The following Management's Discussion and Analysis of Financial Condition and Results of Operation ("MD&A") is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes ("Notes") thereto. The following statements may be forward-looking in nature and actual results may differ materially.
Plan of Operation:
FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking
statements that involve a number of risks and uncertainties. Factors that could
cause actual results to differ materially include the following: inability to
locate property with mineralization, lack of financing for exploration efforts,
competition to acquire mining properties; risks inherent in the mining industry,
and risk factors that are listed in the Company's reports and registration
statements filed with the
The Company re-started the advancement of the
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Results of Operations:
In 2021, the Company recorded a net loss of
Fourth Quarter comparisons
Total revenue for the quarter ending
Year end comparisons December 31,2021-2020
Total revenues for the year ended
Total operating expenses for the period ending
Liquidity and Capital Resources:
The consolidated financial statements for the year ended
The liquidity of the Company was enhanced on
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On
On
In
On
The Company has historically incurred losses, however, under the BeMetals Option Agreement, the Company now has a recurring source of revenue, and its ability to continue as a going concern is no longer dependent on equity capital raises and borrowings. However, the Company believes it has the ability to raise capital in order to fund its future exploration and working capital requirements if necessary.
Potential additional sources of cash, include additional external debt, the sale
of shares of our stock, or alternative methods such as mergers or sale of
8,000,000 BeMetals common stock shares held by the company. (
Our plans for the long-term continuation as a going concern include financing our future operations through sales of our common stock and/or debt and the potential exploitation of our mining properties. Our plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property. In addition to the BeMetals Corp. Option Agreement, we believe that the Company will be able to meet its financial obligations because of the following:
º OnFebruary 15, 2022 , we had$1,089,407 cash in our bank accounts. º We do not include in this consideration any option payments mentioned below. º Management is committed to manage expenses of all types to not exceed the on-hand cash resources of the Company at any point in time, now or in the future. º The Company will also consider other sources of funding, including potential mergers, the sale of all or part of the Company`s BeMetals Corp. (TSX-V: BMET) common shares beneficially held, and/or additional farm-out of its other exploration property.
For the year ended
Our future liquidity and capital requirements will depend on many factors, including timing, cost and progress of our exploration efforts, our evaluation of, and decisions with respect to, our strategic alternatives, and costs associated with the regulatory approvals. If it turns out that we do not have enough cash to complete our exploration programs, we will attempt to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.
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Additional financing may be required in the future to fund our planned operations. We do not know whether additional financing will be available when needed or on acceptable terms, if at all. If we are unable to raise additional financing when necessary, we may have to delay our exploration efforts or any property acquisitions or be forced to cease operations. Collaborative arrangements may require us to relinquish our rights to certain of our mining claims.
Private Placement
On
The offerings are believed exempt from registration pursuant to the exemption
for transactions by an issuer not involving any public offering under Section
4(6) the Securities Act of 1933, as amended. The securities offered, sold, and
issued in connection with the private placement have not been or are not
registered under the Securities Act of 1933, as amended, or any state securities
laws and may not be offered or sold in
Contractual Obligations
During 2008 and 2009, three lease arrangements were made with landowners that
own land parcels adjacent to the Company's South Mountain patented and
unpatented mining claims. The leases were for a seven-year period, with options
to renew, with annual payments (based on
Payments due by period Contractual obligations More than Total* Less than 1 year 2-3 years 4-5 years 5 years Acree Lease (yearly,$6,780 $3,390 $3,390 - $ - June)(1) Lowry Lease (yearly,$22,560 $11,280 $11,280 - $ - October)(1)(2) OGT LLC(3)$20,000 $5,000 $5,000 $10,000 $ - Total$49,340 $19,670 $19,670 $10,000 $ - (1) Amounts shown are for the lease periods years 15 through 16, a total of 2 years that remains after 2021, the lease was extended an additional 10 years at$30 /acre after 2014. (2) The Lowry lease has an early buy-out provision for 50% of the remaining amounts owed in the event the Company desires to drop the lease prior to the end of the first seven-year period. (3)OGT LLC , managed by the Company's wholly owned subsidiary SMMI, receives a$5,000 per year payment for up to 10 years, or until a$5 million capped NPI Royalty is paid.
Critical Accounting Policies
We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management's judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future. The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:
a) Estimates. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition.
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b) Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
c) Income Taxes. We have current income tax assets recorded in our financial statements that are based on our estimates relating to federal and state income tax benefits. Our judgments regarding federal and state income tax rates, items that may or may not be deductible for income tax purposes and income tax regulations themselves are critical to the Company's financial statement income tax items.
d) Investments. In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture's management committee.
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