Mining Global, Inc. - Quarter Report: 2012 May (Form 10-Q)

f10q0512_yaterra.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31, 2012

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER: 000-53556

YATERRA VENTURES CORP.

(Exact name of registrant as specified in its charter)

NEVADA	75-3249571
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1120 Slide Road No. 30
Lubbock, TX	79416
(Address of principal executive offices)	(Zip Code)

(214) 736-3321

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

xYes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

xYes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

As of August 13, 2012, the Registrant had 14,130,000 shares of common stock outstanding .

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and nine months ended May 31, 2012 are not necessarily indicative of the results that can be expected for the year ending August 31, 2012.

As used in this Quarterly Report, the terms "we,” "us,” "our,” “Yaterra” and the “Company” mean Yaterra Ventures Corp. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

YATERRA VENTURES CORP.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	MAY 31,			AUGUST 31,
	2012			2011

ASSETS
Current Assets:
Cash	$	126		$	-
Deposits		25,000			360
Total Current Assets		25,126			360

Mineral property acquisition costs		22,000			22,000

Total Assets	$	47,126		$	22,360

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities		189,484			161,241
Amounts payable to related parties		72,250			47,033
Accrued interest		60,497			36,207
Accrued interest on related party notes		1,488			107
Short-term debt		925,041			231,293
Short-term debt to related party		27,024			9,486
Convertible notes		13,334			-
Derivative liabilities		59,962			-
Total Current Liabilities		1,349,080			485,367

Stockholders’ Deficit:
Preferred stock, $0.001 par value, 100,000,000 shares authorized, none issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares authorized, 14,130,000 and 1,630,000 shares issued and outstanding		14,130			1,630
Additional paid-in capital		(496,186	)		189,370
Deficit accumulated during the exploration stage		(819,898	)		(654,007	)
Total Stockholders’ Deficit		(1,301,954	)		(463,007	)

Total Liabilities and Stockholders’ Deficit	$	47,126		$	22,360

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

YATERRA VENTURES CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


													NOVEMBER 20,
													2006
	THREE						NINE						(INCEPTION)
	MONTHS ENDED						MONTHS ENDED						THROUGH
	MAY 31,						MAY 31,						MAY 31
	2012			2011			2012			2011			2012

Operating Expenses
Selling, general, and administrative	$	(6,159	)	$	7,345		$	9,472		$	23,680		$	112,084
Mineral property costs		-			-			2,984			1,756			55,924
Professional fees		19,612			9,849			65,169			43,143			325,317
Management compensation		27,699			12,000			52,699			36,000			248,199
Total Operating Expenses		41,152			29,194			130,324			104,579			741,524

Other Income (Expenses)
Gain on change in fair value of derivatives		3,327			-			3.327			-			3,327
Interest expense		(22,250	)		(6,363	)		(38,895	)		(16,365	)		(81,701	)
Total Other Expenses		(18,923	)		(6,363	)		(35,568	)		(16,365	)		(78,374	)

Net Loss	$	(60,075	)	$	(35,557	)	$	(165,892	)	$	(120,944	)	$	(819,898	)

Net Loss Per Share – Basic and Diluted	$	(0.02	)	$	(0.02	)	$	(0.08	)	$	(0.07	)

Weighted Average Number of Common Shares Outstanding – Basic and Diluted		2,988,696			1,630,000			2,086,204			1,630,000

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

YATERRA VENTURES CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


							NOVEMBER 20,
							2006
	NINE						(INCEPTION)
	MONTHS ENDED						THROUGH
	MAY 31,						MAY 31,
	2012			2011			2012

Cash Flows from Operating Activities
Net loss	$	(165,892	)	$	(120,944	)	$	(819,898	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			98			1,184
Amortization of debt discounts		8,623			-			8,623
Gain on change in fair value of derivatives		(3,327	)		-			(3,327	)
Stock-based compensation		7,699			-			7,699
Write-off of mineral property acquisition costs		-			-			3,369
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		42,684			36,324			240,238
Amounts payable to related parties		26,635			12,250			73,668
Prepaid expenses		360			(2,500	)		-
Net cash used in operating activities		(83,218	)		(74,772	)		(488,444	)

Cash Flows from Investing Activities
Mineral property acquisition costs		-			(493	)		(25,369	)
Computer equipment		-			-			(1,184	)
Net cash used in investing activities		-			(493	)		(26,553	)

Cash Flows from Financing Activities
Issue of common stock for cash		-			-			191,000
Proceeds from debt		71,715			75,051			305,605
Repayment of debt		(76,310	)		(2,597	)		(78,907	)
Proceeds from related party debt		26,317			-			35,803
Repayment of related party debt		(6,378	)		-			(6,378	)
Proceeds from convertible notes		68,000			-			68,000
Net cash provided by financing activities		83,344			72,454			515,123

Net Increase (Decrease) In Cash		126			(2,811	)		126
Cash at the beginning of the period		-			51			-
Cash at the end of the period	$	126		$	(2,760	)	$	126

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	-		$	-		$	-
Income taxes		-			-			-

Non-Cash Investing and Financing Activities
Common shares issued for the acquisition of Pure Spectrum Oil, Inc.	$	680,755		$	-		$	680,755
Debt discounts due to beneficial conversion features		63,289			-			63,289

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

YATERRA VENTURES CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The unaudited financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. These consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included for the fiscal year ended August 31, 2011. The Company assumes that the readers of these interim financial statements herein have read, or have access to, the audited financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s financial statements for the fiscal year ended August 31, 2011, has been omitted. The results of operations for the nine month period ended May 31, 2012 are not necessarily indicative of results for the entire year ending August 31, 2012.

Organization

Yaterra Ventures Corp. (“the Company”) was incorporated in Nevada on November 20, 2006.

On May 21, 2012, the Company acquired 100% of Pure Spectrum Oil, Inc., a company incorporated in Nevada in exchange for 2,500,000 shares and the assumption of accounts payable of $9,803 and notes payable of $695,952. In addition, a payable owed by Pure Spectrum Oil totaling $25,000 was forgiven in the acquisition. As a result of the acquisition of the Pure Spectrum Oil shares, the Company is now in the business of oil and gas exploration.

The Company and Pure Spectrum Oil were under common control as of the date of the acquisition. On December 5, 2011, Cedric Atkinson (the Chief Executive Officer of the Company) acquired control of Pure Spectrum, Inc. (the parent of Pure Spectrum Oil) through the acquisition of Series B voting preferred stock in Pure Spectrum, Inc. The acquisition of these Series B preferred shares provided Cedric Atkinson with majority ownership in Pure Spectrum, Inc. In addition, on March 2, 2012, Cedric Atkinson obtained control of Yaterra Ventures, Corp. through the purchase of 900,000 common shares from the previous owner of the Company. Accordingly, for accounting purposes, the acquisition of Pure Spectrum is being accounted for at historical carrying values. The Chief Executive Officer and controlling shareholder of the Company is also the Chief Executive Officer and controlling shareholder of Pure Spectrum. Transfers or exchanges of equity instruments between entities under common control are recorded at the carrying amount of the transferring entity at the date of transfer with no goodwill or other intangible assets recognized. Our consolidated financial statements and reported results of operations reflect the Pure Spectrum Oil carryover values, and our reported results of operations and stockholders’ equity have been retroactively restated for all periods presented to reflect the operations of Pure Spectrum Oil and the Company as if the acquisition had occurred on March 2, 2012, the date the Company and Pure Spectrum Oil commenced common control. All intercompany accounts and balances have been eliminated in consolidation.

Exploration Stage Activities

The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties. The Company has not commenced business operations. The Company is an exploration stage company in accordance with FASB ASC 915, Development Stage Entities.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a three-tier fair value hierarchy which prioritizes the inputs in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company classified the fair value of its derivative liabilities related to conversion options on outstanding debt as Level 3. The following is a reconciliation of the conversion option liability for which Level 3 inputs were used in determining fair value:

	MAY 31,
	2012
Beginning balance, September 1, 2011	$	-

Initial recognition of derivatives		63,289
Change in fair value of derivatives		(3,327	)
Transfers in or out of level 3 classification		-

Ending balance, May 31, 2012	$	59,962

During the nine ended May 31, 2012, the company recorded a gain on the change in the fair value of derivatives of $3,327.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $819,898 for the period from November 20, 2006 (inception) to May 31, 2012, and has no sales. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its natural resource properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates.

NOTE 3. DEPOSIT

During the nine month period ended May 31, 2012, the Company deposited $25,000 with the Railroad Commission of Texas for the right to acquire and hold drilling permits in the state.

NOTE 4. MINERAL PROPERTIES

Mineral properties consisted of the following as of May 31, 2012 and August 31, 2011:

	MAY 31,		AUGUST 31,
	2012		2011
Mineral Property
Blue Jack claims	$	16,000	$	16,000
Minnie Lode claims		6,000		6,000

	$	22,000	$	22,000

During the year ended August 31, 2007, the Company entered into a purchase agreement to acquire an undivided 100% interest in a mineral claim (known as the “Minnie Lode Claims”) located in the Leecher Creek Mining District, Okanogan County, Washington. The consideration was $6,000 cash (paid) on execution of the agreement.

During the year ended August 31, 2009, the Company entered into a purchase agreement to acquire an undivided interest in a series of ten mineral claims (collectively referred to as the “Blue Jack Claims”) located in Humboldt County, Nevada. The consideration was $16,000 (paid) on execution of the agreement.

NOTE 5. PROMISSORY NOTES PAYABLE

During the nine month period ended May 31, 2012, the Company borrowed $71,715 from third parties, net of debt-purchase agreements which changed ownership of already outstanding debt debts but not the terms of the debt. These notes bear interest of 10%, are unsecured and are repayable on demand. Also during this period, the Company made payments aggregating $76,310 on its third party debt. As of May 31, 2012, the promissory notes consist of $229,089 in principal and a total of $56,569 has been accrued as interest.

In connection with the acquisition of Pure Spectrum Oil, the Company assumed promissory notes payable aggregating $695,952 (see Note 1). These notes are unsecured, bear interest at 21% per annum and matured between July 2009 and January 2012. As of May 31, 2012, these notes were past due and due on demand.

NOTE 6. PROMISSORY NOTES PAYABLE TO RELATED PARTIES

During the nine month period ended May 31, 2012, the Company borrowed $26,317 from related parties. The Company paid back $6,378 of its related party notes during the period. These notes bear interest at 10%, are unsecured and are repayable on demand. As of May 31, 2012, the promissory notes consist of $27,024 in principal and a total of $1,488 has been accrued as interest.

NOTE 7. CONVERTIBLE NOTES

During the nine month period ended May 31, 2012, the Company borrowed $68,000 under 10% convertible notes, due on December 31, 2014. The notes may be converted into common stock equal to the principal amount of the note divided by 75% of the average trading price for 10 business days prior to the date of conversion. Upon conversion, the Company may elect to pay accrued interest by issuance of common stock using the same terms for the conversion of the notes.

In accordance with the provisions of ASC 470-20, Debt with Conversion and Other Options, the Company recognized a derivative liability associated with the debt of $63,289 and a corresponding debt discount of $63,289. The fair value of the derivative liability was calculated using a Black-Scholes pricing model, based on the underlying estimated fair values of the common stock. The resulting debt discount is being accreted over the term of the note using the effective interest amortization method. In the event of conversion of the note, the proceeds will be allocated proportionately to the carrying value of the convertible note, additional paid-in capital, and to common stock, consistent with the original allocations between their debt and equity components. At May 31, 2012, the Company has recorded amortization of $8,623 on the discount and accrued interest of $2,761.

NOTE 8. RELATED PARTY TRANSACTIONS

During the nine month period ended May 31, 2012, the Company paid or accrued management fees for services valued at $23,500 to directors and also paid or accrued $1,500 to a member of management.

As at May 31, 2012, a total of $72,250 is owing to a director and two members of management. These amounts are unsecured, do not bear interest and are due on demand.

NOTE 9. STOCKHOLDERS’ EQUITY

As outlined in Note 10, the Company issued in advance 10,000,000 common shares to the new CEO of the company during the nine months ended May 31, 2012. The fair value of the grant was determined to be $281,008 and through May 31, 2012, $1,540 was recognized as stock-based compensation. The remaining $279,469 will be expensed over the remaining vesting period.

As outlined in Note 1, the Company issued 2,500,000 common shares for the acquisition of Pure Spectrum Oil, Inc. on May 15, 2012. The shares were valued at the carryover value of the net liabilities assumed of $680,755.

NOTE 10. COMMITMENTS AND CONTRACTUAL OBLIGATIONS

On May 15, 2012, the Company reserved 1,000,000 Series A Preferred Shares to be held in escrow and to be issued to the new CEO after the closing of the Pure Spectrum purchase and the completion of a 2 year term. The stock purchase agreement is the sale of the old CEO’s Company stock to the new CEO. The fair value of the grant was determined to be $281,008 and is being expensed over the vesting period of 2 years. The Company has accrued $6,159 in stock-based compensation related to this award during the nine months ended May 31, 2012.

Additionally, on May 15, 2012, the Company approved executive compensation shares to be issued to two directors. Each director will be paid 20,000 common shares for each fiscal quarter in which the Company’s Form 10Q is timely filed and 15,000 shares for each fiscal quarter in which the Company’s Form 10Q is filed after an extension is filed. As of August 13, 2012, no shares have been earned under these agreements.

On May 21, 2012, the Company entered into an agreement for a five year term, effective May 1, 2012, with the new CEO receiving for his services $20,000 per month and 10,000,000 common shares which will vest 2,000,000 shares per annum upon completion of each 12 months term of service. The fair value of the grant was determined to be $281,008 and through May 31, 2012, $1,540 was recognized as stock-based compensation. The remaining $279,469 will be expensed over the remaining vesting period.

The company has no other significant commitments or contractual obligations with any other parties respecting executive compensation or consulting agreements. Rental of premises is on a month-to-month basis.

NOTE 11. SUBSEQUENT EVENTS

Subsequent to May 31, 2012:

a) The Company entered into three promissory note agreements, whereby, it borrowed $185 from a related party. The notes bear interest at 10% per annum, are unsecured and are repayable on demand.

b) The Company borrowed a total of $67,500 under four convertible promissory note agreements. One note will be due on December 1, 2012, two notes will be due December 14, 2012 and the fourth note will be due on January 12, 2013. Each note can be converted beginning 180 after the issue date by the lender. The notes will bear interest at 8% per annum payable annually and may be converted into common stock of the Company at 50% discount to the “Fair market value” but not less than $0.001. “Fair Market Value”: on a date shall be the lessor of: (i) the closing bid price for the date immediately preceding the date of conversion excluding any trades which are not bona fide arm’s length transactions or (ii) the average of the last five trading days closing volume weighted average price. The Company may elect at its option to pay the interest required annually by an issuance of common shares using the same terms for the conversion of the notes.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate,” "believe,” "estimate,” "should,” "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption, “Part II - Item 1A. Risk Factors,” and elsewhere in this Quarterly Report.

Forward looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date such statement are made.

We intend to discuss in our Quarterly Reports and Annual Reports any events or circumstances that occurred during the period to which such documents relate that are reasonably likely to cause actual events or circumstances to differ materially from those disclosed in this Quarterly Report. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forwarding looking statement.

We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the "Exchange Act").

OVERVIEW

We were incorporated on November 20, 2006 pursuant to the laws of the State of Nevada.

We are an exploration stage company engaged in the acquisition and exploration of mineral properties. Currently, we hold a 100% interest in two mineral properties that we call the “Blue Jack Property” and the “Minnie Claim”. The Blue Jack Property is comprised of 10 mineral claims covering approximately 206 acres in Humboldt County, Nevada. The Minnie Claim covers an area of approximately 20 acres in the Leecher Creek Mining Division, Washington State. We plan to focus our resources on the Blue Jack Property in order to assess whether it possesses mineral deposits of gold, silver, copper and rare earth minerals capable of commercial extraction.

In November 2011, we completed a preliminary rock sampling program on the Blue Jack Property. Based on these results, we planned to commence Phase I of the Blue Jack exploration program in Spring 2012. See “Plan of Operation”.

In May 2012, the Company entered into a purchase agreement to acquire 100% of the issued and outstanding shares of PureSpectrum Oil and Gas, Inc., a Nevada Corporation (“PureSpectrum”). The consideration for such transaction was the issuance of 2,500,000 shares of Yaterra common stock to the parent entity of PureSpectrum, and Yaterra’s assumption of $695,952 in PureSpectrum’s liabilities. Management determined that it would be in the best interests of the Company to change its business model and focus its further operations in the Oil and Gas industry.

INTRODUCTION

We are an oil and gas exploration, development and production company. The immediate focus is to purchase existing production from established producing operators as a base to begin the building process. The initial area of activity will be Texas, with New Mexico, Northern Louisiana, Oklahoma and Pennsylvania as secondary areas of interest. The intermediate goal is to utilize positive cash flows generated from production to perform workovers, recompletions and engage in risk-adjusted developmental drilling.

We believe that the current situation in the oil and gas industry, and the opportunities presented by it, offer an extremely favorable window of opportunity that must be acted upon now. Favorable industry fundamentals, including soft crude oil and soft natural gas prices, advances in drilling, completion and fracture stimulation techniques, coupled with ready access to infrastructure will allow the Company to pursue several attractive oil investment opportunities.

We intend to only acquire oil and gas reserves at a purchase price that is expected to result in a profitable operation assuming no further increase in oil and gas prices. We intend to acquire properties that offer two to three years of development drilling opportunities. The potential for increasing revenue and profitability include aggressively pursuing this low risk strategy to increase reserves and production of crude oil and natural gas onshore in the USA. We plan to develop low cost reserves by exploiting mature reserves and finding new reserves in existing producing areas, adjacent to existing infrastructure. We plan to do workovers of existing wells, recompletions in zones behind the pipe and additional development drilling.

We have a limited operating history of oil and gas production and no proven reserves. We have not earned any revenues to date. Management cannot provide any assurances that the Company will ever operate profitably. Our longer-term success depends on, among many other factors, the production of grade oil and gas properties and on the prevailing sales prices for oil and natural gas along with associated operating expenses. The volatile nature of the energy markets makes it difficult to estimate future prices of oil and natural gas; however, any prolonged period of depressed prices would have a material adverse effect on our results of operations and financial condition.

PLAN OF OPERATION

During the next twelve months and subject to our ability to obtain additional financing, we intend to purchase existing production with identifiable upside to establish cash flow, and effectively manage, enhance and further develop those reserves and continually enlarge them. In addition, we intend to reevaluate the Blue Jack Property Phase I (a) plan in the fourth quarter, to determine the viability of the proposed plan. After our evaluation we then determine if we should proceed, pursue a Joint Venture or sell our existing claims. To date, we have not earned any revenues and we do not anticipate earning revenues in the near future.

Blue Jack Property

Our plan is to conduct Phase I(a) of our exploration program on the Blue Jack Property in Summer 2012. However, we will require additional financing in order to implement Phase I(a) of our exploration program on the Blue Jack Property. If we are able to raise additional financing, of which there is no assurance, our plan for the Blue Jack Property is as follows:

Phase	Recommended Exploration Program	Estimated Cost	Status
Phase I(a)	Detailed geological mapping and radiometric surveys and soil and rock sampling along grid.	$25,700	To be implemented in Summer 2012, subject to obtaining additional financing.
Phase I(b)	Geophysical survey (IP and magnetometer).	$43,050	Planned for Summer 2012.
Phase II(a)	Trenching and geochemical analysis	$40,500	Dependent on the Results of Phases I(a) and I(b)

We anticipate that we will incur the following expenses over the next twelve months:

Category	Planned Expenditures Over The Next 12 Months (US$)
Legal and Accounting Fees	$	30,000
Office Expenses		6,000
Consulting Fees		48,000
Phase I Exploration Expenses		68,750
TOTAL	$	152,750

As at May 31, 2102, we had $126 cash on hand. As such, we do not have sufficient financial resources to meet the anticipated costs of completing our exploration program for the Blue Jack Property. Accordingly, we will need to obtain additional financing in order to complete our plan of operation and meet our current obligations as they come due. Our Board of Directors approved an offering of up to $100,000 of 10% convertible notes (the “Offering”) pursuant to Regulation S of the Securities Act. As at May 31, 2012, we have issued $68,365 of convertible notes. Completion of the Offering is subject to a number of factors outside of our control, including the results from our exploration program, and any unanticipated problems relating to our mineral exploration activities, such as environmental assessments and additional costs and expenses that may exceed our current estimates. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us in which case our business will fail.

RESULTS OF OPERATIONS

Three and Nine Months Summary

	Three Months Ended						Percentage			Nine Months Ended						Percentage
	May 31,			May 31,			Increase /			May 31,			May 31,			Increase /
	2012			2011			(Decrease)			2012			2011			(Decrease)
Revenue	$	-		$	-			n/a		$	-		$	-			n/a
Expenses		(60,075	)		(35,557	)		68.9	%		(165,892	)		(120,944	)		37.2	%
Net Loss	$	(60,075	)	$	(35,557	)		68.9	%	$	(165,892	)	$	(120,944	)		37.2	%

Revenue

We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter 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 deposits are discovered, that we will enter into further substantial exploration programs.

Expenses

Our expenses for the three and nine months ended May 31, 2012 and the three and nine months ended May 31, 2011 consisted of the following:

	Three			Three
	Months			Months					Nine Months			Nine Months
	Ended			Ended		Percentage			Ended			Ended		Percentage
	May 31,			May 31,		Increase /			May 31,			May 31,		Increase /
	2012			2011		(Decrease)			2012			2011		(Decrease)
Selling, general, and administrative	$	(6,159	)	$	7,345		(183.9	)%	$	9,472		$	23,680		(60.0	)%
Mineral property costs		-			-		0.0	%		2,984			1,756		69.9	%
Professional fees		19,612			9,849		99.1	%		65,169			43,143		51.1	%
Management compensation		27,699			12,000		130.8	%		52,699			36,000		46.4	%
Total Operating Expenses	$	41,152		$	29,914		26.5	%	$	130,324		$	104,579		24.6	%

Gain on fair value of derivatives		(3,327	)		-		100.0	%		(3,327	)		-		100.0	%
Interest Expense		22,250			6,363		249.7	%		38,895			16,365		137.7	%
Net Loss	$	60,075		$	35,557		69.0	%	$	165,892		$	120,944		37.2	%

Our operating expenses increased from $29,914, during the three mont hs ended May 31, 2011, to $41,152, during the three months ended May 31, 2012. The increase was primarily due to increases in professional fees and management compensation as a result of hiring of a new CEO during the period, which were offset by decreases in selling, general, and administrative expenses.

Our operating expenses increased from $104,579, during the nine months ended May 31, 2011, to $130,324, during the nine months ended May 31, 2012. The increase was primarily due to increases in professional fees and management compensation as a result of hiring of a new CEO during the period, which were offset by decreases in selling, general, and administrative expenses.

Professional Fees expenses primarily relate to expenses incurred in connection with meeting our ongoing reporting requirements under the Exchange Act, and consist of accounting and audit expenses, consulting expenses, and legal expenses.

Management Fees consists of salaries paid to our executive directors and officers, as well as stock-based compensation related to stock grants.

Mineral Property Exploration Costs relate to costs incurred with our preliminary rock sampling program on the Blue Jack Property in November 2011.

If we are able to obtain sufficient financing to proceed with our plan of operation, of which there is no assurance, we expect that our expenses will increase significantly as we engage in mining and exploration activities.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
	As at			As at			Increase /
	May 31, 2012			August 31, 2011			(Decrease)
Current Assets	$	25,126		$	360			6879.4	%
Current Liabilities		(1,349,080	)		(485,367	)		178.0	%
Working Capital Deficit	$	(1,323,954	)	$	(485,007	)		173.0	%

Cash Flows
	Nine Months Ended			Nine Months Ended
	May 31, 2012			May 31, 2011
Cash Flows (Used In) Operating Activities	$	(83,218	)	$	(74,772	)
Cash Flows (Used In) Investing Activities		-			(493	)
Cash Flows Provided By Financing Activities		83,344			72,454
Increase (Decrease) In Cash During Period	$	126		$	(2,811	)

As of May 31, 2012, we had $126 cash on hand and a working capital deficit of $1,323,954. The increase in our working capital deficit is primarily a result of: (i) an increase in debt payable of $695,952 from the acquisition of Pure Spectrum, Inc. (ii) an increase in accounts payable due to a lack of capital to meet our ongoing expenditures; (iii) the fact that we received $26,317 in short term loans from related parties, which bears interest at 10%, are unsecured and due on demand; and (iiii) the fact that we issued $68,000 of convertible notes. We have incurred a cumulative net loss of $819,898 for the period from the date of our inception on November 20, 2006 to May 31, 2012 and have not attained profitable operations to date.

Since our inception, we have used our common stock to raise money for our operations and to fund our property acquisitions. We have not obtained profitable operations and are dependent upon obtaining additional financing to pursue our plan of operation.

Future Financings

We currently do not have sufficient financial resources to implement Phase I(a) of our exploration program on the Blue Jack Property. Therefore, we will need to obtain additional financing in order to implement our exploration program on the Blue Jack Property.

On December 9, 2011, our Board of Directors approved an offering of up to $100,000 of 10% convertible notes (the “Offering”). The Offering will be completed pursuant to Regulation S of the Securities Act to persons who are not U.S. Persons as contemplated under Regulation S. The proceeds of the Offering will be used to fund our business and for working capital purposes. As of May 31, 2012, we have issued $68,000 of convertible notes. There is no assurance that the Offering will be completed on the above terms or at all.

Our plan of operation calls for us to spend significantly more than our current capital resources or the amount of financing that we have been able to obtain to date. As such, there is a substantial doubt that we will be able to raise significant financing to complete our stated plan of operation. Any substantial financing that we are able to obtain is expected to be in the form of equity financing.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

CRITICAL ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates.

Significant accounts that require estimates as a basis for determining the stated amounts include mineral property acquisition costs and impairment, accrued liabilities and the valuation allowance of deferred tax assets.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method of accounting. Until such properties are acquired and developed, we will continue to prepare our financial statements and related disclosures in accordance with entities in the exploration stage.

Mineral Property Interests

We are an exploration stage mining company and have not yet realized any revenue from our operations. We are primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing when facts and circumstances indicate impairment may exist.

We regularly perform evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of our investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.

Our management periodically reviews the carrying value of our investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that we will continue exploration on such project. We do not set a predetermined holding period for properties with unproven deposits; however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.

Our exploration activities and proposed mine development are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. We have made, and expect to make in the future, expenditures to comply with such laws and regulations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rules 13a-15(e) and 15(d)-15(e) as of May 31, 2012, (“Evaluation Date”). Based upon that evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed in our Annual Report on Form 10-K for the year ended August 31, 2011 (the "2011 Annual Report").

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our 2011 Annual Report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended May 31, 2012 fairly present our financial condition, results of operations and cash flows in all material respects.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended May 31, 2012 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

Smaller reporting companies are not required to provide the information required by this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:

Exhibit No.	Description
31.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *	XBRL Instance Document

101.SCH *	XBRL Taxonomy Schema

101.CAL *	XBRL Taxonomy Calculation Linkbase

101.DEF *	XBRL Taxonomy Definition Linkbase

101.LAB *	XBRL Taxonomy Label Linkbase

101.PRE *	XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		YATERRA VENTURES CORP.



Date: August 13, 2012	By:	/s/ Cedric Atkinson
		CEDRIC ATKINSON
		President, Secretary and Treasurer
		(Principal Executive Officer and Principal Accounting Officer)