis, which implies that
our company will continue to realize its assets and discharge its liabilities
and commitments in the normal course of business. Our company has not generated
revenues since inception and has never paid any dividends and is unlikely to
pay dividends or generate earnings in the immediate or foreseeable future. The
continuation of our company as a going concern is dependent upon the continued
financial support from our shareholders, the ability of our company to obtain
necessary equity financing to achieve our operating objectives, and the attainment
of profitable operations.
These circumstances raise substantial doubt about our ability
to continue as a going concern, as described in the explanatory paragraph to our
independent auditors report on the April 30, 2010 and 2009 consolidated
financial statements which are included with this annual report. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty. The continuation of our business is
dependent upon us raising additional financial support. The issuance of
additional equity securities by us could result in a significant dilution in the
equity interests of our current stockholders. Obtaining commercial loans,
assuming those loans would be available, will increase our liabilities and
future cash commitments.
20
There are no assurances that we will be able to obtain further
funds required for our continued operations. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be forced to scale down or perhaps even cease the operation of our
business.
Future Financings
As stated above we do not have sufficient funds for planned
operations and we will be required to raise additional funds for operations
after that date. We anticipate continuing to rely on equity sales of our common
shares or shareholder loans in order to continue to fund our business
operations. Issuances of additional shares will result in dilution to our
existing stockholders. There is no assurance that we will achieve any additional
sales of our equity securities or arrange for debt or other financing to fund
our planned activities.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK. |
Not Applicable.
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA. |
REPORT OF INDEPENDENT REGISTERED PUBLIC |
F-1 |
ACCOUNTING FIRM |
|
FINANCIAL STATEMENTS |
|
Balance Sheets |
F-2 |
Statements of
Operations |
F-3 |
Statements of Cash Flows |
F-4 |
Statement of
Stockholders Equity (Deficiency) |
F-5 |
NOTES TO FINANCIAL STATEMENTS |
F-6 |
21
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 2010 AND 2009
(Stated in U.S. Dollars)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Snowdon Resources Corporation
(An Exploration Stage Company)
We have audited the accompanying balance sheets of Snowdon Resources
Corporation (an exploration stage company) as at April 30, 2010 and 2009 and
the related statements of operations and cash flows for each of the years in
the two year period ended April 30, 2010 and for the cumulative period from
inception, March 1, 2006 to April 30, 2010 and stockholders’ (deficiency)
equity for the cumulative period from inception, March 1, 2006 to April 30,
2010. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audits included consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as at
April 30, 2010 and 2009 and the results of its operations and its cash flows
for each of the years in the two year period ended April 30, 2010 and for the
cumulative period from inception, March 1, 2006, to April 30, 2010, 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 suffered recurring losses and negative cash
flows from operations and has a working capital deficit at April 30, 2010. These
factors raise substantial doubt about the Companys ability to continue
as a going concern. Managements plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Vancouver, Canada |
“Morgan & Company” |
|
|
August 9, 2010 |
Chartered Accountants |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
BALANCE SHEETS
(Stated in U.S. Dollars)
|
|
APRIL 30 |
|
|
|
2010 |
|
|
2009
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash
|
$ |
479
|
|
$ |
247,853
|
|
Amounts receivable
|
|
10,041 |
|
|
17,316 |
|
Prepaid
expenses |
|
12,600 |
|
|
5,000 |
|
|
|
|
|
|
|
|
|
$ |
23,120
|
|
$ |
270,169 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable
and accrued liabilities |
$ |
88,519 |
|
$ |
- |
|
Promissory
note payable (Note 5) |
|
20,000
|
|
|
- |
|
Due to related
parties (Note 6) |
|
7,698
|
|
|
-
|
|
|
|
116,217 |
|
|
- |
|
|
|
|
|
|
|
|
STOCKHOLDERS (DEFICIENCY) EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock (Note 7) |
|
|
|
|
|
|
Authorized:
100,000,000 common shares with
a par value of $0.00001 per share
100,000,000
preferred shares with a par value of $0.00001 per share
(none issued) |
|
|
|
|
|
|
Issued and outstanding:
15,750,000 common shares at April 30, 2010
(2009 15,500,000 common
shares) |
|
158 |
|
|
155 |
|
|
|
|
|
|
|
|
Additional Paid-in Capital |
|
564,005
|
|
|
549,945 |
|
Deficit Accumulated During The Exploration Stage |
|
(657,260 |
) |
|
(279,931 |
) |
|
|
(93,097 |
)
|
|
270,169
|
|
|
|
|
|
|
|
|
|
$ |
23,120
|
|
$ |
270,169
|
|
Going Concern (Note 1)
Commitments And Contractual Obligations (Note 9)
Going Concern (Note 1)
The accompanying notes are an integral part of these financial
statements.
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
CUMULATIVE |
|
|
|
|
|
|
|
|
|
PERIOD FROM |
|
|
|
|
|
|
|
|
|
INCEPTION |
|
|
|
|
|
|
|
|
|
MARCH 1 |
|
|
|
|
|
|
|
|
|
2006 TO |
|
|
|
YEARS ENDED APRIL 30 |
|
|
APRIL 30 |
|
|
|
2010 |
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Consulting fees (Note 6) |
|
183,322 |
|
|
42,000 |
|
|
225,322 |
|
Foreign exchange
(gain) loss |
|
(1,352 |
) |
|
3,005 |
|
|
1,653 |
|
Impairment of mineral claim
interest |
|
- |
|
|
- |
|
|
10,000 |
|
Mineral property
exploration costs |
|
4,053 |
|
|
77,595 |
|
|
92,429 |
|
Mineral property investigation
costs |
|
20,260 |
|
|
- |
|
|
20,260 |
|
Office and
sundry (Note 6) |
|
64,475 |
|
|
32,696 |
|
|
105,005 |
|
Professional fees |
|
41,876 |
|
|
38,390 |
|
|
137,896 |
|
Research
costs |
|
64,695 |
|
|
- |
|
|
64,695 |
|
|
|
377,329 |
|
|
193,686 |
|
|
657,260 |
|
|
|
|
|
|
|
|
|
|
|
Net Loss For The
Period |
$ |
(377,329 |
) |
$ |
(193,686 |
) |
$ |
(657,260 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic And Diluted Loss Per Common Share |
$ |
(0.03 |
) |
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number Of Common Shares Outstanding |
|
15,602,740
|
|
|
15,500,000
|
|
|
|
|
The accompanying notes are an integral part of these financial
statements.
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
CUMULATIVE |
|
|
|
|
|
|
|
|
|
PERIOD FROM |
|
|
|
|
|
|
|
|
|
INCEPTION |
|
|
|
|
|
|
|
|
|
MARCH 1 |
|
|
|
|
|
|
|
|
|
2006 TO |
|
|
|
YEARS ENDED APRIL 30 |
|
|
APRIL 30 |
|
|
|
2010 |
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows (Used In) Provided By: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
|
Net
loss for the period |
$ |
(377,329 |
) |
$ |
(193,686 |
) |
$ |
(657,260 |
) |
Adjustment
to reconcile net loss to net cash used by
operating activities: |
|
|
|
|
|
|
|
|
|
Non-cash services |
|
15,730
|
|
|
- |
|
|
15,730 |
|
Foreign currency
translation adjustment |
|
35,962 |
|
|
- |
|
|
35,962 |
|
Net
changes in non-cash operating assets and
liabilities: |
|
|
|
|
|
|
|
|
|
Amounts receivable |
|
7,275 |
|
|
(17,316 |
) |
|
(10,041 |
) |
Prepaid expenses |
|
(7,600 |
) |
|
(5,000 |
) |
|
(12,600 |
) |
Accounts payable and accrued liabilities |
|
86,852
|
|
|
(1,170 |
)
|
|
86,852
|
|
|
|
(239,110 |
) |
|
(217,172 |
) |
|
(541,357 |
) |
Financing Activities |
|
|
|
|
|
|
|
|
|
Issue
of share capital |
|
- |
|
|
- |
|
|
550,100 |
|
Proceeds from
issuance of promissory note payable |
|
20,000 |
|
|
- |
|
|
20,000 |
|
Advances
from (repayments to) related party |
|
7,698 |
|
|
(66,258 |
) |
|
7,698 |
|
|
|
27,698
|
|
|
(66,258 |
)
|
|
577,798
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
(35,962 |
)
|
|
-
|
|
|
(35,962 |
) |
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase In Cash |
|
(247,374 |
) |
|
(283,430 |
) |
|
479 |
|
|
|
|
|
|
|
|
|
|
|
Cash, Beginning Of Period |
|
247,853
|
|
|
531,283
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Cash, End Of Period
|
$ |
479
|
|
$ |
247,853
|
|
$ |
479
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash Financing Activities |
|
|
|
|
|
|
|
|
|
Shares
issued for services |
$ |
14,063
|
|
$ |
- |
|
$ |
14,063 |
|
Supplemental Cash Flow Information |
|
|
|
|
|
|
|
|
|
Cash Activities: |
|
|
|
|
|
|
|
|
|
Interest
paid (received) |
$ |
-
|
|
$ |
(2,000 |
)
|
$ |
(2,000 |
)
|
Income
taxes paid |
$ |
- |
|
$ |
- |
|
$ |
- |
|
The accompany notes are an integral part of these financial statements.
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS (DEFICIENCY) EQUITY
(Stated in U.S. Dollars)
PERIOD FROM INCEPTIONMARCH 1, 2006 TO APRIL 30, 2010
|
|
|
|
|
|
|
|
|
|
|
DEFICIT |
|
|
|
|
|
|
NUMBER |
|
|
|
|
|
|
|
|
ACCUMULATED |
|
|
|
|
|
|
OF |
|
|
|
|
|
ADDITIONAL |
|
|
DURING THE |
|
|
|
|
|
|
COMMON |
|
|
PAR |
|
|
PAID-IN |
|
|
EXPLORATION |
|
|
|
|
|
|
SHARES |
|
|
VALUE |
|
|
CAPITAL |
|
|
STAGE |
|
|
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, March 1, 2006 |
|
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 22, 2006 Shares issued for
cash at $0.00001 |
|
10,000,000 |
|
|
100 |
|
|
- |
|
|
- |
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
- |
|
|
- |
|
|
- |
|
|
(30,300 |
) |
|
(30,300 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2006 |
|
10,000,000 |
|
|
100 |
|
|
- |
|
|
(30,300 |
) |
|
(30,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
- |
|
|
- |
|
|
- |
|
|
(12,820 |
) |
|
(12,820 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2007 |
|
10,000,000 |
|
|
100 |
|
|
- |
|
|
(43,120 |
) |
|
(43,020 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4, 2008 Shares issued for cash
at $0.10 |
|
5,500,000 |
|
|
55 |
|
|
549,945 |
|
|
- |
|
|
550,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
- |
|
|
- |
|
|
- |
|
|
(43,125 |
) |
|
(43,125 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2008 |
|
15,500,000 |
|
|
155 |
|
|
549,945 |
|
|
(86,245 |
) |
|
463,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
- |
|
|
- |
|
|
- |
|
|
(193,686 |
) |
|
(193,686 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(35,962 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2009 |
|
15,500,000 |
|
|
155 |
|
|
549,945 |
|
|
(279,931 |
) |
|
270,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for non-cash consulting services |
|
250,000 |
|
|
3 |
|
|
14,060 |
|
|
- |
|
|
14,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
- |
|
|
- |
|
|
- |
|
|
(377,329 |
) |
|
(377,329 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
April 30, 2010 |
|
15,750,000
|
|
$ |
158 |
|
$ |
564,005
|
|
$ |
(657,260 |
) |
$ |
(93,097 |
) |
The accompany notes are an integral part of these financial statements.
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
1. |
NATURE OF OPERATIONS AND GOING CONCERN |
|
|
|
Organization |
|
|
|
Snowdon Resources Corporation (the Company)
was incorporated in the State of Nevada, U.S.A., on March 1, 2006. |
|
|
|
Exploration Stage Activities |
|
|
|
The Company was formed for the purpose of acquiring
exploration and development stage natural resource properties. The Company
has been in the exploration stage since its formation and has not yet
realized any revenues from its planned operations. |
|
|
|
Going Concern |
|
|
|
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. |
|
|
|
As shown in the accompanying financial statements, the
Company has incurred a net loss of $621,298 for the period from inception
March 1, 2006 to April 30, 2010, and as at April 30, 2010 had a stockholders
deficiency of $93,097, and a working capital deficit of $93,097. The future
of the Company is dependent upon its ability to obtain financing and upon
future profitable operations. These factors raise substantial doubt about
its ability to continue as a going concern. Although there is no assurance
that managements plans will be realized, management has plans to
seek additional capital through a private placement or public offering
of its common stock. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets,
or the amounts of and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. |
|
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
The financial statements of the Company have been prepared
in accordance with generally accepted accounting principles in the United
States of America (GAAP). |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
|
|
|
|
In June 2009, the Financial Accounting Standards
Board (FASB) issued its final Statement of Financial Accounting
Standards (SFAS) No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles, a replacement of FASB Statement No. 162 (SFAS
168). SFAS 168 establishes the FASB Accounting Standards
Codification (Codification), which officially launched
July 1, 2009, to become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be
applied by non-governmental entities, superseding existing FASB, American
Institute of Certified Public Accountants (AICPA), Emerging
Issues Task Force (EITF), and related accounting literature.
Rules and interpretive releases of the Securities and Exchange Commission
(SEC) under authority of federal securities laws are also
sources of authoritative U.S. GAAP for SEC registrants. SFAS 168 recognizes
the previously issued GAAP pronouncements into accounting topics and displays
them using a consistent structure. The subsequent issuances of new standards
will be in the form of Accounting Standards Updates that will be included
in the Codification. SFAS 168 is effective for the Company as of the year
ended April 30, 2010. As the Codification was not intended to change or
alter existing GAAP, it does not have an impact on the Companys
financial statements. The only impact is that references to authoritative
accounting literature are in accordance with the Codification. The Company
has included in its disclosures the Accounting Standards Codification
(ASC) cross-reference alongside the references to the accounting
standards issued and adopted prior to the adoption of Codification. |
|
|
|
|
The financial statements have, in managements
opinion, been properly prepared within reasonable limits of materiality
and within the framework of the significant accounting policies summarized
below: |
|
|
|
|
a) |
Exploration Stage Enterprise |
|
|
|
|
|
The Companys financial statements are prepared
using the accrual method of accounting and according to the provisions
of Statement of Financial Accounting Standards No. 7 (SFAS No. 7),
Accounting and Reporting for Development Stage Enterprises
(codified in ASC Topic 915 entitled Development Stage Entities),
as it devotes substantially all of its efforts to acquiring and exploring
mineral properties. Until such properties are acquired and developed,
the Company will continue to prepare its financial statements and related
disclosures in accordance with entities in the exploration stage. |
|
|
|
|
b) |
Cash |
|
|
|
|
|
Cash consists of cash on deposit with a high quality,
major financial institution, and to date the Company has not experienced
losses on any of its balances. The carrying amounts approximated fair
market value due to the liquidity of these deposits. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
|
|
|
|
c) |
Mineral Property Costs |
|
|
|
|
|
The Company has been in the exploration stage since
its inception and has not yet realized any revenues from its planned operations.
It is primarily engaged in the acquisition and exploration of mining properties.
Mineral property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized when incurred. The Company
assesses the carrying costs for impairment at each fiscal quarter end.
When it has been determined that a mineral property can be economically
developed as a result of establishing proven and probable reserves, the
costs then incurred to develop such property, are capitalized. Such costs
will be amortized using the units-of-production method over the estimated
life of the probable reserve. If mineral properties are subsequently abandoned
or impaired, any capitalized costs will be charged to operations. |
|
|
|
|
d) |
Long-lived Assets |
|
|
|
|
|
The Company tests long-lived assets or asset groups
for recoverability when events or changes in circumstances indicate that
their carrying amount may not be recoverable. Circumstances which could
trigger a review include, but are not limited to: significant decreases
in the market price of the asset; significant adverse changes in the business
climate or legal factors; accumulation of costs significantly in excess
of the amount originally expected for the acquisition or construction
of the asset; current period cash flow or operating losses combined with
a history of losses or a forecast of continuing losses associated with
the use of the asset; and current expectation that the asset will more
likely than not be sold or disposed significantly before the end of its
estimated useful life. |
|
|
|
|
|
Recoverability is assessed based on the carrying amount
of the asset and its fair value which is generally determined based on
the sum of the undiscounted cash flows expected to result from the use
and the eventual disposal of the asset, as well as specific appraisal
in certain instances. An impairment loss is recognized when the carrying
amount is not recoverable and exceeds fair value. |
|
|
|
|
e) |
Asset Retirement Obligations |
|
|
|
|
|
An asset retirement obligation (ARO) associated
with the retirement of a tangible long- lived asset is recognized as a
liability in the period in which it is incurred and becomes determinable
with an offsetting increase in the carrying amount of the associated asset. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
|
|
|
|
|
f) |
Use of Estimates and Assumptions |
|
|
|
|
|
|
The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Management makes these estimates using the best information available
at the time the estimates are made. Actual results could differ from those
estimates. |
|
|
|
|
|
g) |
Fair Value of Financial Instruments |
|
|
|
|
|
|
ASC 820-10 (formerly SFAS No. 157, Fair
Value Measurements) establishes a three-tier value hierarchy, which
prioritizes the inputs used in measuring fair value. The hierarchy prioritizes
the inputs into three levels based on the extent to which inputs used
in measuring fair value are observable in the market. |
|
|
|
|
|
|
These tiers include: |
|
|
|
|
|
|
|
Level 1 defined as observable inputs such as quoted
prices in active markets; |
|
|
|
|
|
|
|
Level 2 defined as inputs other than quoted prices in
active markets that are either directly or indirectly observable; and |
|
|
|
|
|
|
|
Level 3 defined as unobservable inputs in which little
or no market data exists, therefore requiring an entity to develop its own
assumptions. |
|
|
|
|
|
|
Cash consists of cash on deposit with a high
quality major financial institution. The carrying cost approximates fair
value due to the liquidity of these deposits. |
|
|
|
|
|
|
The carrying amounts of other financial assets
and liabilities, such as amounts receivable, accounts payable, and accrued
liabilities, and due to related parties, approximate their fair values
because of the short maturity of these instruments. |
|
|
|
|
|
|
The Companys financial risk is the risk
that arises from fluctuations in foreign exchange rates and the degree
of volatility of these rates. The Companys head office operations
are in Canada and approximately 45% of its assets at April 30, 2010 are
denominated in Canadian dollars, giving rise to exposure to market risks
from changes in foreign currency rates. Currently, the Company does not
use derivative instruments to reduce its exposure to foreign currency
risk. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
|
|
|
|
h) |
Environmental Costs |
|
|
|
|
|
Environmental expenditures that relate to current operations
are charged to operations or capitalized as appropriate. Expenditures
that relate to an existing condition caused by past operations, and which
do not contribute to current or future revenue generation, are charged
to operations. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable, and the cost can be reasonably estimated.
Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or the Companys commitments to
a plan of action based on the then known facts. |
|
|
|
|
i) |
Income Taxes |
|
|
|
|
|
The Company uses the asset and liability method of accounting
for income taxes in accordance with SFAS No. 109 Accounting
for Income Taxes (codified in ASC Topic 740, Income Taxes).
This standard requires the use of an asset and liability approach for
financial accounting and reporting on income taxes. If it is more likely
than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is recognized. |
|
|
|
|
j) |
Basic and Diluted Net Income (Loss) Per Share |
|
|
|
|
|
The Company reports net income (loss) per share in accordance
with SFAS No. 128 "Earnings per Share" (codified in ASC Topic 260,
Earnings Per Share), which requires presentation of both basic
and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available
to common shareholders by the weighted average number of shares outstanding
during the period. Diluted EPS gives effect to all dilutive potential
common shares outstanding during the period using the treasury stock method
and convertible preferred stock using the if-converted method. Diluted
EPS excludes all dilutive potential shares if their effect is anti-dilutive.
The Company has no options or warrants or other dilutive securities and
therefore no dilutive potential shares. As the Company generated net losses
in the periods presented, any exercise of options or warrants, if there
were any, would be anti-dilutive. For those reasons, basic and diluted
loss per share is the same. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
|
|
|
|
|
k) |
Foreign Currency Translation |
|
|
|
|
|
|
The Companys functional currency is
the U.S. dollar. Transactions in Canadian dollars are translated into
U.S. dollars as follows: |
|
|
|
|
|
|
i) |
monetary items at the rate prevailing at the balance
sheet date; |
|
|
ii) |
non-monetary items at the historical exchange rate; |
|
|
iii) |
revenue and expense at the average rate in effect during
the applicable accounting period. |
|
|
|
|
|
|
Transactional gains and losses on translation
are recorded in the statement of operations. Unrealized translation adjustments
are included in other comprehensive income (loss). Cumulative changes
are included in accumulated other comprehensive income (loss) in stockholders
(deficiency) equity. |
|
|
|
|
|
l) |
Concentration of Credit Risk |
|
|
|
|
|
|
The Company does not have any concentration
of related financial credit risk. |
|
|
|
|
|
m) |
Stock-Based Compensation |
|
|
|
|
|
|
The Company follows the fair value recognition
provisions of ASC 718, Compensation- Stock Compensation (formerly
SFAS 123R, Share-Based Payment). The Company adopted these provisions
using the modified-prospective-transition method. Under this method, compensation
cost recognized comprises compensation cost for all share-based payments
granted, based on the grant-date fair value estimated in accordance with
these provisions. In accordance with ASC 718, the compensation expense
is amortized on a straight-line basis over the requisite service period
which approximates the vesting period. Stock options granted to non-employees
were accounted for in accordance with ASC 718 and ASC 505-50 (prior authoritative
literature: EITF No. 96-18, "Accounting for Equity Instruments that
are Issued to Other Than Employees for Acquiring, or in Conjunction With
Selling Goods or Services") and were measured at the fair value of
the options as determined by an option pricing model on the measurement
date and compensation expense is amortized over the vesting period or,
if none exists, over the service period. Compensation expense for unvested
options to non-employees is revalued at each balance sheet date and is
being amortized over the vesting period of the options. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
3. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
|
|
|
|
a) |
On April 9, 2009, the FASB also approved ASC 825-10
(formerly FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments) to require disclosures about fair
value of financial instruments in interim period financial statements
of publicly traded companies and in summarized financial information required
by APB Opinion No. 28, Interim Financial Reporting. The Company was required
to adopt this FSP for its interim and annual reporting periods ending
after June 15, 2009. This FSP does not require disclosures for periods
presented for comparative purposes at initial adoption. This FSP did not
have a material impact on the Companys financial statements. |
|
|
|
|
b) |
In April 2009, the FASB updated guidance related to
fair-value measurements to clarify the guidance related to measuring fair-value
in inactive markets, to modify the recognition and measurement of other-than-temporary
impairments of debt securities, and to require public companies to disclose
the fair values of financial instruments in interim periods. The adoption
did not have an impact on its financial position or results of operations. |
|
|
|
|
c) |
In May 2009, the FASB issued ASC 855-10 (formerly SFAS
No. 163, Subsequent Events), which establishes general standards
of accounting for and disclosure of events that occur after the balance
sheet date but before financial statements are issued or are available
to be issued. ASC 855-10 is effective for interim and annual periods ending
after June 15, 2009. The adoption did not have an impact on the Companys
financial statements. |
|
|
|
|
d) |
In January 2010, the FASB issued Accounting Standards
Update (ASU) 2010-06, Fair Value Measurements and Disclosures
(Topic 820), Improving Disclosures about Fair Value Measurements,
amending ASC 820. ASU 2010-06 amends the disclosure requirements related
to recurring and non-recurring fair value measurements. The guidance requires
disclosure of transfers of assets and liabilities between Level 1 and
Level 2 of the fair value measurement hierarchy, including the reasons
and the timing of the transfers and information on purchases, sales, issuance,
and settlements on a gross basis in the reconciliation of the assets and
liabilities measured under Level 3 of the fair value measurement hierarchy.
This guidance was effective for the Company beginning March 1, 2010. The
adoption of this guidance did not have a material impact on the Companys
financial statements. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
3. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
(Continued) |
|
|
|
|
e) |
In February 2010, the FASB issued ASU 2010-09 Subsequent
Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements.
ASU 2010-09 removes the requirement for an SEC filer to disclose a date
in both issued and revised financial statements. Revised financial statements
include financial statements revised as a result of either correction
of an error or retrospective application of GAAP. All of the amendments
in ASU 2010-09 are effective upon issuance of the final ASU, except for
the use of the issued date for conduit debt obligors. That amendment is
effective for interim or annual periods ending after June 15, 2010. The
adoption did not have an impact on the Companys financial statements. |
|
|
|
4. |
MINERAL CLAIM INTERESTS |
|
|
|
|
a) |
Gila County, Arizona, USA |
|
|
|
|
|
During the year ended April 30, 2006, the Company acquired
a 100% interest in five mineral claims located in Gila County, Arizona,
USA. The consideration for the acquisition was a cash payment of $10,000,
which represented reimbursement of the cost paid by the vendor for the
mineral claims. These costs had been considered impaired and were written
off. |
|
|
|
|
|
The claims were re-staked in February, 2008 and a further
seven contiguous claims were added. |
|
|
|
|
|
During the year ended April 30, 2010, the Company expended
$4,053 (2009 - $77,595) on survey and claim-related expenses. |
|
|
|
|
b) |
Coconino and Mohave Counties, Arizona, USA |
|
|
|
|
|
The Company entered into an agreement and mutual release
dated June 20, 2009, to acquire rights, title and interest to five State
mineral leases and two federal unpatented mineral claims located in the
Coconino and Mohave Counties, Arizona, USA, by way of receiving assignment
of the vendors State mineral exploration permits. Consideration
for the acquisition was $20,260 by way of forgiveness of debt owned to
it by the vendor and conveyance of a 1% net smelter return royalty to
the vendor to a maximum of $400,000. The forgiven debt comprised expenditures
by the Company of $20,260 (2009 - $Nil) relating to exploration of these
leases and claims on behalf of the vendor. These expenditures have been
expensed as mineral property investigation costs by the Company. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
4. |
MINERAL CLAIM INTERESTS (Continued) |
|
|
|
|
b) |
Coconino and Mohave Counties, Arizona, USA (Continued) |
|
|
|
|
|
Subsequently, one of the mineral leases was allowed
to expire without renewal. |
|
|
|
|
|
By a mineral exploration and option agreement, effective
February 11, 2010, Snowdon granted another party the exclusive right to
conduct exploration and the option to receive an assignment of any or
all of the remaining exploration permits. This party is required to spend
in work on the property, or make payments in lieu thereof, the amounts
required by the exploration permits. The term of this agreement is for
a period of one year. |
|
|
|
|
|
In order to keep all claims in good standing, a claim
maintenance fee in the amount of $140 per claim must be paid to the Arizona
Bureau of Land Management each year on or before September 1st. |
|
|
|
|
Although the Company has taken steps to ensure
the title to the mineral property in which it has an interest, in accordance
with industry standards for the current stage of exploration of such properties,
these procedures may not guarantee the Companys title. Property
title may be subject to unregistered prior agreements or transfers and
title may be affected by undetected defects. Formal title to the Coconino
and Mohave County leases and claims has not yet been transferred to the
Company, as quit claim documentation has not yet been completed and filed
with the State of Arizona. |
|
|
|
5. |
PROMISSORY NOTE PAYABLE |
|
|
|
|
On February 12, 2010, the Company issued an
unsecured promissory note in the amount of $20,000, due on demand and
bearing interest of 10% per annum. Interest of $422 was accrued during
the year ended April 30, 2010. |
|
|
|
6. |
RELATED PARTY TRANSACTIONS AND AMOUNTS
OWING |
|
|
|
|
During the year ended April 30, 2010, the
Company carried out a number of transactions with related parties in the
normal course of business. These transactions are recorded at their exchange
amount, which is the amount of consideration paid or received as established
and agreed to between the related parties. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
6. |
RELATED PARTY TRANSACTIONS AND AMOUNTS OWING (Continued) |
|
|
|
The following are related party transactions for the
years ended April 30, 2010 and 2009 that are not disclosed elsewhere in
these financial statements: |
|
|
The Company paid consulting fees of $93,000 and
rent of $34,880 to a major shareholder and to two companies controlled by
two major shareholders, one of whom is also a |
|
|
director and officer, in the aggregate amount of
$127,880 (2009 - $67,375); |
|
|
The loan due to a company controlled by a director
of $7,698 (2009 - $Nil) are unsecured with an annual interest rate of 8%
with no specific terms of repayment; |
|
|
Accounts payable and accrued liabilities includes
amounts due to a major shareholder and to two companies controlled by two
major shareholder, one of whom is also a director and officer, of $23,000
(2009 - $Nil) that were unsecured and non-interest bearing. |
7. |
CAPITAL STOCK |
|
|
|
|
a) |
Common Stock |
On March 22, 2006, the Company issued
10,000,000 common shares at $0.00001 per share to two founding shareholders.
On March 10, 2008 the Company completed
an initial public offering, selling 5,500,000 common shares at a price of $0.10
per share, for total proceeds of $550,000. The shares were issued on April 4,
2008.
On December 1, 2009 the Company issued
250,000 common shares with an estimated fair value of $33,750 in connection
with a media relations services agreement. Of that total, $14,063 was expensed
during the year and the balance will be recorded over the term of the 36 month
term of the agreement.
On April 1, 2010 the Company is committed
to issue stock equal to 300,000 common shares (issued May 3, 2010) with an estimated
fair value of $60,000 in connection with an agreement for office space and corporate
support services for three years. Of that total, $1,667 was expensed during
the year.
|
b) |
Stock Options |
|
|
|
|
|
The Company has a stock option plan that provides for
the issuance of options to its directors, officers, employees, attorneys,
outside consultants and advisors. The maximum number of shares of the
Company available for grants of stock options under the plan was 10,000,000
common shares. No stock options have been granted under the plan to date. |
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
8. |
INCOME TAXES |
|
|
|
|
a) |
A reconciliation of income tax expense to the amount
computed at the statutory rate is as follows: |
|
|
|
2010 |
|
|
2009
|
|
|
Net loss for the year |
$ |
(377,329 |
) |
$ |
(193,686 |
) |
|
Statutory tax rate |
|
34% |
|
|
34% |
|
|
Computed expected income taxes (benefit) |
|
(128,292 |
) |
|
(65,850 |
) |
|
Increase in valuation allowance |
|
128,292 |
|
|
65,850 |
|
|
Income tax provision |
$ |
- |
|
$ |
- |
|
|
b) |
Significant components of deferred income tax assets
are as follows: |
|
|
|
2010 |
|
|
2009
|
|
|
Operating losses carried forward |
$ |
224,328 |
|
$ |
96,036 |
|
|
Less: Valuation allowance |
|
(224,328 |
) |
|
(96,036 |
) |
|
Net deferred tax assets recognized |
$ |
- |
|
$ |
- |
|
The Company has available losses for
income tax purposes of approximately $647,000 which, if unutilized will expire
through to 2030. Subject to certain restrictions, the Company has mineral property
expenditures of $24,313 available to reduce future taxable income. Future tax
benefits, which may arise as a result of these losses, have not been recognized
in these financial statements and have been offset by a valuation allowance.
9. |
COMMITMENTS AND CONTRACTUAL OBLIGATIONS |
On September 30, 2008, the Company entered
into an agreement with a privately held company owned by a director of the Company
for consulting services commencing October, 2008 for three years at the rate
of $3,000 per month, increased to $6,000 per month effective October 1, 2009,
plus applicable taxes.
On September 30, 2008, the Company entered
into an agreement with a significant shareholder of the Company for consulting
services commencing October, 2008 for three years at the rate of $3,000 per
month plus applicable taxes.
SNOWDON RESOURCES CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 and 2009
(Stated in U.S. Dollars)
9. |
COMMITMENTS AND CONTRACTUAL OBLIGATIONS (Continued) |
|
|
|
On April 1, 2010, the Company executed an agreement
for office space and administrative support services with a privately
held company controlled by a significant shareholder, effective April
1, 2010 for a term of three years at a rate of CDN$7,500 per month plus
applicable taxes, and 300,000 shares of common stock of the Company (issued
May 3, 2010). |
|
|
|
On November 24, 2009, the Company entered into an agreement
with a company for public relations services, effective December 1, 2009
for a term of one year for a cash fee of $4,500 per month and 250,000
shares of common stock of the Company (issued). |
|
|
|
The Company has no other significant commitments or
contractual obligations with any parties respecting executive compensation
or other matters. |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
None.
PART III
ITEM 9A(T). |
CONTROLS AND PROCEDURES.
|
(a) |
Evaluation of disclosure controls and procedures
and remediation |
As required by Rule 13(a)-15 under the Exchange Act, in
connection with this annual report on Form 10-K, under the direction of our
Chief Executive Officer and Chief Financial Officer, we have evaluated our
disclosure controls and procedures as of April 30, 2010, including the remedial
actions discussed below, and we have concluded that, as of April 30, 2010, our
disclosure controls and procedures were ineffective as discussed in greater
detail below. As of the date of this filing, we are still in the process of
remediating such material weaknesses in our internal controls and
procedures.
It should be noted that while our management believes our
disclosure controls and procedures provide a reasonable level of assurance, they
do not expect that our disclosure controls and procedures or internal controls
will prevent all error and all fraud. A control system, no matter how well
conceived or 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 our 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 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 override of the controls. The design of any
system of internal control 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.
(b) |
Managements annual report on internal control over
financial reporting |
Management is responsible for establishing and maintaining
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Our management evaluated, under the supervision and with the
participation of our Chief Executive Officer, the effectiveness of our internal
control over financial reporting as of April 30, 2010.
Based on its evaluation under the framework in Internal
ControlIntegrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission, our management concluded that our
internal control over financial reporting was not effective as of April 30,
2010, due to the existence of significant deficiencies constituting material
weaknesses, as described in greater detail below. A material weakness is a
control deficiency, or combination of control deficiencies, such that there is a
reasonable possibility that a material misstatement of the annual or interim
financial statements will not be prevented or detected on a timely basis.
This annual report does not include an attestation report of
our companys independent registered public accounting firm regarding internal
control over financial reporting. Managements report was not subject to
attestation by our companys independent registered public accounting firm
pursuant to temporary rules of the SEC that permit our company to provide only
managements report in this annual report.
Limitations on Effectiveness of Controls
Our Chief Executive Officer and Chief Financial Officer do not
expect that our disclosure controls or our internal control over financial
reporting 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 our 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. Additional controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the controls. 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
22
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.
Material Weaknesses Identified
In connection with the preparation of our consolidated
financial statements for the year ended April 30, 2010, certain significant
deficiencies in internal control became evident to management that represent
material weaknesses, including:
|
(i) |
Lack of a sufficient number of independent directors for
our board and audit committee. We currently have no independent director
on our board, which is comprised of one director. As a publicly-traded
company, we strive to have a majority of our board of directors be
independent; |
|
|
|
|
(ii) |
Insufficient segregation of duties in our finance and
accounting functions due to limited personnel. During the year ended April
30, 2010, we had limited staff that performed nearly all aspects of our
financial reporting process, including, but not limited to, access to the
underlying accounting records and systems, the ability to post and record
journal entries and responsibility for the preparation of the financial
statements. This creates certain incompatible duties and a lack of review
over the financial reporting process that would likely result in a failure
to detect errors in spreadsheets, calculations, or assumptions used to
compile the financial statements and related disclosures as filed with the
SEC. These control deficiencies could result in a material misstatement to
our interim or annual financial statements that would not be prevented or
detected; |
|
|
|
|
(iii) |
There is a lack of sufficient supervision and review by
our corporate management; |
|
|
|
|
(iv) |
Insufficient corporate governance policies. Although we
have a code of ethics which provides broad guidelines for corporate
governance, our corporate governance activities and processes are not
always formally documented. Specifically, decisions made by the board to
be carried out by management should be documented and communicated on a
timely basis to reduce the likelihood of any misunderstandings regarding
key decisions affecting our operations and management; and |
|
|
|
|
(v) |
Our companys accounting personnel does not have
sufficient technical accounting knowledge relating to accounting for
income taxes and complex US GAAP matters. Management corrected any errors
prior to the release of our companys April 30, 2010 financial
statements. |
Plan for Remediation of Material Weaknesses
We intend to take appropriate and reasonable steps to make the
necessary improvements to remediate these deficiencies. We intend to consider
the results of our remediation efforts and related testing as part of our
year-end 2011 assessment of the effectiveness of our internal control over
financial reporting.
Subject to receipt of additional financing, we intend to
undertake the below remediation measures to address the material weaknesses
described in this annual report. Such remediation activities include the
following:
|
(1) |
We continue to recruit two or more additional independent
board members to join our board of directors and will consider the
adoption of an audit committee at such time as additional board members
are retained; |
|
|
|
|
(2) |
We intend to retain a qualified CFO to assist in the
preparation of our public filings and assist on accounting matters;
and |
|
|
|
|
(3) |
We intend to continue to update the documentation of our
internal control processes, including formal risk assessment of our
financial reporting processes. |
(c) |
Changes in Internal Controls over Financial
Reporting |
There were no changes in our internal control over financial
reporting during the quarter ended April 30, 2010 that have materially affected
or are reasonably likely to materially affect, our internal control over
financial reporting.
23
ITEM 9B. |
OTHER INFORMATION |
None.
ITEM 10. |
DIRECTORS AND EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE. |
Our director serves until his successor is elected and
qualified. Our officer is elected by the board of directors to a term of one
year and serves until his or her successor is duly elected and qualified, or
until he or she is removed from office. The board of directors has no
nominating, auditing or compensation committees.
The name, address, age and position of our present officers and
directors are set forth below:
Name and
Address |
Age |
Position(s) |
|
|
|
Robert Baker |
56 |
president, principal executive officer,
treasurer, |
885 Pyrford Road |
|
secretary and a member of the board of
directors |
West Vancouver, British Columbia |
|
|
Canada V7S 2A2 |
|
|
Background of Officers and Directors
On December 3, 2008, Robert M. Baker was appointed president
and treasurer. Mr. Baker replaced Elden Schorn who resigned at that time from
those positions, as well as his position as a director of the company.
Since March 1, 2006, Mr. Baker has been our secretary and a
member of the board of directors. From June 2003 to January 5, 2006, Mr. Baker
was appointed president, treasurer, and a member of the board of directors of
Global Green Solutions Inc. (formerly High Grade Mining Inc.). On January 5,
2006, Mr. Baker resigned as president and of Global Green Solutions Inc. His
resignation was not as a result of any disagreement and he continues to hold the
positions of secretary and a member of its board of directors. From May 27, 2005
to July 31, 2007, Mr. Baker was secretary and a member of the board of directors
of Marathon Gold Corp., a Nevada corporation engaged in the business of mining
exploration. Since December 9, 2004, he has been the secretary and director of
International Gold Corp. (International) Since July 31, 2007, he has been the
president and treasurer of International. International is a Nevada corporation
engaged in the business of mining exploration. From January 2004 to May 2007,
Mr. Baker was a member of the board of directors of Sterling Gold Corporation
(Sterling), a Nevada corporation, engaged in the business of mining
exploration. On May 15, 2007, Mr. Baker resigned as a director. His resignation
was not as a result of any disagreement with Sterling. From January 2004 to
March 2006, Mr. Baker was the president and treasurer of Sterling. From
September 2004 to June 2006, Mr. Baker was a director and secretary of Tapestry
Ventures Ltd. (Tapestry) located in Vancouver, British Columbia. Tapestry is
engaged in the business of mining exploration. Tapestry does not file reports
with the United States Securities and Exchange Commission, but is listed for
trading on the TSX Venture Exchange under the symbol TPV.H. Since October 2004,
Mr. Baker has been a director and secretary of Tapango Resources Ltd.
(Tapango) located in Vancouver, British Columbia. Tapango is engaged in the
business of mining exploration. Tapango does not file reports with the United
States Securities and Exchange Commission, but is listed for trading on the TSX
Venture Exchange under the symbol TPA.H. From November 2004 to December 2005,
Mr. Baker was a director of Cierra Pacific Ventures Ltd. (Cierra Pacific)
located in Vancouver, British Columbia. Cierra Pacific is engaged in the
business of mining exploration. Cierra Pacific does not file reports with the
United States Securities and Exchange Commission, but is listed for trading on
the TSX Venture Exchange under the symbol CIZ.H. From June 2002 to October 2003,
Mr. Baker was the president, principal executive officer, treasurer, principal
financial officer and a member of the board of directors of TexEn Oil & Gas,
Inc. From November 1, 1998 to June 4, 2002, Mr. Baker was a registered
representative with Canaccord Capital Corporation, a Canadian broker/dealer
registered with the United States Securities and Exchange Commission.
Involvement in Certain Legal Proceedings
Our sole director, executive officer and control person has not
been involved in any of the following events during the past ten years:
|
1. |
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. |
any conviction in a criminal proceeding or being subject
to a pending criminal proceeding (excluding traffic violations and other
minor offenses); |
|
|
|
|
3. |
being 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; |
24
|
4. |
being found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange 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; |
|
|
|
|
5. |
being the subject of, or party to, any federal or state
judicial or administrative order, judgment, decree, or finding not
subsequently reversed, suspended or vacated relating to an alleged
violation of: (i) any federal or state securities or commodities law or
regulation; or (ii) any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a
temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order, or (iii) any law or regulation prohibiting
mail or wire fraud or fraud in connection with any business entity;
or |
|
|
|
|
6. |
being the subject of, or a party to, any sanction or
order, not subsequently reversed, suspended or vacated, of any self-
regulatory organization (as defined in Section 3(a) (26) of the Securities
Exchange Act of 1934), any registered entity (as defined in Section 1(a)
(29) of the Commodity Exchange Act), or any equivalent exchange,
association, entity or organization that has disciplinary authority over
its members or persons associated with a member. |
Audit Committee and Charter
Audit committee functions are performed by our board of
directors, which consists of one non-independent director. Audit committee
responsibilities that the board currently fulfills are: (1) selection and
oversight of our independent accountant; (2) establishing procedures for the
receipt, retention and treatment of complaints regarding accounting, internal
controls and auditing matters; (3) establishing procedures for the confidential,
anonymous submission by future employees of concerns regarding accounting and
auditing matters; (4) engaging outside advisors; and, (5) funding for the
outside auditors and any outside advisors engagement by the audit committee.
Specifically with respect to audit committee responsibilities, our board met
once last year.
25
Code of Ethics
We have adopted a corporate code of ethics. We believe our code
of ethics is reasonably designed to deter wrongdoing and promote honest and
ethical conduct; provide full, fair, accurate, timely and understandable
disclosure in public reports; comply with applicable laws; ensure prompt
internal reporting of code violations; and provide accountability for adherence
to the code.
Section 16(a) of the Securities Exchange Act of 1934
Our sole executive officer and director and owners of 10% or
more of our outstanding shares of common stock have filed all reports required
by section 16(a) of the Securities Exchange Act of 1934.
ITEM 11. |
EXECUTIVE
COMPENSATION. |
The following table sets forth information with respect to
compensation paid by us to our officers during the last three completed fiscal
years. Our fiscal year end is April 30.
Summary Compensation
Table |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqual- |
|
|
|
|
|
|
|
|
Non-Equity |
ified |
|
|
|
|
|
|
|
|
Incentive |
Deferred |
All |
|
|
|
|
|
|
|
Plan |
Compen- |
Other |
|
|
|
|
|
Stock |
Option |
Compen- |
sation |
Compen- |
|
Name and Principal |
|
Salary |
Bonus |
Awards |
Awards |
Sation |
Earnings |
sation |
Totals |
Position
[1] |
Year |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
Robert M. Baker |
2010 |
nil |
nil |
nil |
nil |
nil |
nil |
57,000(1) |
57,000(1) |
President, Treasurer & |
2009 |
nil |
nil |
nil |
nil |
nil |
nil |
36,000(1) |
36,000(1) |
Secretary |
2008 |
nil |
nil |
nil |
nil |
nil |
nil |
nil |
nil |
|
(1) |
On September 30, 2008, the Company entered into an
agreement with a privately held company owned and controlled by Robert
Baker for the provision of certain consulting services commencing October,
2008 for three years at the rate of $3,000 per month plus applicable
taxes. The agreement was subsequently amended in October, 2009, pursuant
to which the rate was increased to $6,000 per month. Robert Baker is also
a shareholder and director of Sweetwater Capital Corp., a private company
that provides office support services to the Company at a rate of $7,500
per month. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each executive officer and
director certain information concerning the outstanding equity awards as of
April 30, 2010:
26
Name
|
Options Awards
|
Stock Awards
|
Number of
Securities Underlying
Unexercised Options (#)
Exercisable |
Number
of Securities Underlying
Unexercised Options (#)
Unexercisable |
Equity
Incentive Plan Awards: Number
of Securities Underlying
Unexercised Unearned Options
(#) |
Option
Exercise Price ($) |
Option
Expiration Date |
Number of
Shares or Units of
Stock That Have Not
Vested (#) |
Market
Value of Shares or
Units of Stock That
Have Not Vested
($) |
Equity
Incentive Plan Awards: Number
of Unearned Shares, Units or
Other Rights That
Have Not Vested
(#) |
Equity
Incentive Plan Awards: Market
or Payout Value of Unearned
Shares, Units or Other
Rights That
Have Not
Vested ($) |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
Robert M. Baker President, Treasurer &
Secretary |
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Director Compensation
Our sole director is also our sole executive officer and
information regarding his compensation is discussed above.
Employment Agreements
We have no employment agreements with any of our officers or
directors. We have entered into the following consulting agreements with our
directors/officers and affiliates:
We entered into a consulting agreement with Woodburn Holdings
Ltd. dated October 1, 2008 as amended, a private company beneficially owned by
our sole director and officer, pursuant to which we pay a monthly fee of $6,000
in consideration of certain financing, strategic planning and business
development services provided to the Company. We entered into a consulting
agreement dated effective October 1, 2008 with Timothy B. Brock, a significant
shareholder of the Company, pursuant to which Mr. Brock agreed to provide
certain management consulting services to the Company in consideration of a fee
of $3,000 per month.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.
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.
27
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT. |
The following table sets forth, as of the date of this report,
the total number of shares owned beneficially by each of our directors, officers
and key employees, individually and as a group, and the present owners of 5% or
more of our total outstanding shares. The stockholders listed below possess sole
voting and dispositive power with respect to the shares.
Name and Address |
Amount and Nature of Beneficial |
Percentage of |
Beneficial Ownership(1) |
Ownership |
Ownership(2) |
|
Shares |
|
|
|
|
Robert Baker(3) |
5,300,000 - Indirect |
33.2% |
885 Pyrford Road |
|
|
West Vancouver, British Columbia |
|
|
Canada V7S 2A2 |
|
|
|
|
|
Timothy Brock(4) |
5,000,000 - Indirect |
31.2% |
5866 Eagle Island |
|
|
West Vancouver, British Columbia |
|
|
Canada |
|
|
(1) |
The persons named above may be deemed to be a parent
and promoter of our company, within the meaning of such terms under the
Securities Act of 1933, as amended. |
|
|
(2) |
Based on 16,050,000 common shares issued and outstanding
as of August 12, 2010. |
|
|
(3) |
Mr. Baker holds title to his common stock in the name of
Woodburn Holdings Ltd., a British Columbia corporation, which he owns and
controls. Ownership totals include 5,000,000 shares directly owned by Mr.
Baker and 300,000 shares registered in the name of Sweetwater Capital
Corporation. Mr. Baker has voting and investment power over the Snowdon
shares held by Sweetwater Capital. |
|
|
(4) |
Mr. Brock holds title to his common stock in the name of
West Peak Ventures of Canada Limited, a British Columbia corporation,
which he owns and controls. |
Future Sales by Existing Stockholders
In March 2006, 5,000,000 shares of common stock were issued to
Woodburn Holdings Ltd, a corporation owned and controlled by our secretary,
Robert M. Baker and 5,000,000 shares of common stock were issued to West Peak
Ventures of Canada Limited, a corporation owned and controlled by Timothy Brock,
all of which, subject to volume restrictions, are free trading securities.
Woodburn Holdings Ltd. and West Peak Ventures of Canada Limited could each sell
up to 160,500 shares quarterly. If they do sell their stock into the market,
such sales could cause the market price of the stock to drop.
Because an officer/director and a major shareholder control us,
other shareholders ability to cause a change in the course of our operations is
eliminated. As such, the value attributable to the right to vote is gone. This
could result in a reduction in value to the shares because of the ineffective
voting power of the non-controlling shareholders.
Changes in Control
We are unaware of any contract, or other arrangement or
provision of our Articles or By-laws, the operation of which may at a subsequent
date result in a change of control of our company.
28
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
In March 2006, we issued a total of 5,000,000 shares of
restricted common stock to Woodburn Holdings, Ltd. (Woodburn), a corporation
owned and controlled by Robert M. Baker, our secretary, in consideration of $50
and 5,000,000 shares of restricted common stock to West Peak Ventures of Canada
Limited (West Peak), a corporation owned and controlled by Timothy Brock, in
consideration of $50.
Woodburn and West Peak Ventures advanced a total of $66,258 for
claim staking, legal and accounting expenses. The advances were repaid in full
by October, 2008.
During the year ended April 30, 2010, the Company paid
consulting fees and rent to a major shareholder and to two companies controlled
by two major shareholders, one of whom is also a director and officer, in the
amount of $127,880 (2009 - $67,375). The loan due to a company controlled by a
director of $7,698 (2009 - $Nil) is unsecured with an annual interest rate of 8%
with no specific terms of repayment. Amounts due to a major shareholder and to
two companies controlled by two major shareholder, one of whom is also a
director and officer, and included in accounts payable aggregate $23,000 (2009 -
$Nil).
Director Independence
Under NASDAQ Rule 5605(a)(2), a director is not considered to
be independent if he or she is also an executive officer or employee of the
company or accepted any compensation from the company in excess of $120,000
during any period of twelve consecutive months within the three years preceding
the determination of independence.
We determined that our sole director is not independent as that
term is defined by NASDAQ Rule 5605(a)(2).
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
The aggregate fees billed for each of the last two fiscal years
for professional services rendered by the principal accountant for our audit of
annual financial statements and review of financial statements included in our
Form 10-QSBs or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years was:
|
2010 |
$ |
39,636 |
|
|
Morgan & Company, Chartered
Accountants |
|
|
2009 |
$ |
23,650 |
|
|
Morgan & Company, Chartered Accountants |
|
The aggregate fees billed in each of the last two fiscal years
for assurance and related services by the principal accountants that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported in the preceding paragraph:
|
2010 |
$ |
Nil |
|
|
Morgan & Company, Chartered
Accountants |
|
|
2009 |
$ |
Nil |
|
|
Morgan & Company, Chartered Accountants |
|
The aggregate fees billed in each of the last two fiscal years
for professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning was:
|
2010 |
$ |
Nil |
|
|
Morgan & Company, Chartered
Accountants |
|
|
2009 |
$ |
Nil |
|
|
Morgan & Company, Chartered Accountants |
|
The aggregate fees billed in each of the last two fiscal years
for the products and services provided by the principal accountant, other than
the services reported in paragraphs (1), (2), and (3) was:
29
|
2010 |
$ |
Nil |
|
|
Morgan & Company, Chartered
Accountants |
|
|
2009 |
$ |
Nil |
|
|
Morgan & Company, Chartered Accountants |
|
Our pre-approval policies and procedures for the board, acting
in lieu of a separately designated, independent audit committee, described in
paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approve all accounting related activities prior to the performance of any
services by any accountant or auditor.
The percentage of hours expended on the principal accountants
engagement to audit our financial statements for the most recent fiscal year
that were attributed to work performed by persons other than the principal
accountants full time, permanent employees was 0%.
|
|
Incorporated by reference |
|
Exhibit |
|
|
|
|
Filed |
Number |
Document Description |
Form |
Date |
Number |
herewith |
3.1 |
Articles of Incorporation. |
SB-2 |
06/06/06 |
3.1 |
|
|
|
|
|
|
|
3.2 |
Bylaws. |
SB-2 |
06/06/06 |
3.2 |
|
|
|
|
|
|
|
4.1 |
Specimen Stock Certificate. |
SB-2 |
06/06/06 |
4.1 |
|
|
|
|
|
|
|
10.1 |
Corporate Support Agreement
dated July 1, 2009 between Sweetwater Capital Corp. and Snowdon Resources
Corporation |
10-Q |
3/23/09 |
10.1 |
|
|
|
|
|
|
|
10.2 |
Consulting Agreement between
Snowdon Resources Corporation and Timothy B. Brock |
10-Q |
3/23/09 |
10.2 |
|
|
|
|
|
|
|
10.3 |
Consulting Agreement between
Snowdon Resources Corporation and Woodburn Holdings Ltd. |
10-Q |
3/23/09 |
10.3 |
|
|
|
|
|
|
|
10.4 |
2008 Nonqualified Stock Option
Plan |
S-8 |
12/02/08 |
10.1 |
|
|
|
|
|
|
|
10.5 |
Agreement and Mutual Release
dated July 20, 2009 between Snowdon Resources Corporation, Eagle Hill
Exploration Corporation, and Eagle Hill Arizona Uranium LLC |
8-K |
7/24/09 |
10.1 |
|
|
|
|
|
|
|
10.6 |
Contract for Public Relations
dated November 24, 2009 between Vorticom and Snowdon Resources Corporation
|
10-Q |
3/22/10 |
10.7 |
|
|
|
|
|
|
|
10.7 |
Mineral Exploration And Option
Agreement dated January 1, 2009 between Eagle Hill Uranium LLC, Limestone
Resources LLC, Quaterra Alaska, Inc., and Snowdon Resources Corporation
|
10-Q |
3/22/10 |
10.8 |
|
|
|
|
|
|
|
10.8 |
|
|
|
|
X
|
|
|
|
|
|
|
14.1 |
Code of Ethics. |
10-KSB |
9/14/07 |
14.1 |
|
|
|
|
|
|
|
31.1 |
Certification
of Principal Executive Officer and Principal Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
X |
|
|
|
|
|
|
32.1 |
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
Executive Officer and Chief Financial Officer. |
|
|
|
X
|
|
|
|
|
|
|
99.1 |
Subscription Agreement. |
SB-2 |
06/06/06 |
99.1 |
|
|
|
|
|
|
|
99.2 |
Audit Committee Charter. |
10-KSB |
9/14/07 |
99.2 |
|
|
|
|
|
|
|
99.3 |
Disclosure Committee Charter.
|
10-KSB |
9/14/07 |
99.3 |
|
30
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities and
Exchange Act, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 13th day of August,
2010.
|
SNOWDON RESOURCES CORPORATION
|
|
|
|
|
|
BY: |
/s/
Robert M. Baker |
|
|
Robert M. Baker, President, Principal Executive
Officer, Treasurer, |
|
|
Principal Financial Officer, Principal Accounting
Officer, Secretary |
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 dated indicated.
Signature
|
Title |
Date |
|
|
|
/s/ Robert M. Baker |
|
August 13, 2010 |
|
|
|
|
President, Principal Executive Officer,
Treasurer |
|
|
Principal Financial Officer, Principal
Accounting |
|
|
Officer, Secretary and a member of the Board of
Directors |
|
31