JOSHUA GOLD RESOURCES INC - Annual Report: 2021 (Form 10-K)

Nevada	27-0531073
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging Growth Company ☐

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PART I	4
ITEM 1.Business	4
ITEM 1A.Risk Factors	7
ITEM 1B.Unresolved Staff Comments	10
ITEM 2.Properties	10
ITEM 3.Legal Proceedings	35
ITEM 4.Mine Safety Disclosures	35
PART II	36
ITEM 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36
ITEM 6.Selected Financial Data	37
ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
ITEM 7A.Quantitative and Qualitative Disclosures about Market Risk	39

ITEM 8.Financial Statements and Supplementary Data

39

ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	59
ITEM 9A.Controls and Procedures	59
ITEM 9B.Other Information	60
PART III	60
ITEM 10.Directors, Executive Officers and Corporate Governance	60
ITEM 11.Executive Compensation	62
ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
ITEM 13.Certain Relationships and Related Transactions, and Director Independence	65
ITEM 14.Principal Accounting Fees and Services	65
PART IV	66
ITEM 15.Exhibits, Financial Statement Schedule	66

 

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PART I

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This 2021 Annual Report on Form 10-K, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains “forward-looking statements” that include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources.  These forward-looking statements include, without limitation, statements regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical facts.  Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

 

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to:

 

·

our inability to raise additional funds to support operations and capital expenditures;

 

·

our inability to achieve greater and broader market acceptance of our products and services in existing and new market segments;

 

·

our inability to successfully compete against existing and future competitors;

 

·

our inability to manage and maintain the growth of our business;

 

·

our inability to protect our intellectual property rights; and

 

·

other factors discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

 

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws.  If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

ITEM 1.	BUSINESS

 

With respect to this discussion, the terms “we” “us” “our” and the “Company” refer to Joshua Gold Resources Inc., a Nevada corporation.

 

(a) Corporate History and Background.

 

We were incorporated in the State of Nevada on July 10, 2009 under the name “ABC Acquisition Corp 1501.” Prior to the Stock Purchase transaction described below, our business purpose was to seek the acquisition of or merger with, an existing private company.  Accordingly, we were engaged in organizational efforts in order to put us in a position where we could seek to target and eventually acquire an existing private company.

 

On June 4, 2010, Ben Fuschino, our sole officer and director at that time, sold his 35,000,000 shares of the Company’s common stock, which shares represented 100% of our issued and outstanding common stock, to Luc Duchesne and Robert Cormier for a total purchase price of $7,000 (the “Stock Purchase”).  Upon closing of the Stock Purchase, (i) Mr. Duchesne and Mr. Cormier held a controlling 100% ownership in the Company, (ii) we changed our business and became a start-up carbon measuring company and (iii) we changed our name to “Bio-Carbon Systems International Inc.” to better reflect our new business enterprise.

 

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Immediately after the closing of the Stock Purchase, on June 4, 2010, we entered into a license agreement (the “Cormier License”) with R&B Cormier Enterprises Inc. (“Cormier Enterprises”), an Ontario corporation and a license agreement (the “GSN License”) with GSN Dreamworks, Inc., an Ontario corporation (“GSN”).  The Cormier License and GSN License (collectively, the “License Agreements”) granted the Company licensed intellectual property and technology to conduct airborne and other surveys of forested lands in areas that are difficult to access. Those surveys would have been conducted in a statistically verifiable process designed for use in carbon trading programs to assess the potential value of the surveyed lands as carbon sequestration land parcels in carbon trading, carbon sequestration, and other greenhouse gas emission control, offset and reduction programs.

 

Also, on June 4, 2010, the Company entered into consulting agreements (collectively, the “Consulting Agreements”) with Mr. Duchesne and Mr. Cormier, pursuant to which Mr. Duchesne and Mr. Cormier agreed to provide the Company with management and advisory services with respect to the intellectual property licensed to the Company under the Cormier and GSN Licenses.  

 

On December 23, 2010, the Company elected to terminate the License Agreements and Consulting Agreements as the Company determined that conditions were not in place for the successful exploitation of the technology covered by the License Agreements. The termination did not given rise to any penalties against the Company as the termination was concluded through a mutual agreement of separation.

 

Upon termination of the aforementioned License and Consulting Agreements, the Company abandoned the carbon measuring business and became a mineral exploration company located in Oakville, Ontario, Canada through the acquisition of a mineral rights lease and other mineral properties, as described in further detail below.  The Company’s principal business activity now is the exploration of mineral property interests.  The Company is considered to be in the exploration stage and substantially all of the Company’s efforts are devoted to exploring mineral property interests. There has been no determination whether the Company’s interests in unproven mineral properties contain mineral reserves which are economically recoverable.

 

On February 1, 2016, the Company registered articles of amendment with the state of Nevada changing the name of the Company from “Joshua Gold Resources Inc.” to “Enhanced Energy Solutions Corp.”

 

On October 18, 2016, the Company registered articles of amendment with the state of Nevada changing the name of the Company from “Enhanced Energy Solutions Corp.” back to “Joshua Gold Resources Inc.”

 

The Company does not have any current plans, arrangements, discussions or intentions, whether written or oral, to engage in a merger or acquisition with an identified or unidentified company or person to be used as a vehicle for a private company to become a reporting company.

 

We are an exploration stage company and currently have little revenue. At December 31, 2021, our total current assets were $110,187  and our total current liabilities were $1,463,282. Our net loss for the year ended December 31, 2021, was $1,000,689. 

 

(b)	Business of Issuer.

 

Business Overview

 

We intend to devote substantially all of our efforts on establishing our business plan and continuing to grow our operations in the mineral exploration sector.  We do not have sufficient capital to operate our business and will require additional funding to sustain operations through December 2021.  There is no assurance that we will be able to achieve revenues sufficient to become profitable. Our internet address is www.joshuagoldresources.com.

 

Employees

 

As of February 28, 2022, we had no full-time employees and two part-time employees. We expect no significant changes in the number of our employees in the next twelve (12) months.

 

Competition

 

We are an exploration stage mineral resource exploration company that competes with other mineral resource exploration companies for financing and for the acquisition of mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact our ability to achieve the financing necessary for us to acquire mineral property interests and conduct exploration activities.

 

We will also compete with other mineral exploration companies for financing from a limited number of investors that are prepared to make investments in mineral exploration companies. The presence of competing mineral exploration companies may adversely impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors.

 

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Government Regulation and Standards

 

There are several governmental regulations that materially restrict the exploration for minerals and the extraction of minerals and any related mining activities in Canada and in the Northwest Territories.  The Company will be subject to the mining laws and regulations in force in Canada and in the Northwest Territories (as well as any other jurisdiction wherein a future-acquired property is located).  In order to comply with applicable regulations, the Company may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to land.  

 

Additionally, the Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law in July of 2010, includes a requirement for certain companies using “conflict minerals” in the manufacturing of, or contracting to manufacture, products to publicly disclose the source of the conflict mineral.  The conflict mineral list currently includes columbite-tantalite, cassiterite, wolframite, and gold mined in the Democratic Republic of Congo and several surrounding central African countries.  These companies reporting obligations begin with the 2013 calendar year, with the initial reports due in May 2014.  The Company currently has no business operations, nor intent to engage in business development activity, within the covered region.  The Company is currently focused on development of mineral properties primarily in Canada. However, the Company may incur costs related to its future customers’ compliance with the law, including, but not limited to: (i) assist future mineral purchase customers by creating and maintaining adequate chain of custody records relating to minerals mined by the Company to establish that they are not conflict minerals, and (ii) provide information to customers for their own conflict mineral reports and audits.

 

As a general matter, management of the Company will attempt to ensure that all budgets for exploration programs include a contingency for regulatory compliance.

 

Emerging Growth Company

 

We are and we will remain an "emerging growth company" as defined under The Jumpstart Our Business Startups Act (the “JOBS Act”), until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

 

As an "emerging growth company", we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

 

·

only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis” disclosure;

·

reduced disclosure about our executive compensation arrangements;

·

no requirement that we hold non-binding advisory votes on executive compensation or golden parachute arrangements; and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

 

We have taken advantage of some of these reduced burdens, and thus the information we provide stockholders may be different from what you might receive from other public companies in which you hold shares.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time as we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act (“SOX”) requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.

 

 

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ITEM 1A.

RISK FACTORS

 

An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our company's common stock. You could lose all or part of your investment due to any of these risks.

 

RISKS RELATING TO OUR COMPANY

 

Management and our auditors have expressed substantial doubt about our ability to continue as a going concern.

 

Our audited financial statements for the year ended December 31, 2021 were prepared assuming that we will continue our operations as a going concern. We were incorporated on July 10, 2009, and do not have a history of earnings. As a result, our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations are dependent on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.

 

There is uncertainty regarding our ability to continue as a going concern, indicating the possibility that we may be required to curtail or discontinue our operations in the future. If we discontinue our operations, you may lose all of your investment.

 

We have an accumulated deficit of $(15,955,191) from our inception on July 10, 2009 to December 31, 2021 and have completed only the preliminary exploration stages of our business plan. We anticipate incurring additional losses before realizing any revenues and will depend on additional financing in order to meet our continuing obligations and ultimately, to attain profitability. We anticipate that our current cash assets will be extinguished by December 31, 2022. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business. If we are unable to obtain additional financing from outside sources and eventually produce enough revenues, we may be forced to sell our assets, or curtail or discontinue our operations. If this happens, you could lose all or part of your investment.

 

We are in an early stage of development. If we are not able to develop out business as anticipated, we may not be able to generate revenues or achieve profitability and you may lose your investment.

 

We have no production, no customers, and we have earned revenues on the sale of four mineral leases totaling $15,336 to date. Our business prospects are difficult to predict because of our limited operating history, early stage of development, and unproven business strategy. Our primary business activities will be focused on exploration of the mining interests. Although we believe that our business plan has significant profit potential, we may not attain profitable operations and our management may not succeed in realizing our business objectives. If we are not able to develop out business as anticipated, we may not be able to generate revenues or achieve profitability and you may lose your investment.

 

We expect to suffer losses in the immediate future that may cause us to curtail or discontinue our operations.

 

We expect to incur operating losses in future periods. These losses will occur because we do not yet have any revenues to offset the expenses associated with the development of mining properties, and our business operations, generally. We cannot guarantee that we will ever be successful in generating revenues in the future. We recognize that if we are unable to generate revenues, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will almost certainly fail.

 

We may not be able to execute our business plan or stay in business without additional funding.

 

Our ability to generate future operating revenues depends in part on whether we can obtain the financing necessary to implement our business plan. We will likely require additional financing through the issuance of debt and/or equity in order to establish profitable operations, and such financing may not be forthcoming. If such conditions and constraints continue or if there is no investor appetite to finance our business, we may not be able to acquire additional financing through credit markets or equity markets. Even if additional financing is available, it may not be available on terms favorable to us. At this time, we have not identified or secured sources of additional financing. Our failure to secure additional financing when it becomes required will have an adverse effect on our ability to remain in business.

 

The loss of the services of Benedetto Fuschino, our President and Chief Executive Officer, Dino Micacchi Chief Financial Officer, or our failure to timely identify and retain competent personnel could negatively impact our ability to develop our properties.

 

The development of our business will continue to place a significant strain on our limited personnel, management, and other resources. Our future success depends upon the continued services of our executive officers who are developing our business, and on our ability to identify and retain competent consultants and employees with the skills required to execute our business objectives. The loss of the services of Benedetto Fuschino, our President and Chief Executive Officer, Dino Micacchi, our Secretary-Treasurer and Chief Financial Officer, or our failure to timely

 

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identify and retain competent personnel could negatively impact our ability to develop our website and sell our services, which could adversely affect our financial results and impair our growth. 

 

We are a mineral exploration business in the exploration stage, with no experience in the market, and failure to successfully compensate for this inexperience may adversely impact our operations and financial position.

 

By industry standards, there are generally four types of mining companies. We are considered an “exploration stage” company. Typically, an exploration stage mining company is focused on exploration to identify new, commercially viable gold deposits. “junior mining companies” typically have proven and probable reserves of less than one million ounces of gold, generally produce less than 100,000 ounces of gold annually, and/or are in the process of trying to raise enough capital to fund the remainder of the steps required to move from a staked claim to production. “Mid-tier” and large mining “senior” companies may have several projects in production plus several million ounces of gold in reserve.

 

As a mineral exploration business, in a highly competitive industry. We have little operating history, few substantial tangible assets, no customer base and no revenue to date. This makes it difficult to evaluate our future performance and prospects. Our prospectus must be considered in light of the risks, expenses, delays and difficulties frequently encountered in establishing a business in a depressed industry characterized by intense competition, including:

 

●

our business model and strategy are still evolving and are continually being reviewed and revised;

●

we may not be able to raise the capital required to develop our initial customer base and reputation;

●

we may not be able to successfully implement our business model and strategy; and

●

our management consists of two people: Benedetto Fuschino who serves as our Chief Executive Officer, President and Director, and Dino Micacchi who serves as our Chief Financial Officer, Secretary-Treasurer and Director.

 

We cannot be sure that we will be successful in meeting these challenges and addressing these risks and uncertainties. If we are unable to do so, our business will not be successful and the value of your investment in our company will decline.

 

Our failure to protect our mineral property rights may significantly impair our competitive advantage.

 

Our success and ability to compete depend in large part upon protecting our mineral property rights. We rely on a combination of fund-raising deferred financing to protect our property rights. The steps we have taken may not be sufficient to prevent the expiration of these rights.

 

We may face costly claims against our mineral property rights, the result of which would decrease the amount of cash we would anticipate to operate and complete our business plan.

 

We anticipate that from time to time we could receive communications from third parties asserting that they have certain property rights. If anticipated claims arise, we will evaluate their merits. Any claims brought by third parties could result in protracted and costly litigation, which could result in substantial cost to us and diversion of our resources, may be necessary to enforce our property rights or to defend us against claims by others. Any litigation could have a material adverse effect on our business, financial condition and results of operations.

 

We incur costs associated with SEC reporting compliance, which may significantly affect our financial condition.

 

The Company made the decision to become an SEC "reporting company" in order to comply with applicable laws and regulations. We incur certain costs of compliance with applicable SEC reporting rules and regulations including, but not limited to attorneys' fees, accounting and auditing fees, other professional fees, financial printing costs and Sarbanes-Oxley compliance costs in an amount estimated at approximately $65,000 per year. On balance, the Company determined that the incurrence of such costs and expenses was preferable to the Company being in a position where it had very limited access to additional capital funding. 

 

The nature of mineral exploration and production activities involves a high degree of risk and the possibility of uninsured losses that could materially and adversely affect our operations.

 

Exploration for minerals is highly speculative and involves greater risk than many other businesses. Many exploration programs do not result in the discovery of mineralization and any mineralization discovered may not be of sufficient quantity or quality to be profitably mined. Few properties that are explored are ultimately advanced to the stage of producing mines. Our future exploration efforts will be subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, including, but not limited to:

 

	·	Economically insufficient mineralized material;
	·	Fluctuations in production costs that may make mining uneconomical;
	·	Labor disputes;
	·	Unanticipated variations in grade and other geologic problems;
	·	Environmental hazards;

 

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	·	Water conditions;
	·	Troublesome surface or underground conditions;
	·	Industrial accidents;
	·	Metallurgical and other processing problems;
	·	Mechanical and equipment performance problems;
	·	Failure of pit walls or dams;
	·	Unusual or unexpected rock formations;
	·	Personal injury, fire, flooding, cave-ins, and landslides; and
	·	Decrease in reserves due to a lower gold price.

 

Any of these risks can materially and adversely affect, among other things, the development of mineral properties, production quantities and rates, costs and expenditures, and production commencement dates. We currently have no insurance to guard against any of these risks. If we determine that capitalized costs associated with any of our mineral interests are not likely to be recovered, we would incur a write-down of our investment in these interests. All of these factors may result in losses proportionate to amounts spent, which may not be recoverable.

 

The potential profitability of mineral ventures depends in part upon factors beyond our control and even if we discover and exploit mineral deposits, we may never become commercially viable and we may be forced to cease operations.

 

The commercial feasibility of mineral properties is dependent upon many factors beyond our control, including the existence and size of mineral deposits in the properties we explore, the proximity and capacity of processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production, and environmental regulation. These factors cannot be accurately predicted and any one or more of these factors may result in our Company not receiving an adequate return on invested capital. These factors may have material and negative effects on our financial performance and our ability to continue operations.

 

Mineral exploration and development activities are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated, causing an adverse effect on our company.

 

Mineral exploration and development activities are subject to various laws, regulations and policies governing prospecting, mine development, mineral production, removal and transport of natural resources, as well as discharge of materials into the environment. Mining activities are also subject to various regulations regarding taxation, import and export, labor standards, occupational health standards, safety standards, waste disposal, toxic substances, land use, water use, environmental protection, and other matters.

 

Permits from various foreign, federal, state, provincial and local governmental authorities are required for mining operations to be conducted, and no assurance can be given that such permits will be successfully obtained. Environmental and other legal standards imposed by governmental authorities may be changed, and any such change may prevent us from conducting planned activities, or increase our costs of doing so, which could have material adverse effects on our business. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on our business operations. Additionally, we may be subject to liability for pollution or other environmental damages, which we may not be able to insure against due to prohibitive premium costs and other financial and practical considerations. Any laws, regulations, or policies of any government body or regulatory agency may be changed, applied, or interpreted in a manner which will alter and negatively affect our ability to carry on our business. We cannot assure you that new rules and regulations will not be enacted, or that existing rules and regulations will not be applied in a manner which could limit or curtail our exploration or development activities on our properties.

 

We believe that we are in compliance with all material laws and regulations that currently apply to our activities, but there can be no assurance that we can continue to remain in compliance. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such necessary approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.

 

The lack of an established trading market for our common stock will limit the ability of our stockholders to liquidate their investment.

 

Our common stock has been quoted on the OTC Pink market only since August 2019.  There is currently a very limited public market for our common stock and we can provide no assurance that a significant trading market will ever develop or that, if developed, it will be sustained. Consequently, holders of our common stock may find it difficult to resell their securities at the times and in the amounts that they desire.

 

We may, in the future, issue additional common shares, which would reduce investors’ percent of ownership and may dilute our share value.

 

Our Articles of Incorporation authorize the issuance of 400,000,000 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

 

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The issuance of preferred stock could adversely affect the voting power or other rights of the holders of our common stock.

 

Our Articles of Incorporation authorizes the issuance of up to 100,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by our directors. Accordingly, our directors are empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company.

 

Our common shares may be subject to the “Penny Stock” Rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

 

Under U.S. federal securities legislation, our common stock will likely constitute "penny stock” since quoted on the OTCQB. Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor's account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Because we do not presently intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

 

For the indefinite future, 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 foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

 

The recent COVID-19 coronavirus outbreak and related government, private sector, and individual consumer responsive actions may adversely affect our business operations, financial condition, liquidity, and cash flow.

 

The outbreak of the COVID-19 coronavirus disease has been declared a pandemic by the World Health Organization continues to spread in the United States, Canada, and in many other countries globally. Related government and private sector responsive actions may adversely affect our business operations. It is impossible to predict the effect and ultimate impact of the COVID-19 pandemic as the situation is rapidly evolving. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its impact.

 

ITEM 1B.

UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2.

PROPERTIES

 

Our corporate headquarters is located at Unit 20 – 1033 Pattullo Avenue, Woodstock, Ontario, Canada N4V 1C8 and our telephone number is +1-226-888-5610.

 

We currently have patents\leases on ten significant properties:

 

a)

Kenty Gold Property

b)

Carson Property

c)

Asquith Property (Sold 2020)

d)

C1 Mortimer Property

e)

Chewett Property

f)

King Solomon Mines Property

 

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g)

Borden Lake North Property

h)

Halcrow Gold, McCool, Seymour Lake Property

i)

Haycock, Godfrey, Roma Lake Property

j)

Hiltz Property

	k)	Jo-Anne Property
	l)	Niobe Property
	m)	Benoit West Property

 

Property Continuity Schedule for 2021

 

		Mineral Properties
Balance at January 1, 2016		$	1
Carson Property acquisition (b)			15,000
Impairment charge Carson Property			(15,000	)
Balance at December 31, 2016		$	1
Rollo Property			25,000
Janes Reef Property			16,000
Asquith Property (c)			10,000
C1 Mortimer Property (d)			941,460
Impairment charge			(992,460	)
Balance at December 31, 2017 and 2018		$	1
C1 Mortimer amendment (d)			359,760
Chewitt Property (e)			60,360
King Solomon Mines Property (f)			1,280,000
Impairment charge			(1,700,120	)
Balance at December 31, 2019		$	1
Borden Lake North (g)			15,000
Halcrow, McCool, Seymour Lake (h)			145,000
Haycock, Godfrey and Roma (i)			138,000
Hiltz (j)			21,000
Jo-Anne Property(k)			168,000
Impairment charge			(487,000	)
Balance at December 31, 2020			1
Niobe Property (l)			120,000
Benoit West Property (m)			150,000
Impairment charge			(270,000	)
Balance at December 31, 2021			1

 

a)

Kenty Gold Property

 

a.

Location and Access

The property is located approximately 125 km southwest of Timmins, Ontario. The property is accessed by driving west from Timmins approx. 95 km on HWY 101 to Foleyet Timber Road. After travelling north approx. 54 km, a secondary gravel road leads directly into the property after 4.2 km. Trip distance from the Kenty property to Mill site is approx. 175 kms.

 

b.

Description and Claim Conditions

 

As consideration for the sale of the McClay Conveyed Property, the Company agreed to deliver the following to McClay in the manner set forth below:

 

i.

Closing Date. CDN$50,000 within three (3) business days following the closing date.

 

ii.

February 4, 2013.

i.

CDN$100,000 on or before February 4, 2013; and

 

Index

ii.

200,000 common shares of Company on or before February 4, 2013.

 

iii.

April 4, 2013.

i.

CDN$150,000 on or before April 4, 2013; and

ii.

200,000 common shares of Company on or before April 4, 2013.

 

iv.

October 4, 2013.

i.

CDN$300,000 on or before October 4, 2013; and

ii.

250,000 common shares of Company on or before October 4, 2013.

 

v.

April 4, 2014.

i.

CDN$300,000 on or before April 4, 2014; and

ii.

250,000 common shares of Company on or before April 4, 2014.

 

vi.

October 4, 2014.

i.

CDN$300,000 on or before October 4, 2014; and

ii.

250,000 common shares of Company on or before October 4, 2014.

 

(g)

April 4, 2015.

i.

CDN$300,000 on or before April 4, 2015; and

ii.

550,000 common shares of Company on or before April 4, 2015.

 

(h)

Reserve.

Upon completion of a NI 43-101 compliant Indicated Reserve of 1,000,000 Troy Ounces of Gold (Aurum Metal) on the McClay Conveyed Property, Company shall pay CDN$1,000,000 to McClay.

 

(i)

Production.

(i) Upon production of 1,000,000 Troy Ounces of Gold (Aurum Metal) from the McClay Conveyed Property, Company shall pay CDN$1,000,000 to McClay.

(ii) Upon production of 3,000,000 Troy Ounces of Gold (Aurum Metal) from the McClay Conveyed Property, Company shall pay CDN$2,000,000 to McClay.

(iii) Upon production of 5,000,000 Troy Ounces of Gold (Aurum Metal) from the McClay Conveyed Property, Company shall pay CDN$2,000,000 to McClay.

 

(j)

Early Buyout Option.

Company shall have the option of early buyout within one year of execution for a cash payment of CDN$750,000 and 750,000 common shares of Company.

 

In addition, upon the Commencement of Commercial Production (as defined in the McClay Agreement), Company shall pay to McClay a royalty in an amount equal to three percent (3%) of all Net Smelter Returns (as defined in the McClay Agreement) on minerals mined from the McClay Conveyed Property (the “Seller NSR”) on the terms and conditions as set out in the McClay Agreement. Notwithstanding the foregoing, at any point in time following the closing date and upon Company’s sole election, McClay shall sell to Company fifty percent (50%) of the Seller NSR for a purchase price of CDN$1,500,000. 

 

In 2013 the Company recognized an impairment charge of $657,667 against the carrying value of the Kenty Property based on the decrease in the market price of gold which the Company believes is other than temporary.

 

As at December 31, 2020, the Company has made payments of $125,000 to the Vendors.

 

As at December 31, 2020, a third party has filed a claim in the Ontario Superior Court of Justice, against the Company. The Company and its legal counsel have determined that the claim is without merit and that no further impairment of the property’s value is required. The third party has made application claiming 100% ownership of the Kenty Property. The Company has responded in the Ontario Superior Court of Justice, with a counter application claiming the property was acquired from the Vendors, who at the time had an undivided 100% interest in the property. The Company has also claimed damages in the amount of $1,000,000 CDN.

 

c. History 

The property contains numerous gold bearing quartz veins, two shafts, and underground workings dating back to the 1930’s.

 

The company performed prospecting and sampling gold zones on the property in July 2020 defined the sample area to Hopkins Vein #2; a north-south trending quartz vein system typically 2-4” wide in a trench located approx. 150 m north of Shaft #1. (GPS – E: 379203, N: 5299435, UTM Zone: 17)

 

Index

Sampling of Vein #2 assayed 23.8 g/t (2020-02 Vein #2). Sample collected in a pile of blasted material from a previous operator and mineralized with ankerite, pyrite, and The bulk sample, extracted by Mag Rock Drilling during July-August via methods of drill and blasting, was loaded and transported to the mill site on August 14, 2020.

 

d. Present 

i.

Property Condition

 

ii.

Work done during the year - None

 

iii.

Details of Equipment

 

Currently there is no equipment on site. All works is subcontracted to third parties.

 

e. Rock formations and mineralization

 

The Kenty property demonstrates respectable gold grades of 25.02 g/t in Vein #2.

The veins mining width may not be suitable for a large-scale operation, however, can be profitable if ore is sorted and selected properly. Small-scale mining methods must be taken into consideration when mining a vein this narrow to ensure minimal dilution of ore. Further exploration is recommended to examine the vein at depth and test the southern extension; there is good possibility of this north-south vein trend intersecting the main Kenty No. 1 structure located 150 m south. Typically, the convergence of shrinkage vein structures to main feeders are favorable for deposits of high-grade gold.

 

f) Map

 

 

 

Index

 

 

Index

b)

Carson Property

 

a.

Location and Access

 

The Carson property is located on the western shore of Damoti Lake, approximately 195 kilometers north-northwest of Yellowknife. Access is best achieved by fixed or rotary wing aircraft. The Colomac winter road traverses lndin Lake approximately five kilometers to the west of the property. This winter road can be used as a seasonal staging point.

 

b.

Description and Claim Conditions

 

The property consists of a single mining lease. Mining lease 3446 is 1141 acres in size. It was surveyed to lease in 1993 and is paid in good standing until June 30th, 2024. The lease is registered at the Northwest Territories Mining Recorder.

 

c.

History

 

Exploration has been periodically conducted in the lndin Lake area since the mid 1930's with the discovery of lode gold in the mafic volcanic rocks that surround the lake. Prospecting of the area around the lake identified several additional gold showings in the volcanic and surrounding sedimentary rocks. In the 1970's, exploration shifted focus to polymetallic base metal targets and lead to the discovery of new occurrences in the lndin Lake belt. The discovery of iron formation-hosted gold at Damoti Lake, and active mining at the Colomac deposit, fueled the exploration effort during the 1990's. At present, elevated gold prices have renewed staking and exploration interest in the lndin Lake belt.

 

The earliest organized exploration recorded on the property was conducted by Snowden Yellowknife Mines (Snowden) in 1947. This exploration effort may have lead to the discovery of the Pond, Chuck Vein, and Hilltop showings. These showings remain the most prominent mineral occurrences recognized on the property. Snowden reported trenching and diamond drilling activities on the Pond showing and isolated localities along strike to the northeast. Grades as high as 1.26 oz/t Au over 7 inches in hole S-18 and 0.55 oz/t Au over 7 inches in hole S-16 are reported (Glidden and Burton, 1948). In 1981, Wollex Exploration examined the property through prospecting, mapping, and re-sampling existing trenches. Noranda Exploration Company of Canada assessed the property in 1985. Additional prospecting, mapping, re-sampling of the surface trenches, and VLF-EM and total field magnetic surveys were completed. No further groundwork is reported.

 

d. Present

 

i.

Property Condition

 

ii.

Work done during the year - None

 

iii.

Details of Equipment

 

Currently there is no equipment onsite.

 

e.

Rock formations and mineralization

 

The structural setting, alteration, and mineral assemblages of the gold showings are consistent with orogenic lode gold-type mineralization. Gold occurs in, or in altered host rock at the margins of, quartz veins hosted in shear zones oriented parallel or subparallel to property- and/or regional-scale tectonic fabrics. Metamorphic minerals observed on the property are consistent with greenschist grade. Host rock adjacent to mineralized quartz veins is silicified and carbonatized and shows chlorite±biotite, pyrite±pyrrhotite mineral assemblages.

 

f.

Map

 

Index

 

Index

c)

Asquith Property

 

a.

Location and Access

 

Located in Asquith Township, Larder Lake Mining division approximately 100km southwest of Kirkland Lake and approximately 110 km south of Timmins Ontario. Travel to the property from Kirkland Lake you take highway 66 west for seventy kilometres to highway65 south to Elk Lake (530050E, 5311479N). South on highway 65 for 40 kilometres to Elk Lake and Highway 560 west (549511 E, 5286831 N) Drive west on highway 560 for 90 kilometres to the entrance of the Thee Bear Camp (480710 E, 5268168 N). Drive west for 0.6 kilometres to the boat launch (480280 E,5267944 N) located on the north shore of West Shining Tree Lake. From the boat launch head west by boat for 820 meters to Area #1 on McRae Island (479461E, 5267886 N). Although the boat ride is only 820 meters from the Boat launch, caution must be taken due to rock outcrops just below the surface of the water.

 

b.

Description and Claim Conditions

 

These claims are recorded in MLAS by the following Tenure IDs: 555444 (Cell ID 41P11C056), 555445 (Cell ID 41P11C057 ), 561605 (Cell ID 41P11C036), 561606 (Cell ID 41P11C037)

 

c.

History

 

In ODM 1920, Vol 29 pt. 3 page 51 is the only reference on the Sullivan occurrence which is the target for Area # 1. In this description it describes the occurrence as follows:

as pillow lavas cut by quartz veins and lenses containing visible gold. In 1963 & 1964 A. Justas drilled a number of shallow holes on the northern & eastern limit of McRae Island on claims 567142 & 567143. The drill report did not contain any assays and had crude description of the core recovered. In hole #1 (479471E,5267934 N) core is described as green stone and quartz with carbonate alteration. Therefore the Sullivan showing is an area of interest. In area #2 was another point of interest due to map 29acontained in ODM 1920,Yo129 pt.3 in the back pocket indicates a number of east -west ( 70 degrees ) located just in the tree line of the northern shore line of the most eastern bay.

 

d.

Present

i.

Property Condition

In August 2020, the Company sold the 100% interest for $15,336 cash to I am Gold Inc.

ii.

Work done during the year - None

iii.

Details of Equipment

 

Currently there is no equipment onsite.

 

e.

Rock formations and mineralization

 

McRae Island is in the central part of the eastern limit of West Shining Tree Lake. Vegetation consists of mostly cedar, birch, spruce and jack pine trees. Some poplar was noticed along with white and red pine in certain areas. Heavy brush along the shoreline and in low wet areas is also present. The terrain is relatively flat except where outcrop ridges are located rising no more four to 5 meters. I can only comment on the areas visited during this program. The ground is uneven and has several boulders in the till. Bed rock is covered by sandy loam from a few centimetres to one to two meters.

 

Index

 

f. Map

 

Index

d)

C1 Mortimer Property

 

a.

Location and Access

 

This 734ha claims group is located within Swayze, Rollo, Coppel and Dore Townships, Porcupine Mining Division, approximately 150 km northwest of the City of Sudbury, west off Highway 144, midway between the established mining camps of Timmins to the north and Sudbury to the south and km south of the town of Gogama in the province of Ontario.

 

b.

Description and Claim Conditions

 

The Company owns a one hundred percent interest in 37 contiguous staked mining claims formerly comprised of Legacy Claim Numbers 4275244, 4275245, and 4275246.

 

This claims group requires annual exploration expenditures of $11,200.00 CAD per year ($400.00 per 19 single cell claims and $200.00 per 18 boundary claims), accompanied by an industry standard report detailing the work completed, due on their various anniversary dates (recorded in table below).

 

Legacy Claim Id	Twp	Tenure ID	Tenure Type	Anniversary Date	Work Required	Work Applied
4275244	ROLLO	343107	Single Cell Mining Claim	2021-03-09	400	800
4275244	ROLLO,SWAYZE	311135	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	311134	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO,SWAYZE	304312	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	273820	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	269805	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	255729	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO,SWAYZE	201078	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	188921	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	185262	Single Cell Mining Claim	2021-03-09	400	800
4275244	ROLLO	180954	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	156470	Single Cell Mining Claim	2021-03-09	400	800
4275244	ROLLO	136289	Single Cell Mining Claim	2021-03-09	400	800
4275244	ROLLO	110491	Single Cell Mining Claim	2021-03-09	400	800
4275244	ROLLO,SWAYZE	104103	Boundary Cell Mining Claim	2021-03-09	200	400
4275244	ROLLO	104102	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	281059	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	278432	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	269805	Boundary Cell Mining Claim	2021-03-09	200	400
4275245	ROLLO	259093	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	259092	Boundary Cell Mining Claim	2021-03-09	200	400
4275245	ROLLO,SWAYZE	251917	Boundary Cell Mining Claim	2021-03-09	200	400
4275245	ROLLO	251916	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	251915	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	225101	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	185262	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	185261	Boundary Cell Mining Claim	2021-03-09	200	400
4275245	ROLLO,SWAYZE	104103	Boundary Cell Mining Claim	2021-03-09	200	400

 

Index

Legacy Claim Id	Twp	Tenure ID	Tenure Type	Anniversary Date	Work Required	Work Applied
4275245	ROLLO	104102	Single Cell Mining Claim	2021-03-09	400	800
4275245	ROLLO	104101	Boundary Cell Mining Claim	2021-03-09	200	400
4275246	COPPELL,ROLLO	325684	Single Cell Mining Claim	2021-03-09	400	600
4275246	COPPELL,DORE,ROLLO,SWAYZE	297033	Boundary Cell Mining Claim	2021-03-09	200	400
4275246	ROLLO	297032	Boundary Cell Mining Claim	2021-03-09	200	400
4275246	ROLLO	278432	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	277653	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	259093	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	259092	Boundary Cell Mining Claim	2021-03-09	200	400
4275246	ROLLO	242605	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	230403	Single Cell Mining Claim	2021-03-09	400	600
4275246	ROLLO	192540	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	176522	Single Cell Mining Claim	2021-03-09	400	800
4275246	ROLLO	129128	Single Cell Mining Claim	2021-03-09	400	600
4275246	ROLLO	129127	Boundary Cell Mining Claim	2021-03-09	200	400
4275246	ROLLO	104471	Boundary Cell Mining Claim	2021-03-09	200	400

 

They are recorded in MLAS with the current Assessment Assignment by MNDM with the following Tenure IDs:

 

Legacy Claim Id	Tenure ID	Cell ID	MNDM  Assessment Assignment
4275244	343107	41O15G317	$50, 000.00
4275244	311135	41O15G356	$50, 000.00
4275244	311134	41O15G295	$50, 000.00
4275244	304312	41O15G355	$50, 000.00
4275244	273820	41O15G297	$50, 000.00
4275244	269805	41O15G298	$50, 000.00
4275244	255729	41O15G315	$50, 000.00
4275244	201078	41O15G357	$50, 000.00
4275244	188921	41O15G296	$50, 000.00
4275244	185262	41O15G338	$50, 000.00
4275244	180954	41O15G335	$50, 000.00
4275244	156470	41O15G336	$50, 000.00
4275244	136289	41O15G337	$50, 000.00
4275244	110491	41O15G316	$50, 000.00
4275244	104103	41O15G358	$50, 000.00
4275244	104102	41O15G318	$50, 000.00
4275245	281059	41O15G319	$50, 000.00
4275245	278432	41O15H301	$50, 000.00
4275245	259093	41O15H321	$50, 000.00
4275245	259092	41O15H281	$50, 000.00
4275245	251917	41O15G359	$50, 000.00
4275245	251916	41O15G339	$50, 000.00
4275245	251915	41O15G320	$50, 000.00
4275245	225101	41O15G340	$50, 000.00
4275245	185261	41O15G300	$50, 000.00

 

Index

Legacy Claim Id	Tenure ID	Cell ID	MNDM  Assessment Assignment
4275245	104101	41O15G299	$50, 000.00
4275246	325684	41O15H325	$50, 000.00
4275246	297033	41O15H345	$50, 000.00
4275246	297032	41O15H284	$50, 000.00
4275246	277653	41O15H302	$50, 000.00
4275246	242605	41O15H322	$50, 000.00
4275246	230403	41O15H304	$50, 000.00
4275246	192540	41O15H303	$50, 000.00
4275246	176522	41O15H323	$50, 000.00
4275246	129128	41O15H324	$50, 000.00
4275246	129127	41O15H283	$50, 000.00
4275246	104471	41O15H282	$50, 000.00

 

c.

History

 

In 1965, the property was mapped (Donovan) Swayze and Dore townships at a scale of 1:50,000. The claim 4270364 is shown to be underlain by mafic to intermediate massive flows and intermediate to felsic volcainics with porphyritic textures. Limited metasediment lenses occur within the felsic and intermediate volcanics. On a regional scale NW trending fault are noted, as well as ENE trending synclinal and anticlinal fold axis, although none are noted on claim 4270364.

 

The Geological Survey of Canada mapped the Swayze Greenstone Belt at a scale of 1:50,00 (Heather and Shore, 1999). General fault and fold structures agree with those observed by Donovan (1965), although additional high strain deformation zones are noted. More differentiation of volcanic sequences are made, leading to a more detailed representation of the geology underlying claim 4270364. The claim is underlain by intrusive ultramafic volcaincs (SNui) and mafic volcanics (SNm), with felsic units intercalated with metasediments to the north and south of the claims.

 

Red Pine Exploration Inc. (2010 - 2011) explored the claims directly surrounding the Kenty mine, which include the current claim group. Their work program consisted of line-cutting, IP, stripping and trenching, and limited diamond drilling. Trenching and striping identified several anomalous gold values associated with quartz-carbonate altered volcanics and quartz veins, with more limited showings associated with a felsic porphyry unit with significant gold assays. Some higher grade assays were reported associated with north-south trending quartz veins. Diamond drilling showed very limited anomalous gold mineralization occurring in relation to the felsic porphyry unit targeting some IP anomalies, although several IP anomalies with high resistivity and high chargeability related to the auriferous quartz carbonate vein mineralization remain untested.

 

d. Present

i.

Property Condition

 

ii.

Work done during the year - None

 

iii.

Details of Equipment

 

There is currently no equipment ion site.

 

e.

Rock formations and mineralization

 

The property is underlain by mafic to intermediate volcanic rocks that are bounded to the north and south by felsic volcanic rocks. The mafic volcanics are intruded by several smaller felsic porphyry intrusions, as well as intermediate to felsic dykes. A narrow band of altered ultramfic volcanics are suggested from historic geological mapping on the Kenty Mine area, as well as regional mapping by Heather et al (1991). Faulting and shearing appears to occur in a north-south orientation group, as well as a more east-west orientation group that is slight north of the eastern trend of the volcanic rocks. Airborne and ground geophysics suggest electromagnetic anomalies are associated with sediments and felsic volcanic assemblages at the contact with the mafic volcanics, representing accessory graphite mineralization.

 

f.

Map

 

Index

 

 

 

 

Index

e)

Chewett Property

 

a.

Location and Access

 

The property is located approximately 30 km northeast of Chapleau, due east of Wawa, 160 km WSW of Timmins and 240 northwest of Sudbury in north-central Ontario.

 

b.

Description and Claim Conditions

 

The Company owns a one hundred percent interest in these nine contiguous single cells staked mining claims, eight of which are located in Chewett Township and one of which is located in Collins Township, all within the Porcupine Mining Division.

 

This claims group requires annual exploration expenditures of $3600.00 CAD per year ($400.00 per claim), accompanied by an industry standard report detailing the work completed, due on their various anniversary dates.

 

Currently, MNDM Assessment Assignment to each of these Tenure IDs is as follows:

 

535703 (Cell ID 41O14I064): $50,000.00

535704 (Cell ID 41O14I046): $50,000.00

535705 (Cell ID 41O14I045): $50,000.00

535706 (Cell ID 41O14I063): $50,000.00

535707 (Cell ID 41O14I065): $50,000.00

535708 (Cell ID 41O14I066): $50,000.00

535709 (Cell ID 41O14I044): $50,000.00

535710 (Cell ID 41O14I043): $50,000.00

561607 (Cell ID 42B03A224): $50,000.00

 

Township / Area	Tenure ID	Tenure Type	Anniversary Date	Tenure Status	Tenure Percentage	Work Required
CHEWETT	535703	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535704	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535705	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535706	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535707	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535708	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535709	Single Cell Mining Claim	2020-12-04	Active	100	400
CHEWETT	535710	Single Cell Mining Claim	2020-12-04	Active	100	400
COLLINS	561607	Single Cell Mining Claim	2021-10-11	Active	100	400

 

 

c.

History

 

There is no history of previous exploration work on the property readily available.

 

d. Present

i.

Property Condition

 

ii.

Work done during the year - None

 

iii.

Details of Equipment

 

There currently is no equipment on site.

 

Index

e.       Rock formations and mineralization

 

The Chewatt claims are within the Nemegosenda Lake Alkalic Rock Complex which lies within the Kapuskasing Subprovince of the Superior Province of the Canadian Shield. The complex consists largely of fine- to medium-grained, syenitic to malignitic rocks which are bordered along the southern margin of the complex by an arcuate mass of coarse-grained nepheline syenite (Sage 1987b). The complex is enclosed within a fenitized envelope produced by metasomatism by alkali-iron-rich aqueous fluids from the crystallizing alkaline magma (Parsons 1961). The rocks surrounding the complex are variably altered and fenitized, with the intensity of fenitization increasing towards the intrusion (Pell, 1998). Locally, the Chewett claims are hosted in the Alkalic Intrusive Suite and Carbonatite (circa 1.1 to 1.2 Ga) and contain units of Alkalic syenite, ijolite, nepheline syenite, fenite, associated mafic and ultramafic rocks, and minor carbonatite.

 

f.       Map

 

 

Index

f)       King Solomon Mines Property

 

a.       Location and Access

 

The property is located in the northwestern portion of Davis Township, Sudbury Mining Division approximately 40km east-northeast of the city of Sudbury, Ontario. The property is accessed by an unmarked road which bisects the property. This road is reached by heading east on Hwy 17 from Sudbury then heading north on Hwy 535 from the town of Markstay-Warren and continuing north on the road which passes by the west side of Washagami Lake.

 

b.       Description and Claim Conditions

 

The Company owns a one hundred percent interest in these four contiguous staked boundary mining claims (approx.. 180 acres). This claims group requires annual exploration expenditures of $800 CAD per year ($200.00 per claim), accompanied by an industry standard report detailing the work completed, due on their July 31^st anniversary date.

 

Currently, MNDM Assessment Assignment to each of these Tenure IDs is as follows:

 

322868 (Cell ID 41I10I336): $48,000.00

320702 (Cell ID 41I10I337): $50,000.00

208133 (Cell ID 41I10I317): $50,000.00

100056 (Cell ID 41I10I316): $50,000.00

 

Legacy Claim Id	Township / Area	Tenure ID	Tenure Type	Anniversary Date	Tenure Status	Tenure Percentage	Work Required
4281716	DAVIS	322868	Boundary Cell Mining Claim	2020-07-30	Active	100	200
4281716	DAVIS	320702	Boundary Cell Mining Claim	2020-07-30	Active	100	200
4281716	DAVIS	208133	Boundary Cell Mining Claim	2020-07-30	Active	100	200
4281716	DAVIS	100056	Boundary Cell Mining Claim	2020-07-30	Active	100	200

 

c.       History

 

There is no history of previous exploration work on the property readily available.

 

d.       Present

i.       Property Condition

 

ii.       Work done during the year - None

 

iii.       Details of Equipment

 

There currently is no equipment on site.

 

e.       Rock formations and mineralization

 

Davis Township is primarily underlain by Huronian sediments of the Cobalt Group which have been intruded by broad Nipissing gabbro sills and dike (Thomson and Card, 1963). Terrain in this region is fairly rugged, characterized by prominent NWest trending ridges reaching elevations of up to 200 feet above lake level. These ridges are generally parallel to the gabbro unit which hosts gold-bearing veins in a series of parallel and sub-parallel fractures (McLeod, 1988). The KSM property features a prominent NWest striking Nipissing gabbro sill with a width of up to 3500 feet. This gabbro sill was the focus of this investigation, as it harbours numerous

 

Index

sequences of quartz-carbonate filled fractures which also trend NWest. Some of these quartz veins are found to contain pyrite, chalcopyrite and gold which may occur in native form (McLeod, 1988).

 

f.       Map

 

 

Index

g)       Borden Lake North Property

 

a.       Location and Access

 

The property is in Cochrane and Darcy Townships located about 6.5 kilometers (app. 4 miles) north of the Newmont Borden Lake gold mine in Northern Ontario. The property Access to the property is best obtained by boat on Henderson Lake.

 

b.       Description and Claim Conditions

 

Claims are numbered 536933-536943 (inclusive)

 

c.       History

 

There is no history of previous exploration work on the property readily available.

 

d.       Present

i.       Property Condition

 

ii.        Work done during the year - None

 

iii.       Details of Equipment

 

There is currently no equipment on site.

 

e.       Rock formations and mineralization

 

Gneissic tonalite suite. Tonalite to granodiorite-foliated to gneissic-with minor supracrustal inclusions.

 

f.       Map

 

 

 

Index

h)       Halcrow Gold, McCool, Seymour Lake Property

 

a.       Location and Access

 

The Halcrow Gold property is located in northeastern Ontario, 35 kilometers East of Chapleau.

 

b.       Description and Claim Conditions

 

The Property consists of thirty five claims, known as the Halcrow Gold Property, McCool Property and Seymour Lake Extension Property Northern Ontario. The Halcrow Gold property is located in northeastern Ontario, 35 kilometers East of Chapleau. It consists of two (2) claim units covering approximately 80 acres.  Located 25 km of the property is Newmont’s Borden Lake Mine, an active gold producer with proven and probable reserves of 2.61 million tonnes of estimated, measured and indicated gold reserves with an average grade of 5.81 g/t Au

 

The property is also 11 km southwest of Rockridge Resources Ltd.’s - Raney Gold Project. Recent news release (April 29, 2020) from the Raney Gold Project indicates an impressive drill result of 28.0 g/t Au over 6.0 m at a vertical depth of 95 m. The Halcrow Gold property is also 3 km north of the historical Halcrow Swayze Mine, a developed prospect with 115,600 tonnes of unclassified reserves at 3.8 g/t Au (1934).

 

c.       History

 

Significant historical gold values associated with disseminated pyrite, arsenopyrite, quartz veins and red syenite-porphyry were established in two separate shear zones in Archean age volcanic tuffs, sediments, and conglomerates that resulted in the following (Au) values:

 

0.93 g/t Au - chip samples over 18’ and 24’ (Government Geologist Rickaby - 1934)

4.35 g/t Au - arsenopyrite-bearing qtz vein and bleached wallrock (Sulpetro - 1981)

1.4  g/t Au - pink grey qtz and feldspar porphyry-syenite, minor pyrite and chalcopyrite (K. Filo - 1992)

8.3  g/t Au - obtained in dumps of the main trench (W. Troup - 1995)”

 

d.       Present

i.       Property Condition

 

ii.        Work done during the year - None

 

iii.       Details of Equipment

 

There currently is no equipment on site.

 

e.       Rock formations and mineralization

 

Index

f.       Map

 

 

Index

i)       Haycock, Godfrey, Roma Lake Property

 

a.       Location and Access

 

The Haycock Gold property is composed of 8 cell units in Haycock township, located in Northwestern Ontario, 12 km east of Kenora, Ontario.

 

b.       Description and Claim Conditions

 

c.       History

Historical Exploration work established gold mineralization with impressive assay results:


 

1.

Assays of 8.7 g/t Au (0.28 oz/t), 7.1 g/t Au (0.208 oz/t) and

1.4 g/t Au (0.04 oz/t) - (G. Clark, 1983)

2.

Grades from previous mining operations reported to be $36.00 to $120.00 per ton from several assayed samples while gold was valued at $20.00 per ounce, respectively, grading between 55.9 g/t and 186.6 g/t Au (1.8 oz/t to 6 oz/t) - (The Colonist, 1896)

 

The property features two gold zones where historic shafts were developed.

 

The Sweden shaft was sunk on the main vein to a depth of 21.3 m with 3 m of lateral development by the Sweden Gold Mining Company of Ontario in 1986.  The inclined shafts collar dimensions are 2.5 x 3 m. The main zone cuts the inclusion-laden quartz diorite to the east of an area of muskeg and swamp and consists of a 1 to 2 m wide shear zone striking 055° and dipping 70°SE. Vein structure has been traced over 240 m by a series of trenches and pits located in the vicinity of the shaft.

 

The Emmons shaft is located 700 m southeast of the Sweden and has collar dimensions of 4 x 2.5 m. Depth of shaft is unknown and water level is measured 7 m below surface. The associated waste rock pile has dimensions of 12 x 3 x 4 m. Multiple trenches and pits were also developed in the vicinity of the shaft. 

 

The property sat fairly dormant until staked by P. Karwcki and G. Clark in 1983 and was optioned to Jalna Resources Ltd in 1984.

 

d.       Present

i.       Property Condition

 

ii.       Work done during the year - None

 

iii.       Details of Equipment

 

Currently there is no equipment onsite.

 

e.       Rock formations and mineralization

 

The geology is underlain by quartz diorite of the Island Lake intrusion, which is characterized by the irregular occurrence of mafic intrusions. The larger inclusions have been fractured and intruded by irregular bodies and diffuse veins of quartz diorite. The exposed bedrock in the vicinity of old workings varies from predominantly basalt to predominantly quartz diorite.  The property is aligned north of a structural trend leading in the direction of former operating mines known as the Triumph and Treasure. The structure from the Triumph Mine was noted to head in the direction of the property while it was dewatered and assessed in 1987. 

 

Index

f.       Map

 

 

 

Index

j)       Hiltz Property

 

a.       Location and Access

The property is located in Asquith Township in Northern Ontario.

 

b.       Description and Claim Conditions

 

The Hiltz property is eight claims covering, roughly, 350 acres in The Shining Tree gold camp.

 

c.       History

 

There is no history of exploration work on the property that is readily available.

 

d.       Present

i.       Property Condition

 

ii.       Work done during the year - None

 

iii.       Details of Equipment

 

There currently is no equipment on site.

 

e.       Rock formations and mineralization

 

The Hiltz property is within the Abitibi Greenstone Belt and is underlain by an early Archean metavolcanic sequence with a basal layer of pyroclastic and sediments, followed by a sequence of mafix tholeiitic, and an upper layer felsic metadata volcanics. Volcanics are intruded by later stage felsic units as well as diabase dykes. Gold mineralization in the area is characterized by shear or vein types characterized by a mesothermal gold mineralization model.

 

f.       Map

 

There is no map of the property readily available.

 

k) Jo-Anne Property

 

On November 13, 2020, the Company purchased a 100% interest in two claims, known as the Jo-Anne Property, in Benoit Township in Northern Ontario. The Company paid two million four hundred thousand JSHG common shares at $0.07 per share for the mineral property and a two per cent (2%) Net Smelter Royalty ('NSR') of which the Company has the option to repurchase 50% of the NSR for two million Canadian dollars ($2,000,000) at any time.

 

In 2020, the Company recognized an impairment charge of $168,000 on the carrying value of the Jo-Anne Property based on the substantial doubt of the Company’s ability to raise adequate financing.

 

 

Index

l)       Niobe Property

 

a.       Location and Access

 

b.       Description and Claim Conditions

 

On May 15, 2021, the Company entered into a mineral property acquisition agreement, pursuant to which the Company acquired 100% interest in fifteen claims, known as the Borden North Property in Collins\Chewett Townships located in Northern Ontario. Under the acquisition agreement, the Company issued equity consideration of 2,000,000 shares of common stock, valued at US$0.06 per share recorded in shares to be issued and agreed to a two per cent (2.0%) Net Smelter Royalty (NSR) to be paid. Vendor granted the Purchaser an Option to purchase 50% of the NSR (1.0%NSR) for $2 Million Canadian dollars ($2,000,000).

 

c.       History

No work was done on this property in 2021 and the property reverted back to the Crown.

 

d.       Present

i.       Property Condition

 

ii.       Work done during the year – None

 

iii.       Details of Equipment

 

There currently is no equipment on site.

 

e.       Rock formations and mineralization

 

f.       Map

 

Index

m)       Benoit West Property

 

a.         Location and Access

 

b.        Description and Claim Conditions

 

On August 17, 2021, the Company entered into a mineral property acquisition agreement, pursuant to which the Company acquired 100% interest in fifteen claims, known as the Benoit West located in Northern Ontario. Under the acquisition agreement, the Company issued equity consideration of 2,500,000 shares of common stock, valued at US$0.06 per share recorded in shares to be issued and agreed to a two per cent (2.0%) Net Smelter Royalty (NSR) to be paid. Vendor granted the Purchaser an Option to purchase 50% of the NSR (1.0%NSR) for $1 Million Canadian dollars ($1,000,000).

 

c.       History

 

d.       Present

i.       Property Condition

 

ii.       Work done during the year None

 

iii.       Details of Equipment

 

There currently is no equipment on site.

 

e.       Rock formations and mineralization

 

f.       Map

 

 

Index

ITEM 3.

LEGAL PROCEEDINGS

 

Except as indicated below, there are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company is a party or of which any of its property is the subject, or any such proceedings known to be contemplated by any governmental authority.

 

At present the Company is involved in three material litigation proceedings. These actions are ongoing in the Ontario Superior Court of Justice and all involve the ownership of the Kenty Property.

 

The first application is an application brought by Emerald Isle Resources on May 14, 2013 seeking a declaration that it is the legal owner of the Kenty Property. The application alleges: (i) that Brian A. McClay, the owner of the Kenty Property, had sold 100% of his interest therein to Emerald Isle in 1986, although Emerald Isle did not register its acquisition of the Kenty Property at that time; and (ii) that at the time he entered into an agreement to sell the Kenty Property to the Company, Mr. McClay had no interest in the Kenty Property to sell. The Company has responded to that application.

 

By separate application commenced March 13, 2014 the Company and its co- applicant, Mr. McClay commenced a separate proceeding in the Ontario Superior Court of Justice seeking a formal declaration that Mr. McClay is the sole owner of a 100% undivided interest in the Kenty Property subject only to a smelting agreement and a Mineral Property Acquisition Agreement in favor of the Company.

 

These matters remain to be resolved.

 

In separate proceedings, on May 13, 2015, the Company filed a Statement of Claim against Mr. McClay seeking damages totaling $10,750,000 in the event that the Application of the Company and Mr. McClay is unsuccessful and on or about September 28, 2015, Mr. McClay filed a counterclaim against the Company alleging that the Company has failed to deliver the consideration for the purchase of the Kenty Property and therefore has no rights thereto, and seeking damages in the amount of $2,500,000 against the Company. The matter remains in abeyance pending the resolution of the two Applications.

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

As the mines operated by the Company are not located in the United States, we are not subject to the provisions of the Federal Mine Safety and Health Act of 1977 and are thus not required to provide the information required by this Item 4.

 

Index

PART II

 

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Our common stock has been quoted on the OTC Pink market only since August 2019.  There is currently a limited public market for our common stock and we can provide no assurance that a significant trading market will ever develop or that, if developed, it will be sustained. Consequently, holders of our common stock may find it difficult to resell their securities at the times and in the amounts that they desire.

 

Holders

 

As of December 31, 2021, there were 153,556,362 shares of common stock issued and outstanding held by approximately 220 stockholders of record. This figure does not include an indeterminate number of stockholders who may hold their shares in “street name.”

 

Dividends

 

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor entitled "Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.”

 

As at December 31, 2021, we were in arrears in our dividends on preferred shares. The balance of dividends payable of $486,202 includes dividends of $78,769 and accrued interest of $207,432, accrued at 10.0% interest compounded annually.

 

Securities authorized for issuance under equity compensation plans

 

We have never and have no current plans to issue securities under any equity compensation plans.  However, during 2021, securities were to be issued to employees under individual employment agreements as further detailed below in “Recent Sales of Unregistered Securities” and Item 13.

 

Recent Sales of Unregistered Securities

 

a)

Common Stock

 

During the year ended December 31, 2021, the Company issued no shares of common stock to directors and employees of the Company for services rendered.

 

During the year ended December 31, 2021, the Company issued 7,200,000 shares of common stock to third parties for the acquisition of mineral rights at the transaction prices ranging from $0.06 to $0.07 per share for a total value of $459,000.

 

During the year ended December 31, 2021, the Company issued 3,933,334 shares of common stock to third parties for investor services at the transaction prices ranging from $0.10 to $0.15 per share for a total value of $570,000.

 

During the year ended December 31, 2021, the Company issued 738,347 shares of common stock to third parties for exploration services at the transaction price of $0.07 per share for a total value of $61,405.

 

During the year ended December 31, 2021, the Company issued 200,000 shares of common stock to third parties for a private placement $0.02 per share for a total value of $10,000.

 

Stock To be Issued

 

As of December 31, 2021, the Company has yet to issue 9,521,577 shares of common stock at the transaction prices ranging from $0.02 to $0.15 per share for a total of $2,682,11. In addition, 3,576,534 shares of common stock are to be issued to directors for services recorded in prior years. An additional 1,995,043 shares of common stock are yet to be issued for debt settlements from prior years.

 

Index

For the year ended December 31, 2021, 2,000,000 shares became issuable to directors and officers of the Company for services rendered. These transactions have been recorded as consulting fees having a total value of $200,000 within shares to be issued.

 

As December 31, 2021, the Company had not yet issued 1,950,000 shares of common stock for debt settlements having a total value of $39,000. This was recorded as reduction in current liabilities and as an increase within shares to be issued.

 

Purchases of Equity Security by the Issuer and Affiliated Purchasers

 

None; not applicable.

 

Use of Proceeds

 

On July 24, 2018, the Company publicly filed with the SEC its Registration Statement on Form S-1 (Registration No. 333-226315), which registration statement was declared effective on August 10, 2019. The Registration Statement provided for the registration of: (i) 5,000,000 shares of common stock for sale by the Company under its Primary Offering; and (ii) 62,912,797 shares of common stock for resale under a Secondary Offering by certain Selling Stockholders of the Company.

 

As of January 24, 2019, the Company had sold 75,590 Flow-Through shares of common stock under the Primary Offering at a price of $0.15 per share, and the Board of Directors resolved to terminate the Primary Offering only. In accordance with an undertaking made by the Company in the Registration Statement to remove from registration, by means of a post-effective amendment, any of the securities registered thereunder that remained unsold at the termination of the offerings, on January 24, 2019, the Company filed with the SEC Post-Effective Amendment No. 1 to the Registration Statement to remove and withdraw from registration the 4,924,410 shares that were registered but remained unsold upon the termination of the Primary Offering. Such Post-Effective Amendment No. 1 had no effect on the 62,912,797 shares registered for resale under the Secondary Offering. The Company used the $11,338.50 in proceeds from its sale of 75,590 shares for operating expenses and reduction of accounts payable.

 

On December 26, 2019, the Company filed with the SEC Post-Effective Amendment No. 2 to the Registration Statement to remove and withdraw from registration the 62,912,797 shares registered for resale under the Secondary Offering as these shares had satisfied a one year holding requirement under Rule 144 of the SEC.

 

ITEM 6.

SELECTED FINANCIAL DATA

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Liquidity and Capital Resources.

 

We are an exploration stage company focused on developing our business in the mineral exploration sector.  Our principal business objective for the next twelve (12) months will be to continue to develop our business plan in this sector.

 

As of December 31, 2021, we had cash on hand of $293 and current liabilities of $1,463,282. We do not have sufficient capital to operate our business and will require additional funding to sustain operations through December 2022. There is no assurance that we will be able to achieve revenues sufficient to become profitable.

 

We have incurred losses since inception and our ability to continue as a going-concern depends upon our ability to develop profitable operations and to continue to raise adequate financing.  We are actively targeting sources of additional financing to provide continuation of our operations. In order for us to meet our liabilities as they come due and to continue our operations, we are solely dependent upon our ability to generate such financing.

 

There can be no assurance that the Company will be able to continue to raise funds, in which case we may be unable to meet our obligations and we may cease operations.

 

Net cash used in operating activities.  During the fiscal year ended December 31, 2021, net cash used in operating activities was $(65,397) compared with $(112,189) used in operating activities for the fiscal year ended December 31, 2020.  The cash flow used in operating activities in the fiscal year ended December 31, 2021 was primarily the result of incurred operating losses. The cash flow used in operating activities in the fiscal year ended December 31, 2020 was primarily the result of incurred operating losses.

 

Net cash used in investing activities. During the fiscal year ended December 31, 2021, net cash used in investing activities was $Nil compared with $Nil used in investing activities for the fiscal year ended December 31, 2020.

 

Index

Net cash provided by financing activities. During the fiscal year ended December 31, 2021, net cash provided by financing activities was $66,172 compared with $115,226 provided by financing activities for the fiscal year ended December 31, 2020.  The cash flow provided by financing activities in the fiscal year ended December 31, 2021 was primarily attributable to advances from shareholders and a private placement. The cash flow provided by financing activities in the fiscal year ended December 31, 2020 was primarily attributable to advances from shareholders and the issuance of preferred shares.

 

(b)       Results of Operations.

 

Comparison of Fiscal Year Ended December 31, 2021 to Fiscal Year Ended December 31, 2020

 

We earned no revenues during the fiscal year ended December 31, 2021 and we earned $15,336 in revenues from the sale of four mining leases during the fiscal year ended December 31, 2020.  We do not anticipate earning any further revenues until such time as we have entered into commercial production of our mineral properties.  We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.

 

Consulting Fees.  Consulting fees decreased to $116,400 for the fiscal year ended December 31, 2021 from $200,000 for the fiscal year ended December 31, 2020. The increase in consulting fees was primarily attributable to the decrease in the trading price range of the common stock used for stock based executive compensation.

 

Exploration Expenses.  Exploration expenses decreased to $1,904 for the fiscal year ended December 31, 2021 from $67,357 for the fiscal year ended December 31, 2020.  The decrease in exploration expenses was attributable to reduced drilling, staking fees and geological consultants.

 

General and Administrative Expenses.  General and administrative expenses increased to $499,546 for the fiscal year ended December 31, 2021 from $13,716 for the fiscal year ended December 31, 2020. The increase was due to increased costs associated with marketing.

 

Professional Fees.  Professional fees decreased to $69,926 for the fiscal year ended December 31, 2021 from $95,821for the fiscal year ended December 31, 2020. The fees are the Company’s costs associated with Company filings.

 

Interest Expense.  Interest expense was $24,013 for the fiscal years ended December 31, 2021 and $18,670 for the fiscal year ended December 31, 2020. The interest accrued on the David Mason loan as described in Note 5 to the financial statements.

 

Depreciation.  Depreciation expenses of $Nil for the fiscal year ended December 31, 2021 and for the fiscal year ended December 31, 2020. The company did not acquire any depreciable assets during the year.

 

Loss on Note Receivable.   The loss in 2021 was due to the settlement of a debt netted against a note receivable as described in Note 7 to the financial statements.

 

Loss on Debt Settlement.   The loss in 2021 was due to the settlement of a debt exchanged for share of commonstock and warrants as described in Note 7 to the financial statements.

 

Loss on Disposal of Mineral Rights.   The loss in 2020 was due to the impairment charge on mineral rights as described in Note 4 to the financial statements.

 

Net loss.  For the fiscal year ended December 31, 2021, we incurred a net loss of $(1,000,689) as compared to a net loss of $(860,556) for the fiscal year ended December 31, 2020.  The net loss was primarily a result of the increase in marketing exploration activity and, not yet having commenced its mining operations, terminated or expired property agreements, impairment of acquired mineral rights.

 

(c)       Off-balance sheet arrangements.

 

We have not entered into any 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 and would be considered material to investors.

 

(d)       Inflation.

 

We do not believe that inflation has had in the past or will have in the future any significant negative impact on our operations.

 

(e)       Contractual Obligations.

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to provide the information required by this item.

Index

---

Index

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Index

Presented in US Dollars
		December 31, 2021			December 31, 2020
Current Assets
Cash		$	293		$	3,716
Accounts receivable and other assets			11,043			11,237
Prepaid expenses			88,330			-
Notes receivable (Note 7)			10,521			19,000
Total Current Assets			110,187			33,953
Other Assets
Mineral properties (Note 3)			1			1
TOTAL ASSETS		$	110,188		$	33,954
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	314,671		$	297,594
Accrued liabilities			27,278			27,410
Advances from stockholders (Note 4)			635,131			555,555
Dividends Payable (Note 6)			486,202			419,848
Due on mineral rights (Note 5)			-			39,270
Total Liabilities			1,463,282			1,339,677
Stockholders' Deficit
Preference Shares, $0.0001 par value; 100,000,000			25			25
shares authorized; 243,690 shares issued and
outstanding (December 31, 2020 – 243,690) (Note 6)
Common Stock, $0.0001 par value; 400,000,000
shares authorized; 153,556,362 shares issued and
outstanding (December 31, 2020 –141,484,681) (Note 6)			15,346			14,139
Additional Paid In Capital (Note 6)			12,278,733			11,179,536
Shares to be Issued (Note 6)			2,256,444			2,341,728
Accumulated other comprehensive income			51,549			46,998
Accumulated Deficit			(15,955,191)			(14,888,149)
Total Stockholders' Deficit			(1,353,094)			(1,305,723)
Total Liabilities and Stockholders' Deficit		$	110,188		$	33,954
Going Concern – see Note 1
Commitments and Contingencies – See Note 3

---

Index

		Year ended			Year ended
		December 31, 2021			December 31, 2020
REVENUE
Sale of mineral property leases		$	-		$	15,336
OPERATING EXPENSES
Consulting fees (Note 6)		$	116,400		$	200,000
Professional fees			69,926			95,821
General and administrative			499,546			13,717
Exploration			1,904			67,357
Interest			24,013			18,670
Foreign exchange loss (gain)			701			(6,672)
Loss on note receivable (Note 7)			8,479			-
Loss on debt settlement(Note 6)			9,720			-
Loss on impairment of properties (Note 3)			270,000			487,000
TOTAL OPERATING EXPENSES			1,000,689			875,893
NET LOSS			(1,000,689)			(860,557)
OTHER COMPREHENSIVE LOSS
Foreign currency translation gain (loss)			4,551			(13,532)
NET LOSS AND COMPREHENSIVE LOSS		$	(996,138)		$	(874,089)
NET LOSS		$	(1,000,689)		$	(860,557)
Dividends on Preferred Stock			(66,353)			(59,986)
NET LOSS ATTRIBUTED TO COMMON SHAREHOLDERS		$	(1,067,042)		$	(920,543)
LOSS PER SHARE - BASIC AND DILUTED			$0.0067			$0.0062
WEIGHTED NUMBER OF SHARES
OUTSTANDING - BASIC AND DILUTED			150,986,918			139,729,490

---

Index

		Preferred Stock				Common Stock				Additional Paid-in		Stock to be		Accumulated Other Comprehensive		Accumulated		Total Stockholders’
		Shares		Par Value		Shares		Par Value		Capital		Issued		Income		Deficit		Deficit
Balance – December 31, 2019		240,000		24		138,084,681		13,799		10,878,186		1,901,044		60,530		(13,967,606)		(1,114,023)
Stock to be issued for compensation (Note 6)												200,000						200,000
Stock issued from private placement (Note 6)		3,690		1						3,689								3,690
Stock issued for mineral rights (Note 6)						3,400,000		340		297,660								298,000
Stock issued for services (Note 6)												51,685						51,685
Stock to be issued for mineral rights (Note 6)												189,000						189,000
Foreign currency translation														(13,532)				(13,532)
Net loss																(860,557)		(860,557)
Dividends																(59,986)		(59,986)
Balance – December 31, 2020		243,690		25		141,484,681		14,139		11,179,536		2,341,728		46,998		(14,888,149)		(1,305,723)
Stock to be issued for compensation (Note 6)												116,400						116,400
Stock issued from private placement (Note 6)						200,000		20		9,980		-						10,000
Stock issued for debt settlement (Note 6)						738,347		74		61,331		(12,685)						48,720
Stock issued for mineral rights (Note 6)						7,200,000		720		458,280		(189,000)						270,000
Stock issued for services (Note 6)						3,533,334		353		529,647								530,000
Stock issued for services (Note 6)						400,000		40		39,960								40,000
Foreign currency translation														4,551				4,551
Net loss																(1,000,689)		(1,000,689)
Dividends																(66,353)		(66,353)
Balance – December 31, 2021		243,690		25		153,556,362		15,346		12,278,733		2,256,444		51,549		(15,955,191)		(1,353,094)

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Index

		Year Ended			Year Ended
		December 31, 2021			December 31, 2020
CASH FLOWS USED IN OPERATIONS
OPERATING ACTIVITIES
Net loss		$	(1,000,689)		$	(860,557)
Adjustments for non-cash items:
Loss on impairment of mineral rights			270,000			487,000
Loss on debt settlement (Note 6)			9,720			-
Loss on note receivable (Note 7)			8,479			-
Interest on shareholder loans			24,013			-
Stock based compensation			116,400			200,000
Issuance of Common shares for services (Note 6)			570,000			51,685
Adjustments for changes in working capital
Accounts receivable and other assets			8,673			8,653
Prepaid expenses			(88,330)			-
Accounts payable and accrued liabilities			16,337			(281)
Due on mineral rights			-			1,311
NET CASH USED IN OPERATING ACTIVITIES			(65,397)			(112,189)
FINANCING ACTIVITIES
Advances from stockholders (Note 4)			56,172			111,535
Advances from Private placement (Note 6)			10,000			-
Debt settlement of mineral rights loan (note 7)			(8,479	)		-
Loss on Note receivable (Note 7)			(39,270	)		-
Issuance of shares from debt settlement (Note 7)			39,000			-
Issuance of Preferred shares (Note 6)			-			3,691
NET CASH PROVIDED BY FINANCING ACTIVITIES			57,423			115,226
EFFECT OF EXCHANGE RATE CHANGE FOR OPENING CASH			4,551			(13,532)
NET (DECREASE) IN CASH			(3,423)			(10,495)
CASH, BEGINNING OF YEAR			3,716			14,211
CASH, END OF YEAR		$	293		$	3,716
SUPPLLEMENTARY CASH FLOW INFORMATION
Income taxes paid		$	-		$	-
Interest paid		$	-		$	-
Stock issuances to for services		$	570,000		$	-
Stock issuances to acquire mineral properties		$	270,000		$	487,000

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021

Level 1 -	Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 -	Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 -	Inputs to the valuation methodology are unobservable and significant to the fair value.

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021

	Mineral Properties
Balance at January 1, 2016		$	1
Carson Property acquisition (a)			15,000
Impairment charge Carson Property (a)			(15,000)
Balance at December 31, 2016		$	1
Rollo Property			25,000
Janes Reef Property			16,000
Asquith Property			10,000
C1 Mortimer Property (c)			941,460
Impairment charge (c)			(992,460)
Balance at December 31, 2017 and 2018		$	1
C1 Mortimer amendment (c)			359,760
Chewitt Property (d)			60,360
King Solomon Mines Property (e)			1,280,000
Impairment charge (c) (d) (e)			(1,700,120)
Balance at December 31, 2019		$	1
Borden Lake North (f)			15,000
Halcrow, McCool, Seymour Lake (g)			145,000
Haycock, Godfrey and Roma (h)			138,000
Hiltz (i)			21,000
Jo-Anne Property(j)			168,000
Impairment charge (f)(g)(h)(i)(j)			(487,000)
Balance at December 31, 2020			1
Niobe Property (k)			120,000
Benoit West Property (l)			150,000
Impairment charge (k)(l)			(270,000)
Balance at December 31, 2021			1

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Index

Joshua Gold Resources Inc.

(An Exploration Stage Company)

Notes to Financial Statements

For the year ended December 31, 2021