ITEM
1. BUSINESS
Business
Development
We
were originally incorporated under the laws of the state of Nevada in June 2009 as MyOtherCountryClub.com for the purpose of developing
a website that would offer reciprocal golf privileges, and other related services, to members of private country clubs throughout
the United States.
On
May 2, 2012, we completed a 7-for-1 forward split of all outstanding shares of our common stock and a corresponding increase in
our authorized common stock. The effect of the forward split was to increase the number of our common shares issued and outstanding
from 8,400,000 to 58,800,000 and to increase our authorized common shares from 50,000,000 shares, par value $0.001, to 350,000,000
shares, par value $0.001.
On
May 7, 2012, we entered into an Acquisition Agreement and Plan of Merger, as amended on July 24, 2012 and on October 24, 2012
(collectively referred to as the “Merger Agreement”), with our wholly-owned subsidiary, JSR Sub Co, a Nevada corporation
(“Sub Co”), and Bolcán Mining Corporation, a Nevada corporation (“Bolcán Mining”). Pursuant
to the Merger Agreement, we issued 25,000,000 shares of our Rule 144 restricted common stock in exchange for 100% of Bolcán
Mining’s issued and outstanding capital stock.
Pursuant
to the terms of the Merger Agreement, on October 29, 2012 Sub Co merged with and into Bolcán Mining (the “Merger”)
with Bolcán Mining surviving the Merger as our wholly owned subsidiary. After the Merger, there were 31,300,000 shares
of our common stock outstanding, of which approximately 80% were held by the former shareholders of Bolcán Mining. Prior
to the Merger, we were a shell company with no business operations. As a result of the Merger, we are no longer considered a shell
company.
Description
of Bolcán Mining Corporation’s Business
Bolcán
Mining was incorporated on April 11, 2012 to pursue the exploration of certain mining claims, mineral leases and excavation rights
for mining projects located in (a) Star Mining District in Beaver County, Utah, (b) Spor Mountain Mining District in Juab County,
Utah, and (c) Ogden Bay Wildlife Management Area in Weber County, Utah. On April 23, 2012, Bolcán Mining acquired certain
lode mining claims and mineral leases related to the Star Mining District and Spor Mountain Mining District projects.
Effective
as of June 30, 2012, pursuant to an Asset Purchase Agreement between Bolcán Mining and The Bolcán Group LLC (“Bolcán
Group”) which was formed in October 12, 2010 by Mr. Michael Stanford, Bolcán Mining purchased all of the assets and
assumed certain liabilities of Bolcán Group resulting in a combination of the two companies.
The
operating activities of the Bolcán Group were inconsequential until October 2011 and consisted primarily of historical
site research performed by Mr. Stanford. Mr. Stanford has other mining interests and provides services to the mining industry
that are not part of Bolcán Mining.
Projects
Our
current active projects include the following:
Star
Mountain/Chopar Mine (Star Mining District)
On
April 23, 2012, the Company paid and capitalized $22,113 to acquire 117 unpatented lode mining claims from the Bureau of Land
Management related to the Star Mountain project near Milford, Utah. In addition, on May 1, 2012, the Company entered into a mineral
lease agreement with the State of Utah for approximately 1,400 acres that are contiguous with the Star Mountain lode mining claims.
The initial costs incurred and capitalized in connection with obtaining the lease was $1,599. Collectively, the Star Mountain
claims and lease encompass a total area of approximately 3,740 acres.
The
Star Mountain lease has an initial term of 10 years, subject to certain extension provisions. The future minimum annual rental
commitment is $1.00 per acre (or $1,408). The lease also provides for a minimum annual royalty payment of $4,224 beginning in
the 11th year of the lease (if extended), and requires contingent production royalty payments based on 4% to 8% of the gross value
(as defined in the lease) of non-fissionable and fissionable metalifferous minerals, respectively, extracted from the leased area.
Spor
Mountain/Dugway Minerals (Spor Mountain Mining District)
On
May 1, 2012, the Company entered into a mineral lease agreement with the State of Utah for approximately 1,920 acres related to
the Dugway Minerals project near Delta, Utah (the “Dugway Minerals Lease”). The initial costs incurred and capitalized
in connection with obtaining the lease were $2,157. The lease has an initial term of 10 years, subject to certain extension provisions.
The future minimum annual rental commitment is $1.00 per acre (or $1,918). The lease also provides for a minimum annual royalty
payment of $5,754 beginning in the 11th year of the lease, and requires contingent production royalty payments based on 4% to
8% of the gross value (as defined in the lease) of non-fissionable and fissionable metalifferous minerals extracted from the leased
area
Ogden
Bay Minerals
The
Company’s plans for the Ogden Bay Minerals project consists of developing a mineral exploration and possible excavation
project on federal protected wetlands, canals and river systems across 25 square miles of land area known as North Delta located
in West Ogden, Utah. Excavation and harvesting rights are maintained through easement rights obtained from Weber County and a
special use river/stream alteration permit as part of a State of Utah/Weber County flood mitigation project. We intend to continue
to explore for silica, zircon, silver and gold.
Products
We
intend to develop our project mining claims, mineral leases and excavation rights to produce the following specialized mining
products:
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Copper
Ore with Precious Metals Component — Hard rock mineralized material will be drilled, blasted, excavated and hauled,
then crushed and classified to customer specifications. We will deliver this product on-demand or just in time to customers
on a 24/7 schedule, utilizing truck and pup combos for local deliveries and rail for regional deliveries. The Union Pacific
Railroad main line from Los Angeles to Ogden, Utah, is routed through Milford, Utah, approximately five miles east of our
Star Mountain project site.
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Mined
Mineral Concentrates — Finely divided particles from hard rock mining and recovery operations containing significant
enrichments of silver and gold will be upgraded by gravity concentrating methods to contain a minimum 3,000 grams of precious
metals per ton of concentrate. Mineral concentrate products are dried, bagged and shipped to customers.
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Refined
Precious Metals — During 2014–2015, we plan to develop a refining capacity
for up to two tons per day of selected precious metals concentrates from our mining and
recovery operations. Precious metals concentrates containing greater than 50% combined
silver/gold mixture will be further concentrated, refined, separated and manufactured
into bar and ingot product.
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Our
Industry
Copper
is the world’s third most widely used metal, after iron and aluminum, and an important component in the world’s infrastructure.
Copper has unique chemical and physical properties including high ductility, malleability, thermal and electrical conductivity,
and resistance to corrosion that has made it a superior material for use in electrical and electronic products including power
transmission and generation, which accounts for about three quarters of the global copper use, telecommunications, building construction,
transportation and industrial machinery businesses. Copper is also an important metal in non-electrical applications such as plumbing
and roofing and, when alloyed with zinc to form brass, in many industrial and consumer applications.
Copper
is an internationally traded commodity with prices principally determined by the major metal exchanges, the New York Commodities
Exchange or “COMEX” and the London Metal Exchange or “LME”. Copper is usually found in association with
sulfur. Pure copper metal is generally produced during a multistage process beginning with the mining and concentrating of low-grade
ores containing copper sulfide minerals followed by smelting and electrolytic refining to produce a pure copper cathode. An increasing
share of copper is produced from acid leaching of oxidized ores. Copper is one of the oldest metals ever used and has been one
of the important materials in the development of civilization.
Copper
Market
. Copper is an important industrial metal with significant demand for fabrication of electrical wires, plumbing and
industrial machinery. Most copper is mined or extracted as copper sulfides from large open pit mines in porphyry copper deposits
that contain 0.4% to 1.0% copper. Copper is 100% recyclable with no quality degradation and is the third most recycled metal.
It is estimated that 80% of the copper ever mined is still in use today.
Gold
Market
. The global market for gold is large and highly liquid. Primary demand for gold is associated with a safe haven investment
with additional demand for jewelry, industrial and health science applications. Gold is also considered a hedge against inflation
and a commodity of refuge from concerns with fiat currencies and corresponding risks related to economic, political and social
uncertainties.
The
World Gold Council, a leading international gold industry research organization, published on its website that total gold demand
for 2013 decreased 2% to 3,756 metric tons (a metric ton is equal to 2,204.6 pounds) year-over-year. Of this decrease, investment
demand posted the largest segment decrease offsetting the increase in gold jewelry demand.
Silver
Market
. Demand for silver is predominantly for industrial applications, especially electronics and jewelry, with investment
making up only a small portion of total annual demand.
Government
and Environmental Regulation
Our
mining, processing operations and exploration activities are subject to various laws and regulations governing: (i) the protection
of the environment; (ii) exploration; (iii) mine safety, development and production; (iv) exports, (v) taxes, (vi) labor standards,
(vii) occupational health, (viii) waste disposal, (ix) hazardous substances, (x) water rights; (xi) explosives; (xii) land reclamation
and (xiii) other matters. New laws and regulations, amendments to existing laws and regulations or more stringent implementation
of existing laws and regulations could have a material adverse impact on us, increase costs, cause a reduction in levels of, or
suspension of, production and/or delay or prevent the development of new mining properties.
The
governmental agencies and regulators tasked with implementing and enforcing the above laws and regulations include Beaver County
(Utah), the Bureau of Land Management, the Mine Safety and Health Administration, the Utah Department of Natural Resources, the
Utah State Institutional Trust Lands Administration, the Utah Department of Environmental Quality, the Environmental Protection
Agency, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
We
believe we are currently in compliance in all material respects with all applicable environmental laws and regulations. Such compliance
requires significant expenditures and increases mine development and operating costs. Mining is subject to potential risks and
liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration
and production. Environmental liability may result from mining activities conducted by others prior to our ownership of a property.
To the extent we are subject to uninsured environmental liabilities, the payment of such liabilities would reduce our otherwise
available earnings and could have a material adverse effect on our business plan.
Licenses
and Permits
Our
operations require licenses and permits from various governmental authorities. We believe we hold all material licenses and permits
required under applicable laws and regulations and believe we are presently complying in all material respects with the terms
of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There can be
no guarantee that we will be able to obtain or maintain all necessary licenses and permits that may be required to explore and
develop our properties, to commence construction or operation of mining facilities and properties under exploration or development
or to maintain continued operations that economically justify the cost.
Mine
Safety and Health Administration Regulations
Pursuant
to Section 1503(a) of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, issuers that are operators, or that
have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic
reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments
and legal actions and mining-related fatalities. At this time, we have no safety violations, orders, citations, related assessments
or legal actions or mining-related fatalities to report.
Competition
Because
the life of a mine is limited by its mineral reserves, we plan to continually seek to replace and expand our reserves through
the exploration of existing properties as well as through acquisitions of interests in new properties or of interests in companies
which own such properties. We encounter competition from other mining companies in connection with the acquisition of properties
and with the engaging and maintaining of qualified industry experienced personnel. This competition may increase the cost of acquiring
suitable properties and retaining qualified industry experienced personnel.
Employees
For
the years ended December 31, 2013 and 2012, we had no employees. We utilize the services of independent contractors.
ITEM
1A. RISK FACTORS
An
investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below,
together with all of the other information included in this report, before making an investment decision. If any of the following
risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price
of our common stock could decline, and investors may lose all or part of their investment. Investors should read the section entitled
“Special Note Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking
statements as well as the significance of such statements in the context of this Annual report.
Risks
Related To Our Business And Financial Condition
Estimates
of mineralized material are based on interpretation and assumptions and may yield less mineral production under actual conditions
than is currently estimated
.
There
are numerous uncertainties inherent in estimating quantities of mineralized material such as copper, gold and silver including
many factors beyond our control and no assurance can be given that the recovery of mineralized material will be realized. In general,
estimates of mineralized material are based upon a number of factors and assumptions made as of the date on which the estimates
are determined, including:
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the
geological and engineering estimates that have inherent uncertainties and the assumed effects of regulation by governmental
agencies;
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the
judgment of the engineers preparing the estimates;
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the
estimates of future metals prices and operating costs;
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the
quality and quantity of available data;
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the
interpretation of that data; and
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the
accuracy of various mandated economic assumptions all of which may vary considerably from actual results.
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Until
mineralized material is actually mined and processed, it must be considered an estimate only. These estimates are imprecise and
depend on geological interpretation and statistical inferences drawn from drilling and sampling analysis which may prove to be
unreliable. We cannot assure that these mineralized material estimates will be accurate or that this mineralized material can
be mined or processed profitably. Any material changes in estimates of mineralized material will affect the economic viability
of placing a property into production and such property’s return on capital. There can be no assurance that minerals recovered
in small-scale metallurgical tests will be recovered at production scale.
We
may have difficulty meeting our current and future capital requirements
.
Our
management and Board of Directors monitor overall costs and expenses and, if necessary, adjust programs and planned expenditures
in an attempt to ensure sufficient operating capital. We continue to evaluate costs and planned expenditures for on-going development,
care and maintenance efforts at our mineral properties. The continued development, care and maintenance of our mineral properties
will require significant amounts of additional capital. As a result, we likely will need to explore raising additional capital
during fiscal 2014 and beyond so that we can continue to fully fund our planned activities. Our ability to obtain this financing
will depend upon, among other things, the price of minerals and the industry’s perception of its future price. The extraordinary
conditions in the global financial and capital markets have currently limited the availability of this funding. Therefore, availability
of funding is dependent largely upon factors outside of our control and cannot be accurately predicted. If the disruptions in
the global financial and capital markets continue, debt or equity financing may not be available to us on acceptable terms, if
at all. If we are unable to fund future operations by way of financing, including public or private offerings of equity or debt
securities, our business, financial condition and exploration activities will be adversely impacted.
The
volatility of the price of gold or silver and other precious metals could adversely affect our future operations and, if warranted,
our ability to develop our properties.
The
potential for profitability of our operations, the value of our properties and our ability to raise funding to conduct continued
exploration and development, if warranted, are directly related to the market prices of gold, silver and other precious metals.
The prices of such metals fluctuate widely and are affected by numerous factors beyond our control including interest rates, expectations
for inflation, speculation, currency values (in particular the strength of the U.S. dollar), global and regional demand, political
and economic conditions, global and regional demand, the sale of gold and silver by central banks, the political and economic
conditions of major gold and silver producing countries throughout the world, and production costs in major metal producing regions
of the world. The price of gold may also have a significant influence on the market price of our common stock and the value of
our properties. Our decision to put a mine into production and to commit the funds necessary for that purpose must be made long
before the first revenue from production would be received. A decrease in the prices of gold or silver may prevent our property
from being economically mined or result in the write-off of assets whose value is impaired as a result of lower gold, zinc, lead,
copper or silver prices.
The
nature of mineral exploration and production activities involves a high degree of risk and the possibility of uninsured losses
.
Exploration
for and the production of minerals is highly speculative and involves greater risk than many other businesses. Many exploration
programs do not result in the discovery of mineralization and any mineralization discovered may not be of sufficient quantity
or quality to be profitably mined. Our operations are, and any future development or mining operations we may conduct will be,
subject to all of the operating hazards and risks normally incident to exploring for and development of mineral properties, such
as, but not limited to:
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economically
insufficient mineralized material;
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fluctuation
in production costs that make mining uneconomical;
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labor
disputes;
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unanticipated
variations in grade and other geologic problems;
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environmental
hazards;
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water
conditions;
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difficult
surface or underground conditions;
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industrial
accidents;
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metallurgic
and other processing problems;
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mechanical
and equipment performance problems;
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failure
of pit walls or dams;
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unusual
or unexpected rock formations;
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personal
injury, fire, flooding, cave-ins and landslides; and
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decrease
in the value of mineralized material due to lower gold or silver prices.
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Any
of these risks can materially and adversely affect, among other things, the development of properties, production quantities and
rates, costs and expenditures, potential revenues and production dates. We currently have limited insurance to guard against some
of these risks. If we determine that capitalized costs associated with any of our mineral interests are not likely to be recovered,
we would incur a write down of our investment in these interests. All of these factors may result in losses in relation to amounts
spent which are not recoverable or result in additional expenses.
Difficult
conditions in the global capital markets and the economy generally may materially and adversely affect our business and results
of operations, and we do not expect these conditions to improve in the near future.
Our
results of operations are materially affected by conditions in the domestic capital markets and the economy generally. The stress
experienced by domestic capital markets that began in the second half of 2007 has continued and substantially increased into the
present. Recently, concerns over inflation, energy costs, geopolitical issues, the availability and cost of credit, the U.S. mortgage
market and a declining real estate market in the U.S. have contributed to increased volatility and diminished expectation for
the economy and the markets going forward. These factors, combined with volatile oil and gas prices, declining business and consumer
confidence and increased unemployment, have precipitated an economic slowdown and fears of a continued recession. In addition,
the fixed-income markets are experiencing a period of extreme volatility that has negatively impacted market liquidity conditions.
Title
to our properties may be challenged or defective
.
Our
planned future operations and exploration activities may require amendments to our currently approved permits from various governmental
authorities. Our operations are and will continue to be governed by laws and regulations governing prospecting, mineral exploration,
exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine
safety, mining royalties and other matters. There can be no assurance that we will be able to acquire all required licenses, permits,
amendments or property rights on reasonable terms in a timely manner, or at all, and that such terms will not be adversely changed,
that required extensions will be granted or that the issuance of such licenses, permits or property rights will not be challenged
by third parties.
We
attempt to confirm the validity of our rights of title to, or contract rights with respect to, each mineral property in which
we have a material interest. However, we cannot guarantee that title to our properties will not be challenged. Our mineral properties
may be subject to prior unregistered agreements, interests or native land claims, and title may be affected by undetected defects.
There may be valid challenges to the title of any of the claims comprising our mineral properties that, if successful, could impair
possible development and/or operations with respect to such properties in the future. Challenges to permits or property rights,
whether successful or unsuccessful; changes to the terms of permits or property rights or a failure to comply with the terms of
any permits or property rights that have been obtained could have a material adverse effect on our business by delaying, preventing
or making continued operations economically unfeasible.
We
are subject to complex environmental and other regulatory risks, which could expose us to significant liability and delay, and
potentially the suspension or termination of our development efforts
.
Compliance
with environmental quality requirements and reclamation laws imposed by federal, state, provincial and local governmental authorities
may:
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require
significant capital outlays;
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materially
affect the economics of a given property;
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cause
material changes or delays in our intended activities; and
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expose
us to lawsuits.
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These
regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set
limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Applicable authorities may require
us to prepare and present data pertaining to the effect or impact that any proposed exploration for or production of minerals
may have upon the environment. The requirements imposed by any such authorities may be costly, time consuming, and delay operations.
Future legislation and regulations designed to protect the environment, as well as future interpretations of existing laws and
regulations, may require substantial increases in equipment and operating costs and delays, interruptions, or a termination of
operations. We cannot accurately predict or estimate the impact of any such future laws or regulations, or future interpretations
of existing laws and regulations, on our operations.
Historic
mining activities have occurred on certain areas of our properties by unrelated parties prior to the general mining law of 1872,
prior to the Federal Land Policy and Management Act of 1976, prior to the Resources Conservation & Recovery Act of October
21, 1978, and subsequent other Federal/State regulatory acts and statutes. If such historic activities have resulted in releases
or threatened releases of regulated substances to the environment, potential for liability, however unlikely, may exist under
federal or state remediation statutes. Such liability would include remediating any damage that we may have caused including costs
for removing or remediating the release and damage to natural resources, including ground water, as well as the payment of fines
and penalties. We are not aware of any such claims under these statutes at this time and cannot predict whether any such claims
will be asserted in the future.
We
may produce air emissions and pollutions that could fall under the jurisdiction of U.S. federal laws
.
Under
the U.S. Resource Conservation and Recovery Act, mining companies may incur costs for generating, transporting, treating, storing
or disposing of hazardous waste, as well as for closure and post-closure maintenance once they have completed mining activities
on a property. Our mining operations may produce air emissions, including fugitive dust and other air pollutants, from stationary
equipment, storage facilities and the use of mobile sources such as trucks and heavy construction equipment which are subject
to review, monitoring and/or control requirements under the Federal Clean Air Act and state air quality laws. Permitting rules
may impose limitations on our production levels or create additional capital expenditures in order to comply with the rules.
Legislation
has been proposed that would significantly affect the mining industry
.
Periodically,
members of the U.S. Congress have introduced bills which would supplant or alter the provisions of the General Mining Law of 1872
which governs the unpatented claims that we control with respect to our U.S. properties. One such amendment has become law and
has imposed a moratorium on the patenting of mining claims which reduced the security of title provided by unpatented claims such
as those on our properties
.
If additional legislation is enacted, it could substantially increase the cost of holding unpatented
mining claims by requiring payment of royalties and could significantly impair our ability to develop mineral estimates on unpatented
mining claims. Such bills have proposed, among other things, to make permanent the patent moratorium, to impose a federal royalty
on production from unpatented mining claims and to declare certain lands as unsuitable for mining. Although it is impossible to
predict at this time what royalties may be imposed in the future, the imposition of such royalties could adversely affect the
potential for development of such mining claims and the economics of existing operating mines on federal unpatented mining claims.
Passage of such legislation could adversely affect our business.
Our
operations are subject to permitting requirements which could require us to delay, suspend or terminate our operations on our
mining properties
.
Our
operations, including ongoing exploration drilling programs, require permits from state and federal governments including permits
for the use of water and for drilling wells for water. We may be unable to obtain these permits in a timely manner, on reasonable
terms, on terms that provide us sufficient resources to develop our properties or at all. Even if we are able to obtain such permits,
the time required by the permitting process can be significant. If we cannot obtain or maintain the necessary permits, or if there
is a delay in receiving these permits, our timetable and business plan for exploration of our properties will be adversely affected
which may in turn adversely affect our results of operations, financial condition and cash flows.
We
may face a shortage of water.
Water
is essential in all phases of the exploration, development and operation of mineral properties. The nature of our operations requires
water to be used in such processes as exploration, drilling, testing, dust suppression, milling and tailings disposal. The lack
of available water and the cost of acquisition may make an otherwise viable project economically impossible to complete.
Global
climate change is an international concern and could impact our ability to conduct future operations
.
Global
climate change is an international issue and receives an enormous amount of publicity. We would expect that the imposition of
international treaties or federal, state or local laws or regulations pertaining to mandatory reductions in energy consumption
or emissions of greenhouse gasses could affect the feasibility of our mining projects and increase our operating costs.
Because
access to the mineral property may be restricted by inclement weather or other hazards, we may be delayed in our development efforts
.
We
are subject to risks and hazards including environmental hazards, the existence of unusual or unexpected geological formations
and the occurrence of cave-ins, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions.
As a result, access to our mineral properties may be restricted during parts of the year. During the winter months, heavy snowfall
can make it difficult to undertake work programs. Frequent inclement weather in the winter months can make development and mining
activities difficult for short periods of time.
We
may face a shortage of supplies, equipment and materials
.
The
mineral industry has experienced from time to time shortages of certain supplies, equipment and materials necessary in the exploration,
evaluation, development and production of mineral deposits. The prices at which such supplies and materials are available have
also greatly increased. Our planned operations could be subject to delays due to such shortages and further price escalations
could increase our costs for such supplies, equipment and materials. Our experience and that of others in the industry is that
suppliers are often unable to meet contractual obligations for supplies, equipment, materials and services and that alternate
sources of supply do not exist.
The
market for obtaining desirable properties, investment capital, and outside engineers and consultants is highly competitive
.
Presently,
we utilize outside consultants, and in large part rely on the personal efforts of our officers and director. Our success will
depend, in part, upon the ability to attract and retain qualified outside engineers and other professionals to develop and operate
our mineral properties in addition to obtaining investment capital to conduct our mining operations. We believe that we will be
able to attract competent employees and consultants but no assurance can be given that we will be successful in this regard as
competition for these professionals is highly competitive. If we are unable to engage and retain the necessary personnel, our
business would be materially and adversely affected.
We
depend upon a limited number of personnel and the loss of any of these individuals could adversely affect our business
.
If
any of our current executive employees were to die, become disabled or leave our company, we would be forced to identify and retain
individuals to replace them. Mr. Michael Stanford is our CEO, President, Chairman and Sole Director and our critical employee
at this time. There is no assurance that we can find suitable individuals to replace him or to add to our employee base if that
becomes necessary. We are entirely dependent on Mr. Stanford as our critical personnel at this time. We have no life insurance
on Mr. Stanford.
Our
Chairman and CEO own 63.4% of the issued and outstanding Common Stock and thereby acting alone he has the ability to choose management
or impact operations, which will limit your ability to influence the outcome of important transactions, including a change in
control.
Our
Chairman and CEO, Michael Stanford, owns 63.4% of the outstanding Common Stock and has voting power of 63.4% of our issued and
outstanding Common Stock as of December 31, 2013. Consequently, Mr. Stanford has the ability to influence control of our operations
and, acting alone, has the ability to influence or control substantially all matters submitted to stockholders for approval, including:
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Election
of the Board of Directors;
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Removal
of directors; and
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Amendment
to the our certificate of incorporation or bylaws;
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Mr.
Stanford thus has substantial influence over our management and affairs and other stockholders possess no practical ability to
remove management or effect the operations of our business. Accordingly, this concentration of ownership by itself may have the
effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from
making a tender offer for the Common Stock, and c
ould deprive our
stockholders of an opportunity to receive a premium for their
Common Stock
as part
of a sale of our Company and might ultimately affect the market price of our
Common Stock
.
We
have incurred substantial losses since our inception and may never be profitable
.
We
have incurred losses since inception resulting in an accumulated stockholders’ equity deficit of $523,982 as of December
31, 2013, and further losses have continued through the first quarter of 2014 and are anticipated in the development of our business.
As a development stage enterprise, there exists substantial doubt regarding our ability to continue as a going concern. The ability
to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary
financing to meet our obligations and repay our liabilities arising from normal business operations. Management intends to finance
operating costs over the next twelve months with existing cash on hand, loans from stockholders and directors and the private
placement of common stock.
We
currently have not entered into forward sales, commodity, derivatives or hedging arrangements with respect to our mineral production
and as a result we are exposed to the impact of any significant decrease in mineral prices.
We
expect to sell the minerals we produce at prevailing market prices. Currently, we have not entered into forward sales, commodity,
derivative or hedging arrangements to establish a price in advance for the sale of future production although we may do so in
the future. As a result, we may realize the benefit of any short-term increase in prices but we are not protected against decreases;
and if prices decrease significantly, our expected future revenues may be materially and adversely affected.
Our
ability to become and remain profitable over the long term will depend on our ability to identify, explore and develop our current
and additional properties
.
Gold,
silver, and other mineral properties are wasting assets. They eventually become depleted or uneconomical to continue mining. Our
ability to become and remain profitable over the long term depends on our ability to finalize the design, permit, development
and profitable extraction and recovery of mineral resources beyond our current planned mine life. If our ability to expand the
operations beyond their current planned mined lives does not occur, we may seek to acquire other precious and base metals properties
beyond our current properties. The acquisition of precious and base metals properties and their exploration and development are
subject to intense competition. Companies with greater financial resources, larger staff, more experience and more equipment for
exploration and development may be in a better position to compete for such mineral properties. If we are unable to find, develop
and economically mine new properties, we most likely will not be profitable on a long-term basis and the price of our common stock
may suffer.
Because
we have a very limited operating history, investors have little basis to evaluate our ability to operate
.
Our
activities to date have been focused on raising capital funds, exploring our properties and preparing those properties for production.
Although some of our mine and concentrating facilities have previously operated, these operations were carried out under different
ownership and, therefore, we face all of the risks commonly encountered by other businesses that lack an established operating
history including the need for additional capital personnel and intense competition. There is no assurance that our business plan
will be successful.
The
construction of our mines and our mills are subject to all of the risks inherent in construction, start-up and operations
.
These
risks include potential delays, cost overruns, shortages of material or labor, construction defects, breakdowns and injuries to
persons and property. We expect to engage self-employed personnel, subcontractors and material suppliers in connection with the
construction and development of our mine projects. While we anticipate taking all measures that we deem reasonable and prudent
in connection with construction of the mines and the operation of the mills, there is no assurance that the risks described above
will not cause delays or cost overruns in connection with such construction or operation. Any delays would postpone our anticipated
receipt of revenue and adversely affect our operations which in turn may adversely affect the price of our stock.
We
do not insure against all of the risks to which we may be subject in our operations.
While
we currently maintain insurance against general commercial liability claims and the physical assets at our projects, we do not
maintain insurance to cover all of the potential risks associated with our operations. We might be subject to liability for environmental,
pollution or other hazards associated with mineral exploration and development which risks may not be insured against, which may
exceed the limits of our insurance coverage or which we may elect not to insure against because of premium costs or other reasons.
We may also not be insured against interruptions to our operations. Losses from these or other events may cause us to incur significant
costs which could materially and adversely affect our financial condition and our ability to fund activities on our property.
A significant loss could force us to reduce or terminate our operations.
We
may require significant additional capital to fund our business plan
.
We
will be required to expend significant funds to determine if proven and probable mineral reserves exist at some of our properties,
to continue exploration, and if warranted, develop our existing properties and to identify and acquire additional properties to
diversify our property portfolio. There can be no assurance that any of the development properties we now hold, or which we may
acquire, will contain a commercial ore reserve, and therefore, there can be no assurance that we will ever generate a positive
cash flow from the sale of production on such properties. In addition, once we decide to place a property into production, risks
still exist that the amount and grade of the reserves may be significantly less than predicted in geological and geophysical reserve
reports prepared for us by third party professionals. We have spent and will be required to continue to spend significant amounts
of capital for drilling, geological and geochemical analysis, assaying and feasibility studies with regard to the results of our
exploration. We may not benefit from these investments if we are unable to identify commercially exploitable mineralized material.
Our
ability to obtain necessary funding for these purposes, in turn, depends upon a number of factors including the status of the
national and worldwide economy and the prices of gold and other precious and base metals. Capital markets worldwide have been
adversely affected by substantial losses by financial institutions in turn caused by investments in asset-backed securities. We
may not be successful in obtaining the required financing, or if we can obtain such financing, such financing may not be on terms
that are favorable to us. Failure to obtain such additional financing could result in delay or indefinite postponement of further
mining operations or exploration and development and the possible partial or total loss of our potential interest in our properties.
If we
fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our
financial results. As a result, current and potential shareholders could lose confidence in our financial reporting, which would
harm our business and the trading price of our stock.
Our management
has determined that as of December 31, 2013, we did not maintain effective internal controls over financial reporting based on
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated
Framework as a result of identified material weaknesses in our internal control over financial reporting related to
the
omission of (i) receipt of funds for purchases of our common stock in the first, second and third quarters of 2013, (ii) an issuance
of 230,426 shares of our common stock in September 2013, and (iii) the issuance of 5,360,000 shares of our common stock in August
2013. Further, a lack of controls over the accounting for surety bond costs resulted in the reclassification of surety bond costs
from an expense to mineral rights on our balance sheet. These errors will require us to restate our consolidated financial statements
for the three months ended March 31, 2013, the six months ended June 30, 2013 and the nine months ended September 30, 2013 to
correct these errors. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial
statements will not be prevented or detected on a timely basis. For a detailed description of these material weaknesses and our
remediation efforts and plans, see “Part II — Item 9A) — Controls and Procedures.” If the result of our
remediation of the identified material weaknesses is not successful, or if additional material weaknesses are identified in our
internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal
control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement
expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our
financial reports which could have an adverse effect on our stock price and potentially subject us to litigation.
Our
operating costs could be adversely affected by inflationary pressures especially to labor and fuel costs
.
The
global economy is currently in a period of high commodity prices and, as a result, the mining industry is attempting to increase
production. This has caused significant upward price pressures in the operating costs of mining companies especially in the area
of skilled labor. The skilled labor needed by the mining industry is in tight supply and its cost is increasing. Many of our competitors
have lower costs and their mines are located in better locations that may give them a competitive advantage in employee hiring
and retention.
The
cost of fuel to run machinery and generate electricity is closely correlated to the price of oil and energy. Over the past two
years, the price of oil has risen significantly and has increased the operating cost of mines dependent on fuel to run their business.
Continued upward price pressures in our operating costs may cause us to generate significantly less operating cash flows than
expected which would have an adverse impact to our business.
We
will continue to incur losses for the foreseeable future
.
Prior
to completion of the development and pre-production stage, we anticipate that we will incur increased operating expenses without
realizing any significant revenues. We expect to incur continued and significant losses until such time that we achieve commercial
production from our mining operations on our mineral claims. As a result of continuing losses, we may exhaust all of our resources
and be unable to complete development of our planned mining operations. Our accumulated deficit will continue to increase as we
continue to incur losses. We may not be able to generate profits or continue operations if we are unable to generate significant
revenues from future mining of the mineral claims and our business will most likely fail.
Risks
Related To Our Common Stock
There
currently is only a minimal public market for our common stock. Failure to develop or maintain a trading market could negatively
affect the value of our common stock and make it difficult or impossible for investors to sell shares.
There
currently is only a minimal public market for shares of our common stock and an active market may never develop. Our common stock
is quoted on the OTCQB tier of the OTC Markets Group Inc. under the symbol “JMSN”. We may not ever be able to satisfy
the listing requirements for our common stock to be listed on a national exchange which are often a more widely-traded and liquid
market. Some, but not all, of the factors that may delay or prevent the listing of our common stock on a more widely-traded and
liquid market includes the following:
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our
stockholders’ equity may be insufficient;
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the
market value of our outstanding securities may be too low;
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our
net income from operations may be too low;
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our
common stock may not be sufficiently widely held;
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our
inability to secure market makers for our common stock; and
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our
inability to meet the rules and requirements mandated by the several exchanges and markets.
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If
we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report
our financial results. As a result, current and potential shareholders could lose confidence in our financial reporting which
would harm our business and result in a restatement of our financial statements.
Our
management has determined that for the years ended December 31, 2013 and 2012, we did not maintain effective internal controls
over financial reporting as a result of identified material weaknesses in our internal control over financial reporting described
later in this report. There are no assurances that these material weaknesses will not result in errors in our financial statements
in future periods. If we are required to restate our financial statements, we will incur additional costs and could be subject
to litigation.
We
cannot assure investors that the common stock will become liquid or that it will be listed on a national securities exchange.
Until
our common stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we
expect our common stock to remain eligible for quotation on the OTCQB or other over-the-counter quotation systems. In such venues,
however, an investor may find it difficult to obtain accurate quotations as to the market value of our common stock. In addition,
if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on brokers or dealers
who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may
deter brokers or dealers from recommending or selling our common stock which may further affect the liquidity of the common stock.
This would also make it more difficult for us to raise capital.
The
application of the “penny stock” rules could adversely affect the market price of our common stock and increase transaction
costs to sell those such stock.
The
SEC has adopted rule 3a51-1 that establishes the definition of a “penny stock,” for the purposes relevant to us, as
any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share
subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires that a broker or
dealer needs to:
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approve
a person’s account for transactions in penny stocks, and
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receive
from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be
purchased.
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In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
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obtain
financial information and investment experience objectives of the person and
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make
a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating
to the penny stock market which, in highlight form:
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sets
forth the basis on which the broker or dealer made the suitability determination and
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declares
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make
it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.
The
market price for our common stock is particularly volatile given our status as a relatively unknown company with a small and thinly
traded public float, limited operating history and lack of profits that could lead to wide fluctuations in our stock price. Investors
may be unable to sell our common stock at or above the original purchase price, which may result in substantial losses.
The
market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect
that our stock price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our
stock price is attributable to a number of factors. First, as noted above, our common stock is sporadically and thinly traded.
As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately
influence the price of those shares in either direction. The price for our stock could, for example, decline precipitously in
the event that a large number of our common shares are sold on the market without commensurate demand as compared to a seasoned
issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky”
investment due to our limited operating history and lack of profits to date and uncertainty of future market acceptance for our
potential products and services. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing
all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the
market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors
are beyond our control and may decrease the market price of our common stock regardless of our operating performance. We cannot
make any predictions or projections as to what the prevailing market price for our common stock will be at any time including
as to whether our common stock will sustain their current market prices or as to what effect that the sale of shares or the availability
of common stock for sale at any time will have on the prevailing market price.
We
do not pay dividends on our common stock.
We
have not paid any dividends on our common stock and do not anticipate paying dividends in the foreseeable future. We plan to retain
earnings, if any, to finance the development and expansion of our business.
Rule
144 related risk.
The
SEC adopted amendments to Rule 144 which became effective on February 15, 2008 that apply to securities acquired both before and
after that date. Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least
six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been one of our affiliates
at the time of or at any time during the three months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting
requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period,
we provide current information at the time of sale.
Persons
who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time
of, or at any time during the three months preceding a sale, would be subject to additional restrictions by which such person
would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either
of the following:
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1%
of the total number of securities of the same class then outstanding; or
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the
average weekly trading volume of such securities during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale;
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provided,
in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.
Restrictions
on the reliance of Rule 144 by shell companies or former shell companies.
Historically,
the SEC staff has taken the position that Rule 144 is not available for the resale of securities initially issued by companies
that are, or previously were, blank check companies like us. The SEC has codified and expanded this position in the amendments
discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business
combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided
an important exception to this prohibition, however, if the following conditions are met:
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the
issuer of the securities that was formerly a shell company has ceased to be a shell company;.
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the
issuer of the securities is subject to the reporting requirements of Section 14 or 15(d) of the Exchange Act;.
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the
issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding
12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports
on Form 8-K; and
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at
least one year has elapsed from the time that the issuer filed current comprehensive
disclosure with the SEC reflecting its status as an entity that is not a shell company.
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ITEM
2. PROPERTIES
Administrative
Offices
Our
primary business office is located at 2300 West Sahara Ave., Suite 800, Las Vegas, NV 89102. Our phone number is 702-933-0808.
Our residential office is leased from an entity controlled by the majority shareholder.
Star
Mountain/Chopar Mine (Star Mining District)
On
April 23, 2012, the Company paid and capitalized $22,113 to acquire 117 unpatented lode mining claims from the Bureau of Land
Management related to the Star Mountain project near Milford, Utah. In addition, on May 1, 2012, the Company entered into a mineral
lease agreement with the State of Utah for approximately 1,400 acres that are contiguous with the Star Mountain lode mining claims.
The initial costs incurred and capitalized in connection with obtaining the lease was $1,599. Collectively, the Star Mountain
claims and lease encompass a total area of approximately 3,740 acres.
Star
Mountain Mining District Chopar Claim Map: showing claim corners and boundaries.
Mineral
Lease Tract Boundaries T28S, R12W, SLB&M, Sec. 2 [All], and T29S, R12W, SLB&M, Sec. 2 [All].
The
Star Mountain lease has an initial term of 10 years, subject to certain extension provisions. The future minimum annual rental
commitment is $1.00 per acre (or $1,408). The lease also provides for a minimum annual royalty payment of $4,224 beginning in
the 11th year of the lease (if extended), and requires contingent production royalty payments based on 4% to 8% of the gross value
(as defined in the lease) of non-fissionable and fissionable metalifferous minerals, respectively, extracted from the leased area.
The
Company’s lode mining claim mineral rights on the Chopar Mine properties consist of lode mining claims on United States
Forest Service land. The mineral rights were acquired by staking lode mining claims as per the Mining Law of 1872. Each lode mining
claim in respect to the Chopar Mine project consists of Approx. 20 acres. All claims are subject to an annual maintenance fee
of $140.00/claim due on or before September 1
st
each year. Mining claims are subject to the same risk of defective
title that is common to all real property interests. Additionally, mining claims are self-initiated and self-maintained and therefore,
possess some unique vulnerabilities not associated with other types of property interests. It is impossible to ascertain the validity
of unpatented mining claims solely from an examination of public real estate records and, therefore, it can be difficult or impossible
to confirm that all of the requisite steps have been followed for location and maintenance of a claim. Furthermore, as these interests
are derived from multiple jurisdictions, the risk of a defective claim or other problems with ownership and development of the
claim (including but not limited to the right of eminent domain) is compounded further. If the validity of a patented mining claim
or mineral interest is challenged by an applicable governmental body on the grounds that mineralization has not been demonstrated,
the claimant has the burden of proving the present economic feasibility of mining minerals located thereon. Such a challenge might
be raised at any stage of development or at the commencement of production, or simply when the government seeks to include the
land in an area to be dedicated to another use.
Star
Mountain/Chopar Mine (Star Mining District) General Geology:
Stratigraphy.
Rocks of the Star Range which encompass the Star Mining District include sedimentary, intrusive and extrusive igneous, metamorphosed
sedimentary and igneous types. The intrusive igneous rocks are mostly quartz monzonite to granodiorite. A number of lamprophyre
and aplite dikes cut the sedimentary and intrusives. Volcanic rocks are rhyolite, andesite, and basalt. Sedimentary and volcanic
rocks have been contacted and hydrothermally metamorphosed. Contact metamorphic mineralization is also evident along the borders
of the intrusives.
Geology
General Statement.
The area which encompasses the Star Mining District is located in a thrusted and fault-cut range about
13 km (8 miles) ESE from Milford, Utah. It hosts several distinct features that may be related to Tertiary-age plutons noted in
the area. Field examination indicates Porphyry-epithermal gold-silver-copper system intruded into older Paleozoic and Mesozoic
sedimentary units.
General
Statement of Geophysical/Geochemical work completed.
Recent field work completed on the property to date included ground magnetometer
surveys, cross sectional modeling and deep penetrating 3D survey, geologic reconnaissance mapping, surface sampling and assaying,
Reverse Circulation, Core Drilling, and assaying of selected targets, combined geophysical analysis, bulk sampling and bench scale
testing for scale of economy for the beneficiation of Copper (Cu), Silver (Ag) and Gold (Au).
General
Statement of Exploration Status
. The company has been managing an ongoing diamond core drilling program within the Wild Bill
area (approximately 900 acre area) at the northern most end of the Star Mountain, Chopar Mine. The company completed a reverse
circulation (RC) drilling program of 15 drill holes to a depth of 500 feet each (7,500 feet drilled), then commenced diamond core
drilling in August 2013.
Further
Exploration
. The diamond core drilling and analysis of the core and RC cuttings continued through the end of 2013. The company
budgeted $1,200,000 for exploration expenses, and actually expensed $1,021,597 for exploration as of the year ended of December
31, 2013.
General
Statement regarding Exploration and Mining Permits
. The State of Utah, Division of Natural resources, Division of Oil, Gas,
and Mining, Administrative Services, Minerals Program (the “Division”) which regulates all mining activities according
to the Mined Land Reclamation Act, Title 40-8, Utah Code Annotated 1953, as amended in 1975, and the General Rules and Rules of
Practice and Procedures, R647-1 through R647-5, required a Notice of Intent to conduct Exploration activities, and to place a
Surety Reclamation Bond for exploration of $8,900/first acre and $4,900 each additional acre. Regarding drilling dry, and in addition
to the above exploration costs the Division also requires a one-time mob/demob fee of $1,000 and $210 per each exploration hole
drilled. Regarding drilling wet up to 7” diameter, and in addition to the above costs the Division requires $7,000 mod/demob
charge for holes 800 feet or less plus $4.25/foot plus $210 for cap, $10,000 mob/demob charge for holes between 801 and 1,600
feet plus $210 for cap, $16,000 mob/demob for holes greater than 1,600 feet, and $5.44/foot plus $210 for cap. The Notices are
amendable in time and scope and additional bonding may be assessed according to current or future plans, rules, and regulations.
The
Chopar Mine property currently does not own a mine plant or mill or mining equipment, and is considered an “advanced stage”
exploration project, and has no proven or probable reserves as defined by SEC Industry Guide 7.
Spor
Mountain/Dugway Minerals (Spor Mountain Mining District)
On
May 1, 2012, the Company entered into a mineral lease agreement with the State of Utah for approximately 1,920 acres related to
the Dugway Minerals project near Delta, Utah (the “Dugway Minerals Lease”). The initial costs incurred and capitalized
in connection with obtaining the lease were $2,157. The lease has an initial term of 10 years, subject to certain extension provisions.
The future minimum annual rental commitment is $1.00 per acre (or $1,918). The lease also provides for a minimum annual royalty
payment of $5,754 beginning in the 11th year of the lease, and requires contingent production royalty payments based on 4% to
8% of the gross value (as defined in the lease) of non-fissionable and fissionable metalifferous minerals extracted from the leased
area.
Mineral
Lease Tract Boundaries T11S, R10W, SLB&M, Sec. 32 [All], T12S, R9W, SLB&M [All], T12S, R10W, SLB&M, Sec. 2 [All].
Spor
Mountain/Dugway Minerals General Geology:
Stratigraphy
General Statement
. Paleozoic rocks, probably deformed during the Sevier orogeny, consist of Lower Cambrian Prospect Mountain
Quartzite thrust over Middle Cambrian limestone. These rocks are unconformably overlain by Eocene andesite and latite. Subsidence
of a newly recognized cauldron (approximately 5 km in diameter), between 39.4 and 36.2 million years ago, resulted in the formation
of megabreccia. Eruption of a lithic-crystal ash-flow tuff may have accompanied subsidence and an inferred vent may mark the structural
wall of the cauldron. Intrusion of several granodiorite stocks and plugs, about 36 million years ago, caused widespread alteration
and mineralization. Later intrusions formed pebble dikes and granite plugs.
General
Statement of Geophysical/Geochemical work completed
. A joint Utah Geological and Mineral Survey (UGMS)-U. S. Geological Survey
(USGS) investigation of the mineral potential began in the area covered by the Dugway Minerals Lease following the release of
a report announcing the discovery of pyritized rocks with economic potential. Mapping in the area covered by this lease, in conjunction
with the USGS Delta CUSMAP project, focused on the geologic setting of several little-explored occurrences of silver, lead, zinc,
and copper mineralization. The company has performed grass roots prospecting, surface rock sampling, bulk sampling, and analysis
of combined historical geophysical/geochemical data in the area covered by the Dugway Minerals Lease.
General
Statement of Exploration Status
. Exploration was limited to research and analysis of collected data, and geologic mapping
through end of December 31, 2013.
Further
Exploration.
Mineralized rock in the area covered by the Dugway Minerals Lease consists of highly oxidized veins and stockwork
zones containing potentially economic concentrations of silver, lead, copper, and bismuth as reported by the Utah Geological Survey.
The company plans on performing further geophysical/geochemical work through a third party engineering firm on the properties
beginning in the second quarter of 2014. Scope of work and associated costs will be based upon proposals and bids from several
firms. The final budget and timeline are expected to be developed in 2014.
General
Statement regarding Exploration and Mining Permits
. The Dugway Minerals project currently does not have a mine plant, mill
or mining equipment, and is considered an “early stage” exploration project, and has no proven or probable reserves
as defined by SEC Industry Guide 7.
Ogden
Bay Minerals
The
Company’s plans for the Ogden Bay Minerals project consists of developing a mineral exploration and possible excavation
project on federal protected wetlands, canals and river systems across 25 square miles of land area known as North Delta located
in West Ogden, Utah. Excavation and harvesting rights are maintained through easement rights obtained from Weber County and a
special use river/stream alteration permit as part of a State of Utah/Weber County flood mitigation project. We intend to continue
to explore for silica, zircon, silver and gold.
Ogden
Bay Minerals Exploration Base Map
Stratigraphy
General Statement
. The Ogden Bay site lies on an extensive lowland plain formed during the Quaternary Period by depositions
of ancient Lake Bonneville and Great Salt Lake sediments, in combination with delta deposits, alluvial fans from the Weber River,
and other siliceous mineral sands deposited from deep positive flow warm springs. Sand and soils consist of warm springs fine
sandy loam, Lakeshore fine sand loam, Leland silt loam, and silica sand.
General
Statement of Geophysical/Geochemical work completed
. In 2010, the company completed augur soil sampling and assaying of mineralized
zones of interest, analyzed combined historical geophysical/geochemical data located in the public realm for the Ogden Bay site.
At year-end 2012 we had mined and stockpiled approximately 15,000 short tons of mineral sand for scale of economy and testing
for the recovery of silica sand and other minerals of interest.
Further
Exploration
. Exploration for the Ogden Bay site is currently on hold pending results of bulk sampling for the mineral stockpiled
on this site, as well as prospective future federal funding grants that may subsidize the project. The Company expects to resume
exploration activities at the Ogden Bay site during 2014 and begin processing the heavier mineral fraction of excavated sands.
General
Statement regarding Exploration and Mining Permits
. Excavation rights are maintained through easement rights obtained from
Weber County and a special use river/stream alteration permit as part of a State of Utah/Weber County flood mitigation project.
The
Ogden Bay Minerals project currently does not have a mine plant, mill or mining equipment, and is considered an “early stage”
exploration project, and has no proven or probable reserves as defined by SEC Industry Guide 7.