For the three-month and nine-month periods ended February 29, 2012, we incurred net losses of $39,133 and $89,420 respectively, compared to net losses of $10,197 and $14,237 for the comparable periods of 2011, respectively. We incurred a net loss of $146,223 for the period of inception, May 18, 2010, to February 29, 2012, compared to a net loss of $49,607 for the period of inception, May 18, 2010 to February 28, 2011. We utilized office space provided by our president and we concentrated our efforts in raising the funds and acquiring a mineral property for our business.
Liquidity and Capital Resources
At February 29, 2012, we had cash of $87,450 (February 28, 2011 - $962) and short-term note receivable of $294,210 (February 28, 2011 - $0.00). Note Receivable yields an interest of 8% per annum and is due on demand.
We are in the start-up stage of operations and have not yet generated any revenues other than interest income. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns.
We will continue to seek additional financing in order to obtain the capital required to continue implementation of our business plan.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available to us on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to our existing shareholders.
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3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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4.
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CONTROLS AND PROCEDURES.
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Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective due to limited segregation of duties, lack of independent directors, and no written internal control procedure manual. The Company plans to address the weakness in control as soon as the Company considers that the financial situation allows the Company to spend the limited resources to mitigate the weakness in control.
There were no material changes in our internal control over financial reporting during the quarter ended February 29, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Working capital is the cost related to operating our office. It comprises expenses for mail, stationary and other office supplies, and legal and accounting fees related to filing reports with the SEC. Telephone, office equipment, and minor office services are provided free of charge as an accommodation by one of our officers and director, Oliver Xing. We have allocated a range of money for exploration. That is because we do not know how much will ultimately be needed for exploration. If our initial exploration proves positive results, we will expand the exploration activities.
On January 12, 2011, our Form S-1 registration statement (SEC file no. 333-167804) was declared effective by the SEC. Pursuant to the S-1, we offered 2,000,000 shares of common stock minimum, 5,000,000 shares maximum at an offering price of $0.10 per share in a direct public offering, without any involvement of underwriters or broker-dealers.
As at August 12, 2011, we have completed the maximum offering of 5,000,000 common stock at $0.10 per share and received $500,000 and closed the public offering.
We plan to use proceeds raised through the sale of the Company’s securities for operating expenses, working capital, and general corporate activities, including the acquisition of mineral properties if an opportunity arises that we believe would justify the expenditure and capital is available to make the acquisition.
There is no change of securities for the three months period ended February 29, 2012.