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GENTOR RESOURCES INC. - Quarter Report: 2011 June (Form 10-Q)

Converted by EDGARwiz

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


(Mark One)


x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2011


or


o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period form ____________________ to ____________________.



Commission file number 333-130386



GENTOR RESOURCES, INC.

___________________________________________

(Exact Name of registrant as specified in its charter)



Florida

20-2679777

-------------------------------

      -------------------------

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 



 1 First Canadian Place, Suite 7070

100 King Street West

Toronto, Ontario M5X 1E3

Canada

___________________________________________

 (Address of principal executive offices)(Zip Code)


(416) 366-2221

___________________________________________

(Registrant=s telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 the filing requirements for at least the past 90 days.

x YES o 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 (Section 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 reports).  o YES o NO


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

 

          Large accelerated filer o


          Accelerated filer o


          Non-accelerated filed  o


          Smaller reporting company x


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the exchange Act).  oYES x NO



APPLICABLE ONLY TO CORPORATE ISSUERS


As of the date this report, there were 59,368,340 shares of the registrant's $0.0001 par value Common Stock outstanding.







GENTOR RESOURCES, INC.


TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION


Item 1.

Interim Condensed Consolidated Financial Statements as at and for the Three and Six

    Months Ended June 30, 2011


Item 2.

Management=s Discussion and Analysis of Financial Condition and Results of Operations.


Item 3.

Quantitative and Qualitative Disclosures About Market Risk.


Item 4.

Controls and Procedures.


PART II - OTHER INFORMATION


Item 1.

Legal Proceedings.


Item 1A.

Risk Factors.


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.


Item 3.

Defaults Upon Senior Securities..


Item 5.

Other Information.


Item 6.

Exhibits.


SIGNATURES







PART I - FINANCIAL INFORMATION


(a) Condensed Consolidated Balance Sheets


GENTOR RESOURCES, INC.

(an Exploration Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in US dollars)

(unaudited)

Statement of Financial Position

ASSETS

 

As at

06/30/2011

12/31/2010

 

 

 

Current

 

 

Cash

$          7,537,245

$            5,331,916

Prepaids and advances (note 4)

144,072

46,809

Total current assets

$          7,681,317

$            5,378,725

 

 

 

Long term deposit (note 5)

10,000

10,000

Capital assets (note 7)

385,425

376,297

Mineral properties (note 6)

18,248,198

18,248,198

 

 

 

Total assets

$        26,324,940

$          24,013,220

 

 

 

LIABILITIES

 

 

 

Current

 

 

Accounts payable

$             293,684

$               413,307

Accrued liabilities

26,519

50,062

Due to related parties (note 8)

205,113

211,351

Note payable (note 9)

796,566

769,733

Loan payable – current portion (note 10)

37,096

36,729

Total current liabilities

1,358,978

1,481,182

 

 

 

Loan payable – long term portion (note 10)

18,827

37,467

 

 

 

Total liabilities

$          1,377,805

$            1,518,649

 

 

 

SHAREHOLDER’S EQUITY

 

 

 

Authorized

 

 

100,000,000 Common Shares, $0.0001 par value

 

 

50,000,000 Preferred Shares, $0.0001 par value

 

 

Issued and outstanding

 

 

59,368,340 Common Shares (December 31, 2010 –              52,851,672)(note 12)


5,936


5,285

Additional paid-in capital

36,752,553

32,067,618

Deficit accumulated during the exploration stage

(11,811,354)

(9,578,332)

Total shareholders’ equity

24,947,135

22,494,571

Total liabilities and shareholder’s equity

$        26,324,940

24,013,220


See accompanying summary of accounting policies and notes to the interim condensed consolidated financial statements








(b) Condensed Consolidated Statements of Operations


GENTOR RESOURCES, INC.

(an Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Stated in US dollars)

(unaudited)

            


For the three month period ended 06/30/2011


For the three month period ended 06/30/2010


For the six month period ended 06/30/2011


For the six month period ended 06/30/2010


Cumulative from inception on 03/24/2005 to 06/30/2011

Expenses

 

 

 

 

 

 

 

 

 

 

 

Field camps expenses

$          34,842

$           4,313

$         62,763

$         85,605

$       559,306

Surveying

-

-

-

-

64,854

Geophysics

38,210

15,132

103,698

652,389

763,725

Geochemistry

23,660

-

26,896

-

210,904

Geology

171,985

563

268,342

1,063

860,403

Drilling

274,738

649

401,864

649

3,520,635

Environmental testing

-

326

-

326

28,210

Mineral properties

-

25,000

100,000

50,000

663,045

Consulting fees – related parties

-

-

-

-

12,400

Consulting fees – others

11,784

-

19,070

-

209,520

Management fees

-

-

-

-

2,000

Professional fees

146,304

119,363

333,058

162,821

1,528,724

General and administrative

expenses

460,038

437,464

828,946

603,322

2,892,457

Depreciation

45,592

37,567

88,505

69,077

461,072

Net Operating Loss          

(1,207,153)

(640,377)

(2,233,142)

(1,625,252)

(11,777,255)

Interest income

65

-

120

87

2,674

(Loss) gain on sale of capital assets

-

-

-

(1,213)

6,507

Rental income

-

-

-

-

6,720

Loss on deposit

-

-

-

-

(50,000)

Net loss

$   (1,207,088)

$    (640,377)

$ (2,233,022)

$ (1,626,378)

$  (11,811,354)

 

 

 

 

 

 

Basic and diluted loss per common share (note 12(e))

$            (0.02)

$          (0.02)

$(0.04)

$          (0.05)

 

 

 

 

 

 

 

Weighted average number of basic and diluted common shares outstanding (note 12(e))

58,368,340

40,088,275

58,039,630

33,074,834

 


See accompanying summary of accounting policies and notes to the interim condensed consolidated financial statements







(c) Condensed Consolidated Statements of Cash Flows


GENTOR RESOURCES, INC.

(an Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US dollars)

(unaudited)

 

For the six month period ended

06/30/2011

For the six month period ended

06/30/2010

Cumulative from inception on 03/24/2005 to 06/30/2011

CASH PROVIDED BY (APPLIED TO):

 

 

 

Operating activities:

 

 

 

Adjustments required to reconcile net loss with net

cash used in operating activities

 

 

 

Net Loss

$         (2,233,022)

$      (1,626,378)

$   (11,811,354)

Depreciation

88,505

69,077

461,072

Loss (gain) on sale of capital asset

-

1,213

(6,507)

Accrued interest included in notes payable

26,833

49,262

121,948

Stock based compensation – employees

243,550

-

384,384

Stock based compensation – consultants

-

-

97,500

Loss on deposit

-

-

50,000

Shares issued for mineral properties

-

-

100,000

Shares issued for services

-

180,000

180,000

Change in non cash working capital balance

 

 

 

Accounts payable

(144,551)

(274,434)

212,552

Accrued liabilities

(23,543)

-

17,701

Prepaids and advances

(97,263)

330

(191,701)

Cash used in operating activities

(2,139,491)

(1,600,930)

(10,384,405)

Financing Activities

 

 

 

Loan payable repayment

(18,273)

(17,913)

(89,576)

Notes payable

-

767,237

676,389

Due to related parties/advances

(6,238)

(326,704)

(326,041)

Common shares and warrants issued (net of issuance costs)

4,442,036

1,895,480

18,172,345

Cash provided from financing activities

4,417,525

2,318,100

18,433,117

Investing activities

 

 

 

Purchase of capital assets

(72,705)

(30,272)

(603,606)

Gentor Resources Limited acquisition (note 3)

-

255,889

255,889

Proceeds from disposal of capital assets

-

4,000

15,250

Purchase of a certificate of deposit

-

-

(10,000)

Mineral properties

-

-

(169,000)

Cash used in investing activities

(72,705)

229,617

(511,467)

Net increase in cash

2,205,329

946,787

7,537,245

Cash, beginning of the period

5,331,916

17,547

 

Cash, end of the period

$            7,537,245

$            964,334

$           7,537,245


Supplemental cash flow information (note 13)


See accompanying summary of accounting policies and notes to the interim condensed consolidated financial statements







(d) Condensed Consolidated Statements of Shareholders= Equity


GENTOR RESOURCES, INC.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Six Month Period Ended June 30, 2011

(Stated in US dollars)

(unaudited)

 



Common

Shares


Common Shares

Amount


Additional

Paid-In-

Capital



Accumulated Deficit

Total

Shareholders= Equity

 (deficiency)

Shares issued on 03/24/2005 at $0.0004 per share

12,500,000

$     1,250

$         48,750

$                     -

 $          50,000

Net loss for the year

-

-

-

(97,637)

(97,637)

Balance at 12/31/2005

12,500,000

1,250

48,750

(97,637)

(47,637)

Shares issued on 12/15/2006 at $0.20 per share

5,000,000

500

999,500

-

1,000,000

Net loss for the year

-

-

-

(233,900)

(233,900)

Balance at 12/31/2006

17,500,000

$     1,750

1,048,250

(331,537)

718,463

Shares issued on 7/23/2007 at $0.20 per share

500,000

$          50

99,950

-

100,000

Shares issued on 07/31/2007 at $0.20 per share

1,000,000

100

199,900

-

200,000

Shares issued on 11/20/2007 at $0.25 per share

1,000,000

100

249,900

-

250,000

Shares issued on 12/17/2007 at $1.00 per share

2,500,000

250

2,374,750

-

2,375,000

Net loss for the year

-

-

-

(1,881,910)

(1,881,910)

Balance at 12/31/2007

22,500,000

$     2,250

3,972,750

(2,213,447)

1,761,553

Net loss for the year

-

-

-

(3,189,473)

(3,189,473)

Balance at 12/31/2008

22,500,000

$     2,250

$    3,972,750

$   (5,402,920)

$   (1,427,920)

Net loss for the year

-

-

-

(564,947)

(564,947)

Balance at 12/31/2009

22,500,000

$     2,250

$    3,972,750

$   (5,967,867)

$  ( 1,992,867)

Shares issued on 03/08/2010 at $1.02 per share (notes 3 and 12)

13,063,000

1,306

13,322,954

-

13,324,260

Shares issued at $0.75 per share on 04/28/2010 (note 12)

2,600,000

260

4,679,740

-

4,680,000

Shares issued at $0.50 per share on 04/29/2010 (note 12)

4,000,000

400

1,164,512

-

1,164,912

Warrants issued on 04/29/2010 (note 12)

-

-

730,568

-

730,568

Shares issued at $0.75 per share on 10/28/2010 (note 12)

4,000,000

400

2,260,794

-

2,261,194

Warrants issued on 10/28/2010 (note 12)

-

-

738,806

-

738,806

Shares issued at $0.75 per share  on 10/29/2010 (note 12)

333,334

33

183,844

-

183,877

Warrants issued on 10/29/2010 (note 12)

-

-

60,049

-

60,049

Shares issued at $0.75 per share on 11/02/2010 (note 12)

2,666,667

267

1,507,196

-

1,507,463

Warrants issued on 11/02/2010 (note 12)

-

-

492,537

-

492,537

Shares issued at $0.75 per share on 11/18//2010 (note 12)

26,000

3

14,695

-

14,698

Warrants issued on 11/18/2010 (note 12)

-

-

4,802

-

4,802

Shares issued at $0.75 per share on 12/22/ 2010 (note 12)

3,662,671

366

2,032,186

-

2,032,552

Warrants issued on 12/22/2010 (note 12)

-

-

663,851

-

663,851

Issuance of stock options on 08/30/2010 (note 12)

-

-

238,334

-

238,334

Net loss for the year

-

-

-

(3,610,465)

(3,610,465)

Balance at 12/31/2010

52,851,672

$     5,285

$  32,067,618

$   (9,578,332)

$    22,494,571

Shares issued at $0.75 per shares on (note 12) on 01/18/2011

200,000

20

112,762

-

112,782

Warrants issued on 01/18/2011 (note 12)

-

-

37,218

-

37,218

Shares issued at $0.75 per shares on 01/24/1011 (note 12)

250,000

25

140,952

-

140,977

Warrants issued on 01/24/2011 (note 12)

-

-

46,523

-

46,523

Shares issued at $0.75 per shares on

01/26/ 2011 (note 12)

5,333,334

533

3,006,986

-

3,007,519

Warrants issued on 01/26/2011 (note 12)

-

-

992,481

-

992,481

Shares issued at $0.75 per shares on 01/27/2011 (note 12)

200,000

20

112,762

-

112,782

Warrants issued on 01/27/2011 (note 12)

-

-

37,218

-

37,218

Shares issued at $0.75 per shares on 02/24/2011 (note 12)

222,000

22

125,166

-

125,188

Warrants issued on 02/24/2011 (note 12)

-

-

41,312

-

41,312

Shares issued at $0.75 per shares on 03/04/2011 (note 12)

33,334

3

18,794

-

18,797

Warrants issued on 03/04/2011 (note 12)

-

-

6,203

-

6,203

Shares issued at $0.75 per shares on 03/07/2011 (note 12)

113,000

11

63,711

-

63,722

Warrants issued on 03/07/2011 (note 12)

-

-

21,028

-

21,028

Shares issued at $0.75 per shares on 03/15/2011 (note 12)

165,000

17

93,028

-

93,045

Warrants issued on 03/15/2011 (note 12)

-

-

30,705

-

30,705

Financing costs (note 12)

-

-

(445,464)

-

(445,464)

Stock based compensation expense (note 12)

-

-

243,550

-

243,550

Net loss for the period

-

-

-

(2,233,022)

(2,233,022)

 

59,368,340

$     5,936

$  36,752,553

$ (11,811,354)

$    24,947,135


See accompanying summary of accounting policies and notes to the interim condensed consolidated financial statements








(e) Notes to the Unaudited Interim Condensed Consolidated Financial Statements


1.

ORGANIZATION AND GOING CONCERN


Gentor Resources, Inc. (“the Company”) was incorporated on March 24, 2005 under the Florida Business Corporation Act.  The Company is an exploration stage corporation formed for the purpose of prospecting and developing mineral properties.  

  

The accompanying interim condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, the realization of assets and satisfaction of liabilities in the normal course of business.  For the six months ended June 30, 2011, the Company has a loss from operations of $2,233,022 (six months ended June 30, 2010 - $1,626,378) and accumulated deficit of $11,811,354 (December 31, 2010 – $9,578,332), which raises substantial doubt on the Company’s ability to continue on a going concern basis.  


The Company intends to fund its operations through equity financing arrangements, which may be insufficient to fund its capital expenditure, working capital and other cash requirements. The Company’s continued existence is dependent upon it emerging from the exploration stage, obtaining additional financing to continue operations, exploring and developing the mining properties and the discovery, development and sale of ore reserves.


These interim condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.


2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a)

BASIS OF PRESENTATION


The accompanying interim condensed consolidated financial statements of the Company for the three and six month periods ended June 30, 2011 and 2010 are unaudited. However, in the opinion of the Company, all adjustments considered necessary for a fair presentation have been reflected therein. Certain financial information which is normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), but is not required for interim reporting purposes, has not been presented. The accompanying interim condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2010. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.


 b)

BASIS OF CONSOLIDATION


The Company’s interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Gentor Idaho and Gentor Resources Limited (formerly known as APM Mining Limited).  Gentor Idaho was incorporated on June 28, 2007 under the laws of the State of Idaho.  APM Mining Limited was incorporated on November 19, 2009 under the laws of the British Virgin Islands and changed its name from APM Mining Limited on April 30, 2010 following its acquisition by the Company on March 8, 2010 (see note 3). Intercompany balances and transactions have been eliminated in preparing the accompanying interim condensed consolidated financial statements.



c)

MINERAL PROPERTIES AND EXPLORATION COSTS


Exploration costs pertaining to mineral properties with no proven reserves are charged to operations as incurred. When it is determined that mineral properties can be economically developed as a result of establishing proven and probable reserves, costs incurred to develop such properties are capitalized. Such costs will be depreciated using the units-of-production method over the estimated life of the probable reserves. The Company is in the exploration stage and has not yet realized any revenue from its planned operations.


d)

CAPITAL ASSETS


Capital assets are recorded at cost less accumulated depreciation. Depreciation is recorded as follows:


Vehicle

-

Straight line over a range of two to four years

Mining equipment

-

Straight line over four years

Office equipment

-

Straight line over four years

Furniture and fixtures

-

20% declining balance basis

Building

-

Straight line over five years

 

e)

ASSET IMPAIRMENT


The Company monitors events and changes in circumstances which may require an assessment of the recoverability of its long lived assets.  If required, the Company would assess recoverability using estimated undiscounted future operating cash flows of the related asset or asset grouping. Assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups.  If the carrying amount of an asset is not recoverable, an impairment loss is recognized in operations, measured by comparing the carrying amount of the asset to its fair value.  No impairment losses were warranted or recorded for the three and six months ended June 30, 2011, and 2010.  Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less cost to sell.


f)

ASSET RETIREMENT OBLIGATIONS


The fair value of the liability of an asset retirement obligation is recorded when it is incurred and the corresponding increase to the asset is depreciated over the estimated life of the asset. The liability is periodically adjusted to reflect changes in the estimates present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the asset retirement obligation.  The Company has no asset retirement obligations recorded on its balance sheets as at June 30, 2011 and December 31, 2010.    

 

g)

STOCK BASED COMPENSATION


The Company has a stock option plan, which is described in note 12(c).  The Company uses the fair value method of accounting for stock options granted to directors, officers and employees whereby the fair value of options granted measured at the grant date is recorded as a compensation expense in the financial statements over the requisite employee service period (usually the vesting period).  Compensation expense on stock options granted to non-employees is measured at the earlier of the completion of performance and the date the options are vested using the fair value method and is recorded as an expense in the same period as if the Company had paid cash for the goods or services received.  Any consideration paid by directors, officers, employees and consultants on exercise of stock options or purchase of shares is credited to capital stock.  Shares are issued from treasury upon the exercise of stock options.  The Company estimates that all options will vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.


h)

CASH


Cash consists of bank balances. The Company maintains cash in bank deposit accounts that at times, may exceed US and Canadian federally insured limits.  The Company has not experienced any losses in such accounts.


i)

FOREIGN EXCHANGE


The Company’s functional and reporting currency is United States dollars. The functional currency of the foreign operations is in United States dollars and amounts are translated as follows: monetary assets and liabilities are translated at the spot rates of exchange in effect at the end of the period; non-monetary items are translated at historical exchange rates in effect on the dates of the transactions. Revenues and expense items are translated at average rates of exchange in effect during the period, except for depreciation which is translated at its corresponding historical rate. Realized and unrealized exchange gains and losses are included in the condensed consolidated statements of operations.


j)

USE OF ESTIMATES


The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future. The Company bases its estimates and assumptions on historical experience, current facts, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Significant estimates and assumptions include those related to the recoverability of mineral properties and capital assets, estimation of future income taxes, useful lives of depreciable assets, and fair value estimates for stock options and warrants.


k)

FAIR VALUE OF FINANCIAL INSTRUMENTS


Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments.  Currently, the Company does not use derivative instruments to reduce its exposure to these risks. The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, due to related parties, loan payable and note payable. The carrying value of its financial instruments, other than loan payable, approximates their fair values due to the relatively short maturity of these instruments.


l)

INCOME TAXES


Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes, which require the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, and for the tax loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes deferred taxes for the estimated future tax effects attributable to deductible temporary differences and loss carryforwards when realization is more likely than not.  The deferred taxes for the Company amount to nil at the balance sheet date.


Accounting Standards Codification 740, “Income Taxes” requires that the Company recognize the impact of a tax position in our financial statement if the position is more likely than not of being sustained upon examination and on the technical merits of the position. At June 30, 2011, the Company has no material unrecognized tax benefits. The Company does not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months.


m)

LOSS PER SHARE


Basic loss per share calculations are based on the weighted average number of common shares issued and outstanding during the period.  Diluted earnings per share is calculated using the treasury method.  The treasury method assumes that outstanding stock options and share purchase warrants with an average exercise price below market price of the underlying shares are exercised and the assumed proceeds are used to repurchase common shares of the Company at the average market price of the common shares for the period.  As the Company is incurring losses, basic and diluted loss per share are the same since including the exercise of outstanding stock options and share purchase warrants in the diluted loss per share calculation would be anti-dilutive.   


3.

ACQUISITION


On March 8, 2010, pursuant to a stock exchange agreement, the Company acquired all of the issued and outstanding shares of Gentor Resources Limited (formerly APM Mining Limited) in exchange for 10,362,000 of its own common shares.  

 

Gentor Resources Limited is a mineral exploration company which has secured the earn-in rights to specific exploration ground holdings in the Sultanate of Oman (“Oman”), comprising sites identified as having significant potential for copper mineralization.


The purchase price for this acquisition was $13,395,583, which included 10,362,000 of the Company’s common shares at a price of $1.02 per share and direct costs of $2,826,343.   As part of the transaction costs, the Company issued 2,701,000 shares at a price of $1.02 per share to a related party in exchange for capital raising services.  Included in direct costs are $71,323 of costs that are part of accounts payable and accrued liabilities. The price of $1.02 per share was based on the market price of the shares on March 8, 2010, being the date the Company and Gentor Resources Limited closed the agreement.


The acquisition was accounted for as a purchase of assets. The total consideration and transaction costs have been allocated to the net assets acquired and liabilities assumed as follows:


Issuance of 10,362,000 common shares

$     10,569,240

Transaction costs (including issuance of 2,701,000 common shares)

2,826,343

Purchase Price

 $    13,395,583

 

 

Net assets acquired and liabilities assumed:

 

Cash

$          255,889

Prepaids and deposits

2,371

Capital assets

108,921

Mineral properties

13,748,198

Accounts payable and accrued liabilities

(190,415)

Due to related parties

(529,381)

Net assets acquired

$13,395,583


In connection with the foregoing transaction, the Company issued 2,500,000 shares to a non-US Person in connection with the amendment of a certain Earn-In Agreement between Al Fairuz Mining Company, LLC (“Al Fairuz Mining”) and Gentor Resources Limited with respect to the Company’s Block 5 project located in the Sultanate of Oman. The 2,500,000 shares were issued on April 28, 2010 at a price of $1.80 per share. Consequently, there was an increase to mineral properties of $4,500,000.


4.

PREPAIDS AND ADVANCES


The prepaids and advances include prepaid rent and insurance and employee advances as at June 30, 2011.  As at December 31, 2010, prepaids and advances included only prepaid rent and insurance.


5.

LONG TERM DEPOSIT


The long term deposit is a $10,000 certificate of deposit issued on March 11, 2011 and assigned to the United States Department of the Interiors, Bureau of Land Management, as a reclamation bond for the installation of a bridge crossing the Patterson creek at the Company’s Idaho project.  


This certificate of deposit bears an interest rate of 1.75% per annum and matures on March 11, 2012.  It will automatically roll over to maintain the bond in good standing.


6.

MINERAL PROPERTIES


Oman Project


On March 8, 2010, the Company acquired, through its wholly-owned subsidiary Gentor Resources Limited, the earn-in rights to the Block 5 and Block 6 copper exploration projects located in Oman.  Pursuant to the Earn-in Agreement between Al Fairuz Mining and Gentor Resources Limited, which relates to the Block 5 project, the Company has the right to earn up to a 65% equity position in Al Fairuz Mining.  Pursuant to the earn-in Agreement between Al Zuhra Company, LLC (“Al Zuhra Mining”) and Gentor Resources Limited, which relates to the Block 6 project, the Company has the right to earn up to a 70% equity position in Al Zuhra Mining.


The entire balance of $18,248,198 recorded in mineral properties in the balance sheet as of June 30, 2011 (December 31, 2010 - $18,248,198) is attributable to the Oman Project.


Idaho Project


Effective as of July 23, 2007, Bardswich LLC, an entity that is owned and controlled by Lloyd J. Bardswich, who was the president and CEO of the Company, and Gentor Idaho, a wholly owned subsidiary of the Company, entered into an assignment agreement whereby Bardswich LLC assigned all of its rights, title and interest in and to the Idaho Option Agreement (“Idaho Option Agreement”) to Gentor Idaho in exchange for $40,000 in cash and 500,000 shares of the Company’s common stock. The Idaho Option Agreement dated effective as of March 1, 2007 relates to a certain mineral lease agreement and an option to purchase twenty one (21) patented mining claims located over approximately 376 acres of real property and four other parcels of approximately 216 acres (collectively, the  “Optioned Properties”) in Lemhi County, Idaho.  An initial payment of $40,000 in cash was made by the Idaho claim owner upon execution of the Idaho Option Agreement and an additional payment of $60,000 was made on the six-month anniversary date of signing the original Idaho Option Agreement.  A payment of $100,000 was made during the month of March 2008 with respect to the first anniversary date of the Idaho Option Agreement. Additional payments of (i) $100,000 in cash was due on or before the second and third anniversary date of the Idaho Option Agreement, and (ii) $200,000 in cash is due on or before the fourth anniversary date thereafter until the purchase price is paid or the Idaho Option Agreement is terminated or cancelled. However, on March 1, 2009, the second anniversary date of the Idaho Option Agreement, the Idaho Claim Owner agreed to accept four equal payments of $25,000 on each March 1, May 1, July 1, and September 1, 2009 in lieu of the $100,000 payment that was due in full on March 1, 2009.  All payments with respect to the second anniversary date were made accordingly. Similarly, on February 14, 2010, the Idaho Claim Owner agreed to accept four equal payments of $25,000 each on each of March 1, May 1, July 1, and September 1, 2010 in lieu of the $100,000 payment that was due in full on March 1, 2010, the third anniversary date of the Idaho Option Agreement. The $25,000 payments that were due on March 1, May 1, July 1 and September 1, 2010 were paid to the Idaho Claim Owner.  On March 8, 2011, the Idaho Claim Owner agreed to accept a payment of $100,000 in lieu of the $200,000 payment that was due in full on March 1, 2011 (the fourth anniversary date of the Idaho Option Agreement). The foregoing agreed upon $100,000 payment has been paid to the Idaho Claim Owner.  All payments that become due subsequent to March, 2011 remain as stipulated in the original agreement.  To the extent that the Company makes any advanced minimum royalty payments, the Company is entitled to receive a corresponding credit against any required net smelter return royalties that are otherwise required to be paid to the Idaho claim owner under the Idaho Option Agreement. The Idaho Option Agreement also grants the Company an option to purchase the Idaho claim  owner’s rights to the Optioned Properties, including but not limited to the IMA  Mine, for a total purchase price of $5,000,000, excluding there from the right of the Idaho claim owner to receive a three percent (3%) royalty on net revenue generated from the sale of any molybdenum, copper, lead and zinc recovered from the IMA Mine and five percent (5%) royalty on the net revenue generated from the sale of all other ores, minerals, or other products recovered from the Optioned Properties.


7.

CAPITAL  ASSETS


June  30, 2011

 

 

 

 

 

 

 

 

Cost and additions during the period

Accumulated Depreciation

Net Book Value

Vehicle

$                  168,328

$              42,171

$     126,157

Mining equipment

204,602

103,012

101,590

Office equipment

60,897

33,126

27,771

Furniture and Fixtures

13,097

2,954

10,143

Building

358,241

238,477

119,764

 

$                  805,165

$            419,740

$     385,425

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

Cost and additions during the period

Accumulated Depreciation

Net Book Value

Vehicle

$                  108,921

$              22,691

$ 86,230

Mining equipment

189,505

78,079

111,426

Office equipment

40,488

25,752

14,736

Furniture and Fixtures

10,377

2,060

8,317

Building

358,241

202,653

155,588

 

$                  707,532

$            331,235

$     376,297

 

 

 

 


8.

RELATED PARTY TRANSACTIONS


As of June 30, 2011, a balance of $194,969 advanced to the Company from a former director and officer of the Company was outstanding (December 31, 2010 - $194,969).  This advance is unsecured, non-interest bearing and re-payable upon demand.


In June 2009, an amount of $79,675 was advanced by two directors of the Company and used to repay accounts payable owed by the Company.  As of June 30, 2011, $4,686 is still owing (December 31, 2010 - $4,686).  These advances are unsecured, non-interest bearing and re-payable upon demand.


As of June 30, 2011, an amount of $5,458 (December 31, 2010 - $9,923) was due to a corporation of which, a director and officer of the Company is a partner.  During the six months ended June 30, 2011, the Company reimbursed to this corporation travel and other office expenses incurred on behalf of this director and officer of the Company in the amount of $14,977 (six months ended June 30, 2010 - $124,718).


As of June 30, 2011, no interest was owed to two directors of the Company (December 31, 2010 - $1,772) relating to the $193,771 previously advanced to the Company for working capital purposes during the first quarter of 2010.  The principal amount of this advance was repaid during the fourth quarter of 2010.


All transactions are in the normal course of operations and are measured at the exchange value.


9.

NOTE PAYABLE


As of June 30, 2011, the Company has an outstanding promissory note of $796,566, (December 31, 2010 - $769,733) which includes $80,944 (December 31, 2010 - $54,111) of accrued interest. This note bears interest at a rate of 8% per annum, is unsecured and is due on demand.


10.

LOAN PAYABLE


On December 12, 2008, the Company entered into a financing agreement for the purchase of a bulldozer in the amount of $145,500. The loan bears an interest rate of 1.99% and has a term of 48 months with monthly principle and interest payments of $3,156.  The current portion, which is payable within 1 year, is $ 37,096 As of June 30, 2011, the loan payable repayments for each of the following periods are as follows:



 

2011

2012

Total

Loan payment

$18,456

$37,467

$55,923


The estimated fair value of the loan is $54,092 as at June 30, 2011 (December 31, 2010 - $71,028) and it is calculated using the borrowing rates currently charged by financial institutions or loans with similar terms and maturities.


11.

REPORTABLE SEGMENTS


The Company operates in one business segment: the exploration, mine development and extraction of precious metals in two geographic areas, the Sultanate of Oman and the United States.



As at

June 30,

2011

December 31, 2010

 

 

 

Oman – mineral properties

$             18,248,198

$          18,248,198

Oman – capital assets

198,221

140,390

United States – capital assets

187,204

235,907

 

$             18,663,623

$          18,624,495


12.

SHARE CAPITAL


a)

Authorized Share Capital


The authorized share capital of the Company consists of 50,000,000 preferred shares and 100,000,000 common shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote and no holder of the common shares shall be entitled to any right of cumulative voting. Preferred shares may be issued in series with distinctive serial designations.


b)

Issued Share Capital


From January 18, 2011 to March 15, 2011, as part of a private placement the Company sold 6,516,666 units at a price of $0.75 per unit for gross proceeds of $4,887,500.  Each unit consists of one share of common stock of the Company and one warrant (“Warrant”) which entitles the holder thereof to purchase one additional common share (see note 12(d)).  Each Warrant is exercisable for a period of 12 months from the date of issuance at an exercise price of $0.90 per share.  


As of June 30, 2011, the Company had outstanding 59,368,338 (December 31, 2010 – 52,851,672) common shares and no preferred shares.


c)

Stock Based Compensation


On July 28, 2010, the Company announced that it had authorized and approved the adoption and implementation of the Gentor Resources 2010 Performance and Equity Incentive Plan (the “Plan”). Persons eligible to receive awards under the Plan include officers or employees of the Company, directors and advisors to the Company.  The aggregate number of shares of common stock of the Company, par value $0.0001 per share subject to awards under the Plan is 4,000,000 shares. The Plan authorizes stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, and other forms of awards granted or denominated in Common Stock, as well as performance based awards, which may be denominated in cash or stock.


On August 30, 2010 (the “Grant Date”), the Company announced that 725,000 non-qualified stock options were issued to various employees and consultants under the Plan.  The holder is entitled to purchase one share of the $0.0001 par value common stock of the Company at a purchase price of $0.75 per share within 5 years.  The options vest at a rate of 25% on each six month anniversary of the Grant Date.


On April 1, 2011 (the “Grant Date”), the Company announced that 400,000 non-qualified stock options were issued to various employees.  After the granting of the foregoing awards, and pursuant to the terms of the Plan, the remaining aggregate number of shares of common stock of the Company, par value $0.0001 per share subject to awards under the Plan is 2,875,000 shares. The holder is entitled to purchase one share of the $0.0001 par value common stock of the Company at a purchase price of $0.90 per share within 5 years.  The options vest at a rate of 25% on each six month anniversary of the Grant Date.


As at June 30, 2011, the Company had 1,125,000 stock options outstanding to acquire common shares at a weighted average price of $0.80. The remaining weighted average contractual life of outstanding options is 4.38 years.  The weighted average fair value of the options granted on April 1, 2011 is $1.08 per share. All of the stock options granted are expected to vest.   As of June 30, 2011, the forfeiture estimate of the outstanding options is 0%.  The number of stock options forfeited, cancelled, expired and exercised was nil.  As at June 30, 2011, there were 181,250 stock options exercisable and an additional 943,750 stock options outstanding but not yet exercisable that are expected to vest. The weighted average exercise price of the options exercisable is $0.75 with a remaining weighted average contractual life of 4.17 years.  


During the six months ended June 30, 2011, the Company recognized in the statement of operations as an expense $243,550 (six months ended June 30, 2010 - $nil). This amount was credited accordingly to additional paid-in capital in the balance sheet (see note 13).


The Black-Scholes option-pricing model was used to estimate values of all stock options granted in 2011 based on the following assumptions:

 

(i)

risk-free interest rate: 2.24% which is based on the 5 Year US Treasury Bond Rate (December   31, 2010 – 1.39%)

(ii)

expected volatility: 68.71% which is based on the Company’s historical stock price

(December 31, 2010 – 69.20%)

(iii)

expected life: 5 years (December 31, 2010 – 5 years)

(iv)

expected dividends: $Nil (December 31, 2010 - $Nil)


d)

Warrants


As at June 30, 2011, the Company had outstanding and exercisable common stock purchase warrants (“Warrants”) of 21,205,340 (December 31, 2010 – 14,688,672) entitling the holder to purchase one common share of the Company:

      


Date of Issue





Number of Warrants Issued





Exercise Price




Exercise Period

(months)



Remaining Contractual Life

(months)

April 29, 2010

4,000,000

$0.75

24

10

October 28, 2010

4,000,000

$0.90

12

4

October 29, 2010

333,334

$0.90

12

4

November 2, 2010

2,666,667

$0.90

12

4

November 18, 2010

26,000

$0.90

12

4

December 22, 2010

3,662,671

$0.90

12

6

January 18, 2011

200,000

$0.90

12

7

January 24, 2011

250,000

$0.90

12

7

January 26, 2011

      5,333,334

$0.90

12

7

January 27, 2011

200,000

$0.90

12

7

February 24, 2011

222,000

$0.90

12

8

March 4, 2011

33,334

$0.90

12

8

March 7, 2011

113,000

$0.90

12

8

March 15, 2011

165,000

$0.90

12

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,205,340

 

 

 


As of June 30, 2011, the weighted average price of the Warrants was $0.48 (December 31, 2010 - $0.55).  The number of Warrants that were cancelled, expired and exercised during the six months ended June 30, 2011 was nil (year ended December 31, 2010 – nil).


The Black-Scholes option-pricing model was used to estimate values of the Warrants granted based on the following assumptions:

 

(i)

risk-free interest rate: 0.23% - 0.28% which is based on the US Treasury bond rate in effect at     the time of grant for bonds with maturity dates at the estimated term of the Warrants   (December 31, 2010; 0.22% -1.01%)

(ii)

expected volatility: 73.66% - 73.67% which is based on the Company’s historical stock price   (December 31, 2010; 60.14% - 73.66%)

(iii)

expected life: 1 year (December 31, 2010; 1 - 2 years)

(iv)

expected dividends: $Nil


e)

Loss Per Share


Loss per share was calculated on the basis of the weighted average number of common shares outstanding for the three and six months ended June 30, 2011, amounting to 59,368,340 and 58,039,630 common shares, respectively (three and six months ended June 30, 2010 – 40,088,275 and 33,074,834, respectively).


Diluted loss per share was calculated using the treasury stock method. For the three and six months ended June 30, 2011, 22,330,340 common shares related to stock options and warrants were anti-dilutive. There were no anti-dilutive effects in the three and six months ended June 30, 2010 due to the absence of stock options and warrants.


13.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION



For the three months ended

June 30,

2011

June 30,

2010

Non-cash transactions:

 

 

Stock based compensation (note 12(c))

$             243,550

$                      -

Acquisition of Capital Assets

$               24,928

-

Acquisition of Gentor Resources Limited (note 3)

-

10,569,240

 

 

 

Cash paid during the period for:

 

 

Interest

-

-

Income Taxes

-

-

 

14.

INCOME TAXES


For income tax purposes the Company had $2,234,000 of net operating losses for the six month period ended June 30, 2011, which can be used to offset future taxable income. During the year ended December 31, 2010, the Company incurred net losses and, therefore, had no tax liability. The net deferred tax asset generated by the cumulative loss carryforward has been fully reserved. The net operating loss carryforward is $9,290,000 at June 30, 2011. No income tax benefit has been recorded in the accompanying interim condensed consolidated financial statements since the recoverability of such assets is more likely than not to be realized through known future revenue sources.



15.

COMMITMENTS


Pursuant to the terms of the loan payable, the Company has agreed to pay the following amounts:


Year

Amount

2011 (note 10)

$              18,456

2012 (note 10)

37,467

 

$              55,923


16.

FINANCIAL INSTRUMENTS


a)

 INTEREST RATE RISK


The note payable held by the Company is due on demand; however, the interest rates are fixed and are not expected to change.


b)

 FOREIGN CURRENCY RISK


Foreign currency risk is the risk that a variation in exchange rates between the United States dollar and other foreign currencies will affect the Company’s operations and financial results. A portion of the Company’s transactions are denominated in Omani Rials and Canadian dollars.  The Company is also exposed to the impact of currency fluctuations on its monetary assets and liabilities. Significant foreign currency gains or losses are reflected as a separate component of the condensed consolidated statement of operations. The Company does not use derivatives instruments to reduce its exposure to foreign currency risk.


The following table indicates the impact of foreign currency risk on net working capital as at June 30, 2011. The table below also provides a sensitivity analysis of a 10 percent strengthening of the US dollar against the Omani rial and Canadian dollar as identified which would have increased (decreased) the Company’s net loss by the amounts shown in the table below. A 10 percent weakening of the US dollar against the Omani rial and Canadian dollar would have had the equal but opposite effect as at June 30, 2011.


 

Omani Rial

Canadian Dollar

 

 

 

             Cash

$             151,014

$             96,121

             Prepaids and advances

53,573

-

             Accounts payable  

(37,010)

-

             Accrued liabilities

(6,593)

(12,000)

             Total foreign currency working capital

              160,984   

            84,121

             US$ exchange rate at June 30, 2011

2.59670

0.9645

             Total foreign currency net working capital in US$

$             418,027

$          81,134

             Impact of a 10% strengthening of the US$ on net loss

$               41,803

$            8,113


17.

SUBSEQUENT EVENT


On July 18, 2011, the Company announced that it had engaged a Canadian securities dealer to act as lead agent, together with a syndicate of agents to be mutually determined, to sell on a "best efforts" private placement basis units of the Company at a price of Cdn$1.00 per unit for gross proceeds of a minimum of Cdn$1.0 million and a maximum of Cdn$4.0 million (the "Financing").  Each such unit will consist of one common share of the Company and one-half of one warrant of the Company, with each full warrant entitling the holder to purchase one common share of the Company at a price of Cdn$1.25 for a period of one year from the closing of the Financing.

 

The Company intends to use the net proceeds from the Financing for exploration and development activities related to the Company’s mineral properties in Oman and for working capital and general corporate purposes.  The closing of the Financing is subject to the receipt of all necessary approvals.







Item 2.   Management=s Discussion and Analysis of Financial Condition and Results of Operations.


The following discussion of our financial condition and results of operations constitutes management=s review of the factors that affected our financial performance for the three (3) and six (6) months ended June 30, 2011. This discussion is intended to further the reader=s understanding of the interim condensed consolidated financial condition and results of operations of our Company.  This discussion should be read in conjunction with the interim condensed consolidated financial statements and notes thereto contained elsewhere in this report. These historical financial statements may not be indicative of our future performance.

 

Cautionary Statement Regarding Forward Looking Statements


The information provided in this Form 10-Q (the AReport@) may contain Aforward looking@ statements or statements which arguably imply or suggest certain things about our future. Statements, which express that we Abelieve@, Aanticipate@, Aexpect@, Aintend to@ or Aplan to@, as well as, other similar expressions and/or statements which are not historical fact, are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions that we believe are reasonable, but a number of factors and/or risks could cause our actual results to differ materially from those expressed or implied by these statements, including, but not limited to:


$

risks related to our properties being in the exploration stage

$

risks related to mineral exploration and development activities

$

risks related to our title and rights in and to our mineral properties

$

risks related our mineral operations being subject to government regulation

$

risks related to the competitive industry of mineral exploration

$

risks related to our ability to obtain additional capital to develop our resources, if any

$

risks related to the fluctuation of prices for precious and base metals

$

risks related the possible dilution of our common stock from additional financing activities

$

risks related to our subsidiary activities

$

risks related to our shares of common stock


The foregoing list is not exhaustive of the factors that may affect our forward looking statements and new risk factors may emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Report. These forward-looking statements are based on our current expectations and are subject to a number of risks and uncertainties, including those set forth above. Although we believe that the expectations reflected in these forward-looking statements are reasonable, our actual results could differ materially from those expressed in these forward-looking statements, and any events anticipated in the forward-looking statements may not actually occur. Except as required by law, we undertake no duty to update any forward-looking statements after the date of this report to conform those statements to actual results or to reflect the occurrence of unanticipated events. Furthermore, any discussion of our financial condition and results of operations should be read in conjunction with the interim financial statements and the notes thereto included elsewhere in this Report.


Overview


In this Report, references to Awe,@ Aus,@ Aour@ and/or the ACompany@ refer to Gentor Resources, Inc., a Florida corporation.


We are a Florida corporation formed under the name of Gentor Resources, Inc. on March 24, 2005.


We are an exploration stage company (as such term is defined in Securities Act Industry Guide 7(a)(4)(i)) which means that we are engaged in the search for mineral deposits (reserves) which are not either in the development or production stage. Our corporate strategy is to create shareholder value by acquiring and developing highly prospective mineral properties.


Mineral exploration is a research and development activity that does not produce a specific product. Successful exploration often results in increased project value that can be realized through the optioning or selling of the claimed site to larger companies.  As such, we aim to acquire properties which we believe have potential to host economic concentrations of minerals, particularly gold, molybdenum, nickel and copper.  These acquisitions have and may take the form of unpatented mining claims on federal land, or leasing claims, and/or private property owned by others, both domestically and internationally.


As of the date of this Report, we maintain the rights to and are currently engaged in the exploration of mineral properties in (i) the state of Idaho (the AIdaho Project@) and (ii) the Sultanate of Oman (the “Oman Project”). The Idaho Project is a molybdenum-tungsten project located in east central Idaho and the Oman Project is a copper and gold project located in the Batinah Coastal Region of the Sultanate of Oman. The Idaho Project and the Oman Project (each a “Project” and collectively, the “Projects”) are without known reserves and all of our exploration activities with respect to each Project to date have been exploratory in nature. Moreover, there is no assurance that a “commercially viable” mineral deposit (that is, that the potential quantity of a mineral deposit and its market value would, after consideration of the costs and expenses that would be required to explore, develop and/or extract any such mineral deposit (if any), would justify a decision to do so) exists at either Project and further exploration activities beyond the scope of our current exploration activities, such as comprehensive drilling programs, will be necessary before we are able to complete any feasibility studies on either Project. If our exploration activities result in an indication that either of the Projects contains potentially commercial viable quantities of minerals, then we intend to attempt to complete such feasibility studies on our Projects to assess whether commercial exploitation of either Project would be commercially feasible. There is no assurance that commercial exploitation of either Project would be commercially feasible even if our initial exploration programs show evidence of significant mineralization. Furthermore, we currently do not have sufficient financing to undertake and complete advanced exploration activities at both of our Project and there is no assurance that we will be able to obtain the necessary financing to do so. As such, we intend to raise additional capital and/or seek a joint venture partner to finance the further advanced exploration of the Projects.


From December 31, 2008 to the date of this Report, the Company has not undertaken any substantive exploration activities at the Idaho Project.  As of the date of this Report, we intend to devote substantially all of our available resources to the exploration activities at the Oman Project, which we believe, is our most promising project. While the near-term outlook for copper prices and demand is uncertain, we believe the underlying fundamentals of the copper business remain positive, supported by limited supplies from existing mines, the absence of significant new development projects and increased demand from Asia.


Results of Operations


Since our inception on March 24, 2005, we have been classified as an Aexploration stage company@ (as such term is defined in Securities Act Industry Guide 7(a)(4)(i)) with no producing mines and, accordingly, we do not produce income and have not generated any revenue. Our net loss for the three and six months ended June 30, 2011 was $1,207,088 and $2,233,022 respectively, as compared to a net loss of $640,377 and $1,626,378 respectively for the three and six months ended June 30, 2010.  The foregoing increase of $566,711 and $606,644 in respective net losses is attributable primarily to our increased drilling and geology costs related to the Oman Project (even though our costs related to geophysics decreased) and our general administrative activities, which included costs for items such as stock based compensation, salaries and professional fees.

 

During the three and six months ended June 30, 2011, we spent approximately $859,298 and $1,464,822, respectively, in connection with the Oman Project and $3,765  and $107,892, respectively,  in connection with the Idaho Project and are net of interest income. Such expenditures are consistent with our current intention to concentrate substantially all of our available resources towards the exploration of the Oman Project. We also incurred corporate and administrative costs of $298,433 and $571,803, respectively, for the three and six months ended June 30, 2011, compared to $556,827 and $766,143 for the same period in 2010. These costs included salaries, general office expenses, general legal expenses and accounting and compliance costs.


Depreciation costs for the three and six months ended June 30, 2011 were $45,592 and $88,505, respectively, compared to $37,567 and $69,077 of depreciation costs for the same period in 2010.


Liquidity and Capital Resources


As of the date of this Report, we do not have sufficient financing to undertake a full exploration of either Project and there is no assurance that we will be able to obtain the necessary financing to do so.


Our net cash balance at June 30, 2011 was $7,537,245 compared to $5,331,916 as at December 31, 2010. The foregoing increase in our net cash balance was primarily due to financing activities that resulted in the issuance of common shares and warrants. However, even though the Company raised approximately $4,417,525 (after repayment of loans payable and due to related parties) through its financing activities, our cash position only increased by $2,205,329 since our financing activities was offset by (i) $2,139,491 of operating activities, which consisted of exploration activities, general corporate costs and administrative costs and (ii) $72,705 of capital expenditures, resulting from the acquisition of various capital assets.


Total assets at June 30, 2011 were $26,324,940 compared to $24,013,220 as at December 31, 2010. The change in these balances reflects the acquisition of capital assets since December 31, 2010 as well as the increase in cash balance described above.


Current liabilities at June 30, 2011 were $1,358,978 compared to $1,481,182 as at December 31, 2010. This decrease in our current liabilities is the result of the payment of accounts payable and accrued liabilities that were incurred in the first and second quarters of 2011.


Over the next twelve months, we estimate that we will incur (i) approximately $200,000 to maintain our rights to the Idaho Project, (ii) approximately $95,414 to maintain our rights to the Oman Project and (iii) approximately $1,000,000 for general and administrative expenses, which includes legal fees and audit fees. Since our cash balance at June 30, 2011 was $7,537,245, we believe that we have enough cash to satisfy what we believe to be our minimum cash requirements for the next twelve months.


However, in addition to our estimated minimum capital requirements for the next twelve months, and considering that we intend to devote substantially all of our available resources to the Oman Project, based on the information currently available to us, we also believe that over the next twelve months we will require approximately $6,000,000 to undertake our contemplated exploration activities at the Oman Project approximately $1,378,000 to discharge and/or reduce our current liabilities. When we consider the foregoing estimated expenses in addition to our estimated minimum capital requirements, we believe that we do not have enough cash to satisfy our contemplated plan of operation for the next twelve months. As such, the Company believes that it will need to raise additional financing to continue its contemplated operating and exploration activities through the second quarter of 2012. As such, and as previously disclosed in the Company’s Form 8-K filed on July 20, 2011, the Company has engaged a Canadian securities dealer on a “best efforts” to  act as a lead agent with respect to a private placement that could raise a minimum of CDN$1,000,000 and a maximum of CDN$4,000,000 for the Company. If we are unable to raise sufficient capital when needed, it will be necessary to develop alternative plans that would likely delay the exploration of the Oman Project and/or the Idaho Project.  There is no assurance that we will be able to obtain the necessary financing for the Oman Project and/or the Idaho Project on customary terms, or at all.


Going Concern


Due to our recurring net losses and negative cash flows from operations, the Form 10-K of the Company for the year ending December 31, 2010 included references to the Company’s ability to continue as a going concern. Our independent auditors had included an explanatory paragraph in their 2010 audit report concerning these matters which raise substantial doubt about the Company=s ability to continue as a going concern. Those financial statements did not include any adjustments that might be necessary if we were unable to continue as a going concern. If the Company is unable to raise sufficient quantities of capital when needed, it will be necessary to develop alternative plans that would likely delay the exploration of the Oman Project.  There is no assurance that we will be able to obtain the necessary financing for the Oman Project on customary terms, or at all.


Our ability to continue as a going concern is dependent on our ability to raise additional capital and/or find one or more joint venture partners for our Projects. We currently do not have any financing arrangements in place and there are no assurances that we will be able to obtain additional financing in an amount sufficient to meet our needs or on terms that are acceptable to us. If we raise funds through equity or convertible securities, our existing shareholders may experience dilution and our stock price may decline.


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 is material to stockholders.


Changes in Accounting Policies

 

We did not change our accounting policies during the three and six months ended June 30, 2011.


Item 3.   Quantitative and Qualitative Disclosures About Market Risk.


Since the Company is a Asmaller reporting company@ as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information required under this item.


Item 4.   Controls and Procedures.


Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we have evaluated the effectiveness of the design and operation of the Company's “disclosure controls and procedures” as such term is defined in Rules 13a 15(e) and 15d 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Report (the “Evaluation Date”). The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the United States Securities & Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective as of the Evaluation Date.


Changes in Internal Controls. During the quarter ended June 30, 2011, there were no changes in the Company’s internal controls that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings.


None.


Item 1A.   Risk Factors.


Since the Company is a Asmaller reporting company@ as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information required under this item.


Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.


None.


Item 3.   Defaults Upon Senior Securities.


None.


Item 4.   Submission of Matters to a Vote of Security Holders.


None.


Item 5.   Other Information.


TSX Venture Exchange Application


As previously reported in the Company’s Form 8-K filed on April 20, 2011, the Company issued a press release to report that the Company had made application to list its common shares on the TSX Venture Exchange.  No assurance can be given that such application will be accepted by the TSX Venture Exchange.


Engagement of Equity Financial Trust Company


As a condition precedent to any listing on the TSX Venture Exchange, the TSX Venture Exchange requires that the listing applicant engage and maintain the services of a qualified transfer agent with physical offices located in Canada.  Accordingly, on June 16, 2011, the Company, Equity Financial Trust Company (“Equity Financial”) and Island Capital Management, LLC, dba Island Stock Transfer (“Island Stock Transfer” and the current transfer agent of the Company) entered into that certain Co-Transfer Agency Agreement whereby Equity Transfer, an approved transfer agent and registrar in Canada for securities listed on the TSX Venture Exchange, agreed to serve as the Company’s co-transfer agent. Even though the Company has engaged the services of Equity Financial, no assurance can be given that such application will be accepted by the TSX Venture Exchange.


Appointment of Simon F. W. Village as the Chairman of the Board


On July 26, 2011, the Board of Directors of the Company (the “Board”) appointed Simon F. W. Village (“Village”) to serve as the Chairman of the Board. Village shall serve as the Chairman of the Board at the pleasure of the Board until the earlier of his resignation or removal.


Item 6.   Exhibits.




EXHIBIT NO.


DESCRIPTION

3.01

Amended and Restated Articles of Incorporation (2)

3.02

Amendment to Amended and Restated Articles of Incorporation (3)

3.03

Bylaws (4)

10.01

Mineral Lease Agreement and Option to Purchase Regarding the Idaho Project (5)

10.02

Assignment Agreement Regarding the Idaho Project (5)

10.03

Stock Exchange Agreement Regarding the Acquisition of APM Mining Limited (6)

10.03

Earn-In Agreement With Respect to the Block 5 Copper Project in the Sultanate of Oman (7)

10.04

Novation Agreement With Respect to the Block 5 Copper Project in the Sultanate of Oman (7)

10.05

Amendment to the Earn-In Agreement With Respect to the Block 5 Copper Project in the Sultanate of Oman (7)

10.06

Addendum to Earn-In-Agreement With Respect to the Block 5 Copper Project in the Sultanate of Oman (1)

10.7

Earn-In Agreement With Respect to the Block 6 Copper Project in the Sultanate of Oman (7)

10.8

Gentor Resources 2010 Performance and Equity Incentive Plan (8)

10.9

Form of Non-Qualified Stock Option Agreement granted to Employees of the Company (9)

10.10

Form of Non-Qualified Stock Option Agreement granted to Consultants of the Company (9)

10.10

Employment Agreement For Peter Ruxton (10)

21.01

Subsidiaries (11)

31.01

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Peter Ruxton as the principal executive officer of the Company (1)

31.02

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Donat Madilo as the principal financial officer of the Company (1)

32.01

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Peter Ruxton as principal executive officer of the Company (1)

32.02

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Donat Madilo as principal financial officer of the Company (1)


(1)

Filed herewith

(2)

Filed as part of the Form 8-K dated March 1, 2007 (filed March 6, 2007)

(3)

Filed as part of the Form 8-K dated September 1, 2009 (filed September 2, 2009)

(4)

Filed as part of the Registration Statement on Form SB-2 (filed December 16, 2005)

(5)

Filed as part of the Form 8-K dated July 23, 2007 (filed July 26, 2007)

(6)

Filed as part of the Form 8-K dated February 23, 2010 (filed February 24, 2010)

(7)

Filed as part of the Form 10-Q for the Quarter Ending March 31, 2001 (filed May 17, 2011)

(8)

Filed as part of the Form 8-K dated July 23, 2010 (filed July 28, 2010)

(9)

Filed as part of the Form 8-K dated August 30, 2010 (filed September 3, 2010)

(10)

Filed as part of the Form 10-K for the Fiscal Year Ending December 31, 2010 (filed March 31, 2011)

(11)

Filed as part of the Form 10-Q for the Quarter Ending March 31, 2010 (filed May 16, 2011)








SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



GENTOR RESOURCES, INC.




Date: August 15, 2011

/s/ Peter Ruxton

____________________


By: Peter Ruxton, President and principal executive officer



Date: August 15, 2011

/s/ Donat Madilo

______________________

By: Donat Madilo, principal financial officer