1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
[ x ]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2011
or
[ ]
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
000-53291
LAKE VICTORIA MINING COMPANY,
INC.
(Exact name of registrant as specified in its
charter)
Nevada
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Not Applicable
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State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization
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Identification No.)
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Suite 810 675 West Hastings Street
Vancouver,
British Columbia, Canada V6B 1N2
(Address of principal executive
offices, including zip code)
604.681.9635
(telephone number, including
area code)
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class
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Name of each Exchange on which registered
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Nil
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N/A
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Securities registered pursuant to Section 12(g) of the Act
Common Stock, par value $0.00001 per
share
(Title of Class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
YES
[ ]
NO
[ x ]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act:
YES
[ ]
NO
[ x
]
Indicate by check mark whether the registrant(1) has filed all
reports required 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 day.
YES
[ x ]
NO
[ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule405 of Regulation S-T (§229.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).
YES
[ ]
NO
[ ]
Not Applicable
2
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulations S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
[ ]
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 if the
Exchange Act.
Large Accelerated Filer
[ ]
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Accelerated Filer
[ ]
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Non-accelerated Filer
[ ]
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Smaller Reporting Company
[ x ]
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).
YES
[ ]
NO
[ x ]
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked prices of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter: $17,791,979 based on a price of $0.34 per share, being
the closing price of the registrants common stock as quoted on the OTC Bulletin
Board on September 30, 2010.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable date.
97,485,733 shares of common stock as of July 13, 2011.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980).
Not Applicable
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TABLE OF CONTENTS
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PART I
Forward Looking Statements
This annual report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or managements plans and objectives for our future
operations. In some cases, you can identify forward-looking statements by
terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors and the
risks set out below, any of which may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks include, by way of example and not in limitation:
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risks and uncertainties relating to the interpretation of sampling results,
the geology, grade and continuity of mineral deposits;
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risks and uncertainties that results of initial sampling and mapping will
not be consistent with our expectations;
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mining and development risks, including risks related to accidents,
equipment breakdowns, labor disputes or other unanticipated difficulties with
or interruptions in production;
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the potential for delays in exploration activities;
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risks related to the inherent uncertainty of cost estimates and the
potential for unexpected costs and expenses;
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risks related to commodity price fluctuations;
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the uncertainty of profitability based upon our limited history;
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risks related to failure to obtain adequate financing on a timely basis and
on acceptable terms for our planned exploration project;
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risks related to environmental regulation and liability;
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risks that the amounts reserved or allocated for environmental compliance,
reclamation, post-closure control measures, monitoring and on-going
maintenance may not be sufficient to cover such costs;
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risks related to tax assessments;
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political and regulatory risks associated with mining development and
exploration; and
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other risks and uncertainties related to our mineral property and business
strategy.
This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.
Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States and Canada, we do not intend to update any of the
forward-looking statements to conform these statements to actual results.
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In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to the common shares in our capital stock.
As used in this annual report, the terms we, us, our, the
Company and Lake Victoria mean Lake Victoria Mining Company, Inc., and our
wholly owned subsidiaries Kilimanjaro Mining Company Inc., Lake Victoria
Resources (T) Limited, Chrysos 197 Company Tanzania Ltd and Jin 197 Company
Tanzania Ltd, unless otherwise indicated.
General
Lake Victoria Mining Company, Inc. (formerly known as
Kilimanjaro Mining Company, Inc.) was incorporated on December 11, 2006 under
the laws of the State of Nevada. On December 7, 2010, our majority shareholders
approved our 2010 stock option plan and an amendment to our existing articles of
incorporation to increase our authorized capital from 100,000,000 to 250,000,000
shares of common stock. We are an exploration stage corporation. An exploration
stage corporation is one engaged in the search for mineral deposits or reserves
which are not in either the development or production stage. We intend to
conduct mineral exploration activities on properties to find an economic mineral
body containing gold.
We maintain our statutory registered agents office at The
Corporation Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada
89511 and our business and administrative office is located at Suite 810 675
West Hastings Street, Vancouver, British Columbia, V6B 1N2, Canada. This is our
mailing address as well. Our telephone number is 604.681.9635.
Recent Corporate Developments
Since the commencement of our fourth quarter ended March 31,
2011, we experienced the following significant corporate developments:
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1.
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On February 24, 2011, we entered into a debt settlement
and subscription agreement with Roger Newell, a director of the company,
pursuant to which we issued 145,833 shares of our common stock at a deemed
price of $0.24 per share in settlement of $35,000 of outstanding debt owed
by our company to Mr. Newell. The shares were issued pursuant to Rule 506
of Regulation D and/or Section 4(2) of the Securities Act of
1933.
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2.
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Effective March 7, 2011, we issued 20,000,000 units at a
price of $0.15 per unit for gross proceeds of $3,000,000. Each unit
consisted of one share of common stock and one share purchase warrant
entitling the warrant holder to purchase an additional share of common
stock at a price of $0.30 per share for a period of six months from
closing. We issued an aggregate of 2,963,333 units to 9 subscribers that
each represented that they were not a US person (as that term is defined
in Regulation S of the
Securities Act of 1933
) in an offshore
transaction pursuant to Regulation S and/or Section 4(2) of the
Securities Act of 1933.
We issued an additional 17,036,667 units to
23 U.S. persons, who represented that they were accredited investors (as
that term is defined in Rule 501 of Regulation D, promulgated by the
Securities and Exchange Commission pursuant to the
Securities Act of
1933
, pursuant to Rule 506 of Regulation D and/or Section 4(2) of the
Securities Act of 1933
.
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3.
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Effective April 1, 2011, the Company changed its head
office address from 1781 Larkspur Drive, Golden, Colorado 80401 to Suite
810 675 West Hastings Street, Vancouver, British Columbia V6B
1N2.
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4.
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On April 20, 2011, the Company entered into a prospecting
license purchase agreement with Pili Sadiki, to acquire a 100% interest in
a certain prospecting license located in the Kiabakari Musoma District of
Tanzania. Also on April 20, 2011, the Company entered into a prospecting
license purchase agreement with Rashid Omar, to acquire a 100% interest in
a certain prospecting license located in the Handeni Tanga District of
Tanzania.
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5.
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On April 26, 2011, the Company entered into a consulting
agreement with David Kalenuik, pursuant to which the Company engaged Mr.
Kalenuik to, among other things: provide the services of
corporate management, reporting to the board of directors including
without limiting the generality of the foregoing, hiring other managers
and employees as required, finding new projects and assisting in financing
requirements. As consideration for the performance of his consulting
services under the agreement, the Company agreed to pay Mr. Kalenuik
CDN$10,000 per month commencing April 1, 2011, plus applicable taxes.
Contingent upon Mr. Kalenuik executing the consulting agreement and as
part of the consideration for Mr. Kalenuiks services, the Company agreed
to grant Mr. Kalenuik upon the completion of twelve (12) months of April
26, 2011 and annually on the anniversary each and every year that follows,
during Mr. Kalenuiks continuous consulting, an option to purchase 500,000
shares of the Companys restricted common stock, which shall be subject to
the terms and conditions set forth in the Stock Option Agreement. The
consulting agreement is for a term of two years and may be renewed at the
option of the Company by giving 30 days written notice prior to the expiry
of the initial term.
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6.
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On April 26, 2011, the Company entered into a consulting
agreement with Roger Newell, pursuant to which the Company engaged Mr.
Newell to, among other things: provide the services to the corporate
management, reporting to the president and subsequently to the board of
directors including without limiting the generality of the foregoing,
reviewing and editing technical data/press releases, finding and assessing
new projects and assisting in investor relations, corporate presentations
and financing requirements. As consideration for the performance of his
consulting services under the agreement, the Company agreed to pay Mr.
Newell USD$3,500 per month commencing April 1, 2011, plus applicable
taxes. Contingent upon Mr. Newell executing the consulting agreement and
as part of the consideration for Mr. Newells services, the Company agreed
to grant Mr. Newell upon the completion of twelve (12) months of April 26,
2011 and annually on the anniversary each and every year that follows,
during Mr. Newells continuous consulting, an option to purchase 250,000
shares of the Companys restricted common stock, which shall be subject to
the terms and conditions set forth in this the Stock Option Agreement. The
consulting agreement is for a term of two years and may be renewed at the
option of the Company by giving 30 days written notice prior to the expiry
of the initial term.
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7.
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On April 26, 2011, the Company entered into an employment
letter agreement with Heidi Kalenuik, pursuant to which the Company
employed Ms. Kalenuik to, among other things: carry out the duties and
responsibilities of the position of Secretary, Treasurer and Supervisor of
Operations of the Company. As consideration for the performance of her
duties under the employment letter agreement, the Company agreed to pay
Ms. Kalenuik CDN$102,000 per year commencing April 1, 2011. Ms. Kalenuik
is also entitled to receive a one-time bonus in the amount of
CDN$1,000.
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8.
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Effective April 26, 2011, the Company entered into an
employment letter agreement with Ming Zhu, pursuant to which the Company
employed Mr. Zhu to, among other things: carry out the duties and
responsibilities of the position of Chief Financial Officer of the
Company. As consideration for the performance of his duties under the
employment letter agreement, the Company agreed to pay Mr. Zhu CDN$90,000
per year commencing April 1, 2011. Mr. Zhu is also entitled to receive a
one-time bonus in the amount of CDN$1,000.
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9.
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On May 10, 2011, the Company entered into four joint
venture and option agreements (the Options) with Otterburn Ventures Inc.
(Otterburn) pursuant to which Otterburn had the right to acquire up to
an undivided 70% interest (the Options) in and to certain Primary
Mineral Licenses (PMLs) and Prospecting Licenses (PLs) located in
the Lake Victoria Greenstone Belt in Tanzania, East Africa. The PMLs and
PLs owned by the Company are known as the Singida Gold Project, North
Mara Gold Project, Kalemela Gold Project and Geita Gold Project, and cover
approximately 623 square kilometers. On May 20, 2011 Otterburn completed
its due diligence investigation of the title and environmental condition
of the Properties to its satisfaction, paid the initial cash payment of
US$497,423 and completed the issuance of 2,200,000 common shares to Lake
Victoria.
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10.
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On May 30, 2011, the Board of Directors of the Company
amended and restated the Companys bylaws. The amendment and restatement
of the bylaws was for the purpose of, among other things, removing certain
outdated and redundant provisions that existed in the Companys prior
bylaws with respect to corporate governance, shareholder and director
meeting procedures, and indemnification procedures. The changes to the
Companys prior bylaws include: (i) expanding certain provisions with
respect to shareholders meetings including change of quorum requirements;
(ii) amending certain provisions respecting appointment of directors,
corporate governance and committees, and directors meetings;
(iii) expanding certain provisions with respect to officers and
their duties; (iv) changing certain provisions with respect to share
certificates; (v) eliminate inconsistencies between the bylaws the
provisions of the Nevada Revised Statutes; and (vi) amended
indemnification provisions.
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11.
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On May 30, 2011, the Company entered into a prospecting
license purchase agreement with Manga Mining Corp, to acquire a 100%
interest of one prospecting license located in the Handeni District of
Tanzania.
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12.
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On June 17, 2011, the Company incorporated two new
wholly-owned subsidiaries, Chrysos 197 Company Tanzania Ltd and Jin 179
Company Tanzania Ltd., in Tanzania to facilitate property acquisitions in
compliance with The Mining (Mineral Rights) Regulations 2010 of
Tanzania.
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13.
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On July 1, 2011, the Company entered into a prospecting
license purchase agreement with I. M. Kwematuku Export Trade Ltd, to
acquire up to 100% interest of one prospecting licenses located in the
Handeni District of Tanzania.
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14.
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On July 8, 2011, Otterburn Ventures Inc. exercised its
rights to terminate four option and joint venture agreements dated May 6,
2011 between Otterburn and the Company, pursuant to which we granted
Otterburn the right to acquire up to an undivided 70% interest in and to
certain primary mining licenses and prospecting licenses owned by us known
as the Singida Gold Project, North Mara Gold Project, Kalemela Gold
Project and Geita Gold Project and Otterburn paid the cash payment of
$412,423 and issued 2,200,000 of its common shares to our company. In
connection with the termination of the option
agreements:
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(i)
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Otterburn agreed to pay such applicable Tanzanian
government fees to leave the respective licenses in good standing for a
period six months from July 8, 2011.
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(ii)
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Otterburn terminated the exploration service agreement
dated May 20, 2011 between Otterburn, Lake Victoria Resources (T) Ltd.,
our wholly-owned subsidiary, and agree to pay a reimbursement for the work
expenditures incurred by Otterburn during the months of March through the
termination date of July 8, 2011 and, if required, certain termination
costs, provided such termination costs have been incurred in accordance
with the exploration service agreement.
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Our Current Business
We are an exploration stage corporation focused on acquiring,
exploring and developing gold deposits in the Lake Victoria Greenstone Belt in
Tanzania, East Africa. We hold prospective gold projects, consisting of 30
Prospecting Licenses (PLs) and 84 Primary Mining Licenses (PMLs) and five
uranium projects consisting of 9 Prospecting and Reconnaissance Licenses plus
two licenses currently under application, within its Tanzania property
portfolio, covering approximately 3,046 square kilometers (752,587 acres). We
carry out our business by acquiring, exploring and evaluating mineral properties
through our ongoing exploration program. Following exploration, we intend to
either advance them to a commercially feasible mining stage, enter joint
ventures to further develop these properties or dispose of them if the
properties do not meet our requirements. Our properties are all early stage
exploration properties. Within our mineral exploration land in Tanzania our
focus is primarily on gold, although our portfolio also contains uranium
prospects.
We have no revenues, we have incurred losses since inception, we have relied upon the sale of our securities to fund operations. To date, we have not discovered a commercially viable ore body, mineral deposit or mineral reserve on any of our properties and we will be unable to do so until further exploration is done and a comprehensive evaluation concludes an economic and legal feasibility study.
Our property portfolio is large, therefore we may interest
other companies in our properties to either participate by means of option or
joint venture agreements in the exploration of them or to finance and establish
production if mineralization is found.
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Competitive Factors
The gold mining industry is fragmented, that is there are many
gold prospectors and producers, small and large. We are a small exploration
stage mining company and we do not have the financial, personnel or equipment
resources that many competitors possess. Because of our lack of resources we may
not be able to adequately withstand the competitive forces that exist in the
mining industry generally and specifically with respect to gold mining.
Regulations
Mineral rights in the United Republic of Tanzania are governed
by the Mining Act of 1998 and The Mining (Mineral Rights) Regulations, 2010 and
control over minerals is vested in the United Republic of Tanzania. Prospecting
for minerals may only be conducted under authority of a mineral right granted by
the Ministry of Energy and Minerals under this Act.
The three types of mineral rights most often encountered, which
are applicable to us include: prospecting licenses; retention licenses; and
mining licenses. A prospecting license grants the holder thereof the exclusive
right to prospect in the area covered by the license for all minerals, other
than building and gemstones, for an initial period of four years. Thereafter,
the license is renewable for two further periods of three and two years
consecutively. On each renewal of a prospecting license, 50 percent of the area
covered by the license must be relinquished. The maximum initial area for a
prospecting license is 300 square kilometers. A company applying for a
prospecting license must, inter alia, state the financial and technical
resources available to it. A retention license can also be requested from the
Minister, after the expiry of the 4-3-2-year prospecting license period, for
reasons ranging from funds to technical considerations.
Mining is carried out through either a mining license or a
special mining license or a primary mining license, all three of which confer on
the holder thereof the exclusive right to conduct mining operations in or on the
area covered by the license. A mining license is granted for a period of 10
years and is renewable for a further period of 10 years. A special mining
license is granted for a period of 25 years and is renewable for the estimated
life of the ore body or such period as the applicant may request whichever
period is shorter. If the holder of a prospecting license has identified a
mineral deposit within the prospecting area which is potentially of commercial
significance, but it cannot be developed immediately by reason of technical
constraints, adverse market conditions or other economic factors of a temporary
character, it can apply for a retention license which will entitle the holder
thereof to apply for a special mining license when it sees fit to proceed with
mining operations.
A retention license is valid for a period of five years and is
thereafter renewable for a single period of five years. A mineral right may be
freely transferred by the holder thereof to another person, except for a mining
license, which must have the approval of the Ministry to be assigned.
However, this approval requirement for the assignment of a
mining license will not apply if the mining license is assigned to an affiliate
company of the holder or to a financial institution or bank as security for any
loan or guarantee in respect of mining operations.
A holder of a mineral right may enter into a development
agreement with the Ministry to guarantee the fiscal stability of a long-term
mining project and make special provision for the payment of royalties, taxes,
fees and other fiscal imposts.
We have complied with all applicable requirements and the
relevant licenses have been issued.
Environmental Law
We are also subject to Tanzania laws dealing with environmental
matters relating to the exploration and development of mining properties. While
in the exploration stage, on any of our project areas, we are conscious of any
environmental impact we may be having. However, our obligations are very
limited, as our activities cause minimal environmental disturbances and are
limited to mapping, sampling, trenching, geophysical surveying and drilling.
Once project areas reach a point of being commercially feasible for mining then
we will be required to conduct proper environmental impact studies based on
feasibility reports and planned mining operations. We do protect the environment
through any regulations affecting:
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Health and Safety
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Archaeological Sites
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3.
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Exploration Access
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Subsidiaries
We have four wholly owned subsidiaries. Kilimanjaro Mining
Company Inc., a US corporation, Lake Victoria Resources (T) Limited, Chrysos 197
Company Tanzania Ltd and Jin 179 Company Tanzania Ltd. which are Tanzanian
corporations.
Employees
On April 26, 2011, the Company entered into employment and
contract agreements with our officers and directors. Our president David
Kalenuik and secretary Heidi Kalenuik agreed to handle our administrative
duties.
To the extent possible we intend to use the services of
subcontractors for manual labor and exploration work on our properties. Lake
Victoria Resources (T) Limited, our wholly owned Tanzania subsidiary may hire
subcontractors and employees to complete exploration work. A large skilled and
unskilled workforce is readily available within Tanzania to satisfy any labour
requirements we may have. Through contractors and skilled professional employees
the company does provide any necessary on the job training to accomplish our
exploration objectives.
Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections and estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.
Risks Associated with Mining
All of our properties are in the exploration stage. There is
no assurance that we can establish the existence of any mineral resource on any
of our properties in commercially exploitable quantities. Until we can do so, we
cannot earn any revenues from operations and if we do not do so we will lose all
of the funds that we expend on exploration. If we do not discover any mineral
resource in a commercially exploitable quantity, our business could fail.
Despite exploration work on our mineral properties, we have not
established that any of them contain any mineral reserve, nor can there be any
assurance that we will be able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7
) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a reserve that meets the requirements of the
Securities and Exchange Commissions Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any reserve and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on one or
more of our properties, there can be no assurance that we will be able to
develop our properties into producing mines and extract those resources. Both
mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.
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The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our properties, our business may fail.
Both mineral exploration and extraction require permits from
various foreign, federal, state, provincial and local governmental authorities
and are governed by laws and regulations, including those with respect to
prospecting, mine development, mineral production, transport, export, taxation,
labour standards, occupational health, waste disposal, toxic substances, land
use, environmental protection, mine safety and other matters. There can be no
assurance that we will be able to obtain or maintain any of the permits required
for the continued exploration of our mineral properties or for the construction
and operation of a mine on our properties at economically viable costs. If we
cannot accomplish these objectives, our business could fail.
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. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. 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 approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.
Our business activities are conducted in Tanzania.
Our mineral exploration activities in Tanzania may be affected
in varying degrees by political stability and government regulations relating to
the mining industry and foreign investment in that country. The government of
Tanzania may institute regulatory policies that adversely affect the exploration
and development (if any) of the Companys properties. Any changes in regulations
or shifts in political conditions in this country are beyond the control of the
Company and may adversely affect its business. Investors should assess the
political and regulatory risks related to the Companys foreign country
investments. Our operations may be affected in varying degrees by government
regulations with respect to restrictions on production, price controls, export
controls, foreign exchange controls, income taxes, expropriation of property,
environmental legislation and mine safety.
We may not have clear title to our properties.
Acquisition of title to mineral properties is a very detailed
and time-consuming process, and the Companys title to its properties may be
affected by prior unregistered agreements or transfers, or undetected defects.
Several of the Companys prospecting licenses are currently subject to renewal
by the Ministry of Energy and Minerals of Tanzania. In result, there is a risk
that we may not have clear title to all our mineral property interests, or they
may be subject to challenge or impugned in the future. We have exploration
licenses. We do not have a license to mine any minerals or reserves whatsoever
commercially at this time on any part of our properties. Once exploration has
advanced to a point where mining on one or more of our properties is feasible,
we plan to apply for a mining license or licenses.
If we establish the existence of a mineral resource on any
of our properties in a commercially exploitable quantity, we will require
additional capital in order to develop the property into a producing mine. If we
cannot raise this additional capital, we will not be able to exploit the
resource, and our business could fail.
If we do discover mineral resources in commercially exploitable
quantities on any of our properties, we will be required to expend substantial
sums of money to establish the extent of the resource, develop processes to
extract it and develop extraction and processing facilities and infrastructure.
Although we may derive substantial benefits from the discovery of a major deposit, there can be no
assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
11
Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.
Mineral exploration, development and production involve many
risks, which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure or against which we may elect not to
insure. Any such event could result in work stoppages and damage to property,
including damage to the environment. We do not currently maintain any insurance
coverage against these operating hazards nor do we expect to get such insurance
for the foreseeable future. If a hazard were to occur, the costs of rectifying
the hazard may exceed our asset value and cause us to liquidate all of our
assets, resulting in the loss of your entire investment in our company.
Mineral prices are subject to dramatic and unpredictable
fluctuations.
We expect to derive revenues, if any, either from the sale of
our mineral resource properties or from the extraction and sale of precious and
base metals such as gold, silver and copper. The price of those commodities has
fluctuated widely in recent years, and is affected by numerous factors beyond
our control, including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates,
global or regional consumptive patterns, speculative activities and increased
production due to new extraction developments and improved extraction and
production methods. The effect of these factors on the price of base and
precious metals, and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.
The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.
The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining
operations.
If our costs of exploration are greater than anticipated,
then we may not be able to complete the exploration program for our Tanzanian
properties without additional financing, of which there is no assurance that we
would be able to obtain.
We are proceeding with the initial stages of exploration on our
Tanzanian properties. We are carrying out an exploration program that has been
recommended by a consulting geologist. This exploration program outlines a
budget for completion of the recommended exploration program. However, there is
no assurance that our actual costs will not exceed the budgeted costs. Factors
that could cause actual costs to exceed budgeted costs include increased prices
due to competition for personnel and supplies during the exploration season,
unanticipated problems in completing the exploration program and delays
experienced in completing the exploration program.
12
Increases in exploration costs could result in our not being
able to carry out our exploration program without additional financing. There is
no assurance that we would be able to obtain additional financing in this
event.
Because of the speculative nature of exploration of mining
properties, there is substantial risk that no commercially exploitable minerals
will be found and our business will fail.
We are in the initial stage of exploration of our mineral
property, and thus have no way to evaluate the likelihood that we will be
successful in establishing commercially exploitable reserves of gold, silver or
other valuable minerals on our Tanzanian properties.
The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold, silver or
other valuable minerals in our mineral property. Exploration for minerals is a
speculative venture necessarily involving substantial risk. The expenditures to
be made by us on our exploration program may not result in the discovery of
commercial quantities of ore. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. Problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.
Because our executive officers have limited experience in
mineral exploration and do not have formal training specific to the
technicalities of mineral exploration, there is a higher risk that our business
will fail.
Our executive officers have limited experience in mineral
exploration and do not have formal training as geologists or in the technical
aspects of management of a mineral resource exploration company. As a result of
this inexperience, there is a higher risk of our being unable to complete our
business plan for the exploration of our mineral property. With no direct
training or experience in these areas, our management may not be fully aware of
many of the specific requirements related to working within this industry. Our
decisions and choices may not take into account standard engineering or
managerial approaches mineral resource exploration companies commonly use.
Consequently, the lack of training and experience of our management in this
industry could result in management making decisions that could result in a
reduced likelihood of our being able to locate commercially exploitable reserves
on our mineral property with the result that we would not be able to achieve
revenues or raise further financing to continue exploration activities. In
addition, we will have to rely on the technical services of others with
expertise in geological exploration in order for us to carry out our planned
exploration program. If we are unable to contract for the services of such
individuals, it will make it difficult and maybe impossible to pursue our
business plan. There is thus a higher risk that our operations, earnings and
ultimate financial success could suffer irreparable harm and our business will
likely fail.
Risks Relating to Our Common Stock
If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.
Our articles of incorporation authorize the issuance of up to
250,000,000 shares of common stock with a par value of $0.00001 per share. Our
board of directors may choose to issue some or all of such shares to acquire one
or more businesses or to provide additional financing in the future. The
issuance of any such shares will reduce the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will reduce the proportionate ownership and voting power of all
current shareholders. Further, such issuance may result in a change of control
of our corporation.
Our common stock is illiquid and shareholders may be unable
to sell their shares.
There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. In addition, stock prices for junior mineral
exploration companies fluctuate widely for reasons that may be unrelated to
their operating results. These fluctuations may adversely affect the trading
price of our common shares.
13
Penny stock rules will limit the ability of our stockholders
to sell their stock.
The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholders ability
to buy and sell our stock.
In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for its shares.
Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.
Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of identifying, acquiring, exploring and developing
commercial reserves of primarily gold and potentially uranium. Our properties
are in the exploration stage only and are without known reserves of gold and/or
uranium. Accordingly, we have not generated any revenues nor have we realized a
profit from our operations to date and there is little likelihood that we will
generate any revenues or realize any profits in the short term. Any
profitability in the future from our business will be dependent upon locating
and developing economic reserves of gold and/or uranium, which itself is subject
to numerous risk factors as set forth herein. Since we have not generated any
revenues, we will have to raise additional monies through the sale of our equity
securities or debt in order to continue our business operations.
We do not intend to pay dividends on any investment in the
shares of stock of our company.
We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.
14
Risks Related to Our Company
Our by-laws contain provisions indemnifying our officers and
directors.
Our by-laws provide the indemnification of our directors and
officers to the fullest extent legally permissible under the Nevada corporate
law against all expenses, liability and loss reasonably incurred or suffered by
them in connection with any action, suit or proceeding. Furthermore, our by-laws
provide that our board of directors may cause our company to purchase and
maintain insurance for our directors and officers, and we have implemented
director and officer insurance coverage.
Because most of our directors and officers are residents of
other countries other than the United States, investors may find it difficult to
enforce, within the United States, any judgments obtained against our directors
and officers.
Most of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our officers or directors, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof.
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS.
|
Not applicable.
Executive Offices
As of the date of this report, our executive offices consist of
approximately 200 square feet, plus common area, located at Suite 810, 675 West
Hastings Street, Vancouver, British Columbia V6B 1N2, Canada. We rent the office
at a rate of $1,400 plus tax per month on a month to month basis. We believe
that our office space and facilities are sufficient to meet our present needs
and do not anticipate any difficulty securing alternative or additional space,
as needed, on terms acceptable to us.
Mineral Properties
Acquisition of Primary Mining Licenses in Singida,
Tanzania
On May 15, 2009, a subsidiary of the Company, Kilimanjaro
Mining Company Inc., entered into a Mineral Financing Agreement with a director
of the Company authorizing him, on behalf of the Company, to acquire Primary
Mining Licenses (PMLs) in the Singida area of Tanzania. The agreement was
entered into as a result of certain requirements under the Tanzania Mining Act
as it relates to the ability to hold title to Primary Mining Licenses (PMLs).
The Mining Act allows only a Tanzanian national or a Tanzanian corporation that
is 100% owned by Tanzanian nationals to hold title to PMLs. As a result, the
Company entered into the Mineral Financing Agreement along with a Statutory
Declaration and Declaration of Trust with one of its directors (a Tanzanian
National) to facilitate the optioning, exploration and purchase of the PMLs at
the Singida gold project. Upon application, approval and the issuing of a
Special Mining License that is comprised of two or more of the PMLs in the
Singida project area, the Company will become the registered owner on title.
In September, 2009, the Company provided notification to all
the PML owners involved in Singida Mineral Properties and Sales Agreements that
the Company would extend their due diligence period for an additional 120 days,
as per 2.1.1 of the agreement, upon paying the same amount as the Initial
Payment again. In addition, the director completed an Addendum to the Mineral
Properties and Sales Agreement that altered clause 2.1.5. On October 27, 2009,
an amended Mineral Financing Agreement was signed between the director (a
Tanzanian national) and the Company.
On January 19, 2010, a director on behalf of the Company signed
second addendums to Singida Mineral Properties Sale and Purchase agreements. The
addendums revised and extended the second payment of the mineral agreements.
15
The second payment was divided into three payments with
$470,927 due on January 27, 2010, $470,927 due on July 27, 2010 and $922,900 due
on January 27, 2011.
On July 27, 2010, the director signed third addendums to the
Singida mineral properties sales and purchase agreements on behalf of the
Company. The third addendums revised the payment terms of the second addendum.
Based on the revised terms, the second instalment of $470,927 was divided into
two payments, with $281,065 paid on July 27, 2010 and $187,051 paid on October
26 and November 26, 2010.
On February 7, 2011, a director signed fourth addendums to the
Singida mineral properties sales and purchase agreements on behalf of the
Company. The fourth addendums revised the payment terms of the second addendum.
Based on the revised terms, the third instalment of approximately $922,900 was
divided into three payments, with $92,065 paid on February 9, 2011, $181,998
paid on March 10, 2011 and $646,030 due on August 9, 2011.
At the option of the Company, any PMLs may be relinquished at
any time during the agreement and the title transferred back to the original
owner. Also, at the option of the Company, a 2% Net Smelter Production royalty
or 2% of the Net Sale Value may be substituted in place of the final payment for
each PML and paid on a pro rata basis determined by the total final number of
PMLs involved in a special mining license.
Under the terms of the mineral properties sales and purchase
agreements the Company has completed initial option payments in the amount of
$1,707,810. As of March 31, 2011, the Company has acquired 100% of 23 PMLs. The
Company has the option to acquire 37 additional and different PMLs in the
Singida area. Pursuant to the original agreement and the subsequent addendums,
the Company agreed to pay approximately $646,030 on August 9, 2011, $419,100 on
January 23, 2013 and $3,828,000 on February 24, 2013.
Acquisition of Prospecting Licenses in Tanzania
On April 20, 2011, the Company entered into a Prospecting
License Purchase Agreement with Pili Sadiki, to acquire a 100% interest in a
certain prospecting license located in the Kiabakari Musoma District of
Tanzania.
On April 20, 2011, the Company entered into a Prospecting
License Purchase Agreement with Rashid Omar, to acquire a 100% interest in a
certain prospecting license located in the Handeni Tanga District of Tanzania.
On May 30, 2011, the Company entered into a Prospecting License
Purchase Agreement with Manga Mining Company to acquire a 100% interest in a
certain prospecting license located in the Handeni Tanga District of Tanzania.
On July 1, 2011, the Company entered into a Prospecting License
Purchase Agreement with I. M. Kwematuku Export Trade Ltd. to acquire up to 100%
interest in a certain prospecting license located in the Handeni Tanga District
of Tanzania.
Option Agreements with Otterburn Ventures Inc.
On May 6, 2011, Lake Victoria Mining Company, Inc. (the
Company) entered into the following four option and joint venture agreements
with Otterburn Ventures Inc. (Otterburn). On July 8, 2011 Otterburn terminated
these four option and joint venture agreements.
Geita Option Agreement
In the option and joint venture agreement (the Geita Option
Agreement) between the Company and Otterburn with respect to property located
in the Geita District of the Mwanza Region of the United Republic of Tanzania
(the Geita Property), the Company agreed to grant an exclusive option to
Otterburn to acquire up to a 70% undivided interest in and to certain
prospecting licenses with respect to the Geita Property. Pursuant to the Geita
Option Agreement, and in consideration for the 70% option, Otterburn agreed to:
(i) make a cash payment to the Company in the amount of $2,739.70 on May 20,
2011 (the Effective Date) representing all license fees paid by the Company;
(ii) make cash payments to the Company in the aggregate of up to $150,000 over a
two-year period commencing on May 13, 2011 (the Closing Date); (iii) allot and
issue up to 600,000 common shares of Otterburn to the Company over a two year
period commencing on the Closing Date; and (iv) fund working costs up to
$1,570,000 on the Geita Property over a three year period commencing on the
Effective Date.
16
Kalemela Option Agreement
In the option and joint venture agreement (the Kalemela Option
Agreement) between the Company and Otterburn with respect to property located
in the Magu District of the Mwanza Region of the United Republic of Tanzania
(the Kalemela Property), the Company agreed to grant an exclusive option to
Otterburn to acquire up to a 70% undivided interest in and to certain
prospecting licenses with respect to the Kalemela Property. Pursuant to the
Kalemela Option Agreement, and in consideration for the 70% option, Otterburn
agreed to: (i) make a cash payment to the Company in the amount of $21,897.80 on
the Effective Date representing all license fees paid by the Company; (ii) make
cash payments to the Company in the aggregate of up to $150,000 over a two-year
period commencing on May 13, 2011 (the Closing Date); (iii) allot and issue up
to 600,000 common shares of Otterburn to the Company over a two year period
commencing on the Effective Date; and (iv) fund working costs up to $1,350,000
on the Kalemela Property over a three year period commencing on the Effective
Date.
Mara Option Agreement
In the option and joint venture agreement (the Mara Option
Agreement) between the Company and Otterburn with respect to property located
in the Tarime District of the North Mara Region of the United Republic of
Tanzania (the Mara Property), the Company agreed to grant an exclusive option
to Otterburn to acquire up to a 70% undivided interest in and to certain
prospecting licenses with respect to the Mara Property. Pursuant to the Mara
Option Agreement, and in consideration for the 70% option, Otterburn agreed to:
(i) make a cash payment to the Company in the amount of $32,015.20 on the
Effective Date representing all license fees paid by the Company; (ii) make cash
payments to the Company in the aggregate of up to $180,000 over a two-year
period commencing on May 13, 2011 (the Closing Date); (iii) allot and issue up
to 900,000 common shares of Otterburn to the Company over a two year period
commencing on the Effective Date; and (iv) fund working costs up to $1,850,000
on the Mara Property over a three year period commencing the Effective Date.
Singida Option Agreement
In the option and joint venture agreement (the Singida Option
Agreement) among the Company, Ahmed Abubakar Magoma and Otterburn with respect
to property located in the Singida Region of the United Republic of Tanzania
(the Singida Property), the Company and Mr. Magoma agreed to grant an
exclusive option to Otterburn to acquire up to a 70% undivided interest in and
to certain prospecting licenses with respect to the Singida Property divided
into two option grants. Pursuant to the Singida Option Agreement, and in
consideration for 51% of the interest, Otterburn agreed to: (i) make a cash
payment to the Company in the amount of $770 on the Effective Date representing
all license fees paid by the Company; (ii) make cash payments to the Company in
the aggregate of up to $400,000 over a two-year period commencing on May 13,
2011 (the Closing Date); (iii) allot and issue up to 2,200,000 common shares
of Otterburn to the Company over a two year period commencing on the Effective
Date; and (iv) fund working costs up to $4,500,000 on the Singida Property over
a three year period commencing on the Closing Date and fund and complete the
Preliminary Economic Assessment on or before the third anniversary date from the
Effective Date, as described in more detail in the Singida Option Agreement.
Pursuant the Singida Option Agreement, in consideration for the remaining 19%
interest Otterburn agreed to: (i) allot and issue up to 1,000,000 common shares
of Otterburn to the Company on or before the sixth anniversary date from the
Effective Date; (ii) fund and complete the Pre-Feasibility Report compliant with
Canadian National Instrument 43-101
Standards of Disclosure for Mineral
Projects
, on or before the sixth anniversary date from the Effective Date;
and (iii) fund working costs up to $750,000 on the Singida Property, $250,000 on
or before each of the fourth, fifth and sixth anniversary dates from the
Effective Date.
Termination of Option and Joint Venture Agreements
On July 8, 2011, Otterburn Ventures Inc. exercised its rights
to terminate four option and joint venture agreements dated May 6, 2011 between
Otterburn and the Company, pursuant to which we granted Otterburn the right to
acquire up to an undivided 70% interest in and to certain primary mining
licenses and prospecting licenses owned by us known as the Singida Gold Project,
North Mara Gold Project, Kalemela Gold Project and Geita Gold Project and
Otterburn paid the cash payment of $497,423 and issued 2,200,000 of its common
shares to our company. In connection with the termination of the option
agreements:
|
(i)
|
Otterburn agreed to pay such applicable Tanzanian
government fees to leave the respective licenses in good standing for a
period six months from July 8, 2011.
|
17
|
(ii)
|
Otterburn terminated the exploration service agreement
dated May 20, 2011 between Otterburn, Lake Victoria Resources (T) Ltd.,
our wholly-owned subsidiary, and and agree to pay a reimbursement for the
work expenditures incurred by Otterburn during the months of March through
the termination date of July 8, 2011 and, if required, certain termination
costs, provided such termination costs have been incurred in accordance
with the exploration service agreement.
|
|
|
|
|
(iii)
|
Otterburn agreed to repurchase the 2,200,000 common
shares of Otterburn that we received pursuant to the Option Agreements at
a price of $0.10 per share.
|
Licenses
The following chart (Table 1) is a complete list of each gold
prospecting license that we own by project name, license number, the area of
location, district of its location and the size in square kilometers. Table 2, a
complete list of our uranium prospect licenses, follows the gold license list
(Table 1). We own no prospecting property other than the
following licenses listed on
Table 1 and Table 2. There are no known reserves on these
properties and any proposed programs by us are exploratory in nature.
Table 1: Gold Projects and License List
Project
|
License No
|
Area
|
District
|
Size
(SqKm)
|
KALEMELA
|
|
|
|
|
|
PL 2747/2004
|
Magu
|
Magu
|
34.01
|
|
PL 2910/2004
|
Bunda South
|
Bunda
|
37.9
|
|
PL 3006/2005
|
Bunda
|
Bunda
|
56.56
|
|
PL 5892/2009
|
Magu
|
Magu
|
29.67
|
|
PL 5912/2009
|
Magu
|
Magu
|
56.74
|
|
PL 5988/2009
|
Bunda South
|
Magu
|
38.92
|
|
|
|
|
253.8
|
GEITA
|
|
|
|
|
|
PL 2806/2004
|
Geita
|
Geita
|
21.59
|
|
PL 5958/2009
|
Geita
|
Geita
|
20.85
|
|
|
|
|
42.44
|
MUSOMA BUNDA
|
|
|
|
|
Murangi
|
|
|
|
|
|
PL 4511/2007
|
Masinono
|
Musoma
|
51.9
|
Suguti
|
|
|
|
|
|
PL 3966/2006
|
Suguti
|
Musoma
|
72.95
|
Kinyambwiga
|
|
|
|
|
|
PL 4653/2007
|
Kinyambwiga
|
Musoma
|
30.89
|
24 PML's
|
|
|
|
|
|
1)PM0001173
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
2)PM0001174
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
18
Project
|
License No
|
Area
|
District
|
Size
(SqKm)
|
|
3)PM0001175
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
4)PM0001176
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
5)PM0001177
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
6)PM0001178
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
7)PM0001179
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
8)PM0001180
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
9)PM0001181
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
10)PM0001182
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
11)PM0001183
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
12)PM0001184
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
13)PM0001185
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
14)PM0001301
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
15)PM0001302
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
16)PM0001307
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
17)PM0004582
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
18)PM0004583
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
19)PM0004584
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
20)PM0004585
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
21)PM0004586
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
22)PM0004587
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
23)PM0004588
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
24)PM0004589
|
Kinyambwiga
|
Musoma
|
8.36 Hectares
|
|
|
|
|
2.01
|
SINGIDA
|
|
|
|
|
60 PMLs
|
200mx500m
|
Singida - Londoni
|
Singida
|
4.74
|
|
|
|
|
4.74.
|
BUHEMBA
|
|
|
|
|
|
PL 5919/2009
|
Buhemba
|
Serengeti
|
34.92
|
|
|
|
|
34.92
|
19
Project
|
License No
|
Area
|
District
|
Size
(SqKm)
|
UYOWA
|
|
|
|
|
|
PL 4531/2007
|
Uyowa
|
Urambo
|
95.12
|
|
PL 3425/2005
|
Uyowa
|
Uyowa
|
171.2
|
|
PL 5009/2008
|
Uyowa
|
Urambo
|
244.32
|
|
PL 5916/2009
|
Uyowa
|
Urambo
|
49.89
|
|
PL 4749/2007
|
Kisimani River and Iseramigas
|
Urambo
|
34.24
|
|
PL 5153/2008
|
Uyowa
|
Uyowa
|
134.96
|
|
|
|
|
729.73
|
KAHAMA
|
|
|
|
|
|
PL 3439/2005
|
Salawe
|
Shinyanga
|
48.00
|
|
PL6437/2011
PLR 4188/2006
|
Kahama South
|
Kahama
|
183.05
|
|
PL6341/2010
PLR 4189/2006
|
Kahama
|
Kahama
|
60.79
|
|
|
|
|
291.84
|
NORTH MARA
|
|
|
|
|
Tarime
|
PL 4882/2007
|
Tarime
|
Nyagisa/Tarime
|
61.8
|
Tarime
|
PL 3340/2005
|
Ikoma
|
Tarime
|
96.83
|
Tarime
|
PL 2677/2004
|
Tarime
|
Tarime
|
37.32
|
Tarime
|
PL 3005/2005
|
Tarime
|
Mara Tarime
|
42.72
|
Tarime
|
PL 4873/2007
|
Tarime
|
Tarime
|
40.97
|
Tarime
|
PL 3341/2005
|
Utegi
|
Tarime
|
25.48
|
Tarime
|
PL 4225/2007
|
Kiagata
|
Musoma
|
42.56
|
Nyabigena East
|
PL 3355/2005
|
Nyamwanga/Nyam ongo
|
Tarime
|
12.42
|
Kubaisi Kiserya
|
PL 4833/2007
|
Kiterere Hills
|
Tarime & Serengeti
|
27.34
|
|
|
|
|
387.44
|
30 Prospecting Licenses (PLs) -
Total SqKm
|
|
|
1,895.91
|
84 Primary Mining Licenses (PMLs)- Total SqKm
|
|
|
6.75
|
Table 2: Uranium Projects and License List
Project
|
License No
|
Area
|
District
|
Size (SqKm)
|
MBINGA
|
|
|
|
|
|
PL6342/2010
|
|
|
|
|
(PLR 4433/2007)
|
Mbinga
|
Mbinga
|
199.40
|
|
PL6509/2010
|
|
|
|
|
(PLR 4335/2007)
|
Litembo
|
Mbinga
|
199.97
|
|
PL 4254/2007
|
Pulambili
|
Mbinga
|
98.39
|
|
Application
|
|
|
|
|
(PLR4345/2007)
|
Mbinga
|
Mbinga
|
|
|
Application
|
|
|
|
|
(PLR4346/2007)
|
Mbinga
|
Mbinga
|
|
|
|
|
|
497.76
|
|
|
|
|
|
KIWIRA
|
|
|
|
|
|
PL
4651/2007
|
Makete
|
Makete & Kyela
|
86.11
|
20
|
PL 4406/2007
|
Chunya
|
Mbeya
|
49.84
|
|
PL 4514/2007
|
Kyela
|
Kyela
|
69.44
|
|
|
|
|
205.39
|
|
|
|
|
|
NJOMBE
|
|
|
|
|
|
PL6526/2010
|
|
|
|
|
(PLR
4297/2007)
|
Njombe
|
Makete
|
199.13
|
|
|
|
|
199.13
|
|
|
|
|
|
LAKE RUKWA
|
|
|
|
|
|
PL6519/2010
|
|
|
|
|
(PLR
4068/2007)
|
Chunya
|
Mbeya
|
199.02
|
|
|
|
|
199.02
|
|
|
|
|
|
BAHI
|
|
|
|
|
|
PL 4211
|
Bahi
|
Bahi
|
43.66
|
|
|
|
|
43.66
|
|
|
|
|
|
9 Prospecting and Reconnaissance Licenses - Total
(Sqkm)
|
|
1,144.96
|
21
Prospective Projects and Properties
The following map (Map 1) is a gold project location map. The
red is the outline of all of our individual Prospecting Licenses (PLs) that
are combined to make a project area and that were in joint venture with
Otterburn. Our other gold projects that werenare outlined in blue. For a
detailed listing see Item 2: Properties Table 1
Map 1:
Gold Project Location Map, March 2011
22
The following map (Map 2) is a uranium project location map.
The black is the outline of all of our individual Prospecting Licenses (PLs or
PLRs) that are combined to make a project. Our projects are outlined in grey.
For a detailed listing see Item 2: Properties Table 2
Map 2:
Uranium Location Map, March 2011
Prospective Gold Projects
The following is a brief overview of our portfolio of
prospective mineral properties, the exploration developments on them where
applicable and some of the details of the historical option agreements for them.
During the fiscal year ended March 31, 2011, our exploration work was primarily
concentrated on the Singida, Kinyambwiga, Uyowa and North Mara gold projects.
Kalemela Gold Project
The Kalemela Gold project consists of a package of six
prospecting licenses (Table 1) that make up a total area of 253.8 square
kilometers near the south-eastern corner of Lake Victoria (Table 3). On April 1,
2007, PL2747/2004 was the original prospecting license acquired from Uyowa Gold
Mining and Exploration Company Limited, P.O. Box 3167, Dar es Salaam, Tanzania.
Subsequently, on November 18, 2008 we acquired two additional adjacent and
contiguous licenses PL3006/2005 and PL2910/2004. We entered into an Exploration
Services Agreement with Geo Can to conduct geologic mapping, soil and rock
sampling and ground magnetic surveys.
The original three licenses covered about 261.8 square
kilometers and have each been split in half in compliance with the Mining Act of
Tanzania. This has resulted in the Kalemela project now being comprised of six
(6) PLs with an additional three (3) new PL numbers being assigned and totaling
about 253.80 sq. km. However, all the subsequent exploration comments refer to
the original three prospecting licenses (PLs).
We completed the initial exploration of all the Kalemela
licenses during 2008/2009. Results of geologic mapping, ground magnetic
surveying and soil and rock sampling have identified exploration sites suitable
for electrical induced polarization (I.P.) geophysical surveys to further
define possible drill targets. Depending on available resources and project
scheduling, follow up soil sampling will be conducted to confirm previous
sampling results, followed by a targeted electrically induced polariztion (I.P.)
geophysical survey and a possible initial drill program. No additional work was
conducted on the Kalemela project during this reporting period.
23
Table 3: Kalemela Gold Project Prospecting Licenses
License Details
|
Area (km
2
)
|
PL 2747/2004
|
34.01
|
PL 2910/2004
|
37.90
|
PL 3006/2005
|
56.56
|
PL 5892/2009
|
29.67
|
PL 5912/2009
|
56.74
|
PL 5988/2009
|
38.92
|
TOTAL
|
253.80
|
Location and Access
The Kalemela Gold Project is located in the Kilimafedha
greenstone belt of the Lake Victoria Gold Field in the Magu and Bunda Districts,
Mwanza Region of northern Tanzania. The properties can be reached by traveling
northeastwards from Mwanza city on the all-weather Mwanza-Magu-Bunda paved
highway that continues northwards to Musoma.
The properties are near the eastern tip of Lake Victorias
Speke Gulf and close to the southern shoreline of Lake Victoria. The nearest
airport with regularly scheduled flights is in Musoma although the Mwanza
airport is preferred where there are daily flights to and from Dar es Salaam and
Kilimanjaro international airports.
The city of Musoma has a population of about 1.5 million and a
well-developed social and commercial infrastructure including: transportation,
telecommunications, educational institutes, hospitals, hotels, and recreational
facilities. The licenses are approximately 86 kilometers south of Musoma. Bunda,
a closer, smaller commercial center than Musoma, is only about 36 kilometers
north of the project area.
Road access to the licenses from Musoma, the nearest large
town, is to Lamadi village over a well maintained paved highway, and then by
dirt roads to all parts of the project. Two wheel vehicles are satisfactory in
the dry season, but four wheel drive vehicles are required during the wet
season.
As Map 3 shows, the license blocks are contiguous, apart from a
narrow strip of land between PL 5892 and PL 5912.
Map 3, The Kalemela Gold Property Location Map, Tanzania
illustrates the location of the all six Kalemela licenses relative to Lake
Victoria, the Serengeti National Park and their respective areas in square
kilometers (sq.km.).
The Kalemela Gold Project is located in the Kilimafedha
greenstone belt of the Lake Victoria Gold Field in the Magu and Bunda Districts,
Mwanza Region of northern Tanzania. The properties can be reached by traveling
northeastwards from Mwanza city on the all-weather Mwanza-Magu-Bunda paved
highway that continues northwards to Musoma.
The properties are near the eastern tip of Lake Victorias
Speke Gulf and close to the southern shoreline of Lake Victoria. The nearest
airport with regularly scheduled flights is in Musoma although the Mwanza
airport is preferred where there are daily flights to and from Dar es Salaam and
Kilimanjaro international airports.
24
The city of Musoma has a population of about 1.5 million and a
well-developed social and commercial infrastructure including: transportation,
telecommunications, educational institutes, hospitals, hotels, and recreational
facilities. The licenses are approximately 86 kilometers south of Musoma. Bunda,
a closer, smaller commercial center than Musoma, is only about 36 kilometers
north of the project area.
Road access to the licenses from Musoma, the nearest large
town, is to Lamadi village over a well maintained paved highway, and then by
dirt roads to all parts of the project. Two wheel vehicles are satisfactory in
the dry season, but four wheel drive vehicles are required during the wet
season.
As Map 3 shows, the license blocks are contiguous, apart from a
narrow strip of land between PL 5892 and PL 5912.
Map 3: Kalemela Gold Project Location Map, November 2009.
Physiography and Climate
Topographically, the license consists of sweeping terrain, with
several low hills in the southern and eastern parts; flat stretches of grass and
dark colored clay rich mbuga soils dominate the central and northern parts of
the license. The most conspicuous topographic features in the area surrounding
the project are two large hills known as Ngasamo Hill and Wamangola Hill. These
two hills lie south of the project and are formed by iron and magnesium rich
intrusive rocks.
The project is located at the western fringe of the Kilimafedha
greenstone belt. Granitoid and greenstone rocks extend northward to the Ndabaka
Plains and to the Serengeti Game Reserve. The licenses constitute the northern
extremity of a large and physiographically mature area known as Sukumaland. The
area is adequately drained by the northwest flowing Lutubiga stream together
with various other tributaries to the generally east flowing Ramadi River. All
rivers in the area flow into the Duma River that eventually empties into Lake
Victoria. The drainage channels are structurally controlled and follow joints,
shear zones and other internal structures in the underlying bedrock. Outcrops
are generally scarce as much of the area is covered with extensive amounts of
Recent clay rich soils.
25
Geology
The Kalemela property is located in the south-western portion
of the Kilimafedha Greenstone Belt (Map 3). The greenstone rocks in this area
are part of the Nyanzian system which, together with Dodoman system and younger
Kavirondian, forms what is known as the Tanzania craton. The craton is
surrounded by Proterozoic mobile belts. The Precambrian terranes have been
disrupted episodically throughout the Phanerozoic by rifting, most recently in
the Cenozoic with the development of the famed East African Rift System.
The most significant regional structural feature is the
northwest trending Suguti Shear Zone, which is located about 25 kilometers to
the northeast. This structure lies within a broad, 2-3 kilometer wide
depression; smaller faults within our properties are believed to represent
offshoots from the larger Suguti structure. It may be possible that these small
faults have helped to control the location of elevated metal values.
Greenstone volcanic rocks and granite rocks are the major
lithologies present on the Kalemela licenses. The greenstones have planar flow
structures in the southwest, central and southeast parts of the property. A
major northeast trending linear feature, present in the Lutubiga area, coincides
with greenstone outcrops in the central part of the property. Minor northwest
trending faults and fracture features are also present, and a well defined
greenstone dike is present in the central south part of the licenses that might
help control some elevated metal values.
Local (Deposit) Geology
The local geology of the area is shown in Map 4, and the major
rock types are briefly described below:
Geological mapping was undertaken by Geo Can Resources in
2008/09 over the license blocks see also Map 4.
The Kalemela Gold Project is located within the western
extremity of the Kilimafedha Greenstone Belt. Granitoids form higher relief in
the southern part of the license, while lower elevations with greenstones and
clay-rich mbuga soils are present in the north. Several gabbro, dolerite and
felsic porphyry dykes are present. However, outcrops are scarce, especially in
the north of the license area.
In the west and northwest parts of the area, greenstones are
dominant in the form of mafic volcanics and basaltic pillow lavas; occasional
rhyolites and felsic porphyry dykes are also present. The northern half of the
property is blanketed by a generally thin clay-rich mbuga soil cover, which
overlies prospective greenstone and granitic rocks.
History
There are no historical large mines or developed gold
mineralized bodies within the property; prior to our current activity, only
limited reconnaissance exploration was conducted on the property and within the
region.
26
Map 4: Regional Geological Map for the Kalemela Gold
Project, July 2008
Kalemela Exploration Program
Exploration across the Kalemela licenses has largely been
conducted by Geo Can Resources between July, 2008 and February, 2009 with later
follow-up investigation on a few of the anomalies by Lake Victoria Mining
Company during the latter part of 2009 (Table 4). The work program consisted of
gridding, soil and rock sampling, geophysical ground magnetic surveying,
trenching, geological mapping, soil and rock assays, report writing,
accommodations and travel.
Table 4: Summary of exploration undertaken by GeoCan
Resources
Activity
|
Unit
|
PL 2747
|
PL 2910
|
PL 3006
|
TOTAL
|
Mapping
|
km²
|
70.72
|
37.90
|
113.90
|
222.52
|
Soil sampling
|
Samples
|
1589
|
1762
|
341
|
3692
|
Rock chips
|
Samples
|
33
|
22
|
6
|
61
|
Trenching
|
Trenches
|
10
|
|
|
10
|
|
Samples
|
105
|
|
|
105
|
Ground magnetics
|
line-km
|
688
|
648
|
850
|
2186
|
No detailed follow-up work has been undertaken from the initial
exploration results obtained by Geocan Resources other than minor trenching
across areas of increased soil anomalism. However, geological mapping has
confirmed that the environment is favourable for the presence of gold
mineralisation. The project area lies within the Lake Victoria Greenstone
Belt.
Soil geochemical sampling and limited trenching have confirmed
the presence of gold in the area, while ground magnetic surveys have identified
potential feeder channel sites which, allied with the regional structural
regime, strongly suggest that the area is conducive to the emplacement of
gold.
27
The following targets have been identified for field
investigation Map 5:
|
1.
|
The area immediately north of Mwabujose and Chumve Hills
in the western most PL 2910/2004. A major NE-SW structure cuts the area
and together with the cross-cutting NW-SE structures provides prospective
targets. IP Gradient array survey with selected N-S Schlumberger profiles
are proposed with the aim of defining targets for follow-up trenching,
augering (over mbuga-covered area) and RAB drilling.
|
|
|
|
|
2.
|
The geochemical anomalous area in the north-eastern part
of the project area on PL 5892/2008. A number of NE-SW trending structures
cut by NW-SE dykes characterize this area. Auger or RAB drilling is
proposed.
|
|
|
|
|
3.
|
The granite/basalt contact, largely overlain by mbuga
soils requires verification by IP and Schlumberger/VLF profiling.
Follow-up soil sampling by auger or RAB drilling is required to test
beneath the mbuga.
|
Map 5: Exploration Targets Priortized on the Kalemela Gold
Project
Geita Project PL2806/2004 and
PL5958/2009
On January 27, 2009, we executed a definitive Option Agreement
(the Option) with Geo Can to earn a 50% interest in Geo Cans Geita Gold
Project, Prospecting License Number PL2806. Subsequently, on May 5, 2009 through
a Property Purchase Agreement between our wholly owned subsidiary Kilimanjaro
Mining Company and Geo Can we acquired a 100% interest in the Property
totaling 43.77 sq km. The Geita Gold Project (original license number:
PL2806/2004) is located in Northern Tanzania within the Lake Victoria goldfields
in the Geita District, Mwanza Region. This license is about 6 kilometers west of
the town of Geita and about 78 kilometers west of Mwanza. The original
prospecting license PL2806 has been divided and the project is now comprised of
two licenses: PL2806/2004 (21.59 sq.km.) and PL5958/2009 (20.85 sq.km.), which
totals about 42.44 sq.km.
28
During 2008, under contract by us, Geo Can completed detailed
ground magnetic surveys, and both reconnaissance and detailed electrical
prospecting (induced polarization, I.P.) surveys. Following this work, we
commenced drilling on the Geita Project in January, 2009 and completed 37
reverse circulation drill holes for a total of 3,508 meters (11,506 feet). The
drilling identified sub-economic gold values; the best mineralized intersection
was 2 meters of 3.03 grams per metric ton from 50 meters to 52 meters in drill
hole GR-15. Other than desktop studies and and reconnaissance visits, no
additional work was conducted on the project during this reporting period.
Description and Location
The Geita property (License number: PL2806/204) is situated in
the famous Lake Victoria goldfields in Geita district, Mwanza region, northern
Tanzania. It is located between Latitude 2o 54S and 2o 92S and Longitude 32°
06E and 32° 22E that encompasses an area of 42.44 square kilometers. This area
lies approximately 6 Km west of the town of Geita and 78 Km west of the city
Mwanza. Mwanza, on the southern shore of Lake Victoria is an important port and
the second largest city in Tanzania.
Accessibility, Infrastructure, Physiography and
Climate
Geita (Map 6) can be reached by air via Mwanza International
airport, located in Mwanza town and then 78 Km drive to Geita town via
Geita-Biharamulo tarmac road. The property can as well be reached from Kahama
district, Shinyanga through KakolaGeita road. The Geita town has several mobile
telephone networks (Vodacom, Celtel, Zantel, Tigo and TTCL) and internet
communication is available in local internet cafes.
Topographically on the north side, the property consists of
prominent hills and relative low hills on the southern side (Map 76). Nyamalembo
on the northeast side of the property is the highest reaching elevation of 1474
metres above sea level (Map 7 and Map 8). Most of the hills consist of granitic
rocks with the exception of Samena Hill (on the northwest side), which is
composed of greenstone rocks. The hill slopes are covered by Fe rich fertile red
or black soil that grades to black cotton soil on the far south of the hills.
The property area is drained at its midway by the Mtakuja stream, which flows
northwesterly into swamps near Nungwe Bay at the Lake Victoria. The climate is
tropically humid with two major seasons, a wet season that starts from November
to May and a dry season the remainder of the year. The wet seasons maximum
rainfall is between March and April. To date, weather has not affected
exploration progress.
Map 6: Geita Property location and major roads
29
Map 7:
Topographical map of the Geita property
Map 8:
Geology and Location Map of PL2806/2004
30
History
The Geita area has been the most productive gold area in
Tanzania with nearly a continuous history of mining activity from 1932 to the
present. To the northwest at Samena Hill, prospecting and exploration dates back
to the 1930s when the search for gold lead to the discovery of a massive
sulphide deposit.
In 1961, the Geological Survey of Tanganyika carried out
geophysical surveys and drilling programs. A number of boreholes contained some
anomalous base metals but only small amounts of gold.
In 1994, Cluff Resources (UK based company) acquired ground
east and west of Geita including the Old Geita mines and surrounding prospects.
Cluff conducted exploration work at Lone Cone, Samena, Nyamonge and Prospect 30.
Significant discoveries were made in 1996 when Cluff was acquired by Ashanti
Gold. Ashanti continued exploration work and discovered additional high grade
mineralized zones at Nyankanga west of Lone Cone. Later in 1997, Samax Resources
acquired properties to the north and northeast of Geita Hill (Old Geita mine) at
the location called Kukuluma and Matandani. Presently AngloGold-Ashanti owns the
Geita Gold mine.
The Geita Gold Mine is subdivided by northwest trending
deformation corridors separated into three distinct sub-terrains, which have
been named Nyamulilima in the west, Nyankanga-Geita in the central and Kukuluma
to the northeast. The Nyankanga block is situated on the southern limb of a west
plunging synform with a west-northwest trending axial plane. The mineralized
zone extends more than a kilometer to the northeast, and to a depth of at least
150 meters.
The Kukuluma trend comprises five deposits within a five
kilometer long east-southeast mineralized trend that cuts obliquely across
northwest trending horseshoe ridges. The deposits are located six kilometers
northeast of Nyankanga Block. The mineralization is open at depth. Grades and
widths indicate an underground mine might be possible at a future time.
At Samena Hill prospecting and exploration activities are
recorded back to the 1930s. Several companies and individuals combed the area
looking for gold without success. The discovery of the massive sulphides was
rather accidental and the discoverers thought that in the end, the sulphides
would lead them to a gold deposit.
Within the validity of the current license, investigations have
been limited to a remote sensing analysis, geophysical surveys (ground magnetic
and induced polarisation surveys), and sub-surface sampling by means of reverse
circulation drilling. Both the remote sensing analysis and the ground magnetic
surveys indicated the presence of structures, which, in association with the
known regional geology, could be favourable for the emplacement of gold
mineralisation. Interpretation of the IP survey results suggested the presence
of sulphides which were reflected in the reverse circulation drill cuttings.
Isolated anomalous gold mineralization was confirmed by the assay results from
the drilling.
The work described briefly above has shown the geological
environment to be favorable for the presence of gold mineralization. The
additional work necessary to prove this further includes geochemical soil
sampling, pitting/trenching of geochemical anomalies and infill reverse
circulation drilling.
Musoma Bunda Murangi Gold Project
The Musoma Bunda Murangi Gold Project is comprised of three
Prospecting Licenses (PLs) (see Table 1 and Map 10) that are located on the
eastern side of Lake Victoria. All three licenses lie within the Musoma-Mara
Greenstone belt.
The Company owns the mineral rights over the Kinyambwiga,
Murangi and Suguti Projects. The licenses, which lie in and to the south of the
Musoma - Mara Greenstone Belt, cover a combined area of 155.74 square kilometres
in the northeast of the United Republic of Tanzania, East Africa, close to the
southeast shore of Lake Victoria.
Musoma, located 30 kilometres north of the Suguti license, is
the main commercial centre of Mara Region. The town of Bunda, located on the
main Mwanza - Musoma paved highway, is 18 kilometres to the east of the
Kinyambwiga license.
31
The Company, under its subsidiary company Kilimanjaro Mining
Company Limited, acquired the licenses from Geo Can Resources Limited (Geo Can)
in May 2009. Exploration work undertaken in the Kinyambwiga Project area prior
to the acquisition of Geo Can comprised remote sensing, regolith mapping, ground
magnetic surveys and drilling. No exploration had been undertaken in either the
Suguti or Murangi licenses at that time. Since acquiring the properties we have,
up to September 2010, spent over US$259,500 on exploration. In the Kinyambwiga
Project area work undertaken includes geochemical soil sampling, Gradient Array
IP surveys, Schlumberger VES target profiling, two trenching programs and a RC
borehole campaign in which 2,427 metres of drilling was completed in 2010.
Ground magnetometer surveys have recently been completed across the Suguti and
Murangi Prospecting Licenses.
Location and Access
The three prospecting licenses (Table 1) lie to the west of the
main Mwanza-Musoma tar road in the Musoma District (see Map 19). The licenses
are located some 30 to 60km south of Musoma, the major town in the district.
Access to the individual licenses is via all weather dirt roads that connect to
the various villages within the license areas. The three licenses are commonly
referred to by the following names:
-
Kinyambwiga project (PL 4653/2007) and 24 Primary Mining licenses(PMLs)
-
Murangi project (PL 4511/2007)
-
Suguti project (PL3966/2006)
Physiography, Climate, Vegetation and Water
The area is typically flat lying and is covered by grass and
scattered woodland. Black cotton soils (mbuga) cover the entire area. The Mohoji
and the Serengeti Plains lie to the south and south east of the area
respectively. Perennial streams bisect the mbuga landscape and drain into Lake
Victoria. The climate is tropically humid with an alternative wet (March to
April) and dry season (from October to December).
History
Regional exploration has been carried out in the Musoma
District from the 1920s. Geosurvey International undertook an aeromagnetic
survey across the region during 1976-77. Barth compiled a geological map of the
Lake Victoria Goldfields on a 1:1,000,000 scale in 1990. Exploration and
exploitation of gold in the Musoma-Mara Greenstone belt commenced in the 1920s.
Mining occurred during the colonial times at Buhemba and Kiabakari, located east
of the Musoma Bunda license area.
Various international companies have worked on parts of the
licenses since the mid-1990s and have largely concentrated around artisanal
sites. Known artisanal workings occur on both the Kinyambwiga and Suguti
projects.
All artisanal sites are licensed as Primary Mining Licenses
(PMLs) to Tanzanian Nationals. All 24 PMLs on the Kinyambwiga prospecting
license have been purchased outright by Geo Can Resources Company Limited (Geo
Can) and are titled in the name of a common director of Geo Can and Lake
Victoria Mining Company, Inc..
Regional Geology
The area is largely underlain by the Archaean Nyanzian
Supergroup suite of granitic rocks (the Musoma Series). These have been
uncomformably overlain by metavolcanic rocks of the Kavirondian System. Most of
the documented gold occurrences in the Musoma-Mara region lie within the
Nyanzian formation. The greenstone belt extends for over 180 km from the shores
of Lake Victoria in the west to the Serengeti National Park in the east.
Shear-hosted, gold bearing quartz veins, often striking NNE-SSW
are typically present within the greenstone rocks. A crosscutting northwest
southeast structural fabric is present.
Kinyambwiga project
On April 2, 2009 we completed an Option to Purchase
Prospecting Licenses Agreement with Geo Can for PL4653/2007. Subsequently, on
May 5, 2009 through a Property Purchase Agreement between our wholly owned subsidiary Kilimanjaro Mining Company and Geo Can we acquired a
100% interest in the Property totaling 30.89 square kilometers in quandrangle
QDS23/1. The Kinyambwiga Gold Project is about 208 kilometers northeast of the
city of Mwanza in northern Tanzania, in the Precambian Musoma-Mara greenstone
belt of northern Tanzania, East Africa (Map 9).
32
Distance from the nearest town of Bunda to the project is
approximately 18 kilometers. Access from Bunda is over dirt roads through Guta
Village; four wheel drive vehicles are required during the rainy season. The
nearest airport is in Musoma. However, the airport in Mwanza is preferred which
has regularly scheduled flights, and is connected to Bunda with a major paved
highway. The distance from Mwanza to Bunda is approximately 190 kilometers.
Map 9: Musoma-Bunda Gold Project Location Map includes
Kinyambwiga Project PL4653
The geology at Kinyambwiga consists of granites, northwest
trending mafic dykes and northeast trending gold bearing quartz veins. The
granites generally fall into two main categories: syn- and post-Nyanzian ages,
the mafic dykes have moderate to strong magnetic properties, and the quartz
veins follow consistent, through-going fault structures and have near vertical
dips.
Shallow, small scale artisanal gold mining has intermittently
exposed the veins over approximately 300 to 400 meters and to an estimated depth
of about 15 meters. Exploration by Lake Victoria has focused on defining the
locations and gold grades of multiple veins.
Kinyambwiga has two main areas of exploration interest: a
northern zone with alluvial gold deposits and a southern zone of significant
hard rock artisanal mining activity. From June 1, 2009 to date rock sampling,
geologic mapping, a detailed ground magnetic survey, and a major trenching and
sampling program has extended and projected the known vein system to the
northeast for at least 1,000 meters. This detailed exploration program was
designed to refine and extend results from the 2008 RC (1,300 meter) and RAB
(6,000 meter) drilling program.
The 2009, detailed magnetic survey consists of 62 north-south
lines of 2.3 kilometers long and spaced 50 meters apart; 143 line kilometers
were surveyed using Company owned, state-of-the-art GPS equipped magnetometers.
Interpretation of the detailed ground magnetic survey highlights the structural
shift from east-northeast to a more northeast direction. From the artisanal workings, the
vein-magnetic pattern extends both to the northeast and to the southwest, which
suggests the quartz veins may have a length greater than one kilometer (see Map
9).
33
Also NW trending fault is predominant and mostly associated
with dolerite dykes. During the 2009 trenching program, 54 trenches excavated
and detailed samples were collected from quartz veins exposed in 37 of the
trenches. The trenching and sampling program covered a strike length of about
one kilometer. Gold assay results including those from trenching in 2008 appear
to have defined about a 1,000 meter long mineralized zone with approximate vein
grades of 3.96 grams per metric ton; much more work is required to confirm these
results and to determine whether Kinyambwiga will contain a commercial ore body.
At this date, Kinyambwiga does not contain a mineralized ore body.
Exploration Strategy
During this reporing period, exploration work has largely been
focused on the Kinyambwiga license (PL4653/2007). Ground magnetic surveys,
undertaken in-house, have recently been concluded across the Suguti (PL
3966/2006) and Murangi (PL 4511/2007
)
licenses. No record of previous
exploration on either of these two licenses is currently known.
Kinyambwiga PL4653/2007- Kunanga 1, 2 and 3
prospects
Exploration conducted since June 2010 was focused at extending
the strike length of the prospect by undertaking:
-
Gridding and Regolith Mapping over the entire license area.
-
A geophysical gradient induced polarization (IP) survey, along 200 meter
spaced north south traverses across the entire prospecting license, that
commenced in June, and that has been completed. A total of 72 line-kilometers
have been surveyed, covering an area of approximately 30 square kilometers.
-
Follow-up detailed Schlumberger geophysical profiling across the Kunanga
Prospects, located in the northeast part of the Kinyambwiga license, has been
completed. A total of 17 north-south traverses of 300 to 400 meters in length
has been undertaken on three target areas within the Kunanga Prospect.
-
Detailed mapping of the Kunanga Prospect on 1:2000 scale has been
completed.
Kunanga 1
-
Previous trenching at the Kunanga Prospect outlined the existence of at
least five, shear hosted, narrow gold bearing quartz veins. These veins, which
trend east-northeast and west-southwest, have been partly exposed by artisanal
mining along a strike length of about 300 meters. The latest phase of
trenching involved re-opening of a number of the previously in-filled trenches
as well as excavating a number of new trenches.
-
A total of 21 trenches of which 254 meters and 382 meters of new and
re-opened trenches respectively, were excavated.
-
Results have established the existence of at least 2 main shear hosted,
narrow gold bearing quartz veins that pinch and swell along a known strike
length of 350 meters. These veins are spaced approximately 15 to 20 meters
apart.
-
Geophysics
Follow-up geophysical surveying, using the Schlumberger
geophysical profiling method, along north-south traverses across the exposed
quartz vein was undertaken to secure a geophysical signature of the structure.
The survey was then extended out along strike of the quartz veins with the aim
of tracing the structure beneath the soil covered plain.
34
-
Drilling
Drilling, totaling 1263 meters, at Kanunga 1 Prospect was
focused at following the strike extensions of the known mineralized quartz veins
for some 200 meters to the east and west respectively as well as testing the
depth extension at the edge of the known mineralized zones which previous
drilling had delineated.
Map 10: Drilling grid showing borehole collar positions for
both Phase 1 and Phase 2
Positioning of the collars were in part assisted by the results
of the Schlumberger IP profiling which revealed chargeability anomalies in the
expected position of the pyritised quartz veins/shear structures.
Drilling results on the eastern side of Kanunga 1 Prospect
traced the strike extent of the two known mineralized quartz veins for some 200
meters to the east. Two boreholes drilled along the easternmost fence (Section
581700E) failed to intersect the quartz veins possibly suggesting that the
quartz veins pinch out at this position.
Drilling to test the down-dip extension of the quartz vein
along the eastern edge of the prospect, intersected the southern lens,
represented by a 2 meter quartz vein having a grade of 3.34g/t gold at a depth
of 80 meters below surface.
Drilling on the western side of the prospect traced the two
mineralized quartz veins along Section 581060E. Although the northern vein
continues towards the west on the neighboring section, the southern vein appears
to pinch out. An additional quartz vein of marginal grade occurs some 40 meters
to the south which has been traced for a strike length of 80 meters.
Drilling has delineated 700 meters of strike length of
semi-discontinuous two narrow gold bearing, en echelon quartz veins hosted
within sheared granitic rocks. The full potential of the occurrence has yet to
be evaluated.
35
A Schlumberger IP target situated some
100 meters north of the main quartz vein (Map 10) was also tested by one
borehole which intercepted at least 3 anomalous zones down hole with the best
intersection returning 1.78 g/t gold over 1 meter.
Kunanga 2
-
Located some 500 meters north of the artisanal workings of Kunanga 1, this
target is comprised of a single artisanal shaft of +20 meters deep that lies
along a northeast-southwest trending IP anomaly. Quartz float was observed in
the cultivated field some 500 meters along strike to the northeast from the
artisanal shaft.
-
Schlumberger geophysical profiling revealed a distinct chargeability
anomaly from the area of quartz float on the eastern side of the prospect.
-
Although a single north-south trench of 100 meters in length was undertaken
across the field, a 4 meter zone of shearing striking 075
o
, and in
which interfoliated thin quartz veins occur within weathered granite, was
noted midway in the trench. However, the results of the 2 meter composite
samples did not reflect any gold anomaly.
-
Drilling
Two boreholes spaced 80 meters apart were drilled to test the
ENE-WSW trending, 1 meter wide, sub- vertical quartz vein exposed in the 25
meter deep shaft on the western side of Kanunga 2 Prospect. Although both
holes did intersect a 1 meter oxidized zone of increased quartz veining within
the granite, no gold mineralization was reflected in the assay results.
Two
scissor Reverse Circulation boreholes were drilled to further test the area
beneath the trench, located some 500 meters to the east of the shaft. The hole
KNRC 0033 collared to the south of the quartz float intersected a number of
anomalous zones down-hole of >0.44ppm over 1 meter.
Kunanga 3
-
Located 1000 meters north from Kunanga 1, is an area of 200 meters by 100
meters of artisanal surface workings.
-
Previous reverse circulation drilling on the northern side of the workings
failed to encounter any significant mineralisation. However a single RAB hole
drilled in the central to southern part of the artisanal workings returned
2.06 g/t gold over 9 meters.
-
Schlumberger profiling suggests that the area lies at the intersection of
an east-northeast and north-west structure, similar to the IP pattern observed
at Kunanga 1.
-
Drilling, totaling 866 meters, did not discover the source of the abundant
surface quartz which mark the artisanal site. The two scissor holes drilled
to test the anomalous RAB hole (KNRAB-246) returned only anomalous intercepts
of 100 ppb gold.
However, a borehole collared immediately west of the
artisanal site intersected a wide anomalous zone of 290 ppb gold over 25
meters (including 1.03 g/t gold over 1 meter) across the interpolated ENE and
NW IP trend. Minor surface quartz is noted some 75 meters further west and
previous trenching (KTRM) did encounter anomalous mineralization. The area
requires follow-up investigation as the possible source of gold anomaly at the
artisanal site.
Drilling program
The 2427 meter Reverse Circulation drill program was completed
at all 3 prospects by early December 2010. Sampling of the drill samples was
monitored and supervised by the onsite Qualified Person* according to best
practices acceptable by industry standards. A total of 571 samples, including
122 quality control samples comprised of Blanks, Commercial Standards and
duplicates. Analytical work was carried out at the independent SGS Laboratories in Mwanza, Tanzania. The drill samples were
subject to full sample preparation followed by a 50 gram fire assay with an AA
finish. Blanks (5%), commercial standards (5%) and duplicates (5%) were used in
each sample batch of 20 samples to monitor laboratory performance during the
analysis. By 31 December, all drill assay results had been received.
36
Samples that returned grades >5g/t gold were re-assayed by
gravimetric analysis in order to compare results and determine whether this
would be a more accurate measure of assaying samples that contained abundant
visible and nugget gold. Sample duplicates were used for the analysis since
insufficient pulps from the original prepared samples were available. Results of
both analyses together with the visual pan results are given in Table 5.
Table 5: Comparative study between Fire Assay and
Gravimetric analysis for samples that assay > 5g/t gold
|
|
|
|
|
|
|
|
|
(1=trace to
|
=
|
|
|
|
|
|
|
|
50gm FA
|
Gravimetric
|
Intensity
|
4
|
intense)
|
|
HOLE_ID
|
FROM
|
TO
|
INT
|
New
SANO
|
SANO
|
AU_PPM
|
AU_PPM
|
PYRITE
|
MAG
|
ARSPY
|
VG_COUNT
|
KNRC0023
|
53
|
54
|
1
|
A03620
|
A03620
|
19.40
|
17.30
|
0.5
|
|
|
27
|
KNRC0027
|
51
|
52
|
1
|
A03708
|
A03708
|
16.50
|
16.90
|
1
|
|
|
92
|
KNRC0023
|
54
|
55
|
1
|
A03621
|
A03621
|
15.60
|
15.40
|
2
|
|
|
<100
|
KNRC0026
|
39
|
40
|
1
|
A03681
|
A03681
|
11.00
|
9.30
|
|
|
|
22
|
KNRC0029
|
59
|
60
|
1
|
A03785
|
A03785
|
10.50
|
10.10
|
|
|
|
|
KNRC0026
|
40
|
41
|
1
|
A03682
|
A03682
|
9.76
|
8.70
|
|
|
|
25
|
KNRC0028
|
61
|
62
|
1
|
A03748
|
A03748
|
5.49
|
5.90
|
1
|
|
|
15
|
|
|
|
|
|
Mean
|
12.61
|
11.94
|
|
|
|
|
|
|
|
|
|
Correlation
|
0.98
|
|
|
|
|
|
A good correlation exists between both the Fire assay and
gravimetric analysis (correlation 0.98) . Although the population is small, the
general trend appears that the gravimetric analysis returned 5% lower values
than the average Fire assay values.
Sample Collection
:
Samples were collected
every meter. Each sample was homogenised as well as reduced in size by passing
the sample through a 3-way splitter. The smaller fraction was further split
using a Gilson splitter to a 1.200 -kilogram size sample. The reject was sealed
and packed into rice sacks for storage at the Bunda field office. Contamination
at both splitters was reduced by brushing or blowing compressed air after each
sample run. Composite samples were prepared based on the results of the panned
sample at site. Where no visible pyrite or gold was noted in the pan, a 5-meter
sample interval was composited by equal weight. A 200-gram representative sample
was collected and weighed from each 1-meter sample by using a plastic scoop.
This procedure was done for each 1-meter consecutive sample across a 5-meter
interval in order to obtain a 1-kilogram representative sample, which was then
submitted for analysis. Where visible sulphides, gold or zones of intense
oxidation and increased silicification are present, the sample interval remained
at 1 meter.
Each hole drilled was sampled from the collar to the end of the
hole. However, where the upper 2 meters consisted of black cotton soil
(mbuga), no sample was collected for analysis.
Composite sampling across barren intercepts, devoid of sulphide
or gold mineralisation, was done to save costs on assaying as well as to reduce
the number of samples having to be transported to the Laboratory. Should any 5
meter sample return a grade of >1ppm gold, the interval would have been
re-sampled on 1 meter intervals and re-submitted for analysis. This exercise was
not undertaken since none of the composites assays returned values >1 ppm.
Table 6: Summary of Reverse Circulation drill results from
the Kanunga 1 Prospect-Phase 2 drilling
Hole No.
|
Total
Depth
|
Section
|
*North
|
*East
|
Azimuth
|
Declin.
|
From
|
To
|
Interv
al
|
Grade
|
|
(m)
|
|
Co-ord
|
Co-ord
|
(deg)
|
(deg)
|
(m)
|
(m)
|
(m)
|
Au g/t
|
KNRC002
2
|
90
|
581460E
|
9776919
|
581460
|
0
|
-60
|
86
|
88
|
2
|
3.34
|
KNRC002
3
|
78
|
581380E
|
9776954
|
581543
|
0
|
-50
|
53
|
57
|
4
|
9.74
|
37
Hole No.
|
Total
Depth
|
Section
|
*North
|
*East
|
Azimuth
|
Declin.
|
From
|
To
|
Interv
al
|
Grade
|
(including 2 meters @ 17.50g/t
Au)
|
KNRC002
6
|
70
|
581376E
|
9776920
|
581376
|
0
|
-60
|
39
|
41
|
2
|
10.38
|
KNRC002
7
|
90
|
581140E
|
9776826
|
581140
|
0
|
-60
|
50
|
52
|
2
|
9.38
|
|
and
|
|
|
|
|
|
77
|
80
|
3
|
1.06
|
KNRC002
8
|
75
|
581100E
|
9776828
|
581102
|
0
|
-50
|
46
|
48
|
2
|
1.17
|
|
and
|
|
|
|
|
|
60
|
63
|
3
|
2.65
|
KNRC002
9
|
80
|
581060E
|
9776788
|
581057
|
0
|
-50
|
58
|
61
|
3
|
5.41
|
|
and
|
|
|
|
|
|
65
|
66
|
1
|
2.59
|
KNRC003
2
|
75
|
581300E
|
9777000
|
581300
|
0
|
-50
|
28
|
29
|
1
|
1.79
|
KNRC003
9
|
60
|
581180E
|
9778008
|
581159
|
0
|
-50
|
39
|
40
|
1
|
1.03
|
KNRC004
0
|
60
|
581260E
|
9778020
|
581260
|
0
|
-50
|
40
|
41
|
1
|
1.01
|
KNRC005
4
|
50
|
581060E
|
9776840
|
581065
|
0
|
-50
|
22
|
27
|
5
|
2.06
|
|
and
|
|
|
|
|
|
32
|
38
|
6
|
1.28
|
* Datum Arc 1960
Notes
:
*34.286 grams of gold/metric tonne = 1 Troy ounce of gold/short
ton;
*g/t = grams/metric ton; Au is the chemical symbol for gold.
*The mineralized interval represents the drill hole intercept
and is not the true horizontal width of the mineralized structure.
*Qualified Person: CHM King, registered with the South African
Council of Natural Scientific Professions (Pr.Sci.Nat Reg. No. 400065/09) has
over 30 years experience in base and precious metal exploration.
Past exploration has included a detailed ground magnetic survey
over the artisanal sites and environs in the northeast part of the license.
Rotary Air Blast (RAB) drilling (377 boreholes) totaling 7418 meters has been
completed across ground magnetic targets in the northeastern part of the
license. Reversed circulation (RC) drilling (21 boreholes) totaling 1543 meters
focused on testing the two main artisanal sites on the license. This coupled
with trenching has delineated a 400-meter long shear zone containing a number of
narrow gold bearing quartz veins distributed over a surface width of 100 meters.
Best borehole grades returned 20.9g/t Au over 2 meters and 5.14 g/t Au over 8
meters.
Exploration at Kinyamwiga has largely been centered around the
Kanunga 1 Prospect where the strike extension of the known gold bearing quartz
vein beneath the mbuga cover is being explored. The following geophysical
techniques have been applied:
-
VLF Survey.
The Company rented an EM16-16R VLF instrument from Geonics,
Ontario, Canada with on site TX27 transmitter to test the suitablility of
using this instrument to detect the subsurface extension along strike to the
NE and SW of the Kanunga 1 Quartz Vein set.
An orientation survey was
initially set up in which a number of traverses across the exposed quartz vein
at Kanunga 1 were undertaken. Unfortunately, the instrument malfunctioned and
after numerous tests to try to get it to work correctly, the survey was
abandoned and the instrument returned to Canada.
-
IP Schlumberger VES N-S selected profiles are currently in progress along
the Kanunga 1, NE SW mineralizing structure. A total of 18 profiles are
planned.
The results of the Schlumberger survey will assist in the
planning of a follow-up RAB/RC drilling program planned later in the year in
order to increase the resource potential of Kanunga 1. Investigation of a number
of soil anomalies, outlined during the 2009 soil sampling program, that
lie along a 1.5 kilometer zone to the E and W of the Kanunga 1 Prospect is
planned. This will involve infill soil sampling/pitting/trenching.
38
Suguti (PL3966) and Murangi (PL4511)
Both the Suguti and Murangi projects are at grass roots
level. The extensive mbuga cover makes exploration exceedingly difficult.
Recent ground magnetometer surveys have indicated the persistence of the
important NE-SW fracture trends, coupled with the cross-cutting NW-SE
lineaments/dykes, the intersections of which are known to be a controlling
influence for gold mineralization in the Lake Victoria Gold Belt Based on this
structural model, follow-up exploration with emphasis on the structurally
potential areas outlined is expected to entail:
|
(i)
|
Gradient Array IP surveys across the licenses including
the thick mbuga deposits overlying the Suguti Fault Zone, in order to
refine the structural signature and to identify any chargeability
anomalies associated with pyrite-gold mineralization.
|
|
|
|
|
(ii)
|
Select Schlumberger profiles to be planned on the results
of the Gradient array survey.
|
|
|
|
|
(iii)
|
VLF profiles, utilizing on site transmitter, to be
conducted across coincident ground magnetic and IP targets.
|
|
|
|
|
(iv)
|
Mapping of surface outcrop, float, cultural effects and
the distribution of red-soil (overlying greenstone rocks) versus
mbuga.
|
|
|
|
|
(v)
|
Soil sampling across non-mbuga areas on an initial 400
meter x 50 meter grid with later infilling on 200 meter spaced lines
depending upon results of the first phase of the program.
|
|
|
|
|
(vi)
|
Termite sampling and panning of all intermediate size
termite mounds.
|
|
|
|
|
(vii)
|
Rock sampling of interesting rock outcrops exhibiting
iron alteration wherever possible. Similar, selective rock sampling of the
BIF in the southern part of Suguti license is to be undertaken.
|
|
|
|
|
(viii)
|
Follow-up pitting and trenching on any significant
anomalies outlined from the above program.
|
|
|
|
|
(ix)
|
Phase 1 drilling a 2000 meter Rotary Air Blast (RAB)
drilling program and/or auger program is planned pending the discover of
an encouraging geochemical anomaly(s) on each of the
licenses:
|
A total of 544 samples have been collected from the Suguti
project of which includes 26 Blank samples (Table 7).
Table 7: Statistical summary of soil sample results
collected at Suguti PL
Range (ppb Au)
|
Samples
|
Blanks
|
Outstanding assays
|
<10
|
354
|
21
|
|
10-20
|
83
|
4
|
20-30
|
53
|
1
|
30-40
|
5
|
|
40-50
|
2
|
|
>50
|
1
|
|
Total
|
498
|
26
|
20
|
Over 71% of the soil results returned <10ppb gold with the
remainder falling between 10 to 50ppb gold. A single, maximum soil value of
160ppb Au was reported and has yet to be verified in the field.
Regolith mapping has been completed across the entire Suguti
license. The license is transected by the major NW-SE trending Suguti Fault
which has formed a topographic depression that has subsequently been infilled by
a thick deposit of mbuga that covers an area of some 25 square kilometers and
constitutes 34% of the license. The area becomes totally waterlogged during the
wet season and is used for growing rice. Exposure is limited to minor rock out crops on the northern side of the Suguti Shear. To the
south, well exposed ridges of Banded Iron Formation and Basalt form a
topographic high, rising some 300m above the general land surface.
39
Continued exploration on the Suguti and Murangi Licenses is to
include:
|
(x)
|
Processing the IP gradient array survey with the aim to
refine the underlying structure of the greenstone rocks as well as
identify any chargeability anomalies associated with pyrite-gold
mineralization.
|
|
(xi)
|
Select Schlumberger profiles to be planned on the results
of the Gradient array survey.
|
|
(xii)
|
Termite sampling and panning of all intermediate size
termite mounds.
|
|
(xiii)
|
Rock sampling of interesting rock outcrops exhibiting
iron alteration wherever possible. Similar, selective rock sampling of the
BIF in the southern part of Suguti License is to be undertaken.
|
|
(xiv)
|
Follow-up pitting and trenching on any significant
anomalies outlined from the above program
|
|
(xv)
|
Phase 1 drilling a 2000 meter Rotary Air Blast (RAB)
drilling program and/or auger program is planned pending the discover of
an encouraging geochemical anomaly(s) on each of the
licenses:
|
The Company has recently completed a Technical report in
compliance with National Instrument 43-101 of the Canadian Securities
Administrators (NI 43-101) and the Guidelines given in Form 43-101F1 and
includes all work undertaken on the Kinyambwiga-Suguti-Murangi Gold Project up
to and including the last round of Reverse Circulation drilling undertaken in
the later part of 2010.
Singida Gold Project
Company personnel first visited the Singida project area during
March, 2009 and became aware of the high level of artisanal (small scale) gold
mining that was being conducted along an estimated five (5) kilometer
mineralized zone. Subsequently, on May 15, 2009, the Company signed a Mineral
Financing Agreement with one director of the Company authorizing him, on behalf
of the Company, to acquire Primary Mining Licenses (PMLs) in the Singida area.
As of July 13, 2011, this director has entered into several different Mineral
Properties Sales and Purchase agreements with multiple PML owners that hold
title to the licenses along the mineralized zone at the Singida project area.
Twenty-three (23) PML agreements were executed for an outright purchase of the
PMLs and they have been completed. These twenty-three PMLs have been 100%
acquired by this director in behalf of the Company. The Company also has option
agreements to acquire an additional thirty-seven (37) PMLs within a targeted
area at the Singida project. Under the terms of all the agreements, if we
complete all sixty (60) of the various agreements, that when combined form the
Singida project area, then our total purchase consideration will be
approximately $6,432,930 (TZS9,896,816,657) by February, 2013.
At the option of the Company, we may relinquish any PML at any
time during the agreement and transfer the title back to the original owner.
Also, at the option of the Company, a 2% Net Smelter Production royalty or 2% of
the Net Sale Value may be substituted in place of the final payment for each PML
and paid on a pro rata basis determined by the total final number of PMLs
involved in a special mining license.
In September 2009, pursuant to the agreement, the Company
completed an Addendum to the Mineral Properties and Sale and provided
notification to all the PML owners involved in Singida Mineral Properties and
Sale Agreements that the Company would extend their due diligence period for an
additional 120 days as upon paying $48,782.
On January 19, 2010, a director on behalf of the Company signed
second addendums to Singida mineral properties sales and purchase agreements.
The addendums revised and extended the second payment of the mineral agreements.
The second payment was divided into three payments with $470,927 due on January
27, 2010, $470,927 due on July 27, 2010 and $922,900, due on January 27,
2011.
On July 27, 2010, the director signed third addendums to the
Singida mineral properties sales and purchase agreements on behalf of the
Company. The third addendums revised the payment terms of the second addendum.
Based on the revised terms, the second instalment of $470,927 was divided into
two payments, with $281,065 due on July 27, 2010 and $187,426 due on October 24,
2010. The Company made the payment of $281,065 on July 27, 2010, and the payment
of $187,426 on October 26, 2010.
On February 7, 2011, a director signed fourth addendums to the
Singida mineral properties sales and purchase agreements on behalf of the
Company. The fourth addendums revised the payment terms of the second addendum.
40
Based on the revised terms, the third instalment of
approximately $922,900 was divided into three payments, with $92,065 paid on
February 9, 2011, $181,998 paid on March 10, 2011 and $646,030 due on August 9,
2011.
As of March 31, 2011, under the terms of the mineral properties
sales and purchase agreements the Company has completed initial option payments
in the amount of $1,707,810. Pursuant to the original agreement and the
subsequent four addendums, the Company will pay approximately $646,030 on August
9, 2011 and the Company will pay approximately $419,100 on January 23, 2013 and
$3,828,000 on February 24, 2013.
On May 6, 2011, the Company entered into a joint venture
agreement with Otterburn Ventures Inc. (Otterburn). The Letter of Intent set
out a proposal by Otterburn to acquire up to an undivided 70% interest in the
Singida project.
Summary
The Singida Gold Project is located in central Tanzania about
600 kilometers south of Mwanza and approximately 90 kilometers south-southeast
of the Regional government and commercial town center of Singida. The gold
fields of interest were discovered in 2004 by a local farmer, and the location
is now an active small scale artisanal mine site that appears ideal for larger
scale mechanized mining.
Access from the town of Singida to the project is south over
the main paved road to the village of Ikungi, and then easterly over an
all-weather gravel road for a distance of about 70 kilometers to the village of
Londoni. During the wet season, access within the project area requires 4WD
vehicles.
The property covers an area of about 6 square kilometers in QDS
(Quadrangle) number 123/3 for Londoni Village.
More than 200 small scale mine shafts are estimated present
along a shear zone vein system that is at least five kilometers long. This
mining activity lies along well defined, northwest-southeast trending silicified
vein and shear zone structures that are in Precambrian Archean greenstone
metavolcanic rocks. The shafts appear to average about 50 meters deep.
We began working in the area following an initial field visit
by company personnel in March, 2009. Work conducted on the project during 2009
includes: geologic mapping, detailed ground magnetic and electrical induced
polarization (I.P.) geophysical surveying, mine dump sampling, tailing sampling
and sampling of thirty-six underground mine shafts and mine workings.
Detailed ground magnetic surveying consists of traverses
totaling over 630 line kilometers, and over 50 line kilometers of IP surveying.
Detailed geological mapping, magnetometer and IP surveying have defined a 5
kilometer long northwest-southeast trending mineralized sheared zone that
contains a system of sub-parallel quartz veins known to carry important amounts
of gold. A total of 184 underground samples, 2,478 tailings samples, and 5,545
mine dump samples were sent to SGS or HUMAC laboratories in Mwanza for gold
assaying.
Assays for the 184 underground mine samples averaged 7.11 g/t;
the highest grade being 140g/t.
During this reporting period, 2010 through 2011, we have
completed: additional soil sampling for gold and arsenic, detailed mapping of
geology and small scale workings, identified five drill targets (Sambaru 1-5),
Phase 1 Reverse Circulation (RC) drilling August, 2010 of 6420 meters, Phase 2
Reverse Circulation (RC) drilling March, 2011 of 9023 meters and completion of a
Technical report in compliance with National Instrument 43-101 of the Canadian
Securities Administrators (NI 43-101) and the Guidelines given in Form 43-101F1
that includes all work undertaken on the Singida-Londoni Gold Project up to and
including Phase 1 drilling program.
No Reserves or Resources are present at this time.
Property Description and Location
The Singida project is located in central Tanzania about 90
kilometers south-southeast of the town of Singida (Map 11).
41
Map 11:
Singida Gold Project Location Map, Tanzania
(PMLs held are shown in green)
Accessibility, Climate, Local Resources, Infrastructure
and Physiography
The Singida Gold Project is located in central Tanzania about
600 kilometers south of Mwanza and approximately 90 kilometers south-southeast
of the Regional government and commercial town center of Singida.
The town of Singida has a population of approximately 75,000
people and a well-developed social and commercial infrastructure that includes
transportation, telecommunications, educational institutes, hospitals, hotels,
and recreational facilities.
The project area is hilly, covered with reddish iron rich
soils, thorn bushes, grasses and small trees. Some small family farms are
present and corn is the main crop. The climate in the area is tropically humid
with two distinct seasons; a rainy season from November to May and a dry season
from June to October. Day time temperatures in the dry season vary from 22-32ºC.
The region can experience strong winds; climatic conditions are not expected to
unduly restrict exploration programs.
History
The Singida area was included in a countrywide airborne
magnetic and radiometric survey undertaken by Geosurvey International between
1976 and 1979.
Geological Setting
The Singida project lies within the East African Archean
craton. The Archaean craton in Tanzania consists largely of granites and related
belts of volcanic and sedimentary greenstone rocks. The greenstone belts contain
clastic debris of older granitic and gneissic basement rocks that locally abut
against the older gneiss belts. The Archaean granites and greenstone belts are
bordered on the west by a younger Proterozoic age Ubendian mobile belt. This
Ubendian belt contains meta-sedimentary units not present in the Archaean, but
that are considered to be metamorphosed relics of the Archaean sequences. The
Ubendian rocks have undergone high-grade metamorphism and strong deformation. On
the east, the Archaean block is bordered by the Neoproterozoic Mozambique mobile
belt (Usagaran). The rocks of these belts include marbles and
graphitic schists, gneisses and some high-grade granulites.
42
At the close of the Proterozoic, the entire region was
effectively peneplained and buried by continental clastic sediments of the
Bukoban System. Abundant mafic dikes cut this sequence and appear to have been
nearly contemporaneous with sedimentation. Most of the Bukoban rocks have now
been eroded, but a major outlier remains in northwestern Tanzania.
During the Mesozoic, clastic sediments of the Karoo Series were
deposited in rift basins throughout eastern Tanzania. The oldest Karoo sequences
are cut by a wide range of alkaline intrusives, including carbonatites,
kimberlites and alkaline syenites. Tertiary sediments and volcanics overlie an
erosion surface at the top of the Mesozoic. Subsequent formation of the Cenozoic
rift valleys with their attendant sedimentation and alkalic volcanism has
covered the Archaean and Proterozoic rocks in some areas and, at Singida, iron
rich soils have formed over the underlying greenstone rocks.
Regional Geology
The regional geology at Singida consists of Archean age
porphyroblastic biotite granites and relatively minor amounts of greenstone
rocks. The granitic terrain is similar to that found at Barricks large Buzwagi
mine near the town of Kahama. At Singida, greenstone rocks hosting the gold
mineralization are characterized by mafic volcanics, subordinate felsic
volcanics and clastic sediments. These rocks have experienced multiple periods
of deformation.
Property Geology
Associated with the mafic greenstone host rocks are sheared,
fine to medium grained mafic dikes, a sheared mafic porphyry and gold bearing
quartz veins. Ore minerals reported include native gold, pyrite, arsenopyrite,
pyrrhotite and traces of chalcopyrite. Alteration and gangue minerals include
hematite, silica, goethite, sericite, chlorite and limonite. Weathering and
oxidation levels are believed to generally be between 15 and 20 meters deep. The
project area is covered by reddish iron rich soils that are often 3 to 4 meters
thick. Geologic mapping was conducted at a scale of 1:5,000 (Map 12).
43
Map 12:
Geological Map of Primary Mining Licenses
(PMLs) at the Singida Project
The mineralized quartz vein system trends northwest-southeast
with a general strike of about 310 degrees; vein dips are near vertical at about
80
0
NE. Multiple sub-parallel quartz veins are present along the five
kilometer strike length.
Deposit Types
Gold ores at Singida are associated with structurally
controlled shear zone hosted quartz veins in mafic greenstone host rocks and
with pyrite, arsenopyrite, pyrrhotite and traces of chalcopyrite. The
combination of elevated gold values, five kilometers of quartz veining in
northwest-southeast trending fracture zones, cross cutting dikes and deformed
greenstone rocks makes Singida a very attractive gold exploration project.
Mineralization
Exploration at Singida has identified a five kilometer long
strike length of quartz veins hosted in greenstone volcanic rocks. Artisanal
mining is very active in the area,
Artisanal or small scale mining is from vertical mine shafts
that have an average depth of about 50 meters, and based on safety conditions,
Company geologists and technicians were able to enter and sample 36 of an
estimated 200 small scale mine shafts. A total of 184 samples were collected
from the underground workings, and each sample weight was two kilograms. The
samples were assayed at the SGS laboratory in Mwanza. In general, elevated gold
values in the quartz veins are reported to correlate with stronger fracturing,
more limonite and higher silicification. The higher gold values also tend to be
associated with disseminated pyrite.
Exploration by the Company began in early June 2009 and has
continued until the time of this filing in July, 2011.
44
Mineral Processing and Metallurgical Testing
We collected Singida artisanal mine tailings for gold recovery
testing. The recovery tests were conducted at the Resource Development
Laboratory, Golden Colorado. The tailing samples assayed 4.65 grams per metric
ton gold, and bottle roll leaching tests, after: 6 hours resulted in 74.9
percent gold recovery; 24 hours resulted 81.9 percent extraction; and 48 hours
yielded 86.6 percent recovery.
Mineral Resource and Mineral Reserve
Estimates
No Reserves or Resources are present at this time.
Exploration 2010-2011
During June 2010, a soil sampling survey was completed across
the Singida-Londoni license area in which 534 samples, including 28 quality
control blank samples, were collected and submitted to the SGS Laboratory,
Mwanza for gold and arsenic determination by Aqua Regia. Samples were collected
on 400 meter spaced north-south grid lines at intervals of 50 meters and at a
depth of 30 centimeters. Additional detailed mapping of the geology and
locations of the artisanal workings was also carried out on a scale of
1:2000.
The soil sample results, besides indicating areas of known
artisanal mining, have formed broad, gold-in-soil anomalies. These gold
anomalies occur over the areas from which previous electrically induced
polarization (IP) geophysical profiling had identified a number of underground
resistive bodies, believed to represent gold-bearing quartz veins beneath the
surface. Five gold targets were developed, and are referred to as Sambaru 1 to
5, that seem to have surface strike lengths varying between 200 to 600 meters.
In addition to assaying for gold, all of the soil samples were tested for
arsenic. Arsenic in soil samples can often be a "pathfinder" element for gold
when gold itself is not measurably present at surface. In addition to
identifying the five targets, the compiled assay results also defined a large
arsenic anomaly that is located within the central to northwestern part of the
license area and encompasses the Sambaru 4 target, decreasing in intensity
towards Sambaru 5 in the northwest corner of the license. Noteworthy is that
four IP profile lines, undertaken across the recently identified arsenic
anomaly, indicated at least 8 sub-surface, resistive bodies, thought to be
gold-bearing quartz veins, across a surface width of 350 meters.
Mapping of the location of the artisanal shafts within these
target areas suggests that mining was undertaken on a number of narrow
sub-outcropping gold veins across a surface width of up to 50 meters. However,
IP geophysical profiling suggests that these veins may extend further to the
northeast beneath the surface cover.
Detailed mapping of the regolith, topography and soils formed
an integral part of the program in order to understand the value of the soil
results.
In August, 2010 we commenced a reverse circulation drill
program, amounting to 6420 meters across the five Sambaru targetsat the
Singida-Londoni gold project that was completed in late October 2010. Sampling
of the drill samples was monitored and supervised by the on site Qualified
Person* according to best practices acceptable by industry standards. A total of
3040 samples, including 448 quality control samples comprised of Blanks,
Commercial Standards and duplicates. Analytical work was carried out at the
independent SGS Laboratories in Mwanza, Tanzania. The drill samples were subject
to full sample preparation followed by a 50 gram fire assay with an AA finish.
Blanks (5%), commercial standards (5%) and duplicates (5%) were used in each
sample batch of 20 samples to monitor laboratory performance during the
analysis. By November, 2010 results had been received.
Samples that returned grades >5g/t Au were re-assayed by
gravimetric analysis in order to compare results and determine whether this
would be a more accurate measure of assaying samples that contained abundant
visible and nugget gold. Sample duplicates were used for the analysis since
insufficient pulps from the original prepared samples were available. Results of
both analyses together with the visual pan results are given in Table 8.
45
Table 8: Comparative study between Fire Assay and
Gravimetric analysis for samples that assay > 5g/t gold
|
|
|
|
|
|
|
|
|
=
|
|
|
|
|
|
|
50gm FA
|
Gravimetric
|
Intensity
|
(1=trace to 4
|
intense)
|
|
HOLE_ID
|
FROM
|
TO
|
INTERVAL
|
SANO
|
AU_PPM
|
AU_PPM
|
PYRITE
|
MAGNETITE
|
ARSPY
|
VG_COUNT
|
SGRC0008
|
54
|
55
|
1
|
A00731
|
8.16
|
9.8
|
2
|
2
|
1
|
|
SGRC0008
|
75
|
76
|
1
|
A00756
|
5.39
|
5.3
|
|
1
|
2
|
|
SGRC0024
|
67
|
68
|
1
|
A01245
|
10.60
|
12.1
|
|
|
4
|
34
|
SGRC0024
|
68
|
69
|
1
|
A01247
|
6.84
|
6.2
|
|
|
4
|
4
|
SGRC0024
|
69
|
70
|
1
|
A01248
|
37.30
|
33.7
|
|
|
4
|
56
|
SGRC0025
|
42
|
43
|
1
|
A01288
|
10.20
|
9.8
|
|
|
1
|
32
|
SGRC0039
|
52
|
53
|
1
|
A01702
|
11.5
|
10.2
|
|
|
2
|
|
SGRC0039
|
53
|
54
|
1
|
A01703
|
22.1
|
19
|
1
|
|
4
|
12
|
SGRC0041
|
71
|
72
|
1
|
A01786
|
18.1
|
17.1
|
|
|
2
|
50
|
SGRC0060
|
34
|
35
|
1
|
A02560
|
16
|
14.4
|
|
|
|
9
|
SGRC0060
|
35
|
36
|
1
|
A02561
|
26.2
|
8.9
|
|
|
|
25
|
SGRC0060
|
36
|
37
|
1
|
A02562
|
7.2
|
30.8
|
|
|
|
100
|
SGRC0061
|
26
|
27
|
1
|
A02615
|
5.84
|
6.6
|
|
|
|
8
|
SGRC0061
|
35
|
36
|
1
|
A02625
|
13.9
|
12.4
|
|
|
2
|
3
|
SGRC0061
|
43
|
44
|
1
|
A02635
|
7.5
|
6.1
|
|
|
|
4
|
SGRC0068
|
7
|
8
|
1
|
A02996
|
5.34
|
4.2
|
|
|
|
|
SGRC0069
|
57
|
58
|
1
|
A03047
|
5.28
|
6.8
|
|
|
|
51
|
SGRC0071
|
73
|
74
|
1
|
A03164
|
16.4
|
14.4
|
|
|
2
|
50
|
SGRC0071
|
74
|
75
|
1
|
A03165
|
5.25
|
6.8
|
|
|
2
|
12
|
SGRC0076
|
56
|
57
|
1
|
A03375
|
7.43
|
6.5
|
0.5
|
|
2
|
|
SGRC0078
|
27
|
28
|
1
|
A03433
|
5
|
3.9
|
|
|
|
23
|
SGRC0078
|
28
|
29
|
1
|
A03434
|
5.62
|
6.2
|
|
|
|
80
|
SGRC0078
|
33
|
34
|
1
|
A03440
|
5.59
|
6.8
|
|
|
|
18
|
SGRC0079
|
70
|
71
|
1
|
A03523
|
8.07
|
10.7
|
|
|
|
|
|
|
|
|
Mean
|
11.28
|
11.20
|
|
|
|
|
|
|
|
|
Correlation
1
|
0.68
|
|
|
|
|
|
(removal
of outliers)
|
|
|
|
Correlation
2
|
0.98
|
|
|
|
|
|
Results indicate that, other than the 2 samples shown
highlighted in Table 2 that were completely out of line, the two data sets are
very similar. This discrepancy may have been result of mistakenly switching the
sample numbers around before the samples were re-submitted.
In comparing these two assay sets, once the two outlier values
had been removed, it appears that the gravimetric results for the lower end
values of between 5 g/t to 10 g/t gold tend to be slightly higher (5.6%) than
the corresponding results from the Fire assay values. However, in the higher
values >.10g/t gold the reverse seems to the case with gravimetric results
being 8% lower on average.
Although the data set is small, both sets of data average out
and correlate well. (correlation co-efficient of 0.98) .
46
Figure 1: Distribution of all assay values (excluding QA-QC)
samples at the Singida-Londoni gold project
* This data set includes all 1 meter
and 4 meter composite samples.
Composite sampling across barren intercepts, devoid of sulphide
or gold mineralisation, was done to save costs on assaying as well as to reduce
the number of samples having to be transported to the Laboratory. Any 4-meter
composite sample that returned a gold grade of >1 ppm gold was re-sampled on
1-meter intervals. The 1-meter sample rejects stored at the camp were retrieved
and the sample split using the Gilson splitter to a 1kilogram sample. This
sample was then submitted to the lab for analysis. The results replaced the
4-meter composite sample in the database.
Drilling targeted the areas beneath 5 artisanal mining sites.
Mineralisation is confined to narrow and discrete, vertical to sub-vertical
shear zones with little wall rock alteration, other than magnetite being noted
from the pan. Magnetite is often present in the wall rocks decreasing in
abundance within zones of arsenopyrite mineralisation. The distribution of assay
values is shown in Figure 1. The majority (94%) of all assay results returned
values of <0.5ppm gold. Only results >0.5ppm have been reported in the
Assay summary table (Table 9).
Sample Collection:
Samples were collected every meter.
Each sample was homogenised as well as reduced in size by passing the sample
through a 3-way splitter. The smaller fraction was further split using a Gilson
splitter to a 1.250 -kilogram size sample. The reject was sealed and packed into
rice sacks for storage at the field camp. Contamination at both splitters was
reduced by brushing or blowing compressed air after each sample run. Composite
samples were prepared based on the results of the panned sample at site. Where
no visible arsenopyrite or gold was noted in the pan, a 4-meter sample interval
was composited by equal weight. A 250-gram representative sample was collected
and weighed from each 1-meter sample by using a plastic scoop. This procedure
was done for each 1-meter consecutive sample across a 4-meter interval in order
to obtain a 1-kilogram representative sample, which was then submitted for
analysis. Where visible sulphides, gold or zones of intense oxidation and
increased silicification are present, the sample interval remained at 1
meter.
Each hole drilled was sampled from the collar to the end of the
hole. However, where the upper 2 meters consisted of rock waste from the
artisanal mining, no sample was collected for analysis.
47
Table 9: Summary of intersections at five Sambaru Prospects,
Singida-Londoni gold project
Hole No.
|
Section
|
*North
|
*East
|
Azimuth
|
Declin.
|
From
|
To
|
Interval
|
Grade
|
|
|
Co-ord
|
Co-ord
|
(deg)
|
(deg)
|
(m)
|
(m)
|
(m)
|
Au g/t
|
Sambaru
1
|
SGRC0075
|
500W
|
728892
|
9411318
|
40
|
-50
|
47
|
48
|
1
|
1.23
|
SGRC0076
|
420W
|
728944
|
9411250
|
40
|
-50
|
34
|
35
|
1
|
1.21
|
|
|
|
|
|
and
|
56
|
57
|
1
|
7.43
|
Sambaru
2
|
SGRC0060
|
2020W
|
727477
|
9411978
|
40
|
-50
|
34
|
42
|
8
|
6.81
|
(including 2 meter @ 21.1g/t
Au)
|
SGRC0061
|
2020W
|
727457
|
9411940
|
40
|
-50
|
26
|
37
|
11
|
3.60
|
(including 1 meter @ 13.90g/t
Au)
|
|
|
|
|
|
and
|
42
|
52
|
10
|
1.30
|
SGRC0062
|
2020W
|
727429
|
9411906
|
40
|
-50
|
83
|
93
|
10
|
1.41
|
|
|
|
|
|
and
|
100
|
102
|
2
|
1.15
|
SGRC0067
|
2180W
|
727335
|
9412036
|
40
|
-55
|
46
|
50
|
4
|
1.86
|
SGRC0068
|
2180W
|
727311
|
9412010
|
40
|
-55
|
7
|
10
|
3
|
2.96
|
|
|
|
|
|
and
|
14
|
15
|
1
|
2.55
|
SGRC0069
|
2180W
|
727325
|
9412022
|
40
|
-65
|
8
|
9
|
1
|
2.27
|
|
|
|
|
|
and
|
57
|
61
|
4
|
2.97
|
SGRC0071
|
1940W
|
727500
|
9411867
|
40
|
-55
|
73
|
81
|
8
|
3.09
|
(including 1 meter @ 16.40g/t
Au)
|
|
|
|
|
|
and
|
102
|
105
|
3
|
1.10
|
SGRC0072
|
2180W
|
727591
|
9411860
|
40
|
-50
|
25
|
27
|
2
|
1.31
|
|
|
|
|
|
and
|
48
|
49
|
1
|
2.65
|
Sambaru
3
|
SGRC0004
|
2580W
|
9412284
|
727015
|
40
|
-55
|
2
|
7
|
5
|
4.14
|
SGRC0008
|
2500W
|
9412254
|
727088
|
40
|
-60
|
31
|
38
|
7
|
1.78
|
|
|
|
|
|
and
|
44
|
65
|
21
|
1.15
|
|
|
|
|
|
and
|
75
|
78
|
3
|
2.17
|
(including 1 meter @ 5.39g/t
Au)
|
|
|
|
|
|
and
|
82
|
87
|
5
|
1.56
|
SGRC0014
|
2660W
|
9412336
|
726950
|
40
|
-55
|
58
|
59
|
1
|
23.6
|
SGRC0078
|
2540W
|
727082
|
9412312
|
220
|
-50
|
11
|
13
|
2
|
1.00
|
|
|
|
|
|
and
|
23
|
37
|
14
|
2.71
|
|
|
|
|
|
and
|
53
|
54
|
2
|
2.03
|
SGRC0079
|
2460W
|
727189
|
9412302
|
220
|
-50
|
64
|
66
|
2
|
1.11
|
|
|
|
|
|
and
|
70
|
72
|
2
|
5.23
|
|
|
|
|
|
and
|
80
|
81
|
1
|
1.80
|
Sambaru
4
|
SGRC0019
|
3520W
|
9412796
|
726195
|
40
|
-55
|
11
|
13
|
2
|
0.88
|
SGRC0023
|
3760W
|
9413004
|
726056
|
40
|
-55
|
53
|
63
|
10
|
1.14
|
|
|
|
|
|
and
|
69
|
70
|
1
|
7.19
|
48
Hole No.
|
Section
|
*North
|
*East
|
Azimuth
|
Declin.
|
From
|
To
|
Interval
|
Grade
|
|
|
Co-ord
|
Co-ord
|
(deg)
|
(deg)
|
(m)
|
(m)
|
(m)
|
Au g/t
|
SGRC0041
|
3760W
|
9413070
|
726115
|
220
|
-50
|
24
|
26
|
2
|
0.9
|
SGRC0041
|
|
|
|
|
and
|
71
|
83
|
12
|
2.81
|
(including 1 meter @ 18.10g/t
Au)
|
SGRC0024
|
3840W
|
9413066
|
726003
|
40
|
-55
|
67
|
71
|
4
|
13.91
|
(including 1 meter @ 37.30g/t
Au)
|
SGRC0043
|
3840W
|
9413150
|
726066
|
220
|
-50
|
73
|
74
|
1
|
6.33
|
SGRC0025
|
3920W
|
9413146
|
725978
|
40
|
-55
|
41
|
45
|
4
|
3.85
|
(including 1 meter @ 10.20g/t
Au)
|
SGRC0045
|
3020W
|
9412490
|
726620
|
220
|
-55
|
86
|
88
|
2
|
3.22
|
SGRC0046
|
3140W
|
9412524
|
726485
|
40
|
-50
|
32
|
36
|
4
|
2.01
|
Sambaru
5
|
SGRC0039
|
4640W
|
9413876
|
725625
|
40
|
-55
|
52
|
54
|
2
|
16.8
|
(including 1 meter @ 22.10g/t
Au)
|
* Datum Arc 1960
|
|
|
|
|
|
|
|
|
Notes
:
*34.286 grams of gold/metric tonne = 1
Troy ounce of gold/short ton; * g/t = grams/metric ton; Au is the chemical
symbol for gold.
* The mineralized interval represents the drill hole
intercept and is not the true horizontal width of the mineralized
structure.
* Qualified Person: CHM King, registered with the South African
Council of Natural Scientific Professions (Pr.Sci.Nat Reg. No. 400065/09) has
over 30 years experience in base and precious metal exploration.
Sambaru 1
Results from Sambaru 1, located on the Singida Plains in the
southeastern corner of the License, indicate that the main gold mineralization
occurs as a single narrow quartz vein which has been targeted by the small scale
miners. The best grade (7.43g/t gold over 1 meter) is associated with
disseminated arsenopyrite within a massive porphyritic diorite which is
intersected in the central part of the small scale mine workings. Although the
vein appears to pinch out towards the east, drilling along the western fence
indicates that it may continue out under the soil cover of the Singida Plain.
Sambaru 2
Results indicate that the main zone of gold mineralization
occurs along Section 2020W, in the central part of the Sambaru 2 prospect. The
gold mineralization is present within three vertical lenses in which significant
amounts of arsenopyrite together with visible gold was reported from on site
panning. Intercepts of 10 to 11 meters have returned gold grades of 3.60 g/t and
1.30 g/t gold across the two main lenses, whereas the third lens, located some
30 meters to the northeast intersected 6.81g/t gold over 8 meters. This lens,
possibly representing a shallow sub-vertical mineralized zone, was not
encountered in the borehole drilled 40 meters beneath the intercept.
The two main lenses have been intersected 80 meters to the
southeast on Section 1940W at a depth of 60-80 meters below the surface. Grades
of 3.09 g/t and 1.1g/t gold over 8 meters and 3 meters respectively are
reported. The spatial position of these intercepts relative to the intersections
encountered on Section 2020W suggests that the lenses plunge to the southwest.
Northwest of Section 2020W, the two main gold lenses appear to
pinch out and only re-appear again 160 meters further to the northwest on
Section 2180W where they narrow to 4 meter wide intercepts having gold grades of
2.97 g/t and 1.86 g/t.
49
Overall, the mineral lenses occur across a strike length of
some 250 meters and although they appear to narrow, they are open to the
northwest. However, drilling on 80 meter spaced sections to the southeast failed
to encounter any significant mineralization beneath the 300 meter strike length
of the 2 zones of small scale workings. This area was reported to consist of a
number of discrete and oxidized shear zones and although mineralization was
expected, the assay results reflect low gold values.
Sambaru 3
At Sambaru 3, at least four mineralized zones have been
intercepted on one drill fence. These four zones have been partly traced to the
corresponding drill fences over a strike length of about 160 meters. The two
infill boreholes, drilled on either side of Section 2500W at the Sambaru 3
prospect area, returned corresponding gold grades to the observed panned
samples. The borehole, collared 40 meters to the west of Section 2500W and
drilled at an inclination of -50
o
to the southeast, intersected 2.71
g/t gold over 14 meters in the upper part of the hole. The 2
nd
borehole, collared east of Section 2500W, aimed at testing the
interpolated south-westerly plunge of the mineral lens returned a number of 2
meter wide intercepts at a down-hole depth of 60 to 80 meters suggesting the
possibility of a south-westerly plunging mineral shoot. Further drilling is
required to explore the down-dip extension of this mineral zone.
Sambaru 4
At Sambaru 4, drill results from immediately west of the active
artisanal mine area indicate that the main 2 to 4 meter wide artisanal mining
zone averaging 2.41g/t Au has now been traced for some 120 meters along strike.
This main zone appears to also be present along strike to the northwest at a
distance of about 620 meters within the central part of Sambaru 4. Drilling has
also traced two additional mineralized zones along a strike distance of about
160 meters. The best intersection of 37.30g/t Au over 1 meter was within in a 4
meter wide, massive arsenopyrite gold-bearing sulphide zone that averaged 13.91
g/t Au within the central Sambaru 4 target area.
A drill fence of 4 Reverse Circulation boreholes, totaling 398
meters were drilled along Section 3520W to investigate the IP resistivity
anomalies as reflected from the Schlumberger VES profile.
These resistive bodies appear to be related to lithological
differences encountered in the boreholes in which zones of silicified basalt and
increase magnetite alteration mainly within the diorite unit appear to have
acted as the resistive units within the meta-volcanic rock package.
Sambaru 5
At Sambaru 5, in the northwestern part of the license area, one
borehole averaged 16.80 g/t Au over 2 meters within a narrow zone of
arsenopyrite. The mineralized intercepts in Sambaru 3, 4 and 5 occur less than
70 meters below the surface.
This successfully concludes the first phase of drilling on the
Singida-Londoni gold project. Mineralized intercepts were encountered at all 5
targets.
Based on the results from drilling, magnetite was found to be a
prominent mineral present in the wall rocks to zones of increased arsenopyrite
and gold mineralisation. Earlier, a detailed ground magnetometer survey, across
the license area, clearly delineated narrow zones of limited strike length of
intense magnetisation parallel to the regional northwest to south-east trending
shear fabric of the Singida shear corridor. The main artisanal workings lie
contiguous to the south-western magnetic trend. Detailed soil sampling on 50
meter spaced north-south traverses, at a sample interval of 25 meters was
undertaken across 17 magnetic targets in the shear corridor. A total of 588
samples, including 39 Blanks, were submitted for gold and arsenic analysis by
Aqua Regia to SGS Laboratory Mwanza.
Results of the detailed soil sampling indicate that all of the
grids, other that the grid across the Sambaru 4 area, returned low values.
Drilling has demonstrated that continuity of these mineralised
and structural zones between sections as well as between surface and borehole
intercepts is reasonably good considering that the drill fence spacing is at 80
meters. Grades, however, may vary significantly depending upon the intensity of
arsenopyrite mineralisation in each of the intercepts. Infill drilling on 40
meter and possibly 20 meter spaced sections is planned to evaluate the known
mineralized zones at Sambaru 2, 3, 4 and 5 with the intention
of developing an indicated/measured ore resource during 2011. Reverse
Circulation drilling, totaling approximately 8000 meters, will commence first,
the results of which will be used to optimize a follow-up diamond drill program
planned latter on in the year. Additional exploration targets include:
50
-
Detailed soil sampling between Sambaru 3 and Sambaru 4 on 100 meter spaced
N-S grid lines at a sample interval of 25 meters.
-
Exploration drilling, totaling some 1500 meters to investigate a 600 meter
x 120 meter soil anomaly east of Sambaru 4.
The Company commenced Phase 2 Reverse Circulation drilling
program in March 2011, centered at the Samabaru 2,3,4 and 5 Prospects (Table
10). Drilling has recently been completed in which 92 boreholes, totalling 9,023
meters have been drilled.
Table 10: Summary of Reverse Circulation drilling undertakenat
the Singida-Londoni Gold project
Prospect
|
Phase 1
|
Phase 2
|
Total
|
Sambaru 1
|
264
|
-
|
264
|
Sambaru 2
|
2348
|
2963
|
5311
|
Sambaru 3
|
1078
|
2931
|
4009
|
Sambaru 4
|
2163
|
2328
|
4491
|
Sambaru 5
|
564
|
897
|
1461
|
Total
|
6417
|
9119
|
15536
|
Exploration drilling across the 600 meter x 120 meter soil
anomaly east of Samabru 4 was tested by a fence of 3 boreholes totaling 210
meters. Similar QA/QC procedures as those undertaken during Phase 1 drilling
were adopted. The full set of assay results are still pending from SGS
laboratory, Mwanza.
Once all the results have been received and processed a
decision will be made whether or not to undertake a possible 1500 meter diamond
drill program, at this time, in order to establish an indicated resource .
Additional exploration targets include:
-
A detailed soil sampling program on 100 meter spaced N-S grid lines at an
interval of 25 meters between Sambaru 3 and Sambaru 4.
-
Regional investigation outside the current PML Block in order to explore
for additional gold resources within and proximal to the Singida Shear
corridor .
The Company has recently completed a Technical report in
compliance with National Instrument 43-101 of the Canadian Securities
Administrators (NI 43-101) and the Guidelines given in Form 43-101F1 and
includes all work undertaken on the Singida-Londoni Gold Project up to and
including Phase 1 drilling program.
Buhemba Project
The Buhemba Gold Project is comprised essentially of two
Prospecting Licenses (PLs), which have been reduced by 50% on renewal of the
licenses according to Government regulations. The shed off areas were
immediately reapplied as a separate license in order to keep both licenses
intact. The total area of the combined licenses amounts to 107km
2
(Table 1, Map 13).
51
Map 13: Location Map of the Prospecting Licenses Comprising
the Buhemba Gold Project
Location and Access
The Buhemba Gold Project is in the administrative district of
Musoma. The project is accessible either from the main tarmac road, 203km
northwest from Mwanza or 33km south of Musoma town.
Physiographic, Climate, Vegetation and Water
The area is characterized by two rainy seasons: the main rains
falling from March to April and a lighter period of rain beginning in October
and continuing sporadically through to December. Typically, the annual rainfall
averages between 760mm to 1270mm. The Nyagubu and Rwako rivers, flowing
westwards into Lake Victoria, drain the project area.
Topographically, the area is generally undulated with granitic
hills in the southern and central parts. The highest point is approximately
1550m above mean sea level in the southeastern part of the project area. Most of
the area is covered by subsistence farming of cassava, sorghum and maize. Only
the hills and the area underlain with Nyanzian rocks are lightly covered by
forest and thick bush.
History
Three areas of colonial/artisanal workings are present on
PL4892 and PL2344:
1. Magendagenda consists of 2 shallow workings spaced some 500m
apart along a north-south shear zone.
2. Nyabukamu, located approximately 2km north-northwest of
Mgendagenda along the sheared granite/greenstone contact.
3. Kiharagweta, located approximately 1km north-northwest of
Nyambaku within north-south trending quartz vein hosted by an inlier of basaltic
rocks.
52
Rand Gold investigated these PLs between October 2003 to
October 2006 in which they undertook regional soil sampling, mapping with
follow-up trenching and pitting. Artisanal working defined the main soil
anomalies, which lie along a north south to north-northwest by south-southeast,
strike direction closely associated with granite/greenstone contact in the
south-western part of the license. The artisanal area has been covered by six
(6) Primary Mining Licenses (PML) having dimensions of 500m x 800m.
Regional Geology
The area is largely underlain by the Archaean Nyanzian
Supergroup suite of granitic rocks (the Musoma Series). These have been
uncomformably overlain by basal conglomerates (with fragments of Nyanzian
rocks), feldspathic grits, argillites, banded ironformation and minor volcanic
rocks of the Kavirondian System.
The central part of PL4892/2007 consists of basaltic rocks of
the Nyanzian Supergroup enclosed by younger foliated and unfoliated granites.
Shearing has occurred along the western contact of the basaltic rocks and the
granite resulting in a number or generations of quartz veins. Chloritization and
local silicification, with minor Fe-oxidation is present in the basalt wall
rocks. A graphitic metasedimentary unit interbedded within the basalt contains
disseminated pyrite and quartz veinlets. The main structural trend within this
license lies mainly between the northwest and northeast strike directions.
Exploration Strategy
A field investigation of the work undertaken by Rand Gold has
already been completed which has confirmed the presence of at least 4 areas of
artisanal workings. Follow-up exploration is planned to target the known areas
of artisanal mining as well as to investigate the western sheared basalt/granite
contact in PL 4892/2007. Although the PMLs of the artisanal workings do not form
part of the PL license, we believe that the owners would be amenable to entering
a JV agreement. Pole-Dipole traverses are planned across the sheared contact in
order to prioritize a follow-up reverse circulation (RC) drilling program that
is expected in this year..
No work has yet been undertaken on either of the two licenses
PL2979/2005 and PL5159/2009 southeast of Buhemba town (Map 15). Soil sampling on
200m x 50m centers are planned across the license outside the mbuga-covered
areas, as well as gradient IP survey and mapping. Results from these are
expected to dictate the next phase of exploration.
Uyowa Project
The Uyowa Gold project consist of a complete package of 7
Prospecting Licenses (PLs) that cover a total area of 900km
2
(Table
1) in the central to western side of Tanzania (Map 14).
53
Map 14: Location map showing the Uyowa Prospecting
Licenses
Location and Access
Uyowa Project is located in Tabora Region in northwestern
Tanzania. It is situated approximately 100km to the NW of Tabora town. A
reasonable gravel road connects Tabora with the villages located in the NE
corner of the license. Access to the license area is also from Kahama town
situated some 110km to the north by a dry seasonal road only. The 20km stretch
of this road passes through low-lying ground, which during the rainy season
becomes impassable.
Access within the license is by a number of secondary dirt
roads and footpaths.
Physiography, Climate, Vegetation and Water
Topographically, the property is relatively flat and is covered
by grassland and low scrub other than areas in which subsistence farming is
being carried on. The climate is tropically humid with alternating wet and dry
seasons.
History
During 2003-04, Ashanti Goldfields undertook regional
exploration across the Uyowa license in which soil sampling on 400m x 100
centers was completed (133 samples). Regional geological and regolith mapping,
covering 84km
2
and 960km
2
respectively, together with a
structural interpretation from the Government Aeromagnetic survey were
completed. An area of extensive artisanal working occurs in the northern part of
the license, which is under license to Primary Mining License (PML) holders.
Ashanti Goldfields entered a joint venture agreement with the PML holders in
order to explore the prospect. They drilled a total of 13 RC holes (999m) on
40m-spaced fences. Best borehole grades were 5 g/t over 20 m, 3 g/t over 12 m,
85.3 g/t over 1 m, 8.09 g/t over 1 m, and 21.9 g/t over 3m, intersected within 5
gold bearing quartz veins across a strike of 400 m. The artisanal site appears
to be located along a 10km shear zone.
54
Regional Geology
The licenses lie to the southwest of the Nzega greenstone belt
within the Archaean Nyanzian Supergroup suite of granitic rocks. The underlying
lithologies on the Uyowa license consist mostly of granite. Interpretation of
the Government aeromagnetic survey across the license indicates a prominent
NE-SW pattern of fractures and lineaments. A large fold nose has been
interpreted in the eastern part of the license. Besides the extensive artisanal
workings in the northern part of the license, a few artisanal workings are noted
in the northern to eastern half of the license.
Exploration Strategy
An initial site visit was made in July 2010 to the eastern and
northern parts of the license to review the current level of artisanal activity
as well as take cognizance of the logistics involved in setting up an
exploration program in the immediate future.
Exploration work on the Uyowa Project commenced in January 2011
and continued until the onset of the rainy season in early May. All work has
been stopped until the end of the rains which is expected to last until late
July-early August.
The following exploration activities have been undertaken:
-
The raw aeromagnetic data, flown by Geosurvey International G.m.b.H
between 1977 to 1980 on a line spacing of 1.0km and at a height of 120m, has
been purchased from the Geological Survey, Dodoma and has been subsequently
re-processed and interpreted. A number of priority areas were highlighted
(Targets 1 to 5). Due to accessibility, exploration has been focused on Target
3 which lies across the central and eastern side of the License Block and
includes PL 5916/2009.
-
Detailed ground magnetometer survey has commenced across Target 3 on 200
meter space N-S traverse lines. To date, at total of 35 traverses of 7.5
kilometer each, totaling 265 line-kilometers, have been completed along the
eastern part of Target 3.
-
Soil sampling on 400 meter x 50 meter centers is currently underway. A
total of 1057 samples of 1 kilogram each, including 52 Blanks, have been
collected, prepared on site to 80 mesh and submitted to SGS Laboratory Mwanza
for gold determination by Aqua Regia.
Results indicate that 77% of all samples returned below
background values (<10 ppb Au) Table 8. All of the anomalous values
(>50ppb Au) tend to be isolated single point values. The maximum soil value
reported is 1.24g/t Au.
Table 11: Statistical summary of soil sample results
collected on Target 3, Uyowa Gold Projecty
Range (ppb Au)
|
Samples
|
Blanks
|
Outstanding assays
|
<10
|
782
|
36
|
|
10-20
|
129
|
9
|
20-30
|
58
|
6
|
30-40
|
18
|
|
40-50
|
14
|
|
>50
|
8
|
1
|
Total
|
1009
|
52
|
96
|
-
A total of 12 rock samples were collected and submitted for 50gm Fire
Assay. All samples returned <0.02g/t gold.
-
Termitaria sampling was undertaken but samples have yet to be panned.
-
Regolith mapping has been undertaken in conjunction with the soil sampling
program across Target 3.
-
Remote sensing studies have been undertaken using various Band ratios with
Landsat Imagery. ASTER imaging has been obtained for the area and has been
processed using the various mineral Index ratios. Follow-up ground truthing is
planned once exploration resumes during the dry season.
55
Follow-up exploration on the Uyowa Block of licenses is to
include:
|
(i)
|
Ground truthing of Landsat and ASTER imaging
|
|
(ii)
|
Field investigation and follow up
sampling/pitting/trenching on any of the delineated soil anomalies in
Target 3.
|
|
(iii)
|
Focus exploration activities on Target 1 which
covers an area of artisanal mining previously investigated briefly by
Anglo-Ashanti Goldfields. Landsat and Aster Imagery indicate a number of
significant structures and iron alteration patterns associated with this
area of known gold mineralization.
|
|
(iv)
|
Selected Gradient IP surveys and Schlumberger
VES profiling across delineated targets.
|
|
(v)
|
RAB/RC drilling over prioritized targets.
|
Kahama Project
The Kahama Project is comprised of the Kahama South and Kahama
Shinyanga prospecting licenses consisting of 5 Prospecting Licenses (PLs) that
cover a total area of 519km
2
(Table 1) in the central to western side
of Tanzania (Map 15 and Map 16).
Map 15: Location map of the Kahama South Prospecting
Licenses
56
Map 16: Location map of the Kahama Shinyanga Prospecting
License
Location and Access
Although all the licenses occur within the same project area
they are 100 kilometres a part. The Kahama Shinyanga license is located some
60km north of the main KahamaNzega paved road. The license is accessed by the
all weather road from the town of Itwapgi, located close to the Kahama-Nzega
junction, northwards to the town of Bungulwa. The road passes through the
eastern side of the license.
Kahama South licenses are located some 40km to the
south-southwest of Kahama town. Access to the licenses is via a number of all
weather dirt roads that lead to the village of Ushetu and surrounding villages.
Access is also possible from Tabora in the south but is restricted to the dry
season only, on account of a large low lying Gombe River drainage basin to the
south of the licenses that floods during the wet season.
Physiography, Climate, Vegetation and Water
The area is typically flat lying and is largely covered by
mbuga. Typical savannah scrubland of grass and scattered thorn bush and acacia
trees dominant the landscape. Tobacco and cotton farming are the main cash crops
in the area. Access to parts of the license may be difficult during the rainy
season and would require the use of a 4X4 vehicle.
History
Geosurvey International flew airborne magnetic and radiometric
surveys over the area from 1977-1980. Other than the Government data, no
information on exploration undertaken by previous companies is currently
available.
Regional Geology
The Archaean Nyanzian Supergroup suite of granitic rocks
largely underlies the license areas. Patches of greenstone rocks, comprising of
meta-volcanic and meta-sedimentary units occur as patches within the granitic
terrain.
57
Exploration Strategy
Since the Company acquired these licenses, no exploration work
has yet been undertaken on them. The projects are basically at grass-roots
level of exploration and thus have a lower priority rating than many of the
other projects within the company portfolio.
An initial field visit to the projects is to be undertaken in
order to access the level of artisanal workings present on each of the licenses.
Due to the large coverage of mbuga soils, detailed ground magnetometer surveys
will be undertaken across the entire license from which selected follow up
targets for gradient array surveys will be defined. Results of the geophysical
programs will determine the next phase of exploration in order to explore
beneath the mbuga cover.
North Mara Project
The North Mara Project is comprised of Nine (9) Prospecting
Licenses (PLs) and have been divided into three (3) project blocks, namely the
Tarime North, North Mara Nyabigena East and the Kubiasi-Kiserya areas that cover
a total area of 599km
2
(Table1) in the northern part of Tanzania (Map
17and Map 18 and Map 19)
Map 17: Location map of the Tarime North Mara Prospecting
Licenses
58
Map 18:Location of the Nyabigena Prospecting
Licenses
Map 19: Location of the Kubiasi Kiserya Prospecting
Licenses
59
Location and Access
The Tarime gold property (PL2677/2004) is located in northern
Tanzania within the Musoma-Mara greenstone belt of the Lake Victoria Goldfield,
in Tarime District, Mara Region. The property covers a total of 518.68km
2
in QDS (Quadrangle) 5/1, 2, 3 & 4. Its accessibility is through
the Tarime-Musoma road that crosses the property at the southeast corner of the
license. Utegi is the major town centre close to 3341/2005. (Map 17)
The Nyabigena licenses (Map 18) located to the east of Tarime
and proximal to the Kenya border are largely covered by phonolitic lava that
forms the capping of the Nyamwaga Escarpment.
The Kubiasi Kiserya licenses (Map 19) occur to the south of the
Nyamwaga Escarpment. Both licenses lie on or adjacent to the Mara River and to
the north of the Serengeti Game Reserve.
All licenses are easily accessible. The Tarime licenses are
accessed via the paved road between Mwanza and Musoma with good secondary roads
connecting the various villages on the licenses. All weather gravel roads pass
either through or close by the other two exploration areas.
Physiography, Climate, Vegetation and Water
The physiography in the Tarime District is largely flat with
black cotton soils (mbuga) covering much of the area. Most of the area is
grassland and only lightly forested. Rivers are generally intermitted. The
climate is tropically humid with alternative wet and dry season.
Further to the north in the Nyabigena license area, the
topography becomes hilly and dark reddish brown soils, developed from the
phonolitic lavas, are present. Granite inselbergs dot the plains to the east
around the Mara River region in the area of the Kubiasi-Kiserya licenses.
History
North Mara area has a long history of artisanal gold mining. A
number of PMLs owned by artisanal miners have been pegged over known gold
workings within the Company owned licenses. Exploration undertaken by
internationally recognized companies are not available.
Regional Geology
The North Mara Goldfields is situated within the eastern arm of
the Lake Victoria Goldfields. The basement geology is composed of Archean
granite, meta-volcanic and meta-sedimentary rocks that make up the greenstone
terranes and which form part of the Tanzanian Craton. The geology in the North
Mara Region lies within the Nyanzian and Kavirondian Systems.
Exploration Strategy
Since much of the area in the Tarime District is overlain by
mbuga soils, target generation has to be made from undertaking detailed
structural analysis from both Magnetic and IP data. The detailed aeromagnetic
survey data undertaken by the Finnish Geological Survey (2003) is to be
purchased from the Government and processed. Follow-up gradient array surveys is
planned to be focused on magnetically interpreted structural targets. In
erosional areas, soil sampling and mapping is be undertaken with focus around
artisanal sites on the licenses.
To the east, soil sampling and mapping is planned to explore
the Kubiasi Kiserya (PL4833/2007). No exploration is to be undertaken over the
prospecting license (PL3338/2007), which straddles the Mara River. This license,
together with the Nyabigena (PL4645/2007) located over the Nyamwaga Escarpment,
is to be relinquished in the immediate future.
The North Mara Gold Projects have been divided into 3 blocks,
namely the Tarime, Nyabigena and the Kubiasi Kiserya areas (Table 12).
60
Table 12: Details of the North Mara Prospecting
licenses
License ID
|
Area
|
Area (Km
2
)
|
PL 4882/2007
|
TARIME NORTH MARA
|
61.8
|
PL 2677/2004
|
TARIME NORTH MARA
|
37.32
|
PL 3340/2005
|
TARIME NORTH MARA
|
195.5
|
PL 3341/2005
|
TARIME NORTH MARA
|
51.51
|
PL 3005/2005
|
TARIME NORTH MARA
|
85.43
|
PL 4225/2007
|
TARIME NORTH MARA
|
42.56
|
PL 4873/2007
|
TARIME NORTH MARA
|
40.97
|
PL 3355/2005
|
NORTH MARA NYABIGENA EAST
|
24.17
|
PL 4833/2007
|
KUBAISI-KISERYA
|
27.34
|
Total
|
|
566.60
|
Note: Three licenses previously listed, namely PL 3338/2005,
PL4645/2007 and PL 3339/2005, have been relinquished
Tarime & Utegi PLs
Exploration across the 3 Tarime and the 3 Utegi PLs comprising
PL4882/2005, PL3005/2005, PL3340/2005 and PL4873/2007, PL2677/2004, PL3341/2005
respectively located on the western side of the North Mara Greenstone Belt, has
recently commenced in which the following exploration activities have been
undertaken:
-
Acquisition of the raw aero-magnetic data from the Geological Survey,
Dodoma. This high resolution survey, undertaken by the Finnish Geological
Survey on behalf of the Ministry of Mines, Tanzania during 2004-2006, was
conducted by a fixed wing aircraft, flown at a height of 45 meters and a line
spacing of 200 meters. The data has been processed and interpreted in-house.
-
Stream sediment sampling was completed during the latter part of 2010, in
which 51 samples were collected from 2
nd
and 3
rd
order
streams (Table 13) and submitted for BLEG at SGS Laboratories, Mwanza.
Table 13: Summary of stream sediment samples collected on the
Tarime and Utegi PLs
Range (ppb Au)
|
Samples
|
<10
|
28
|
20-30
|
12
|
20-30
|
8
|
30-40
|
1
|
40-50
|
1
|
>50
|
1
|
Total
|
51
|
A number of structural targets have been interpreted from the
aeromagnetic data within the greenstone rocks that require field investigation
prior to any follow-up pitting or trenching.
61
Kubiasi Kiserya PL
Exploration at the Kubiasi Kiserya PL commenced in the latter
part of 2010 with a regional soil sampling program across the entire license on
a N-S grid spacing of 200 meters x 50 meters. A Total of 1418 soil samples were
collected of which 721 samples, collected on 400 meter x 50 meter grid, were
prepared and submitted to SGS Laboratory, Mwanza for gold by Aqua Regia
digestion. Distribution of results are presented in Table 14.
Table 14: Summary of soil sample results collected on the
Kubiasi Kiserya PL
Range (ppb Au)
|
Samples
|
Duplicates (QA/QC)
|
<10
|
415
|
70
|
20-30
|
118
|
|
20-30
|
67
|
|
30-40
|
30
|
|
40-50
|
13
|
|
>50
|
8
|
|
Total
|
651
|
70
|
A total of 25 rock samples were collected across the PL and
assayed by 50g Fire Assay.
A number of small artisanal workings as well as a colonial
shaft are present on the PL that have returned a maximum gold grade of 5.17 g/t
gold in quartz vein.
Exploration is to be focused on following up the soil anomalies
by:
|
(i)
|
Submitting the soil samples collected on the 200 meter
line infill on either side of the present soil anomalies
|
|
|
|
|
(ii)
|
Pitting/trenching
|
Select Schlumberger profiling across delineated targets.
Uranium Projects
Mbinga Project
The Mbinga Uranium Project is comprised of three (3)
Prospecting License (Table 2) and two (2) Reconnaissance Licenses (Map 20) The
Reconnaissance Licenses, located along the eastern shoreline of Lake Nyasa are
currently under application and have not been included within this summary.
62
Map 20: Location map of the Mbinga Uranium projects
Location and Access
The Mbinga properties are located in southern Tanzania near
Lake Nyasa in the Mbinga District, of the Ruvuma Region (Map 1920). The project
is approximately 150 km west of Songea town, the main commercial and
administrative centre in the Ruvuma region. The Mbinga Uranium Project covers a
total area of 1761km
2
located across 4-quarter degree sheets (QDS:
297, 298, 309 and 310). The town of Mbinga is strategically located within the
central part of the property, which is 100km southwest of the regional centre of
Songea. Generally, the property has poor accessibility and roads within the
concessions are limited to a few areas where 4-wheel drive vehicles are required
during the rainy seasons. The dirt road along the lakeshore is in reasonable
condition. The nearest airport with only irregularly scheduled flights is in
Songea town. Another small airstrip exists at Mbinga town.
Physiography, Climate, Vegetation and Water
Steep mountain ridges and valleys, dropping off to flat and
low-lying plains around the lakeshore characterize the physiography of the area.
Much of the area is under subsistence cultivation. The climate at Mbinga is
continental. Generally the Ruvuma Region has mild temperatures averaging
23
o
C. October and November are the hottest months with an average
temperature of 30
o
C. The rainy season commences in early November and
continues through to March. A number of the licenses border the eastern shore of
Lake Nyasa (Lake Malawi).
History
Geosurvey International conducted an airborne radiometric and
magnetic survey over the area from 1977 to 1980.
High Resolution Helicopter-Borne Radiometric Survey was
contracted to New Resolution Geophysics (NRG) of South Africa in March 2008, to
undertake a survey across all licenses at a line spacing of 250m.
63
Geo Can Resources Company Limited undertook a follow-up ground
radiometric survey, in April 2008 on PL4335. Three uranium anomalies were
identified which was tested by a number of shallow trenches. Values of
>1,000ppm U
3
O
8
were reported from each anomaly.
Regional Geology
The Mbinga properties lie close to the southern part of the
Ruhuhu Basin consisting of Karoo rock formations of fluvial-continental origin.
The rock of the Ruhuhu Basin unconformably overlies the Usagaran Formation,
which comprise of metamorphosed igneous and sedimentary rocks. The rocks at
Mbinga are varied and in PL4335/2007 and PL4433/2007 are mainly basement
gneisses, granites and granodiorites. In PL4254/2007, the rocks include
charnockites, granulites and gneisses.
Two major northwest-southeast trending lineaments traverse the
properties.
Property Geology
A total of 117 Uranium point source anomalies have been
detected within the property from the Radiometric Interpretation map, sheet 310
(1980). Three mineralized trends have been identified from the Geosurveys
radiometric total intensity image. The trends include northeast, north-south and
northwest directions and are largely reflected by braided drainage channels.
On PL4254/2007, uranium mineralization is associated with small
zones of charnokites and cataclastic mylonites in the upland of Mkwaya village
as well as in the continental arenaceous sediments of the Karoo system in the
northeastern area of the property. To the south, the uranium anomalies correlate
with a large stretch of post-orogenic granite that is partly covered with recent
sediments.
More than 57 uranium anomalies were identified by the Geosurvey
International within and surrounding the property. The most significant anomaly
was found to be associated with the north-south trending zone, which parallels
the shoreline of Lake Nyasa, on the northern side of the property. The anomaly
correlates with dark colored, magnetic mineral bearing sands assumed to be
derived from a small zone of garnet-cordierite granulite.
Exploration Strategy
Exploration is to be based on the results obtained from the
High Resolution Helicopter-Borne Radiometric Survey. Anomalies shown from the
survey are to be prioritized for follow-up ground survey that is to involve
mapping and ground scintillometer surveys. Rock chip sampling followed by
trenching on prospective targets would be planned before RAB/RC drilling is
proposed.
Kiwara Project
The Kiwara Uranium Project is comprised of three (3)
Prospecting License ( Table 2, Map 21).
64
Map 21: Location map of the three Prospecting Licenses that
form the Kiwira Uranium Project
Location and Access
The Kyela-Kiwira properties (PL4651/07 & PL4514/2007) are
120km southwest of the Mbeya, the main town in southern Tanzania. A tar road
connects Dar es Salaam to Mbeya. The nearest town to Kiwira property is Kyela
town. Access to the property is good.
The Chimala-Igurusi property (PL4406/2007) is 65km northeast of
Mbeya and is 25 km southwest of Chimala town in Mbarali District. Access to the
property is via the town of Mbarali, located 15 km from license boundary.
Physiography, Climate, Vegetation and Water
The major topographic feature in Kyela-Kiwira property is the
rift valley on the northern side of Lake Nyasa. The property sits at an altitude
of 1,200 to 1,800m above sea level and typically displays alpine flora.
The Chimala-Igurusi property occurs at lower altitudes, with a
flat lying topography in the northern part covered with savannah soils. Hills
occur in the southern part of the license. The climate is mainly continental and
strongly influenced by the Nyasa plain, with rain (November - May) and dry (June
- October) seasons. Prior to the rainy season, the region is characterized by
mild winds and dust. In mountainous areas of Kyela-Kiwira area, temperatures are
several degrees colder (< 10°C) in June through November. Chimala-Igurusi
area has a typical savannah climate characterized by hot temperatures in the dry
season and is cold during the wet season.
History
Initially, Geosurvey International conducted countrywide
airborne radiometric and magnetic surveys from 1979 to 1980. This airborne
geophysical survey identified several uranium "targets" worthy of further
investigations. Fluvial and lacustrine type deposits were identified in the
Chimala-Igurusi area as hosts for the uranium mineralization. Ground follow-up
has shown banded cherts with Mn-stains that reflect significant radioactivity
anomalies.
65
Unlike Chimala-Igurusi prospect, the Kyela-Kiwira property
shows anomalous radiation values located within geological setting dominated by
the Karoo sediments of the Selous and Ruhuhu Basins. These sediments are
considered to be prospective for sandstone hosted roll-front type uranium
mineralization.
Regional Geology
The regional geology of the Kyela-Kiwira license is
characterized by Paleoproterozoic (2.0 Ga), highly metamorphosed basement rocks,
Karoo sedimentary formations and Quartenary volcanic sediments. The basement
rocks are made of reworked Archean crust, mainly metamorphic granulites and
gneisses. The regional geology of the Igurusi-Chimala is characterized by
Paleoproterozoic (1.95 Ga) sediments, which have undergone regional metamorphism
and, in some places, have been intruded by granites. These rocks consist of
metasediments, micaceous schists, gneisses and migmatites. The area is bounded
by the Usangu plains of the Mbarali area. Younger Mesoproterozoic (1.37 Ga)
continental argillaceous rocks consisting of reddish and copper rich green
shale, quartzites and dolomite and limestone rocks lie conformably on the
underlying Paleoproterozoic rocks. These sediments are, in turn, overlain by
Quaternary volcanic formations, which cover part of Rungwe and Igurusi-Kongolo
area. The basement rocks reflect prominent regional northeast and northwest
striking structural lineaments. The area has been structurally complicated by
extensive fracture and faulting during the development of the Buhoro and Nyasa
basins.
Property Geology
Rock types within the Kyela-Kiwira project consist of three
major groups:
|
(i)
|
Late orogenic Paleoproterozoic granites and granodiorites
(post 1.95Ga);
|
|
|
|
|
(ii)
|
Karoo formation of undifferentiated carboniferous
terrestrial sandstone, quartzite, siltstone, conglomerate and limestone
and often poorly exposed and covered by lake beds underlain by Proterozoic
granites;
|
|
|
|
|
(iii)
|
Nyasa alluvial beds, which comprise of alluvial sediments
namely, fine calcareous sands, fine clays, and silts. The sediments cover
and fill most of the Kyela-Kiwira property. The late Orogenic granitic
rocks consist mostly of hornblende/biotite microgranites with some
syenites being reported within the project area.
|
The Karoo beds are largely undifferentiated and often poorly
exposed and covered by recent Nyasa alluvial sediments. These sediments fill
most of Nyasa plains and are poorly consolidated lacustrine deposits. The river
valleys contain a patchy distribution of conglomeratic pebbly beds together with
considerable amounts of volcanic tuff. The basement Paleoproterozoic rocks
consisting of mylonitic migmatites, granulites and quartzites have been cut by a
series of northwest trending faults.
The geology of Chimala-Igurusi property consists of assemblage
of Paleoproterozoic continental sediments with lavas that lie unconformably on
the Archean (>2.5 Ga.) basement metamorphic rocks. Younger gabbroic intrusive
rocks are common and have formed a series inselbergs that transect the
continental rocks in the southwestern and central Chamoto Hill area.
Horizontally bedded sedimentary rocks, comprising of colluviums and alluvial
gritty sands cover most of the property. Alluvial clays intercalated with
colluviums cover the northeastern part of the license. Siliceous clays are found
north and east of Chamoto Hill. The structural set-up of Chimala-Igurusi
prospect is a series of complicated intrusive gabbros, extensive fracture
jointing and faulting. The argillitic rocks, namely shale have been folded with
fold axes plunging to the south.
Exploration Strategy
In order to define possible drill targets, the first phase of
proposed exploration will be to:
66
Success of this first phase will lead to an understanding of
the location and extension of the anomalous radioactive trends from which second
phase can be initiated:
Njombe Project
The Njombe Uranium Project is comprised of one (1) Prospecting
and Reconnaissance License (Table 2, Map 22).
Map 22: Location map of the Njombe Uranium Project.
Location and Access
Njombe property is centrally located at the junction of survey
sheets in the QDS 260, 261, 273 and 274. The town of Njombe is situated 25km to
the east of the property (Map 22). The property is surrounded by numerous small
villages. Road access is restricted to a network of dirt roads and tracks that
require 4X4 vehicles to access the property during the rainy season.
Physiography, Climate, Vegetation and Water
The topography is dominated by gently rolling grass covered
ridges and valleys in the northern parts which develop into sandy plains to the
south.
67
The climate at the property is mainly continental and strongly
influenced by the high elevation of the area, which is generally between 1500m
and 2300m above sea level. The region is also characterized by strong wind and
dust. Temperatures are often several degrees colder. Fog occurs during the
winter season. Precipitation is moderate.
History
Geosurvey International undertook an airborne magnetic,
radiometric and VLF-EM survey across the area from 1997-1980. Geo Can Resources
Company Limited undertook an assessment of the data in 2007, which defined the
existence of elevated uranium values following a northwest trend through the
middle of the license.
Regional Geology
The Ubendian System consisting of proterozoic
quartz-feldsparthic granular gneiss, migmatite, underlies geology of the area
and amphibolite rocks. The northeast part of the license is dominated by
palaeoproterozoic granitoid consisting essentially of late- to post-orogenic
granite and granodiorite.
Recent alkaline volcanic rocks are found in the northwest part
of the license area. The remainder of the license consists of a
northwest-southeast trending belt of Mesoproterozoic age metasediments,
migmatites and orthogneiss that is interpreted to form part of the Ukingan
Group. To the south the Unebian rocks are exposed. Northwest-southeast trending
bands of meta-gabbro, anorthosite and ultramafic rocks occur to the west and
southwest of the license.
Uranium mineralization is thought to be associated with
structural unconformities within the Proterozoic rocks as well as being related
to the intrusive granite of the Ilunga series.
Exploration Strategy
Based on the radiometric data obtained by Geosurvey
International, a large uranium and thorium anomaly were shown to occur in the
northeast part of property that follows a northwest trend through the middle of
the license. Follow up exploration is aimed to ground test this anomaly. Mapping
and geochemical sampling by a hand held scintillometer will not only provide a
geological model for the style of Uranium mineralization but will also assist to
prioritize higher grade uranium targets within the anomalous area for follow-up
evaluation.
68
Lake Rukwa Project
The Lake Rukwa Uranium License forms the Rukwa Project,
situated to the east of Lake Rukwa (Table 2 and Map 23).
Map 23: Location map of the Rukwa Uranium License that forms
the Rukwa Project
Location and Access
The Rukwa Lake project, covering a total of 268.80
km
2
, is located 45km west of Lake Rukwa and 150km northwest of Mbeya
in southwest Tanzania (Map 23). Access to the town of Njombe, located 25km to
the east of the property, from Mbeya, is good. Numerous small villages surround
the property and road access is restricted to a network of dirt roads and tracks
that require 4X4 vehicle usage during the wet season.
Physiography, Climate, Vegetation and Water
The major topographic feature of the property is the Rukwa
fault scarp, which follows a northwest trend, from the southeast corner of the
property and cutting the northern boundary. The Lukwaiti River, due to the
uplift of the fault scarp, has incised into the western corner of the license.
Over the remainder of the license the drainage is mature, and "mbuga" soils are
developed in the upper reaches of most of the rivers and streams. The country is
almost entirely covered with "miombo" forest except for the carbonatite hill
lying outside but immediately adjacent to the northern boundary of the license.
This hill is grass covered, with dense vegetation growing in the gullies. Thorn
bushes and scattered small trees grow over areas where dark-red soils are
prevalent.
The climate at the property is mainly continental and strongly
influenced by the high elevation of the area, which is generally between 3500 ft
(1060m) and 4000 ft (1220m) above mean sea level.
History
Geosurvey International conducted countrywide airborne
radiometric and magnetic surveys over the area from 1979 to 1980 along 1km
spaced flight lines. No recent exploration undertaken on the license area is
known.
69
Regional Geology
The property is mostly underlain by syn- and post-orogenic
granite and granodiorite. To the north of the license boundary, gneisses and
metasediments of the Mesoproterozoic-age Karagwe-Ankolean System dominate the
bedrock. A carbonatite plug, referred to as the Rukwa Lake Carbonatite occurs
immediately adjacent to the northwest corner of the license and is also
reflected as a radiometric anomaly.
Exploration Strategy
Follow-up field investigation into the radiometric anomalies as
outlined by Geosurvey International is to take place by mapping and ground
radiometric surveys in order to define and prioritize targets for focused
exploration.
Mkuju and Mkuju East Project
The Mkuju Uranium Projects comprising of the Mkuju
(PLR4644/2007) and Mkuju East (PLR4692/2007), were granted as Prospecting and
Reconnaissance Licenses. It has recently been decided by the Company that these
two licenses should be relinquished back to the Government due to the fact that
they lie within a National Game Reserve. Not only are there inherent problems in
undertaking exploration in the park, but the chances of being able to obtain a
mining license to exploit any future discovered resource are slim.
ITEM 3.
|
LEGAL PROCEEDINGS.
|
We are presently not a party to any litigation.
ITEM 4.
|
(REMOVED AND RESERVED)
|
PART II
ITEM 5.
|
MARKET FOR THE REGISTRANTS COMMON EQUITY,
RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES.
|
Market for Securities
Our companys common stock is traded on the FINRAs OTC
Bulletin Board under the symbol LVCA. Set forth below are the range of high
and low bid quotations for the periods indicated as reported by the FINRA. The
market quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions and may not necessarily represent actual transactions.
Quarter Ending
|
High
|
Low
|
March 31, 2011
|
$0.26
|
$0.22
|
December 31, 2010
|
$0.35
|
$0.32
|
September 30, 2010
|
$0.37
|
$0.32
|
June 30, 2010
|
$0.35
|
$0.28
|
March 31, 2010
|
$0.41
|
$0.36
|
December 31, 2009
|
$0.62
|
$0.62
|
September 30, 2009
|
$0.87
|
$0.87
|
June 30, 2009
|
$0.53
|
$0.53
|
Our transfer agent is Pacific Stock Transfer Company, of 4045
South Spencer Street, Suite 403, Las Vegas, NV 89119; telephone number:
702.361.3033; facsimile: 702.433.1979.
70
Holders of our Common Stock
As of July 13, 2011, there were 222 registered stockholders
holding 97,485,733 shares of our issued and outstanding common stock.
Dividend Policy
There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:
|
1.
|
We would not be able to pay our debts as they become due
in the usual course of business; or
|
|
|
|
|
2.
|
Our total assets would be less than the sum of our total
liabilities plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving the
distribution.
|
We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
Other than as disclosed in the Companys Quarterly Reports or
Current Reports on Form 8-K for the fiscal year ended March 31, 2011, we have
not sold any equity securities that were not registered under the Securities Act
during the fiscal year ended March 31, 2011.
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
We did not purchase any of our shares of common stock or other
securities during our fiscal year ended March 31, 2011.
Securities Authorized for Issuance Under Equity Compensation
Plans
Effective October 7, 2010 we adopted our 2010 Stock Option
Plan. The purpose of our 2010 Stock Option Plan is to retain the services of
directors, officers, valued key employees and consultants of the Company and
such other persons as the plan administrator selects, and to encourage such
persons to acquire a greater proprietary interest in our company, thereby
strengthening their incentive to achieve the objectives of the Companys
stockholders, and to serve as an aid and inducement in the hiring of new
employees. Under the plan, the plan administrator is authorized to grant stock
options to acquire up to a total of 10,000,000 shares of our common stock. Also
on October 7, 2010 we granted options to one of our consultants to acquire
120,000 shares of common stock exercisable at a price of $0.29 until October 7,
2013. These options vest immediately. On October 21, 2010 we granted an
aggregate of 4,080,000 options at an exercise price of $0.45 for a term of three
years to our directors, officers and certain consultants. The options vest
immediately.
71
The following table provides a summary of the number of stock
options granted under the 2010 Stock Option Plan, the weighted average exercise
price and the number of stock options remaining available for issuance under the
Companys option plans as at March 31, 2011:
Equity Compensation
Plan Information
|
Plan category
|
Number
of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
Weighted-Average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plan
(excluding
securities reflected
in
column (a))
|
Equity compensation plans not
approved
by security holders (2010
Stock Option Plan)
|
4,200,000
|
$0.45
|
5,800,000
|
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
We are a smaller reporting company as defined by Rule 12b-2 of
the Exchange Act and are not required to provide the information required under
this item
.
ITEM 7.
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS.
|
The following discussion should be read in conjunction with our
audited financial statements and the related notes that appear elsewhere in this
annual report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.
Our audited consolidated financial statements are stated in
United States dollars and are prepared in accordance with United States
generally accepted accounting principles.
Plan of Operation
As of March 31, 2011, we had working capital of approximately
$2,110,177. We plan to spend approximately $1.3 million for our property
acquisitions and $3.0 million for exploration activities through 2011, with work
being conducted on several projects including soil sampling, trenching, IP
gradient, magnetic survey and drilling. We will need to raise additional funds
to finance the exploration activities on our projects. There is no assurance
that such financing would be available at this time.
Our estimated expenses over the next twelve months are as
follows:
Cash Requirements during the Next Twelve Months
Expense
|
|
($)
|
Property acquisition and holding costs
|
|
1,290,000
|
Exploration expenses
|
|
3,000,000
|
Professional fee
|
|
400,000
|
General and administration fee
|
|
1,210,000
|
Total
|
|
5,900,000
|
72
There is no historical financial information about us upon
which to base an evaluation of our performance. We are an exploration stage
corporation and have not generated any revenues from operations. 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, possible delays in the exploration of our
properties, possible cost overruns due to price and cost increases for services
and economic conditions. Because the Company does not currently derive any
production revenue from operations, its ability to conduct exploration and
development on properties is largely based upon its ability to raise capital by
equity funding.
As of March 2011 we received all assay results from our initial
drilling program completed at the Sambaru 1 - 5 prospect areas within the
Singida-Londoni gold project, Tanzania. Also in November, 2010 the Company
commenced a phase two reverse circulation drilling program at the Musoma Bunda
gold projects Kinyambwiga license (PL4653/2007) located near the eastern side
of Lake Victoria in northeastern Tanzania approximately 750 kilometers by road
from the Companys Singida-Londoni gold project. The 2,427 meter drill program
tested three targets at the Kunanga Prospect area which is situated in the
northeastern part of the 30.89 square kilometer Kinyambwiga License. In the
meantime, a ground magnetometer geophysical survey has also been completed at
the Companys nearby 72.95 square kilometer Suguti (PL3966/2006) and 51.9 square
kilometer Murangi (PL 4511/2007) licenses which are located about 15 kilometers
and 8 kilometers north and northwest of Kinyambwiga respectively. The Company
has recently completed Technical reports for the Singida-Londoni Gold Project
and the the Kinyambwig-Suguti-Murangi Gold Project in compliance with National
Instrument 43-101 of the Canadian Securities Administrators (NI 43-101) and the
Guidelines given in Form 43-101F1. The Singida-Londoni technical report includes
all work undertaken on the Singida-Londoni Gold Project up to and including
Phase 1 drilling program and the Kinyambwiga-Suguti-Murangi technical report
includes all work undertaken on it up to and including the last round of Reverse
Circulation drilling undertaken in the later part of 2010.
Our exploration objective is to find an economic mineral body
containing gold. Our success depends upon finding mineralized material. This
includes a determination by our contracted consultants and professional staff
whether the property contains resources and/or reserves. Mineralized material is
a mineralized body, which has been delineated by appropriately spaced drilling
or underground sampling to support sufficient tonnage and average percentage
grade of metals to justify removal. If we dont find mineralized material or we
cannot remove mineralized material, either because we do not have the money to
do so or because it is not economically feasible to do so, we will cease
operations or seek other properties.
In addition, we may not have enough capital to complete
exploration of our properties. If we have not raised sufficient funds to
complete our exploration program, we will try to raise additional funds from
another equity or debt offering or rely on loans from shareholders. If we
require additional funds and are unable to raise the required amounts, we will
have to suspend or cease operations until we succeed in raising the additional
funds.
RESULTS OF OPERATIONS
The following summary of our results of operations should be
read in conjunction with our audited financial statements for the financial
years ended March 31, 2011 and 2010 which are included herein.
Our operating results for the years ended March 31, 2011 and
2010 are summarized as follows:
|
|
Years Ended
|
|
|
|
March31,
|
|
|
|
2011
|
|
|
2010
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
Operating Expenses
|
|
4,943,936
|
|
|
7,974,927
|
|
Other Income (Expenses)
|
|
(76,775
|
)
|
|
(59,542
|
)
|
Net Loss
|
$
|
5,020,711
|
|
$
|
8,034,469
|
|
Revenue
We had no operating revenues for the fiscal years ended March
31, 2011 and 2010. We do not anticipate earning any revenue from our operations
until such time as we have entered into commercial production at one or more of
our mineral projects or we sell one or more of our mineral properties. We are
currently in the exploration stage of our business and we can provide no assurance that we will
discover a reserve on our properties or, if we do discover a reserve that we
will be able to enter into commercial production.
73
Operating Costs and Expenses
The major components of our expenses for the years ended March
31, 2011 and 2010 are outlined in the table below:
|
|
For the Year Ended
|
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
$
|
|
|
$
|
|
EXPENSES
|
|
|
|
|
|
|
Amortization and depreciation
|
|
24,221
|
|
|
10,727
|
|
Exploration costs
|
|
1,194,934
|
|
|
803,810
|
|
General and administrative
|
|
432,154
|
|
|
1,455,998
|
|
Impairment of mineral property
acquisition costs
|
|
742,180
|
|
|
3,935,611
|
|
Management and director fees
|
|
102,000
|
|
|
198,017
|
|
Professional fees
|
|
831,947
|
|
|
1,455,922
|
|
Stock-based compensation
|
|
1,593,989
|
|
|
|
|
Travel and accommodation
|
|
22,511
|
|
|
114,842
|
|
Total Operating
Expenses
|
|
4,943,936
|
|
|
7,974,927
|
|
The decrease of $1,023,844 in our general and administrative expenses for the year ended March 31, 2011 as compared to the same period in fiscal 2010 was primarily due to a) the decrease of investor relations expenses of $1,200,000 b) the increase of general office expenses incurred in subsidiary incorporated in fiscal year 2011.
Exploration costs were increased by $391,124 to $1,194,934
during the current period as a result of the increased exploration activity in
the Company. On June 21, 2011, we entered into exploration service agreement
with Otterburen to perform exploration services on optioned projects. As per the
service agreement, Otterburn agreed to pay exploration cost incurred on Singida
project from the month of March through the termination date of July 8, 2011.
The reimbursement of exploration cost on Singida for March was $256,968.
Professional fees for the twelve months ended March 31, 2011
decreased to $831,947 compared to $1,455,922 for the same period of 2010. A main
factor to this reduction is a higher level of advice the Company required for
business combination in last fiscal year.
In 2010, the Compay completed major properties acquisition. The
property option payments incurred in 2011 were only for Signida Project. As a
result, impairment of mineral property acquisition costs during the 2011 twelve
months period decreased by $3,193,431 to 742,180 compared to $3,935,611 in 2010.
The Company has, through its subsidiary Kilimanjaro Mining
Company, advanced funds to Geo Can Resources Company Limited (Geo Can). The
advances bear no interest, are unsecured and are due on demand. The unencumbered
funds advanced to Geo Can would be refundable to the Company. The advances as of
March 31, 2011 and 2010 have not been offset against payables nor had any
encumbrances been reported to the Company. As of March 31, 2011, the Company
advanced $499,043 to Geo Can through direct payment to some contracted suppliers
of Geo Can which included service invoices for drilling, technical consulting,
property rentals, geophysical equipment repairs and loans.
Prior to incorporation of the Companys wholly-owned subsidiary
in Tanzania, Lake Victoria Resources (T) Limited, and prior to the completion of
the share exchange agreement with Kilimanjaro, Lake Victoria entered into option
agreements with Geo Can. According to the terms of the option agreements the
Company was required to perform geological exploration of the optioned
properties and subsequently it contracted with Geo Can, a related company with
shared common directors, to perform exploration services on all of these
properties. As of March 31, 2011 and March 31, 2010, the Company owed $620,523
and $700,523, respectively, to Geo Can for exploration services that it had
provided primarily on the Kalemela project licenses PL2747, 2910 and 3006; Geita
project license PL2806 and Kinyambwiga project license PL4653. The outstanding
amounts are non-interest bearing, unsecured and due on demand.
74
Since November, 2009 the Company has used its wholly owned
subsidiary Lake Victoria Resources (T) Limited to perform all exploration and
contracting within Tanzania. Geo Can, a Tanzania corporation, was initially
founded by three common directors of the Company to identify prospective mineral
properties in Tanzania. Through time Geo Can had acquired a portfolio of
prospective licenses. On May 4, 2009, Kilimanjaro completed a Property Purchase
Agreement with Geo Can. Under the terms of the agreement Kilimanjaro acquired
100% interests of the mineral property assets of Geo Can, which included 33 gold
prospecting licenses and 13 uranium licenses. Prior to the closing of the
Property Purchase Agreement between Geo Can and Kilimanjaro, Geo Can had entered
into Option to Purchase Property agreements, regarding some of its resource
properties, with Lake Victoria. As of the execution of the Property Purchase
Agreement, May 5, 2009, Geo Can no longer had any interest in those prior
property agreements with Lake Victoria. As of the date of this annual report,
Geo Can holds property titles in trust for Kilimanjaro as the sole Beneficiary,
in accordance with the terms of the Statutory Declaration, Declaration of Trust
and Release dated July 23, 2009. Geo Can will act on the direction of
Kilimanjaro as the Beneficiary to transfer the title or interest to the
Beneficiary or as directed by the Beneficiary.
Liquidity and Capital Resources
Working Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
As at
|
|
|
As at
|
|
|
Increase /
|
|
|
|
March 31, 2011
|
|
|
March 31, 2010
|
|
|
(Decrease)
|
|
Current Assets
|
$
|
3,071,597
|
|
$
|
1,458,668
|
|
|
111%
|
|
Current Liabilities
|
$
|
961,420
|
|
$
|
890,919
|
|
|
8%
|
|
Working Capital (Deficiency)
|
$
|
2,110,177
|
|
$
|
567,749
|
|
|
272%
|
|
Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Increase /
|
|
|
|
March 31, 2011
|
|
|
March 31, 2010
|
|
|
(Decrease)
|
|
Cash used by Operating Activities
|
$
|
(2,604,023
|
)
|
$
|
(735,492
|
)
|
|
(254%
|
)
|
Cash provided (used) by Investing
|
$
|
(768,838
|
)
|
$
|
(2,228,880
|
)
|
|
24%
|
|
Activities
|
|
|
|
|
|
|
|
|
|
Cash provided by Financing Activities
|
$
|
4,700,360
|
|
$
|
3,389,205
|
|
|
39%
|
|
Net Increase (Decrease) in Cash
|
$
|
1,327,501
|
|
$
|
424,832
|
|
|
212%
|
|
We had a cash balance of $2,282,902 and working capital of $2,110,177 as of March 31, 2011 compared to cash of $955,401 and working capital of $567,749 as of March 31, 2010. We anticipate that we will incur approximately $1,600,000 for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next twelve months.
On February 24, 2011, we entered into a debt settlement and
subscription agreement with Roger Newell, a director of the company, pursuant to
which we issued 145,833 shares of our common stock at a deemed price of $0.24
per share in settlement of $35,000 of outstanding debt owed by our company to
Mr. Newell. The shares were issued pursuant to Rule 506 of Regulation D and/or
Section 4(2) of the Securities Act of 1933.
Effective March 7, 2011, we issued 20,000,000 units at a price
of $0.15 per unit for gross proceeds of $3,000,000. Each unit consisted of one
share of common stock and one share purchase warrant entitling the warrant
holder to purchase an additional share of common stock at a price of $0.30 per
share for a period of six months from closing. We issued an aggregate of
2,963,333 units to 9 subscribers that each represented that they were not a US
person (as that term is defined in Regulation S of the
Securities Act of
1933
) in an offshore transaction pursuant to Regulation S and/or Section
4(2) of the
Securities Act of 1933.
We issued an additional 17,036,667
units to 23 U.S. persons, who represented that they were accredited investors as
that term is defined in Rule 501 of Regulation D.
Going Concern
The audited financial statements accompanying our annual report on Form 10-K for the year ended March 31, 2011 have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As of March 31, 2011, we had cash of $2,282,902 and we estimate that we will require approximately $1,610,000 for general and administration costs and professional fees, and $4,290,000 for property acquisition holding and exploration costs associated with our plan of operation over the next twelve months. Although we have sufficient funds for general and administration activities, we do not have sufficient funds for planned mineral property acquisition and exploration activities and therefore we will be required to raise additional funds.
75
The advancement of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Future Financings
We had a cash balance of $2,282,902 and working capital of
$2,110,177 as of March 31, 2011 compared to cash of $955,401 and working capital
of $567,749 as of March 31, 2010 and we estimate that we will require
approximately $5,900,000 for costs associated with our plan of operation over
the next twelve months. Accordingly, we do not have sufficient funds for planned
operations and we will be required to raise additional funds for operations. We
intend to raise additional funds from another equity offering or loans. If we
need additional funds and are unable to raise them, we will have to suspend or
cease operations until we succeed in raising additional funds.
Outstanding shares and options
On December 7, 2010, our shareholders approved a resolution to
amend the articles of incorporation to increase the number of authorized shares
of our common stock from 100,000,000 shares to 250,000,000 shares. As of July
13, 2011, we have 97,485,733 shares of common stock outstanding, 4,200,000 stock
options outstanding and 41,404,901 warrants outstanding.
Off-Balance Sheet Arrangements
We have no 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 are material to
stockholders.
Critical Accounting Policies
The following are the accounting policies that we consider to
be critical accounting policies. Critical accounting policies are those that are
both important to the portrayal of our financial condition and results and those
that require the most difficult, subjective, or complex judgments, often as
results of the need to make estimates about the effect of matters that are
subject to a degree of uncertainty.
Business Combinations
The Company follows the guidance in ASC 805, Business
Combinations, and ASC 810, Consolidation. The non-controlling interest
recognized at March 31, 2010 was previously the minority interest held by
certain passive shareholders at the consolidated financial statement level of
Kilimanjaro, and whose interests were eliminated for accounting purposes by the
August 7, 2009 share exchange agreement. The Company, after August 7, 2009, had
no further non-controlling interests.
For the years ended March 31, 2011 and 2010, losses of $nil and
$1,927,226 respectively, were recognized as being attributed to the
non-controlling interest of the Companys controlled subsidiary.
76
Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As of March 31, 2011 and 2010, the Company had 45,604,901 and 13,006,651, respectively, potentially dilutive securities outstanding.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with
maturity of three months or less at the time of issuance to be cash equivalents.
As of March 31, 2011 and 2010, the Company has approximately $2,234,000 and $850,435, respectively, deposited at FDIC insured banks in the United States. FDIC deposit insurance covers the balance of each depositor’s account up to $250,000 per insured bank. As of March 31, 2011, the Company has Tanzania shillings 19,595,000 (approximately $12,700 USD) and $35,800 deposited in Tanzania. The Deposit Insurance Board in Tanzania insures up to 1,500,000 Tanzanian Shillings (approximately $975 USD as of March 31, 2011) per customer per bank. Any amount beyond the basic insurance amount may expose the Company to loss.
Property and Equipment
Property and equipment consists of mining tools and equipment,
furniture and equipment and computers and software which are depreciated on a
straight line basis over their expected lives of five years.
Mineral Property Costs
Under US GAAP mineral property acquisition costs are ordinarily
capitalized when incurred using FASB ASC Topic 805-20-55-37, whether Mineral
Rights are Tangible or Intangible Assets. The carrying costs are assessed for
impairment under ASC Topic 360-36-10-35-20, Accounting for Impairment or
Disposal of Long-Lived Assets, whenever events or changes in circumstances
indicate that the carrying costs may not be recoverable. The Company expenses as
incurred all maintenance and exploration property costs.
The Company also evaluates the carrying value of acquired
mineral property rights in accordance with ASC Topic 930-360-35-1, Mining
Assets: Impairment and Business Combinations, using the Value Beyond Proven and
Probable (VBPP) method. The fair value of a mining asset generally includes both
VBPP and an estimate of the future market price of the minerals.
When the Company has capitalized mineral property costs, these
properties will be periodically assessed for impairment of value. Once a
property reaches the production stage, the related capitalized costs will be
amortized, using the units of production method. Since the Company is unable to
support continued capitalization of acquisition costs, the Company has
recognized impairment charges of $742,180 and $3,935,611 for the years ended at
March 31, 2011 and 2010, respectively.
Long-Lived Assets
In accordance with ASC 360, Property Plant and Equipment the
Company tests long-lived assets or asset groups for recoverability when events
or changes in circumstances indicate that their carrying amount may not be
recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life. Recoverability is assessed based on the carrying amount of the asset and
the sum of the undiscounted cash flows expected to result from the use and the
eventual disposal of the asset, as well as specific appraisal in certain
instances. An impairment loss is recognized when the carrying amount is not
recoverable and exceeds fair value.
77
Asset Retirement Obligations
The Company accounts for asset retirement obligations in
accordance with the provisions of ASC 440, Asset Retirement and Environmental
Obligations which requires the Company to record the fair value of an asset
retirement obligation as a liability in the period in which it incurs a legal
obligation associated with the retirement of tangible long-lived assets that
result from the acquisition, construction, development and/or normal use of the
assets. The Company did not have any asset retirement obligations as of March
31, 2011.
Foreign Currency Translation
The Companys functional and reporting currency is the United
States dollar. Monetary assets and liabilities denominated in foreign currencies
are translated to United States dollars in accordance with ASC 740, Foreign
Currency Translation Matters, using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on translation or settlement of foreign
currency denominated transactions or balances are included in the determination
of income.
To the extent that the Company incurs transactions that are not
denominated in its functional currency, they are undertaken in Canadian dollars
and the Tanzanian Schilling. A portion of business transactions in Tanzania and
mineral option purchase agreements are denominated in the Tanzanian Schilling.
The Company has not, to the date of these financials statements, entered into
derivative instruments to offset the impact of foreign currency
fluctuations.
Segment Information
At March 31, 2011, the accompanying consolidated balance sheet
contains approximately $48,500 of cash, $26,600 of advances and accounts
receivable, and $82,900 of property and equipment in a foreign country
(Tanzania). Although Tanzania is considered economically stable, it is always
possible that unanticipated events in foreign countries could disrupt the
Companys operations.
Comprehensive Loss
ASC 220, Comprehensive Income, establishes standards for the
reporting and display of comprehensive loss and its components in the
consolidated financial statements. As at March 31, 2011 and 2010, the Company
had no items that represent other comprehensive loss, and therefore has not
included a schedule of comprehensive loss in the consolidated financial
statements.
Income Taxes
The Company accounts for income taxes using the asset and
liability method in accordance with ASC 740, Income Taxes. The asset and
liability method provides that deferred tax assets and liabilities are
recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and for
operating loss and tax credit carryforwards. Deferred tax assets and liabilities
are measured using the currently enacted tax rates and laws that will be in
effect when the differences are expected to reverse. The Company records a
valuation allowance to reduce deferred tax assets to the amount that is believed
more likely than not to be realized.
Stock-Based Compensation
The Company records stock-based compensation in accordance with
ASC 718, Compensation Stock Based Compensation and ASC 505, Equity Based
Payments to Non-Employees, which requires the measurement and recognition of
compensation expense based on estimated fair values for all share-based awards
made to employees and directors, including stock options.
78
ASC 718 requires companies to estimate the fair value of
share-based awards on the date of grant using an option-pricing model. The
Company uses the Black-Scholes option-pricing model as its method of determining
fair value. This model is affected by the Companys stock price as well as
assumptions regarding a number of subjective variables. These subjective
variables include, but are not limited to the Companys expected stock price
volatility over the term of the awards, and actual and projected employee stock
option exercise behaviours. The value of the portion of the award that is
ultimately expected to vest is recognized as an expense in the statement of
operations over the requisite service period.
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.
Recent Accounting Pronouncements
In January 2010, the FASB issued Accounting Standards Update
(ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which
amends the ASC Topic 820, Fair Value Measurements and Disclosures. ASU No.
2010-06 amends the ASC to require disclosure of transfers into and out of Level
1 and Level 2 fair value measurements, and also requires more detailed
disclosure about the activity within Level 3 fair value measurements. The new
disclosures and clarifications of existing disclosures are effective for interim
and annual reporting periods beginning after December 15, 2009, except for the
disclosures concerning purchases, sales, issuances, and settlements in the roll
forward of activity in Level 3 fair value measurements. Those disclosures are
effective for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years. The adoption of this amendment is not
expected to have a material effect on the Companys financial statements.
The Company has evaluated all other recent accounting
pronouncements and determined that they would not have a material impact on the
Companys financial statements or disclosures.
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
|
We are a smaller reporting company as defined by Rule 12b-2 of
the Exchange Act and are not required to provide the information required under
this item
.
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.
|
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
|
March 31, 2011
|
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Lake Victoria
Mining Company, Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Lake Victoria
Mining Company, Inc. (An Exploration Stage Company) as of March 31, 2011 and the
related statements of operations, cash flows and stockholders deficit for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements as of March
31, 2010, and for the year then ended, were audited by another firm of
independent accountants, which expressed an audit opinion without reservation on
those financial statements in its report dated July 13, 2010. Our opinion,
insofar as it relates to the amounts included for the cumulative period from
December 11, 2006 (Date of Inception) to March 31, 2010, is based on the reports
of the other auditors.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of internal control over financial reporting. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, based on our audit and the report of other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Lake Victoria Mining Company, Inc.
(An Exploration Stage Company) as of March 31, 2011, and the results of its
operations, cash flows and stockholders deficit for the year then ended and
accumulated for the period from December 11, 2006 (Date of Inception) to March
31, 2011 in conformity with accounting principles generally accepted in the
United States.
/s/ “Manning Elliott LLP”
CHARTERED ACCOUNTANTS
Vancouver, Canada
July 14, 2011
F-2
To the Board of Directors and Stockholders of
Lake Victoria
Mining Company, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We have audited the accompanying consolidated balance sheet of
Lake Victoria Mining Company, Inc. (an exploration stage company) as of March
31, 2010, and the related consolidated statements of operations, stockholders
equity (deficit) and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Lake Victoria Mining Company, Inc. as of March 31, 2010, and the results of
their operations and their cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of
America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the consolidated financial statements, the Company has
suffered recurring losses and has an accumulated deficit at March 31, 2010.
These factors raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ BehlerMick PS
BehlerMick PS
Spokane,
Washington
July 13, 2010
F-3
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Consolidated Balance Sheets
|
(Expressed in US dollars)
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
$
|
|
|
$
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash
|
|
2,282,902
|
|
|
955,401
|
|
Advances and deposits (Note 3(g))
|
|
32,684
|
|
|
4,224
|
|
Amounts receivable (Note 7)
|
|
256,968
|
|
|
|
|
Advances to related party (Note 3)
|
|
499,043
|
|
|
499,043
|
|
Total Current Assets
|
|
3,071,597
|
|
|
1,458,668
|
|
Property and
Equipment (Note 4)
|
|
103,302
|
|
|
100,864
|
|
Total Assets
|
|
3,174,899
|
|
|
1,559,532
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
212,721
|
|
|
99,736
|
|
Accounts payable to related party (Note 3)
|
|
624,773
|
|
|
700,523
|
|
Acquisition liabilities
|
|
|
|
|
61,482
|
|
Accrued expenses
|
|
119,540
|
|
|
|
|
Other payables (Note 6)
|
|
4,386
|
|
|
29,178
|
|
Total Liabilities
|
|
961,420
|
|
|
890,919
|
|
|
|
|
|
|
|
|
Commitments (Note 11)
|
|
|
|
|
|
|
Subsequent Events (Note 12)
|
|
|
|
|
|
|
Stockholders Equity
|
|
|
|
|
|
|
Preferred Stock, 100,000,000 shares
authorized, $0.00001 par value;
No shares issued and outstanding (Note
8)
|
|
|
|
|
|
|
Common Stock, 250,000,000 shares authorized, $0.00001 par
value;
96,346,900 shares issued and outstanding (2010 - 67,871,225)
(Note 8)
|
|
964
|
|
|
679
|
|
Additional Paid-in Capital
|
|
15,620,475
|
|
|
9,110,183
|
|
Subscription Receivable
|
|
|
|
|
(20,000
|
)
|
Common Stock and Warrants Issuable (Notes
8(b))
|
|
35,000
|
|
|
|
|
Deficit
Accumulated During the Exploration Stage
|
|
(13,442,960
|
)
|
|
(8,422,249
|
)
|
Total Stockholders Equity
|
|
2,213,479
|
|
|
668,613
|
|
Total Liabilities
and Stockholders Equity
|
|
3,174,899
|
|
|
1,559,532
|
|
The accompanying notes are an integral part of these consolidated
financial statements
F-4
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Consolidated Statements of Operations
|
(Expressed in US dollars)
|
|
|
|
|
|
|
|
|
Accumulated From
|
|
|
|
For the
|
|
|
For the
|
|
|
December 11, 2006
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
(Date of Inception) to
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Amortization and depreciation
|
|
24,221
|
|
|
10,727
|
|
|
38,102
|
|
Exploration costs (Note 7)
|
|
1,194,934
|
|
|
803,810
|
|
|
3,012,912
|
|
General and administrative
|
|
432,154
|
|
|
1,455,998
|
|
|
2,100,981
|
|
Impairment of mineral property
acquisition costs (Note 7)
|
|
742,180
|
|
|
3,935,611
|
|
|
11,143,091
|
|
Management and director fees
|
|
102,000
|
|
|
198,017
|
|
|
524,017
|
|
Professional and consulting
fees
|
|
831,947
|
|
|
1,455,922
|
|
|
3,295,619
|
|
Stock-based compensation (Note 9)
|
|
1,593,989
|
|
|
|
|
|
1,593,989
|
|
Travel and accommodation
|
|
22,511
|
|
|
114,842
|
|
|
332,631
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
4,943,936
|
|
|
7,974,927
|
|
|
22,041,342
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
(4,943,936
|
)
|
|
(7,974,927
|
)
|
|
(22,041,342
|
)
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses)
|
|
|
|
|
|
|
|
|
|
Gain on long-term investments
|
|
|
|
|
10,000
|
|
|
5,000
|
|
Foreign exchange loss
|
|
(15,612
|
)
|
|
(70,153
|
)
|
|
(85,764
|
)
|
Interest income
|
|
3,112
|
|
|
1,133
|
|
|
8,587
|
|
Interest expense
|
|
(523
|
)
|
|
(522
|
)
|
|
(1,045
|
)
|
Loss on debt settlement
|
|
(63,752
|
)
|
|
|
|
|
(63,752
|
)
|
Other income
|
|
|
|
|
|
|
|
15,900
|
|
Total Other Income
(Expenses)
|
|
(76,775
|
)
|
|
(59,542
|
)
|
|
(121,074
|
)
|
Net loss
|
|
(5,020,711
|
)
|
|
(8,034,469
|
)
|
|
(22,162,416
|
)
|
Net loss
attributable to non-controlling interest
|
|
|
|
|
1,927,226
|
|
|
8,719,456
|
|
Net Loss Attributable to the Company
|
|
(5,020,711
|
)
|
|
(6,107,243
|
)
|
|
(13,442,960
|
)
|
Net Loss Per Share
Basic and Diluted
|
|
(0.07
|
)
|
|
(0.12
|
)
|
|
|
|
Weighted Average Shares Outstanding
|
|
73,469,406
|
|
|
49,105,191
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements
F-5
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Consolidated Statements of Cash Flows
|
(Expressed in US dollars)
|
|
|
For the
|
|
|
For the
|
|
|
Accumulated From
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
December 11, 2006
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
(Date of Inception)
|
|
|
|
2011
|
|
|
2010
|
|
|
to
March 11, 2011
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
(5,020,711
|
)
|
|
(6,107,243
|
)
|
|
(13,442,960
|
)
|
Adjustments to reconcile net loss to cash
used in operating activities
|
|
|
|
|
|
|
|
|
|
Amortization and depreciation
|
|
24,221
|
|
|
10,727
|
|
|
38,102
|
|
Loss in subsidiary attributed
to non-controlling interest
|
|
|
|
|
(1,927,226
|
)
|
|
(8,719,456
|
)
|
Restructuring charges
|
|
|
|
|
(110,029
|
)
|
|
(110,019
|
)
|
Impairment of mineral property
acquisition cost
|
|
742,180
|
|
|
3,935,611
|
|
|
11,143,091
|
|
Gain on long-term investments
|
|
|
|
|
(10,000
|
)
|
|
(5,000
|
)
|
Loss on debt settlement
|
|
63,752
|
|
|
-
|
|
|
63,751
|
|
Share payment for consulting services
|
|
207,475
|
|
|
2,292,623
|
|
|
2,697,598
|
|
Directors' compensation share
payments
|
|
|
|
|
35,000
|
|
|
35,000
|
|
Stock-based compensation
|
|
1,593,989
|
|
|
-
|
|
|
1,593,989
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Increase in advances and deposits
|
|
(28,460
|
)
|
|
(423
|
)
|
|
(32,684
|
)
|
Increase in amounts receivable
|
|
(256,968
|
)
|
|
-
|
|
|
(256,968
|
)
|
Decrease in advances to related party
|
|
|
|
|
978,837
|
|
|
(499,043
|
)
|
Increase(Decrease) in amounts
due to related parties
|
|
(75,750
|
)
|
|
(238,518
|
)
|
|
624,773
|
|
Increase in accounts payable and accrued
liabilities
|
|
112,986
|
|
|
500,973
|
|
|
212,726
|
|
Decrease in accrued expenses
|
|
58,055
|
|
|
(125,000
|
)
|
|
119,539
|
|
Decrease in other payables
|
|
(24,792
|
)
|
|
29,178
|
|
|
4,386
|
|
Net Cash Provided By (Used In) Operating Activities
|
|
(2,604,021
|
)
|
|
(735,492
|
)
|
|
(6,533,175
|
)
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
(26,658
|
)
|
|
(103,269
|
)
|
|
(141,403
|
)
|
Cash payment for acquisition
of mineral properties
|
|
(742,180
|
)
|
|
(2,135,611
|
)
|
|
(3,462,791
|
)
|
Proceeds of subsidiary stock issuances
|
|
|
|
|
|
|
|
1,600,300
|
|
Purchase of investment
|
|
|
|
|
|
|
|
(5,000
|
)
|
Proceeds from sale of investments
|
|
|
|
|
10,000
|
|
|
10,000
|
|
Net Cash Used In Investing Activities
|
|
(768,838
|
)
|
|
(2,228,880
|
)
|
|
(1,998,894
|
)
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from note payable
|
|
12,750
|
|
|
|
|
|
12,750
|
|
Repayment of note payable
|
|
(12,750
|
)
|
|
|
|
|
(12,750
|
)
|
Proceeds from issuance of stock, net
|
|
4,700,360
|
|
|
3,389,205
|
|
|
10,828,971
|
|
Payment for cancellation of
stock
|
|
|
|
|
|
|
|
(14,000
|
)
|
Related party payable proceeds
|
|
|
|
|
|
|
|
420
|
|
Related party payable payments
|
|
|
|
|
|
|
|
(420
|
)
|
Net Cash Provided
By Financing Activities
|
|
4,700,360
|
|
|
3,389,205
|
|
|
10,814,971
|
|
Net Increase In Cash
|
|
1,327,501
|
|
|
424,832
|
|
|
2,282,902
|
|
Cash at Beginning
of Period
|
|
955,401
|
|
|
530,570
|
|
|
|
|
Cash at End of Period
|
|
2,282,902
|
|
|
955,401
|
|
|
2,282,902
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash Investing and Financing Activities
|
|
|
|
|
|
|
|
|
|
Stock issued for services
|
|
41,000
|
|
|
2,292,623
|
|
|
2,333,623
|
|
Stock issued for subscription
receivable
|
|
|
|
|
20,000
|
|
|
33,275
|
|
Stock issued to settle debt
|
|
230,227
|
|
|
|
|
|
230,227
|
|
Investment acquired for amount payable
|
|
|
|
|
8,000
|
|
|
8,030
|
|
Receivable exchange for long-term investment
|
|
|
|
|
10,000
|
|
|
10,000
|
|
Share payments for mineral
interest acquisition costs
|
|
|
|
|
1,800,000
|
|
|
7,680,300
|
|
Accounts receivable exchanged for mineral
property acquisition
|
|
|
|
|
1,039,981
|
|
|
1,039,981
|
|
Accounts receivable exchanged for long-term
investment
|
|
|
|
|
460,019
|
|
|
460,019
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
523
|
|
|
522
|
|
|
1,045
|
|
Income taxes paid
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements
F-6
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Consolidated Statements of Stockholders Equity (Deficit)
|
(Expressed in US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Deficit During
|
|
|
Stockholders'
|
|
|
Non-
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Subscription
|
|
|
Stock
|
|
|
Exploration
|
|
|
Equity
|
|
|
Controlling
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Receivable
|
|
|
Issuable
|
|
|
Stages
|
|
|
(Deficit)
|
|
|
Interest
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Balance, at December 12, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in December for cash at $0.001 per
share
|
|
14,730,000
|
|
|
147
|
|
|
12,128
|
|
|
(9,775
|
)
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
Common stock issued in February for
consulting service provided at $0.10 per share
|
|
2,370,000
|
|
|
24
|
|
|
197,476
|
|
|
|
|
|
|
|
|
|
|
|
197,500
|
|
|
|
|
Subsidiary equity interest purchased in March by
non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Net loss for period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(294,102
|
)
|
|
(294,102
|
)
|
|
(7,441
|
)
|
Balance, at March 31, 2007
|
|
17,100,000
|
|
|
171
|
|
|
209,604
|
|
|
(9,775
|
)
|
|
|
|
|
(294,102
|
)
|
|
(94,102
|
)
|
|
(7,431
|
)
|
Common stock issued in April for cash at
$0.10 per share
|
|
5,172,000
|
|
|
52
|
|
|
430,948
|
|
|
(3,500
|
)
|
|
|
|
|
|
|
|
427,500
|
|
|
|
|
Common stock issued in October for cash at $0.75 per share
|
|
2,201,923
|
|
|
22
|
|
|
1,375,748
|
|
|
|
|
|
|
|
|
|
|
|
1,375,770
|
|
|
|
|
Common stock issued in November for cash at
$0.75 per share
|
|
48,000
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
As of October, Subsidiary equity interest purchased by non-
controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,300
|
|
Miscellaneous adjustments to Equity
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
|
Common stock issued in February for cash at $0.75 per share
|
|
60,720
|
|
|
1
|
|
|
37,949
|
|
|
|
|
|
|
|
|
|
|
|
37,950
|
|
|
|
|
Net loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(619,622
|
)
|
|
(619,622
|
)
|
|
(8,705
|
)
|
Balance, March 31, 2008
|
|
24,582,643
|
|
|
246
|
|
|
2,084,249
|
|
|
(13,280
|
)
|
|
|
|
|
(913,724
|
)
|
|
1,157,491
|
|
|
84,164
|
|
Common stock issued in April for cash at
$0.75 per share
|
|
208,000
|
|
|
2
|
|
|
129,998
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
|
Common stock issued in December for cash at $0.50 per share
|
|
1,765,765
|
|
|
18
|
|
|
735,667
|
|
|
|
|
|
|
|
|
|
|
|
735,684
|
|
|
|
|
As of May, Subsidiary equity interest
purchased by non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
F-7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Deficit During
|
|
|
Stockholders'
|
|
|
Non-
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Subscription
|
|
|
Stock
|
|
|
Exploration
|
|
|
Equity
|
|
|
Controlling
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Receivable
|
|
|
Issuable
|
|
|
Stages
|
|
|
(Deficit)
|
|
|
Interest
|
|
As of November, Subsidiary equity interest purchased by
non- controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
As of November, Subsidiary equity interest
purchased by non- controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
Subsidiary equity interest issued in December for mineral
properties acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,350,300
|
|
Common stock cancelled for refund at $0.50
per share
|
|
(33,600
|
)
|
|
|
|
|
(14,000
|
)
|
|
|
|
|
|
|
|
|
|
|
(14,000
|
)
|
|
|
|
Subsidiary equity interest issued in January for mineral
properties acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,690,000
|
|
Subsidiary equity interest issued in
January for mineral properties acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,840,000
|
|
Net loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,401,282
|
)
|
|
(1,401,282
|
)
|
|
(6,776,084
|
)
|
Balance, March 31, 2009
|
|
26,522,808
|
|
|
266
|
|
|
2,935,914
|
|
|
(13,280
|
)
|
|
|
|
|
(2,315,006
|
)
|
|
607,894
|
|
|
688,380
|
|
Subsidiary equity interest issued in April for directors
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
Common stock issued in May for mineral
properties acquisition
|
|
6,211,500
|
|
|
62
|
|
|
2,588,063
|
|
|
|
|
|
|
|
|
|
|
|
2,588,125
|
|
|
|
|
Common stock issued in June for cash at $0.25 per share
|
|
1,747,200
|
|
|
17
|
|
|
363,983
|
|
|
|
|
|
|
|
|
|
|
|
364,000
|
|
|
|
|
Common stock issued in June for consulting
service provided
|
|
186,000
|
|
|
2
|
|
|
38,748
|
|
|
|
|
|
|
|
|
|
|
|
38,750
|
|
|
|
|
Common stock issued in June for consulting service provided
|
|
1,186,200
|
|
|
12
|
|
|
322,113
|
|
|
|
|
|
|
|
|
|
|
|
322,125
|
|
|
|
|
Common stock issued in June for consulting
service provided
|
|
1,620,720
|
|
|
16
|
|
|
337,634
|
|
|
|
|
|
|
|
|
|
|
|
337,650
|
|
|
|
|
Common stock issued in June for consulting service provided
|
|
179,122
|
|
|
2
|
|
|
59,705
|
|
|
|
|
|
|
|
|
|
|
|
59,706
|
|
|
|
|
Subsidiary equity interest issued in June
for mineral properties acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800,000
|
|
As of August, loss attributable to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,927,226
|
)
|
As of August, Reverse acquisition
restructuring of the non-controlling interest and investment held by
parent company
|
|
18,198,000
|
|
|
182
|
|
|
(2,102,180
|
)
|
|
5
|
|
|
|
|
|
|
|
|
(2,101,993
|
)
|
|
(596,154
|
)
|
F-8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Deficit During
|
|
|
Stockholders'
|
|
|
Non-
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Subscription
|
|
|
Stock
|
|
|
Exploration
|
|
|
Equity
|
|
|
Controlling
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Receivable
|
|
|
Issuable
|
|
|
Stages
|
|
|
(Deficit)
|
|
|
Interest
|
|
Common stock attached with warrants to be
issued in September for cash at $0.60 per share
|
|
200,000
|
|
|
2
|
|
|
119,998
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
Common stock issued in November for consulting service
provided
|
|
255,000
|
|
|
3
|
|
|
152,997
|
|
|
|
|
|
|
|
|
|
|
|
153,000
|
|
|
|
|
Common stock issued in November for
consulting service provided
|
|
201,250
|
|
|
2
|
|
|
120,748
|
|
|
|
|
|
|
|
|
|
|
|
120,750
|
|
|
|
|
Common stock issued in November for consulting service
provided
|
|
1,450,000
|
|
|
15
|
|
|
1,217,986
|
|
|
|
|
|
|
|
|
|
|
|
1,218,000
|
|
|
|
|
Common stock issued in December for
consulting service provided
|
|
68,775
|
|
|
1
|
|
|
42,639
|
|
|
|
|
|
|
|
|
|
|
|
42,640
|
|
|
|
|
Common stock attached with warrants issued
|
|
2,501,001
|
|
|
25
|
|
|
1,454,679
|
|
|
|
|
|
|
|
|
|
|
|
1,454,704
|
|
|
|
|
Received subscription payment
|
|
|
|
|
|
|
|
|
|
|
13,275
|
|
|
|
|
|
|
|
|
13,275
|
|
|
|
|
Common stock attached with warrants issuable for private
placement at $0.20 per share
|
|
7,343,650
|
|
|
73
|
|
|
1,457,157
|
|
|
(20,000
|
)
|
|
|
|
|
|
|
|
1,437,230
|
|
|
|
|
Net loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,107,243
|
)
|
|
(6,107,243
|
)
|
|
|
|
Balance, at March 31, 2010
|
|
67,871,225
|
|
|
679
|
|
|
9,110,183
|
|
|
(20,000
|
)
|
|
|
|
|
(8,422,249
|
)
|
|
668,613
|
|
|
|
|
Common stock attached with warrants issued
in May for cash at $0.20 per share
|
|
3,129,350
|
|
|
31
|
|
|
625,839
|
|
|
|
|
|
|
|
|
|
|
|
625,870
|
|
|
|
|
Common stock issued in April to settle debt
|
|
153,525
|
|
|
2
|
|
|
58,338
|
|
|
|
|
|
|
|
|
|
|
|
58,340
|
|
|
|
|
Common stock issued in April to settle debt
|
|
85,000
|
|
|
1
|
|
|
34,849
|
|
|
|
|
|
|
|
|
|
|
|
34,850
|
|
|
|
|
Common stock attached with warrants issued in May for cash
at $0.20 per share
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
Common stock attached with warrants issued
in August for cash at $0.225 per share, net of cost of $23,416
|
|
4,790,700
|
|
|
48
|
|
|
1,054,442
|
|
|
|
|
|
|
|
|
|
|
|
1,054,490
|
|
|
|
|
Common stock issued in October to settle debt
|
|
217,100
|
|
|
2
|
|
|
102,036
|
|
|
|
|
|
|
|
|
|
|
|
102,038
|
|
|
|
|
Stock options granted to directors and
officers and consultant
|
|
|
|
|
|
|
|
1,593,989
|
|
|
|
|
|
|
|
|
|
|
|
1,593,989
|
|
|
|
|
Common stock issued in November for consulting services
|
|
100,000
|
|
|
1
|
|
|
40,999
|
|
|
|
|
|
|
|
|
|
|
|
41,000
|
|
|
|
|
Common stock issuable in February to settle debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
35,000
|
|
|
|
|
F-9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Deficit During
|
|
|
Stockholders'
|
|
|
Non-
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Subscription
|
|
|
Stock
|
|
|
Exploration
|
|
|
Equity
|
|
|
Controlling
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Receivable
|
|
|
Issuable
|
|
|
Stages
|
|
|
(Deficit)
|
|
|
Interest
|
|
Common stock attached with warrants issued
in March for cash at $0.15 per share
|
|
20,000,000
|
|
|
200
|
|
|
2,999,800
|
|
|
|
|
|
|
|
|
|
|
|
3,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5020,711
|
)
|
|
(5020,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, at March 31, 2011
|
|
96,346,900
|
|
|
964
|
|
|
15,620,475
|
|
|
|
|
|
35,000
|
|
|
(13,442,960
|
)
|
|
2,213,479
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-10
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
1.
|
Nature of Operations
|
|
|
|
|
Lake Victoria Mining Company, Inc. (the “Company”) was incorporated on December 11, 2006 under the laws of the State of Nevada. The Company’s administrative office is located in Vancouver, Canada. The Company is an Exploration Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has been in the exploration stage since inception and has not yet realized any revenues from its planned operations.
|
|
|
|
|
The principal business of the Company is to search for
mineral deposits or reserves which are not in either the development or
production stage. The Company is conducting exploration activities on gold
and uranium properties located in Tanzania.
|
|
|
|
|
As of March 31, 2011, none of the Company’s mineral property interests had proven or probable reserves as determined under the requirements of SEC Industry Guide No. 7. Planned principal activities have not yet begun. The ability of the Company to emerge from the exploration stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional debt or equity financing and/or attain profitable mining operations. As shown in the accompanying financial statements, the Company has an accumulated deficit of $13,442,960 incurred through March 31, 2011. The Company has no revenues. Management intends to seek additional capital from new equity securities offerings that will provide funds needed to continue the exploration for gold and uranium. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern. The Company expects to be able to meet its necessary cash outflows for the next twelve months from working capital at March 31, 2011.
|
|
|
|
2.
|
Summary of Significant Accounting Policies
|
|
|
|
|
a)
|
Basis of Presentation
|
|
|
|
|
|
These consolidated financial statements and related notes
are presented in accordance with accounting principles generally accepted
in the United States, and are expressed in U.S. dollars. These
consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Kilimanjaro Mining Company, Inc.
(Kilimanjaro) and Lake Victoria Resources Company, (T) Ltd. Significant
intercompany accounts and transactions have been eliminated. The Companys
fiscal year-end is March 31.
|
|
|
|
|
b)
|
Use of Estimates
|
|
|
|
|
|
The preparation of financial statements in accordance
with United States generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses in the reporting period.
The Company regularly evaluates estimates and assumptions related to
long-lived assets, mineral property costs, asset retirement obligations,
stock-based compensation, financial instrument valuations and deferred
income tax asset valuations. The Company bases its estimates and
assumptions on current facts, historical experience and various other
factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying
values of assets and liabilities and the accrual of costs and expenses
that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the
Companys estimates. To the extent there are material differences between
the estimates and the actual results, future results of operations will be
affected.
|
|
|
|
|
c)
|
Business Combinations
|
|
|
|
|
|
The Company follows the guidance in ASC 805, Business
Combinations, and ASC 810, Consolidation. The net loss attributable to
non-controlling interest recognized during the year ended March 31, 2010
was previously the minority interest held by certain passive shareholders
at the consolidated financial statement level of Kilimanjaro, and whose
interests were eliminated for accounting purposes by the August 7, 2009
share exchange agreement. The Company, after August 7, 2009, had no
further non-controlling interests.
|
|
|
|
|
|
For the years ended March 31, 2011 and 2010, losses of
$nil and $1,927,226 respectively, were recognized as being attributed to
the non-controlling interest of the Companys controlled
subsidiary.
|
F-11
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
2.
|
Summary of Significant Accounting Policies
(continued)
|
|
|
|
|
d)
|
Basic and Diluted Net Income (Loss) Per Share
|
|
|
|
|
|
The Company computes net income (loss) per share in
accordance with ASC 260, Earnings per Share, which requires presentation
of both basic and diluted earnings per share (EPS) on the face of the
income statement. Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS
gives effect to all dilutive potential common shares outstanding during
the period using the treasury stock method and convertible preferred stock
using the if-converted method. In computing diluted EPS, the average stock
price for the period is used in determining the number of shares assumed
to be purchased from the exercise of stock options or warrants. Diluted
EPS excludes all dilutive potential shares if their effect is anti
dilutive. As of March 31, 2011 and 2010, the Company had 45,604,901 and
13,006,651, respectively, potentially dilutive securities
outstanding.
|
|
|
|
|
e)
|
Cash and Cash Equivalents
|
|
|
|
|
|
The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be cash
equivalents.
|
|
|
|
|
|
As of March 31, 2011 and 2010, the Company has
approximately $2,234,000 and $850,435, respectively, deposited at FDIC
insured banks in the United States. FDIC deposit insurance covers the
balance of each depositors account up to $250,000 per insured bank. As of
March 31, 2011, the Company has Tanzania shillings of 19,595,000
(approximately $12,700 USD) and $35,800 deposited in Tanzania. The Deposit
Insurance Board in Tanzania insures up to 1,500,000 Tanzanian Shillings
(approximately $975 USD as of March 31, 2011) per customer per bank. Any
amount beyond the basic insurance amount may expose the Company to
loss.
|
|
|
|
|
f)
|
Property and Equipment
|
|
|
|
|
|
Property and equipment consists of mining tools and
equipment, furniture and equipment and computers and software which are
depreciated on a straight line basis over their expected lives of five
years.
|
|
|
|
|
g)
|
Mineral Property Costs
|
|
|
|
|
|
Under US GAAP mineral property acquisition costs are
ordinarily capitalized when incurred using FASB ASC Topic 805-20-55-37,
whether Mineral Rights are Tangible or Intangible Assets. The carrying
costs are assessed for impairment under ASC Topic 360-36-10-35-20,
Accounting for Impairment or Disposal of Long- Lived Assets, whenever
events or changes in circumstances indicate that the carrying costs may
not be recoverable. The Company expenses as incurred all property
maintenance and exploration costs.
|
|
|
|
|
|
The Company also evaluates the carrying value of acquired
mineral property rights in accordance with ASC Topic 930-360-35-1, Mining
Assets: Impairment and Business Combinations, using the Value Beyond
Proven and Probable (VBPP) method. The fair value of a mining asset
generally includes both VBPP and an estimate of the future market price of
the minerals.
|
|
|
|
|
|
When the Company has capitalized mineral property costs,
these properties will be periodically assessed for impairment of value.
Once a property reaches the production stage, the related capitalized
costs will be amortized, using the units of production method. During the
years ended March 31, 2011 and 2010, management determined that the
carrying amounts of mineral property acquisition costs were not
recoverable and therefore, were written down to their estimated fair
values of $nil. The Company has recognized impairment charges of $742,180
and $3,935,611 for the years ended at March 31, 2011 and 2010,
respectively.
|
|
|
|
|
h)
|
Long-Lived Assets
|
|
|
|
|
|
In accordance with ASC 360, Property Plant and Equipment
the Company tests long-lived assets or asset groups for recoverability
when events or changes in circumstances indicate that their carrying
amount may not be recoverable. Circumstances which could trigger a review
include, but are not limited to: significant decreases in the market price
of the asset; significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the amount
originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of
losses or a forecast of continuing losses associated with the use of the
asset; and current expectation that the asset will more likely than not be
sold or disposed significantly before the end of its estimated useful
life. Recoverability is assessed based on the carrying amount of the asset
and the sum of the undiscounted cash flows expected to result from the use
and the eventual disposal of the asset, as well as specific appraisal in
certain instances. An impairment loss is recognized when the carrying
amount is not recoverable and exceeds fair value.
|
F-12
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
2.
|
Summary of Significant Accounting Principles
(continued)
|
|
|
|
|
i)
|
Asset Retirement Obligations
|
|
|
|
|
|
The Company accounts for asset retirement obligations in
accordance with the provisions of ASC 440, Asset Retirement and
Environmental Obligations which requires the Company to record the fair
value of an asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the retirement of
tangible long-lived assets that result from the acquisition, construction,
development and/or normal use of the assets. The Company did not have any
asset retirement obligations as of March 31, 2011.
|
|
|
|
|
j)
|
Financial Instruments
|
|
|
|
|
|
ASC 825, Financial Instruments requires an entity to
maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. ASC 825 establishes a fair value
hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial
instruments categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value
measurement. ASC 825 prioritizes the inputs into three levels that may be
used to measure fair value:
|
|
|
|
|
|
Level 1
|
|
|
|
|
|
Level 1 applies to assets or liabilities for which there
are quoted prices in active markets for identical assets or
liabilities.
|
|
|
|
|
|
Level 2
|
|
|
|
|
|
Level 2 applies to assets or liabilities for which there
are inputs other than quoted prices that are observable for the asset or
liability such as quoted prices for similar assets or liabilities in
active markets; quoted prices for identical assets or liabilities in
markets with insufficient volume or infrequent transactions (less active
markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by,
observable market data.
|
|
|
|
|
|
Level 3
|
|
|
|
|
|
Level 3 applies to assets or liabilities for which there
are unobservable inputs to the valuation methodology that are significant
to the measurement of the fair value of the assets or
liabilities.
|
|
|
|
|
|
The Companys financial instruments consist principally
of cash, advances and deposits, amounts receivable, advances to related
party, accounts payable, accounts payable to related party and other
payables.
|
|
|
|
|
|
Pursuant to ASC 825, the fair value of cash is determined
based on Level 1 inputs, which consist of quoted prices in active
markets for identical assets. The Company believes that the recorded
values of advances and deposits, amounts receivable, advances to related
party, accounts payable, accounts payable to related party and other
payables approximate their current fair values because of their nature and
respective relatively short maturity dates or durations.
|
|
|
|
|
|
Assets measured at fair value on a recurring basis were
presented on the Companys balance sheet as of March 31, 2011 as
follows:
|
|
|
|
Fair Value Measurements Using
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
|
Active Markets
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
|
For Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
Balance
|
|
|
|
|
Instruments
|
|
|
Inputs
|
|
|
Inputs
|
|
|
March 31,
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
2011
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
2,282,902
|
|
|
|
|
|
|
|
|
2,282,902
|
|
F-13
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
2.
|
Summary of Significant Accounting Policies
(continued)
|
|
|
|
|
k)
|
Foreign Currency Translation
|
|
|
|
|
|
The Companys functional and reporting currency is the
United States dollar. Monetary assets and liabilities denominated in
foreign currencies are translated to United States dollars in accordance
with ASC 740, Foreign Currency Matters, using the exchange rate prevailing
at the balance sheet date. Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are
included in the determination of income.
|
|
|
|
|
|
To the extent that the Company incurs transactions that
are not denominated in its functional currency, they are undertaken in
Canadian dollars and the Tanzanian Schilling. A portion of business
transactions in Tanzania and mineral option purchase agreements are
denominated in the Tanzanian Schilling. The Company has not, to the date
of these financials statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.
|
|
|
|
|
l)
|
Segment Information
|
|
|
|
|
|
At March 31, 2011, $82,900 of property and equipment is
located in Tanzania and $20,402 in Canada. Although Tanzania is considered
economically stable, it is always possible that unanticipated events in
foreign countries could disrupt the Companys operations.
|
|
|
|
|
m)
|
Comprehensive Loss
|
|
|
|
|
|
ASC 220, Comprehensive Income, establishes standards for
the reporting and display of other comprehensive loss and its components
in the consolidated financial statements. As at March 31, 2011 and 2010,
the Company had no items that represent other comprehensive loss, and
therefore has not included a schedule of comprehensive loss in the
consolidated financial statements.
|
|
|
|
|
n)
|
Income Taxes
|
|
|
|
|
|
The Company accounts for income taxes using the asset and
liability method in accordance with ASC 740, Income Taxes. The asset and
liability method provides that deferred tax assets and liabilities are
recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and
liabilities, and for operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using the currently enacted tax
rates and laws that will be in effect when the differences are expected to
reverse. The Company records a valuation allowance to reduce deferred tax
assets to the amount that is believed more likely than not to be
realized.
|
|
|
|
|
o)
|
Stock-Based Compensation
|
|
|
|
|
|
The Company records stock-based compensation in
accordance with ASC 718, Compensation Stock Based Compensation and ASC
505, Equity Based Payments to Non-Employees, which requires the
measurement and recognition of compensation expense based on estimated
fair values for all share-based awards made to employees and directors,
including stock options.
|
|
|
|
|
|
ASC 718 requires companies to estimate the fair value of
share-based awards on the date of grant using an option-pricing model. The
Company uses the Black-Scholes option-pricing model as its method of
determining fair value. This model is affected by the Companys stock
price as well as assumptions regarding a number of subjective variables.
These subjective variables include, but are not limited to the Companys
expected stock price volatility over the term of the awards, and actual
and projected employee stock option exercise behaviours. The value of the
portion of the award that is ultimately expected to vest is recognized as
an expense in the statement of operations over the requisite service
period.
|
|
|
|
|
|
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.
|
F-14
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
2.
|
Summary of Significant Accounting Policies
(continued)
|
|
|
|
|
p)
|
Recent Accounting Pronouncements
|
|
|
|
|
|
In January 2010, the FASB issued Accounting Standards
Update (ASU) No. 2010-06, Improving Disclosures about Fair Value
Measurements, which amends the ASC Topic 820, Fair Value Measurements and
Disclosures. ASU No. 2010-06 amends the ASC to require disclosure of
transfers into and out of Level 1 and Level 2 fair value measurements, and
also requires more detailed disclosure about the activity within Level 3
fair value measurements. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures
concerning purchases, sales, issuances, and settlements in the roll
forward of activity in Level 3 fair value measurements. Those disclosures
are effective for fiscal years beginning after December 15, 2010, and for
interim periods within those fiscal years. The adoption of this amendment
is not expected to have a material effect on the Companys financial
statements.
|
|
|
|
|
|
The Company has evaluated all other recent accounting
pronouncements and determined that they would not have a material impact
on the Companys financial statements or disclosures.
|
|
|
|
|
q)
|
Reclassifications
|
|
|
|
|
|
Certain reclassifications have been made to the prior
periods financial statements to conform to the current periods
presentation.
|
|
|
|
3.
|
Related Party Transactions and Balances
|
|
|
|
|
a)
|
Prior to incorporation of the Companys wholly-owned
subsidiary in Tanzania, the Company contracted with Geo Can Resources
Company Ltd (Geo Can), a related company with a shared common director, to
perform exploration services on all of the properties. As of March 31,
2011, the Company owed $624,773 (2010 - $700,523) to Geo Can for
exploration services provided. The amounts are non-interest bearing,
unsecured and due on demand.
|
|
|
|
|
|
The Company, through its subsidiary Kilimanjaro Mining
Company, advanced funds to Geo Can Resources Company to find mineral
property interests in Tanzania. As of March 31, 2011 and 2010, the Company
had advanced $499,043 to Geo Can. The advances bear no interest, are
unsecured and are due on demand. The advances have not been offset against
payables nor have any encumbrances been reported to the Company.
|
|
|
|
|
b)
|
At March 31, 2011, the Company owed $6,251 (2010 - $nil)
of consulting fees to the President of the Company which has been included
in accounts payable. During the twelve months ended March 31, 2011, the
Company incurred $54,000 (2010 - $46,084) of consulting fees to the
President of the Company.
|
|
|
|
|
c)
|
At March 31, 2011, the Company owed $3,500 (2010 - $nil)
of management fees to a director of the Company which has been included in
accounts payable. During the twelve months ended March 31, 2011, the
Company incurred $102,000 (2010 - $155,750) of management fees to the
director.
|
|
|
|
|
d)
|
At March 31, 2011, the Company owed $3,000 (2010 - $nil) of director fees to a director of the Company which has been included in accounts payable. During the twelve months ended March 31, 2011, the Company incurred $15,000 (2010 - $11,000) of directors fees to the director.
|
|
|
|
|
e)
|
At March 31, 2011, the Company owed $2,450 (2010 - $nil)
of accounting fees to an individual related to an officer of the Company
which has been included in accounts payable. During the twelve months
ended March 31, 2011, the Company incurred $3,150 (2010 - $nil) of
accounting fees to the individual.
|
|
|
|
|
f)
|
During the twelve months ended March 31, 2011, the
Company incurred $81,000 (2010 - $125,000) of geologist consulting fees to
a director of the Company.
|
|
|
|
|
g)
|
As at March 31, 2011, the Company held $9,710 in trust
with a Company sharing a common director, which has been included in
advances and deposits.
|
F-15
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
4.
|
Property and Equipment
|
|
|
|
At March 31, 2011 and March 31, 2010, property and
equipment consisted of the following:
|
|
|
|
As at March 31, 2011
|
|
|
As at March 31, 2010
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
|
Cost
|
|
|
Amortization
|
|
|
Value
|
|
|
Cost
|
|
|
Amortization
|
|
|
Value
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Mining tools and equipment
|
|
101,495
|
|
|
25,278
|
|
|
76,217
|
|
|
87,360
|
|
|
7,280
|
|
|
80,080
|
|
|
Furniture and equipment
|
|
10,101
|
|
|
1,794
|
|
|
8,307
|
|
|
4,489
|
|
|
612
|
|
|
3,877
|
|
|
Computer and software
|
|
29,808
|
|
|
11,030
|
|
|
18,778
|
|
|
22,896
|
|
|
5,989
|
|
|
16,907
|
|
|
|
|
141,404
|
|
|
38,102
|
|
|
103,302
|
|
|
114,745
|
|
|
13,881
|
|
|
100,864
|
|
5.
|
Note Payable
|
|
|
|
On May 22, 2010, the Company signed a finance agreement
for payment of insurance in the amount of $12,750 at an annual rate of
9.99% for a ten month period, payable in monthly instalments of $1,334. On
October 27, 2010, the Company paid the balance in full.
|
|
|
6.
|
Other Payables
|
|
|
|
As of March 31, 2011 and 2010, one subsidiary of the
Company withheld payroll deductions of $4,386 and $29,178, respectively,
to conform to local tax law.
|
|
|
7.
|
Mineral Property Acquisition and Exploration
Costs
|
|
|
|
On May 4, 2009, Kilimanjaro completed a Property
Acquisition Agreement (the Geo Can Agreement) with Geo Can (a related
party, see Note 3). Under the terms of the agreement Kilimanjaro acquired
a 100% interest in the mineral property assets, which included 33 gold
prospecting licenses and 13 uranium licenses. Included in this agreement
were the Kalemela projects licenses, Geita projects license, Uyowa
Projects licenses and Kinyambwiga projects license and other projects
licences. Geo Can had entered into property option agreements, regarding
some of these resource properties, with Lake Victoria before the share
exchange agreement between Lake Victoria and Kilimanjaro on August 7,
2009, as a consequence Geo Can no longer has any interest in those prior
property agreements.
|
|
|
|
The mineral property acquisition costs are capitalized
and the carrying values are periodically assessed for impairment of value
and any diminution in value. When a property reaches the development
stage, the related costs will be capitalized and amortized, using the
units of production method on the basis of periodic estimates of ore
reserves. Costs to maintain the mineral rights and leases are expensed as
incurred.
|
|
|
|
All of the Companys mineral property interests are
located in Tanzania. Geo Can holds resource properties in trust for the
Company. Most of the resource property interests are still formally
registered to Geo Can to save on registration fees. When the annual filing
for each property comes due then the formal registration of each property
will be transferred to Kilimanjaro or as directed by
Kilimanjaro.
|
|
|
|
The following is a continuity of mineral property
acquisition costs accumulated from inception:
|
|
|
|
Kalemela
|
|
|
Geita
|
|
|
Kinyambwiga
|
|
|
Singida
|
|
|
Other
|
|
|
|
|
|
|
|
Gold Project
|
|
|
Project
|
|
|
Project
|
|
|
Project
|
|
|
Projects
|
|
|
Total
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
|
|
|
|
|
|
Balance, March 31, 2009
|
|
3,575,300
|
|
|
2,730,000
|
|
|
|
|
|
|
|
|
160,000
|
|
|
6,465,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash payments
|
|
67,825
|
|
|
22,608
|
|
|
122,608
|
|
|
904,148
|
|
|
956,940
|
|
|
2,074,129
|
|
|
Share payments
|
|
|
|
|
|
|
|
1,800,000
|
|
|
|
|
|
|
|
|
1,800,000
|
|
|
Accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
61,482
|
|
|
|
|
|
61,482
|
|
|
|
|
67,825
|
|
|
22,608
|
|
|
1,922,608
|
|
|
965,630
|
|
|
926,940
|
|
|
3,935,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2010
|
|
3,643,125
|
|
|
2,752,608
|
|
|
1,922,608
|
|
|
956,630
|
|
|
1,116,940
|
|
|
10,400,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash payments
|
|
|
|
|
|
|
|
|
|
|
742,180
|
|
|
|
|
|
742,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2011
|
|
3,643,125
|
|
|
2,752,608
|
|
|
1,922,608
|
|
|
1,707,810
|
|
|
1,116,940
|
|
|
11,143,091
|
|
F-16
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
7.
|
Mineral Property Acquisition and Exploration Costs
(continued)
|
|
|
|
The following is a continuity of mineral property
exploration costs accumulated from inception:
|
|
Kalemela
$
(a)
|
|
Geita
$
(b)
|
|
Kinyambwig
a
$
(c)
|
|
Suguti
$
(d)
|
|
Singida
$
(e)
|
|
Uyowa
$
(f)
|
|
North
Mara
$
(g)
|
|
Mbinga
$
(h)
|
|
Other
Project
$
|
|
Total
$
|
|
Balance, March 31, 2009
|
618,970
|
|
395,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,014,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camp, Field Supplies and Travel
|
-
|
|
-
|
|
46,606
|
|
-
|
|
99,002
|
|
599
|
|
-
|
|
-
|
|
-
|
|
146,207
|
|
Geological consulting and Wages
|
8,749
|
|
7,600
|
|
102,697
|
|
-
|
|
220,638
|
|
19
|
|
-
|
|
-
|
|
-
|
|
339,703
|
|
Geophysical and Geochemical
|
-
|
|
-
|
|
16,128
|
|
-
|
|
156,816
|
|
-
|
|
-
|
|
-
|
|
-
|
|
172,944
|
|
Parts and equipment
|
-
|
|
-
|
|
4,000
|
|
-
|
|
16,092
|
|
-
|
|
-
|
|
-
|
|
-
|
|
20,092
|
|
Project Administration Fee
|
6,175
|
|
6,175
|
|
34,450
|
|
-
|
|
39,325
|
|
-
|
|
-
|
|
-
|
|
-
|
|
86,125
|
|
Vehicle and Fuel expenses
|
-
|
|
-
|
|
5,342
|
|
-
|
|
33,397
|
|
-
|
|
-
|
|
-
|
|
-
|
|
38,739
|
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
14,925
|
|
13,775
|
|
209,224
|
|
|
|
565,269
|
|
618
|
|
|
|
|
|
|
|
803,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2010
|
633,895
|
|
408,972
|
|
209,224
|
|
-
|
|
565,269
|
|
618
|
|
-
|
|
|
|
-
|
|
1,817,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camp, Field Supplies and Travel
|
-
|
|
511
|
|
14,869
|
|
14,968
|
|
89,808
|
|
7,654
|
|
3,597
|
|
2,321
|
|
272
|
|
134,001
|
|
Drilling Cost
|
-
|
|
-
|
|
136,381
|
|
-
|
|
544,533
|
|
-
|
|
-
|
|
-
|
|
-
|
|
680,914
|
|
Geological consulting and Wages
|
6,509
|
|
2,442
|
|
88,413
|
|
13,732
|
|
229,162
|
|
15,555
|
|
12,749
|
|
6,218
|
|
2,120
|
|
376,900
|
|
Geophysical and Geochemical
|
-
|
|
1,200
|
|
18,250
|
|
4,439
|
|
81,745
|
|
4,450
|
|
7,140
|
|
-
|
|
133
|
|
117,357
|
|
Parts and equipment
|
-
|
|
206
|
|
12,129
|
|
719
|
|
12,625
|
|
2,543
|
|
650
|
|
1,211
|
|
-
|
|
30,082
|
|
Vehicle and Fuel expenses
|
-
|
|
2,458
|
|
15,595
|
|
17,782
|
|
53,710
|
|
5,467
|
|
7,608
|
|
6,880
|
|
3,148
|
|
112,648
|
|
Expense reimbursements
|
-
|
|
-
|
|
-
|
|
-
|
|
(256,968
|
)
|
-
|
|
-
|
|
-
|
|
-
|
|
(256,968
|
)
|
|
6,509
|
|
6,817
|
|
285,637
|
|
51,640
|
|
754,615
|
|
35,669
|
|
31,744
|
|
16,630
|
|
5,673
|
|
1,194,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2011
|
640,404
|
|
415,789
|
|
494,861
|
|
51,640
|
|
1,319,884
|
|
36,287
|
|
31,744
|
|
16,630
|
|
5,673
|
|
3,012,912
|
|
|
a)
|
Kalemela Gold Project
|
|
|
|
|
|
As a part of the Geo Can Agreement, Kilimanjaro owns 100%
interest in the Kalemela Gold Projects three prospecting licenses
PL2747/2004, PL3006/2005 and PL2910/2004. The original three prospecting
licenses have been divided and the project is now comprised of six
licenses: PL2747/2004, PL3006/2005, PL2910/2004, PL5892/2009, PL5912/2009
and PL5988/2009. The Kalemela Gold Project is located within the
Southeastern Lake Victoria Goldfields in Northern Tanzania in Magu
District, Mwanza Region.
|
|
|
|
|
|
On March 29, 2011, the Company entered into a non-binding letter of intent with Otterburn Ventures Inc. (“Otterburn”). The Letter of Intent set out a proposal by Otterburn to acquire up to an undivided 70% interest in the Kalemela project. On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. Refer to Note 12(g). On July 8, 2011, Otterburn terminated the option and joint venture agreement. Refer to Note 12(g).
|
|
|
|
|
b)
|
Geita Project
|
|
|
|
|
|
As a part of the Geo Can Agreement, the Company owns 100%
interest in the Geita projects one prospecting license as at March 31,
2011. The original prospecting license PL2806 has been divided and the
project is now comprised of two licenses: PL2806/2004 and PL5958/2009. The
Geita Gold Project is located in Northern Tanzania within the Lake
Victoria Goldfields in the Geita District, Mwanza Region.
|
|
|
|
|
|
On March 29, 2011, the Company entered into a non-binding letter of intent with Otterburn Ventures Inc. (“Otterburn”). The Letter of Intent set out a proposal by Otterburn to acquire up to an undivided 70% interest in the Geita project. On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. Refer to Note 12(g). On July 8, 2011, Otterburn terminated the option and joint venture agreement. Refer to Note 12(g).
|
F-17
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
7.
|
Mineral Property Acquisition and Exploration Costs
(continued)
|
|
|
|
|
c)
|
Musoma Bunda - Kinyambwiga Project:
|
|
|
|
|
|
The Musoma Bunda Gold Project comprise of three
prospecting licences that are located on the eastern side of Lake
Victoria.
|
|
|
|
|
|
Kinyambwiga project is part of the Musoma Bunda Gold
Project. As a part of the Geo Can Agreement, the Company owns 100%
interest of Kinyambwiga projects one prospecting license and 24 primary
mining licenses. The Kinyambwiga Gold Project is about 208 kilometers
northeast of the city of Mwanza in northern Tanzania.
|
|
|
|
|
|
A director of the Company entered into Mineral Purchase
agreements on behalf of the Company with 24 Primary Mining Licenses (PMLs)
which are part of the Kinyambwiga Project and which are recorded in his
name and are to be transferred over to the Company at a future
date.
|
|
|
|
|
d)
|
Musoma Bunda - Suguti Project
|
|
|
|
|
|
Suguti project is part of the Musoma Bunda Gold Project.
As a part of the Geo Can Agreement, the Company owns 100% interest of
Suguti projects one prospecting license.
|
|
|
|
|
e)
|
Singida Project
|
|
|
|
|
|
On May 15, 2009, the Company signed a Mineral Financing
Agreement with one director of the Company authorizing him, on behalf of
the Company, to acquire Primary Mining Licenses (PMLs) in the Singida
area. As of December 31, 2010, this director has entered into Mineral
Properties Sales and Purchase agreements with various PML owners. The
Company has 100% acquired 23 PML agreements. The Company has the option to
acquire 37 additional and different PMLs in the Singida area. Under the
terms of these agreements, if the option to purchase is completed on all
these PMLs, then the total purchase consideration would be approximately
$6,432,930 (TZS9,896,816,657,outstanding option payments in US Dollar
amount is estimated with an exchange rate of 0.00065 as at March 31,
2011), payable by February 24, 2013. Pursuant to the Mineral Financing
Agreement, the Company has made payments of $965,630 in fiscal 2010 and
$742,180 in fiscal 2011.
|
|
|
|
|
|
In September 2009, pursuant to the agreement, the Company
completed an Addendum to the Mineral Properties and Sale and provided
notification to all the PML owners involved in Singida Mineral Properties
and Sale Agreements that the Company would extend their due diligence
period for an additional 120 days as upon paying $48,782.
|
|
|
|
|
|
On January 19, 2010, a director on behalf of the Company
signed second addendums to Singida mineral properties sales and purchase
agreements. The addendums revised and extended the second payment of the
mineral agreements. The second payment was divided into three payments
with $470,927 due on January 27, 2010, $470,927 due on July 27, 2010 and
$922,900, due on January 27, 2011.
|
|
|
|
|
|
On July 27, 2010, the director signed third addendums to
the Singida mineral properties sales and purchase agreements on behalf of
the Company. The third addendums revised the payment terms of the second
addendum. Based on the revised terms, the second instalment of $470,927
was divided into two payments, with $281,065 due on July 27, 2010 and
$187,426 due on October 24, 2010. The Company made the payment of $281,065
on July 27, 2010, and the payment of $187,426 on October 26,
2010.
|
|
|
|
|
|
On February 7, 2011, a director signed fourth addendums
to the Singida mineral properties sales and purchase agreements on behalf
of the Company. The fourth addendums revised the payment terms of the
second addendum. Based on the revised terms, the third instalment of
approximately $922,900 was divided into three payments, with $92,065 paid
on February 9, 2011, $181,998 paid on March 10, 2011 and $646,030 due on
August 9, 2011.
|
|
|
|
|
|
At the option of the Company, any PMLs may be
relinquished at any time during the agreement and the title transferred
back to the original owner. Also, at the option of the Company, a 2% Net
Smelter Production royalty or 2% of the Net Sale Value may be substituted
in place of the final payment for each PML and paid on a pro rata basis
determined by the total final number of PMLs involved in a special mining
license.
|
|
|
|
|
|
As of March 31, 2011, under the terms of the mineral
properties sales and purchase agreements the Company has completed initial
option payments in the amount of $1,707,810. Pursuant to the original
agreement and the subsequent addendums, the Company will pay approximately
$646,030 on August 9, 2011, approximately $419,100 on January 23, 2013 and
$3,828,000 on February 24, 2013.
|
|
|
|
|
|
On March 29, 2011, the Company entered into a non-binding letter of intent with Otterburn Ventures Inc. (“Otterburn”). The Letter of Intent set out a proposal by Otterburn to acquire up to an undivided 70% interest in the Singida project. On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. Refer to Note 12(g). On July 8, 2011, Otterburn terminated all agreements. Refer to Note 12(g).
|
F-18
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
7.
|
Mineral Property Acquisition and Exploration Costs
(continued)
|
|
|
|
|
f)
|
Uyowa Project
|
|
|
|
|
|
As a part of the Geo Can Agreement the Company owns 100%
interest in the Uyowa projects prospecting licenses. The Uyowa Gold
project consists of seven prospecting licenses.
|
|
|
|
|
g)
|
North Mara Project
|
|
|
|
|
|
During the year, there are three prospecting licenses
expired. As of March 31, 2011, the North Mara Project comprised of nine
prospecting licenses.
|
|
|
|
|
|
On March 29, 2011, the Company entered into a non-binding letter of intent with Otterburn Ventures Inc. (“Otterburn”). The Letter of Intent set out a proposal by Otterburn to acquire up to an undivided 70% interest in the North Mara project. On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. Refer to Note 12(g). On July 8, 2011, Otterburn terminated the option and joint venture agreement. Refer to Note 12(g).
|
|
|
|
|
h)
|
Mbinga Project
|
|
|
|
|
|
The Mbinga Uranium Project is comprised of 3 PLs and 2
Reconnaissance Licenses. The Reconnaissance Licenses, located along the
eastern shoreline of Lake Nyasa are currently under application.
|
|
|
|
|
|
As of March 31, 2011, the Company owns 100% interest of
Mbinga projects prospecting licenses.
|
8.
|
Capital Stock
|
|
|
|
|
Preferred Stock
|
|
|
|
|
The Company is authorized to issue 100,000,000 shares of
preferred stock with a par value of $0.00001. As of March 31, 2011, the
Company has not issued any preferred stock.
|
|
|
|
|
Common Stock
|
|
|
|
|
On December 7, 2010, the Company’s shareholders approved a resolution to amend the Company’s articles of incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 250,000,000 shares. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.
|
|
|
|
|
a)
|
On March 7, 2011, the Company completed a private
placement of 20,000,000 units at $0.15 per share for total consideration
of $3,000,000. Each unit consists of one share of common stock and one
share purchase warrant. One warrant entitles the holder to purchase one
additional share of common stock at $0.30 per share until September 7,
2011. The units were issued on March 7, 2011.
|
|
|
|
|
b)
|
On February 24, 2011, the Company signed debt settlement and subscription agreement with a director to settle a consulting fee of $35,000 in exchange for 145,833 shares of common stock at $0.24 per share. As of March 31, 2011, the shares were not issued.
|
|
|
|
|
c)
|
On November 9, 2010, the Company issued 100,000 shares of
common stock to a consultant. The shares were valued at $41,000
representing their fair value on the date of issuance.
|
|
|
|
|
d)
|
On October 18, 2010, the Company signed debt settlement and subscription agreement with a consultant to settle a consulting fee of $54,275 for geological and business development services provided. On October 18, 2010, the Company issued 217,100 restricted shares of common stock at $0.25 to settle the outstanding balance. The shares were valued at $102,037 representing their fair value on the date of the agreement. The company recognized a loss on debt settlement of $47,762.
|
|
|
|
|
e)
|
On September 7, 2010, the Company completed a private
placement of 4,790,700 units at $0.225 per share for gross consideration
of $1,077,907. The Company incurred share issuance costs of $23,416. Each
unit consists of one share of common stock and two redeemable warrants.
One redeemable warrant entitles the holder to purchase one additional
share of common stock at $0.40 per share until August 12, 2013. The other
redeemable warrant entitles the holder to purchase one additional share of
common stock at $0.60 per share until August 12, 2013. The redeemable
warrants are callable by the Company upon 20 days written notice to the
warrant holder. If the redeemable warrants are not exercised within 20
days of being called, they will terminate and may not be exercised
thereafter. The units were issued on November 9, 2010.
|
|
|
|
|
f)
|
On April 15, 2010, the Company issued 153,525 restricted shares of common stock and paid $21,265 to settle debt related to geological and business development services provided by a consultant. The services were valued at $58,340. The company recognized a loss on debt settlement of $8,342.50.
|
F-19
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
8.
|
Capital Stock (continued)
|
|
g)
|
On April 15, 2010, the Company issued 85,000 restricted shares of common stock to settle debt relating to consulting and business development services provided by a consulting company. The services were valued at $34,850. The company recognized a loss on debt settlement of $7,650.
|
|
|
|
|
h)
|
On January 28, 2010, the Company opened a private
placement offering a maximum of 10,473,000 units at $0.20 per unit. Each
unit consisted of one share of common stock and one redeemable warrant.
One redeemable warrant and payment of $1.25 entitles the holder to
purchase one additional common share until January 28, 2013. The
redeemable warrants are callable by the Company upon 30 days written
notice to the warrant holder. If the redeemable warrants are not exercised
within 30 days of being called, they will terminate and may not be
exercised thereafter.
|
|
|
|
|
|
As of March 31, 2010, the Company received a total cash payment of $1,448,730 and subscription receivable of $20,000 for 7,343,650 units. As of May 19, 2010, the Company issued additional 3,129,350 units for cash of $645,870, to complete a private placement of 10,473,000 units at $0.20 per share for gross consideration of $2,094,600. The Company incurred share issuance costs of $11,500.
|
|
|
|
|
i)
|
On December 31, 2009, the Company completed a private placement of 2,701,001 units at $0.60 per unit for cash of $1,574,704, net of cost of $45,900. Each unit consists of one share of common stock and one redeemable warrant. Two redeemable warrants and payment of $1.25 entitles the holder to purchase one additional share of common stock until September 9, 2012.
|
|
|
|
|
j)
|
On December 31, 2009, the Company paid $20,000 in cash
and issued 68,775 restricted shares of common stock for geological and
business development services provided by a consultant and valued the
services at $42,640.
|
|
|
|
|
k)
|
On November 15, 2009, the Company issued 1,450,000
restricted shares of common stock for business development services
provided by a consultant and valued the services at $1,218,000.
|
|
|
|
|
l)
|
On November 5, 2009, the Company issued 456,250
restricted shares of common stock for business development services
provided by consultants and valued the services at $273,750.
|
|
|
|
|
m)
|
Acquisition Issuances:
|
|
|
|
|
|
According to the share exchange agreement, Kilimanjaro,
on August 7, 2009, cancelled 4,000,000 common shares held in its
subsidiary, Lake Victoria, of which 3,000,000 shares were originally
issued to Kilimanjaro and 1,000,000 shares to former directors on March
14, 2007, the inception of the subsidiary. Also in accordance with the
share exchange agreement Kilimanjaro, on August 7, 2009, cancelled
6,350,300 common shares in its subsidiary Lake Victoria which included
2,350,300 shares issued on December 23, 2008 and 4,000,000 shares issued
on February 13, 2009 to Geo Can Resources Company Ltd. that were acquired
in May 2009 by Kilimanjaro.
|
|
|
|
|
|
On August 7, 2009 the Company issued 37,653,549 common
shares pursuant to a share exchange agreement with Kilimanjaro. Of these
shares, 24,478,300 had been issued originally by Kilimanjaro prior to
December 31, 2008.
|
|
|
|
|
n)
|
Kilimanjaro Issuances:
|
|
|
|
|
|
The remaining portions of the underlying shares were
issued by Kilimanjaro prior to the August 7, 2009 share exchange agreement
for the following purposes:
|
|
1.
|
1,747,200 were issued for cash at $0.25 per
share
|
|
2.
|
6,211,500 were issued for acquisition of mineral
properties
|
|
3.
|
3,172,042 were issued for payment of consulting
services
|
|
|
In January 2009, Kilimanjaro cancelled 33,600 common
shares in the amount of $14,000 due to the request of an individual
investor to withdraw his private placement.
|
|
|
|
|
o)
|
Lake Victoria Issuances for Non-controlling
Interests:
|
|
|
|
|
|
Lake Victoria, prior to the share exchange agreement with
its controlling parent company, Kilimanjaro, issued the following shares
as the reporting registrant and subsidiary of Kilimanjaro:
|
|
|
|
|
|
On April 15, 2009, Lake Victoria granted 70,000
restricted common shares at a fair value of $35,000 to officers and
directors. The shares were issued on August 4, 2009.
|
|
|
|
|
|
On February 13, 2009, the Lake Victoria issued 4,000,000
shares of common stock at a fair value of $1,840,000 in accordance with
the January 21, 2009 Option to Purchase agreement for Geita PL
2806/2004.
|
F-20
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
8.
|
Capital Stock (continued)
|
|
|
|
|
o)
|
Lake Victoria Issuances for Non-controlling Interests:
(continued)
|
|
|
|
|
|
All of these shares were acquired by Kilimanjaro as part
of a property purchase agreement in May 2009.
|
|
|
|
|
|
On January 21, 2009, Lake Victoria entered into an option
to purchase prospecting license agreement with Geo Can Resources Ltd. to
acquire prospecting license PL2806/2004 at Geita area in Geita District.
The total consideration included an aggregate cash payment of $200,000 and
issuance of 5,500,000 shares of common stock.
|
|
|
|
9.
|
Stock Options and Warrants
|
|
|
|
|
On October 7, 2010, the Company adopted the 2010 Stock
Option Plan under which the Company is authorized to grant stock options
to acquire up to a total of 10,000,000 shares of common stock.
|
|
|
|
|
On October 21, 2010, the Company granted 3,580,000 stock
options to six directors and officers, and 500,000 stock options to a
senior geological consultant at an exercise price of $0.45 per share which
will expire on October 21, 2013. All stock options are non-qualified and
vested immediately. The fair value of the options was estimated using the
Black-Scholes pricing model based on the following assumptions: dividend
yield of 0%; risk- free interest rate of 0.52%; expected life of three
years; and volatility of 170%. The fair value of $1,564,711 was recorded
as stock-based compensation.
|
|
|
|
|
On October 7, 2010, the Company entered into a consulting
agreement with Misac Noubar Nabighian to provide geophysical data
processing, geophysical data interpretation services. The Company granted
the Consultant an option to acquire 120,000 shares of common stock of the
Company pursuant to the terms of the Companys 2010 Stock Option Plan, at
an exercise price of $0.29 per share, exercisable until October 7, 2013
and vesting immediately. The fair value of the options was estimated using
the Black-Scholes pricing model based on the following assumptions:
dividend yield of 0%; risk-free interest rate of 0.54%; expected life of
three years; and volatility of 169%. The fair value of $29,278 was
recorded as stock-based compensation.
|
|
|
|
|
The fair value of stock options granted during the year
ended March 31, 2011, was $0.38, per share.
|
|
|
|
|
The weighted average assumptions used in the
Black-Scholes valuation model were as follows:
|
|
|
|
Year Ended
|
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Expected dividend yield
|
|
0%
|
|
|
|
|
|
Risk-free interest rate
|
|
0.52%
|
|
|
|
|
|
Expected volatility
|
|
170%
|
|
|
|
|
|
Expected option life (in years)
|
|
3.00
|
|
|
|
|
The total intrinsic value of stock
options exercised during the years ended March 31, 2011, and 2010 was $nil.
The following table summarizes the
continuity of the Companys stock options:
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
|
Options
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, March 31, 2009
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Acquired
(1)
|
|
4,312,500
|
|
|
1.01
|
|
|
|
|
|
|
|
|
Outstanding, March 31, 2010
|
|
4,312,500
|
|
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
4,200,000
|
|
|
0.45
|
|
|
|
|
|
|
|
|
Expired
|
|
(4,312,500
|
)
|
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, March
31, 2011
|
|
4,200,000
|
|
|
0.45
|
|
|
2.56
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, March
31, 2011
|
|
4,200,000
|
|
|
0.45
|
|
|
2.56
|
|
|
-
|
|
At March 31, 2010 and 2010, the Company
did not have any unvested options.
(1)
As part of the
acquisition effective August 7, 2009, the Company acquired 4,312,500 outstanding
stock warrants of the prior subsidiary to be exercised by investors.
F-21
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
9.
|
Stock Options and Warrants (continued)
|
|
|
|
The following table summarizes the continuity of the
Companys warrants:
|
|
|
|
Number of
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
Shares
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
Issuable
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
|
Upon
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
|
Exercise
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, March 31, 2009
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Granted
|
|
13,006,651
|
|
|
1.25
|
|
|
2.77
|
|
|
-
|
|
|
Outstanding, March 31, 2010
|
|
13,006,651
|
|
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
(4,312,500
|
)
|
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, March 31, 2011
|
|
41,404,901
|
|
|
1.08
|
|
|
1.27
|
|
|
-
|
|
The Company had the following warrants
outstanding as of March 31, 2011:
|
Exercise Price per
|
|
|
Share
|
Shares Issuable
|
Expiration Date
|
$
|
Upon Exercise
|
|
|
|
September 7, 2011
|
0.30
|
20,000,000
|
September 9, 2012
|
1.25
|
1,350,501
|
January 28, 2013
(1)
|
1.25
|
10,473,000
|
August 13, 2013
(2)
|
0.40
|
4,790,700
|
August 13, 2013
(2)
|
0.60
|
4,790,700
|
|
|
41,404,901
|
|
(1)
These redeemable warrants are callable by
the Company upon 30 days written notice to the warrant holder. If the
redeemable warrants are not exercised within 30 days of being called, they
will terminate and may not be exercised thereafter.
|
|
|
|
|
(2)
These redeemable warrants are callable by
the Company upon 20 days written notice to the warrant holder. If the
redeemable warrants are not exercised within 20 days of being called, they
will terminate and may not be exercised thereafter.
|
|
|
|
10.
|
Income Taxes
|
|
|
|
At March 31, 2011 and March 31, 2010, the Company had net deferred tax assets (calculated at an expected rate of 34%) of approximately $4,029,000 and $2,863,000 principally arising from net operating loss carryforwards for income tax purposes. Management of the Company has determined that it is not more likely than not that the Company will realize the benefit of the deferred tax asset. Accordingly a valuation allowance equal to the deferred tax asset has been established at March 31, 2011 and 2010. The significant components of the deferred tax asset at March 31, 2011 and 2010 were as follows:
|
|
|
|
|
|
March 31, 2011
|
|
|
March 31, 2010
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
$
|
11,848,970
|
|
$
|
8,422,000
|
|
|
|
|
|
|
|
|
|
|
Deferred tax asset
|
|
4,028,650
|
|
|
2,863,000
|
|
|
Deferred tax asset valuation allowance
|
|
(4,028,650
|
)
|
|
(2,863,000
|
)
|
|
|
$
|
|
|
$
|
|
|
|
|
|
-
|
|
|
|
|
|
Net deferred tax asset
|
|
|
|
|
-
|
|
F-22
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
11.
|
Commitments
|
|
|
|
|
a)
|
On May 15, 2009, Kilimanjaro signed a Mineral Financing
Agreement with a director of the Company authorizing him, on behalf of the
Company, to acquire Primary Mining Licenses (PMLs) in the Singida area of
Tanzania. As of March 31, 2011, this director has entered into Mineral
Properties Sales and Purchase agreements with various PML owners of which
23 PML Option to Purchase agreements have been completed. These PMLs have
been 100% acquired and the Company has the option to acquire 37 additional
and different PMLs in the Singida area. Under the terms of these
agreements, if the option to purchase is completed on all these PMLs, then
the total purchase consideration will be approximately $6,432,930 (see
Note 7(e)).
|
|
|
|
|
b)
|
The same director of the Company entered into Mineral
Purchase agreements with 24 PMLs which are part of the Kinyambwiga
Project and which are recorded in his name and are to be transferred over
to the Company at a future date (see Note 7(c)).
|
|
|
|
|
c)
|
On December 31, 2009, the Company entered into a
Geological and Business Development Consulting Services Agreement with
Jack V. Everett (Everett) under which Everett will provide public
relations, geological, and consulting services to us and the Company
agrees to compensate Everett on a quarterly basis in two methods: (a) cash
and (b) restricted common shares of the Company. The quarterly
compensation will be agreed upon, in advance of each quarter, by the
Company and Everett. Accordingly, upon execution of the agreement the
Company paid Everett a cash payment of $20,000 and issued him 68,775
restricted common shares valued at $42,641. On May 10, 2010, the Company
paid Everett a cash payment of $21,265 and on April 7, 2010 issued him
153,525 restricted common shares valued at $50,000. On November 9, 2010,
the Company issued him 217,100 restricted common shares for services
provided valued at $54,275. The term of the consulting agreement is twelve
months. As of March 31, 2011, the Company accrued an expense of $80,614
for services rendered for the period from October 2010 to March 31,
2011.
|
|
|
|
|
d)
|
On January 4, 2010, the Company entered into a finder’s fee agreement with Robert A. Young, The RAYA Group (“Young”) wherein we agreed to pay Young fees limited to introductions that Young makes to the Company of investors who invest in the Company’s private placements or become involved with the Company through joint venture property agreements. No Finder’s fees will be paid in connection with any introduction to any existing contacts of the Company. The fee will be 10% of the first $10,000,000 and 5% of amounts in excess of $10,000,000. The term of the finder’s fee agreement is five years.
|
|
|
|
|
e)
|
On May 11, 2010, the Company entered into an agreement
with a consultant to provide services as a Senior Geological Consultant.
In consideration of the foregoing the Company will pay a base compensation
of $15,000 per month for the first six months, to be increased to $20,000
per month after the initial six months; eligibility of a bonus of 100,000
shares of common stock at the end of six months; and at the end of 12
months the Company will grant the consultant 300,000 stock options. On
November 9, 2010, the Company issued 100,000 shares of common stock to the
consultant. On October 21, 2010, the Company passed a board resolution to
grant the Consultant 500,000 stock options at an exercise price of $0.45
per share. On November 11, 2010, the Company signed an amendment with the
consultant to the original May 11
th
consulting agreement. The
amendment extended the term of the agreement to three years and the
Company agreed to pay $17,500 per month for the first 12 months and
$20,000 per month thereafter. The Company will grant the Consultant
300,000 stock options on November 1, 2011, 2012 and 2013.
|
|
|
|
|
f)
|
On October 7, 2010, the Company entered into a consulting
agreement with Misac Noubar Nabighian to provide geophysical data
processing and geophysical data interpretation services to the Company in
consideration for:
|
|
i.
|
granting the Consultant an option to acquire 120,000
shares of common stock of the Company pursuant to the terms of the
Companys 2010 Stock Option Plan, at an exercise price of $0.29 per share,
exercisable until October 7, 2013 and vesting immediately. On October 7,
2010, the Company granted 120,000 options to the Consultant;
|
|
|
|
|
ii.
|
paying the Consultant 0.5% of the net proceeds from the
sale of any mining properties;
|
|
|
|
|
iii.
|
granting the Consultant a royalty on producing properties
as follows: (a) $1.00 per ounce of gold produced or 0.25% of net smelter
returns (as such term is defined in the Agreement), whichever is greater,
and (b) 0.25% of net smelter returns for all other commercial
production.
|
The agreement is for a term of 36
months and may be renewed at the option of the Company upon 30 days written
notice.
12.
|
Subsequent Events
|
|
|
|
|
a)
|
On April 8, 2011, the Company signed a debt settlement
agreement with a consultant to settle a consulting fee of $80,614 for
geological and business development services provided. The Company agreed
to pay $31,714 cash and 163,000 shares at $0.30 per share to settle an
outstanding balance of $48,900.
|
|
|
|
|
b)
|
On April 20, 2011, the Company signed two prospecting
licences purchase agreements to acquire two prospecting licenses. The
total consideration includes:
|
|
i.
|
paying $160,400 within 14 days on receipt of the
notification from Tanzania Ministry of Energy and Minerals. The payment
was made on April 28, 2011;
|
|
|
|
|
ii.
|
paying a total amount of $65,000 to the owner of the
licenses, of which 10% is due on the closing date and 90% due on receipt
of prospecting licenses. On April 28, 2011, the Company paid $6,500 to the
licenses owner;
|
|
|
|
|
iii.
|
paying a finders fee of $60,000 and 800,000 common
shares.
|
|
c)
|
On April 26, 2011, the Company entered into a consulting
agreement with the CEO and President of the Company. Pursuant to the
agreement, the Company agreed to pay CAD $10,000 per month for two years
and grant, upon completion of twelve months services, and annually on the
anniversary each and every year thereafter, an option to purchase 500,000
shares of the Companys common stock.
|
|
|
|
|
d)
|
On April 26, 2011, the Company entered into a consulting
agreement with the Chairman of the Company. Pursuant to the agreement, the
Company agreed to pay $3,500 per month for two years and grant upon
completion of twelve months services, and annually on the anniversary each
and every year thereafter, an option to purchase 250,000 shares of the
Companys common stock.
|
|
|
|
|
e)
|
On April 26, 2011, the Company entered into an employment
agreement with the Secretary and Treasurer of the Company. Pursuant to the
agreement the Company agreed to pay the Secretary CAD $102,000 per year
and a one time bonus of CAD $1,000.
|
F-23
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
12.
|
Subsequent Events (continued)
|
|
|
|
|
f)
|
On April 26, 2011, the Company entered into an employment
agreement with the Chief Financial Officer of the Company. Pursuant to the
agreement the Company agreed to pay the CFO CAD $90,000 per year and a one
time bonus of CAD $1,000.
|
|
|
|
|
g)
|
On May 6, 2011, the Company entered into four option and
joint venture agreements with Otterburn Ventures Inc. (Otterburn)
(collectively the Agreements), pursuant to which the Company granted
Otterburn the right (the Options) to acquire up to an undivided 70%
interest in and to certain primary mining licenses and prospecting
licenses owned by the Company known as the Singida Gold Project, North
Mara Gold Project, Kalemela Gold Project and Geita Gold Project
(collectively the Properties) subject to Otterburn incurring certain
expenditures on the Properties, issuing a certain number of its common
shares, and making certain cash payments as further outlined below.
Closing of the Options is subject to the completion of a due diligence
investigation of the title and environmental condition of the Properties
to the satisfaction of Otterburn by May 20, 2011.
|
|
|
|
|
|
Otterburn is under no obligation to make any cash
payments or issue any common shares to Lake Victoria until the
satisfactory completion of the due diligence investigation, other than
payment of a deposit for each Property (as described below) which is due
and payable by May 13, 2011.
|
|
|
|
|
|
Otterburn may terminate the contract at any time prior to
earning the 70% interest in any of the Properties. In the event of a
termination of the Agreements by Otterburn, Otterburn will have no further
right or interest in the Property and no further obligations under the
Agreement. The Company may only terminate the Agreement if there is a
default by Otterburn under the Agreement which has not been cured within
the permitted time periods as further set out in the Agreements.
|
|
|
|
|
|
In the event Otterburn exercises the Options and earns a
70% interest in any Property, the parties are deemed to enter into a joint
venture for further exploration and development of the Property with
Otterburn holding a 70% interest and the Company holding the remaining 30%
interest. As a further condition of the Agreements, Otterburn agreed to
enter into an exploration services agreement with Lake Victoria Resources
(T) Ltd. (LVMC Sub) pursuant to which LVMC Sub will be retained to
perform all recommended exploration work on the Properties for an initial
twelve month term from the Effective Date which includes payment of a 12%
management fee to LVMC Sub for all recommended exploration work performed
by LVMC Sub.
|
|
|
|
|
|
Geita Option Agreement
|
|
|
|
|
|
In the option and joint venture agreement (the Geita
Option Agreement) between the Company and Otterburn with respect to
property located in the Geita District of the Mwanza Region of the United
Republic of Tanzania (the Geita Property), the Company agreed to grant
an exclusive option to Otterburn to acquire up to a 70% undivided interest
in and to certain prospecting licenses with respect to the Geita Property.
Pursuant the Geita Option Agreement, in consideration for the 70% option
Otterburn will: (i) make a cash payment to the Company in the amount of
$20,000 on the Closing Date; (ii) make cash payments to the Company in the
aggregate of up to $150,000 over a two-year period commencing on the
earlier of the completion by the Company of a concurrent private placement
of approximately $6,750,000 or May 13, 2011 (the Closing Date); (iii)
allot and issue up to 600,000 common shares of Otterburn to the Company
over a two year period commencing on the Closing Date; and (iv) fund
working costs up to $1,570,000 on the Geita Property over a three year
period commencing on the Effective Date.
|
|
|
|
|
|
Kalemela Option Agreement
|
|
|
|
|
|
In the option and joint venture agreement (the Kalemela
Option Agreement) between the Company and Otterburn with respect to
property located in the Magu District of the Mwanza Region of the United
Republic of Tanzania (the Kalemela Property), the Company agreed to
grant an exclusive option to Otterburn to acquire up to a 70% undivided
interest in and to certain prospecting licenses with respect to the
Kalemela Property. Pursuant the Kalemela Option Agreement, in
consideration for the 70% option grant Otterburn will: (i) make a cash
payment to the Company in the amount of $20,000 on the Closing Date; (ii)
make cash payments to the Company in the aggregate of up to $150,000 over
a two-year period commencing on the Closing Date; (iii) allot and issue up
to 600,000 common shares of Otterburn to the Company over a two year
period commencing on the Effective Date; and (iv) fund working costs up to
$1,350,000 on the Kalemela Property over a three year period commencing on
the Effective Date.
|
|
|
|
|
|
North Mara Option Agreement
|
|
|
|
|
|
In the option and joint venture agreement (the “North Mara Option Agreement”) between the Company and Otterburn with respect to property located in the Tarime District of the North Mara Region of the United Republic of Tanzania (the “North Mara Property”), the Company agreed to grant an exclusive option to Otterburn to acquire up to a 70% undivided interest in and to certain prospecting licenses with respect to the North Mara Property. Pursuant the Mara Option Agreement, in consideration for the 70% option grant
|
F-24
Lake Victoria Mining Company, Inc.
|
(An Exploration Stage Company)
|
Notes to the Consolidated Financial Statements
|
March 31, 2011
|
(Expressed in US dollars)
|
12.
|
Subsequent Events (continued)
|
Otterburn will: (i) make a cash
payment to the Company in the amount of $20,000 on the Closing Date representing
all license fees paid by the Company; (ii) make cash payments to the Company in
the aggregate of up to $180,000 over a two-year period commencing on the Closing
Date; (iii) allot and issue up to 900,000 common shares of Otterburn to the
Company over a two year period commencing on the Effective Date; and (iv) fund
working costs up to $1,850,000 on the Mara Property over a three year period
commencing the Effective Date.
Singida Option Agreement
In the option and joint venture
agreement (the Singida Option Agreement) among the Company, Ahmed Abubakar
Magoma and Otterburn with respect to property located in the Singida Region of
the United Republic of Tanzania (the Singida Property), the Company and Mr.
Magoma agreed to grant an exclusive option to Otterburn to acquire up to a 70%
undivided interest in and to certain prospecting licenses with respect to the
Singida Property divided into two option grants.
Pursuant the Singida Option Agreement,
in consideration for 51% of the interest Otterburn will: (i) make a cash payment
to the Company in the amount of $25,000 on the Closing Date; (ii) make cash
payments to the Company in the aggregate of up to $400,000 over a two-year
period commencing on the Closing Date; (iii) allot and issue up to 2,200,000
common shares of Otterburn to the Company over a two year period commencing on
the Effective Date; and (iv) fund working costs up to $4,500,000 on the Singida
Property over a three year period commencing on the Closing Date.
Pursuant the Singida Option Agreement,
in consideration for the remaining 19% interest Otterburn will: (i) allot and
issue up to 1,000,000 common shares of Otterburn to the Company on or before the
sixth anniversary date from the Effective Date; (ii) fund and complete a
comprehensive report on the Singida Property compliant with Canadian National
Instrument 43-101 Standards of Disclosure for Mineral Projects, on or before
the sixth anniversary date from the Effective date and (iii) fund working costs
up to $750,000 on the Singida Property over a three year period from the
Effective Date.
On May 13, 2011, the Company received
a cash payment of $85,000 from Otterburn. On May 25, 2011, the company received
cash payment of $658,947 from Otterburn which includes the payment of $246,522
for exploration work incurred in March 2011, and 2,200,000 Otterburn common
stock of shares.
On July 8, 2011, Otterburn terminated
the Agreements.
|
h)
|
On May 30, 2011, the Company signed prospecting licence
purchase agreements to acquire one prospecting licenses. The total
consideration includes:
|
|
i.
|
paying $10,000 within 5 days after execution date. The
payment was made on June 16, 2011;
|
|
|
|
|
ii.
|
paying a total amount of $450,000 to the owner of the
license, of which $70,000 due in 2011, $170,000 due in 2012 and $200,000
due in 2013
|
|
|
|
|
iii.
|
paying a finders fee of $30,000 and 300,000 common
shares.
|
F-25
80
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
|
(a) On September 30, 2010, the Board of Directors of the
Company dismissed by mutual agreement, BehlerMick PS, as its principal
independent accountant. On October 6, 2010, the Company engaged Manning Elliott
LLP as its principal independent accountant. The audit committee of the Company
approved the dismissal of BehelerMick PS and the engagement of Manning Elliott
LLP as its independent auditor.
BehelerMick PSs report on the Companys financial statements
for each of the two fiscal years ended March 31, 2009 and March 31, 2010 did not
contain an adverse opinion or disclaimer of opinion, or qualification or
modification as to uncertainty, audit scope, or accounting principles, except
that such report on the Companys financial statements contained an explanatory
paragraph in respect to the substantial doubt about its ability to continue as a
going concern.
During the Companys fiscal years ended March 31, 2009 and
March 31, 2010 and in the subsequent interim period through the date of
dismissal, there were no disagreements, resolved or not, with BehelerMick PS on
any matter of accounting principles or practices, financial statement
disclosure, or audit scope and procedures, which disagreement(s), if not
resolved to the satisfaction of BehelerMick PS, would have caused BehelerMick PS
to make reference to the subject matter of the disagreement(s) in connection
with its report.
During the Companys fiscal years ended March 31, 2009 and
March 31, 2010 and in the subsequent interim period through the date of
dismissal, there were no reportable events as described in Item 304(a)(1)(v) of
Regulation S-K.
We provided BehelerMick PS with a copy of our Current Report on
Form 8-K prior to its filing with the Securities and Exchange Commission, and
requested that it furnish us with a letter addressed to the Securities and
Exchange Commission stating whether it agrees with the statements made in our
Current Report on Form 8-K, and if not, stating the respects with which it does
not agree. A copy of the letter provided from BehelerMick PS was filed as an
exhibit to our Current Report on Form 8-K, filed on October 8, 2010.
(b) During the Companys fiscal years ended March 31, 2009 and
March 31, 2010 and in the subsequent interim period through the date of
appointment of Manning Elliott on October 6, 2010, the Company has not consulted
with Manning Elliott LLP regarding either the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on its financial statements, nor has
Manning Elliott LLP provided to the Company a written report or oral advice that
Manning Elliott LLP concluded was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting
issue. In addition, during such periods, the Company has not consulted with
Manning Elliott LLP regarding any matter that was either the subject of a
disagreement (as defined in Item 304(a)(1)(iv) and the related instructions) or
a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
Disclosure Controls and Procedures
As required by paragraph (b) of Rules 13a-15 or 15d-15 under
the Exchange Act, our principal executive officer and our principal financial
officer evaluated our companys disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the
period covered by this annual report on Form 10-K. Based on this evaluation,
these officers concluded that as of the end of the period covered by this annual
report on Form 10-K, these disclosure controls and procedures were not
effective. Disclosure controls and procedures are controls and other procedures
that are designed to ensure that the information required to be disclosed by our
company in reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities Exchange Commission and include controls and
procedures designed to ensure that such information is accumulated and
communicated to our companys management, including our companys principal
executive officer and our principal financial officer, to allow timely decisions
regarding required disclosure. The conclusion that our disclosure controls and
procedures were not effective was due to the presence of material weaknesses in
internal control over financial reporting as identified below under the heading
Managements Report on Internal Control Over Financial Reporting. Management
anticipates that such disclosure controls and procedures will
not be effective until the material weaknesses are remediated. Our company
intends to remediate the material weaknesses as set out below.
81
Managements Report on Internal Control Over Financial
Reporting
Our companys management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our
companys internal control over financial reporting is designed to provide
reasonable assurance, not absolute assurance, regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in the
United States of America. Internal control over financial reporting includes
those policies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of our companys assets; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles in the
United States of America, and that our companys receipts and expenditures are
being made only in accordance with authorizations of our management and
directors; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions
and that the degree of compliance with the policies or procedures may
deteriorate.
Our management, including our principal executive officer and
our principal financial officer, conducted an evaluation of the design and
operation of our internal control over financial reporting as of March 31, 2011
based on the criteria set forth in Internal Control Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
This evaluation included review of the documentation of controls, evaluation of
the design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation, our
management concluded our internal control over financial reporting was not
effective as at March 31, 2011. The ineffectiveness of our internal control over
financial reporting was due to the following material weaknesses which are
indicative of many small companies with small staff: (i) inadequate segregation
of duties and effective risk assessment; and (ii) insufficient written policies
and procedures for accounting and financial reporting with respect to the
requirements and application of both US GAAP and SEC guidelines.
Our company plans to take steps to enhance and improve the
design of our internal controls over financial reporting. During the period
covered by this annual report on Form 10-K, we have not been able to remediate
the material weaknesses identified above. To remediate such weaknesses, we plan
to implement the following changes during our fiscal year ending March 31, 2011:
(i) appoint additional qualified personnel to address inadequate segregation of
duties and ineffective risk management; and (ii) adopt sufficient written
policies and procedures for accounting and financial reporting. The remediation
efforts set out in (i) is largely dependent upon our company securing additional
financing to cover the costs of implementing the changes required. If we are
unsuccessful in securing such funds, remediation efforts may be adversely
effected in a material manner.
Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.
Changes in Internal Control Over Financial
Reporting.
There were no changes in our companys internal control over
financial reporting during the quarter ended March 31, 2011 that have materially
affected, or are reasonably likely to materially affect, our companys internal
control over financial reporting.
ITEM 9B.
|
OTHER INFORMATION
|
None.
82
PART III
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
|
Directors and Executive Officers
Our directors and executive officers, their ages, positions
held, and duration of such, are as follows:
Name
|
Position Held with the
Company
|
Age
|
Date First Elected
or Appointed
|
David Kalenuik
|
President, Chief Executive
Officer and
Director
|
53
|
October 7, 2010
|
Heidi Kalenuik
|
Secretary, Treasurer and
Director
|
44
|
June 28, 2008
|
Roger Newell
|
Director
|
68
|
June 28, 2008
|
Ahmed A. Magoma
|
Director
|
44
|
June 28, 2008
|
Ian A. Shaw
|
Director, Chairman of Audit
Committee
|
71
|
April 8, 2010
|
Ming Zhu
|
Chief Financial Officer
|
39
|
October 7, 2010
|
Business Experience
The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.
David Kalenuik, President, Chief Executive Officer, and
Director
Mr. Kalenuik became a director and was appointed President and
Chief Executive Officer of the Company on October 7, 2010. Mr. Kalenuik has
spent the last 35 years primarily as founder and owner of his own businesses.
These businesses have ranged from product or service oriented to investor
relations for publicly traded companies. Since December 2006, David has been
actively involved with Kilimanjaro Mining Company Inc. and Lake Victoria Mining
Company, Inc. in the identification, negotiation and acquisitions of mineral
resource properties in Tanzania, East Africa. David as an International
Businessman has extensive experience in start up operations, business
development, strategic planning and management of both private and public
companies. To date, he has been directly and indirectly responsible for the
financing of each of the companies that he has been involved with. His previous
experience includes being the President and Co-Founder of Larrearx, Inc./Larrea
Biosciences Inc., a patented nutritional and health care supplements company,
and, the President and Founder of Mitropolis Solutions Inc., a Vancouver based
investor relations/investment banking firm that successfully financed and
created public awareness programs for numerous public companies.
We believe Mr. Kalenuick is qualified to serve on our board of
directors because of his knowledge of our current operations, in addition to his
business experiences described above.
Heidi Kalenuik, Secretary, Treasurer and a Director
Heidi Kalenuik, originally from South Africa, was the founder
and President of Kilimanjaro Mining Company Inc., in December, 2006, a private
company concentrating on resource property acquisitions, exploration and joint
ventures in the United Republic of Tanzania. From March 2005 to December 2006
Ms. Kalenuik was on sabbatical. Ms. Kalenuik has been extensively involved in
the precious mineral industry and has worked with over 150 private and public
companies in British Columbia, Canada.
Heidi Kalenuik was appointed as an Officer and Director of Lake
Victoria Mining Company in June 2008 due to her knowledge and working experience
in Africa and her interest in the Companys activities having been the President
of Kilimanjaro Mining Company, now a wholly owned subsidiary of
the Company. We believe Ms. Kalenuick is qualified to serve on our board of
directors for the same reasons.
83
Roger Newell, Director
Roger Newell has been a director of our company since June 2008
and was our President, Principal Executive Officer from June 2008 to October 7,
2010. In December 2009 Dr. Newell was appointed an Independent Director of
Midway Gold Corporation a Canadian public corporation that trades on both the
Toronto TSX-V Exchange with symbol MDW and the US NYSE-AMEX also with symbol
MDW. Midway Gold is a mineral exploration and development company with
properties in the western United States.
In October 2007, Dr. Newell joined the management team as
Executive Vice President and Director of Kilimanjaro Mining Company Inc. a
private company involved in the acquisition and exploration of highly
prospective mineral resource properties in Tanzania, East Africa. In June 2008
Mr Newell was appointed President and Director of Lake Victoria Mining Company
(OTCBB; LVCA) in consideration of his history in gold exploration and mining. We
believe Dr. Newell is qualified to serve on our board of directors for the same
reasons.
Mr. Newell served as Vice President-Development and a Board
Member of Capital Gold Corp. (NYSE-AMEX;CGC and Toronto TSX;CGC) from 2000 to
September 2007. As such he was responsible for much of Capital Golds
engineering and business development at El Chanate Gold, Mexico and continued to
serve on Capital Gold Corps Board of Directors until November 2009. He also
served as President (2000 to 2006) of Capital Golds Mexican subsidiary, Minera
Santa Rita.
Prior to this time at Capital Gold, he served as Exploration
Manager/Senior Geologist for the Newmont Mining Company; Exploration Manager for
Gold Fields Mining Company; and Vice President-Development, for Western
Exploration Company.
Ahmed Magoma, Director
Ahmed Magoma has a B.Sc. in geology from the University of Dar
es Salaam (1992) and 16 years of experience in the mining industry, wherein he
has held progressively more responsible management and supervisory roles. Mr.
Magoma joined Kilimanjaro Mining Company Inc., in March of 2007, a private
company involved in the acquisition and exploration of highly prospective
resource properties in Tanzania, East Africa. Mr. Magoma has been a director of
Geo Can Resources Company Ltd., a private company, from April 2007 to present.
In addition to being a director with Kilimanjaro, Mr. Magoma is responsible for
all resource property acquisitions, negotiations and property owner and
government relations within Tanzania. His experience encompasses gold projects
from grassroots through to mining production. His field experience included
working with Tanex, a subsidiary of DeBeers and other South African companies as
a field geologist. Mr. Magoma worked with the Ministry of Energy and Minerals in
Tanzania for a period to learn, through study, the techniques of small-scale
miners to enhance their production. Mr. Magoma has worked with major gold
companies Barrick and Randgold as a project geologist and then as senior project
geologist with Tanzanite Africa. From 2005 to December 2007, Mr. Magoma was the
Senior Project Geologist for Tanzanite Africa Ltd., a private Africa
company.
Mr. Magoma was appointed as a Director in Lake Victoria Mining
Company in June 2008. He was considered for this position because of his
familiarity with the Company projects and operations in Africa. His experience
in the Mining Law and activities native to Tanzania were also deemed to be very
valuable to the Company by acting as a Director for the Company. We believe Mr.
Magoma is qualified to serve on our board of directors for the same reasons.
84
Ian A Shaw
,
Director and Chairman of the Audit
Committee
Ian A. Shaw, B.Comm., C.A. - Mr. Shaw, is a graduate of Trinity
College, University of Toronto (B.Comm., 1964) and obtained his Chartered
Accountant designation in 1969 with Deloitte, Plender, Haskins & Sells,
Toronto. In 1993, after a total of 18 years in financial positions with
producing mining companies he established Shaw & Associates with the
objective of providing corporate finance, regulatory reporting and compliance
services to clients that are typically junior public companies in the mineral
resource industry. In addition to his directorship with the Company he is
currently a director of Pelangio Exploration Inc. and Chief Financial Officer of
Olivut Resources Ltd., all of which are located in Canada and listed on the TSX
Venture Exchange.
We believe Mr. Shaw is qualified to serve on our board of
directors because of his knowledge of our current operations, in addition to his
business experiences described above.
Ming Zhu, Chief Financial Officer
Ming Zhu (B.Comm. MA) has worked along side the management team
of the Company since 2006. Ming attained a Bachelor's Degree in Accounting and
Finance in 1995. He has more than 10 years experience specializing in corporate
finance and accounting. His portfolio includes working for multinational
companies as their finance manager in New York and China. He worked as a
financial controller for an international trading firm for 2 years before
graduating from the University of Newcastle in the UK with his Master's Degree
in 2003 where he majored in Financial Analysis. He worked with a Canadian CA
accounting firm prior to joining our management team as the Financial Controller
and a Director in Kilimanjaro Mining Company Inc., a gold and uranium
exploration company that is now a wholly owned subsidiary of the Company. From
August 2009, he has been serving as the Financial Controller for the Company and
on October 7, 2010 became the Chief Financial Officer for the Company.
Term of Office
Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
Family Relationships
There are no family relationships among our directors or
officers, other than David Kalenuik and Heidi Kalenuik who are husband and
wife.
Involvement in Certain Legal Proceedings
Our directors and executive officers have not been involved in
any of the following events during the past ten years:
|
1.
|
any bankruptcy petition filed by or against any business
of which such person was a general partner or executive officer either at
the time of the bankruptcy or within two years prior to that
time;
|
|
|
|
|
2.
|
any conviction in a criminal proceeding or being subject
to a pending criminal proceeding (excluding traffic violations and other
minor offenses);
|
|
|
|
|
3.
|
being subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities;
|
|
|
|
|
4.
|
being found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities
or commodities law, and the judgment has not been reversed, suspended, or
vacated;
|
85
|
5.
|
being the subject of, or a party to, any federal or state
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged
violation of: (i) any federal or state securities or commodities law or
regulation; or (ii) any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a
temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease- and-desist order, or
removal or prohibition order; or (iii) any law or regulation prohibiting
mail or wire fraud or fraud in connection with any business entity;
or
|
|
|
|
|
6.
|
being the subject of, or a party to, any sanction or
order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Securities Exchange Act of 1934), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a
member.
|
Code of Ethics
We adopted a Code of Ethics applicable to all of our directors,
officers, employees and consultants, which is a code of ethics as defined by
applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to
our annual report filed on Form 10-K with the SEC on June 26, 2008.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their
ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.
Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that other than as disclosed below, all filing requirements applicable to our
officers, directors and greater than ten percent beneficial owners were complied
with.
Name
|
Number of Late Reports
|
Number of Transactions
Not
Reported on a
Timely Basis
|
Failure to File
Requested
Forms
|
David Kaleniuk
|
1
(1)
|
3
|
Nil
|
Heidi Kalenuik
|
1
(1)
|
2
|
Nil
|
Roger Newell
|
3
(1)
|
6
|
Nil
|
Ian A. Shaw
|
1
(2)
2
(1)
|
2
5
|
Nil
Nil
|
Ahmed Magoma
|
1
(1)
|
1
|
Nil
|
Ming Zhu
|
1
(2)
|
1
|
Nil
|
(1)
|
Filed a Form 4 Statement of Changes in Beneficial
Ownership late.
|
(2)
|
Filed a Form 3 Initial Statement of Beneficial
Ownership of Securities late.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
The particulars of compensation paid to the following
persons:
|
(a)
|
our principal executive officers during the year ended
March 31, 2011;
|
|
|
|
|
(b)
|
each of our two most highly compensated executive
officers other than our principal executive officers who were serving as
executive officers at March 31, 2011; and
|
86
|
(c)
|
up to two additional individuals for whom disclosure
would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at March 31,
2011,
|
who we collectively refer to as the named executive officers,
for the fiscal years ended March 31, 2011 and 2010, are set out in the following
summary compensation table:
SUMMARY
COMPENSATION TABLE
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compensa-
tion
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensa
-tion
($)
|
Total
($)
|
David
Kalenuik
(1)
President and
Chief Executive
Officer
|
2011
2010
|
53,250
(2)
N/A
|
Nil
N/A
|
Nil
N/A
|
437,000
(10)
N/A
|
Nil
N/A
|
750
(2)
N/A
|
Nil
N/A
|
491,000
N/A
|
Ming Zhu
(3)
Chief Financial
Officer
|
2011
2010
|
60,000
(4)
N/A
|
Nil
N/A
|
Nil
N/A
|
87,400
(10)
N/A
|
Nil
N/A
|
Nil
N/A
|
Nil
N/A
|
147,400
N/A
|
Heidi Kalenuik
Secretary
and
Treasurer
|
2011
2010
|
98,500
(5)
93,500
(5)
|
Nil
Nil
|
Nil
98,125
(5)(6)
|
367,080
(10)
Nil
|
Nil
Nil
|
3,500
(5)
2,125
(5)
|
Nil
Nil
|
469,080
193,750
|
Roger Newell
(7)
Former
President, Chief
Executive
Officer and
Chief
Financial
Officer
|
2011
2010
|
81,000
(8)
85,000
(8)
|
Nil
Nil
|
Nil
25,000
(8)(9)
|
367,080
(10)
Nil
|
Nil
Nil
|
Nil
27,500
(9)
|
Nil
Nil
|
448,080
137,500
|
|
(1)
|
David Kalenuik was appointed our President and Chief
Executive Officer on October 7, 2010.
|
|
|
|
|
(2)
|
During the fiscal year ended March 31, 2011, David
Kalenuik received consulting fees from our wholly owned subsidiary,
Kilimanjaro Mining Company, of $53,250 in cash and deferred compensation
of $750 to be paid for his services rendered
|
|
|
|
|
(3)
|
Ming Zhu was appointed our Chief Financial Officer on
October 7, 2010
|
|
|
|
|
(4)
|
During the fiscal year ended March 31, 2011, Ming Zhu
received accounting fees from our wholly owned subsidiary, Kilimanjaro
Mining Company, of $60,000 in cash for his services rendered
|
|
|
|
|
(5)
|
During the fiscal year ended March 31, 2011, Heidi
Kalenuik received management fees from our wholly owned subsidiary,
Kilimanjaro Mining Company, of $98,500 in cash and deferred compensation
of $3,500 to be paid for her services rendered
|
|
|
|
|
|
During the fiscal year ended March 31, 2010, Heidi
Kalenuik received management fees from our wholly owned subsidiary,
Kilimanjaro Mining Company, of $93,500 in cash, $12,500 in restricted
common shares of our company and $85,625 in common shares of Kilimanjaro
Mining Company and deferred compensation of $2,125 to be paid for her
services rendered.
|
87
|
(6)
|
On April 15, 2009, Heidi Kalenuik received 25,000
restricted common shares with a value of $12,500. The shares were valued
at $0.50 per share, which was the closing price of our common shares on
April 15, 2009. In June 2009, our wholly owned subsidiary, Kilimanjaro
Mining Company, granted 342,500 shares of its common stock to her with a
value of $85,625. These shares were valued at $0.25 per share, which was
the offering price of the private placement conducted by Kilimanjaro
Mining Company in May 2009.
|
|
|
|
|
(7)
|
Roger Newell resigned as our President, Chief Executive
Officer and Chief Financial Officer on October 7, 2010.
|
|
|
|
|
(8)
|
During the fiscal year ended March 31, 2011, Roger Newell
received $85,000 in cash from our wholly owned subsidiary, Kilimanjaro
Mining Company for his geological professional service rendered. During
the fiscal year ended March 31, 2010, Roger Newell provided geological
professional service to our wholly owned subsidiary, Kilimanjaro Mining
Company. He received $81,000 in cash, $12,500 in restricted common shares
of our company and $12,500 in common shares of Kilimanjaro Mining Company
and deferred compensation of $27,500 to be paid for his services
rendered.
|
|
|
|
|
(9)
|
On April 15, 2009, Roger Newell received 25,000
restricted common shares with a value of $12,500. The shares were valued
at $0.50 per share, which was the closing price of our common shares on
April 15, 2009. In June 2009, our wholly owned subsidiary, Kilimanjaro
Mining Company, granted 50,000 shares of its common stock to Mr. Newell
with a value of $12,500. These shares were valued at $0.25 per share,
which was the offering price of the private placement conducted by
Kilimanjaro Mining Company in May 2009.
|
|
|
|
|
(10)
|
On October 21, 2010, the Company passed a resolution to
grant 3,580,000 stock options to six directors and officers at an exercise
price of $0.45 per share which will expire on October 21, 2013. David
Kalenuik was granted 1,000,000 options with a fair value of $437,000,
Heidi Kalenuik was granted 840,000 options with a fair value of $367,080,
Roger Newell was granted 840,000 options with a fair value of $367,080 and
Ming Zhu was granted 200,000 options with a fair value of $87,400.
The
fair value of the options was estimated using the Black-Scholes pricing
model based on the following assumptions: dividend yield of 0%; risk-free
interest rate of 0.52%; expected life of three years; and volatility of
170%.
|
Employment Contracts
Roger Newell provided management and geological consulting
services to the Company in consideration of which the Company paid Mr. Newell a
consulting fee of $10,000 per month for the period from April 1, 2010 to
September 30, 2010 and $3,500 per month from October 1, 2010 to March 31, 2011.
The consulting agreement was on a month to month basis with no formal contract
and the payment was made by our wholly owned subsidiary company, Kilimanjaro
Mining Company Inc. During the year ended March 31, 2011 an aggregate of $81,000
was paid to Mr. Newell. The consulting agreement terminated on the resignation
of Mr. Newell on October 7, 2010. On April 26, 2011, the Company entered into a
consulting agreement with Roger Newell, pursuant to which the Company engaged
Mr. Newell to, among other things: provide the services to the corporate
management, reporting to the president and subsequently to the board of
directors including without limiting the generality of the foregoing, reviewing
and editing technical data/press releases, finding and assessing new projects
and assisting in investor relations, corporate presentations and financing
requirements. As consideration for the performance of his consulting services
under the agreement, the Company agreed to pay Mr. Newell USD$3,500 per month
commencing April 1, 2011, plus applicable taxes. Contingent upon Mr. Newell
executing the consulting agreement and as part of the consideration for Mr.
Newells services, the Company agreed to grant Mr. Newell upon the completion of
twelve (12) months of April 26, 2011 and annually on the anniversary each and
every year that follows, during Mr. Newells continuous consulting, an option to
purchase 250,000 shares of the Companys restricted common stock. The consulting
agreement is for a term of two years and may be renewed at the option of the
Company by giving 30 days written notice prior to the expiry of the initial
term.
88
Heidi Kalenuik provided administrative and management
consulting services to the Company in consideration of which the Company paid
Mrs. Kalenuik a consulting/management fee of $8,500 per month. The consulting
agreement was on a month to month basis with no formal contract and the payment
was made by our wholly owned subsidiary company, Kilimanjaro Mining Company Inc.
During the year ended March 31, 2011 an aggregate of $98,500 were paid and
$3,500 are to be paid to Mrs. Kalenuik. On April 26, 2011, the Company entered
into an employment letter agreement with Heidi Kalenuik, pursuant to which the
Company employed Mrs. Kalenuik to, among other things: carry out the duties and
responsibilities of the position of Secretary, Treasurer and Supervisor of
Operations of the Company. As consideration for the performance of her duties
under the employment letter agreement, the Company agreed to pay Mrs. Kalenuik
CDN$102,000 (approximately US$107,017) per year commencing April 1, 2011. Mrs.
Kalenuik is also entitled to receive a one-time bonus in the amount of CDN$1,000
(approximately US$1,049).
On April 26, 2011, the Company entered into a consulting
agreement with David Kalenuik, pursuant to which the Company engaged Mr.
Kalenuik to, among other things: provide the services of corporate management,
reporting to the board of directors including without limiting the generality of
the foregoing, hiring other managers and employees as required, finding new
projects and assisting in financing requirements. As consideration for the
performance of his consulting services under the agreement, the Company agreed
to pay Mr. Kalenuik CDN$10,000 (approximately US$10,492) per month commencing
April 1, 2011, plus applicable taxes. Contingent upon Mr. Kalenuik executing the
consulting agreement and as part of the consideration for Mr. Kalenuiks
services, the Company will grant Mr. Kalenuik upon the completion of twelve (12)
months of April 26, 2011 and annually on the anniversary each and every year
that follows, during Mr. Kalenuiks continuous consulting, an option to purchase
500,000 shares of the Companys restricted common stock. The consulting
agreement is for a term of two years and may be renewed at the option of the
Company by giving 30 days written notice prior to the expiry of the initial
term.
Effective April 26, 2011, the Company entered into an
employment letter agreement with Ming Zhu, pursuant to which the Company
employed Mr. Zhu to, among other things: carry out the duties and
responsibilities of the position of Chief Financial Officer of the Company. As
consideration for the performance of his duties under the employment letter
agreement, the Company agreed to pay Mr. Zhu CDN$90,000 (approximately
US$94,427) per year commencing April 1, 2011. Mr. Zhu is also entitled to
receive a one-time bonus in the amount of CDN$1,000 (approximately US$1,049).
Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors from time to time.
Resignation, Retirement, Other Termination, or Change in
Control Arrangements
We have no plans or arrangements in respect of remuneration
received or that may be received by our directors or executive officers to
compensate such directors or officers in the event of termination of employment
(as a result of resignation, retirement, change of control) or a change of
responsibilities following a change of control.
89
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each executive officer
certain information concerning the outstanding equity awards as of March 31,
2011.
|
OPTION AWARDS
|
STOCK AWARDS
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
David
Kalenuik
(1)
President
and Chief
Executive
Officer
|
1,000,000
|
Nil
|
Nil
|
$0.45
|
October
21, 2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Ming
Zhu
(2)
Chief
Financial
Officer
|
200,000
|
Nil
|
Nil
|
$0.45
|
October
21, 2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Heidi
Kalenuik
Secretary
and
Treasurer
|
840,000
|
Nil
|
Nil
|
$0.45
|
October
21, 2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Roger
Newell
(3)
Former
President,
Chief
Executive
Officer
and Chief
Financial
Officer
|
840,000
|
Nil
|
Nil
|
$0.45
|
October
21, 2013
|
Nil
|
Nil
|
Nil
|
Nil
|
(1)
|
David Kalenuik was appointed our President and
Chief Executive Officer on October 7, 2010.
|
90
(2)
|
Ming Zhu was appointed our Chief Financial Officer on
October 7, 2010.
|
|
|
(3)
|
Roger Newell resigned as our President, Chief Executive
Officer and Chief Financial Officer on October 7,
2010.
|
Aggregated Options Exercised in the Year Ended March 31,
2011 and Year End Option Values
There were no stock options exercised during the year ended
March 31, 2011.
Repricing of Options/SARS
We did not reprice any options previously granted during the
year ended March 31, 2011.
Director Compensation
The following table sets forth the compensation for each
director who is not a named executive officer for the fiscal year ended March
31, 2011:
DIRECTOR COMPENSATION
|
Name
|
Fees
earned
or
paid in
cash
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive
plan
compensation
($)
|
Nonqualified
deferred
compensation
earnings
($)
|
All other
compensation
($)
|
Total
($)
|
Ahmed A. Magoma
|
85,135
(1)
|
Nil
|
190,000
|
Nil
|
Nil
|
Nil
|
275,135
|
Ian A. Shaw
(2)
|
Nil
|
Nil
|
76,000
|
Nil
|
Nil
|
Nil
|
76,000
|
(1)
|
Mr. Ahmed Magoma is a director of the Company and its two
subsidiaries, Kilimanjaro Mining Company Inc. and Lake Victoria Resources
(T) Limited and he is an employee of Lake Victoria Resources (T) Limited.
During the fiscal year ended March 31, 2011, he received total directors
fee of $12,000 from the Company. During the fiscal year ended March 31,
2011, Ahmed was paid salary of $73,135 from Lake Victoria Resources (T)
Limited; his monthly gross pay was $6,095.
|
|
|
(2)
|
Mr. Ian A. Shaw was appointed as a director of the
Company on April 8, 2010.
|
We have no formal plan for compensating our directors for their
services in their capacity as directors. Our directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. Our board of
directors may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a director
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
|
As of July 13, 2011, there were 97,485,733 shares of our common
stock outstanding. The following table sets forth certain information known to
us with respect to the beneficial ownership of our common stock as of that date
by (i) each of our directors, (ii) each of our executive officers, and (iii) all
of our directors and executive officers as a group. Except as set forth in the
table below, there is no person known to us who beneficially owns more than 5%
of our common stock.
91
Title of Class
Directors
and Officers:
|
Name and Address
of Beneficial Owner
|
Number of Shares
Beneficially Owned (1)
|
Percentage of Class
(1),(2)
|
Common Stock
|
David Kalenuik
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
19,136,000
(3)
|
19.20%
|
Common Stock
|
Heidi Kalenuik
Suite 810
675 West
Hastings Street
Vancouver, BC V6B 1N2
|
19,136,000
(4)
|
19.20%
|
Common Stock
|
Ming Zhu
Suite 810 675
West
Hastings Street
Vancouver, BC V6B 1N2
|
790,000
(5)
|
0.81%
|
Common Stock
|
Roger Newell
Suite 810
675 West
Hastings Street
Vancouver, BC V6B 1N2
|
2,455,000
(6)
|
2.63%
|
Common Stock
|
Ahmed Magoma
Suite 810
675 West
Hastings Street
Vancouver, BC V6B 1N2
|
1,173,750
(7)
|
1.20%
|
Common Stock
|
Ian A. Shaw
98 Crimson
Millway
Toronto, ON M2L 1T6
|
1,150,000
(8)
|
1.17%
|
Common Stock
|
Directors and Officers as
a
group (6)
|
24,704,750
(9)
|
24.18%
|
5% Stockholders
|
Common Stock
|
David Kalenuik
Suite 810
675 West
Hastings Street
Vancouver, BC V6B 1N2
|
19,136,000
(3)
|
19.20%
|
Common Stock
|
Heidi Kalenuik
Suite 810
675 West
Hastings Street
Vancouver, BC V6B 1N2
|
19,136,000
(4)
|
19.20%
|
(1)
|
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition
rights.
|
|
|
(2)
|
The percentage of class is based on 97,485,733 shares of
common stock issued and outstanding and as of July 13, 2011.
|
|
|
(3)
|
Includes 720,000 shares of the Company held directly,
16,186,000 shares held by Heidi Kalenuik, the
spouse of David Kalenuik and 15,000 shares held by their
children. Also includes 1,000,000 shares of the Company acquirable on
exercise of options held directly, 840,000 shares of the Company
acquirable on exercise of options held indirectly by Heidi Kalenuik and
375,000 shares of the Company acquirable on exercise of warrants held
indirectly by Heidi Kalenuik within 60 days of the date hereof.
|
92
(4)
|
Includes 16,186,000 shares of the Company held directly,
720,000 shares held by David Kalenuik, the spouse of Heidi Kalenuik and
15,000 shares held by their children. Also includes 840,000 shares of the
Company acquirable on exercise of options held directly, 1,000,000 shares
of the Company acquirable on exercise of options held indirectly by David
Kalenuik and 375,000 shares of the Company acquirable on exercise of
warrants held directly within 60 days of the date hereof.
|
|
|
(5)
|
Includes 200,000 shares of the Company acquirable on
exercise of options and 250,000 shares of the Company acquirable on
exercise of warrants within 60 days of the date hereof.
|
|
|
(6)
|
Includes 840,000 shares of the Company acquirable on
exercise of options and 570,000 shares of the Company acquirable on
exercise of warrants within 60 days of the date hereof.
|
|
|
(7)
|
Includes 500,000 shares of the Company acquirable on
exercise of options within 60 days of the date hereof.
|
|
|
(8)
|
Includes 200,000 shares of the Company acquirable on
exercise of options and 550,000 shares of the Company acquirable on
exercise of warrants within 60 days of the date hereof.
|
|
|
(9)
|
Includes 3,580,000 shares of the Company acquirable on
exercise of options and 1,745,000 shares of the Company acquirable on
exercise of warrants within 60 days of the date
hereof.
|
Changes in Control
We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.
ITEM 13.
|
CERTAIN
RELATIONSHIPS
AND
RELATED
TRANSACTIONS,
AND
DIRECTOR
INDEPENDENCE.
|
Except as noted below, none of the following parties has, since
commencement of our fiscal year ended March 31, 2010, had any material interest,
direct or indirect, in any transaction with us or in any presently proposed
transaction that has or will materially affect us, in which our company is a
participant and the amount involved exceeds the lesser of $120,000 or 1% of the
average of our companys total assets for the last two completed financial
years:
|
(i)
|
Any of our directors or officers;
|
|
|
|
|
(ii)
|
Any person proposed as a nominee for election as a
director;
|
|
|
|
|
(iii)
|
Any person who beneficially owns, directly or indirectly,
shares carrying more than 5% of the voting rights attached to our
outstanding shares of common stock;
|
|
|
|
|
(iv)
|
Any of our promoters; and
|
|
|
|
|
(v)
|
Any member of the immediate family (including spouse,
parents, children, siblings and in- laws) of any of the foregoing
persons.
|
Related Party Transactions and Balances:
|
a)
|
Prior to incorporation of the Companys wholly-owned
subsidiary in Tanzania, the Company contracted with Geo Can Resources
Company Ltd (Geo Can), a related company with Ahmed Magoma, a shared
common director, to perform exploration services on all of the properties.
As of March 31, 2011, the Company owed $620,523 (2010 - $700,523) to Geo
Can for exploration services provided. The amounts are non-interest
bearing, unsecured and due on demand. The Company, through its subsidiary Kilimanjaro Mining
Company, advanced funds to Geo Can Resources Company to find mineral
property interests in Tanzania. As of March 31, 2011 and 2010, the Company
had advanced $499,043 to Geo Can. The advances bear no interest, are
unsecured and are due on demand. The unencumbered funds advanced to Geo
Can would be refundable to the Company. The advances have not been offset
against payables nor had any encumbrances been reported to the
Company.
|
93
|
b)
|
At March 31, 2011, the Company owed $750 (2010 - $nil) of
consulting fees to the President of the Company. During the twelve months
ended March 31, 2011, the Company incurred $54,000 (2010 - $46,084) of
consulting fees to the President of the Company.
|
|
|
|
|
c)
|
At March 31, 2011, the Company owed $3,500 (2010 - $nil)
of management fees to Heidi Kalenuik, a director of the Company. During
the twelve months ended March 31, 2011, the Company incurred $102,000
(2010 - $155,750) of management fees to the
director.
|
Director Independence
Our common stock is quoted on the OTC bulletin board
interdealer quotation system, which does not have director independence
requirements. Under NASDAQ rule 5605(a)(2), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. David Kaleniuk is our president and chief executive officer, Heidi
Kalenuik is our secretary and treasurer and Ahmed Magoma is an employee of
subsidiary of the Company and therefore are not considered independent. Messrs.
Newell and Shaw are considered to be independent as they are not officers or
employees of our company.
Audit Committee and Charter
Our audit committee consists of our entire board of directors.
One of our directors, Ian Shaw is independent and is the designated Chair of the
Committee when it is constituted. Our audit committee is responsible for: (1)
selection and oversight of our independent accountant; (2) establishing
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal controls and auditing matters; (3) establishing procedures
for the confidential, anonymous submission by our employees of concerns
regarding accounting and auditing matters; (4) engaging outside advisors; and,
(5) funding for the outside auditory and any outside advisors engagement by the
audit committee. A copy of our audit committee charter was filed with the
Securities and Exchange Commission on June 26, 2008 with our Form 10-K.
Audit Committee Financial Expert
The Board has determined that the Chairman of the Audit
Committee, Ian A. Shaw, qualifies as audit committee financial expert as
defined by the SEC and also meets the additional criteria for independence of
Audit Committee members set forth in Rule 10A-3(b)(l) under the Securities
Exchange Act of 1934, as amended (the Exchange Act).
Disclosure Committee and Charter
We have a disclosure committee and disclosure committee
charter. Our disclosure committee is comprised of all of our officers and
directors. The purpose of the committee is to provide assistance to the Chief
Executive Officer and the Chief Financial Officer in fulfilling their
responsibilities regarding the identification and disclosure of material
information about us and the accuracy, completeness and timeliness of our
financial reports. A copy of the disclosure committee charter was filed with the
Securities and Exchange Commission on June 26, 2008 our Form 10-K.
National Instrument 58-101
We are a reporting issuer in the Province of British Columbia.
National Instrument 58-101 of the Canadian Securities Administrators requires
our company, as a venture issuer, to disclose annually in our annual report
certain information concerning corporate governance disclosure.
94
Board of Directors
Our board of directors currently consists of Roger A Newell,
David Kalenuik, Heidi Kalenuik, Ian A. Shaw and Ahmed A. Magoma. We have
determined that Mr. Kalenuik, Mrs. Kalenuik and Mr. Magoma are not independent
as that term is defined in National Instrument 52-110 due to the fact that they
are directors, officers and employees of our company. Messrs. Newell and Shaw
are independent.
Our board of directors facilitates its exercise of independent
supervision over management by endorsing the guidelines for responsibilities of
the board as set out by regulatory authorities on corporate governance in Canada
and the United States. Our boards primary responsibilities are to supervise the
management of our company, to establish an appropriate corporate governance
system, and to set a tone of high professional and ethical standards. The board
is also responsible for:
-
selecting and assessing members of the board;
-
choosing, assessing and compensating the chief executive officer of our
company, approving the compensation of all executive officers and ensuring
that an orderly management succession plan exists;
-
reviewing and approving our companys strategic plan, operating plan,
capital budget and financial goals, and reviewing its performance against
those plans;
-
adopting a code of conduct and a disclosure policy for our company, and
monitoring performance against those policies;
-
ensuring the integrity of our companys internal control and management
information systems;
-
approving any major changes to our companys capital structure, including
significant investments or financing arrangements; and
-
reviewing and approving any other issues which, in the view of the board or
management, may require board scrutiny.
Directorships
The following directors are also directors of other reporting
issuers (or the equivalent in a foreign jurisdiction), as identified next to
their name:
Director
|
Reporting Issuers or
Equivalent in a Foreign
Jurisdiction
|
David Kalenuik
|
N/A
|
Heidi Kalenuik
|
N/A
|
Roger Newell
|
Midway Gold, Corp
|
Ian A. Shaw
|
Pelangio Exploration Inc.
|
Ahmed A. Magoma
|
N/A
|
Ming Zhu
|
N/A
|
95
Orientation and Continuing Education
We have an informal process to orient and educate new members
to the board regarding their role on the board, our committees and our
directors, as well as the nature and operations of our business. This process
provides for an orientation with key members of the management staff, and
further provides access to materials necessary to inform them of the information
required to carry out their responsibilities as a board member. This information
includes the most recent board approved budget, the most recent annual report,
the audited financial statements and copies of the interim quarterly financial
statements.
The board does not provide continuing education for its
directors. Each director is responsible to maintain the skills and knowledge
necessary to meet his or her obligations as directors.
Nomination of Directors
The board is responsible for identifying new director nominees.
In identifying candidates for membership on the board, the board takes into
account all factors it considers appropriate, which may include strength of
character, mature judgment, career specialization, relevant technical skills,
diversity and the extent to which the candidate would fill a present need on the
board. As part of the process, the board, together with management, is
responsible for conducting background searches, and is empowered to retain
search firms to assist in the nominations process. Once candidates have gone
through a screening process and met with a number of the existing directors,
they are formally put forward as nominees for approval by the board.
Assessments
The board intends that individual director assessments be
conducted by other directors, taking into account each directors contributions
at board meetings, service on committees, experience base, and their general
ability to contribute to one or more of our companys major needs. However, due
to our stage of development and our need to deal with other urgent priorities,
the board has not yet implemented such a process of assessment.
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES.
|
The aggregate fees billed for the completed fiscal years ended
March 31, 2011 and 2010 for professional services rendered by Manning Elliott
LLP for the audit of our annual financial statements, quarterly reviews of our
interim financial statements and services normally provided by the independent
accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:
|
Year Ended
March 31,
2011
|
Year Ended
March 31,
2010
|
Audit Fees and Audit Related Fees
|
$12,783
|
$Nil
|
Tax Fees
|
$Nil
|
$Nil
|
All Other Fees
|
$Nil
|
$Nil
|
Total
|
$12,783
|
$Nil
|
The aggregate fees billed for the completed fiscal years ended
March 31, 2011 and 2010 for professional services rendered by BehlerMick PS for
the audit of our annual financial statements, quarterly reviews of our interim
financial statements and services normally provided by the independent
accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:
96
|
Year
Ended
March 31,
2011
|
Year
Ended
March 31,
2010
|
Audit Fees and Audit Related Fees
|
$166,991
|
$79,186
|
Tax Fees
|
$Nil
|
$Nil
|
All Other Fees
|
$Nil
|
$Nil
|
Total
|
$166,991
|
$79,186
|
In the above tables, audit fees are fees billed by our
companys external auditors for services provided in auditing our companys
annual financial statements for the subject year. Audit-related fees are fees
not included in audit fees that are billed by the auditors for assurance and
related services that are reasonably related to the performance of the audit
review of our companys financial statements. Tax fees are fees billed by the
auditors for professional services rendered for tax compliance, tax advice and
tax planning. All other fees are fees billed by the auditors for products and
services not included in the foregoing categories.
Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors
The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors before the respective services were
rendered.
The board of directors has considered the nature and amount of
fees billed by Manning Elliott LLP and BehlerMick PS and believes that the
provision of services for activities unrelated to the audit is compatible with
maintaining their respective independence.
PART IV. OTHER INFORMATION
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES.
|
Exhibit
|
|
Number
|
Description
|
3.1
|
Articles of Incorporation (incorporated by reference from
our Registration Statement on Form SB-2, filed on June 6, 2007)
|
3.2
|
Certificate of Amendment dated December 7, 2010
(incorporated by reference from our Current Report on Form 8-K dated
December 10, 2010)
|
3.3
|
Amended and Restated Bylaws (incorporated by reference
from our Current Report on Form 8-K filed on June 7, 2011)
|
4.1
|
Specimen Stock Certificate (incorporated by reference
from our Registration Statement on Form SB-2 filed on June 6, 2007)
|
4.2
|
Form of Warrant Certificate for Offering Completed
September 7, 2010 (incorporated by reference from our Quarterly Report on
Form 10-Q filed on November 23, 2010)
|
10.1
|
License (incorporated by reference from our Registration
Statement on Form SB-2, filed on June 6, 2007)
|
10.2
|
Amendment to License Agreement, dated June 3, 2008
(incorporated by reference from our Annual Report on Form 10-K filed on
June 26, 2008)
|
10.3
|
Option Agreement with Geo Can Resources Company Limited
(incorporated by reference from our Annual Report on Form 10-K filed on
July 14, 2009)
|
10.4
|
Binding Letter Agreement with Kilimanjaro Mining Company
Inc. (incorporated by reference from our Annual Report on Form 10-K filed
on July 14, 2009)
|
10.5
|
Consulting Services Agreement with Stocks That Move
(incorporated by reference from our Quarterly Report on Form 10-Q filed on
November 23, 2009)
|
10.6
|
Consulting Agreement with Robert Lupo (incorporated by
reference from our Quarterly Report on Form 10-Q filed on February 22,
2010)
|
10.7
|
Addendum to the Consulting Agreement with Robert Lupo
(incorporated by reference from our Quarterly Report on Form 10-Q filed on
February 22, 2010)
|
10.8
|
Finders Fee Agreement with Robert A. Young and the RAYA
Group (incorporated by reference from our Annual Report on Form 10-K filed
on July 14, 2019)
|
10.9
|
Termination of the Consulting Agreement with Robert Lupo
(incorporated by reference from our Annual Report on Form 10-K filed on
July 14, 2010)
|
10.10
|
Consulting Agreement with Clive Howard Matthew King
(incorporated by reference from our Annual Report on Form 10-K filed on
July 14, 2010)
|
10.11
|
Consulting Agreement dated October 7, 2010 between the
Company and Misac Noubar Nabighian (incorporated by reference from our
Current Report on Form 8-K filed on October 13, 2010)
|
10.12
|
2010 Stock Option Plan (incorporated by reference from
our Current Report on Form 8-K filed on October 13, 2010)
|
10.13
|
Stock Exchange Agreement with Kilimanjaro Mining Company,
Inc. and their selling shareholders (incorporated by reference from our
Quarterly Report on Form 10-Q filed on November 23, 2009)
|
10.14
|
Form of Subscription Agreement for Offering Completed
September 7, 2010 (incorporated by reference from our Quarterly Report on
Form 10-Q filed on November 23, 2010)
|
10.15
|
Amendment No. 1 to Consulting Agreement between the
Company and Clive King dated effective November 11, 2010.(incorporated by
reference from our Quarterly Report on Form 10-Q filed on November 23,
2010)
|
10.16
|
Form of Mineral Property Sales Agreement dated May 15,
2009, July 29, 2009, August 28, 2009 and November 19, 2009 between a
director of the Company and the landowners listed below (collectively the
Landowners) (incorporated by reference from our Quarterly Report on Form
10-Q filed on November 23, 2010):
|
Exhibit
|
|
|
Number
|
Description
|
|
No
|
Owners Name
|
|
S01
|
Pius Joackim Game in Parenership with Mustafa Kaombwe and
Msua Mkumbo
|
|
S03
|
Mohamed Suleimani and Partners Plus Chombo, Alfred Joakim
and Heri S. Mhula
|
|
S04
|
Maswi Marwa In Partnership with Robert Malando, Andrew
Julius Marando and Mathew Melania
|
|
S05
|
John Bina Wambura in Partnership with Fabiano Lango
|
|
S06
|
Elizabeth Shango
|
|
S07
|
Athuman Chiboni in Partnership with Maswi Marwa and
Robert Malando
|
|
S08
|
Malando Maywili in Partnership with Charles Mchembe
|
|
S09
|
Robert Malando
|
|
S10
|
Raymond Athumani Munyawi
|
|
S11
|
Jeremia K. Lulu in Partnership with Agnes Musa, Juma
Shashu, Neema Safari, Neema Tungaraza, Safari Neema Tungaraza, Safari
Meema and Simon Gidazada
|
|
S12
|
Heri S. Mhula and partners Samweli Sumbuka, Plus Gam and
Shambulingole
|
|
S13
|
Limbu Magambo Nyoda and Partners Saba Joseph, Bakari
Kahinda
|
|
S14
|
Shambuli Sumbuka in Partnership with Limbu Gambo
|
|
S15
|
Salama Mselemu
|
|
S16
|
John Bina Wambura in Partnership with Bosco Sevelin
Chaila; Plus Game; Saimon Jonga
|
|
S17
|
John Bina Wambura in Partnership with Jumanne Mtemi;
Anton Gidion; Bosco Sevelin Chaila; Plus Game; Saimon Jonga
|
|
S18
|
Limbu Magambo in Partnership with Pous GamI and Shambuli
Sumbuka
|
|
S19
|
Lukas Mmary in Partnership with Henry Pajero, John Bina,
Massanja Game, Mwajuma Joseph, Mwita Magita and Plus Game
|
|
S20
|
Maswi Marwa In Partnership with Shagida malando; Marwa
Marwa; Benidict Mitti and Fred Mgongo
|
|
S21
|
Mustafa IDD Kaombwe
|
|
S22
|
Mustafa IDD Kaombwe in Partnership with Mahega Malugoyi;
Julias Kamana; Ramadhani Lyanga and Abas Mustafa
|
|
S23
|
Ramadhani Mohamed Lyanga In partnership With Mustafa
Kaombwe and Bethod Njega
|
|
S24
|
Ales David Kajoro in partnership with Henry Ignas; Daud
Peter and Julias Charles Rugiga
|
|
S25
|
Joel Mazemle in Partnership with Christina Mazemle, Plus
Chombo and Limbu Magambo Nyoda
|
|
S26
|
Idd Ismail in Partnership with Bakari Abdi, Elizabeth U.
Yohana, Emanuel Marco, Hamisi Ramadhan, Husein Hasan, Mnaya Hosea, and
Sanane Msigalali
|
10.17
|
Form of Addendum No. 1 to Mineral Property Sales
Agreement dated September 18, 2009 between a director of the Company and
the Landowners (incorporated by reference from our Quarterly Report on
Form 10-Q filed on November 23, 2010)
|
10.18
|
Form of Addendum No. 2 to Mineral Property Sales
Agreement dated January 18, 2010 between a director of the Company and the
Landowners (incorporated by reference from our Quarterly Report on Form
10-Q filed on November 23, 2010)
|
10.19
|
Form of Addendum No. 3 to Mineral Property Sales
Agreement dated July 27, 2010 between a director of the Company and the
Landowners (incorporated by reference from our Quarterly Report on Form
10-Q filed on November 23, 2010)
|
10.20
|
Mineral Financing Agreement between the Company and Ahmed
Magoma dated October 19, 2009 (incorporated by reference from our
Quarterly Report on Form 10-Q filed on November 23, 2010)
|
10.21
|
Property Purchase Agreement between Geo Can Resources
Company Limited and Kilimanjaro Mining Company, Inc dated May 5,
2009(incorporated by reference from our Quarterly Report on Form 10-Q
filed on November 23, 2010)
|
10.22
|
Amendment to Mineral Financing Agreement between the
Company and Ahmed Magoma dated October 27, 2009 (incorporated by reference
from our Quarterly Report on Form 10-Q filed on November 23, 2010)
|
10.23
|
Declaration of Trust of Geo Can Resources Company Limited
dated July 23, 2009 (incorporated by reference from our Quarterly Report
on Form 10-Q filed on November 23, 2010)
|
10.24
|
Form of Subscription Agreement for non US Subscribers
(incorporated by reference from our Current Report on Form 8-K filed on
March 11, 2011)
|
10.25
|
Form of Subscription Agreement for US Subscribers
(incorporated by reference from our Current Report on Form 8-K filed on
March 11, 2011)
|
Exhibit
|
|
Number
|
Description
|
10.26
|
Consulting Agreement
dated April 26, 2011 between David Kalenuik and the Company (incorporated
by reference from our Current Report on Form 8-K filed on May 2, 2011)
|
10.27
|
Consulting Agreement dated April
26, 2011 between Roger Newell and the Company (incorporated by reference
from our Current Report on Form 8-K filed on May 2, 2011)
|
10.28
|
Employment Agreement
dated April 26, 2011 between Heidi Kalenuik and the Company (incorporated
by reference from our Current Report on Form 8-K filed on May 2, 2011)
|
10.29
|
Employment Agreement dated April
26, 2011 between Ming Zhu and the Company (incorporated by reference from
our Current Report on Form 8-K filed on May 2, 2011)
|
10.30
|
Geita Option
Agreement dated May 6, 2011 between Otterburn Ventures Inc. and the Company
(incorporated by reference from our Current Report on Form 8-K filed on
May 12, 2011)
|
10.31
|
Kalemela Option Agreement dated
May 6, 2011 between Otterburn Ventures Inc. and the Company (incorporated
by reference from our Current Report on Form 8-K filed on May 12, 2011)
|
10.32
|
North Mara Option
Agreement dated May 6, 2011 between Otterburn Ventures Inc. and the Company
(incorporated by reference from our Current Report on Form 8-K filed on
May 12, 2011)
|
10.33
|
Singida Option Agreement dated
May 6, 2011 among Otterburn Ventures Inc., the Company and Ahmed Abubakar
Magoma (incorporated by reference from our Current Report on Form 8-K
filed on May 12, 2011)
|
14.1
|
Code of Ethics
(incorporated by reference from our Annual Report on Form 10-K filed on
June 26, 2008)
|
16.1
|
Letter dated October 8, 2010
from BehelerMick PS (incorporated by reference from our Current Report
on Form 8-K filed on October 8, 2010)
|
21.1*
|
List
of Subsidiaries
|
31.1*
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2*
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32.1*
|
Certification
of Chief Executive Officer pursuant Section 906 Certifications under Sarbanes-Oxley
Act of 2002
|
32.2*
|
Certification
of Chief Financial Officer pursuant Section 906 Certifications under Sarbanes-Oxley
Act of 2002
|
99.2
|
Audit Committee Charter (incorporated
by reference from our Annual Report on Form 10-K filed on June 26, 2008)
|
99.3
|
Disclosure Committee
Charter (incorporated by reference from our Annual Report on Form 10-K
filed on June 26, 2008)
|
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
|
LAKE VICTORIA MINING COMPANY,
INC.
|
|
|
|
|
|
|
|
BY:
|
/s/ David Kalenuik
|
|
|
David Kalenuik
|
|
|
President and Chief Executive
Officer
|
|
|
(Principal Executive Office)
|
|
|
|
|
Date:
|
July 14, 2011
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
By
|
/s/ David Kalenuik
|
|
|
David Kalenuik
|
|
|
President, Chief Executive
Officer
|
|
|
and Director
|
|
|
(Principal Executive Officer)
|
|
|
Date: July 14, 2011
|
|
|
|
|
|
|
|
By
|
/s/ Ming Zhu
|
|
|
Ming Zhu
|
|
|
Chief Financial Officer
|
|
|
(Principal Accounting Officer and
Principal Financial Officer)
|
|
|
Date: July 14, 2011
|
|
|
|
|
|
|
|
By
|
/s/ Heidi Kalenuik
|
|
|
Heidi Kalenuik
|
|
|
Director
|
|
|
July 14, 2011
|
|
|
|
|
|
|
|
By
|
/s/ Roger A. Newell
|
|
|
Roger A. Newell
|
|
|
Director
|
|
|
July 14, 2011
|
|
|
|
|
|
|
|
By
|
/s/ Ahmed A. Magoma
|
|
|
Ahmed A. Magoma
|
|
|
Director
|
|
|
July 14, 2011
|
|
|
|
|
By
|
/s/ Ian A. Shaw
|
|
|
Ian A. Shaw
|
|
|
Director
|
|
|
July 14, 2011
|
|
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