UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30,
2020
Or
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to
________________
Commission File Number 000-54332
LITHIUM
CORPORATION
|
(Exact name of
registrant as specified in its charter)
|
Nevada
|
|
98-0530295
|
(State or
other jurisdiction of incorporation or organization)
|
|
(IRS
Employer Identification No.)
|
|
|
|
1031
Railroad St. Ste. 102B, Elko, Nevada
|
|
89801
|
(Address of
principal executive offices)
|
|
(Zip
Code)
|
(775) 410-5287
(Registrant’s telephone number, including area code)
__________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of
each class
|
|
Trading
Symbol(s)
|
|
Name of
exchange on which registered
|
|
|
|
|
|
Common
Stock
|
|
LTUM
|
|
N/A
|
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. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and "emerging growth company" in Rule
12b-2 of the Exchange Act.
Large accelerated filer
☐
|
|
Accelerated
filer ☐
|
Non-Accelerated filer ☒
|
Smaller reporting company ☒
|
Emerging
growth company ☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes ☐
No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date.
95,651,644 common shares issued and outstanding as of November 10,
2020.
LITHIUM CORPORATION
FORM 10-Q
TABLE OF
CONTENTS
PART I -
FINANCIAL INFORMATION
Item 1.
Financial Statements
Our unaudited interim financial statements for the nine month
period ended September 30, 2020 form part of this quarterly report.
They are stated in United States Dollars (US$) and are prepared in
accordance with United States Generally Accepted Accounting
Principles.
LITHIUM
Corporation
|
Balance
Sheets
|
|
|
|
|
|
|
|
|
|
September
30,
2020
(unaudited)
|
|
|
December
31,
2019
|
|
ASSETS
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash
|
|
$ |
221,790 |
|
|
$ |
346,260 |
|
Deposits
|
|
|
700 |
|
|
|
700 |
|
Prepaid
expenses
|
|
|
13,979 |
|
|
|
20,504 |
|
Total Current Assets |
|
|
236,469 |
|
|
|
367,464 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
236,469 |
|
|
$ |
367,464 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$ |
12,901 |
|
|
$ |
16,909 |
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
12,901 |
|
|
|
16,909 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
12,901 |
|
|
|
16,909 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Common stock,
3,000,000,000 shares authorized, par value $0.001; 95,651,644 and
95,651,644 common shares outstanding, respectively
|
|
|
95,652 |
|
|
|
95,652 |
|
Additional
paid in capital
|
|
|
4,322,347 |
|
|
|
4,322,347 |
|
Additional
paid in capital - options
|
|
|
191,513 |
|
|
|
191,513 |
|
Additional
paid in capital - warrants
|
|
|
369,115 |
|
|
|
369,115 |
|
Accumulated
deficit
|
|
|
(4,755,059 |
) |
|
|
(4,628,072 |
) |
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
223,568 |
|
|
|
350,555 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
236,469 |
|
|
$ |
367,464 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these financial statements.
|
LITHIUM
Corporation
|
Statements of
Operations
|
(unaudited)
|
|
|
Three Months
Ended
September 30, 2020
|
|
|
Three Months
Ended
September 30, 2019
|
|
|
Nine Months
Ended
September 30, 2020
|
|
|
Nine Months
Ended
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
|
|
4,750 |
|
|
|
7,500 |
|
|
|
23,301 |
|
|
|
27,489 |
|
Exploration
expenses
|
|
|
15,331 |
|
|
|
6,320 |
|
|
|
19,470 |
|
|
|
13,398 |
|
Consulting
fees - related party
|
|
|
18,000 |
|
|
|
25,000 |
|
|
|
58,500 |
|
|
|
85,000 |
|
Insurance
expense
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,935 |
|
Investor
relations
|
|
|
- |
|
|
|
19,250 |
|
|
|
- |
|
|
|
56,639 |
|
Transfer
agent and filing fees
|
|
|
5,629 |
|
|
|
1,037 |
|
|
|
14,742 |
|
|
|
8,319 |
|
Travel
|
|
|
522 |
|
|
|
1,022 |
|
|
|
3,660 |
|
|
|
1,908 |
|
General and
administrative expenses
|
|
|
1,356 |
|
|
|
1,475 |
|
|
|
7,314 |
|
|
|
6,946 |
|
TOTAL OPERATING
EXPENSES |
|
|
45,588 |
|
|
|
61,604 |
|
|
|
126,987 |
|
|
|
206,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
|
(45,588 |
) |
|
|
(61,604 |
) |
|
|
(126,987 |
) |
|
|
(206,634 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss)
on sale of marketable securities
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(919 |
) |
Gain on sale
of mineral property
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
443,308 |
|
Loss on
investment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(10,000 |
) |
Interest
income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
140 |
|
TOTAL OTHER INCOME
(EXPENSE) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
432,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
|
|
(45,588 |
) |
|
|
(61,604 |
) |
|
|
(126,987 |
) |
|
|
225,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) |
|
$ |
(45,588 |
) |
|
$ |
(61,604 |
) |
|
$ |
(126,987 |
) |
|
$ |
225,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE: BASIC AND DILUTED |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING: BASIC AND DILUTED |
|
|
95,651,644 |
|
|
|
95,651,644 |
|
|
|
95,651,644 |
|
|
|
95,651,644 |
|
The accompanying notes are an integral part of these financial
statements.
LITHIUM
Corparation
|
Statements of
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Paid-in
|
|
|
Paid-in
|
|
|
Other
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Capital -
|
|
|
Capital -
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Warrants
|
|
|
Options
|
|
|
Loss
|
|
|
Deficit
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2018 |
|
|
95,651,644 |
|
|
$ |
95,652 |
|
|
$ |
4,322,347 |
|
|
$ |
369,115 |
|
|
$ |
191,513 |
|
|
$ |
(771 |
) |
|
$ |
(4,408,175 |
) |
|
$ |
569,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized loss on sale of marketable
securities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
771 |
|
|
|
- |
|
|
|
771 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(219,897 |
) |
|
|
(219,897 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019 |
|
|
95,651,644 |
|
|
|
95,652 |
|
|
|
4,322,347 |
|
|
|
369,115 |
|
|
|
191,513 |
|
|
|
- |
|
|
|
(4,628,072 |
) |
|
|
350,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(126,987 |
) |
|
|
(126,987 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2020
(unaudited) |
|
|
95,651,644 |
|
|
$ |
95,652 |
|
|
$ |
4,322,347 |
|
|
$ |
369,115 |
|
|
$ |
191,513 |
|
|
$ |
- |
|
|
$ |
(4,755,059 |
) |
|
$ |
223,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these financial statements.
|
LITHIUM
Corporation
|
Statements of
Cash Flows
|
(unaudited)
|
|
|
Nine Months
Ended September 30, 2020
|
|
|
Nine Months
Ended September 30, 2019
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
Net income
(loss) for the period
|
|
$ |
(126,987 |
) |
|
$ |
225,895 |
|
Adjustment to reconcile net income
to net cash used in operating activities |
|
|
|
|
|
|
|
|
Loss on
investment in Summa, LLC
|
|
|
- |
|
|
|
10,000 |
|
Loss on sale
of marketable securities
|
|
|
- |
|
|
|
919 |
|
Gain on sale
of mineral property
|
|
|
- |
|
|
|
(443,308 |
) |
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Decrease in
prepaid expenses
|
|
|
6,525 |
|
|
|
72,008 |
|
Increase
(decrease) in accounts payable and accrued liabilities
|
|
|
(4,008 |
) |
|
|
(1,246 |
) |
Net Cash Used in Operating
Activities |
|
|
(124,470 |
) |
|
|
(135,732 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Cash paid for
mineral properties
|
|
|
- |
|
|
|
(12,537 |
) |
Cash paid for
investment in Summa, LLC
|
|
|
- |
|
|
|
(10,000 |
) |
Cash from
sale of marketable securities
|
|
|
- |
|
|
|
623 |
|
Net Cash Provided by (Used in)
Investing Activities |
|
|
- |
|
|
|
(21,914 |
) |
|
|
|
|
|
|
|
|
|
Decrease in cash |
|
|
(124,470 |
) |
|
|
(157,646 |
) |
Cash, beginning of period |
|
|
346,260 |
|
|
|
555,029 |
|
Cash, end of period |
|
$ |
221,790 |
|
|
$ |
397,383 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$ |
- |
|
|
$ |
- |
|
Cash paid for
income taxes
|
|
$ |
- |
|
|
$ |
- |
|
The accompanying notes are an integral part of these financial
statements.
Lithium Corporation
Notes to the
Financial Statements
September 30, 2020
(unaudited)
Note 1 - Summary of Significant Accounting
Policies
Lithium Corporation (formerly Utalk Communications Inc.) (the
“Company”) was incorporated on January 30, 2007 under the laws of
Nevada. On September 30, 2009, Utalk Communications Inc. changed
its name to Lithium Corporation.
Nevada Lithium Corporation was incorporated on March 16, 2009 under
the laws of Nevada under the name Lithium Corporation. On September
10, 2009, the Company amended its articles of incorporation to
change its name to Nevada Lithium Corporation. By agreement dated
October 9, 2009 Nevada Lithium Corporation and Lithium Corporation
amalgamated as Lithium Corporation. Lithium Corporation is engaged
in the acquisition and development of certain lithium interests in
the state of Nevada, and battery or Tech metals prospects in
British Columbia and is currently in the exploration stage.
Accounting Basis
The Company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America
("GAAP" accounting). The Company has adopted a December 31 fiscal
year end.
Cash and Cash Equivalents
Cash includes cash on account, demand deposits, and short-term
instruments with maturities of three months or less.
Concentrations of Credit Risk
The Company maintains its cash in bank deposit accounts, the
balances of which at times may exceed federally insured limits. The
Company continually monitors its banking relationships and
consequently has not experienced any losses in such accounts. The
Company believes it is not exposed to any significant credit risk
on cash and cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles 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 amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue
from Contracts with Customers. Under ASC 606, the Company
recognizes revenue from the commercial sales of products, licensing
agreements and contracts to perform pilot studies by applying the
following steps: (1) identify the contract with a customer; (2)
identify the performance obligations in the contract; (3) determine
the transaction price; (4) allocate the transaction price to each
performance obligation in the contract; and (5) recognize revenue
when each performance obligation is satisfied. For the comparative
periods, revenue has not been adjusted and continues to be reported
under ASC 605 — Revenue Recognition. Under ASC 605, revenue is
recognized when the following criteria are met: (1) persuasive
evidence of an arrangement exists; (2) the performance of service
has been rendered to a customer or delivery has occurred; (3) the
amount of fee to be paid by a customer is fixed and determinable;
and (4) the collectability of the fee is reasonably assured.
There was no impact on the Company’s financial statements as a
result of adopting Topic 606 for the nine months ended September
30, 2020 and 2019, or the twelve months ended December 31,
2019.
Income per Share
Basic income per share is computed by dividing loss available to
common shareholders by the weighted average number of common shares
outstanding during the period. The computation of diluted earnings
per share assumes the conversion, exercise or contingent issuance
of securities only when such conversion, exercise or issuance would
have a dilutive effect on earnings per share. The dilutive effect
of convertible securities is reflected in diluted earnings per
share by application of the "if converted" method. In the periods
in which a loss is incurred, the effect of potential issuances of
shares under options and warrants would be anti-dilutive, and
therefore basic and diluted losses per share are the same. The
Company did not have any dilutive securities for the periods ended
September 30, 2020 and 2019.
Income Taxes
The asset and liability approach is used to account for income
taxes by recognizing deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of assets and
liabilities.
Financial Instruments
The Company's financial instruments consist of cash, deposits,
prepaid expenses, and accounts payable and accrued liabilities.
Unless otherwise noted, it is management's opinion that the Company
is not exposed to significant interest, currency or credit risks
arising from these financial instruments. Because of the short
maturity and capacity of prompt liquidation of such assets and
liabilities, the fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
Mineral Properties
Costs of exploration, carrying and retaining unproven mineral lease
properties are expensed as incurred. Mineral property acquisition
costs are capitalized including licenses and lease payments.
Although the Company has taken steps to verify title to mineral
properties in which it has an interest, these procedures do not
guarantee the Company's title. Such properties may be subject to
prior agreements or transfers and title may be affected by
undetected defects. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.
Optioned Properties
Properties under the Company’s ownership which have been optioned
to a third party are deemed the Company’s property until all
obligations under an option agreement are met, at which point the
ownership of the property transfers to the third party. All
non-refundable payments received prior to all obligations under an
option agreement being met are considered liabilities until such
time all obligations have been met, at which time ownership of the
property transfers to the third party and the Company includes
option payments into its statement of operations.
Recent Accounting Pronouncements
In January 2016, the Financial Accounting Standards Board ("FASB"),
issued Accounting Standards Update ("ASU") 2016-01, "Financial
Instruments-Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities," which amends the
guidance in U.S. generally accepted accounting principles on the
classification and measurement of financial instruments. Changes to
the current guidance primarily affect the accounting for equity
investments, financial liabilities under the fair value option, and
the presentation and disclosure requirements for financial
instruments. In addition, the ASU clarifies guidance related to the
valuation allowance assessment when recognizing deferred tax assets
resulting from unrealized losses on available-for-sale debt
securities.
In May 2017, the Financial Accounting Standards Board (“FASB”)
issued Accounting Standards Update (“ASU”) 2017-09,
Compensation-Stock Compensation (Topic 718): Scope of
Modification Accounting , which clarifies when a change to the
terms or conditions of a share-based payment award must be
accounted for as a modification. The new guidance requires
modification accounting if the fair value, vesting condition or the
classification of the award is not the same immediately before and
after a change to the terms and conditions of the award.
In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842,
which amends the guidance in former ASC Topic 840, Leases.
The new standard increases transparency and comparability most
significantly by requiring the recognition by lessees of
right-of-use (“ROU”) assets and lease liabilities on the balance
sheet for all leases longer than 12 months. Under the standard,
disclosures are required to meet the objective of enabling users of
financial statements to assess the amount, timing, and uncertainty
of cash flows arising from leases. For lessees, leases will be
classified as finance or operating, with classification affecting
the pattern and classification of expense recognition in the income
statement. The Company adopted the new lease guidance effective
January 1, 2019. The Company only has one lease in effect; its
office lease located in Elko, Nevada. The lease rate is 350/month
and is on a month to month term. The office lease is insignificant
to the financial presentation of the Company, therefore, it is not
shown on the Company’s financial statements. The Company has
adopted the modified retrospective approach therefore the Company
has no plans of restating prior periods and that there is no asset
or liability currently.
Note 2 – Going Concern
As reflected in the accompanying financial statements, the Company
has a working capital of $223,568 as at September 30, 2020
(December 31, 2019: $350,555) and has used $124,470 (2019:
$135,732) of cash in operations for the nine months ended September
30, 2020. This raises 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’s ability to raise
additional capital and implement its business plan. The financial
statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain
additional funding and implement its strategic plans provide the
opportunity for the Company to continue as a going concern.
Note 3 – Fair Value of Financial Instruments
Under FASB ASC 820-10-5, fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the
measurement date (an exit price). The standard outlines a valuation
framework and creates a fair value hierarchy in order to increase
the consistency and comparability of fair value measurements and
the related disclosures. Under GAAP, certain assets and liabilities
must be measured at fair value, and FASB ASC 820-10-50 details the
disclosures that are required for items measured at fair value.
The Company has certain financial instruments that must be measured
under the new fair value standard. The Company’s financial assets
and liabilities are measured using inputs from the three levels of
the fair value hierarchy. The three levels are as follows:
- Level 1 - Inputs are unadjusted quoted prices in active markets
for identical assets or liabilities that the Company has the
ability to access at the measurement date.
- Level 2 - Inputs include quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the asset
or liability (e.g., interest rates, yield curves, etc.), and inputs
that are derived principally from or corroborated by observable
market data by correlation or other means (market corroborated
inputs).
- Level 3 - Unobservable inputs that reflect our assumptions about
the assumptions that market participants would use in pricing the
asset or liability.
The following schedule summarizes the valuation of financial
instruments at fair value on a recurring basis in the balance
sheets as of September 30, 2020 and December 31, 2019,
respectively:
|
|
Fair
Value Measurements at September 30, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
221,790 |
|
|
$ |
- |
|
|
$ |
- |
|
Total
Assets
|
|
|
221,790 |
|
|
|
- |
|
|
|
- |
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
$ |
221,790 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
Fair
Value Measurements at December 31, 2019
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
346,260 |
|
|
$ |
- |
|
|
$ |
- |
|
Total
Assets
|
|
|
346,260 |
|
|
|
- |
|
|
|
- |
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
$ |
346,260 |
|
|
$ |
- |
|
|
$ |
- |
|
Note 4 - Prepaid Expenses
Prepaid expenses consisted of the following at September 30, 2020
and December 31, 2019:
|
|
September 30,
2020
|
|
|
December 31,
2018
|
|
Bonds
|
|
$ |
9,381 |
|
|
$ |
9,381 |
|
Transfer agent fees and filing
fees
|
|
|
3,000 |
|
|
|
11,123 |
|
Investor relations
|
|
|
1,598 |
|
|
|
- |
|
Total prepaid expenses
|
|
$ |
13,979 |
|
|
$ |
20,504 |
|
Note 5 - Mineral Properties
Yeehaw and Melissa Properties
On March 17, 2017, the Company entered into an agreement whereby
the Company has the option to acquire mineral properties in
Revelstoke, British Columbia. To acquire the properties, the
Company must issue 1,000,000 common shares on March 1, 2017
(issued) and 400,000 common shares (issued) on the anniversary of
the agreement. The properties are subject to a 1% NSR, which may be
purchased by the Company for $500,000. During the year-ended
December 31, 2019, the Company recorded a $217,668 allowance for
the properties and has a net book value of $Nil.
Fish Lake Property
The Company purchased a 100% interest in the Fish Lake property by
making staged payments of $350,000 worth of common stock. Title to
the pertinent claims was transferred to the Company through quit
claim deed dated June 1, 2011, and this quit claim was recorded at
the county level on August 3, 2011 and at the BLM on August 4,
2011. Quarterly stock disbursements were made on the following
schedule:
1st Disbursement: Within 10 days of
signing agreement (paid)
2nd Disbursement: within 10 days of June
30, 2009 (paid)
3rd Disbursement: within 10 days of
December 30, 2009 (paid)
4th Disbursement: within 10 days of March
31, 2010 (paid)
5th Disbursement: within 10 days of June
30, 2010 (paid)
6th Disbursement: within 10 days of
September 30, 2010 (paid)
7th Disbursement: within 10 days of
December 31, 2010 (paid)
8th Disbursement: within 10 days of March
31, 2011 (paid)
During the year-ended December 31, 2019, the Company recorded a
$159,859 allowance for the properties and has a net book value of
$Nil.
On March 10, 2016, the Company entered into an agreement with
respect to the Fish Lake Property whereby the purchaser may earn an
80% interest in the property for payments of $300,000, 80,000
shares (post 10:1 rollback and 2:1 split) and work performed on the
property over the next three years totaling $1,100,000 and $30,000
reimbursement of costs relating to the property. Should these
terms be met, the purchaser has the ability to purchase the
remaining 20% of the property for $1,000,000. The Company
shall retain a 2.5% NSR on the property should they sell 100% of
their interest.
As of September 30, 2020, the Company has received $330,000 and
240,000 common shares (valued at $112,267) in relation to the
option agreement. The $443,308 had been recorded as a liability
against the property until either the purchaser returns the
property to the Company or the purchaser has met all the
obligations associated with the agreement, at which time the
liability will be charged to the statement of operations. During
the year-ended December 31, 2019, the property was returned to the
Company and $443,308 was taken into income.
Staked Properties
The Company has staked claims with various registries as summarized
below:
Name
|
|
Claims
|
|
Cost
|
|
|
Impairment
|
|
|
Net
Carry Value
|
|
San Emidio
|
|
20 (1,600
acres)
|
|
$ |
11,438 |
|
|
$ |
(11,438 |
) |
|
$ |
0 |
|
BC Sugar
|
|
8019.41
(hectares)
|
|
$ |
21,778 |
|
|
|
(21,778 |
) |
|
$ |
0 |
|
The Company performs an impairment test on an annual basis to
determine whether a write-down is necessary with respect to the
properties. The Company believes no circumstances have occurred and
no evidence has been uncovered that warrant a write-down of the
mineral properties other than those abandoned by management and
thus included in write-down of mineral properties.
On May 3, 2016, the Company entered into an agreement with respect
to the San Emidio Property whereby the purchaser could have earned
an 80% interest in the property for payments of $100,000, 30,000
shares (post 10:1 rollback and 2:1 split) and work performed on the
property over the next three years totaling $600,000. Should
these terms had been met, the purchaser had the ability to purchase
the remaining 20% of the property for $1,000,000 in which case te
Company would have retained a 2.5% NSR on the property.
During the fiscal year 2019, the Company has received $100,000 and
40,000 common shares (valued at $102,901) in relation to the option
agreement. The Company recorded $202,901 as a liability
against the property until either the purchaser returns the
property to the Company or the purchaser has met all the
obligations associated with the agreement, at which time the
liability will be charged to the statement of operations.
During the year ended December 31, 2018, the Company received
notification that the purchaser had returned the property and, as
such, $202,901 was taken into income.
Note 6 – Allowance for Optioned Properties
Fish Lake Valley
On March 10, 2016, the Company entered into an agreement with
respect to the Fish Lake Property whereby the purchaser may earn an
80% interest in the property for payments of $300,000, 80,000
shares (post 10:1 rollback and 2:1 split) and work performed on the
property over the next three years totaling $1,100,000 and $30,000
reimbursement of costs relating to the property. Should these
terms be met, the purchaser has the ability to purchase the
remaining 20% of the property for $1,000,000. The Company
shall retain a 2.5% NSR on the property should they sell 100% of
their interest.
As of September 30, 2020, the Company has received $330,000 and
240,000 common shares (valued at $113,308) in relation to the
option agreement. The Company recorded $443,308 as a
liability against the property until either the purchaser returns
the property to the Company or the purchaser has met all the
obligations associated with the agreement, at which time the
liability will be charged to the statement of operations.
During the year ended December 31, 2019, the Company received
notification that the purchaser had returned the property and, as
such, $443,308 was taken into income.
San Emidio
On May 3, 2016, the Company entered into an agreement with respect
to the San Emidio Property whereby the purchaser may earn an 80%
interest in the property for payments of $100,000, 60,000 shares
(post 10:1 rollback and 2:1 split) and work performed on the
property over the next three years totaling $600,000. Should
these terms be met, the purchaser has the ability to purchase the
remaining 20% of the property for $1,000,000. The Company
shall retain a 2.5% NSR on the property should they sell 100% of
their interest.
As of September 30, 2020, the Company has received $100,000 and
40,000 common shares (valued at $102,901) in relation to the option
agreement. The $202,901 has been recorded as a liability
against the property until either the purchaser returns the
property to the Company or the purchaser has met all the
obligations associated with the agreement, at which time the
liability will be charged to the statement of operations.
During the year ended December 31, 2018, the Company received
notification that the purchaser had returned the property and, as
such, $202,901 was taken into income.
Note 7 - Capital Stock
The Company is authorized to issue 300,000,000 shares of it $0.001
par value common stock. On September 30, 2009, the Company effected
a 60-for-1 forward stock split of its $0.001 par value common
stock.
All share and per share amounts have been retroactively restated to
reflect the splits discussed above.
Common Stock
During the nine months ended September 30, 2020, there was no
activity in the Company’s common stock.
There were 95,651,644 shares of common stock issued and outstanding
as of September 30, 2020 (December 31, 2019: 95,651,644).
Note 8 – Related Party Transactions
The Company paid consulting fees totaling $18,000 and $58,500 to
related parties for the three and nine months ended September 30,
2020 (2019: $25,000 and $85,000).
Note 9 - Subsequent Events
The Company has analyzed its operations subsequent to September 30,
2020 through the date these financial statements were issued, and
has determined that it does not have any material subsequent events
to disclose.
Item 2.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These
statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking
statements by terminology such as “may”, “should”, “expects”,
“plans”, “anticipates”, “believes”, “estimates”, “predicts”,
“potential” or “continue” or the negative of these terms or other
comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors
that may cause our or our industry’s actual results, levels of
activity, performance or achievements to be materially different
from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws
of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles. The following discussion
should be read in conjunction with our financial statements and the
related notes that appear elsewhere in this quarterly report. The
following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could
differ materially from those discussed in the forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below
and elsewhere in this quarterly report.
Our financial statements are stated in United States Dollars (US$)
and are prepared in accordance with United States Generally
Accepted Accounting Principles.
In this quarterly report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references
to “common shares” refer to the common shares in our capital
stock.
As used in this quarterly report, the terms “we”, “us”, “our” and
“our company” mean Lithium Corporation and our now defunct
wholly-owned subsidiary Lithium Royalty Corp., a Nevada company,
unless otherwise indicated.
General Overview
We were incorporated under the laws of the State of Nevada on
January 30, 2007 under the name “Utalk Communications Inc.”. At
inception, we were a development stage corporation engaged in the
business of developing and marketing a call-back service using a
call-back platform. Because we were not successful in implementing
our business plan, we considered various alternatives to ensure the
viability and solvency of our company.
On August 31, 2009, we entered into a letter of intent with Nevada
Lithium Corporation regarding a business combination which could be
effected in one of several different ways, including an asset
acquisition, merger of our company and Nevada Lithium, or a share
exchange whereby we would purchase the shares of Nevada Lithium
from its shareholders in exchange for restricted shares of our
common stock.
Effective September 30, 2009, we effected a 1 old for 60 new
forward stock split of our issued and outstanding common stock. As
a result, our authorized capital increased from 50,000,000 shares
of common stock with a par value of $0.001 to 3,000,000,000 shares
of common stock with a par value of $0.001 and our then issued and
outstanding shares increased from 4,470,000 shares of common stock
to 268,200,000 shares of common stock.
Also effective September 30, 2009, we changed our name from “Utalk
Communications, Inc.” to “Lithium Corporation”, by way of a merger
with our wholly owned subsidiary Lithium Corporation, which was
formed solely for the change of name. The name change and forward
stock split became effective with the Over-the-Counter Bulletin
Board at the opening for trading on October 1, 2009 under the stock
symbol “LTUM”. Our CUSIP number is 536804107.
On October 9, 2009, we entered into a share exchange agreement with
Nevada Lithium and the shareholders of Nevada Lithium. The closing
of the transactions contemplated in the share exchange agreement
and the acquisition of all of the issued and outstanding common
stock in the capital of Nevada Lithium occurred on October 19,
2009. In accordance with the closing of the share exchange
agreement, we issued 12,350,000 shares of our common stock to the
former shareholders of Nevada Lithium in exchange for the
acquisition, by our company, of all of the 12,350,000 issued and
outstanding shares of Nevada Lithium. Also, pursuant to the terms
of the share exchange agreement, a director of our company
cancelled 220,000,000 restricted shares of our common stock. Nevada
Lithium’s corporate status was allowed to lapse and the company’s
status with the Nevada Secretary of State has been revoked.
In
April of 2016 our company established a wholly owned subsidiary
called Lithium Royalty Corp. The subsidiary was a Nevada
Corporation in which we had planned to build a portfolio of lithium
mineral property royalties. Also in April of 2016 Lithium Royalty
Corp. staked a lithium property consisting of a block of mineral
claims that became known as the North Big Smoky Property. On May
13th, 2016 Lithium Royalty Corp. sold the North Big Smoky property
to 1069934 Nevada Ltd., retaining a Net Smelter Royalty. On April
28, 2017, the Company entered into an Assignment Agreement with
Lithium Royalty Corp. for the assignment of the residual interest
in the North Big Smoky Property and the subsidiary was subsequently
voluntarily dissolved with the Nevada Secretary of State with an
effective date of April 28, 2017.
Our Current Business
We are an exploration stage mining company engaged in the
identification, acquisition, and exploration of metals and minerals
with a primary focus on lithium mineralization on properties
located in Nevada, and Graphite and Rare Earth Element properties
in British Columbia.
Our current operational focus is to guide and assist in the conduct
of exploration activities on our 25% owned precious and energy
metals properties in Nevada, and our 100% owned Fish Lake Valley,
and San Emidio lithium brine properties, also in Nevada. The
Company is not currently conducting any work on its Graphite or
Rare Earths properties in British Columbia, in large part due to
the issues surrounding ease of movement across the border presently
due to the Corona Virus crisis. The Company continues to evaluate
and generate additional prospects for our exploration
portfolio.
On March 2, 2017 we issued a news release announcing that we had
signed a letter of intent with Bormal Resources Inc. with respect
to three Tantalum-Niobium properties (Michael, Yeehaw, and Three
Valley Gap) located in British Columbia, Canada. The Michael
property in the Trail Creek Mining Division was originally staked
to cover one of the most compelling tantalum (Ta) in stream
sediment anomalies as seen in the government RGS database in
British Columbia. Bormal conducted a stream sediment sampling
program in 2014, and determined that the tantalum-niobium in stream
sediment anomaly here is bona fide, and in the order of 6
kilometers in length. In November of 2016 Lithium Corporation
conducted a short soil geochemistry orientation program on the
property as part of its due diligence, and determined that there
are elevated levels of Niobium-Tantalum in soils here.
Also in the general area of the Michael property the Yeehaw
property had been staked over a similar but lower amplitude
Tantalum/rare earth elements in stream sediment anomaly. Both
properties are situated in the Eocene Coryell Batholith, and it is
thought that these anomalies may arise from either Carbonatite or
Pegmatite type deposits. The Company conducted a helicopter borne
bio-geochemical survey on these two properties in June 2017, which
did return anomalous results. This was followed up by a geological
and geochemical examination of the Yeehaw property in early July
2017, and additional work of a similar nature subsequently in July
2017, and in early October 2017. The examination uncovered a zone
roughly 30 meters wide which includes an interval that is
mineralized with approximately 0.75% Total Rare Earth Elements
(TREE’s). Preliminary geological, and geochemical work were
performed on the Michael property in October of 2016, followed by a
brief airborne biogeochemical survey in June of 2017, and
additional ground geological and geochemical assessment work in
early October, 2017, follow-up work in May of 2018, and more work
in June and October of 2019.
The third property – Three Valley Gap, is in the Revelstoke Mining
Division and is situated in a locale where several Nb-Ta enriched
carbonatites have been noted to occur. A brief field program by
Bormal in 2015 located one of these carbonatites, and concurrent
soil sampling determined that the soils here are enriched with
Nb-Ta over the known carbonatite, and indicated that there are
other geochemical anomalies locally that may indicate that more
carbonatites exist here and are shallowly buried.
On
February 23, 2018 we issued a news release announcing that we had
dropped any interest in the Michael and Three Valley Gap
properties, and had renegotiated the final share payment as
required in the agreement from 750,000 to 400,000 shares. The final
consideration shares have been issued and the Yeehaw property has
been transferred by Bormal. During 2017 the Company conducted
initial stream, rock and magnetometer surveys on the property, and
discovered a 30 meter wide structure (Horseshoe Bend showing) that
exhibits anomalous Titanium/REE mineralization. The company has
staked an additional 5227 acre (2115.51 hectares) mineral claim and
conducted a brief exploration program in Spring 2018 of geological
mapping and rock and soil sampling on the property. This program
discovered a slightly stronger zone of similar mineralization
approximately 660 feet (200 meters) to the northwest of the
Horseshoe Bend, and similar float mineralization another 0.75 miles
(1.2 kms) further to the northwest. Work in 2019 discovered the
extension to the west of the mineralized structure, and also
similar mineralized float was found to the east that possibly
indicates it strikes under cover in that direction also.
On February 16, 2017 we issued a news release announcing that we
had signed a letter of intent with Nevada Sunrise Gold Corp. with
respect to our Salt Wells lithium in brine prospect located in
Churchill County Nevada.
Under the terms of the agreement NEV (TSX-V - NEV, OTC - NVSGF)
could have earned a 100% interest in the Property subject to a 2%
Net Smelter Royalty (NSR) by making staged payments of cash and
shares over the next two years. The terms are;
|
·
|
$10,000 non-refundable deposit on
signing the LOI |
|
·
|
$15,000 & issue 400,000 common
shares of NEV on the later of TSX-V approval or the signing of a
formal definitive agreement |
|
·
|
$50,000 & 500,000 shares - 1st
anniversary |
|
·
|
$75,000 & 600,000 shares - 2nd
anniversary |
NEV was to pay all claim and other property related fees during the
earn-in phase of the agreement, and would have also retained the
right to purchase one half (1%) of the NSR at any time up until the
third anniversary of the signing of the formal agreement for
$1,000,000. Issues arose with respect to the claim block and Nevada
Sunrise’s understanding of the placement of the block, and
ultimately it was determined that the Company would be best served
by cancelling the agreement and refunding the money (minus bank
fees) that Nevada Sunrise had sent. An informal letter agreement
releasing the parties of all obligations save for the Area of
Mutual Interest clause, was executed by both parties on May 5,
2017.
On
May 13, 2016 our wholly owned subsidiary sold 100% of the interest
in the North Big Smoky Property through a Property Acquisition
Agreement with the private company 1069934 Nevada Ltd.
("Purchaser"). Consideration paid to Lithium Royalty Corp.
consisted of $10,000.00, reimbursement of staking and filing fees,
300,000 shares in the "Purchaser Parent", 1069934 B.C. Ltd.,
Lithium Royalty Corp. retained a 2.5% Net Smelter Royalty ("Vendor
NSR") on the North Big Smoky Property and the Purchaser has the
right to purchase up to one-half (50%) of the Vendor NSR for
$1,000,000 to reduce the Vendor NSR to 1.25%. On September 16, 2017
Lithium Corporation agreed to sell back the shares of 1069934
Nevada Ltd. to San Antone Minerals Corp. (successor of 1069934) by
an agreement dated Sept 13th, 2017 for $3,000. Lithium Corporation
was compensated on November 02, 2017.
On February 16, 2016, we issued a news release announcing that our
company has entered into a letter of intent with 1032701 B.C. Ltd.
with respect to our Fish Lake Valley lithium brine property in
Esmeralda County, Nevada. On March 10, 2016 we issued a news
release announcing the signing of the Fish Lake Valley Earn-In
Agreement. The terms of the Earn-In Agreement allow 1032701 to earn
an 80% interest in Fish Lake Valley for payments over two years
totaling $300,000 and issuance of 400,000 common shares of the
publicly traded company anticipated to result from a Going Public
Transaction, and work performed on the property over three years in
the amount of $1,100,000. 1032701 then has a Subsequent Earn-In
option to purchase Lithium Corporation's remaining 20% working
interest within one year of earning the 80% by paying the Company a
further $1,000,000, at that point the Company would retain a 2.5%
Net Smelter Royalty, half of which may be purchased by 1032701 for
an additional $1,000,000. Should the Purchaser elect not to
exercise the Subsequent Earn-In, a joint venture will be
established. During the Joint Venture, should either party be
diluted below a 10% working interest - their interest in the
property will revert to a 7.5% Net Smelter Royalty. The first
tranche of cash and shares are to be issued within 60 days of the
signing of the formal agreement. Menika Mining, a publicly traded
company on the TSX Venture Exchange trading under the symbol MML
announced on March 8, 2016 that it intended to acquire 1032701 B.C.
Ltd and the right to acquire the Fish Lake Valley Property. Menika
Mining completed the acquisition of 1032701 B.C. and changed their
name to American Lithium Corp. They fulfilled the initial
obligations of the Fish Lake Valley Earn-In-Agreement in April of
2016, and all year 1 and year 2 anniversary obligations have been
met. To date, we have received $300,000 and have received 480,000
common shares (effectively 210,000 shares subsequent to a 10:1
reverse split and then a 2:1 forward split) in relation to the Fish
Lake option agreement. The Company received formal relinquishment
of the Purchasers right to earn the interest in the property on
April 30th 2019.
Effective May 3, 2016, our company entered in to an Exploration
Earn-In Agreement with 1067323 B.C. Ltd. with respect to our San
Emidio property. The terms of the formal agreement are; payment of
$100,000, issuance of 300,000 common shares of 1067323 B.C. Ltd.,
or of the publicly traded company anticipated to result from a
Going Public Transaction, and work performed on the property by the
Optionee in the amount of $600,000 over the next three years to
earn an 80% interest in the property. 1067323 then has a subsequent
Earn-In option to purchase Lithium Corporation's remaining 20%
working interest within three years of earning the 80% by paying
our company a further $1,000,000, at that point our company would
retain a 2.5% Net Smelter Royalty, half of which may be purchased
by 1067323 for an additional $1,000,000. Should the Purchaser elect
not to exercise the Subsequent Earn-In, a joint venture will be
established. 1067323 B.C. Ltd. merged with American Lithium Corp.,
and the first tranche of cash and shares were issued in June of
2016. The Company waived the work requirement for the first year
and received 100,000 shares of American Lithium Corp. in May of
2017. During the period ended June 30, 2018, the Company received
notification that the purchaser had returned the property and, as
such, $202,901 was taken into income.
Effective April 23, 2014, we entered into an operating agreement
with All American Resources, L.L.C and TY & Sons Investments
Inc. with respect to Summa, LLC, a Nevada limited liability company
incorporated on December 12, 2013, wherein we hold a 25%
membership. Our company's initial capital contribution to Summa,
LLC was $125,000, of which $100,000 was in cash and the balance in
services. To date we have contributed an additional $31,700 to
Summa, LLC. Summa recently signed an option agreement with 1237025
Nevada Ltd., (now Summa Silver Corp (CSE – SSVR) under which Summa
undertakes to explore the property, pay $400,000 in cash and
$400,000 in shares and incurs $1.5 million in exploration
expenditures. Summa, LLC will retain a 1% Net Smelter Royalty, one
half of which Summa Silver may purchase for $4 million. Summa
Silver commenced drilling activities at the end of June 2020, and
is currently still drilling on the property.
Our company intends to continue identifying additional lithium
properties in Nevada and to conduct exploration on all our
properties on a rational and judicious basis, taking into account
financial, and market conditions. We will continue assessing our
options with respect to our 25% interest in Summa, LLC, a private
Nevada company, which holds the residue of the “Howard Hughes”
Summa Corp., while generating new prospects and evaluating property
submittals for option or purchase.
Fish Lake Valley Property
Fish Lake Valley is a lithium enriched playa (also known as a
salar, or salt pan), which is located in northern Esmeralda County
in west central Nevada, and the property is roughly centered at
417050E 4195350N (NAD 27 CONUS). We currently hold eighteen,
80-acre Association Placer claims that cover approximately 1,440
acres (582.75 hectares). Lithium-enriched Tertiary-era Fish Lake
formation rhyolitic tuffs or ash flow tuffs have accumulated in a
valley or basinal environment. Over time interstitial formational
waters in contact with these tuffs, have become enriched in
lithium, boron and potassium which could possibly be amenable to
extraction by evaporative methods. Our claim block here has
expanded and contracted twice, at times when the lithium market has
contracted, and the prudent thing to do would be to only maintain
essential claims, in order to preserve capital.
The property was originally held under mining lease purchase
agreement dated June 1, 2009, between Nevada Lithium Corporation,
and Nevada Alaska Mining Co. Inc., Robert Craig, Barbara Craig, and
Elizabeth Dickman. Nevada Lithium issued to the vendors $350,000
worth of common stock of our company in eight regular
disbursements. All disbursements were made of stock worth a total
of $350,000, and claim ownership was transferred to our
company.
The geological setting at Fish Lake Valley is highly analogous to
the salars of Chile, Bolivia, and Peru, and more importantly
Clayton Valley, where Albemarle has its Silver Peak lithium-brine
operation. Access is excellent in Fish Lake Valley with all-weather
gravel roads leading to the property from state highways 264, and
265, and maintained gravel roads ring the playa. Power is available
approximately 10 miles from the property, and the village of Dyer
is approximately 12 miles to the south, while the town of Tonopah,
Nevada is approximately 50 miles to the east.
Our company completed a number of geochemical and geophysical
studies on the property, and conducted a short drill program on the
periphery of the playa in the fall of 2010. Near-surface brine
sampling during the spring of 2011 outlined a
boron/lithium/potassium anomaly on the northern portions of the
northern playa, that is roughly 1.3 x 2 miles long, which has a
smaller higher grade core where lithium mineralization ranges from
100 to 150 mg/L (average 122.5 mg/L), with boron ranging from 1,500
to 2,670 mg/L (average 2,219 mg/L), and potassium from 5,400 to
8,400 mg/L (average 7,030 mg/L). Wet conditions on the playa
precluded drilling there in 2011, and for a good portion of 2012,
however a window of opportunity presented itself in late fall 2012.
In November/December 2012 we conducted a short direct push drill
program on the northern end of the playa, wherein a total of
1,240.58 feet (378.09 meters) was drilled in 20 holes at 17
discrete sites, and an area of 3,356 feet (1,023 meters) by 2,776
feet (846 meters) was systematically explored by grid probing. The
deepest hole was 81 feet (24.69 meters), and the shallowest hole
that produced brine was 34 feet (10.36 meters). The average depth
of the holes drilled during the program was 62 feet (18.90 meters).
The program successfully demonstrated that
lithium-boron-potassium-enriched brines exist to at least 62 feet
(18.9 meters) depth in sandy or silty aquifers that vary from
approximately three to ten feet (one to three meters) in thickness.
Average lithium, boron and potassium contents of all samples are
47.05 mg/L, 992.7 mg/L, and 0.535% respectively, with lithium
values ranging from 7.6 mg/L to 151.3 mg/L, boron ranging from 146
to 2,160.7 mg/L, and potassium ranging from 0.1 to 1.3%. The
anomaly outlined by the program is 1,476 by 2,461 feet (450 meters
by 750 meters), and is not fully delimited, as the area available
for probing was restricted due to soft ground conditions to the
east and to the south. A 50 mg/L lithium cutoff is used to define
this anomaly and within this zone average lithium, boron and
potassium contents are 90.97 mg/L, 1,532.92 mg/L, and 0.88%
respectively. On September 3, 2013, we announced that drilling had
commenced at Fish Lake Valley. Due to storms and wet conditions in
the area which our company hoped to concentrate on, the playa was
not passable, and so the program concentrated on larger step-out
drilling well off the playa. This 11 hole, 1,025 foot program did
prove that mineralization does not extend much, if at all, past the
margins of the playa, as none of the fluids encountered in this
program were particularly briny, and returned values of less than 5
mg/L lithium.
Our company is very pleased with the results here, and believes
that the playa at Fish Lake Valley may be conducive to the
formation of a “silver peak” style lithium brine deposit. Our
company reviewed the results in regards to the overall geological
interpretation of the lithium, boron and potassium bearing strata.
The results confirm the presence of targeted mineralization and
further evaluation programs will focus on determining the extent
and depth of mineralization. Our company is currently assessing
options on how best to further explore here.
We signed an Exploration Earn-In Agreement in February 2016 with
1032701 B.C. Ltd., a private British Columbia company with respect
to our Fish Lake Valley lithium brine property.
1032701 B.C. Ltd., had the option to acquire an initial 80%
undivided interest in the Fish Lake Valley property through the
payment of an aggregate of US$300,000 in cash, completing a Going
Public Transaction on or before May 6, 2016, and subject to the
completion of the Going Public Transaction, arranging for the
issuance of a total of 400,000 common shares in the capital of the
Resulting Issuer as follows: (i) within five Business Days
following the effective date,
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·
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On or before the first
anniversary of the signing of the Definitive Agreement pay $100,000
to our company and issue 100,000 common shares of the
Optionee/TSX-V listed public company.
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·
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On or before the first
anniversary of the signing of the Definitive Agreement pay $100,000
to our company and issue 100,000 common shares of the
Optionee/TSX-V listed public company.
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·
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On or before the second
anniversary of the signing of the definitive agreement pay $100,000
to our company and issue 100,000 common shares of the
Optionee/TSX-V listed public company.
|
The Optionee had to make qualified exploration or development
expenditures on the property of $200,000 before the first
anniversary, an additional $300,000 before the second anniversary,
an additional $600,000 prior to the third anniversary, and make all
payments and perform all other acts to maintain the Property in
good standing before fully earning their 80% interest.
Additionally, terms were to be negotiated for the Optionee to
purchase our 20% interest in the property for $1,000,000, at which
point our interest would revert to a 2 1/2% Net Smelter Royalty
(NSR). The Optionee may then elect at any time to purchase one half
of our NSR for $1,000,000.
On
April 7, 2016, 1032701 B.C. Ltd. was acquired by Menika Mining
Ltd., which subsequently changed its name to American Lithium
Corp.(TSXV: LI) In connection with the acquisition of 1032701 and
in accordance with the Exploration Earn-In Agreement, 200,000
common shares were issued to our company. In addition, we received
payment of $130,000. In March of 2017 American Lithium Corp. issued
100,000 common shares and paid the company $100,000 to satisfy
their option commitment. In March of 2018 issued 10,000 common
shares (as they had recently rolled their stock back on a 1 for 10
basis), and paid the company $100,000. In addition it was agreed
that Lithium Corporation would extend the deadline for the year two
exploration expenditure until September 30th 2018 for consideration
of a further 80,000 shares.
American Lithium Corporation conducted confirmation shallow brine
sampling on the property, and drilled two exploratory wells off the
playa area in 2016. In Summer 2018 they reportedly completed a
short seismic survey adjacent to the Company’s claims here, and
attempted to drill a hole on the Company’s claims but were
unsuccessful due to wet ground conditions. On April 30th
2019 American Lithium issued formal relinquishment of Purchasers
right to earn the interest under the agreement. The company
continues to assess its options with respect to this property, and
has recently submitted samples to a lithium processing company
based in California to assess its suitability for processing
utilizing their proprietary technique.
San Emidio Property
The San Emidio property, located in Washoe County in northwestern
Nevada, was acquired through the staking of claims in September
2011. The four, 80-acre, Association Placer claims currently held
here cover an area of approximately 320 acres (129.50 hectares).
The claim block has expanded and contracted a couple of times, in
accordance with the state of the Lithium market. The property is
approximately 65 miles north-northeast of Reno, Nevada, and has
excellent infrastructure.
We developed this prospect during 2009, and 2010 through surface
sampling, and the early reconnaissance sampling determined that
anomalous values for lithium occur in the playa sediments over a
good portion of the playa. This sampling appeared to indicate that
the most prospective areas on the playa may be on the newly staked
block proximal to the southern margin of the basin, where it is
possible the structures that are responsible for the geothermal
system here may also have influenced lithium deposition in
sediments.
Our company conducted near-surface brine sampling in the spring of
2011, and a high resolution gravity geophysical survey in
summer/fall 2011. Our company then permitted a 7 hole drilling
program with the Bureau of Land Management in late fall 2011, and a
direct push drill program was commenced in early February 2012.
Drilling here delineated a narrow elongated shallow brine reservoir
which is greater than 2.5 miles length, and which is adjacent to a
basinal feature outlined by the earlier gravity survey. Two values
of over 20 milligrams/liter lithium were obtained from two holes
located centrally in this brine anomaly.
Most recently we drilled this prospect in late October 2012,
further testing the area of the property in the vicinity where
prior exploration by our company discovered elevated lithium levels
in subsurface brines. During the 2012 program a total of 856 feet
(260.89 meters) was drilled at 8 discrete sites. The deepest hole
was 160 feet (48.76 meters), and the shallowest hole that produced
brine was 90 feet (27.43 meters). The average depth of the seven
hole program was 107 feet (32.61 meters). The program better
defined a lithium-in-brine anomaly that was discovered in early
2012. This anomaly is approximately 0.6 miles (370 meters) wide at
its widest point by more than 2 miles (3 kilometers) long. The peak
value seen within the anomaly is 23.7 mg/l lithium, which is 10 to
20 times background levels outside the anomaly. Our company
believes that, much like Fish Lake Valley, the playa at San Emidio
may be conducive to the formation of a “Silver Peak” style lithium
brine deposit, and the recent drilling indicates that the anomaly
occurs at or near the intersection of several faults that may have
provided the structural setting necessary for the formation of a
lithium-in-brine deposit at depth.
In 2016 we signed an Exploration Earn-In Agreement with 1067323
B.C. Ltd. with respect to our San Emidio property.
1067323 B.C. Ltd., could have acquired an initial 80% undivided
interest in the San Emidio property through the payment of an
aggregate of US$100,000 in cash, completing a Going Public
Transaction and subject to the completion of the Going Public
Transaction, arranging for the issuance of a total of 300,000
common shares in the capital of the Resulting Issuer as
follows:
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Within 30 days of the
Effective Date pay $100,000 to our company and issue 100,000 common
shares of the TSX-V listed public company.
|
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·
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On or before the first
anniversary of the signing of the Definitive Agreement issue
100,000 common shares of the Optionee/TSX-V listed public
company.
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·
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On or before the second
anniversary of the signing of the definitive agreement issue
100,000 common shares of the Optionee/TSX-V listed public
company.
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The Optionee had to have made qualified exploration or development
expenditures on the property of $100,000 before the first
anniversary, an additional $200,000 before the second anniversary,
an additional $300,000 prior to the third anniversary, and make all
payments and perform all other acts to maintain the Property in
good standing before fully earning their 80% interest.
Additionally, Optionee has the right to purchase our 20% interest
in the property for $1,000,000, at which point the our interest
would revert to a 2 1/2% Net Smelter Royalty (NSR). The Optionee
may then elect at any time to purchase one half of our NSR for
$1,000,000.
On May 24, 2016, 1067323 B.C. Ltd. was acquired by American Lithium
Corp.(TSXV: LI) In connection with the acquisition of 1067323 and
in accordance with the Exploration Earn-In Agreement, 100,000
common shares were issued to our company. In addition, we received
payment of $100,000. To date the Company has received 200,000
shares of American Lithium as consideration under this option
agreement.
American Lithium Corp did not conduct any appreciable exploration
work on this prospect, and the Company waived the $100,000
exploration expenditure provision for Year 1 of the option
agreement. In early June 2018 the Company was notified that
American Lithium was allowing the option earn-in to lapse. The
Company received a drilling permit from the BLM in Winnemucca, for
up to 3 RC drill holes here, and the Company was intent on drilling
these in 2019, however since the return of the Fish Lake Valley
property the Company has determined that its resources would better
be utilized in moving that property along.
BC Sugar Flake Graphite Property
On June 6, 2013, we entered into a mining claim sale agreement with
Herb Hyder wherein Mr. Hyder agreed to sell to our company a 50.829
acre (20.57 hectare) claim located in the Cherryville area of
British Columbia. As consideration for the purchase of the
property, we issued 250,000 shares of our company’s common stock to
Mr. Hyder. In addition to the acquired claim, our company staked or
acquired another 13 claims at various times over the subsequent
months, to bring the total area held under tenure to approximately
19,816 acres (8,020 hectares). The flake graphite mineralization of
interest here is hosted predominately in graphitic quartz/biotite,
and lesser graphitic calc-silicate gneisses. The rocks in the
general area of the BC Sugar prospect are similar to the host rocks
in the area of the Crystal Graphite deposit 55 miles (90 kms) to
the southeast. Over the past three years the claim block here has
been strategically decreased, and the Company currently holds one
tenure encompassing 203 acres (82.23 hectares).
The BC Sugar property is within in the Shushwap Metamorphic
Complex, in a geological environment favorable for the formation of
flake graphite deposits, and is in an area of excellent logistics,
with a considerable network of logging roads within the project
area. Additionally the town of Lumby is approximately 19 miles (30
kms) to the south of the property, while the City of Vernon is only
30 miles (50 kms) to the southwest of the western portions of the
claim block.
We received final assays from the October 2013 prospecting and
geological program at the BC Sugar property in December of 2013.
That work increased the area known to be underlain by graphitic
bearing gneisses, and further evaluations were made in the area of
the Sugar Lake, Weather Station, and Taylor Creek showings. In the
general vicinity of the Weather Station showing, a further 13
samples were taken, and hand trenching was performed at one of
several outcrops in the area. In the trench a 5.2 meter interval
returned an average of 3.14% graphitic carbon, all in an oxidized
relatively friable gneissic host rock. Additionally a hydrothermal
or vein type mineralized graphitic quartz boulder was discovered in
the area which graded up to 4.19% graphitic carbon. The source of
this boulder was not discovered during this program, but it is felt
to be close to its point of origin. Samples representative of the
mineralization encountered here were taken for petrographic study,
which was received in late 2013. A brief assessment work program
was performed in September 2014 to ensure all claims in the package
were in good standing prior to the anticipated sale of this asset
to Pathion. Recommendations were made by the consulting geologist
who wrote the assessment report with respect to trenching, and
eventually drilling the Weather Station showing. Our company
submitted a Notice of Work to the BC Government in early May 2015
to enable our company to conduct a program of excavator trenching,
sampling and geological mapping on the Weather Station showing. In
May of 2015 we signed an agreement with KLM Geosciences LLC of Las
Vegas to conduct a short Ground Penetrating Radar (GPR) survey on
the property in the Weather Station – Taylor Creek areas. The GPR
survey as well as a GEM-2 electromagnetic (EM) survey took place in
approximately mid-May 2015. The GPR survey did not provide useful
data because of the moisture saturation in the shallow subsurface.
The EM survey successfully generated an anomaly over known
mineralization as well as extended the anomaly to the west under an
area of cover consisting of glacial/fluvial till. Lithium
Corporation is pleased with the results of the EM survey and has
modified our work plans to include additional work that builds on
the results of this survey.
In August of 2015 our Notice of Work for trenching was approved by
the BC Government and in October we commenced work. A trench of
265.76 feet (81 meters) was excavated and graphitic gneiss was
mapped and sampled. In all 23 samples were taken over the 69 meters
of exposed mineralization that could be safely sampled. Trench
depths varied from 1.2 meters in areas of semi-consolidated rock to
4.8 meters in areas of mainly decomposed material. There was an
approximately 12 meter section of the trench of sand, and fluvial
till in an ancient stream bed where the excavator could not reach
the graphitic material that is inferred to exist at depths greater
than 5 meters. Also there was a 4 meter section at depths from 4.8
to 5 meters where graphite mineralization could be seen at depth,
but could not be safely sampled.
The entire 69 meter interval that was sampled averaged 1.997%
graphitic carbon, and mineralization remains open in all
directions. Within that interval there was a 30 meter section that
averaged 2.73% graphitic carbon, and within that interval there was
a 12 meter section that averaged 2.99% graphitic carbon. The best
mineralization, and most friable material is proximal to the
aforementioned abandoned creek channel, and it appears that
proximity to this feature gave rise to the deep weathering profile
encountered here. Determining the tenor, and extent of the friable
material were the two major objectives of this program as this
material, which is very similar to that mined at Eagle Graphite’s
operation is very easy/economical to be mined and processed, and
typically contains the highest percentages of graphite over
consistent widths.
The Company revised its trenching permit in 2017 and conducted a
program of 12 mechanized test pits in May 2018. This work was done
in an area ranging from 1 to 1.5 kilometers to the east of the
Weather Station Zone in a zone of numerous discrete conductors
detected during the 2015 FDEM geophysical survey. Three of these
pits intercepted weathered weak to moderately mineralized graphitic
material with the best assay being 2.62% graphitic, carbon, and six
test pits bottomed in non-mineralized bedrock. The remaining three
did not reach bedrock or intercept graphitic material prior to
reaching the maximum digging capability of the excavating equipment
used. The Company has reduced its acreage holdings here to
approximately 203 acres ( 82 hectares) to facilitate applying 5
years assessment credit to the property, and is effectively looking
to place it on the “back burner” in favor of developing other
prospects that are of greater commercial interest at this
point.
The Hughes Fee Title Lands
Effective April 23, 2014, we entered into an operating agreement
with All American Resources, L.L.C and TY & Sons Investments
Inc. with respect to Summa, LLC, a Nevada limited liability company
incorporated on December 12, 2013, wherein we hold a 25% membership
in a number of patented mining claims that spring from the once
vast holdings of Howard Hughes. Our company’s initial capital
contribution paid to Summa, LLC was $125,000, of which $100,000 was
in cash and the balance in services.
Our company participated in the formation of Summa, which holds 88
fee-title patented lode claims, which cover approximately 1,191.3
acres of prospective mineral lands. Our company has recently signed
a joint operating agreement with the other participants to govern
the conduct of Summa, and the development of the lands. Our
company’s president, Tom Lewis, has been named as a managing member
of Summa.
The Hughes lands are situated in six discrete prospect areas in
Nevada, the most notable of which being the Tonopah block in Nye
County where Summa holds 56 claims that cover approximately 770
acres in the heart of the historic mining camp where over 1.8
million ounces of gold and 174 million ounces of silver were
produced predominately in the early 1900’s. The Hughes claims
include a number of the prolific past producers in Tonopah, such as
the Belmont, the Desert Queen, and the Midway mines. In addition
there are also claims in the area of the past producing Klondyke
East mining district, which is to the south of Tonopah, and at the
town of Belmont (not to be confused with the Belmont claim in
Tonopah), Nevada, another notable silver producer from the 1800’s,
which is roughly 40 miles to the northeast of Tonopah.
Recently research has been conducted on the Hughes properties,
focusing on the Tonopah area where reporting in the 1980’s,
indicate that over 2.175 million tons of mine dumps and mill
tailings exist at surface on Summa’s properties that contain in the
order of 3.453 million ounces of silver, and 28,500 ounces of gold.
In addition to this easily extractable surficial resource, other
reports indicate that 300 - 500,000 tons of mineralized material is
expected to remain at depth in old workings on Summa’s properties,
which is believed to contain an average 20 ounces silver and 0.20
ounces gold per ton. Also several partially tested exploration
targets have been identified on Summa’s Tonopah claims, where
further work could potentially lead to a marked increase in known
underground resources.
West Kirkland Mining has been working on the development of their
75% owned project in Tonopah, most recently drilling to increase
the resource at the Three Hills gold/silver deposit where they
intend to kick-off their mining efforts in the future. To that end
they have bought an additional six patented mining claims here
recently, and have also negotiated an agreement to procure rights
for the water that they will need for processing. Presently the
reserve at their Hasbrouck/Three Hills/Hill of Gold project stands
at 45.3 million tons containing 762,000 ounces gold, and 10.6
million ounces Silver. Coeur Mines and partner Idaho North
Resources drilled in the Klondyke area to the south of Tonopah (the
same area where Summa holds several patented mining claims that
arise from the Hughes acquisition), and have done some drilling
recently in Tonopah on a prospect they have optioned adjacent and
to the west of Summa’s holdings.
The ongoing litigation with respect to Summa’s Tonopah holdings had
precluded investing time or money into the property, however in
2018 Summa won a “quiet title” case in the Fifth Judicial Court in
Tonopah, which determined that Summas’ title is superior to all
other claimants. We have received expressions of interest from a
couple of mining or exploration companies, but have currently not
entered into an agreement on this property. Also Summa has listed a
number of surface lots for sale through MLS. The Company
contributed significant resources to the preparation of an NI
43-101 compliant report on the Tonopah prospect in Spring 2019, and
most recently conducted a tailings re-sampling program on the
Belmont mill tailings that will eventually be used in the
preparation of an NI 43-101compliant surface resource
estimation.
Summa recently signed an option agreement with 1237025 Nevada Ltd
(now Summa Silver CSE-SSVR)., under which SSVR undertakes to
explore the property, pay $400,000 in cash and $400,000 in shares
and incurs $1.5 million in exploration expenditures in installments
over the next five years. Summa will retain a 1% Net Smelter
Royalty, one half of which SSVR may purchase for $4 million.
We are currently pursuing other properties which are believed to be
prospective for hosting lithium, graphite, nickle - cobalt and Rare
Earth Element mineralization, as well as evaluating a wide range of
opportunities brought to our company by third parties.
Additionally our company continues its generative program exploring
for new deposits of next generation battery related materials.
Results of Operations
Three Months Ended September 30, 2020 Compared to the Three
Months Ended September 30, 2019
We had a net loss of $45,588 for the three month period ended
September 30, 2020, which was $16,016 less than the net loss of
$61,604 for the three month period ended September 30, 2019. The
change in our results over the two periods is primarily the result
of a decrease in consulting fees and investor relations offset by
an increase in transfer agent and filoing fees and exploration
expenses in relation to the comparative period.
|
|
Three Months
Ended
Sep 30,
2020
|
|
|
Three Months
Ended Sep 30,
2019
|
|
|
Change Between Three
Month
Period Ended
Sep 30,
2020 and
Sep 30,
2019
|
|
Professional fees
|
|
$ |
4,750 |
|
|
$ |
7,500 |
|
|
$ |
(2,750 |
) |
Exploration expenses
|
|
|
15,331 |
|
|
|
6,320 |
|
|
|
9,011 |
|
Consulting fees
|
|
|
18,000 |
|
|
|
25,000 |
|
|
|
(7,000 |
) |
Investor relations
|
|
|
- |
|
|
|
19,250 |
|
|
|
(19,250 |
) |
Transfer agent and filing fees
|
|
|
5,629 |
|
|
|
1,037 |
|
|
|
4,592 |
|
Travel
|
|
|
522 |
|
|
|
1,022 |
|
|
|
(500 |
) |
General and administrative
|
|
|
1,356 |
|
|
|
1,475 |
|
|
|
(119 |
) |
Net loss (income)
|
|
$ |
45,588 |
|
|
$ |
61,604 |
|
|
$ |
(16,016 |
) |
NIne Months Ended September 30, 2020 Compared to the Nine
Months Ended September 30, 2019
We had a net loss of $126,987 for the nine month period ended
September 30, 2020 compared to a net income of $225,895 during the
nine months ended September 30, 2019. The change in our results
over the two periods is primarily the result of a gain on sale of
mineral property in the comparative period offset by a decrease in
consulting fees, insurance expense and investor relations.
The following table summarizes key items of comparison and their
related increase (decrease) for the nine month periods ended
September 30, 2020 and 2019:
|
|
Nine Months
Ended
Sep 30,
2020
|
|
|
Nine Months
Ended
Sep 31,
2019
|
|
|
Change Between Nine
Month
Period Ended
Sep 30,
2020 and
Sep 30,
2019
|
|
Professional fees
|
|
$ |
23,301 |
|
|
$ |
27,489 |
|
|
$ |
(4,188 |
) |
Exploration expenses
|
|
|
19,470 |
|
|
|
13,398 |
|
|
|
6,072 |
|
Consulting fees
|
|
|
58,500 |
|
|
|
85,000 |
|
|
|
(26,500 |
) |
Insurance expense
|
|
|
- |
|
|
|
6,935 |
|
|
|
(6,935 |
) |
Investor relations
|
|
|
- |
|
|
|
56,639 |
|
|
|
(56,639 |
) |
Transfer agent and filing fees
|
|
|
14,742 |
|
|
|
8,319 |
|
|
|
6,423 |
|
Travel
|
|
|
3,660 |
|
|
|
1,908 |
|
|
|
1,752 |
|
General and administrative
|
|
|
7,314 |
|
|
|
6,946 |
|
|
|
368 |
|
Other loss (income)
|
|
|
- |
|
|
|
(432,529 |
) |
|
|
432,529 |
|
Net loss (income)
|
|
$ |
126,987 |
|
|
$ |
(225,895 |
) |
|
$ |
352,882 |
|
Revenue
We have not earned any revenues since our inception and we do not
anticipate earning revenues in the upcoming quarter.
Liquidity and Capital Resources
Our balance sheet as of September 30, 2020 reflects current assets
of $236,469. We had cash in the amount of $221,790 and working
capital in the amount of $223,568 as of September 30, 2020. We have
sufficient working capital to enable us to carry out our stated
plan of operation for the next twelve months.
Working Capital
|
|
At
Sep 30,
2020
|
|
|
At
Dec 31,
2019
|
|
Current assets
|
|
$ |
236,469 |
|
|
$ |
367,464 |
|
Current liabilities
|
|
|
12,901 |
|
|
|
16,909 |
|
Working capital
|
|
$ |
223,568 |
|
|
$ |
350,555 |
|
We anticipate generating losses and, therefore, may be unable to
continue operations further in the future.
Cash Flows
|
|
Three Months Ended
|
|
|
|
Sep
30,
|
|
|
|
2020
|
|
|
2019
|
|
Net cash (used in) operating
activities
|
|
$ |
(124,470 |
) |
|
$ |
(135,732 |
) |
Net cash (used in) investing
activities
|
|
|
- |
|
|
|
(21,914 |
) |
Net cash provided by financing
activities
|
|
|
- |
|
|
|
- |
|
Net (decrease) in cash during
period
|
|
$ |
(124,470 |
) |
|
$ |
(157,646 |
) |
Operating Activities
Net cash used in operating activities during the nine months ended
September 30, 2020 was $124,470, a decrease of $11,262 from the
$135,732 net cash outflow during the nine months ended September
30, 2019.
Investing Activities
Cash used in investing activities during the nine months ended
September 30, 2020 was $Nil, which was a $21,914 change from the
$21,914 cash used in investing activities during the three months
ended September 30, 2019.
Financing Activities
The Company did not have financing activities during the nine
months ended September 30, 2020 and 2019.
We estimate that our operating expenses and working capital
requirements for the next 12 months to be as follows:
Estimated Net Expenditures During The Next Twelve
Months
|
|
|
|
|
|
General and administrative
expenses
|
|
$ |
120,000 |
|
Exploration expenses
|
|
|
50,000 |
|
Travel
|
|
|
30,000 |
|
Total
|
|
$ |
200,000 |
|
To date we have relied on proceeds from the sale of our shares in
order to sustain our basic, minimum operating expenses; however, we
cannot guarantee that we will secure any further sales of our
shares or that our sole officer and director with provide us with
any future loans. We estimate that the cost of maintaining basic
corporate operations (which includes the cost of satisfying our
public reporting obligations) will be approximately $17,000 per
month. Due to our current cash position of approximately $221,790
as of September 30, 2020, we estimate that we have sufficient cash
to sustain our basic operations for the next twelve months.
We are not aware of any known trends, demands, commitments, events
or uncertainties that will result in or that are reasonably likely
to result in our liquidity increasing or decreasing in any material
way.
Future Financings
We anticipate continuing to rely on equity sales of our common
stock in order to continue to fund our business operations.
Issuances of additional shares will result in dilution to our
existing stockholders. 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 business activities.
We presently do not have any arrangements for additional financing
for the expansion of our exploration operations, and no potential
lines of credit or sources of financing are currently available for
the purpose of proceeding with our plan of operations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, and capital
expenditures or capital resources that are material to
stockholders.
Critical Accounting Policies
Exploration Stage Company
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles related to
accounting and reporting by exploration stage companies. An
exploration stage company is one in which planned principal
operations have not commenced or if its operations have commenced,
there has been no significant revenues there from.
Accounting Basis
Our company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America
("GAAP" accounting). Our company has adopted a December 31 fiscal
year end.
Cash and Cash Equivalents
Cash includes cash on account, demand deposits, and short-term
instruments with maturities of three months or less.
Concentrations of Credit Risk
Our company maintains its cash in bank deposit accounts, the
balances of which at times may exceed federally insured limits. Our
company continually monitors its banking relationships and
consequently has not experienced any losses in such accounts. Our
company believes we are not exposed to any significant credit risk
on cash and cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles 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 amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue Recognition
Our company has yet to realize revenues from operations. Once our
company has commenced operations, we will recognize revenues when
delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been
approved by its customers, the fee is fixed or determinable based
on the completion of stated terms and conditions, and collection of
any related receivable is probable.
Loss per Share
Basic loss per share is computed by dividing loss available to
common shareholders by the weighted average number of common shares
outstanding during the year. The computation of diluted earnings
per share assumes the conversion, exercise or contingent issuance
of securities only when such conversion, exercise or issuance would
have a dilutive effect on earnings per share. The dilutive effect
of convertible securities is reflected in diluted earnings per
share by application of the "if converted" method. In the periods
in which a loss is incurred, the effect of potential issuances of
shares under options and warrants would be anti-dilutive, and
therefore basic and diluted losses per share are the same.
Income Taxes
The asset and liability approach is used to account for income
taxes by recognizing deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of assets and
liabilities.
Financial Instruments
Our company's financial instruments consist of cash, deposits,
prepaid expenses, and accounts payable and accrued liabilities.
Unless otherwise noted, it is management's opinion that our company
is not exposed to significant interest, currency or credit risks
arising from these financial instruments. Because of the short
maturity and capacity of prompt liquidation of such assets and
liabilities, the fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
Mineral Properties
Costs of exploration, carrying and retaining unproven mineral lease
properties are expensed as incurred. Mineral property acquisition
costs are capitalized including licenses and lease payments.
Although our company has taken steps to verify title to mineral
properties in which it has an interest, these procedures do not
guarantee our company's title. Such properties may be subject to
prior agreements or transfers and title may be affected by
undetected defects. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.
Impairment of $0 and $0 was recorded during the periods ended
September 30, 2020 and 2019, respectively.
Recent Accounting Pronouncements
In January 2016, the Financial Accounting Standards Board ("FASB"),
issued Accounting Standards Update ("ASU") 2016-01, "Financial
Instruments-Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities," which amends the
guidance in U.S. generally accepted accounting principles on the
classification and measurement of financial instruments. Changes to
the current guidance primarily affect the accounting for equity
investments, financial liabilities under the fair value option, and
the presentation and disclosure requirements for financial
instruments. In addition, the ASU clarifies guidance related to the
valuation allowance assessment when recognizing deferred tax assets
resulting from unrealized losses on available-for-sale debt
securities. The new standard is effective for fiscal years and
interim periods beginning after December 15, 2017, and are to be
adopted by means of a cumulative-effect adjustment to the balance
sheet at the beginning of the first reporting period in which the
guidance is effective. Early adoption is not permitted except for
the provision to record fair value changes for financial
liabilities under the fair value option resulting from
instrument-specific credit risk in other comprehensive income. Our
company is currently evaluating the impact of adopting this
standard.
Item 3.
Quantitative and Qualitative Disclosures About Market
Risk
As a “smaller reporting company”, we are not required to provide
the information required by this Item.
Item 4.
Controls and Procedures
Management’s Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission’s
rules and forms, and that such information is accumulated and
communicated to our management, including our president (our
principal executive officer, principal financial officer and
principle accounting officer) to allow for timely decisions
regarding required disclosure.
As of the end of the quarter covered by this report, we carried out
an evaluation, under the supervision and with the participation of
our president (our principal executive officer, principal financial
officer and principle accounting officer), of the effectiveness of
the design and operation of our disclosure controls and procedures.
Based on the foregoing, our president (our principal executive
officer, principal financial officer and principle accounting
officer) concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this quarterly
report.
Changes in Internal Control Over Financial Reporting
During the period covered by this report there were no changes in
our internal control over financial reporting that materially
affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
PART II -
OTHER INFORMATION
Item
1. Legal Proceedings
From time to time, we may become involved in litigation relating to
claims arising out of its operations in the normal course of
business. We are not involved in any pending legal proceeding or
litigation and, to the best of our knowledge, no governmental
authority is contemplating any proceeding to which we area party or
to which any of our properties is subject, which would reasonably
be likely to have a material adverse effect on us, except for the
following:
Item 1A.
Risk Factors
As a “smaller reporting company”, we are not required to provide
the information required by this Item.
Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
No Unregistered sales of Equity Securities.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not applicable.
Item
5. Other Information
None.
Item 6.
Exhibits
Exhibit Number
|
|
Description
|
(3)
|
|
Articles of Incorporation
and Bylaws
|
3.1
|
|
Articles of Incorporation (Incorporated by reference to our
Registration Statement on Form SB-2 filed on December 21,
2007)
|
3.2
|
|
Bylaws (Incorporated by reference to our Registration Statement on
Form SB-2 filed on December 21, 2007)
|
3.3
|
|
Articles of Merger (Incorporated by reference to our Current Report
on Form 8-K filed on October 2, 2009)
|
3.4
|
|
Certificate of Change (Incorporated by reference to our Current
Report on Form 8-K filed on October 2, 2009)
|
(4)
|
|
Instruments Defining the Rights of Security Holders,
Including Indentures
|
4.1
|
|
2009 Stock Option Plan (Incorporated by reference to our Current
Report on Form 8-K filed on December 30, 2009)
|
(10)
|
|
Material Contracts
|
10.1
|
|
Lease Purchase Agreement dated June 1, 2009 between Nevada Lithium
Corporation, Nevada Mining Co., Inc., Robert Craig, Barbara Craig
and Elizabeth Dickman. (Incorporated by reference to our Current
Report on Form 8-K filed on October 26, 2009)
|
10.3
|
|
Mining Option Agreement dated April 15, 2013 between our company
and Thomas Lewis (incorporated by reference to our Current Report
on Form 8-K filed on April 22, 2013)
|
10.4
|
|
Mining Claim Sale Agreement dated June 6, 2013 between our company
and Herb Hyder (incorporated by reference to our Current Report on
Form 8-K filed on June 12, 2013)
|
10.5
|
|
Trust Agreement dated August 30, 2013 between our company and Tom
Lewis (incorporated by reference to our Quarterly Report on Form
10-Q filed on November 7, 2013)
|
10.6
|
|
Operating Agreement dated effective April 23, 2014 between our
company, All American Resources, L.L.C. and TY & Sons
Investments Inc. (incorporated by reference to our Current Report
on Form 8-K filed on April 29, 2014)
|
10.7
|
|
Asset Purchase Agreement dated August 15, 2014 between our company
and Pathion, Inc. (incorporated by reference to our Quarterly
Report on Form 10-Q filed on November 7, 2014)
|
10.8
|
|
Exploration Earn-In Agreement dated effective February 10, 2016
between our company and 1032701 B.C. Ltd. (incorporated by
reference to our Current Report on Form 8-K filed on March 15,
2016)
|
10.9
|
|
Exploration Earn-In Agreement dated effective February 10, 2016
between our company, 1067323 Nevada Ltd. and 1067323 B.C. Ltd.
(incorporated by reference to our Current Report on Form 8-K filed
on May 11, 2016)
|
(14)
|
|
Code of Ethics
|
14.1
|
|
Code of Business Conduct and Ethics (incorporated by reference to
our Annual Report on Form 10-K filed on April 15, 2013)
|
(21)
|
|
Subsidiaries of the Registrant
|
21.1
|
|
Lithium
Royalty Corp, a Nevada corporation
|
(31)
|
|
Rule 13a-14 (d)/15d-14d) Certifications
|
31.1*
|
|
Section 302 Certification by the Principal
Executive Officer, Principal Financial Officer and Principal
Accounting Officer
|
(32)
|
|
Section 1350 Certifications
|
32.1*
|
|
Section 906 Certification by the Principal
Executive Officer, Principal Financial Officer and Principal
Accounting Officer
|
101*
|
|
Interactive Data File
|
101.INS
|
|
XBRL
Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
Document
|
* Filed herewith.
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.
|
|
LITHIUM
CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Dated: November 16, 2020
|
|
/s/ Tom Lewis
|
|
|
|
Tom Lewis
|
|
|
|
President, Treasurer, Secretary
and Director
|
|
|
|
(Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer)
|
|