UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark One)
[ x ]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
April 30, 2012
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
000-52391
ROYAL MINES AND MINERALS
CORP.
(Exact name of registrant as specified in its
charter)
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NEVADA
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20-4178322
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State or other jurisdiction of incorporation or
organization
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(I.R.S. Employer Identification No.)
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2580 Anthem Village Dr.
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Henderson, NV
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89052
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
(702)
588-5973
Securities registered pursuant to Section 12(b) of the Act:
NONE.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par Value Per Share.
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined by Rule 405 of the Securities Act.
[ ]Yes[ x
]
No
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
[ ]Yes[ x
]
No
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed 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 days.
[ x ]
Yes
[ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (s. 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).
[
x ]
Yes
[ ]No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s
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 of the
Exchange Act.
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a smaller
reporting company)
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Smaller reporting company
[ x ]
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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[ x ]
No
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 last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter:
$3,368,550 as of October 31,
2011,
based on the price at which the common equity was
last sold on the OTC Bulletin Board
.
Indicate the number of shares outstanding of each of the
registrant’s classes of common stock, as of the latest practicable date.
As of July 26, 2012, the Registrant had 185,493,141 shares of common stock
outstanding
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ROYAL MINES AND MINERALS CORP.
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ANNUAL REPORT ON FORM 10-K
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FOR THE YEAR ENDED APRIL 30, 2012
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TABLE OF CONTENTS
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Page 2 of 34
PART I
The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding the Company's capital needs, business strategy
and expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expect," "plan," "intend," "anticipate," "believe,"
"estimate,” "predict," "potential" or "continue," the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks described below, and, from time to time, in other reports the Company
files with the United States Securities and Exchange Commission (the “SEC”).
These factors may cause the Company's actual results to differ materially from
any forward-looking statement. The Company disclaims any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements.
As used in this Annual Report, the terms “we,” “us,” “our,”
“Royal Mines,” and the “Company” mean Royal Mines And Minerals Corp., unless
otherwise indicated.
All dollar amounts in this Annual Report are expressed in
U.S. dollars, unless otherwise indicated.
Overview
We were incorporated on December 14, 2005 under the laws of the
State of Nevada. We are an exploration stage company and our primary objectives
are to: (i) commercially extract and refine precious metals from our own and
others mineralized materials; (ii) use our lixiviation processes (Cholla and
thiourea) to recover precious metals from specific ore bearing materials and fly
ash landfills/monofills, and (iii) joint venture, acquire and develop mining
projects in North America.
We are focusing our business on commercially processing
specific fly ash and other mineable materials, using a closed loop, leach
process that exposes extractable gold (the “Cholla Process”) at our processing
and refining plants located in Phoenix, Arizona (the “Phoenix Facility”) and
Scottsdale, Arizona (the “Scottsdale Facility”). Our facilities have the
capacity to process up to 10 tons per day. In our Phoenix Facility, we also
utilize our environmentally friendly proprietary technology for the extraction
of precious metals from other materials using thiourea stabilization (the
“Lixiviation Technology”). The use of thiourea stabilization is more
environmentally friendly than cyanide or sulfuric acid, which have traditionally
been used for this purpose. See “Facilities and Technologies” below.
We entered into an agreement dated June 14, 2012 with Phoenix
PMX LLC (“Phoenix PMX”). Under the terms of the Agreement, Phoenix PMX will
provide us with funding of up to $600,000 to support the establishment of Pilot
Plants in Scottsdale and Phoenix utilizing our proprietary Cholla Process for
recovery of gold from fly ash and other materials. See “Phoenix PMX Agreement”
Below.
We entered into a Memorandum of Understanding dated October 19,
2010 with Golden Anvil, SA de CV (“Golden Anvil”) with respect to the proposed
formation and funding of a proposed joint venture for the exploration and
development of mineral concessions owned by Golden Anvil in the State of
Nayarit, Mexico (the “Golden Anvil Mine”). We are currently working with
management of Golden Anvil to move the assets of Golden Anvil to an entity on
the TSX Venture Exchange from which we would receive a percentage ownership via
common stock from the conversion of our loans. See “Golden Anvil” below.
We also have an interest in a potential gold project that
consists of a mineral lease covering 20.61 acres of patented claims (the “Smith
Lease”) and an option to acquire a 100% interest in 20 unpatented claims (the
“BLM Claims”) located near the Smith Lease. Each BLM Claim is comprised of 160
acres. We have entered into a memorandum of understanding with Stina Resources
Ltd. (“Stina”) whereby Stina will be able to acquire a 70% interest in the Smith
Lease and a 40% interest in the BLM Claims. See “The Piute Valley Property”
below.
We are actively seeking to enter into joint ventures with third
parties who have legal rights to fly ash resources, including
landfills/monofills. There are no assurances that we will be able to
commercially extract precious metals from fly ash or other mineable ores using our Cholla or
thiourea processes or that we will be able to enter into joint ventures for the
exploration and development of additional mining projects.
Page 3 of 34
Facilities and Technologies
Our Phoenix Facility is an industrial building of approximately
9,800 square feet located in Phoenix, Arizona. The Phoenix Facility is designed
as a compact, modular, cost efficient, turn-key operation, with a capacity of
processing 4 tons of fly ash per day. In processing fly ash at our Phoenix
Facility, we utilize our Cholla Process and our Lixiviation Technology, being a
closed loop, zero liquid discharge, leach extraction process. Below is a diagram
of a 2 ton per hour processing circuit. The circuit at our Phoenix Facility is
smaller in size, however, we expect to lease additional equipment to increase
our capacity.
We acquired our interest in the Lixiviation Technology and our
Phoenix Facility on April 2, 2007 under the terms of a Technology and Asset
Purchase Agreement (the “Technology Agreement”) with New Verde River Mining Co.,
Inc. (“New Verde”) and Robert H. Gunnison. In consideration of the Lixiviation
Technology and the Phoenix Facility, we paid and issued the following:
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(a)
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$300,000 to New Verde for the purchase of the equipment
within the Phoenix Facility as follows:
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(i)
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$175,000 upon execution of the Technology Agreement
(which amount has been paid); and
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(ii)
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$125,000 (of which $50,000 is outstanding).
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(b)
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issued 2,000,000 shares to Mr. Gunnison for the
Lixiviation Technology.
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Concurrent with the acquisition of the Lixiviation Technology
and the Phoenix Facility, we entered into an Employment Agreement dated April 2,
2007 (the “Employment Agreement”) with Robert H. Gunnison whereby Mr. Gunnison
agreed to act as our Production Manager commencing on April 2, 2008. In
consideration of Mr. Gunnison’s services, we pay Mr. Gunnison a salary of
$120,000 per annum.
On March 13, 2009, we entered into the Payment Extension and
License Agreement with New Verde and Mr. Gunnison whereby New Verde and Mr.
Gunnison agreed to extend the deadline for the balance owed to New Verde to June
30, 2010. In consideration of the extension, we agreed to pay interest at 6% per
annum on the balance owing to New Verde. We also agreed to grant New Verde and
Mr. Gunnison a non-exclusive worldwide license on the Technology (the
“License”). The License will only take effect in the event of the termination of
the employment agreement between Mr. Gunnison and the Company. New Verde and Mr.
Gunnison will not be permitted to assign or sub-license without our prior
written approval. On July 22, 2010 and July 7, 2011, we entered into a payment
extension with New Verde and Mr. Gunnison whereby New Verde and Mr. Gunnison
agreed to extend the deadline for the balance owed to New Verde
to June 30, 2011 and June 30, 2012, respectively. In consideration of the
extension, we agreed to extend the accrual of interest at 6% per annum on the
balance owing to New Verde. As of the date of this filing the deadline has been
extended to June 30, 2013.
Page 4 of 34
Our Scottsdale Facility is an industrial building of
approximately 6,825 square feet located in Scottsdale, Arizona. The Scottsdale
Facility is designed specifically for processing fly ash using our Cholla
Process, a closed-loop, modular, turn-key, leaching operation, with a capacity
of processing 6 tons of fly ash per day. We are in the process of leasing
additional equipment to increase our capacity.
We have yet to realize significant revenues from our Cholla
Process and Lixiviation Technology.
Phoenix PMX Agreement
We entered into an agreement dated June 14, 2012 with Phoenix
PMX LLC (“Phoenix PMX”). Under the terms of the Agreement, Phoenix PMX will
provide us with funding of up to $600,000 to support the establishment of Pilot
Plants in Scottsdale and Phoenix utilizing our proprietary Cholla Process for
recovery of gold from fly ash and other materials. The funds will be advanced by
Phoenix PMX in tranches of $100,000 per month commencing June 20, 2012
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Each tranche will be secured by a promissory note payable 180 days from
advancement of funds with interest at 8% per annum. At any time during the first
three months of the Agreement, Phoenix PMX will have the option to convert the
amount advanced into units on the basis of $0.05 per unit, with each unit
consisting of one share of our common and one common stock purchase warrant
exercisable at $0.10 per share within one year from the date of issuance. As of
July 27, 2012, $25,000 has been advanced in connection with this agreement.
In consideration of Phoenix PMX providing the funding, Phoenix
PMX shall be entitled to receive 80% of the after royalty amount received from
the sale of gold recovered from the operation of the Plants until such time as
Phoenix PMX has received 100% of the amount advanced (the “Payback Amount”) and
thereafter shall be entitled to receive 60% of the after royalty amount obtained
from the sale of gold recovered in the operation of the Plants. Upon the Payback
Amount being reached, any remaining outstanding notes will be considered paid in
full.
In the event that the Pilot Plant shall achieve commercial
operation, Phoenix PMX will have the right to provide $5,000,000 of funding on
the same terms and conditions for a full-scale plant; however, the funds
advanced for the full-scale plant will not be convertible into securities of
Royal Mines. Phoenix PMX will also have the first right of refusal to
participate in any future plant developments, requiring financing up to
$10,000,000, in North America within 36 months of signing this agreement.
Phoenix PMX will have the option, 90 days following the first
tranche of funding to elect not to proceed with the next three tranches of
funding. If Phoenix PMX elects not to proceed, the total advanced and any
interest accrued thereon will be converted into units on the basis set out above
and Phoenix PMX will not be entitled to receive any further interest in the
proceeds of the sale of gold from the Plants. If Phoenix PMX elects to proceed,
Phoenix PMX will be obligated to complete the next three tranches.
If Phoenix PMX elects to proceed, Phoenix PMX may, within 180
days following the sixth tranche, elect to convert all, but not less than all,
of the principal and interest outstanding into units on the basis set out above
and Phoenix PMX will not be entitled to receive any further interest in the
proceeds of the sale of gold from the Plants.
Golden Anvil
On October 19, 2010, we executed a Memorandum of Understanding
with Golden Anvil, SA de CV (“Golden Anvil”) with respect to the formation of a
proposed Joint Venture for the exploration, development and production of
mineral concessions owned by Golden Anvil in the State of Nayarit, Mexico (the
“Golden Anvil Mine”). The Memorandum of Understanding further defines the terms
of the proposed Joint Venture as contemplated in a Letter of Intent dated
October 21, 2009.
Previous, we loaned to Golden Anvil a total of $600,000 (the
“Loan”) to permit Golden Anvil to establish a new facility (the “Processing
Plant”) in Mexico for the purposes of concentrating ore mined from the Golden
Anvil Mine. We also toll process concentrates from the Golden Anvil
Mine at our Phoenix Plant under the terms of the Toll Processing Agreement.
Page 5 of 34
Under the terms of the Memorandum of Understanding, we formed a
Nevada corporation called Golden Anvil Inc. (the “Joint Venture Company”) and
planned to contribute funding to the Joint Venture Company totaling $3,000,000
(the “Funding Amount”), including the amount of the Loan. Upon our providing the
Funding Amount, Golden Anvil would transfer 100% of the Golden Anvil Mine and
the Processing Plant (the “Golden Anvil Assets”) to the Joint Venture Company.
The additional $2,400,000 is to be funded as follows:
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(a)
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$300,000 within 45 days of the date of the Memorandum of
Understanding (which has been paid); and
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(b)
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The balance of $2,100,000 within 180 days of the date
that Golden Anvil delivers to the Phoenix Plant the first 20 tons of
concentrate generated from the Processing Plant (which we have not
received).
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If we are able to complete the funding, of which there is no
assurance, and Golden Anvil transfers the assets in the Joint Venture Company,
the Joint Venture Company will be owned 50% by us and 50% by Golden Anvil.
In the event that we are unable to raise the Funding Amount in
the time required, we will forfeit our right to proceed with the Joint Venture
and the Loan will be payable in 12 months with interest at 18% from the dates of
advancement and secured by the Golden Anvil Assets.
The final terms of the Joint Venture will be set out in a
formal agreement currently being prepared by legal counsel for the parties.
There is no assurance that we will enter into a formal agreement.
The concentration plant has begun operations at a projected
production rate of 50 tons of head ore per day, resulting in 3 to 4 tons of
concentrate per week. The weekly concentrates are being processed and sold in
Mexico to pay for the Processing Plants operations.
Currently, we are working with the management of Golden Anvil
to move the Golden Anvil Assets to an entity on the Toronto Stock Exchange, from
which we would receive a percentage ownership via common stock from the
conversion of our Loan.
The Piute Valley Property
The Piute Valley Property is a potential gold project
consisting of the Smith Lease and the BLM Claims. We intend to focus our
operations on the Smith Lease and other leasable, patented mining property
adjacent to our Piute Valley Property.
The Smith Lease is a leased patented mineral claim covering
approximately 20.61 acres located in Clark County, Nevada. We acquired our
interest in the Smith Lease upon entering into a Restatement and Amendment to
Lease Agreement dated April 12, 2007 (the “Lease Agreement”) with Erline Y.
Smith, Trustee, Erline Y. Smith Trust and Lawana Hooper (collectively referred
to as the “Lessors”). Under the terms of the Lease Agreement, we were granted
the right to explore, and if proved feasible, develop the Smith Lease. These
rights were granted as a lease for a term of 20 years. As consideration for the
Smith Lease, we agreed to do the following:
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(a)
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pay $5,000 to the Lessors upon execution of the Lease
Agreement (which amount has been paid);
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(b)
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pay an annual rental fee of $1,000 to the Lessors per
each five acre parcel of the Smith Lease (annual rental fee to be paid by
August 15, 2012); and
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(c)
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pay an annual royalty equal to five percent of “net
smelting profit” from production. Net smelting profit is defined as the
net profit derived from the sale of metals and minerals produced from the
Smith Lease.
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Page 6 of 34
In addition to the Smith Lease, our BLM Claims consist of an
option to acquire an undivided interest in 20 mineral claims, covering
approximately 3,200 acres located in Clark County, Nevada. Readers are cautioned
that eight of the BLM Claims appear to be invalid due to conflicts with patented
claims or more senior claims. We are investigating this further in order to
determine the exact extent of the conflict with these claims.
Under the terms of various option agreements entered into in
January 2007 (the “Option Agreements”) with certain optionors (the “Optionors”),
we are required to issue to the Optionors the following consideration in order
to maintain and exercise our option on the BLM Claims:
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1,050,000 shares of common stock on execution of the
Option Agreements (which shares have been issued);
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(b)
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an additional 420,000 shares of common stock on the fifth
anniversary of the Option Agreements (of which 350,000 shares were issued
because we renewed only 20 of the original 24 claims); and
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(c)
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an additional 210,000 shares of common stock on the tenth
anniversary of the Option Agreements.
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On February 8, 2012, we signed a memorandum of understanding
with Stina Resources Ltd. (“Stina”) of Ontario, Canada whereby Stina will have
the right to earn a 70% interest in the Smith Lease as well as a 40% interest in
the BLM claims. In order to acquire the interest, Stina will need to complete
$100,000 of exploration work on the properties within 12 months, and a further
$900,000 within three years of the formal agreement. The parties are currently
negotiating a formal agreement and there is no assurance that the parties will
be able to enter into such agreement.
Compliance with Government Regulation
Our activities are subject to extensive federal, state, and
local regulations in the United States. These statutes regulate the mining of
and exploration for mineral properties, and also the possible effects of such
activities upon the environment. Future legislation and regulations could cause
additional expense, capital expenditures, restrictions and delays in the
development of the Piute Valley Property, the extent of which cannot be
predicted. Our Piute Valley Property is comprised of patented and unpatented
mining claims located on federal land managed by the U.S. Bureau of Land
Management. Mining activities on the Piute Valley Property must be carried out
in accordance with a permit issued by the Bureau of Land Management.
Other regulatory requirements monitor the following:
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(a)
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Explosives and explosives handling.
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(b)
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Use and occupancy of site structures associated with
mining.
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(c)
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Hazardous materials and waste disposal.
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(d)
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State Historic site preservation.
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(e)
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Archaeological and paleontological finds associated with
mining.
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(f)
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Wildlife preservation.
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The State of Nevada adopted the Mined Land Reclamation Act (the
“Nevada Act”) in 1989 that established design, operation, monitoring and closure
requirements for all mining facilities. The Nevada Act has increased the cost of
designing, operating, monitoring and closing new mining facilities and could
affect the cost of operating, monitoring and closing existing mining facilities.
The State of Nevada has also adopted reclamation regulations. The Nevada Act
also requires reclamation plans and permits for exploration projects that will
result in more than five acres of surface disturbance.
In the context of environmental permitting, we must comply with
known standards, existing laws and regulations that may entail greater or lesser
costs and delays, depending on the nature of the activity to be permitted and
how stringently the regulations are implemented by the permitting authority. We
are not presently aware of any specific material environmental constraints
affecting our property that would preclude the economic development or operation
of any specific property.
Page 7 of 34
If our property merits additional exploration or extraction
work, it is reasonable to expect that compliance with environmental regulations
will increase our costs. Such compliance may include feasibility studies on the
surface impact of our proposed operations, costs associated with minimizing
surface impact, water treatment and protection, reclamation activities,
including rehabilitation of various sites, on-going efforts at alleviating the
mining impact on wildlife and permits or bonds as may be required to ensure our
compliance with applicable regulations. It is possible that the costs and delays
associated with such compliance could become so prohibitive that we may decide
to not proceed with exploration, development, or mining operations on our
mineral property.
Competition
We are an exploration stage company. We compete with other
mineral resource exploration and development companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
and development companies with whom we compete have greater financial and
technical resources than we do. Accordingly, these competitors may be able to
spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral
properties. In addition, they may be able to afford greater geological expertise
in the targeting and exploration of mineral properties. This competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.
We will also compete with other junior mineral exploration
companies for financing from a limited number of investors that are prepared to
make investments in junior mineral exploration companies. The presence of
competing junior mineral exploration companies may impact our ability to raise
additional capital in order to fund our exploration programs if investors are of
the view that investments in competitors are more attractive based on the merit
of the mineral properties under investigation and the price of the investment
offered to investors. We will also compete with other junior and senior mineral
companies for available resources, including, but not limited to, professional
geologists, camp staff, helicopter or float planes, mineral exploration supplies
and drill rigs.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or
trademark. We intend to seek patents with respect to the Lixiviation
Technology.
Research and Development Expenditures
During our fiscal year ended April 30, 2012, we spent
approximately $1,216,280 on research and development costs. In fiscal 2011, we
spent approximately $902,546 on research and development costs.
Employees
Other than our executive officers and directors, we do not have
any employees at the time of this Annual Report.
The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.
If we do not obtain additional financing, we may not be able
to continue our operations at our Facilities, enter into the proposed Joint
Venture with Golden Anvil or complete our exploration and development programs
on the Piute Valley Property.
Page 8 of 34
As of April 30, 2012, we had cash on hand of $70,678 and
accumulated net loss of $13,030,822 since inception. Our plan of operation calls
for significant expenses in connection with the operation of our Phoenix
Facility and Scottsdale Facility, the entry into the proposed Joint Venture with
Golden Anvil, and the exploration and development of our Piute Valley Property.
If we are unable to raise sufficient financing, there is a substantial risk that
we will be unable to meet payments of principal and interest to our creditors
and pay our consultants and employees. In addition, we will require substantial
financing in order to implement our plan of operation over the next twelve
months. There is no assurance that this will satisfy all of our working capital
requirements for the next twelve months or that these funds will be sufficient
to complete our planned exploration and development programs.
Because we are an exploration stage company, we face a high
risk of business failure.
We have commenced earning revenues, although minimal, from the
processing of ore at our Phoenix and Scottsdale Facilities. Our primary business
activities have involved the acquisition of the Piute Valley Property, the
exploration and development on the Piute Valley Property and the commencement of
operations at our Phoenix Facility and Scottsdale Facility. Potential investors
should be aware of the difficulties normally encountered by exploration stage
companies and the high rate of failure of such enterprises. 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. These potential problems include,
but are not limited to, unanticipated problems relating to exploration, and
additional costs and expenses that may exceed current estimates.
Because we anticipate our operating expenses will increase
prior to our earning significant revenues, we may never achieve
profitability.
Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses prior to realizing any
significant revenues. We therefore expect to incur significant losses into the
foreseeable future. We recognize that if we are unable to generate significant
revenues from the operation of our Phoenix Facility and Scottsdale Facility or
the exploration and development of our mineral property and the production of
minerals thereon, if any, we will not be able to earn profits or continue
operations. There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we may not be able to ever
generate any operating revenues or achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely fail.
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.
The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of precious metals on
our mineral claims. Exploration for minerals is a speculative venture,
necessarily involving substantial risk. The expenditures to be made by us in the
upcoming exploration of the mineral claims may not result in the discovery of
commercial quantities of ore. 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 of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages if and when
we conduct mineral exploration activities.
The search for valuable minerals involves numerous hazards. As
a result, if and when we conduct exploration activities we may become subject to
liability for such hazards, including pollution, cave-ins and other hazards
against which we cannot insure or against which we may elect not to insure. The
payment of such liabilities may have a material adverse effect on our financial
position.
There is no assurance that any or all of our loan to Golden
Anvil will be repaid.
Under the terms of the Memorandum of Understanding with Golden
Anvil, we loaned Golden Anvil a total of $983,055 bearing interest at a rate of
18% per annum. There is no assurance that Golden Anvil will complete a
transaction for the sale of its assets and repay any or all of our loan.
Page 9 of 34
Even if we discover commercial reserves of precious metals
on our Piute Valley Property, we may not be able to successfully obtain
commercial production.
Our Piute Valley Property does not contain any known bodies of
ore. If our exploration programs are successful in discovering ore of commercial
tonnage and grade, we will require additional funds in order to place those
mineral claims into commercial production. At this time, there is a risk that we
will not be able to obtain such financing as and when needed.
In order to maintain our rights to the Piute Valley
Property, we will be required to make annual filings with federal and state
regulatory agencies and/or be required to complete assessment work on those
properties.
In order to maintain our rights to the Piute Valley Property,
we will be required to make annual filings with federal and state regulatory
authorities. Currently the amount of these fees is minimal; however, these
maintenance fees are subject to adjustment. In addition, we may be required by
federal and/or state legislation or regulations to complete minimum annual
amounts of mineral exploration work on the Piute Valley Property. A failure by
us to meet the annual maintenance requirements under federal and state laws
could result in the loss of our rights to the Piute Valley Property.
As we undertake exploration of our Piute Valley Property, we
will be subject to compliance with government regulation that may increase the
anticipated cost of our exploration program.
There are several government regulations that materially
restrict the exploration of minerals. We may be required to obtain work permits,
post bonds and perform remediation work for any physical disturbance to the land
in order to comply with these laws. While our planned exploration program
budgets for regulatory compliance, there is a risk that new regulations could
increase our costs of doing business and prevent us from carrying out our
exploration program.
Certain work to be performed on our mineral projects may
require us to apply for permits from federal, state or local regulatory
bodies.
If our applications for permits from the relevant regulatory
bodies are denied, we may not be able to proceed with our exploration and
development programs as disclosed above, which could have a negative effect on
our business.
If we receive positive results from our exploration program
and we decide to pursue commercial production, we may be subject to an
environmental review process that may delay or prohibit commercial production.
If the results of our geological exploration program indicate
commercially exploitable reserves, and we decide to pursue commercial production
of our mineral property, we may be subject to an environmental review process
under environmental assessment legislation. Compliance with an environmental
review process may be costly and may delay commercial production. Furthermore,
there is the possibility that we would not be able to proceed with commercial
production upon completion of the environmental review process if government
authorities did not approve our mine or if the costs of compliance with
government regulation adversely affected the commercial viability of the
proposed mine.
If we are unable to hire and retain key personnel, we may
not be able to implement our business plan and our business will fail.
Our success will largely depend on our ability to hire highly
qualified personnel with experience in geological exploration. These individuals
may be in high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are hired. Our
failure to hire key personnel when needed could have a significant negative
effect on our business.
Page 10 of 34
If we complete additional financings through the sale of
shares of our common stock, our existing stockholders will experience
dilution.
The most likely source of future financing presently available
to us is through the issuance of our common stock. The only other anticipated
alternative for the financing of further exploration would be the offering by us
of an interest in our properties to be earned by another party or parties
carrying out further exploration thereof, which is not presently contemplated.
Issuing shares of our common stock, for financing purposes or otherwise, will
dilute the interests of our existing stockholders.
Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.
Our common stock is considered to be a “penny stock” since it
does not qualify for one of the exemptions from the definition of “penny stock”
under Section 3a51-1 of the Exchange Act. Our common stock is a “penny stock”
because it meets one or more of the following conditions (i) the stock trades at
a price less than $5.00 per share; (ii) it is not traded on a “recognized”
national exchange; (iii) it is not quoted on the Nasdaq Stock Market, or even if
so, has a price less than $5.00 per share; or (iv) is issued by a company that
has been in business less than three years with net tangible assets less than $5
million.
The principal result or effect of being designated a “penny
stock” is that securities broker-dealers participating in sales of our common
stock will be subject to the “penny stock” regulations set forth in Rules 15-2
through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2
requires broker-dealers dealing in penny stocks to provide potential investors
with a document disclosing the risks of penny stocks and to obtain a manually
signed and dated written receipt of the document at least two business days
before effecting any transaction in a penny stock for the investor's account.
Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the
account of any investor for transactions in such stocks before selling any penny
stock to that investor. This procedure requires the broker-dealer to (i) obtain
from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably determine,
based on that information, that transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult and time consuming for holders of our common stock to resell their
shares to third parties or to otherwise dispose of them in the market or
otherwise.
Our principal office is at Suite 112, 2580 Anthem Village Dr.,
Henderson, NV 89052, consisting of approximately 150 square feet, which we rent
at a cost of $850 per month. We entered into a lease agreement expiring on April
30, 2013.
We also rent premises located at 6214 E. Phelps Rd.,
Scottsdale, AZ 85254, for use as corporate housing, at a cost of $2,500 per
month. We entered into a lease with respect to this premises which commenced in
May 4, 2011 and is month-to-month.
We also rent premises located at 7235 E. Maverick Rd.,
Scottsdale, AZ 85258, for use as corporate housing, at a cost of $2,402 per
month. We entered into a lease with respect to this premises which commenced in
April 22, 2011 and expires on October 30, 2012.
We also lease our Phoenix Facility located at 2344 North
33
rd
Avenue, Phoenix, AZ 85009. The Phoenix Facility is leased
pursuant to a Lease Agreement dated June 6, 2007 among ourselves, McKendry
Enterprises Inc. and Profit Sharing Plan and Retirement Trust at a cost of
$5,199 per month.. The Phoenix Pilot Production Facility consists of an
industrial building of approximately 9,809 square feet located on approximately
24,559 square feet of land. This lease agreement expires on June 30, 2010. On
November 20, 2009 we extended the term of our lease to August 31, 2013.
We also lease our Scottsdale Facility located at 14325 N.
79
th
St., Scottsdale, AZ 85260. The Scottsdale Facility is leased
pursuant to a Lease Agreement dated June 6, 2011 with Cimarron Industrial
Partners, LLC at a cost of $5,200 per month. The Scottsdale Facility consists of
office and warehouse space of approximately 6,825 square feet. This lease
agreement is month-to-month.
Page 11 of 34
THE PIUTE VALLEY PROPERTY
Location, Climate, Infrastructure and Access
The Piute Valley Property consists of approximately 3,200 acres
of lakebed exploration project, with underlying hard rock potential, located
about 50 miles south of Las Vegas, Nevada.
Access is by vehicle from Las Vegas on Highway 95 to
Searchlight, Nevada then by secondary roads southward. The area is typically
desert climate with relatively high temperatures and low precipitation.
Vegetation consists mainly of desert shrubs and cactus. Sources of water would
be available from valley wells.
Geology
The Piute Valley Property contains extensive sedimentary
deposits, a part of an extensive basin filled with unconsolidated detritus and
bounded by outcropping Miocene volcanic and intrusive rocks. Previous geologic
work conducted from interpretation of satellite infrared imagery indicates the
claims are overlaying a major east-west Fracture Zone as wide as 5-8 miles.
Historically, gold mined from the area was produced principally from
quartz-sulphide-hematite veins trending in the same east-west direction.
Metallurgy and Mineralogy
The Piute Valley Property has a complex mineralogy that
requires a technical extension of conventional fire assay methods to identify
the precious metals of gold, silver and platinum group metals, and unique and
proprietary leaching and separation methods to extract the precious metals. The
gold particles occur as micron clusters in a highly refractory aluminum silicate
matrix that arrested the growth of the gold clusters and prevents their rapid
solutioning, whether in high temperature molten flux used in fire assay
(aluminum silicates melt at temperatures higher than conventional fire assay
temperatures) or in chemical digestion (cyanidation does not attack the aluminum
silicate coating)
.
We have developed the necessary technology to “assay”
the existence of the gold clusters and a process to extract, separate and purify
any precious metals.
History of Exploration
In 2007, we initiated a sampling program on the Piute Valley
Property to analyze the efficacy of conventional fire assay methodology for
determining the grade of precious metals in samples from the property.
-
January 2007
– 20 surface samples randomly collected from Section 2
Range 63E Township 29S were analyzed for Au at our Phoenix Facility. The
samples were collected from excavating 3-5 feet from the surface, screened to
-1/4”, further milled to 200 mesh, fire assayed, and separated into 1000 g (~2
lb) bench leaching. We completed this Phase I study on the precious metals
recoverable composition and found high statistical variance in the results
from the fire assay of 15 g (1/2 assay ton) and 30 g (full assay ton) samples.
The 1000 g bench leaching, however, demonstrated consistent extraction results
using our Lixivation Technology.
-
February to July 2007
– We initiated a 6 month large-scale sampling
program, Phase II study, designed to explore the precious metal values
throughout the 1,280 acre position of the Piute Valley Property. Three 5 ton
sampling efforts were conducted, each consisting of excavating 5-10 feet from
the surface, screened to - 1/4”, further milled to 350 mesh, fire assayed, and
separated into 1000 g (~2 lb) bench leaching, 100 kg batch leaching, and 2000
kg pilot-scale leaching. We completed this Phase II study and our results
demonstrated consistent, scalable extraction economics from the 1000 g bench
leaching, 100 kg batch leaching, and 2000 kg pilot-scale leaching. The results
from the program indicated anomalous values of gold.
Exploration Activities Conducted on the Piute Valley
Property
Our current state of exploration involves a four phase
exploration program to be undertaken on the Piute Valley Property to assess its
potential to host gold and silver mineralization. The four phase program
consists of the following:
Page 12 of 34
|
Phase
|
Exploration Program
|
Cost
|
Status
|
|
Phase I
|
Chain of custody surface exploration.
|
$30,000
|
Completed in October, 2007.
|
|
Phase II
|
Preliminary coring to depths of
100 meters.
|
$75,000
|
Completed in January, 2008.
|
|
Phase III
|
Pilot Production Test on the
Smith Lease.
|
$280,000
|
Completed in June, 2009.
|
|
Phase IV
|
Test diamond drilling of the
prime targets for 20 acres production.
|
$500,000
|
Expected to be completed in
June 2013.
|
|
|
Total Estimated Cost
|
$885,000
|
|
Our exploration program is intended to generate and prioritize
target areas for implementation of our Lixiviation Technology. It has come to
our attention that eight of our original mineral claims have been segregated by
the Bureau of Land Management. A substantial portion of our previous exploration
work on the Piute Valley Property was conducted on these invalid claims.
However, we believe that the mineralization is homogenous throughout the Piute
Valley and accordingly the results should be valid for the remaining claims.
Phase I Exploration Program
Work on Phase I of our exploration program was completed in
October, 2007 and consisted of chain of custody surface exploration and a
shallow drilling program to provide us with additional information on the
mineralization, concentration efficacy, extraction efficiency, and processing
economics of the former 2,560 acres portion of the Piute Valley Property.
Phase II Exploration Program
Work on Phase II of our exploration program was completed in
January, 2008. Phase II of our exploration program consisted of drilling at a
depth of up to 100 meters and was conducted in an area a half-mile wide that
extended two miles south of the area immediately south of the Quartette Mine.
All drilling was conducted on the Smith Lease.
During Phase II of our exploration program, we obtained nine
one-pound samples and nine 200 pound samples from an area of 100 acres located
immediately south of the Quartette Mine. The surface sample results were
analyzed at our mineral processing laboratory in Arizona. We also drilled five
rotary percussion holes at depths between 30 meters and 100 meters. Each 15
meters of drilling generated 200 pounds of cuttings for mineral processing.
The following results were received by us in connection with
Phase II of our exploration program.
Sample Type
|
Average Au
(g/t)
|
Average Ag (g/t)
|
|
9 x 1 lb. surface samples, leached
|
2.54 g/t
|
0.63 g/t
|
|
9 x 200 lb. surface samples screened to minus ¼”
|
1.9 g/t
|
1.5 g/t
|
|
5 drill holes – full depth
|
2.95 g/t
|
0.93 g/t
|
|
5 drill holes – top 30 meters
|
3.18 g/t
|
1.5 g/t
|
Within the fiscal year ending April 30, 2008, we completed a
pilot-scale processing study of the alluvial ore obtained from the Phase II
portion of the exploration program. This processing study involved the gravity
and floatation concentration of the head ore performed by Met-Solve Laboratories
Inc. in Burnaby, British Columbia.
Phase III Exploration Program
We completed our pilot production test on the Smith Lease.
During the pilot production test, we built and operated a gravity concentration
circuit in an effort to create a high value concentrate material. The results
from our test were very promising, although inconclusive as far as the
commercial viability of the gravity concentration process. Consistent with prior
tests, we confirmed the existence of gold in the concentrates. However, the
concentrates were irregular in nature and could not be used as a method to scale
up production. We are currently in the process of having a third party concentration
technology evaluate the material to see if they can get consistent, higher
concentrate results.
Page 13 of 34
Throughout our testing we found anomalous values of gold, that
if efficiently concentrated should prove to be commercially viable. Once we
prove out a viable method for concentration, we will scale up the process and
begin immediate refinement in our Phoenix Facility.
Additional testing on the property revealed significant quartz
structures, over 50 feet wide in some cases, between the 36’ and 44’ depth
levels. These structures appear to be typical of the historic gold bearing
material processed by local mining concerns in the past. The initial test
results indicate anomalous values of gold. These findings have caused us to
reevaluate our drilling plans and reapply for permits to drill out and map the
property. Additional funding is required to properly drilling the claims.
Phase IV Exploration Program
Phase IV of our exploration program will involve the test
diamond drilling of prime targets on the Smith Lease. The implementation of
Phase IV of our exploration requires the filing of a Notice with the Federal
Bureau of Land Management. We anticipate that this phase will cost approximately
$500,000. The completion of the Phase IV portion of our current exploration
program will depend on obtaining sufficient funds for the drilling and mineral
analysis.
Our planned exploration program is exploratory in nature and no
commercially extractable mineral reserves may ever be found.
|
ITEM 3.
|
LEGAL PROCEEDINGS.
|
We are not a party to any other legal proceedings and, to our
knowledge, no other legal proceedings are pending, threatened or
contemplated.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES.
|
None.
Page 14 of 34
PART II
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
MARKET INFORMATION
Our common shares are currently quoted on the OTC Bulletin
Board under the symbol “RYMM." The following table indicates the high and low
prices of the common shares obtained during the periods indicated:
|
|
|
2012
|
|
|
2011
|
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
First Quarter ended July 31
|
$
|
0.08
|
|
$
|
0.06
|
|
$
|
0.04
|
|
$
|
0.02
|
|
|
Second Quarter ended October 31
|
$
|
0.08
|
|
$
|
0.02
|
|
$
|
0.07
|
|
$
|
0.02
|
|
|
Third Quarter ended January 31
|
$
|
0.06
|
|
$
|
0.02
|
|
$
|
0.10
|
|
$
|
0.04
|
|
|
Fourth Quarter ended April 30
|
$
|
0.05
|
|
$
|
0.03
|
|
$
|
0.07
|
|
$
|
0.04
|
|
REGISTERED HOLDERS OF OUR COMMON STOCK
As of July 26, 2012, there were 124 registered holders of
record of our common stock. We believe that a number of stockholders hold stock
on deposit with their brokers or investment bankers registered in the name of
stock depositories.
DIVIDENDS
We have neither declared nor paid any cash dividends on our
capital stock since our inception and do not contemplate paying cash dividends
in the foreseeable future. It is anticipated that earnings, if any, will be
retained for the operation of our business. Our board of directors will
determine future dividend declarations and payments, if any, in light of the
then-current conditions they deem relevant and in accordance with the Nevada
Revised Statutes.
There are no restrictions in our articles of incorporation or
in our bylaws which prevent us from declaring dividends. The Nevada Revised
Statutes, however, do prohibit us from declaring dividends where, after giving
effect to the distribution of a dividend:
|
|
(a)
|
We would not be able to pay our debts as they become due
in the usual course of business; or
|
|
|
|
|
|
|
(b)
|
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
distributions.
|
RECENT SALES OF UNREGISTERED SECURITIES
Other than as described below, all unregistered sales of our
equity securities made during the year ended April 30, 2012 have been reported
by us in our Quarterly Reports and our Current Reports filed with the SEC during
the year, which constituted less than 5% of the number of shares of common stock
outstanding:
|
|
(a)
|
On February 24, 2012, we issued common stock purchase
warrants to acquire 300,000 shares of the Company’s common stock. Each
warrant entitles the holder to purchase one share of the Company’s common
stock at a price of $0.25 per share for a three year period expiring
October 31, 2014. The warrants were issued pursuant to Rule 506 of
Regulation D of the Securities Act to a consultant in consideration for
arranging an equipment lease between the Company and Roles Mining
Equipment LLC. The consultant represented that it is an “accredited
investor” as defined in Regulation D of the Securities
Act.
|
Page 15 of 34
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS OF OPERATIONS.
|
PLAN OF OPERATION
Our plan of operation over the next twelve months is to focus
our financial resources on commercializing the extraction of gold and other
precious metals from fly ash or other ash deposits using our Cholla Process and
Lixiviation Technology.
We also plan to finalize a formal agreement with Stina whereby
Stina can acquire an interest in the Smith Lease and BLM Claims. In
consideration of which, Stina will be required to carry out an exploration
program on our property. We anticipate that this program will involve the
drilling of prime targets on the Smith Lease. The implementation of this
drilling program requires the filing of a Plan of Operations with the Federal
Bureau of Land Management (BLM).
In addition, we are working with the management of Golden Anvil
to move the assets of Golden Anvil to an entity on the TSX Venture Exchange,
from which we would receive a percentage ownership via common stock from the
conversion of our $983,055 Loan.
As of April 30, 2012, we had cash in the amount of $70,678.
Accordingly, we do not have sufficient resources to meet the ongoing costs of
our Phoenix Facility and Scottsdale Facility, the anticipated costs of
completing our plan of operation for our Phoenix Facility and Scottsdale
Facility, the Smith Lease or meeting the administrative costs of operating our
business for the next twelve months. In order to complete our plan of operation,
we will be required to obtain substantial financing from the sale of our common
stock, of which there is no assurance.
RESULTS OF OPERATIONS
|
Summary of Year End Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended April 30,
|
|
|
Percentage
|
|
|
|
|
2012
|
|
|
2011
|
|
|
Increase / (Decrease)
|
|
|
Revenue
|
$
|
49,231
|
|
$
|
20,307
|
|
|
142.4%
|
|
|
Operating Expenses
|
|
(1,777,272
|
)
|
|
(1,658,449
|
)
|
|
7.2%
|
|
|
Other Items
|
|
(15,807
|
)
|
|
(53,992
|
)
|
|
(70.7)%
|
|
|
Net Loss
|
$
|
(1,743,848
|
)
|
$
|
(1,692,134
|
)
|
|
3.1%
|
|
Revenues
During the year ended April 30, 2011, we earned revenues of
$49,231. We are currently in the exploration stage of our business. We have
begun to process fly ash at our Phoenix Facility and Scottsdale Facility;
however, our initial income from the use of our Phoenix Facility and Scottsdale
Facility has been minimal. We can provide no assurances that we will earn
significant revenue from the processing of fly ash or that we will discover
commercially exploitable levels of mineral resources on our Piute Valley
Property, or if such resources are discovered, that we will be able to enter
into commercial production of our Piute Valley Property.
Page 16 of 34
Operating Expenses
The major components of our operating expenses for the years
ended April 30, 2012 and 2011 are outlined in the table below:
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Increase /
|
|
|
|
|
April 30, 2012
|
|
|
April 30, 2011
|
|
|
(Decrease)
|
|
|
Mineral exploration and evaluation expenses
|
$
|
1,095,280
|
|
$
|
779,546
|
|
|
40.5%
|
|
|
Mineral exploration and evaluation expenses – related party
|
|
121,000
|
|
|
123,000
|
|
|
(1.6)%
|
|
|
General and administrative
|
|
279,890
|
|
|
297,531
|
|
|
(5.9)%
|
|
|
General and administrative – related party
|
|
196,799
|
|
|
397,562
|
|
|
(50.5)%
|
|
|
Depreciation and amortization
|
|
84,303
|
|
|
60,810
|
|
|
38.6%
|
|
|
Total Expenses
|
$
|
1,777,272
|
|
$
|
1,658,449
|
|
|
7.2%
|
|
Our operating expenses for the year ended April 30, 2012
increased as compared to the year ended April 30, 2011. The increase in our
operating expenses primarily relates to an increase in our mineral exploration
and evaluation expenses and depreciation and amortization. Those amounts were
partially offset by a decrease in our general and administrative – related party
expenses.
Mineral exploration and evaluation expenses primarily consisted
of rent, extraction processing costs, consulting fees and labor expenses in
connection with our Phoenix Facility and Scottsdale Facility. The increase in
mineral exploration and evaluation expenses in fiscal 2012 was primarily due to
us having a full year of operating expenses at our Scottsdale Facility in fiscal
2012 compared to only three months in fiscal 2011.
Our general and administrative and general and administrative
related party expenses primarily consisted of: (i) stock based expenses; (ii)
monthly consulting fees paid to our Chief Executive Officer, Mr. Matheson and to
our Chief Financial Officer, Mr. Mitchell; and (iii) legal and accounting fees
in connection with meeting our reporting requirements under the Exchange Act.
The decrease in general and administrative – related party expenses is due to
the fact that we incurred stock based expenses of $167,883 in fiscal 2011.
We anticipate that our operating expenses will continue to
increase significantly as we implement our plan of operation for our Phoenix
Facility, Scottsdale Facility and our Piute Valley Property.
LIQUIDITY AND CAPITAL RESOURCES
|
Cash Flows
|
|
|
|
|
|
|
|
|
|
Year Ended April 30
|
|
|
|
|
2012
|
|
|
2011
|
|
|
Net Cash used in Operating Activities
|
$
|
(1,495,871
|
)
|
$
|
(1,082,506
|
)
|
|
Net Cash used in Investing Activities
|
|
(114,407
|
)
|
|
(513,350
|
)
|
|
Net Cash Provided by Financing Activities
|
|
1,663,151
|
|
|
1,576,102
|
|
|
Net Increase (Decrease) in Cash During Period
|
$
|
52,873
|
|
$
|
(19,754
|
)
|
|
Working Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
At
April 30, 2012
|
|
|
At
April 30, 2011
|
|
|
Increase / (Decrease)
|
|
|
Current Assets
|
$
|
85,209
|
|
$
|
34,719
|
|
|
145.4%
|
|
|
Current Liabilities
|
|
(896,348
|
)
|
|
(695,112
|
)
|
|
29.0%
|
|
|
Working Capital Deficit
|
$
|
(811,139
|
)
|
$
|
(660,393
|
)
|
|
22.8%
|
|
Page 17 of 34
As at April 30, 2012, we had a working capital deficit of $811,139 as compared to a working capital deficit of $660,393 as at our year ended April 30, 2011. The increase in our working capital deficit was primarily due to an increase in loans payable and accounts payable – related parties. The increase was partially offset by a decrease in accrued interest – related parties.
During the year ended April 30, 2012, through multiple private
placement offerings, we issued an aggregate of 35,762,789 units (the “Units”) at
a price of $0.05 US per Unit, with each Unit consisting of one share of our
common stock and one share purchase warrant which entitles the holder to
purchase an additional share of our common stock for a period of two years at a
price of $0.10 US per share, as follows:
|
|
(a)
|
21,700,000 Units for cash proceeds of $500,000, in
satisfaction of $465,000 in loans and to retire $120,000 in corporate
indebtedness pursuant to Rule 506 of Regulation D of Act;
|
|
|
|
|
|
|
(b)
|
10,320,000 Units in satisfaction of $502,000 in loans and
to retire $14,000 in corporate indebtedness pursuant to Section 4(2) of
the Act; and
|
|
|
|
|
|
|
(c)
|
3,742,789 Units for cash proceeds of $137,139 and to
retire $50,000 in corporate indebtedness pursuant to Regulation S of the
Act.
|
There is no assurance that any additional securities will be
issued under any of our private placement offerings.
Financing Requirements
Currently, we do not have sufficient financial resources to
complete our plan of operation for the next twelve months. As such, our ability
to complete our plan of operation is dependent upon our ability to obtain
additional financing in the near term.
We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing shareholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned mining, development
and exploration activities.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant 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 is
material to stockholders.
CRITICAL ACCOUNTING POLICIES
We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in Note 1 to our audited financial statements included in this Annual
Report.
Use of Estimates
- The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Mineral Property Rights
– Costs of acquiring mining
properties are capitalized upon acquisition. Mine development costs incurred
either to develop new ore deposits, to expand the capacity of mines, or to
develop mine areas substantially in advance of current production are also
capitalized once proven and probable reserves exist and the property is a
commercially mineable property. Costs incurred to maintain current production or
to maintain assets on a standby basis are charged to operations. Costs of
abandoned projects are charged to operations upon abandonment. The Company
evaluates the carrying value of capitalized mining costs and related property
and equipment costs, to determine if these costs are in excess of their
recoverable amount whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. Evaluation of the carrying
value of capitalized costs and any related property and equipment costs would be
based upon expected future cash flows and/or estimated salvage value in
accordance with Accounting Standards Codification (ASC) 360-10-35-15,
Impairment or Disposal of Long-Lived Assets
.
Page 18 of 34
Exploration Costs
– Mineral exploration costs are
expensed as incurred.
Revenue Recognition
– The Company recognizes revenues
and the related costs when persuasive evidence of an arrangement exists,
delivery and acceptance has occurred or service has been rendered, the price is
fixed or determinable, and collection of the resulting receivable is reasonably
assured. Revenue from licensing our technology is recognized over the term of
the license agreement. Costs and expenses are recognized during the period in
which they are incurred.
Research and Development
- All research and development
expenditures are expensed as incurred.
Stock-Based Compensation
– The Company accounts for
share based payments in accordance with ASC 718,
Compensation - Stock
Compensation
, which requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the financial
statements based on the grant date fair value of the award. In accordance with
ASC 718-10-30-9,
Measurement Objective – Fair Value at Grant Date
, the
Company estimates the fair value of the award using a valuation technique. For
this purpose, the Company uses the Black-Scholes option pricing model. The
Company believes this model provides the best estimate of fair value due to its
ability to incorporate inputs that change over time, such as volatility and
interest rates, and to allow for actual exercise behavior of option holders.
Compensation cost is recognized over the requisite service period which is
generally equal to the vesting period. Upon exercise, shares issued will be
newly issued shares from authorized common stock.
ASC 505, "Compensation-Stock Compensation", establishes
standards for the accounting for transactions in which an entity exchanges its
equity instruments to non employees for goods or services. Under this transition
method, stock compensation expense includes compensation expense for all
stock-based compensation awards granted on or after January 1, 2006, based on
the grant-date fair value estimated in accordance with the provisions of ASC
505.
Page 19 of 34
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.
|
|
1.
|
Report of Independent Registered Public Accounting Firm
(De Joya Griffith, LLC);
|
|
|
|
|
2.
|
Audited Financial Statements for the Years Ended April
30, 2012 and 2011, including:
|
|
|
|
|
|
a.
|
Balance Sheets at April 30, 2012 and 2011;
|
|
|
|
|
|
b.
|
Statements of Operations for the years ended April 30,
2012 and 2011 and for the period from Inception (December 14, 2005) to
April 30, 2012;
|
|
|
|
|
|
c.
|
Statements of Stockholders’ Equity (Deficit) for the
period from Inception (December 14, 2005) to April 30, 2012;
|
|
|
|
|
|
d.
|
Statements of Cash Flows for the years ended April 30,
2012 and 2011 and for the period from Inception (December 14, 2005) to
April 30, 2012; and
|
|
|
|
|
|
e.
|
Notes to Financial Statements.
|
Page 20 of 34
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders
Royal Mines and
Minerals Corp.
We have audited the accompanying balance sheets of Royal Mines
and Minerals Corp. (An Exploration Stage Company) (the “Company”) as of April
30, 2012 and 2011 and the related statements of operations, stockholders’ equity
and cash flows for each of the years in the two-year period ended April 30, 2012
and for the period from inception (December 14, 2005) through April 30, 2012.
Royal Mines and Minerals Corp.’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits 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 company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Royal Mines
and Minerals Corp. (An Exploration Stage Company) as of April 30, 2012 and 2011
and the results of its operations and its cash flows for each of the years in
the two-year period ended April 30, 2012 and for the period from inception
(December 14, 2005) through April 30, 2012 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company has suffered losses from operations, which
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 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ De Joya Griffith, LLC
Henderson, Nevada
July 25,
2012
|
|
De
Joya Griffith, LLC
º 2580 Anthem Village Dr. º Henderson, NV º
89052
Telephone (702) 563-1600
º Facsimile (702)
920
-8049
www.dejoyagriffith.com
|
|
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
BALANCE SHEETS
|
|
(Audited)
|
|
|
|
April 30, 2012
|
|
|
April 30, 2011
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
70,678
|
|
$
|
17,805
|
|
|
Prepaid expenses
|
|
11,716
|
|
|
16,914
|
|
|
Other current assets
|
|
2,815
|
|
|
-
|
|
|
Total current
assets
|
|
85,209
|
|
|
34,719
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Loan receivable
|
|
983,055
|
|
|
900,000
|
|
|
Property and equipment, net
|
|
341,796
|
|
|
164,341
|
|
|
Intellectual property, net
|
|
150,000
|
|
|
150,000
|
|
|
Mineral properties
|
|
63,710
|
|
|
42,600
|
|
|
Other assets
|
|
27,737
|
|
|
8,350
|
|
|
Total
non-current assets
|
|
1,566,298
|
|
|
1,265,291
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
1,651,507
|
|
$
|
1,300,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
70,006
|
|
$
|
64,162
|
|
|
Accounts payable - related parties
|
|
387,516
|
|
|
65,000
|
|
|
Accrued liabilities
|
|
5,000
|
|
|
72,000
|
|
|
Accrued interest
|
|
13,858
|
|
|
10,808
|
|
|
Accrued interest - related
parties
|
|
6,778
|
|
|
133,963
|
|
|
Notes payable
|
|
50,000
|
|
|
50,000
|
|
|
Loans payable
|
|
100,000
|
|
|
-
|
|
|
Loans payable - related parties
|
|
263,190
|
|
|
299,179
|
|
|
Total current
liabilities
|
|
896,348
|
|
|
695,112
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
896,348
|
|
|
695,112
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 100,000,000
shares
authorized, zero shares
issued and outstanding
|
|
-
|
|
|
-
|
|
Common stock, $0.001 par
value; 300,000,000 shares
authorized, 185,493,141 and 148,420,352 shares issued
and outstanding, respectively
|
|
185,493
|
|
|
148,420
|
|
|
Additional paid-in capital
|
|
13,600,488
|
|
|
11,743,452
|
|
|
Accumulated deficit during
exploration stage
|
|
(13,030,822
|
)
|
|
(11,286,974
|
)
|
|
Total stockholders' equity
|
|
755,159
|
|
|
604,898
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
1,651,507
|
|
$
|
1,300,010
|
|
The accompanying notes are an integral part of these financial
statements.
F-1
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
STATEMENTS OF OPERATIONS
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
|
|
|
|
|
|
|
(December 14, 2005)
|
|
|
|
|
For the Years Ended
|
|
|
Through
|
|
|
|
|
April 30, 2012
|
|
|
April 30, 2011
|
|
|
April 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
49,231
|
|
$
|
20,307
|
|
$
|
138,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Mineral exploration and evaluation expenses
|
|
1,095,280
|
|
|
779,546
|
|
|
4,137,568
|
|
|
Mineral exploration and
evaluation expenses - related parties
|
|
121,000
|
|
|
123,000
|
|
|
819,500
|
|
|
General and administrative
|
|
279,890
|
|
|
297,531
|
|
|
3,050,725
|
|
|
General and administrative -
related parties
|
|
196,799
|
|
|
397,562
|
|
|
4,497,643
|
|
|
Depreciation and amortization
|
|
84,303
|
|
|
60,810
|
|
|
567,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
1,777,272
|
|
|
1,658,449
|
|
|
13,072,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
(1,728,041
|
)
|
|
(1,638,142
|
)
|
|
(12,934,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
160
|
|
|
-
|
|
|
103,826
|
|
|
Interest expense
|
|
(15,967
|
)
|
|
(53,992
|
)
|
|
(200,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
(15,807
|
)
|
|
(53,992
|
)
|
|
(96,408
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(1,743,848
|
)
|
$
|
(1,692,134
|
)
|
$
|
(13,030,822
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share - basic:
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic
|
|
170,743,450
|
|
|
121,823,037
|
|
|
|
|
The accompanying notes are an integral part of these financial
statements.
F-2
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit During
|
|
|
Total
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Exploration
|
|
|
Stockholders'
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Stage
|
|
|
Equity (Deficit)
|
|
|
Balance, December 14, 2005
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
Issuance of common stock for cash, $0.001 per share
|
|
1,000
|
|
|
1
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(174,500
|
)
|
|
(174,500
|
)
|
|
Balance, April 30, 2006
|
|
1,000
|
|
|
1
|
|
|
-
|
|
|
(174,500
|
)
|
|
(174,499
|
)
|
|
Issuance of common stock for cash, $0.001
per share
|
|
12,500,000
|
|
|
12,500
|
|
|
-
|
|
|
-
|
|
|
12,500
|
|
|
Issuance of common stock for cash, $0.01 per share
|
|
7,800,000
|
|
|
7,800
|
|
|
70,200
|
|
|
-
|
|
|
78,000
|
|
|
Issuance of common stock for mineral
property options, $0.01 per share
|
|
1,050,000
|
|
|
1,050
|
|
|
9,450
|
|
|
-
|
|
|
10,500
|
|
|
Issuance of common stock for cash, $0.10 per share
|
|
1,250,000
|
|
|
1,250
|
|
|
123,750
|
|
|
-
|
|
|
125,000
|
|
|
Issuance of common stock for cash, Reg. S -
Private Placement, $0.10 per share
|
|
1,800,000
|
|
|
1,800
|
|
|
178,200
|
|
|
-
|
|
|
180,000
|
|
|
Issuance of common stock in acquisition of intellectual
property and equipment, $0.10 per share
|
|
2,000,000
|
|
|
2,000
|
|
|
198,000
|
|
|
-
|
|
|
200,000
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(517,768
|
)
|
|
(517,768
|
)
|
|
Balance, April 30, 2007
|
|
26,401,000
|
|
|
26,401
|
|
|
579,600
|
|
|
(692,268
|
)
|
|
(86,267
|
)
|
|
Issuance of common stock for cash and
subscriptions received, Reg. S - Private Placement, $0.25 per share
|
|
2,482,326
|
|
|
2,482
|
|
|
618,100
|
|
|
-
|
|
|
620,582
|
|
|
Issuance of common stock for cash, Reg. D - Private
Placement, $0.25 per share
|
|
3,300,000
|
|
|
3,300
|
|
|
821,700
|
|
|
-
|
|
|
825,000
|
|
|
Issuance of common stock in reverse
acquisition of Centrus Ventures Inc.
|
|
13,968,926
|
|
|
13,969
|
|
|
(77,164
|
)
|
|
-
|
|
|
(63,195
|
)
|
|
Issuance of stock options for 4,340,000 shares of common
stock to three officers and five consultants.
|
|
-
|
|
|
-
|
|
|
3,583,702
|
|
|
-
|
|
|
3,583,702
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,256,444
|
)
|
|
(5,256,444
|
)
|
|
Balance, April 30, 2008
|
|
46,152,252
|
|
|
46,152
|
|
|
5,525,938
|
|
|
(5,948,712
|
)
|
|
(376,622
|
)
|
|
Issuace of common stock for cash, Reg. S -
Private Placement, $0.50 per share; with attached warrants exercisable at
$0.75 per share
|
|
200,000
|
|
|
200
|
|
|
99,800
|
|
|
-
|
|
|
100,000
|
|
|
Issuance of common stock in satisfaction of debt, $0.30 per
share, with attached warrants exercisable at $0.50 per share.
|
|
450,760
|
|
|
451
|
|
|
134,777
|
|
|
-
|
|
|
135,228
|
|
|
Issuance of stock options for 5,000,000
shares of common stock to two officers and nine consultants.
|
|
-
|
|
|
-
|
|
|
342,550
|
|
|
-
|
|
|
342,550
|
|
|
Issuace of common stock for cash, $0.05 per share, with
attached warrants exercisable at $0.10 per share.
|
|
9,140,000
|
|
|
9,140
|
|
|
447,860
|
|
|
-
|
|
|
457,000
|
|
|
Issuance of common stock in satisfaction of
loans made to the Company, $0.05 per share, with attached warrants
exercisable at $0.10 per share.
|
|
12,400,000
|
|
|
12,400
|
|
|
607,600
|
|
|
-
|
|
|
620,000
|
|
The accompanying notes are an integral part of these financial
statements.
F-4
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit During
|
|
|
Total
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Exploration
|
|
|
Stockholders'
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Stage
|
|
|
Equity (Deficit)
|
|
|
Issuance of common stock in satisfaction of
debt, $0.05 per share, with attached warrants exercisable at $0.10 per
share.
|
|
1,336,840
|
|
|
1,337
|
|
|
65,505
|
|
|
-
|
|
|
66,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to one officer as
compensation pursuant to the management consulting agreement.
|
|
3,000,000
|
|
|
3,000
|
|
|
117,000
|
|
|
-
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,717,000
|
)
|
|
(1,717,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2009
|
|
72,679,852
|
|
|
72,680
|
|
|
7,341,030
|
|
|
(7,665,712
|
)
|
|
(252,002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans made to the Company, $0,05 per share, with attached warrants
exercisable at $0.10 per share.
|
|
2,000,000
|
|
|
2,000
|
|
|
98,000
|
|
|
-
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
debt, $0.05 per share, with attached warrants exercisable at $0.10 per
share.
|
|
500,000
|
|
|
500
|
|
|
24,500
|
|
|
-
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for warrants
excercised, $0.10 per share, in satisfaction of debt for legal services.
|
|
295,000
|
|
|
295
|
|
|
29,205
|
|
|
-
|
|
|
29,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for options
excercised, $0.05 per share, in satisfaction of debt for legal services.
|
|
750,000
|
|
|
750
|
|
|
36,750
|
|
|
-
|
|
|
37,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to investor
relations services firm pursuant to terms of consulting agreement.
|
|
1,500,000
|
|
|
1,500
|
|
|
-
|
|
|
-
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans to the Company, $0.10 per share, with attached warrants excercisable
at $0.20 per share.
|
|
3,500,000
|
|
|
3,500
|
|
|
346,500
|
|
|
-
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock options for 7,000,000
shares of common stock to two directors and nine consultants.
|
|
-
|
|
|
-
|
|
|
391,478
|
|
|
-
|
|
|
391,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for options
excercised, $0.05 per share, in satisfaction of debt for legal services.
|
|
900,000
|
|
|
900
|
|
|
44,100
|
|
|
-
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans to the Company, $0.05 per share, with attached warrants exercisable
at $0.10 per share.
|
|
19,400,000
|
|
|
19,400
|
|
|
950,600
|
|
|
-
|
|
|
970,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuace of common stock for cash, $0.05 per
share, with attached warrants exercisable at $0.10 per share.
|
|
8,280,000
|
|
|
8,280
|
|
|
405,720
|
|
|
-
|
|
|
414,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
debt, $0.05 per share, with attached warrants exercisable at $0.10 per
share.
|
|
1,775,500
|
|
|
1,775
|
|
|
87,000
|
|
|
-
|
|
|
88,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for options
excercised, $0.05 per share, in satisfaction of debt for legal services.
|
|
100,000
|
|
|
100
|
|
|
4,900
|
|
|
-
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for warrants
excercised, $0.10 per share, in satisfaction of debt for legal services.
|
|
105,000
|
|
|
105
|
|
|
10,395
|
|
|
-
|
|
|
10,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,929,128
|
)
|
|
(1,929,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2010
|
|
111,785,352
|
|
|
111,785
|
|
|
9,770,178
|
|
|
(9,594,840
|
)
|
|
287,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock options for 6,000,000
shares of common stock to three directors and eight consultants.
|
|
-
|
|
|
-
|
|
|
178,159
|
|
|
-
|
|
|
178,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for options
excercised, $0.05 per share, in satisfaction of debt.
|
|
1,700,000
|
|
|
1,700
|
|
|
83,300
|
|
|
-
|
|
|
85,000
|
|
The accompanying notes are an integral part of these financial
statements.
F-5
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit During
|
|
|
Total
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Exploration
|
|
|
Stockholders'
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Stage
|
|
|
Equity (Deficit)
|
|
|
Issuance of common stock for options
excercised, $0.05 per share, in satisfaction of debt.
|
|
1,950,000
|
|
|
1,950
|
|
|
95,550
|
|
|
-
|
|
|
97,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans to the Company, $0.05 per share, with attached warrants exercisable
at $0.10 per share.
|
|
17,020,000
|
|
|
17,020
|
|
|
833,980
|
|
|
-
|
|
|
851,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, $0.05
per share, with attached warrants exercisable at $0.10 per share.
|
|
13,100,000
|
|
|
13,100
|
|
|
641,900
|
|
|
-
|
|
|
655,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to investor
relations services firm pursuant to terms of consulting agreement.
|
|
315,000
|
|
|
315
|
|
|
15,435
|
|
|
-
|
|
|
15,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to two officers
and three consultants as as compensation for services previously provided.
|
|
2,550,000
|
|
|
2,550
|
|
|
124,950
|
|
|
-
|
|
|
127,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,692,134
|
)
|
|
(1,692,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2011
|
|
148,420,352
|
|
|
148,420
|
|
|
11,743,452
|
|
|
(11,286,974
|
)
|
|
604,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, $0.05
per share, with attached warrants exercisable at $0.10 per share.
|
|
10,000,000
|
|
|
10,000
|
|
|
490,000
|
|
|
-
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans to the Company, $0.05 per share, with attached warrants exercisable
at $0.10 per share.
|
|
10,340,000
|
|
|
10,340
|
|
|
506,660
|
|
|
-
|
|
|
517,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
debt, $0.05 per share, with attached warrants exercisable at $0.10 per
share.
|
|
2,680,000
|
|
|
2,680
|
|
|
131,320
|
|
|
-
|
|
|
134,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of warrants for 1,030,000 shares
of common stock to one consultant pursuant to terms of consulting
agreement.
|
|
-
|
|
|
-
|
|
|
42,073
|
|
|
-
|
|
|
42,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to one consultant
as compensation pursuant to terms of consulting agreement.
|
|
320,000
|
|
|
320
|
|
|
15,680
|
|
|
-
|
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
debt, $0.05 per share, with attached warrants exercisable at $0.10 per
share.
|
|
1,000,000
|
|
|
1,000
|
|
|
49,000
|
|
|
-
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for mineral
property options, $0.04 per share.
|
|
350,000
|
|
|
350
|
|
|
13,650
|
|
|
-
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in satisfaction of
loans to the Company, $0.05 per share, with attached warrants exercisable
at $0.10 per share.
|
|
9,000,000
|
|
|
9,000
|
|
|
441,000
|
|
|
-
|
|
|
450,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, $0.05
per share, with attached warrants exercisable at $0.10 per share.
|
|
2,742,789
|
|
|
2,743
|
|
|
134,397
|
|
|
-
|
|
|
137,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to one consultant
as compensation pursuant to terms of consulting agreement.
|
|
640,000
|
|
|
640
|
|
|
21,760
|
|
|
-
|
|
|
22,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of warrants for 30,000 shares of
common stock to one vendor for services provided.
|
|
-
|
|
|
-
|
|
|
11,496
|
|
|
-
|
|
|
11,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,743,848
|
)
|
|
(1,743,848
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2012
|
|
185,493,141
|
|
$
|
185,493
|
|
$
|
13,600,488
|
|
$
|
(13,030,822
|
)
|
$
|
755,159
|
|
The accompanying notes are an integral part of these financial
statements.
F-4
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
STATEMENTS OF CASH FLOWS
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
|
|
|
|
|
|
|
(December 14, 2005)
|
|
|
|
|
For the Years Ended
|
|
|
Through
|
|
|
|
|
April 30, 2012
|
|
|
April 30, 2011
|
|
|
April 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(1,743,848
|
)
|
$
|
(1,692,134
|
)
|
$
|
(13,030,822
|
)
|
|
Adjustments to reconcile net loss to
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
84,303
|
|
|
60,810
|
|
|
567,515
|
|
|
Stock-based expenses
|
|
86,408
|
|
|
117,513
|
|
|
1,299,368
|
|
|
Stock-based expenses -
related parties
|
|
-
|
|
|
196,896
|
|
|
3,539,179
|
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
10,759
|
|
|
(9,914
|
)
|
|
845
|
|
|
Other
assets
|
|
(22,202
|
)
|
|
(2,850
|
)
|
|
(30,552
|
)
|
|
Accounts payable
|
|
5,844
|
|
|
59,725
|
|
|
575,370
|
|
|
Accounts
payable - related parties
|
|
85,000
|
|
|
108,000
|
|
|
321,890
|
|
|
Accrued liabilities
|
|
(17,000
|
)
|
|
25,556
|
|
|
(4,127
|
)
|
|
Accrued
interest
|
|
3,050
|
|
|
4,328
|
|
|
13,858
|
|
|
Accrued interest- related
parties
|
|
11,815
|
|
|
49,564
|
|
|
176,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
(1,495,871
|
)
|
|
(1,082,506
|
)
|
|
(6,571,454
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Loan receivable
|
|
(83,055
|
)
|
|
(500,000
|
)
|
|
(983,055
|
)
|
|
Cash paid on mineral property claims
|
|
(7,110
|
)
|
|
(6,800
|
)
|
|
(39,210
|
)
|
|
Cash acquired on reverse merger
|
|
-
|
|
|
-
|
|
|
2,306
|
|
|
Purchase of fixed assets
|
|
(24,242
|
)
|
|
(6,550
|
)
|
|
(621,795
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
(114,407
|
)
|
|
(513,350
|
)
|
|
(1,641,754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Proceeds from stock issuance
|
|
637,140
|
|
|
655,000
|
|
|
4,105,721
|
|
|
Proceeds on borrowings
|
|
100,000
|
|
|
-
|
|
|
100,000
|
|
|
Proceeds on borrowings - related
party
|
|
926,011
|
|
|
921,102
|
|
|
4,078,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing
activities
|
|
1,663,151
|
|
|
1,576,102
|
|
|
8,283,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
|
|
52,873
|
|
|
(19,754
|
)
|
|
70,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AT BEGINNING OF PERIOD
|
|
17,805
|
|
|
37,559
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AT END OF PERIOD
|
$
|
70,678
|
|
$
|
17,805
|
|
$
|
70,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
$
|
1,005
|
|
$
|
100
|
|
$
|
6,411
|
|
|
Income taxes paid
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of intellectual property for stock
|
$
|
-
|
|
$
|
-
|
|
$
|
200,000
|
|
|
Acquisition of mineral property for
stock
|
$
|
14,000
|
|
$
|
-
|
|
$
|
24,500
|
|
|
Stock issued in reverse acquisition of Centrus
Ventures Inc.
|
$
|
-
|
|
$
|
-
|
|
$
|
(63,195
|
)
|
|
Stock issued in satisfaction of
accounts payable
|
$
|
-
|
|
$
|
(12,500
|
)
|
$
|
(220,617
|
)
|
|
Stock issued in satisfaction of accounts payable -
related parties
|
$
|
-
|
|
$
|
(130,000
|
)
|
$
|
(365,228
|
)
|
|
Stock issued in satisfaction of
accrued interest - related parties
|
$
|
(134,000
|
)
|
$
|
-
|
|
$
|
(134,000
|
)
|
|
Stock issued in satisfaction of accrued liabilities
|
$
|
(50,000
|
)
|
$
|
-
|
|
$
|
(50,000
|
)
|
|
Stock issued in satisfaction of notes
payable
|
$
|
-
|
|
$
|
(40,000
|
)
|
$
|
(40,000
|
)
|
|
Stock issued in satisfaction of loans made to the
Company
|
$
|
(967,000
|
)
|
$
|
(851,000
|
)
|
$
|
(3,858,000
|
)
|
|
Stock and warrants issued for prepaid
signing bonus
|
$
|
5,561
|
|
$
|
-
|
|
$
|
5,561
|
|
|
Payable issued for equipment acquisition - related
party
|
$
|
237,516
|
|
$
|
-
|
|
$
|
237,516
|
|
The accompanying notes are an integral part of these financial
statements.
F-5
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
1.
|
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
SIGNIFICANT POLICIES
|
|
|
|
|
|
Basis of Presentation
– The accompanying financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. Royal Mines and
Minerals Corp’s (the “Company”) fiscal year-end is April 30.
|
|
|
|
|
|
Description of Business
– The Company is
considered an exploration stage company. The Company's primary objectives
are to 1) commercially extract and refine precious metals from its own and
other’s leachable assets, 2) use its lixiviation processes to convert
specific ore bodies and fly ash landfills/monofills into valuable assets,
and 3) joint venture, acquire and develop mining projects in North
America. The Company has not yet realized significant revenues from its
primary objectives.
|
|
|
|
|
|
History
– The Company was incorporated on December
14, 2005 under the laws of the State of Nevada. On June 13, 2007, the
Company incorporated a wholly-owned subsidiary, Royal Mines Acquisition
Corp., in the state of Nevada.
|
|
|
|
|
|
On October 5, 2007, Centrus Ventures Inc. (Centrus)
completed the acquisition of Royal Mines Inc. (“Royal Mines”). The
acquisition of Royal Mines was completed by way of a “triangular merger”
pursuant to the provisions of the Agreement and Plan of Merger dated
September 24, 2007 (the “First Merger Agreement”) among Centrus, Royal
Mines Acquisition Corp. (“Centrus Sub”), a wholly owned subsidiary of
Centrus, Royal Mines and Kevin B. Epp, the former sole executive officer
and director of Centrus. On October 5, 2007, under the terms of the First
Merger Agreement, Royal Mines was merged with and into Centrus Sub, with
Centrus Sub continuing as the surviving corporation (the “First
Merger”).
|
|
|
|
|
|
On October 6, 2007, a second merger was completed
pursuant to an Agreement and Plan of Merger dated October 6, 2007 (the
“Second Merger Agreement”) between Centrus and its wholly owned
subsidiary, Centrus Sub, whereby Centrus Sub was merged with and into
Centrus, with Centrus continuing as the surviving corporation (the “Second
Merger”). As part of the Second Merger, Centrus changed its name from
“Centrus Ventures Inc.” to “Royal Mines And Minerals Corp.”(“the
Company”). Other than the name change, no amendments were made to the
Articles of Incorporation.
|
|
|
|
|
|
Under the terms and conditions of the First Merger
Agreement, each share of Royal Mines’ common stock issued and outstanding
immediately prior to the completion of the First Merger was converted into
one share of Centrus’ common stock. As a result, a total of 32,183,326
shares of Centrus common stock were issued to former stockholders of Royal
Mines. In addition, Mr. Epp surrendered 23,500,000 shares of Centrus
common stock for cancellation in consideration of payment by Centrus of
$0.001 per share for an aggregate consideration of $23,500. As a result,
upon completion of the First Merger, the former stockholders of Royal
Mines owned approximately 69.7% of the issued and outstanding common
stock.
|
|
|
|
|
|
As such, Royal Mines is deemed to be the acquiring
enterprise for financial reporting purposes. All acquired assets and
liabilities of Centrus were recorded at fair value on the date of the
acquisition, as required by the purchase method of accounting, and the
tangible net liabilities were debited against equity of the Company. There
are no continuing operations of Centrus from the date of
acquisition.
|
|
|
|
|
|
Going Concern
- As of April 30, 2012, the Company
has incurred cumulative net losses of approximately $13,030,822 from
operations and has negative working capital of $811,139. The Company is
still in the exploration stage and has not fully commenced its mining and
minerals processing operations, raising substantial doubt about its
ability to continue as a going concern.
|
|
|
|
|
|
The ability of the Company to continue as a going concern
is dependent on the Company raising additional sources of capital and the successful execution of the Company's objectives. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives. The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
|
F-6
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
Use of Estimates
- The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
- The
Company considers all investments with an original maturity of three months or
less to be a cash equivalent.
Property and Equipment
-
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is provided principally on the straight-line method over the
estimated useful lives of the assets, which are generally 3 to 10 years. The
cost of repairs and maintenance is charged to expense as incurred. Expenditures
for property betterments and renewals are capitalized. Upon sale or other
disposition of a depreciable asset, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in the statement of
operations.
The Company periodically evaluates
whether events and circumstances have occurred that may warrant revision of the
estimated useful life of fixed assets or whether the remaining balance of fixed
assets should be evaluated for possible impairment. The Company uses an estimate
of the related undiscounted cash flows over the remaining life of the fixed
assets in measuring their recoverability.
Mineral Property Rights
– Costs
of acquiring mining properties are capitalized upon acquisition. Mine
development costs incurred either to develop new ore deposits, to expand the
capacity of mines, or to develop mine areas substantially in advance of current
production are also capitalized once proven and probable reserves exist and the
property is a commercially mineable property. Costs incurred to maintain current
production or to maintain assets on a standby basis are charged to operations.
Costs of abandoned projects are charged to operations upon abandonment. The
Company evaluates the carrying value of capitalized mining costs and related
property and equipment costs, to determine if these costs are in excess of their
recoverable amount whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. Evaluation of the carrying value
of capitalized costs and any related property and equipment costs would be based
upon expected future cash flows and/or estimated salvage value in accordance
with Accounting Standards Codification (ASC) 360-10-35-15,
Impairment or
Disposal of Long-Lived Assets
.
Exploration Costs
– Mineral
exploration costs are expensed as incurred.
Impairment of Long-Lived Assets
– The Company reviews and evaluates long-lived assets for impairment when events
or changes in circumstances indicate the related carrying amounts may not be
recoverable. The assets are subject to impairment consideration under ASC
360-10-35-17,
Measurement of an Impairment Loss
, if events or
circumstances indicate that their carrying amount might not be recoverable. As
of April 30, 2012 exploration progress is on target with the Company’s
exploration and evaluation plan and no events or circumstances have happened to
indicate the related carrying values of the properties may not be recoverable.
When the Company determines that an impairment analysis should be done, the
analysis will be performed using the rules of ASC 930-360-35,
Asset
Impairment
, and 360-10-15-3 through 15-5,
Impairment or Disposal of
Long-Lived Assets
.
F-7
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
Various factors could impact our
ability to achieve forecasted production schedules. Additionally, commodity
prices, capital expenditure requirements and reclamation costs could differ from
the assumptions the Company may use in cash flow models used to assess
impairment. The ability to achieve the estimated quantities of recoverable
minerals from exploration stage mineral interests involves further risks in
addition to those factors applicable to mineral interests where proven and
probable reserves have been identified, due to the lower level of confidence
that the identified mineralized material can ultimately be mined economically.
Material changes to any of these
factors or assumptions discussed above could result in future impairment charges
to operations.
Asset Retirement Obligation
-
The Company follows ASC 410,
Asset Retirement and Environmental
Obligations
, which requires that an asset retirement obligation (“ARO”)
associated with the retirement of a tangible long-lived asset be recognized as a
liability in the period in which it is incurred and becomes determinable, with
an offsetting increase in the carrying amount of the associated asset. The cost
of the tangible asset, including the initially recognized ARO, is depleted, such
that the cost of the ARO is recognized over the useful life of the asset. The
ARO is recorded at fair value, and accretion expense is recognized over time as
the discounted liability is accreted to its expected settlement value. The fair
value of the ARO is measured using expected future cash flow, discounted at the
Company’s credit-adjusted risk-free interest rate. To date, no significant asset
retirement obligation exists. Accordingly, no liability has been recorded.
Fair Value of Financial
Instruments
- Fair value accounting establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1measurements) and the lowest
priority to unobservable inputs (Level 3 measurements). The three levels of the
fair value hierarchy are described below:
|
|
Level
1
|
Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets or
liabilities;
|
|
|
Level
2
|
Quoted prices in markets that are not active, or inputs
that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and
|
|
|
Level
3
|
Prices or valuation techniques that require inputs that
are both significant to the fair value measurement and unobservable
(supported by little or no market activity).
|
The Company’s financial instruments
consist of mineral property purchase obligations. These obligations are
classified within Level 2 of the fair value hierarchy as their fair value is
determined using interest rates which approximate market rates. The Company is
not exposed to significant interest or credit risk arising from these financial
instruments.
Revenue Recognition
– The
Company recognizes revenues and the related costs when persuasive evidence of an
arrangement exists, delivery and acceptance has occurred or service has been
rendered, the price is fixed or determinable, and collection of the resulting
receivable is reasonably assured. Revenue from licensing our technology is
recognized over the term of the license agreement. Costs and expenses are
recognized during the period in which they are incurred.
Research and Development
- All
research and development expenditures are expensed as incurred.
Earnings (Loss) Per Share
- The
Company follows ASC 260,
Earnings Per Share,
and ASC 480,
Distinguishing Liabilities from Equity,
which establish standards for the
computation, presentation and disclosure requirements for basic and diluted
earnings per share for entities with publicly held common shares and potential
common stock issuances. Basic earnings (loss) per share are computed by dividing
net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. Common stock equivalents, which include stock options and warrants to purchase common stock, on April 30, 2012 and 2011 that were not included in the computation of diluted earnings per share because the effect would be antidilutive were 109,095,129 and 102,317,340, respectively.
F-8
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
Income Taxes
- The Company
accounts for its income taxes in accordance with ASC 740,
Income Taxes
,
which requires recognition of deferred tax assets and liabilities for future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date.
For acquired properties that do not
constitute a business as defined in ASC 805-10-55-4,
Definition of a
Business
, deferred income tax liability is recorded on GAAP basis over
income tax basis using statutory federal and state rates. The resulting
estimated future federal and state income tax liability associated with the
temporary difference between the acquisition consideration and the tax basis is
computed in accordance with ASC 740-10-25-51,
Acquired Temporary Differences
in Certain Purchase Transactions that are Not Accounted for as Business
Combinations
, and is reflected as an increase to the total purchase price
which is then applied to the underlying acquired assets in the absence of there
being a goodwill component associated with the acquisition transactions.
Expenses of Offering
- The
Company accounts for specific incremental costs directly related to a proposed
or actual offering of securities as a direct charge against the gross proceeds
of the offering.
Stock-Based Compensation
– The
Company accounts for share based payments in accordance with ASC 718,
Compensation - Stock Compensation
, which requires all share-based
payments to employees, including grants of employee stock options, to be
recognized in the financial statements based on the grant date fair value of the
award. In accordance with ASC 718-10-30-9,
Measurement Objective – Fair Value
at Grant Date
, the Company estimates the fair value of the award using a
valuation technique. For this purpose, the Company uses the Black-Scholes option
pricing model. The Company believes this model provides the best estimate of
fair value due to its ability to incorporate inputs that change over time, such
as volatility and interest rates, and to allow for actual exercise behavior of
option holders. Compensation cost is recognized over the requisite service
period which is generally equal to the vesting period. Upon exercise, shares
issued will be newly issued shares from authorized common stock.
ASC 505, "Compensation-Stock
Compensation", establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments to non employees for goods or
services. Under this transition method, stock compensation expense includes
compensation expense for all stock-based compensation awards granted on or after
January 1, 2006, based on the grant-date fair value estimated in accordance with
the provisions of ASC 505.
Reclassifications
– The Company
reclassified $16,200 of Loans payable – related party and $30,244 of Accrued
interest – related party as of April 30, 2010 to Accrued liabilities to conform
to the current presentation. The reclassification had no effect on the Company’s
financial condition, results of operation, or cash flows.
Recent Accounting Standards
–
From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board (FASB) that are adopted by the Company as of the
specified effective date. Unless otherwise discussed, management believes that
the impact of recently issued standards did not or will not have a material
impact on the Company’s financial position, results of operations, or cash flows
upon adoption.
F-9
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
In May 2011, the FASB issued additional guidance
regarding fair value measurement and disclosure requirements. The most
significant change relates to Level 3 fair value measurements and requires
disclosure of quantitative information about unobservable inputs used, a
description of the valuation processes used, and a qualitative discussion
about the sensitivity of the measurements. The guidance is effective for
interim and annual periods beginning on or after December 15, 2011. The
Company does not expect adoption of the additional fair value measurement
and disclosure requirements to have a material impact on its financial
position or results of operations.
|
|
|
|
|
|
In June 2011, the FASB issued ASU 2011-12, Comprehensive
Income, Presentation of Comprehensive Income. Under the amendments, an
entity has the option to present the total of comprehensive income, the
components of net income, and the components of other comprehensive income
either in a single continuous statement of comprehensive income or in two
separate but consecutive statements. This guidance is effective for the
Company for the fiscal year beginning after December 15, 2011. The Company
does not expect adoption of the additional fair value measurement and
disclosure requirements to have a material impact on its financial
position or results of operations.
|
|
|
|
|
2.
|
LOAN RECEIVABLE
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, the Company has
advanced $983,055 and $900,000, respectively, to Golden Anvil to permit
Golden Anvil to complete its refurbishment and relocation of its mineral
processing plant in Nayarit, Mexico. On November 19, 2010, the Company
entered into a Memorandum of Understanding with Golden Anvil, covering the
total advanced by the Company to Golden Anvil. The loan bears no interest,
matures within 180 days of receiving the first 20 tons of concentrates,
which the Company has yet to receive, and is secured by Golden Anvil’s
equipment and mineral claims.
|
|
|
|
|
|
Under the terms of the Memorandum of Understanding, we
formed a Nevada corporation called Golden Anvil Inc. (the “Joint Venture
Company”) and planned to contribute funding to the Joint Venture Company
totaling $3,000,000 (the “Funding Amount”), including the amount of the
first $600,000 Loan included in the above totals. Upon our providing the
Funding Amount, Golden Anvil would transfer 100% of the Golden Anvil Mine
and the Processing Plant (the “Golden Anvil Assets”) to the Joint Venture
Company. The additional $2,400,000 is to be funded as
follows:
|
|
|
(a)
|
$300,000 within 45 days of the date of the Memorandum of
Understanding (which has been paid); and
|
|
|
|
|
|
|
(b)
|
The balance of $2,100,000 within 180 days of the date
that Golden Anvil delivers to the Phoenix Plant the first 20 tons of
concentrate generated from the Processing Plant, which the Company has yet
to receive.
|
If we are able to complete the funding,
of which there is no assurance, and Golden Anvil transfers the assets in the
Joint Venture Company, the Joint Venture Company will be owned 50% by us and 50%
by Golden Anvil. As of April 30, 2012, the Company has paid, on behalf of Golden
Anvil, $83,055 in expenses which is included in the total Loan amount.
In the event that we are unable to
raise the Funding Amount in the time required, we will forfeit our right to
proceed with the Joint Venture and the Loan will be payable in 12 months with
interest at 18% from the dates of advancement and secured by the Golden Anvil
Assets. The Loan will be paid with the net profits of Golden Anvil. Any net
profit earned by Golden Anvil will be credited to the earned interest first.
F-10
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
Currently, we are working with the management of Golden
Anvil to move the Golden Anvil Assets to an entity on the Toronto Stock
Exchange or similar exchange, from which we would either be repaid our
Loan plus 18% interest or receive a percentage ownership via common stock
from the conversion of our Loan.
|
|
|
|
|
3.
|
PROPERTY AND EQUIPMENT
|
|
|
|
|
|
Property and equipment consists of the
following:
|
|
|
|
As of
|
|
|
As of
|
|
|
|
|
April 30, 2012
|
|
|
April 30, 2011
|
|
|
Process, lab and office equipment
|
$
|
680,042
|
|
$
|
418,284
|
|
|
Site equipment
|
|
179,269
|
|
|
179,269
|
|
|
Total property and equipment
|
|
859,311
|
|
|
597,553
|
|
|
Less: accumulated depreciation
|
|
(517,515
|
)
|
|
(433,212
|
)
|
|
|
$
|
341,796
|
|
$
|
164,341
|
|
|
|
Depreciation expense was $84,303 and $60,810 for the
years ended April 30, 2012 and 2011, respectively.
|
|
|
|
|
4.
|
INTELLECTUAL PROPERTY
|
|
|
|
|
|
On April 2, 2007 the Company entered into a Technology
and Asset Purchase Agreement (“NVRM Agreement”) with Robert H. Gunnison
and New Verde River Mining Co. Inc. (“NVRM”), whereby the Company acquired
equipment and the technology for lixiviation of metals from ore utilizing
thiourea stabilization (“Intellectual Property”). The equipment and
intellectual property were acquired with the issuance of 2,000,000 shares
of the Company’s $0.10 per share common stock and a future cash payment of
$300,000, for a purchase price of $500,000. The purchase price was
allocated to the assets acquired and liabilities assumed based on their
respective fair values at the date of acquisition. The intellectual
property was valued at $200,000. For the year ended April 30, 2010, the
intellectual property was deemed impaired by $50,000 and expensed
accordingly. Based on estimated future cash flows expected to be generated
from the intellectual property, the Company does not believe the asset to
be impaired as of April 30, 2012.
|
|
|
|
|
5.
|
MINERAL PROPERTIES
|
|
|
|
|
|
As of April 30, 2012 and April 30 2011, mineral
properties totaling $63,710 and $42,600, respectively, consist of
twenty-one (21) mining claims located south of Searchlight, Nevada in the
Piute Valley. On January 28, 2007, the Company entered into mineral option
agreements to acquire an 87.5% interest in twenty-four (24) mining claims
with the issuance of 1,050,000 shares of the Company’s common stock on the
date of signing of the option agreement, with the provision that the
Company issue an additional 420,000 and 210,000 shares on the fifth
anniversary and tenth anniversary, respectively, of the signing of the
option agreement if the Company wishes to acquire legal interest to the
mining claims. The transaction was valued at an agreed upon price of
$10,500. Each mining claim is comprised of 160 acres. In August 2008 the
Company did not pay the renewal fee on four (4) of the mining claims after
confirming title to the claims were void due to not being properly located
and being subject to prior segregation. On November 28, 2011 the Company
executed a quitclaim deed and agreement acquiring the other 12.5% interest
in the twenty (20) remaining mining claims. On January 28, 2012, the fifth
anniversary, the Company approved the issuance of 350,000 shares to
maintain the option to acquire 100% legal interest in the remaining twenty
(20) mining claims. The shares were valued at the market price on the date
of issuance.
|
|
|
|
|
|
On March 16, 2007 the Company entered into a lease
agreement of property with one (1) mining claim, for a term of twenty
years, for exploration and potential mining production on 20 acres in
Searchlight, Nevada. The Company paid a one-time signing bonus of $5,000 upon
execution of the agreement and pays a $4,000 rental fee each August. The
Company will also pay an annual royalty equal to five (5) percent of the
net profit from any mining production on the property.
|
F-11
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
Mining claims are capitalized as tangible assets in
accordance with Emerging Issues Task Force abstract 04-02. Upon completion
of a bankable feasibility study, the claims will be amortized using the
unit-of-production method over the life of the claim. If the Company does
not continue with exploration after the completion of the feasibility
study, the claims will be expensed at that time.
|
|
|
|
|
6.
|
ACCOUNTS PAYABLE - RELATED PARTIES
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, accounts payable
– related parties consisted of $150,000 and $65,000, respectively, due to
directors and officers of the Company for consulting fees, and $237,516
for the acquisition of an extraction processing system in January
2012.
|
|
|
|
|
7.
|
NOTES PAYABLE
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, notes payable
consists of an unsecured $50,000 and $50,000, respectively, payable to New
Verde River Mining and Robert H. Gunnison pursuant to the NVRM Agreement
noted above (see Note 4). Mr. Gunnison signed an extension agreement
extending the payment deadline to June 30, 2013. The note payable bears 6%
interest annually.
|
|
|
|
|
8.
|
LOANS PAYABLE
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, loans payable of
$100,000 and $0, respectively, consist of borrowings payable to an
unrelated third party. The loan bears zero percent interest, is unsecured,
and is due on demand.
|
|
|
|
|
9.
|
LOANS PAYABLE AND ACCRUED INTEREST – RELATED
PARTIES
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, loans payable –
related parties of $263,190 and $299,179, respectively, mainly consists of
borrowings, directly and indirectly, from one director of the Company. The
balances bear 10% interest, are unsecured and are due on demand. As of
April 30, 2012 and April 30, 2011, accrued interest – related party was
$6,778 and $133,963, respectively.
|
|
|
|
|
|
On July 13, 2011, 10,340,000 shares were issued in
satisfaction of $517,000 of loans payable – related parties and 2,680,000
shares were issued in satisfaction of $134,000 of accrued interest-
related parties.
|
|
|
|
|
|
On January 30, 2012, 9,000,000 shares were issued in
satisfaction of $450,000 of loans payable – related party.
|
|
|
|
|
10.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
Lease obligations
– The Company has operating
leases for its corporate office, corporate housing and plant facilities.
Future minimum lease payments under the operating leases as of April 30,
2012 are as follows:
|
|
Fiscal year ending April 30, 2013
|
$
|
131,350
|
|
|
Fiscal year ending April 30, 2014
|
$
|
79,472
|
|
|
Fiscal year ending April 30, 2015
|
$
|
63,500
|
|
|
Fiscal year ending April 30, 2016
|
$
|
54,008
|
|
|
Fiscal year ending April 30, 2017
|
$
|
42,016
|
|
|
Thereafter
|
$
|
21,008
|
|
Lease expense was $196,924 and $79,210
for the years ended April 30, 2012 and 2011, respectively.
F-12
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
Legal proceedings
– The Company is not a party to
any legal proceeding and, to our knowledge, no other legal proceedings are
pending, threatened or contemplated.
|
|
|
|
|
|
|
11.
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Common and Preferred Stock:
|
|
|
|
|
|
|
|
As of April 30, 2012 and April 30, 2011, there were
185,493,141 and 148,420,352 shares of common stock outstanding,
respectively and zero shares of preferred stock outstanding. Outstanding
shares of common stock consist of the following:
|
|
|
|
|
|
|
|
a)
|
On March 16, 2006, the Company issued 1,000 shares of
common stock to one individual for cash at $0.001 per share.
|
|
|
|
|
|
|
|
b)
|
On November 30, 2006, the Company issued 12,500,000
shares of common stock to three individuals for cash at $0.001 per
share.
|
|
|
|
|
|
|
|
c)
|
On December 29, 2006, the Company issued 7,800,000 shares
of common stock for cash at $0.01 per share.
|
|
|
|
|
|
|
|
d)
|
On January 10, 2007, the Company issued 1,050,000 shares
of common stock for the purchase of 7/8ths interest in 24 minerals claims
at $0.01 per share.
|
|
|
|
|
|
|
|
e)
|
On February 28, 2007, the Company issued 1,250,000 shares
of common stock to three individuals for cash at $0.10 per
share.
|
|
|
|
|
|
|
|
f)
|
On March 31, 2007, the Company issued 1,800,000 shares of
common stock to four individuals for cash at $0.10 per share.
|
|
|
|
|
|
|
|
g)
|
On April 2, 2007, the Company issued 2,000,000 shares of
common stock to one individual, in connection with the NVRM Agreement, for
the purchase of intellectual property and equipment.
|
|
|
|
|
|
|
|
h)
|
On May 31, 2007, the Company closed a private placement
offering for proceeds of $620,582, of which $505,114 was received and
recorded as share subscriptions received as of April 30, 2007. The Company
issued 2,482,326 shares of common stock, at $0.25 per share, to non-U.S.
investors pursuant to Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
|
|
i)
|
On June 4, 2007, the Company closed a private placement
offering for proceeds of $825,000 and issued 3,300,000 shares of common
stock, at $0.25 per share, to accredited U.S. investors pursuant to
Regulation D of the Securities Act of 1933.
|
|
|
|
|
|
|
|
j)
|
On October 5, 2007, the Company issued 13,968,926 shares
of common stock in the reverse acquisition of Centrus Ventures
Inc.
|
|
|
|
|
|
|
|
k)
|
On September 3, 2008, the Company completed a private
placement of 200,000 units at a price of $0.50 per unit for total proceeds
of $100,000. Each unit is comprised of one share of common stock and
one-half of one share purchase warrant. Each whole share purchase warrant
will entitle the holder to purchase one additional share of common stock
at a price of $0.75 per share for a period ending September 2,
2010.
|
|
|
|
|
|
|
|
l)
|
On November 15, 2008, under the terms of a settlement
agreement, the Company issued 450,760 units at a price of $0.30 per unit,
with each unit consisting of one common share and one share purchase
warrant of the Company. Each warrant is exercisable to purchase an
additional common share at a price of $0.50 per share for a period of two (2) years from the date of
issuance. The units were issued pursuant to the provisions of Regulation S
promulgated under the Securities Act of 1933.
|
F-13
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
m)
|
On February 24, 2009, the Company issued 9,140,000 units
for $457,000 in cash, 12,400,000 units for $620,000 ($400,000 from one
director) in loans made to the Company and 1,336,840 units to retire
$66,842 in corporate indebtedness under three separate private placement
offerings. Each unit was comprised of one share of the Company’s common
stock and one share purchase warrant, with each warrant entitling the
holder to purchase an additional share of common stock for a period of two
years at an exercise price of $0.10 per share. The Company also entered
into a management consulting agreement with an officer of the Company, and
pursuant to the terms of the agreement issued an aggregate of 3,000,000
restricted shares of its common stock.
|
|
|
|
|
|
|
n)
|
On July 16, 2009, the Company issued 2,000,000 units for
$100,000 in loans made to the Company and 500,000 units to retire $25,000
in corporate indebtedness for consulting services under two separate
private placement offerings. Each unit was comprised of one share of the
Company’s common stock and one share purchase warrant, with each warrant
entitling the holder to purchase an additional share of common stock for a
period of two years at an exercise price of $0.10 per share.
|
|
|
|
|
|
|
o)
|
On August 4, 2009, the Company issued 295,000 shares of
common stock for warrants exercised at $0.10 per share and 750,000 shares
of common stock for options exercised at $0.05 per share in satisfaction
of debt for legal services.
|
|
|
|
|
|
|
p)
|
On August 14, 2009, the Company issued 1,500,000 shares
of common stock to an investor relations services firm pursuant to the
terms of the consulting agreement.
|
|
|
|
|
|
|
q)
|
On August 18, 2009, the Company issued 3,500,000 units,
for $350,000 in loans made to the Company by one director, at a price of
$0.10 per unit, with each unit consisting of one share of common stock and
one share purchase warrant, with each warrant entitling the holder to
purchase one additional share of common stock at a price of $0.20 per
share for a period of two years from the date of issue.
|
|
|
|
|
|
|
r)
|
On December 15, 2009, the Company issued 900,000 shares
of common stock for options exercised at $0.05 per share in satisfaction
of debt for legal services.
|
|
|
|
|
|
|
s)
|
On January 31, 2010, the Company issued 19,400,000 units
for $970,000 ($900,000 from one director) in loans made to the Company,
8,280,000 units for $414,000 in cash and 1,775,500 units to retire $88,775
in corporate indebtedness, at a price of $0.05 per unit, with each unit
consisting of one share of common stock and one share purchase warrant,
with each warrant entitling the holder to purchase one additional share of
common stock at a price of $0.10 per share for a period of two years from
the date of issue.
|
|
|
|
|
|
|
t)
|
On February 26, 2010, the Company issued 105,000 shares
of common stock for warrants exercised at $0.10 per share and 100,000
shares of common stock for options exercised at $0.05 per share in
satisfaction of debt for legal services.
|
|
|
|
|
|
|
u)
|
On November 9, 2010, the Company issued 1,700,000 shares
of common stock for options exercised at $0.05 per share in satisfaction
of debt.
|
|
|
|
|
|
|
v)
|
On January 18, 2011, the Company issued 17,020,000 units
for $851,000 in satisfaction of loans made to the Company from one
director, 13,100,000 units for $655,000 in cash and 1,950,000 units to
retire $97,500 in corporate indebtedness, at a price of $0.05 per unit,
with each unit consisting of one share of common stock and one share
purchase warrant, with each warrant entitling the holder to purchase one
additional share of common stock at a price of $0.10 per share for a
period of two years from the date of issue.
|
F-14
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
w)
|
On March 10, 2011, the Company issued 315,000 units
valued at $0.05 per unit to an investor relations services firm pursuant
to the terms of the consulting agreement, with each unit consisting of one
share of common stock and one share purchase warrant, with each warrant
entitling the holder to purchase one additional share of common stock at a
price of $0.10 per share for a period of one year from the date of issue.
The agreement is to last for a period of three months from March 10, 2011;
accordingly, a prepaid expense of $7,000 was recorded as of April 30, 2010
in relation to this issuance.
|
|
|
|
|
|
|
x)
|
On March 28, 2011, the Company issued 2,550,000 shares of
common stock at $0.05 per share as compensatory stock awards to two
directors (1,800,000 shares) and three consultants (750,000
shares).
|
|
|
|
|
|
|
y)
|
On July 13, 2011, the Company issued 10,000,000 units for
$500,000 in cash, 10,340,000 units in satisfaction of $517,000 in loans
made to the Company from one director, and 2,680,000 units to retire
$134,000 in corporate indebtedness, at a price of $0.05 per unit, with
each unit consisting of one share of common stock and one share purchase
warrant, with each warrant entitling the holder to purchase one additional
share of common stock at a price of $0.10 per share for a period of two
years from the date of issue.
|
|
|
|
|
|
|
z)
|
On September 8, 2011, the Company issued 1,030,000
warrants in accordance with the terms of a consultant agreement. 1,000,000
warrants entitle the consultant to purchase one additional share of common
stock at a price of $0.10 per share for a period of two years from the
date of issue and 30,000 warrants entitle the consultant to purchase one
additional share of common stock at a price of $0.25 per share for a
period of two years from the date of issue.
|
|
|
|
|
|
|
|
The fair value of these warrants was estimated at the
date of the agreement, September 8, 2011, using the Black- Scholes Option
Pricing Model with the current value of the stock on the agreement date at
$0.05; dividend yield of 0%; risk-free interest rate of 1.25%; volatility
rate of 213%; and expiration date of two years. The value of the 1,000,000
and 30,000 warrants was determined to be $40,971 and $1,102, respectively.
The total value of the warrants granted was recorded as a prepaid expense
and amortized evenly over nine months.
|
|
|
|
|
|
|
aa)
|
On September 19, 2011, the Company issued 320,000 shares
of common stock valued at $16,000 to a consultant pursuant to the terms of
the consulting agreement. $8,000 of the $16,000 was recorded as a prepaid
expense and amortized evenly over nine months.
|
|
|
|
|
|
|
bb)
|
On September 26, 2011, the Company issued 1,000,000 units
to retire $50,000 in corporate indebtedness, at a price of $0.05 per unit,
with each unit consisting of one share of common stock and one share
purchase warrant, with each warrant entitling the holder to purchase one
additional share of common stock at a price of $0.10 per share for a
period of two years from the date of issue.
|
|
|
|
|
|
|
cc)
|
On January 26, 2012, the Company cancelled warrants to
purchase 18,000,000 shares of our common stock exercisable at $0.10 per
share by agreement with the warrant holder, E-Ore Holdings, LLC.
|
|
|
|
|
|
|
dd)
|
On January 27, 2012, the Company extended the expiration
dates of 22,876,840 and 11,455,500 warrants previously extended on
February 24, 2011 and issued on January 31, 2010, respectively. The
extended warrants were exercisable for one share of the Company’s common
stock for a term of 1 or 2 years at an exercise price of $0.10 per
warrant. Currently, 22,476,840 warrants are exercisable until February 23,
2013 and 11,455,500 warrants are exercisable until January 30, 2013 at an
exercise price of $0.10 per warrant. Since the extension was not
considered a modification under ASC 718, no additional expenses were
incurred with this transaction.
|
F-15
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
ee)
|
On January 27, 2012, the Company issued 350,000 shares of
common stock, in accordance with the mineral option agreements (see Note
5), to the optionors to maintain the option to acquire 100% legal interest
in the remaining twenty (20) mining claims. The shares are valued at
$14,000.
|
|
|
|
|
|
|
ff)
|
On January 30, 2012, the Company issued 9,000,000 units
in satisfaction of $450,000 in loans made to the Company from two
directors and their related companies, at a price of $0.05 per unit, with
each unit consisting of one share of common stock and one share purchase
warrant, with each warrant entitling the holder to purchase one additional
share of common stock at a price of $0.10 per share for a period of two
years from the date of issue.
|
|
|
|
|
|
|
gg)
|
On January 30, 2012, the Company issued 2,742,789 shares
of common stock in satisfaction of $137,139 subscriptions payable from
cash received in September 2011.
|
|
|
|
|
|
|
hh)
|
On January 30, 2012, the Company issued 640,000 shares of
common stock to a consultant pursuant to the terms of the consulting
agreement. The shares are valued at $22,400.
|
|
|
|
|
|
|
ii)
|
On February 24, 2012, the Company issued 300,000 warrants
to a consultant for arranging an agreement to lease equipment on November
1, 2011. The 300,000 warrants entitle the consultant to purchase one
additional share of common stock at a price of $0.25 per share. The
warrants expire October 31, 2014.
|
|
|
|
|
|
|
|
The fair value of these warrants was estimated at the
date of issuance, February 24, 2012, using the Black- Scholes Option
Pricing Model with the current value of the stock on the issuance date at
$0.04; dividend yield of 0%; risk-free interest rate of 1.25%; volatility
rate of 273%; and expiration date of October 31, 2014. The value of the
30,000 warrants was determined to be $11,496.
|
|
12.
|
STOCK INCENTIVE PLANS
|
|
|
|
|
|
2011 Stock Incentive Plan
- Effective September 7,
2010, the Company adopted the 2011 Stock Incentive Plan (the “2011 Plan").
The 2011 Plan allows the Company to grant certain options to its
directors, officers, employees and eligible consultants. A total of
16,700,000 shares of the Company’s common stock are available for issuance
under the 2011 Plan. However, the Company may increase the maximum
aggregate number of shares of the Company’s common stock that may be
optioned and sold under the 2011 Plan provided the maximum aggregate
number of shares of common stock that may be optioned and sold under the
2011 Plan shall at no time be greater than 15.0% of the total number of
shares of common stock outstanding.
|
|
|
|
|
|
On September 7, 2010, the Company granted non-qualified
stock options under the 2011 Plan for the purchase of 6,000,000 shares of
common stock at $0.02 per share. The nonqualified stock options were
granted to various officers, directors and consultants, are fully vested
and expire September 6, 2014. As of April 30, 2012, zero options under the
2011 Plan have been exercised.
|
|
|
|
|
|
From the date of inception through April 30, 2011,
compensation expense related to the granting of stock options under the
2011 Plan was $178,159 and was included in general and administrative
expense. The Company calculated the value of the options using the
Black-Scholes option pricing model using the following assumptions: a bond
equivalent yield of 0.77%, volatility of 240%, estimated life of 4 years
and closing stock price of $0.03 per share on the date of grant.
|
|
|
|
|
|
2010 Stock Incentive Plan
- Effective December 7,
2009, the Company adopted the 2010 Stock Incentive Plan (the “2010 Plan").
The 2010 Plan allows the Company to grant certain options to its
directors, officers, employees and eligible consultants. A total of
10,000,000 shares of the Company’s common stock are available for issuance
under the 2010 Plan. However, the Company may increase the maximum
aggregate number of shares of the Company’s common stock that may be
optioned and sold under the 2010 Plan provided the maximum aggregate number of shares of common stock that may be optioned and sold under the 2010 Plan shall at no time be greater than 12.5% of the total number of shares of common stock outstanding.
|
F-16
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
On December 8, 2009, the Company
granted non-qualified stock options under the 2010 Plan for the purchase of
7,000,000 shares of common stock at $0.05 per share. The nonqualified stock
options were granted to various officers, directors and consultants, are fully
vested and expire December 7, 2011. As of the expiration date, 1,000,000 options
had been exercised and 6,000,000 options expired under the 2010 Plan.
Effective September 7, 2010, the
Company suspended the 2010 Plan. No new options may be granted under the 2010
Plan and the 2010 Plan will be terminated once all outstanding options granted
under the 2010 Plan have been exercised, expired or otherwise terminated.
Compensation expense related to the
granting of stock options under the 2010 Plan was $391,478 and was included in
general and administrative expense. The Company calculated the value of the
options using the Black-Scholes option pricing model using the following
assumptions: a risk-free rate of 1.00%, volatility of 252%, estimated life of 2
years and closing stock price of $0.06 per share on the date of grant.
2009 Stock Incentive Plan
-
Effective January 12, 2009, the Company adopted the 2009 Stock Incentive Plan
(the “2009 Plan"). The 2009 Plan allows the Company to grant certain options to
its directors, officers, employees and eligible consultants. A total of
5,000,000 shares of the Company’s common stock are available for issuance under
the 2009 Plan.
On January 16, 2009, the Company
granted non-qualified stock options under the 2009 Plan for the purchase of
5,000,000 shares of common stock at $0.05 per share. The nonqualified stock
options were granted to various officers, directors and consultants, are fully
vested and expire January 15, 2011. As of the expiration date, 2,450,000 options
had been exercised and 2,550,000 options expired under the 2009 Plan.
Compensation expense related to the
granting of stock options under the 2009 Plan was $342,550 and was included in
general and administrative expense. The Company calculated the value of the
options using the Black-Scholes option pricing model using the following
assumptions: a risk-free rate of 1.00%, volatility of 316%, estimated life of 2
years and closing stock price of $0.07 per share on the date of grant.
2008 Stock Incentive Plan
-
Effective February 1, 2008, the Company adopted the 2008 Stock Incentive Plan
(the “2008 Plan"). The 2008 Plan allowed the Company to grant certain options to
its directors, officers, employees and eligible consultants. A total of
4,600,000 shares of the Company’s common stock were available for issuance under
the 2008 Plan.
On February 1, 2008, the Company
granted non-qualified stock options under the 2008 Plan for the purchase of
4,340,000 shares of common stock at $0.74 per share. The nonqualified stock
options were granted to various officers, directors and consultants, were fully
vested and expired January 31, 2010. All 4,340,000 stock options expired without
exercise.
Compensation expense related to the
granting of stock options under the 2008 Plan was $3,583,702 and was included in
general and administrative expense. The Company calculated the value of the
options using the Black-Scholes option pricing model using the following
assumptions: a risk-free rate of 4.50%, volatility of 107%, estimated life of 2
years and closing stock price of $1.22 per share on the date of grant.
The following is a summary of option
activity during the years ended April 30, 2012 and 2011:
F-17
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Average Exercise
|
|
|
|
|
Number of Shares
|
|
|
Price
|
|
|
Balance, April 30, 2010
|
|
10,250,000
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
Options granted and assumed
|
|
6,000,000
|
|
|
0.02
|
|
|
Options expired
|
|
(2,550,000
|
)
|
|
0.05
|
|
|
Options exercised
|
|
(1,700,000
|
)
|
|
0.05
|
|
|
Balance, April 30, 2011
|
|
12,000,000
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
Options granted and assumed
|
|
0
|
|
|
0.00
|
|
|
Options expired
|
|
(6,000,000
|
)
|
|
0.05
|
|
|
Options exercised
|
|
(0
|
)
|
|
0.00
|
|
|
Balance, April 30, 2012
|
|
6,000,000
|
|
|
0.02
|
|
As of April 30, 2012, 6,000,000 stock
options are exercisable.
Stock warrants
-
The following is a summary of warrants
activity during the years ended April 30, 2012 and 2011:
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
Number of Shares
|
|
|
Exercise Price
|
|
|
Balance, April 30, 2010
|
|
58,483,100
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
Warrants
granted and assumed
|
|
32,385,000
|
|
|
0.10
|
|
|
Warrants
expired
|
|
(550,760
|
)
|
|
0.55
|
|
|
Balance, April 30, 2011
|
|
90,317,340
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
Warrants
granted and assumed
|
|
32,385,000
|
|
|
0.10
|
|
|
Warrants
canceled
|
|
(18,000,000
|
)
|
|
0.10
|
|
|
Warrants expired
|
|
(6,315,000
|
)
|
|
0.15
|
|
|
Balance, April 30, 2012
|
|
103,095,129
|
|
|
0.10
|
|
|
|
All warrants outstanding as of April 30, 2012 are
exercisable.
|
|
|
|
|
13.
|
RELATED PARTY TRANSACTIONS
|
|
|
|
|
|
For the year ended April 30, 2012, the Company incurred
$317,800, in consulting fees expense from companies with a common director
or officer, zero in compensation expense for the issuance of common stock
to directors and officers of the Company, and zero in compensation expense
for the issuance of stock options to directors and officers of the
Company.
|
F-18
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
|
For the year ended April 30, 2011, the Company incurred
$323,665, in consulting fees expense from companies with a common director
or officer, $90,000 in compensation expense for the issuance of common
stock to directors and officers of the Company, and $196,896 in
compensation expense for the issuance of stock options to directors and
officers of the Company.
|
|
|
|
|
|
For the period from inception (December 14, 2005) through
April 30, 2012, the Company incurred $1,871,331 in consulting fees expense
from companies with a common director or officer, $210,000 in compensation
expense for the issuance of common stock to directors and officers of the
Company, and $3,539,178 in compensation expense for the issuance of stock
options to directors and officers of the Company.
|
|
|
|
|
14.
|
INCOME TAXES
|
|
|
|
|
|
FASB ASC 740 requires the use of an asset and liability
approach in accounting for income taxes. Deferred tax assets and
liabilities are recorded based on the differences between the financial
statement and tax bases of assets and liabilities and the tax rates in
effect currently.
|
|
|
|
|
|
FASB ASC 740 requires the reduction of deferred tax
assets by a valuation allowance, if, based on the weight of available
evidence, it is more likely than not that some or all of the deferred tax
assets will not be realized. In the Company’s opinion, it is uncertain
whether they will generate sufficient taxable income in the future to
fully utilize the net deferred tax asset. Accordingly, a valuation
allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $2,862,903 which is calculated by multiplying a 35%
estimated tax rate by the cumulative net operating loss (NOL) adjusted for
the following items:
|
|
For the period
ended April 30,
|
|
2012
|
|
|
2011
|
|
|
Book loss for the year
|
$
|
(1,743,848
|
)
|
$
|
(1,692,134
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Non-deductible stock
compensation
|
|
91,961
|
|
|
321,409
|
|
|
Tax loss for the year
|
$
|
(1,651,887
|
)
|
$
|
(1,370,725
|
)
|
|
Estimated effective tax rate
|
|
35%
|
|
|
35%
|
|
|
Deferred tax asset
|
$
|
578,160
|
|
$
|
479,754
|
|
The total valuation allowance is
$2,862,903. Details for the last two periods are as follows:
|
For the period
ended April 30,
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Deferred tax asset
|
$
|
2,862,903
|
|
$
|
2,284,743
|
|
|
Valuation allowance
|
|
(2,862,903
|
)
|
|
(2,284,743
|
)
|
|
Current taxes payable
|
|
-
|
|
|
-
|
|
|
Income tax expense
|
$
|
-
|
|
$
|
-
|
|
Below is a chart showing the estimated
corporate federal net operating loss (NOL) and the year in which it will expire.
|
Year
|
Amount
|
Expiration
|
|
2012
|
$1,651,887
|
2032
|
|
2011
|
$1,370,725
|
2031
|
F-19
|
ROYAL MINES AND MINERALS CORP.
|
|
(An Exploration Stage Company)
|
|
NOTES TO FINANCIAL STATEMENTS
|
|
APRIL 30, 2012
|
|
(AUDITED)
|
|
15.
|
SUBSEQUENT EVENTS
|
|
|
|
|
|
On June 14, 2012 the Company entered into a convertible
note agreement for $600,000 broken into $100,000 tranches. The convertible
note bears interest at 8% per annum, is unsecured, and each tranche
matures 180 days following the advancement. The note is convertible into units at $0.05/unit, with a unit consisting of 1 share of the Company's common stock and 1 warrant exercisable at $0.10/ share for one year.
|
F-20
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS
WITH
ACCOUNTANTS
ON
ACCOUNTING
AND
FINANCIAL
DISCLOSURE.
|
None.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
Disclosure Controls and Procedures
We carried out an assessment of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of April 30, 2012 (the “Evaluation Date”). This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of the Evaluation Date.
Management’s Annual Report on Internal Control Over
Financial Reporting
.
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting for us, as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control system was designed to provide reasonable assurance to our management
and Board of Directors regarding the preparation and fair presentation of
published financial statements.
Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, management conducted an
evaluation of the effectiveness of our internal control over financial
reporting, as of the Evaluation Date, based on the framework set forth in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its assessment,
management concluded that its internal control over financial reporting was
effective as of the Evaluation Date.
This Annual Report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to the rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial
reporting that occurred during the fiscal quarter ended April 30, 2012 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that its disclosure controls and
procedures, nor its internal control over financial reporting, will necessarily
prevent all fraud and material error. Our disclosure controls and procedures are
designed to provide reasonable assurance of achieving its objectives and our
Chief Executive Officer and Chief Financial Officer concluded that the
disclosure controls and procedures are effective at a reasonable, but not
absolute, assurance level. Further, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must
be considered relative to the costs.
Because of the inherent limitations in all control systems, no
assessment of controls can provide absolute assurance that all control issues
and instances of fraud, if any, will be detected. Inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of internal control.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time the degree of compliance with the policies or
procedures may deteriorate or the controls may become inadequate due to changes
in conditions.
Page 21 of 34
|
ITEM 9B.
|
OTHER INFORMATION.
|
None.
Page 22 of 34
PART III
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
|
The following table sets forth the names and positions of our
officers and directors:
|
Name
|
Age
|
Positions
|
|
K. Ian Matheson
|
71
|
Chief Executive
Officer, President and Director
|
|
Jason S. Mitchell
|
42
|
Chief Financial Officer,
Treasurer, Secretary and Director
|
|
Michael C. Boyko
|
40
|
Director
|
Set forth below is a brief description of the background and
business experience of our executive officers and directors:
K. Ian Matheson
was appointed a member of our Board of
Directors on June 25, 2008 and our Chief Executive Officer and President on
November 19, 2008. Mr. Matheson earned a Bachelor of Commerce degree from the
University of British Columbia in 1963. In 1964 and 1965 he attended McGill
University in Montreal, Quebec where he earned a degree as a Chartered
Accountant at the Quebec Institute of Chartered Accountants. He was admitted
into the British Columbia Institute of Chartered Accountants in 1965. From 1965
to 1967 he worked as a Chartered Accountant with Coopers and Lybrand in
Vancouver, BC. He is presently a member of the British Columbia Institute of
Chartered Accountants and the Canadian Institute of Chartered Accountants. Mr.
Matheson was a member of the board of directors of Searchlight Minerals Corp.
(OTCBB) from February 10, 2005 to February 16, 2007. Mr. Matheson has also been
a director and officer of numerous private companies that have been involved in
the research and development of precious metals in the southern Nevada area.
Jason S. Mitchell
was appointed our Chief Financial
Officer and Treasurer on February 1, 2008, our Secretary on November 19, 2008,
and a member of our Board of Directors on May 28, 2008. Mr. Mitchell earned a
Masters of Accountancy degree from Southern Utah University in 1994. He is a
Certified Public Accountant, who has, since April, 2005, been a self-employed
financial consultant, providing consulting services and preparing financial
statements for numerous companies. From October 1998 to October 2004, Mr.
Mitchell was a corporate controller, principal accounting officer, vice
president and manager of merger and acquisitions for USI Holdings Corporation, a
Nasdaq listed insurance brokerage firm where Mr. Mitchell oversaw financial
reporting responsibilities, prepared SEC annual and quarterly filings, generated
financial models and assisted in its October 2002 $90 million initial public
offering. From October 1994 to September 1998, Mr. Mitchell worked as an auditor
for Arthur Andersen LLP and KPMG Peat Marwick.
Michael C. Boyko
was appointed a member of our Board of
Directors on April 2, 2009. Mr. Boyko obtained his Bachelor of Science in
Finance from Arizona State University and is a member of the AMIGOS – Arizona
Mining Association and the Arizona Society for Mining Engineers. Since 2003, Mr.
Boyko has been the president and owner of Advanced Integrated Resource, LLC, a
private company that markets process equipment to the mining and power industry.
From 2001 to 2003, Mr. Boyko was employed at T.A. Caid Industries, a private
company, where he developed a new business segment focused on equipment
representation and sales to mines and power plants. From 1998 to 2001, Mr. Boyko
was the managing partner and vice president of business development of BME
Engineering, a private company that focused on industrial process equipment for
mines and power plants, where he managed sales, marketing and manufacturing. Mr.
Boyko is also Mine Safety and Health Administration (MSHA) certified.
COMMITTEES OF THE BOARD OF DIRECTORS
Our board of directors does not maintain a
separately-designated standing audit committee. As a result, all of our
directors act as our audit committee. K. Ian Matheson, our Chief Executive
Officer and President, and Jason S. Mitchell, our Chief Financial Officer, each
meet the definition of an “audit committee financial expert.” Mr. Matheson and
Mr. Mitchell are not independent as they act as executive officers.
Page 23 of 34
We presently do not have a compensation committee, nominating
committee, an executive committee of our board of directors, stock plan
committee or any other committees.
TERMS OF OFFICE
Our directors are elected to hold office until the next annual
meeting of the shareholders and until their respective successors have been
elected and qualified. Our executive officers are appointed by our board of
directors and hold office until removed by our board of directors or until their
successors are appointed.
CODE OF ETHICS
We adopted a Code of Ethics applicable to our executive
officers and directors, 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 on Form 10-KSB for the fiscal year ended April 30, 2007, filed on July
30, 2007. If we make any amendments to our Code of Ethics other than technical,
administrative, or other non-substantive amendments, or grant any waivers,
including implicit waivers, from a provision of our Code of Ethics to our Chief
Executive Officer, Chief Financial Officer or certain other finance executives,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a Current Report on Form 8-K filed with the SEC.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT
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 securities (“Reporting Persons”), to file reports of ownership and
changes in ownership with the SEC. Reporting Persons are required by SEC
regulations to furnish us with copies of all forms they file pursuant to Section
16(a). Based solely on our review of such reports received by the Company, the
Company has determined that the following persons have failed to file, on a
timely basis, the identified reports required by Section 16(a) of the Exchange
Act:
Name and Principal Position
|
Number of Late
Insider
Reports
|
Transactions Not
Timely
Reported
|
Known Failures to
File a
Required Form
|
K. Ian Matheson
Chief Executive Officer,
President
and Director
|
Two
|
Three
|
One
|
Jason S. Mitchell
Chief Financial
Officer, Treasurer,
Secretary and Director
|
None
|
One
|
One
|
E-Ore Holdings LLC
10% Holder
|
None
|
One
|
One
|
Page 24 of 34
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
SUMMARY COMPENSATION TABLE
The following table sets forth total compensation paid to or
earned by our named executive officers, as that term is defined in Item
402(m)(2) of Regulation S-K, during the fiscal years ended April 30, 2011 and
2010.
|
SUMMARY COMPENSATION
TABLE
|
Name & Principal
Position
|
Year
End
April 30,
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation ($)
|
Nonqualified
Deferred
Compen-
sation
Earnings
($)
|
All Other
Compen-
sation
($)
|
Total
($)
|
K. Ian Matheson
(1)
CEO, President &
Director
|
2012
2011
|
$60,000
$60,000
|
$0
$3,000
|
$0
$0
|
$0
$35,632
|
$0
$0
|
$0
$0
|
$0
$0
|
$60,000
$98,632
|
Jason S. Mitchell
(2)
CFO, Treasurer,
Secretary &
Director
|
2012
2011
|
$136,800
$144,000
|
$1,000
$3,000
|
$0
$45,000
|
$0
$35,632
|
$0
$0
|
$0
$0
|
$0
$0
|
$137,800
$237,632
|
Michael C. Boyko
(3)
Director of Operations
& Director
|
2012
2011
|
$120,000
$120,000
|
$0
$3,000
|
$0
$45,000
|
$0
$35,632
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$203,632
|
|
Notes:
|
|
|
(1)
|
Under the terms of a verbal agreement, we agreed to pay
Mr. Matheson, $5,000 per month for consulting services provided by Mr.
Matheson.
|
|
(2)
|
Effective February 24, 2009, we entered into a management
consulting agreement with Mr. Mitchell whereby Mr. Mitchell receives a
consulting fee of $12,000 per month and we agreed to issue to Mr. Mitchell
an aggregate of 3,000,000 restricted shares of our common stock to be
distributed to Mr. Mitchell on the following basis (i) 750,000 Shares on
February 24, 2009; (ii) 750,000 Shares on March 1, 2009; (iii) 750,000
Shares on March 1, 2010; and (iv) 750,000 Shares on March 1, 2011. The
amounts paid to Mr. Mitchell during the fiscal years ended April 30, 2012
and 2011 were paid to Cedar Financial Inc., a company controlled by Mr.
Mitchell
|
|
(3)
|
Under the terms of a verbal agreement, we agreed to pay
Mr. Boyko $10,000 a month for management consulting services. The amounts
paid to Mr. Boyko during the fiscal years ended April 30, 2012 and 2011
were paid to Advanced Integrated Resource, a company controlled by Mr.
Boyko.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information concerning unexercised
options for each our named executive officers, as that term is defined in Item
402(m)(2) of Regulation S-K, as of our fiscal year ended April 30, 2012:
Name and Principal
Position
|
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
|
K. Ian Matheson
CEO, President & Director
|
1,200,000
|
--
|
--
|
$0.02
|
09/06/14
|
Jason S. Mitchell
CFO, Treasurer, Secretary
&
Director
|
1,200,000
|
--
|
--
|
$0.02
|
09/06/14
|
Michael C. Boyko
Director of Operations &
Director
|
1,200,000
|
--
|
--
|
$0.02
|
09/06/14
|
Page 25 of 34
DIRECTOR COMPENSATION TABLE
During the year ended April 30, 2012, we did not pay or accrue
any compensation to our Board of Directors.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
|
EQUITY COMPENSATION PLANS
The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.
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
Plans (Excluding
Securities
Reflected in column (a))
(c)
|
Equity Compensation Plans
Approved By Security Holders
|
Not Applicable
|
Not Applicable
|
Not Applicable
|
Equity Compensation Plans Not
Approved By Security
Holders
|
6,000,000
|
$0.02
|
10,700,000
|
2011 Stock Option Plan
Effective September 7, 2010, we adopted the 2011 Stock
Incentive Plan (the “2011 Plan"). The 2011 Plan allows us to grant certain
options to our directors, officers, employees and eligible consultants. The
purpose of the 2011 Plan is to enhance our long-term stockholder value by
offering opportunities to our directors, officers, employees and eligible
consultants to acquire and maintain stock ownership in us in order to give these
persons the opportunity to participate in our growth and success, and to
encourage them to remain in our service.
The 2011 Plan allows us to grant options to our officers,
directors and employees. In addition, we may grant options to individuals who
act as our consultants, so long as those consultants do not provide services
connected to the offer or sale of our securities in capital raising transactions
and do not directly or indirectly promote or maintain a market for our
securities.
A total of 16,700,000 shares of our common stock are available
for issuance under the 2011 Plan. We may increase the maximum aggregate number
of shares that may be optioned and sold under the 2011 Plan provided the maximum
aggregate number of shares that may be optioned and sold under the 2011 Plan
shall at no time be greater than 15% of the total number of shares of common
stock outstanding.
The 2011 Plan provides for the grant of incentive stock options
and non-qualified stock options. Incentive stock options granted under the 2011
Plan are those intended to qualify as “incentive stock options” as defined under
Section 422 of the Internal Revenue Code. However, in order to qualify as
“incentive stock options” under Section 422 of the Internal Revenue Code, the
2011 Plan must be approved by our stockholders within 12 months of its adoption.
The 2011 Plan has not been approved by our stockholders. Non-qualified stock
options granted under the 2011 Plan are option grants that do not qualify as
incentive stock options under Section 422 of the Internal Revenue Code.
Options granted under the 2011 Plan are non-transferable, other
than by will or the laws of descent and distribution.
Page 26 of 34
The 2011 Plan terminates on September 7, 2020, unless sooner
terminated by action of our Board of Directors. No option is exercisable by any
person after such expiration. If an award expires, terminates or is canceled,
the shares of our common stock not purchased thereunder shall again be available
for issuance under the 2011 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of July 26, 2012
by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors
and each of our named executive officers (as defined under Item 402(m)(2) of
Regulation S-K), and (iii) officers and directors as a group. Unless otherwise
indicated, the shareholders listed possess sole voting and investment power with
respect to the shares shown.
Title of Class
|
Name and Address
of Beneficial
Owner
|
Number of Shares
of Common
Stock
(1)
|
Percentage of
Common
Stock
(1)
|
|
DIRECTORS AND OFFICERS
|
Common Stock
|
K. Ian Matheson
CEO, President & Director
|
93,811,000 Shares
(direct &
indirect)
(2)
|
42.9%
|
Common Stock
|
Jason S. Mitchell
CFO, Treasurer, Secretary
& Director
|
79,080,000 Shares
(direct &
indirect)
(3)
|
37.4%
|
Common Stock
|
Michael C. Boyko
Director
|
4,800,000 Shares
(direct &
indirect)
(4)
|
2.6%
|
Common Stock
|
All Officers and Directors
as a Group (3
persons)
|
122,111,000 Shares
(direct & indirect)
|
52.8%
|
|
5% SHAREHOLDERS
|
Common Stock
|
K. Ian Matheson
CEO, President & Director
2215 Lucerne Circle
Henderson, NV 89014
|
93,811,000 Shares
(direct &
indirect)
(2)
|
42.9%
|
Common Stock
|
Jason S. Mitchell
CFO, Treasurer, Secretary
& Director
87 Fountainhead Circle (Street)
Henderson, NV 89052
|
79,080,000 Shares
(direct &
indirect)
(3)
|
37.4%
|
Common Stock
|
E-Ore Holdings LLC
2580 Anthem Village Dr.,
Suite 112
Henderson, NV 89052
|
40,900,000 Shares
(direct)
(5)
|
21.1%
|
|
Notes:
|
|
|
(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. As a result, the percentage of outstanding shares of any person as
shown in this table does not necessarily reflect the person’s actual
ownership or voting power with respect to the number of common shares
actually outstanding on July 26, 2012. As of July 26, 2012, there were
185,493,141 common shares issued and outstanding.
|
Page 27 of 34
|
(2)
|
The number of shares listed as beneficially owned by Mr.
Matheson consist of: (i) 20,351,000 common shares held directly by Mr.
Matheson; (ii) 180,000 common shares held by Mr. Matheson in trust; (iii)
800,000 common shares held by Royal City Minerals Inc., a company
controlled by Mr. Matheson; (iv) 32,200,000 common shares held by E- Ore
Holdings LLC, a company controlled by Mr. Matheson; (v) 7,840,000 common
shares held by Gold Crown Holdings, LLC, a company controlled by Mr.
Matheson; (vi) warrants to acquire 8,000,000 common shares at an exercise
price of $0.10 per share until February 23, 2013; (vii) warrants to
acquire 3,300,000 common shares at an exercise price of $0.10 per share
until January 17, 2013; (viii) warrants to acquire 2,400,000 common shares
at an exercise price of $0.10 per share until July 17, 2013; (ix) warrants
to acquire 2,000,000 common shares at an exercise price of $0.10 per share
until January 20, 2014 ; (x) warrants to acquire 7,020,000 common shares
held by E-Ore Holdings LLC at an exercise price of $0.10 per share until
January 13, 2013; (xi) warrants to acquire 280,000 common shares held by
E-Ore Holdings LLC at an exercise price of $0.10 per share until July 12,
2013; (xii) warrants to acquire 1,400,000 common shares held by E-Ore
Holdings LLC at an exercise price of $0.10 per share until January 19,
2014; (xiii) warrants to acquire 400,000 common shares held by Royal City
Minerals Inc. at an exercise price of $0.10 per share until February 23,
2013; (xiv) warrants to acquire 400,000 common shares held by Royal City
Minerals Inc. at an exercise price of $0.10 per share until January 30,
2013; (xv) warrants to acquire 3,000,000 common shares held by Gold Crown
Holdings LLC at an exercise price of $0.10 per share until January 30,
2013; (xvi) warrants to acquire 1,040,000 common shares held by Gold Crown
Holdings, LLC at an exercise price of $0.10 per share until July 13, 2013;
(xvii) warrants to acquire 2,080,000 common shares held by Gold Crown
Holdings, LLC at an exercise price of $0.10 per share until January 29,
2014; and (xviii) an option to acquire 1,200,000 common shares at an
exercise price of $0.02 per share until September 6, 2014.
|
|
|
|
|
(3)
|
The number of shares listed as beneficially owned by Mr.
Mitchell consist of: (i) 6,500,000 common shares held directly by Mr.
Mitchell; (ii) 32,200,000 common shares held by E-Ore Holdings LLC, a
company controlled by Mr. Mitchell; (iii) 7,840,000 common shares held by
Gold Crown Holdings, LLC, a company controlled by Mr. Mitchell; (iv)
6,800,000 common shares held by PPI Holdings, LLC, a company controlled by
Mr. Mitchell; (v) warrants to acquire 1,000,000 common shares at an
exercise price of $0.10 per share until February 23, 2013; (vi) warrants
to acquire 1,200,000 common shares at an exercise price of $0.10 per share
until January 17, 2013; (vii) warrants to acquire 2,000,000 common shares
held by Pilot Plant Inc. at an exercise price of $0.10 per share until
February 23, 2013; (viii) warrants to acquire 7,020,000 common shares held
by E-Ore Holdings LLC at an exercise price of $0.10 per share until
January 13, 2013; (ix) warrants to acquire 280,000 common shares held by
E-Ore Holdings LLC at an exercise price of $0.10 per share until July 12,
2013; (x) warrants to acquire 1,400,000 common shares held by E-Ore
Holdings LLC at an exercise price of $0.10 per share until January 29,
2014; (xi) warrants to acquire 3,000,000 common shares held by Gold Crown
Holdings LLC at an exercise price of $0.10 per share until January 30,
2013; (xii) warrants to acquire 1,040,000 common shares held by Gold Crown
Holdings, LLC at an exercise price of $0.10 per share until July 13, 2013;
(xii) warrants to acquire 2,080,000 common shares held by Gold Crown
Holdings, LLC at an exercise price of $0.10 per share until January 29,
2014 (xiv) warrants to acquire 2,000,000 common shares held by PPI
Holdings LLC, a company controlled by Mr. Mitchell, at an exercise price
of $0.10 per share until January 30, 2013; (xv) warrants to acquire
2,800,000 common shares held by PPI Holdings LLC, a company controlled by
Mr. Mitchell, at an exercise price of $0.10 per share until January 29,
2013; and (xvi) an option to acquire 1,200,000 common shares at an
exercise price of $0.02 per share until September 6, 2014.
|
|
|
|
|
(4)
|
The number of shares listed as beneficially owned
directly by Mr. Boyko consists of: (i) 2,500,000 common shares held by Mr.
Boyko; (ii) warrants to acquire 500,000 common shares at an exercise price
of $0.10 per share until January 17, 2013; (iii) warrants to acquire
600,000 common shares at an exercise price of $0.10 per share until
January 30, 2013; and (v) an option to acquire 1,200,00 common shares at
an exercise price of $0.02 per share until September 6, 2014
|
|
|
|
|
(5)
|
The number of shares listed as beneficially owned
directly by E-Ore Holdings LLC consists of (i) 32,200,000 common shares
held by E-Ore Holdings LLC, (i) warrants to acquire 7,020,000 common
shares at an exercise price of $0.10 per share until January 13, 2013;
(ii) warrants to acquire 280,000 common shares at an exercise price of
$0.10 per share until July 13, 2013; and warrant to acquire 1,040,000
shares at an exercise price of $0.10 per share until January 29,
2014.
|
CHANGES IN CONTROL
We are not aware of any arrangement that might result in a
change in control in the future.
Page 28 of 34
|
ITEM 13.
|
CERTAIN RELATIONSHIPS
AND
RELATED
TRANSACTIONS,
AND
DIRECTOR
INDEPENDENCE.
|
RELATED TRANSACTIONS
Except as described below, none of the following parties has,
during the last two fiscal years, 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, other than noted in this section:
|
|
(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 10% of the voting rights attached to our
outstanding shares of common stock;
|
|
|
(iv)
|
Any of our promoters; and
|
|
|
(v)
|
Any relative or spouse of any of the foregoing persons
who has the same house as such person.
|
Indebtedness
We have received a number of short-term loans from our
directors, officers and companies controlled by our directors and officers. The
funds received from these loans have been used by us as general working capital
as we pursue our plan of operation. A summary of the amounts owed to related
parties is provided below:
|
(a)
|
As at April 30, 2012 and 2011, we were indebted to Mr.
Matheson for principal amounts totaling $223,190 and $252,179,
respectively. The amounts bear interest at a rate of 10% per annum, are
unsecured and due on demand. Accrued Interest at April 30, 2012 and 2011
totaled $5,778 and $119,212, respectively. As at April 30, 2012 we are
indebted to Mr. Matheson for $75,000 in accrued compensation.
|
|
|
|
|
(b)
|
As at April 30, 2012 and 2011, we were indebted to Gold
Crown Holdings LLC, a company controlled by Mr. Matheson and Mr. Mitchell,
in the principal amount of $0 and $47,000, respectively. The amount bears
interest at a rate of 10% per annum, is unsecured and due on demand.
Interest accrued during the years ended April 30, 2012 and 2011 were in
the amount of $1,000 and $368, respectively.
|
|
|
|
|
(c)
|
As at April 30, 2012 we were indebted to PPI Holdings
LLC, a company controlled by Mr. Mitchell, in the principal amount of
$237,515.50, which was PPI Holdings LLC’s cost to build an Extraction
Processing Plant for us. Additionally, we were indebted to PPI Holdings,
LLC for the principal amount totaling $40,000. The amount bears interest
at a rate of 10% per annum, are unsecured and due on demand. No interest
has accrued as of April 30, 2012.
|
|
|
|
|
(d)
|
As at April 30, 2012 we are indebted to Mr. Boyko for
$75,000 in accrued compensation.
|
Private Placements with Related Parties
During the years ended April 30, 2011 and 2012, we completed
the following private placements to our directors, officers and companies
controlled by our directors and officers.
|
(a)
|
On January 18, 2011, we issued: (i) 3,800,000 units to
Mr. Matheson to settle outstanding indebtedness of $190,000; (ii)
3,800,000 units to Mr. Matheson’s spouse to settle outstanding
indebtedness of $190,000; (iii) 7,020,000 units to E-Ore Holdings LLC to
settle outstanding indebtedness of $351,000; (iv) 200,000 units to Mr.
Mitchell to settle outstanding indebtedness of $60,000; and (v) 500,000
units to Mr. Boyko to settle outstanding indebtedness of
$25,000.
|
|
|
|
|
(b)
|
On March 28, 2011, we issued a total of 900,000 shares of
our common stock as compensatory stock awards to each of Mr. Mitchell and
Mr. Boyko.
|
|
|
|
|
(c)
|
On July 13, 2012 we issued: (i) 2,400,000 units to Mr.
Matheson to settle outstanding indebtedness of $120,000; (ii) 9,300,000
units to Mr. Matheson’s spouse to settle outstanding indebtedness of
$465,000; (iii) 280,000 units to E-Ore Holdings, LLC to settle outstanding
indebtedness of $14,000; and (iv) 1,040,000 units to Gold Crown Holdings, LLC to settle
outstanding indebtedness of $52,000. Each unit consists of one share of
common stock and one share purchase warrant, wit h each warrant entitling
the holder to purchase one additional share of common stock at a price of
$0.10 per share for a period of two year from the date of issue.
|
Page 29 of 34
|
(d)
|
On January 30, 2012, we issued: (i) 2,000,000 units to
Mr. Matheson to settle outstanding indebtedness of $100,000; (ii)
2,800,000 units to PPI Holdings, LLC to settle outstanding indebtedness of
$140,000; (iii) 1,400,000 units to E-Ore Holdings, LLC to settle
outstanding indebtedness of $70,000; and (iv) 2,800,000 units to Gold
Crown Holdings, LLC to settle outstanding indebtedness of $140,000. Each
unit consists of one share of common stock and one share purchase warrant,
with each warrant entitling the holder to purchase one additional share of
common stock at a price of $0.10 per share for a period of two year from
the date of issue.
|
DIRECTOR INDEPENDENCE
Our common stock is quoted on the OTC Bulletin Board
inter-dealer 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. All of our directors are considered executive officers under Rule
3b-7 of the Exchange Act. Therefore, none of our directors are independent.
As a result of our limited operating history and minimal
resources, our management believes that it will have difficulty in attracting
independent directors. In addition, we would likely be required to obtain
directors and officers insurance coverage in order to attract and retain
independent directors. Our management believes that the costs associated with
maintaining such insurance is prohibitive at this time.
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES.
|
The aggregate fees billed for the fiscal years ended April 30,
2012 and 2011 for professional services rendered by the principal accountant for
the audit of our annual financial statements and review of the financial
statements included in our Quarterly Reports on Form 10-Q and services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for these fiscal periods were as follows:
|
|
|
Year Ended April 30,
2012
|
|
|
Year Ended April 30,
2011
|
|
|
|
|
|
|
|
|
|
|
Audit Fees
|
|
$24,700
|
|
|
$37,500
|
|
|
Audit-Related Fees
|
|
-
|
|
|
-
|
|
|
Tax Fees
|
|
$1,000
|
|
|
$1,000
|
|
|
All Other Fees
|
|
-
|
|
|
-
|
|
|
Total
|
|
$25,700
|
|
|
$39,500
|
|
Page 30 of 34
PART IV
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
|
|
Exhibit
|
|
|
Number
|
Description of Exhibits
|
|
2.1
|
Agreement and Plan of Merger dated September 24, 2007
among the Company, Royal Mines Acquisition Corp., Royal Mines Inc. and
Kevin B. Epp.
(4)
|
|
2.2
|
Agreement and Plan of Merger dated October 6, 2007
between the Company and Royal Mines Acquisition Corp.
(5)
|
|
3.1
|
Articles of Incorporation.
(1)
|
|
3.2
|
Certificate of Change Pursuant to NRS 78.209 increasing
the authorized capital of common stock to 300,000,000 shares, par value
$0.001 per share.
(2)
|
|
3.3
|
Bylaws.
(1)
|
|
3.4
|
Articles of Merger between the Company and Royal Mines
Acquisition Corp.
(5)
|
|
4.1
|
Form of Share Certificate.
(1)
|
|
10.1
|
Mineral Property Option Agreement dated January 28, 2007
between Eugene E. Phebus and Royal Mines Inc.
(5)
|
|
10.2
|
Mineral Property Option Agreement dated January 28, 2007
between Charles G. Moore and Royal Mines Inc.
(5)
|
|
10.3
|
Mineral Property Option Agreement dated January 10, 2007
between James E. Sharp and Royal Mines Inc.
(5)
|
|
10.4
|
Mineral Property Option Agreement dated January 28, 2007
between Ben Barnes and Royal Mines Inc.
(5)
|
|
10.5
|
Mineral Property Option Agreement dated January 28, 2007
between Walter Simmons II and Royal Mines Inc.
(5)
|
|
10.6
|
Mineral Property Option Agreement dated January 28, 2007
between Leo Corbet and Royal Mines Inc.
(5)
|
|
10.7
|
Mineral Property Option Agreement dated January 28, 2007
between William Tao and Royal Mines Inc.
(5)
|
|
10.8
|
Mineral Property Option Agreement dated January 28, 2007
between Dr. Wilbur J. Guay and Royal Mines Inc.
(5)
|
|
10.9
|
Mineral Property Option Agreement dated January 28, 2007
between Olivia Tearnan and Royal Mines Inc.
(5)
|
|
10.10
|
Mineral Property Option Agreement dated January 28, 2007
between Jim Mack and Royal Mines Inc.
(5)
|
|
10.11
|
Mineral Property Option Agreement dated January 28, 2007
between Ron Manarey and Royal Mines Inc.
(5)
|
|
10.12
|
Mineral Property Option Agreement dated January 28, 2007
between William Lintz and Royal Mines Inc.
(5)
|
|
10.13
|
Technology and Asset Purchase Agreement dated April 2,
2007 among New Verde River Mining Co., Inc., Robert H. Gunnison and Royal
Mines Inc.
(5)
|
|
10.14
|
Restatement and Amendment to Lease Agreement dated April
12, 2007 among Erline Y. Smith, Trustee, Erline Y. Smith Trust, Lawana
Hooper and Royal Mines Inc.
(5)
|
|
10.15
|
AV Executive Suites Service Agreement dated September 13,
2007 between Royal Mines Inc. and Anthem Village Executive Suites, LLC.
(5)
|
|
10.16
|
Residential Lease Agreement of La Cienega Office.
(5)
|
|
10.17
|
Lease Agreement dated June 6, 2007 among McKendry
Enterprises Inc., Profit Sharing Plan and Retirement Trust and Royal Mines
Inc.
(5)
|
|
10.18
|
2008 Stock Incentive Plan.
(6)
|
|
10.19
|
Non-Qualified Stock Option Agreement between
the Company and William C. Tao.
(6)
|
Page 31 of 34
|
Exhibit
|
|
|
Number
|
Description of Exhibits
|
|
10.20
|
Non-Qualified Stock Option Agreement between the Company
and Jason S. Mitchell.
(6)
|
|
10.21
|
Extension Agreement between the Company and Robert H.
Gunnison.
(7)
|
|
10.22
|
Settlement Agreement and Mutual Release dated effective
November 15, 2008 between the Company and William C. Tao.
(8)
|
|
10.23
|
Extension Agreement dated November 18, 2008 between the
Company and Robert H. Gunnison.
(9)
|
|
10.24
|
2009 Stock Incentive Plan.
(10)
|
|
10.25
|
Form of Non-Qualified Stock Option Agreement for
Directors and Executive Officers.
(10)
|
|
10.26
|
Management Consulting Agreement dated February 24, 2009
between the Company and Jason S. Mitchell.
(11)
|
|
10.27
|
Payment Extension and License Agreement dated March 13,
2009 between New Verde River Mining Co., Inc., Robert H. Gunnison and the
Company.
(12)
|
|
10.28
|
Proprietary Intellectual Property License Agreement dated
March 24, 2009 between the Company and Greene Lyon Group, LLC.
(13)
|
|
10.29
|
Consulting Agreement dated August 14, 2009 between the
Company and Mirador Consulting, Inc.
(14)
|
|
10.30
|
Brecheisen License Agreement dated August 12, 2009
between Brecheisen Company, Inc., Keith D. Brecheisen, Lorna J. Brecheisen
and the Company.
(15)
|
|
10.31
|
Letter of Intent dated October 21, 2009 between the
Company and Golden Anvil, SA de CV.
(16)
|
|
10.32
|
First Amendment of Lease Agreement dated November 20,
2009 among McKendry Enterprises Inc., Profit Sharing Plan and Retirement
Trust and Royal Mines Inc.
(5)
|
|
10.33
|
Toll Processing Agreement dated December 3, 2009 between
the Company and Golden Anvil, SA de CV.
(17)
|
|
10.34
|
2010 Stock Incentive Plan.
(17)
|
|
10.35
|
Form of Non-Qualified Stock Option Agreement for
Directors and Executive Officers.
(17)
|
|
10.36
|
Extension Agreement dated for reference February 15, 2010
between the Company and Golden Anvil, SA de CV.
(18)
|
|
10.37
|
Loan Agreement between Royal Mines And Minerals Corp.
(Lender) and Golden Anvil, SA de CV (Borrower).
(19)
|
|
10.38
|
Extension Agreement dated July 22, 2010, between Robert
H. Gunnison (Lender) and Royal Mines and Minerals Corp
(Borrower).
(20)
|
|
10.39
|
2011 Stock Incentive Plan.
(20)
|
|
10.40
|
Consulting Agreement dated for reference March 10, 2011
between the Company and Complete Advisory Partners, LLC.
(21)
|
|
10.41
|
Form of Compensation Stock Award
Agreement.
(22)
|
|
10.42
|
Consulting Agreement dated for reference September 8,
2011 between the Company and James Mack.
(23)
|
|
10.45
|
Consulting Services Agreement dated February 1, 2012
between the Company and Alvin A. Snaper.
(24)
|
|
10.46
|
Agreement dated June 14, 2012 between the Company and
Phoenix PMX LLC.
(25)
|
|
14.1
|
Code of Ethics.
(3)
|
|
31.1
|
Certification of Chief Executive Officer as adopted
pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer as adopted
pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer as adopted
pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|
Page 32 of 34
|
Notes:
|
|
|
(1)
|
Filed with the SEC as an exhibit to our
Registration Statement on Form SB-2 originally filed on August 17, 2006,
as amended.
|
|
(2)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed June 12, 2007.
|
|
(3)
|
Filed with the SEC as an exhibit to our Annual
Report on Form 10-KSB filed July 30, 2007.
|
|
(4)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed on September 28, 2007
|
|
(5)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed October 12, 2007.
|
|
(6)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed February 5, 2008.
|
|
(7)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed September 15, 2008.
|
|
(8)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed November 18, 2008.
|
|
(9)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed December 15, 2008.
|
|
(10)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed January 16, 2009.
|
|
(11)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed February 26, 2009.
|
|
(12)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed March 17, 2009.
|
|
(13)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed March 26, 2009.
|
|
(14)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed August 17, 2009.
|
|
(15)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed September 14, 2009.
|
|
(16)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed November 3, 2009.
|
|
(17)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed December 10, 2009.
|
|
(18)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed March 16, 2010.
|
|
(19)
|
Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed August 31, 2010.
|
|
(20)
|
Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed September 15, 2010.
|
|
(21)
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Filed with the SEC as an exhibit to our
Quarterly Report on Form 10-Q filed March 17, 2011.
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(22)
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Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed April 1, 2011.
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(23)
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Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed September 14, 2011.
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(24)
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Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed February 1, 2012.
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(25)
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Filed with the SEC as an exhibit to our Current
Report on Form 8-K filed June 20, 2012.
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Page 33 of 34
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.
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ROYAL MINES AND MINERALS CORP.
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Date:
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July
30, 2012
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By:
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/s/
K. Ian Matheson
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K. IAN MATHESON
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Chief Executive Officer, President and
Secretary
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(Principal Executive Officer)
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Date:
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July
30, 2012
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By:
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/s/
Jason S. Mitchell
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JASON S. MITCHELL
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Chief Financial Officer and Treasurer
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(Principal Accounting Officer)
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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.
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Date:
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July
30, 2012
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By:
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/s/
K. Ian Matheson
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K. IAN MATHESON
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Director
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Date:
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July
30, 2012
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By:
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/s/
Jason S. Mitchell
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JASON S. MITCHELL
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Director
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Date:
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July
30, 2012
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By:
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/s/
Michael C. Boyko
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MICHAEL C. BOYKO
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Director
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Royal Mines and Minerals (CE) (USOTC:RYMM)
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