Golden Star Resource Corp. - Quarter Report: 2008 September (Form 10-Q)

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission file number 000-52837

GOLDEN STAR RESOURCE CORP.
(Exact name of registrant as specified in its charter)

NEVADA(State or other jurisdiction of incorporation or organization)

350 - 6338 North New Braunfels Avenue
San Antonio, TX 78209
(Address of principal executive offices, including zip code.)

(210) 862-3071
(telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [X]    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. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [X]   NO [   ]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 7,070,000 as of November 10, 2008.
 

PART I – FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS

The accompanying condensed notes are an integral part of these financial statements.

The accompanying condensed notes are an integral part of these financial statements.

The accompanying condensed notes are an integral part of these financial statements.

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

GOLDEN STAR RESOURCE CORP.
(An Exploration Stage Company)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2008
(Unaudited)
(Stated in U.S. Dollars)

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

     This section of the prospectus includes a number of forward- looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Plan of Operation

     We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.

     Our auditors have issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and do not anticipate generating any revenues until we begin removing and selling minerals. There is no assurance we will ever achieve these goals. Accordingly, we must raise cash from sources other than the sale of minerals in order to implement our project and stay in business. Our only other source for cash at this time is investments by others.

     We will be conducting research in the form of exploration of the property. Our exploration program is explained in as much detail as possible in the business section of this report. We are not going to buy or sell any plant or significant equipment during the next twelve months.

     Our exploration target is to find an mineralized material, specifically, an ore body containing gold. Our success depends upon finding mineralized material. This includes a determination by our consultant that the property contains reserves. We have not yet selected a consultant. Mineralized material is a mineralized body which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we don’t find mineralized material or if it is not economically feasible to remove it, we will cease operations and you will lose your investment.

     In addition, we may not have enough money to complete our exploration of the property. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement or through loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and cannot raise it, we will have to suspend or cease operations.

     We must conduct exploration to determine what amount of minerals, if any, exist on our property and if any minerals can be economically extracted and profitably processed.

     The property is undeveloped raw land. Exploration and surveying has not been initiated.

We must explore and find mineralized material before any potential mineral retrieval can begin. If we successfully find mineralized material, we then need to determine whether it is economically feasible to remove it. Economically feasible means that the costs associated with the removal will not exceed the price at which we can sell it. We cannot make predictions until we find mineralized material, and we acknowledge that the probability is low.

     To our knowledge, the property has never been mined. The only events that have occurred is the acquisition of the property rights from Glengarry Developments Inc. and a physical examination of the property by Mr. Livgard, our geological consultant. No additional payments were made or are due Glengarry Developments Inc. The claims were recorded in Glengarry Developments Inc.’s name to avoid incurring additional costs. As previously noted, the additional costs would be for incorporation of a British Columbian corporation and associated legal and accounting fees. On May 9, 2006, Glengarry Developments Inc. executed a declaration of trust acknowledging that it holds the property in trust for us and that it will not deal with the property in any way, except to transfer the property to us. In the event that Glengarry Developments Inc. transfers title to a third party, the declaration of trust will be used as evidence that it breached its fiduciary duty to us. Glengarry Developments Inc. has not provided us with a signed or executed bill of sale in our favor. Glengarry Developments Inc. will issue a bill of sale to a subsidiary corporation to be formed by us should mineralized material be discovered on the property and should we choose to incorporate a British Columbian wholly-owned subsidiary.

     Glengarry Developments Inc. does not have a right to sell the property to anyone. It may only transfer the property to us. It may not demand payment for the claims when it transfers them to us. Further, Glengarry Developments Inc. does not have the right to sell the claims at a profit to us if mineralized material is discovered on the property. Glengarry Developments Inc. must transfer title to us, without payment of any kind, regardless of what is or is not discovered on the property.

     We do not know if we will find mineralized material. We believe that activities occurring on adjoining properties are not material to our activities. Whatever is located under adjoining property may or may not be located under our property. We do not claim to have any minerals or reserves whatsoever at this time on any of the property.

     We intend to implement an exploration program which consists of core sampling. Core sampling is the process of drilling holes to a depth of up to 1,400 feet in order to extract samples of earth. Mr. Livgard, after confirming with our consultant, will determine where drilling will occur on the property. Mr. Livgard will not receive fees for his services. The samples will be tested to determine if mineralized material is located on the property. Based upon the tests of the core samples, we will determine whether to terminate operations, proceed with additional exploration of the property, or develop the property. We intend to take our core samples to analytical chemists, geochemists and registered assayers located in Vancouver, British Columbia. We have not selected any of the foregoing as of the date of this report.

     We estimate the cost of drilling will be $20 per foot drilled and that we will drill approximately 3,000 linear feet or up to 8 holes to depth of 300 feet. We estimate that it will take up to one month. We will pay a consultant up to a maximum of $5,000 per month for his services, or a total of $5,000. The total cost for analyzing the core samples will be approximately $3,000.

     We do not intend to interest other companies in the property if we find mineralized materials. We intend to try to develop the reserves ourselves with the help of a consultant. We have no plans to interest other companies in the property if we do not find mineralized material. To pay the consultant and develop the reserves, we will have to raise additional funds through a second public offering, a private placement or through loans. As of the date of this report, we have no plans to raise additional funds. Further, there is no assurance we will be able to raise any additional funds even if we discover mineralized material and have a defined ore body.

     If we are unable to complete any phase of exploration because we don’t have enough money, we will cease operations until we raise more money. If we cannot or do not raise more money, we will cease operations. If we cease operations, we don’t know what we will do and we don’t have any plans to do anything.

     We do not intend to hire additional employees at this time. All of the work on the property will be conducted by unaffiliated independent contractors who we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

Operations to Date

     We acquired rights on one property containing one claim. The property is staked and we will begin our exploration plan as soon as we hire a consultant. As of the date of this report, we have yet to being operations and therefore we have yet to generate any revenues.

Limited Operating History; Need for Additional Capital

     There is no 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 increases in services.

     To become profitable and competitive, we need to conduct research and explore our property before we start production of any minerals we may find. If we do find mineralized material, we will need additional funding to move beyond the research and exploration stage. 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. Equity financing could result in additional dilution to existing shareholders.

Liquidity and Capital Resources

     We completed our public offering as of March 28, 2007 and to date have raised $107,060. The costs we have incurred are as set forth in the Use of Proceeds section (item 2) of this report. If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. We do not at this time need additional funding to complete the research and exploration stages of our plans.

     Currently, we do not have sufficient funds for a one month drilling program. Ms. Miller, one of our officers and directors, has agreed to financing further reclamation of the property should mineralized material not be found. The foregoing agreement is oral; we have nothing in writing. While Ms. Miller has agreed to advance the funds, the agreement is unenforceable as a matter of law because no consideration was given. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and can't raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph, we have no other financing plans.

     Since inception, we have issued 7,070,000 shares of our common stock and received $107,060.

     In March 2006, we issued 3,000,000 shares of common stock to Kathrine MacDonald, our former secretary/treasurer, in consideration of $30 and we issued 3,000,000 shares of common stock to Marilyn Miller, one of our officers and directors, in consideration of $30 pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1993. This was accounted for as an acquisition of shares. Kathrine MacDonald advanced $20,760 to cover our costs for incorporation, accounting and legal fees and Mr. Livgard advanced the sum of $10,000 for staking. These funds have been paid directly to our attorney, accountant and staker. The amounts owed to Ms. MacDonald and Mr. Livgard are non-interest bearing, unsecured and due on demand. The amounts owed were paid during the year ended June 30, 2008. The agreements with Ms. MacDonald and Mr. Livgard are oral and there is no written document evidencing the agreement.

     On March 28, 2007, we completed our public offering and sold 1,070,000 shares of common stock at an offering price of $0.10 per share and raised $107,000.00. This was accounted for as a purchase of shares of common stock.

     As of September 30 2008, our total assets were $1,264 and our total liabilities were $9,779.

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 
ITEM 4.      CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

     We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

Changes in Internal Controls

     We have also evaluated our internal controls for financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.

PART II. OTHER INFORMATION

ITEM 1A.    RISK FACTORS

     We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 
ITEM 6.      EXHIBITS.

     The following documents are included herein:

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 14^th day of November, 2008.

EXHIBIT INDEX