LODE-STAR MINING INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this Quarterly Report. In addition to historical financial information, the following discussion includes forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words such as: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. Except as required by applicable law, including the securities laws ofthe United States , we do not intend to update any of the forward-looking statements to conform these statements to actual results Mineral Property Interest Further to a Mineral Option Agreement (the "Option Agreement") datedOctober 4, 2014 , onDecember 5, 2014 , we entered into a subscription agreement (the "Subscription Agreement") withLode-Star Gold INC. , a privateNevada corporation ("LSG") in which we agreed to issue 35,000,000 shares of our common stock, valued at$230,180 , to LSG in exchange for an initial 20% undivided beneficial interest in and to LSG'sGoldfield property (the "Acquisition"), which made LSG our largest and controlling shareholder.
LSG's Goldfield Bonanza property is comprised of 31 patented mineral claims
owned 100% by LSG, located on approximately 460 acres in the district of
LSG was incorporated in theState of Nevada onMarch 13, 1998 for the purpose of acquiring exploration stage mineral properties. It currently has one shareholder,Lonnie Humphries , who is the spouse ofMark Walmesley , our President and Chief Financial Officer.Mr. Walmesley is also the Director of Operations and a director of LSG. The execution of the Subscription Agreement was one of the closing conditions of the Option Agreement, pursuant to which we acquired the sole and exclusive option to earn up to an 80% undivided interest in and to the Property. To earn the additional 60% interest in the Property, we are required to fund all expenditures on the Property and pay LSG an aggregate of$5 million in cash from the Property's mineral production proceeds in the form of an NSR. Until we have earned the additional 60% interest, the NSR will be split 79.2% to LSG, 19.8% to us and 1% to the former Property owner. The Option Agreement can be found as Exhibit 10.1 to our report filed on Form 8-K onOctober 9, 2014 and is incorporated herein by reference. The Subscription Agreement can be found as Exhibit 10.7 to our report filed on Form 10-K/A onJanuary 11, 2017 and is incorporated by reference. If we fail to make any cash payments to LSG within one year ofOctober 4, 2014 , we are required to pay LSG an additional$100,000 , and in any subsequent years in which we fail to complete the payment of the entire$5 million described above, we must make quarterly cash payments to LSG of$25,000 until we have earned the additional 60% interest in the Property. LSG granted us a series of deferrals of the payments, with the most recent being granted onJanuary 11, 2017 . LSG agreed on that date to defer payment of all amounts due in accordance with the Option Agreement until further notice. OnJanuary 17, 2017 , the Company and LSG agreed that as ofJanuary 1, 2017 , all outstanding balances shall carry a compound interest rate of 5% per annum. It was further agreed that the ongoing payment deferral shall apply to interest and principal. LSG acquired the leases to the Property in 1997 and became the registered and beneficial owner of the Property onSeptember 19, 2009 . Since the earlier of those dates, it has conducted contract exploration work on the Property but has not determined whether it contains mineral reserves that are economically recoverable. LSG is an exploration stage company and has not generated any revenues since its inception. The Property represents its only material asset. The Property is located in west-centralNevada , in theGoldfield Mining District at Latitude 37° 42', and Longitude 117° 14'. The claims comprising the Property are located in surveyed sections 35 and 36, Township 2 South, Range 42 East, and in sections 1, 2, 11, and 12, Township 3 South, Range 42 East, inEsmeralda County, Nevada . The Property is accessible by traveling approximately one-half mile northeast of the community ofGoldfield , along a county-maintained road that originates atU.S. Highway 95 , which runs through "downtown"Goldfield . The town ofGoldfield , which is theEsmeralda county seat (population 300), is approximately 200 air miles south ofReno and 180 air miles north ofLas Vegas . Surface access on the Property is excellent and the relief is low, at an elevation of approximately 6,000 feet. Vegetation is sparse, consisting largely of sagebrush, rabbitbrush, Joshua trees and grasses. Water, electricity and other sundry needs such as restaurants, lodging, minor medical needs, fire station, and police are within 1 mile of the property. 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
All properties, claims, buildings, equipment, and supplies are owned by LSG and we have free access to utilize and manage all those items. Operations are managed from a 6,000 sq. ft. office and warehouse facility complete with showers and laundry amenities. Two residential trailer sites are immediately adjacent to this building for crew needs.
The Property has one working shaft, the February Premier, which has access to the 300 ft level, with approximately 1/2 mile of ventilated drift. Underground work has identified 2 high-grade gold-bearing zones which the company plans to further explore. The program that we envision undertaking includes the mining of approximately 10,000 tons of non-NI 43-101 compliant gold mineralization at an approximate grade of 0.9 ounces per ton. The estimated grade is based on historic drilling work done by LSG, for which the 1.5-inch core samples were consumed by assay requirements. In order to provide adequate sample weights to the assaying lab, the entire core was processed for individual samples. While we have encountered several additional high-grade drill anomalies throughout the property, it is important to note that we have no proven and/or probable reserves at the present time and therefore the program is exploratory in nature. Much of the property remains under-explored and it is our belief that the district's high-grade, million-ounce ore zones repeat themselves. Further surface and underground exploration work need to be executed. The Property has two operating water monitoring wells that were mandatory for us to receive a water pollution control permit. Part of the permitting application is for the allowance of the company to store its waste rock underground. The property has no milling onsite and we must rely on a third party to receive our mineralized material and tombstone our tailings. Amendment to Option Agreement
On
Under the Amendment, the exercise of the 60% option was restructured into two separate 30% options, such that we may now earn a 30% interest in the Property (for a total of 50%) (the "Second Option") by completing the following actions:
? paying LSG
in the form of an NSR royalty (the "Initial Payment");
? paying LSG all accrued and unpaid penalty payments under the Option Agreement;
? repaying to LSG (i) all loans, advances or other payments made by LSG to the
Company and (ii) all expenditures on the Property funded by or on behalf of LSG
until the date on which the Initial Payment has been completed; and
? funding all expenditures on the Property until the date on which the Initial
Payment has been completed.
Following the exercise of the Second Option, we may earn an additional 30% interest in the Property (for a total of 80%) (the "Third Option") by completing the following actions:
? paying LSG a further
proceeds in the form of a NSR royalty (the "Final Payment"); and
? funding all expenditures on the Property from the date on which the Second
Option is exercised until the date on which the Final Payment has been completed. The primary effect of the Amendment is therefore to increase to the purchase price for the additional 60% interest in the Property from$5 million to$10 million , while at the same time separating it into tranches. The Amendment also corrects a number of inconsistences in the Option Agreement, updates the defined terms to accommodate the creation of the Second Option and Third Option, and includes our acknowledgements regarding accrued and unpaid penalty payments and amounts owing by us to LSG as ofSeptember 30, 2019 .
The foregoing description of the Amendment includes a summary of all the
material provisions but is qualified in its entirety by reference to the
complete text of the Amendment included as Exhibit 10.8 to our report filed on
Form 8-K on
We agreed with LSG that upon the successful completion of a toll milling
agreement after permitting is achieved, there will be a basis to form a joint
management committee to outline work programs and budgets, as contemplated in
the Option Agreement and for us to act as the operator of the Property. To the
date of this report LSG has borne all costs in connection with operations on the
Property. We expect the first work program, entailing Property-related costs for
which we will be responsible, to be approved in early 2021.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Milling
On February 17, 2017 , we executed an agreement with Scorpio Gold Corporation
(Scorpio) for a pilot toll milling test. We completed the first test in May 2017
and both companies have determined that further testing needs to be completed to
determine a definitive cost analysis and other operational details. The sample
processed was historic material stockpiled on the property surface and therefore
of limited metallurgical value, but indicative of material that will be run
through the mill. Milling throughput did identify specific equipment
configuration details that need to be considered for future runs. Both parties
agree that additional milling circuitry is needed for the most optimum gold
yield.
On January 22, 2020 , we executed a toll milling agreement (the "Agreement") with
Scorpio's affiliate, Goldwedge LLC . The Agreement will allow for the processing
of ore delivered from the Property to the 400 ton per day Goldwedge milling
facility located in Manhattan, Nevada .
Based on previous metallurgical testing, our ore requires gravity combined with
flotation for optimal recoveries of contained precious metals. The Goldwedge
milling circuit is currently configured with a gravity recovery circuit. Under
the terms of the Agreement, we will advance funds required for the design,
engineering, permitting and modifications to the Goldwedge facility to include
the addition of a flotation circuit, supporting reagent tanks/silos, secondary
lining of process containment ponds, leak detection and monitoring wells
associated with fluid containments.
The Agreement provides for us to recoup the advanced funds through a reduction in toll milling rates until all advanced funds have been repaid. Following repayment, the toll charges will revert to standard rates.
Property - Previous Exploration Work, Mineralization and State of Exploration
The Property is wholly owned by LSG, our largest shareholder, and is clear titled. A 1% net smelter royalty exists in the favor of the original property owner. The property consists of 31 patented claims on approximately 460 acres. LSG, over the past 15 years and continuing, has spent close to$8 million on underground rehab of approximately 1/2 mile of drift at the 300ft sub-surface level. LSG also executed 22 surface core drill holes for a total of 10,400ft and 152 underground core drill holes for a total of 23,000ft.
It is important to note the following sample preparation and quality controls used by LSG and by ICN, a previous operator of the Property:
All drill core samples were prepared and delivered to ALS Minerals inReno byTom Temkin , our COO. Individual sampled intervals varied from one to five-foot lengths, based on geologic parameters, and included 100% of core intervals. No core splitting was conducted. No duplicate samples or standards were introduced other than those inserted and utilized by ALS for their internal quality control. Lab preparation of individual samples included crushing and grinding to minus 200 mesh, followed by a 1-ton assay for gold. All samples that initially assayed over 1.0 opt Au were systematically re-assayed.
ICN drill hole core and Rotary RC sampling and analytical protocol
All drill core samples were prepared by ICN personnel and either delivered to the assay lab or were picked up on-site by lab personnel. Rotary RC chip drilling samples were collected on-site and transported toReno by the respective labs. The labs used includedALS Minerals and American Assay Lab . Core was sawn by ALS Minerals and/or ICN personnel. Individual core sampled intervals varied from one to five-foot lengths, based on geologic parameters, and included one-half of the original core material. Rotary RC samples were taken at five-foot intervals entirely. Quality control for all samples included a protocol of inserting duplicate samples, blanks, and known standards, at repeating intervals to maintain .08% check sampling. Lab preparation of Individual samples included crushing and grinding to minus 200 mesh, followed by a 1-ton assay for gold. All samples that initially assayed over 1.0 opt Au
were systematically re-assayed.
Underground work has identified 2 high-grade gold-bearing zones that can support mine development utilizing our current infrastructure. The property is now permitted for production and is mine ready.
Third Party Assay Data AuditMine Development Associates (MDA Reno), a highly regarded third party NI 43-101 service provider, has audited our drill hole database and performed a comparative QA/QC check assay analysis on selected drilling and determined no inconsistencies to exist and assays were repeatable. 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
NI 43-101 Update Status
We filed an independent Technical Report written in accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101) on
our property located in Goldfield, Nevada . Although not required for OTC
listing, we had this report prepared under NI 43-101 guidelines to provide a
summary of the Goldfield Bonanza Project . This NI 43-101 is required
documentation for future possible business transactions and listings on Canadian
exchanges. The Technical Report titled "Technical Report on the Goldfield
Bonanza Project Esmeralda County Nevada U.S.A. " dated January 15, 2020 has been
prepared by Mr. Robert M. Hatch , SME Registered Geologist.
The report is available for review on EDGAR
(https://www.sec.gov/edgar/searchedgar/companysearch.html) and SEDAR
(https://www.sedar.com/) under
Metallurgy Reports To date the Company has had three metallurgy reports prepared. In order they are:Kappes Cassady & Associates located inReno, NV datedJuly 10, 2006 , Newmont Mining located inCarlin, NV datedMay 27, 2010 , andMcClelland Laboratories, Inc. located inReno, NV datedJanuary 26, 2016 . Indications are that we can expect at a minimum, an 85% AU recovery from floatation milling. Better recovery is achieved by Agitated Leach processing, which show results closer to +90%. The best recovery results, +95%, due to the high sulphide content of the ore, is achieved through roasting. An additional lab report has been generated byKappes Cassady & Associates to determine ore compatibility for processing at Scorpio Gold's milling circuit. Key Developments OnNovember 20, 2018 we were issued Water Pollution Control Permit NEV2017109 from theNevada Department of Environmental Protection (NDEP) regarding production at the property. This Permit authorizes the construction, operation, and closure of approved mining facilities inEsmeralda County, Nevada . The Permit is effective for 5 years untilNovember 20, 2023 and authorizes the processing of 10,000 tons of ore per year fromLode-Star's underground operations. 100% of the permitting cost has been borne by our largest shareholder,Lode Star Gold INC. Unique to our production permit, theNevada Department of Environmental Protection has endorsed the Company's intentions to temporarily store waste rock underground. Once stockpiled, waste rock is brought to the surface to backfill and remediate our historic abandoned mine shafts. This will save us the significant time and expense of having to permit and build a surface waste containment facility.
We have received our
Recent Events
The Covid-19 pandemic has had minimal effect on the execution of our milestones.
Manpower:
We now have a crew of 4 miners and 1 grade-control geologist working underground. The manpower component allows for mine development to advance in multiple headings.
Milling: We signed a Toll Milling Agreement with Scorpio Gold Corporation's affiliate,Goldwedge LLC . The Agreement allows for the processing of ore delivered from ourGoldfield Bonanza Project to Scorpio's 400 ton per day Goldwedge milling facility located inManhattan, Nevada . Under the terms of the Agreement, we are to advance funds required for the design engineering, permitting and mill modifications for a new flotation circuit. To date the design engineering work has been completed and Scorpio filed for its Goldwedge mill modification permit with theNevada Department of Environmental Protection (NDEP ) onMay 5, 2020 .Lode-Star Gold, INC , our largest shareholder, has purchased the flotation equipment to be placed within the Goldwedge milling system. The filing of the mill modification application onMay 5, 2020 started the clock running with NDEP. We anticipate a favorable permitting outcome sometime in November which will allow us to proceed with the flotation circuit installation.Lode-Star Gold purchased and sent to theGoldfield site 26 50 cu.ft. MinPro Flotation Cells on our behalf. Included are two banks of 10 cells designated as roughers and cleaners, with the remaining bank of 6 cells as scavengers. Also purchased and received were a drum filter and vacuum system. All other items are more readily available and can be purchased closer to actual installation need. 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Mine Development :
Since the beginning of the year Lode-Star Gold staff have completed underground
rehabilitation and progressed the Bonanza Project into mine development. The
project currently has two headings in which we intend to conduct mining.
Respectively, these are named the Red Hills Stope Zone and Decline Vein Zone . In
February, we commenced blasting inside these zones to assess the nature of rock
breakage and refine blasting technique. It is essential that we apply a highly
disciplined ore grade control. To date we have executed 9 gold zone blasts. Each
blast has been catalogued and compartmentalized for further metallurgical
testing. Additional muck bays are being developed for storage. The plan is to
develop the capacity for 1600 tons of underground storage for stockpiling of ore
for delivery to Scorpio once mining commences. Samples for grade control have
been analyzed in Scorpio's Mineral Ridge Gold laboratory. Scorpio has assayed a
variety of grade-control samples including channel samples, blast-hole samples
and muck pile samples. We continue to refine our blasting technique and most
recent blasts have been very well shaped. We are now understanding breakage
patterns and rock shatter variability between ore and waste. Our April 30 blast
in the Red Hills Stope zone yielded high grade assays from channel sampling
including SC014A and SC014B, of 8.09 oz/ton Au and 1.75 oz/ton Au, respectively,
and a muck sample SM-11, that assayed 2.65oz/ton Au. Our May 14 sampling in the
Red Hills Stope zone yielded another series of high grade assays in blast hole
SB014 coming in at 3.559/(3.550 repeat assay) oz/ton Au and muck pile sample
SM-013 coming in at 6.248/(6.240 repeat assay) oz/ton Au. We view these
measurements as encouraging as we proceed towards being mineable.
We expect to soon file our mine plan with MSHA and commence creating our
Secondary Escape-way (an MSHA requirement). The development plan for the
Escape-way is to repurpose either the property's existing historical Church
shaft or January Whiterock shaft and ultimately incorporate additional hoisting
capability for ore. This should double our daily extraction capability. The
outcome of our drilling campaign, as outlined below, will allow us to decide
which shaft to use.
Step Out Drilling and Exploration:
Drilling is underway on the property. The Company is currently waiting for assays from its first hole. The plan will be to drill approximately twelve holes at a rate of two to three holes per month. This conservative drilling rate will give us time to assay each hole before we methodically drill the next. The objective is to understand the geometry of this gold bearing zone and to identify additional cross cutting features. The immediate target area, as described in our most recent NI 43-101, is the high-grade area referred to as theChurch Vein Zone . This zone measures up to 40 feet in width and trends at least 600 feet north-northeasterly, immediately west of the Church shaft. Drilling by ICN in 2011 included 19 core holes with varying results. Some holes did not hit the intended target and will be re-drilled to better test the target. As drilling progressed into the vein area, marginal gold was identified. Three holes, ICN-003, ICN-013 and ICN-014 (results below) hit solid high- grade intercepts which need further drilling to define. (Grams
per Metric Tonne = 34.2857). Hole ICN-003: included 9.5 ft (2.90 m) weighted averaged assays of 40.79 oz/ton (1398.6 g/t) gold. Hole ICN-013: included 4.5 ft (1.37 m) with 51.46 oz/ton (1764.2 g/t) gold. Hole ICN-014: included 3.5 ft (1.00 m) with 68.02 oz/ton (2332.0 g/t) gold. Hole ICN-001 included 3.0 ft (0.90 m) with averaged assays of 6.29 oz/ton (215.7 g/t) gold and ICN-023 included 4.0 ft (1.22 m) with averaged assays of 1.44 oz/ton (49.35 g/t) gold.
The figure below indicates the relationship between the overall ICN core drilling, high-grade gold intercepts, underground workings, the Church shaft, January/Whiterock shaft and our planned first two holes (approximately). Geologic modeling to date has identified what may prove to be a robust production area. Our drilling phase will determine the accuracy of that modeling.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
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Mine Design and Utilization of Equipment
The mine will be designed through the interpretation of detailed drilling data in cross sections and the use of conventional software. Currently there are two areas, theRed Hills and the Church, containing high-grade gold mineralization identified that are to be incorporated into the mine plan. Currently the mine is equipped with a 1-yard scoop-tram loader. Mining activity will be conducted with the utilization of this loader, pneumatic equipment and by an existing conveyor system providing for the transfer of ore to the surface. ProductionMining Method We intend to maximize profitability through a disciplined approach involving the separation of high-grade gold ore from waste rock during the mining stage, thus avoiding the additional cost of pre-shipment concentration. In order to maintain the highest grade of ore production the blast holes will be sampled during drilling, then assayed to determine ore boundaries prior to blasting. The current plan is to ship ore directly from the mine to an offsite mill employing a toll-milling arrangement. 18 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
For technical details, see our report filed on Form 10-K for the year endedDecember 31, 2019 . The Property'sRed Hills and Church zones can support mine development utilizing the Company's current infrastructure. Underground mining in theRed Hills area will extract ore on the 300-level. We anticipate mining to begin by the end of 2020. We plan to initially mine 10,000 tons of material per year at a rate of approximately 50 tons per day. We have a$5.0 million exploration and mine development program that is focused on defining the Property's existing and mineable gold mineralization; to advance the geologic modeling in preparation for mining; and bulk sampling of the Project's current underground workings as well as for working capital purposes. Funding
Details of the development program are as follows:
Item Major Categories Cost 1. Equipment & Mining Materials$275,000 2. Secondary Escape & Second Production Shaft$1 million 3.Red Hills /Stope & Decline Vein Zones Mining$860,000 4. Drilling the Northeast Corridor$2 million 5. Corporate & General Admin.$865,000 Total$5 million
Line items 1, 2, 3 and 5 above, totaling
Line item 4 accounts for the Development Drilling totaling
The estimates above are for planning purposes only. No information contained herein should be considered an official corporate offering. The application of funds shown above is an estimate and may not exactly match the actual future costs. Funding All of our ongoing operations, since the inception of our Mineral Option Agreement onOctober 4, 2014 , have been funded by monies advanced to us byLode-Star Gold INC. (LSG) our largest shareholder. We do not currently have enough funds to carry out our entire plan of operations, so we intend to meet the balance of our cash requirements for the next 12 months through a combination of debt financing and equity financing through private placements. There is no assurance that we will be successful in completing any such financings If we are unsuccessful in obtaining sufficient funds through our capital raising efforts, we may review other financing options, although we cannot provide any assurance that any such options will be available to us or on terms reasonably acceptable to us. Further, if we are unable to secure any additional financing then we plan to reduce the amount that we spend on our operations, including our management-related consulting fees and other general expenses, so as not to exceed the capital resources available to us. Regardless, our current cash reserves and working capital will not be sufficient for us to sustain our business for the next 12 months, even if we decide to scale back our operations. Personnel We have no employees. SinceJanuary 1, 2020 , we have incurred consulting fees of$25,000 per quarter to a company controlled by our president and CEO,Mark Walmesley , for services provided to us byMr. Walmesley . We expect to continue to use outside consultants, advisors, attorneys and accountants as necessary. Our Chief Operating Officer,Thomas Temkin , who is also a director, is a Certified Professional Geologist and a Qualified Person under National Instrument (NI) 43101, with more than 40 years of experience in the mining industry, primarily in exploration in theWestern United States . He is currently a consulting geologist working with LSG.Mr. Temkin has been associated with LSG and the Property for over 20 years and has been instrumental through its entire exploration program to date.
Our Corporate Secretary,
19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Going Concern
There is substantial doubt that we can continue as an on-going business for the
next twelve months unless we obtain additional capital to pay our expenses. This
is because we have not generated any revenues to-date and we cannot currently
estimate the timing of any possible future revenues. Currently, our only source
of cash is from loans or investments by others in our common stock.
Results of Operations
The following summary of our results of operations for the three months and nine months endedSeptember 30, 2020 and 2019 should be read in conjunction with our financial statements for the period endedSeptember 30, 2020 , included above in Part I, Item 1. Three Months Ended September 30 Change 2020 2019 Amount Percentage $ $ $ Revenue - - - - Operating Expenses 71,407 55,163 16,244 29 % Operating Loss (71,407 ) (55,163 ) (16,244 ) 29 % Other Expenses 21,769 17,373 4,396 25 % Net Loss (93,176 ) (72,536 ) (20,640 ) 28 % EPS 0.00 0.00 - - Nine Months Ended September 30 Change 2020 2019 Amount Percentage $ $ $ Revenue - - - - Operating Expenses 276,493 182,066 94,427 52 % Operating Loss (276,493 ) (182,066 ) (94,427 ) 52 % Other Expenses 61,064 47,009 14,055 30 % Net Loss (337,557 ) (229,075 ) 108,482 47 % EPS (0.01 ) 0.00 - - Revenues
We had no operating revenues during the three-month and nine-month periods endedSeptember 30, 2020 and 2019. We recorded a net loss of$93,176 for the current quarter (2019:$72,536 ) and$337,557 for the nine months endedSeptember 30, 2020 (2019:$229,075 ) and have an accumulated deficit of$3,338,818 . The possibility and timing of revenue being generated from our mineral property
interest remains uncertain.
Expenses
Notable changes in expenses for the third quarter in 2020 compared to 2019 were
as follows:
Three Months Ended September 30 Increase/(Decrease)
2020 2019 Amount Percentage
Consulting services 31,897 14,978 16,919 113 %
Exploration and
evaluation 3,652 - 3,652 -
Professional fees 6,852 9,847 (2,995 ) (30 %)
Interest, bank and
finance charges 21,769 17,373 4,396 25 %
Consulting services expense in the third quarter of 2020 included $25,000 for
mine development and strategic planning, with no equivalent in Q3 of 2019. The
third quarter of 2020 also included an expense of approximately $1,000 related
to options granted in 2018, a decrease of approximately $7,000 over the
equivalent expense in Q3 of 2019. The net of those two items was the primary
reason for the change of approximately $17,000 year over year for Q3.
Exploration and evaluation expense in Q3 of 2020 was for assay costs. No such costs were incurred in 2019.
20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Professional fees were lower in 2020 primarily due to the costs in Q3 2019 of approximately$2,000 for an NI-43-101 report and approximately$2,000 for a US tax filing, with no equivalents in Q3 2020.
Interest, bank and finance charges were higher in Q3 of 2020 as a result of higher balances in interest-bearing amounts due to related parties, i.e. loans, plus accrued mineral option fees and related interest.
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