Indicate by check mark if the
registrant is a well known seasoned issuer, as defined in Rule 405 of the
Securities Act.
Yes [ ] No [X]
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.
Yes [ ] No [X]
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 [X] No [ ]
Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405
of this chapter) is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K [ ]
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a small reporting company. See definition of large
accelerated filer, accelerated filer and small reporting company Rule 12b-2
of the Exchange Act.
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[X] No [ ]
State the aggregate market value
of the voting and non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the
registrants most recent completed second fiscal quarter.
$15,000
Indicate by check mark whether
the registrant has filed all documents and reports required to be filed by
Section 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 [ ]
Indicate the number of shares
outstanding of each of the registrants classes of common stock, as of the
latest practicable date:
This Annual Report on Form 10-K
may include statements that are not historical facts and are considered
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements reflect our
current views about future events and financial performances. These
"forward-looking" statements are identified by the use of terms and phrases such
as "will," "believe," "expect," "plan," "anticipate," and similar expressions
identifying forward-looking statements. Investors should not rely on
forward-looking statements because they are subject to a variety of risks,
uncertainties, and other factors that could cause actual results to differ
materially from our expectation. These factors include, for example: regulatory
and permitting issues; timing and outcome of exploration proposals; future
financial performances of Palayan and its projects; the estimation of mineral
resources and the realization of mineral reserves; exploration, development, and
production activities and estimated future production; costs of production,
capital, operating and exploration expenditure estimates; additional capital
requirements and acquisition; government regulation, environmental risks,
reclamation and rehabilitation expenses; title disputes or claims; insurance
coverage; future prices of gold and other minerals and all risk factors
discussed in the sections entitled Item A risk Factors and item 7 Managements
Discussion and Analysis of Financial Condition and Results of Operations of
this Form 10-K. Such statements made by us fall within the safe harbors provided
by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All such forward-looking statements
are necessarily only estimates of future results and the actual results we
achieve may differ materially from these estimates due to these and other risk
factors as discussed in the sections entitled "Item 1A. Risk Factors" and "Item
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations" of this Form 10-K. We expressly do not undertake any duty to update
forward-looking statements.
PART I
Overview
We were incorporated on July 26, 2013 under the laws of the
State of Nevada. Our principal executive offices are located at 223 De La Cruz
Road, Pasay, Metro Manila, Philippines. Our telephone number is (63)(914) 269
9345. Our fiscal year end is March 31.
We have no subsidiaries.
We are a start-up, exploration stage company. We have purchased
a 100% interest in an 8 unit claim block (the Palayan Gold Claim) containing
approximately 82.7 hectares that is recorded with the Nueva Ecija provincial
office of the Department of the Environment and Natural Resources (Mines and
Geosciences) of the Republic of the Philippines. The Palayan Gold Claim was
assigned to us on June 20, 2013 from Verdasco Enterprises for the sum of $5,000.
However, we do not currently have the necessary funds to undertake exploration
of this property and will need to raise capital in order to do so. If we cannot,
we may have to go out of business. The proposed two phase exploration plan will
cost approximately $16,800 (Approximately 880,000 Philippine Pesos (PHP). There
has been no production to date. There are no full-time employees and management
is able to spend only a small amount of time with respect to these affairs. Our
company has no other assets.
From our inception on July 26, 2013 through March 31, 2018, we
raised $30,000 in capital in private placements by issuing 30,000,000 shares of
common stock at the price of $0.001 per share.
Emerging Growth Company
We are an Emerging Growth Company as defined in the Jumpstart
Our Business Startups (
JOBS
) Act.
We shall continue to be deemed an emerging growth company until
the earliest of
(A) the last day of the fiscal year of
the issuer during which it had total annual gross revenues of $1,000,000,000 (as
such amount is indexed for inflation every 5 years by the Commission to reflect
the change in the Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or
more;
(B) the last day of the fiscal year of
the issuer following the fifth anniversary of the date of the first sale of
common equity securities of the issuer pursuant to an effective registration
statement;
(C) the date on which such issuer has,
during the previous 3-year period, issued more than $1,000,000,000 in
non-convertible debt; or
(D) the date on which such issuer is
deemed to be a large accelerated filer, as defined in section 240.12b -2 of
title 17, Code of Federal Regulations, or any successor thereto..
As an emerging growth company, we are exempt from Section
404(b) of
Regulation S-K
. Section 404(a) requires Issuers to publish
information in their annual reports concerning the scope and adequacy of the
internal control structure and procedures for financial reporting. This
statement shall also assess the effectiveness of such internal controls and
procedures.
Section 404(b) requires that the registered accounting firm
shall, in the same report, attest to and report on the assessment on the
effectiveness of the internal control structure and procedures for financial
reporting.
As an emerging growth company we are exempt from Section 14A
(a) and (b) of the Securities Exchange Act of 1934 which require the shareholder
approval of executive compensation and golden parachutes.
We have elected not to opt out of the extended transition
period for complying with any new or revised accounting standards pursuant to
Section 107(b) of the JOBS Act.
We will be conducting exploration activities in the
Philippines. If the U.S. dollar loses strength to the Philippine Pesos (PHP) our
future operations may be adversely affected.
There have been no purchases of our equity securities by us
since inception.
Regulation of Mining Activity- Republic of Philippines
Mining Laws
Regulation of Mining, Generally
All mineral property rights and mining related activities in
the Republic of the Philippines are subject to a developed system of state
regulation and oversight. Article XII, Section 2 of the 1987 Constitution states
that all lands of the public domain, minerals, coal, and other natural resources
are owned by the State. Section 2 also gives the State full control and
supervision over the right to the exploration, development, and utilization of
natural resources. The State may directly undertake these activities or enter
into co-production, joint venture, or production-sharing agreements with
Filipino citizens or corporations at least 60% Filipino-owned. It may also enter
into agreements (Financial or Technical Assistance Agreement or FTAA) with
foreign corporations involving technical or financial-assistance for large-scale
projects involving minerals, petroleum, and other mineral oils. These directives
are embodied in Mining Act of 1995 (R.A. No. 7942) which, together with
Administrative Order (DAO) No. 2010-21(Consolidated Implementing Rules and
Regulations or IRR), is the primary law governing mining in the Philippines.
The administration and disposition of mineral lands and mineral resources and
the propagation of rules and regulation pursuant to the Mining Act are carried
out by the Department of Environment and Natural Resources (DENR) and the Mines
and Geosciences Bureau (MGB) of the DENR.
Pursuant to the Consolidated Implementing Rules and Regulations
an applicant planning to conduct exploration activities in a specific area needs
to apply for and obtain an exploration permit. Depending on the exploration
results, the exploration permit can be then converted into an Mineral Production
Sharing Agreement (MPSA) or a Financial or Technical Assistance Agreement
(FTAA).
Tenurial Permits and Agreements
Exploration Permits
The acquisition of mineral rights is a process that begins with
the acquisition of an exploration permit (EP). An EP is a grant from the
Philippine government that gives the permit holder the right to conduct
exploration of all minerals within a specified area. An exploration permit
applicant must show its financial capability by having a minimum authorized
capital stock of PHP10 million and a minimum paid-up capital of PHP2.5 million.
It must further show its financial and technical qualification by submitting to
the MGB the following:
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a two-year Exploration Work Program (EWP) duly
prepared, signed and sealed by a licensed mining engineer or geologist;
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proof of technical competence including, among others,
curricula vitae and track record in exploration and environmental
management of the technical personnel who will undertake the activities in
accordance with the submitted EWP;
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proof of financial capability to undertake the
Exploration Program, such as bank deposit or credit line bank guarantee(s)
and/or similar instruments; and
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an Environmental Work Program (EnWP).which includes a
comprehensive and strategic environmental management plan for the
protection and rehabilitation of the disturbed environment during and
after the exploration periods.
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The term of an EP is typically one or two years from date of
issuance. It may generally be renewed for additional one or two year periods.
Subject to any variances approved by the MGB, it cannot exceed a total term of
four years for nonmetallic mineral exploration or six years for metallic mineral
exploration. The MGB will grant a renewal of the exploration period provided
that the MGB has not found the EP holder to have violated (i) the terms and
conditions of the EP, and (ii) any provision of the Mining Act and IRR.
Mineral Production Sharing Agreement and Financial or
Technical Assistance Agreement
If the EP holder determines that mining operations are feasible
within the EP area, the EP holder will submit a Declaration of Mining Project
Feasibility (DMF) during the exploration period and apply for either a Mineral
Production Sharing Agreements (MPSA) or a Financial or Technical Assistance
Agreement (FTAA). The DENR will determine whether to grant the EP holder an MPSA
or an FTAA based upon the DMF.
Mineral Production Sharing Agreements (MPSAs)
An MPSA is one of the three types of Mineral Agreements under
the Mining Act that the government can enter into with a contractor. These three
types of mineral agreements are:
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MPSA, under which the government grants to the MPSA
holder the exclusive right to conduct mining operations within a contract
area. The share of the government is in the form of excise tax equivalent
to a percentage of the gross output. The MPSA holder will provide the
financing, technology, management and personnel necessary for the
implementation of the MPSA.
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Co-production Agreement, under which the government will
provide inputs to the mining operations other than the mineral resource.
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Joint Venture Agreement, under which a joint venture
company is organized by the government and the contractor with both
parties holding equity shares. In addition to earnings from the equity,
the government will be entitled to a share in the gross output.
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To date, the DENR has not entered into a Joint Venture
Agreement and Co-Production Agreement. These types of Mineral Agreements require
the government to contribute inputs other than mineral resource or equity.
MPSA Approval Process
Within the term of the exploration period, an applicant seeking
to enter into an MPSA must, among other things, file with the MGB Regional
Office concerned, a Declaration of Mining Project Feasibility (DMF), a
three-year Development and Construction or Commercial Operation Work Program, a
geologic report, an application for survey, and an Environmental Compliance
Certificate (ECC) indicating compliance with the applicants Environmental Work
Program.
Thereafter, subject to any variation in or extension of the
MPSA, the MPSA holder must complete the development of the mine including the
construction of production facilities within 36 months from the submission and
approval of the DMF.
The MPSA holder must submit to the MGB, within 30 days prior to
completion of mine development and construction of production facilities, a
Three-Year Commercial Operation Work Program. The MPSA holder is required to
commence commercialization of the mine immediately upon approval by the MGB of
the Work Program.
The typical terms of an MPSA is 25 years, renewable for another
25 years upon mutual agreement between the government and the contractor. In the
event the government decides to permit mining operations to be conducted in the
MPSA area by another party, the MPSA stipulates that competitive public bidding
must be conducted. The original MPSA holder will have the right to match the
highest bid.
During the operating period, the MPSA holder must submit to the
MGB Director Work Programs and budgets covering a period of three year, which
must be submitted not later than 30 days before the expiration of the period
covered by the previous Work Program.
Fiscal Regime
The government share in an MPSA is the excise tax on mineral
products at the time of removal. The excise tax is based upon a percentage of
gross production from the mining operation under the MPSA. The excise tax is
generally 2% of all metallic or non-metallic minerals based on the actual market
value of the minerals at the time of removal.
FTAA Approval Process:
The Philippine Constitution provides that the President may, on
behalf of the government, enter into agreements involving either technical or
financial assistance for large-scale exploration, development and utilization of
minerals in order to promote the economic growth and general welfare of the
Philippines. To implement this Constitutional provision and to promote
investments from both domestic and international sources, the Mining Act
authorizes the President to execute and approve on behalf of the government
FTAAs to be entered into with qualified entities for large-scale exploration,
development and commercial utilization of mineral resources. The FTAA holder is
granted the exclusive right to explore, mine, utilize, process, refine, market,
transport, export and dispose of minerals and mineral products and by-products
that may be derived or produced from the FTAA area, subject to such permit
requirements that may be applicable under pertinent laws, rules and
regulations.
The IRR allows an applicant to apply for an FTAA, instead of an
EP. An FTAA entered into in this manner would contain its own exploration
period. However, the applicant would need to justify to the DENR that the
project can qualify as a large-scale mining project that would require an
investment commitment of at least US$50 million for development and
construction. Unlike MPSAs, which are executed by the DENR, FTAAs are executed
by the applicant and the Philippine President upon the recommendation of the
DENR Secretary.
The Term of the model FTAA is 25 years from the Effective Date.
The FTAA may be renewed upon mutual agreement by the FTAA holder and the
government, for a period not exceeding 25 years.
Executive Order 79 Moratorium on MPSAs
On July 9 2012, the Office of the President of the Republic of
the Philippines released Executive Order No. 79 entitled Institutionalizing and
Implementing Reforms in the Philippine Mining Sector, Providing Policies and
Guidelines to Ensure Environmental Protection and Responsible Mining in the
Utilization of Mineral Resources.
Among other reforms, Section 4 of Executive Order 79 imposes a
moratorium on the execution of new mineral agreements (such as mineral
production sharing agreements) until legislation rationalizing existing revenue
sharing schemes and mechanisms shall have taken effect. Accordingly, the DENR
will not accept nor approve applications for mineral agreements until the
moratorium is lifted by the passage of a statute rationalizing the current
fiscal regime of mineral agreements. Section 4, however, excludes the issuance
of exploration permits, financial or technical assistance agreements, mineral
processing permits, and quarry permits from the coverage of the moratorium.
At present, mining contractors are generally subject to a two
percent excise tax based on the actual market value of the gross output of the
mineral resources at the time of removal. Legislators are proposing to increase
the excise tax rate to at least five percent.
Section 4 of the Executive Order likewise relegates the
entitlement of an exploration permit holder to a mineral agreement from an
exclusive right into a right of first option. While the term is not defined
in the Order, a right of first option connotes a right that is inferior to an
exclusive right. As opposed to an exclusive right, a right of first option
implies that third parties will have similar rights with respect to the area covered by the exploration permit but that the permit
holder is given the first option to exercise or enjoy such right.
The MGB Director has also disclosed that the Office of the
President has directed the DENR to immediately provide guidelines for entering
into Joint Venture Agreements (JVAs) and Co-Production Agreements (CPAs), and to
encourage and promote the use of the same. This may indicate that the Philippine
Government intends to prioritize the use of JVAs and CPAs, instead of MPSAs,
although this is interpretation is speculative. In a similar manner to an FTAA,
the terms and conditions of JVAs and CPAs would be negotiated between the
government and the contractor.
The Executive Order also directs the DENR to undertake a review
of existing mining contracts and agreements for possible renegotiation of the
same, and further states that the renegotiated terms and conditions must be
mutually acceptable to the government and the mining contractor.
Concerns have been raised on the validity of the moratorium on
the grant of mineral agreements (i.e., MPSAs, JVAs, and CPAs) under the
Executive Order on the ground that a presidential executive order cannot suspend
the provisions of an act of Congress (i.e., the Mining Act) that allows the
grant of mineral agreements.
Legislation
As at the date of this report, we are in compliance with all
material mining and environmental legislation and regulations applicable to our
activities and hold a valid mineral property license. At this time, we cannot
anticipate the impact that recent developments such as the above described
Executive Order 79 will have on our planned or future operations. Changes to
current laws in the jurisdiction in which we operate may entail additional costs
and increase our financing requirements. Potential changes are unpredictable and
any additional environmental, technical or other substantive requirements may
render our planned exploration activities futile or uneconomical and lead to the
failure of our business.
Market, Customers and Distribution Methods
Although there can be no assurance, large and well capitalized
markets are readily available for all metals and precious metals throughout the
world. A very sophisticated futures market for the pricing and delivery of
future production also exists. The price for metals is affected by a number of
global factors, including economic strength and resultant demand for metals for
production, fluctuating supplies, mining activities and production by others in
the industry, and new and or reduced uses for subject metals.
The mining industry is highly speculative and of a very high
risk nature. As such, mining activities involve a high degree of risk, which
even a combination of experience, knowledge and careful evaluation may not be
able to overcome. Few mining projects actually become operating mines.
The mining industry is subject to a number of factors,
including intense industry competition, high susceptibility to economic
conditions (such as price of metal, foreign currency exchange rates, and capital
and operating costs), and political conditions (which could affect such things
as import and export regulations, foreign ownership restrictions). Furthermore,
the mining activities are subject to all hazards incidental to mineral
exploration, development and production, as well as risk of damage from
earthquakes, any of which could result in work stoppages, damage to or loss of
property and equipment and possible environmental damage. Hazards such as
unusual or unexpected geological formations and other conditions are also
involved in mineral exploration and development.
Competition
The mineral exploration industry is highly competitive. We are
a new and exploration stage company and have a weak competitive position in the
industry. We compete with junior and senior mineral exploration companies,
independent producers and institutional and individual investors who are
actively seeking to acquire mineral exploration properties throughout the world
together with the equipment, labor and materials required to operate on those
properties. Competition for the acquisition of mineral exploration interests is intense with many mineral exploration leases or
concessions available in a competitive bidding process in which we may lack the
technological information or expertise available to other bidders.
Many of the mineral exploration companies with which we compete
for financing and for the acquisition of mineral exploration properties have
greater financial and technical resources than those available to us.
Accordingly, these competitors may be able to spend greater amounts on acquiring
mineral exploration interests of merit or on exploring or developing their
mineral exploration properties. This advantage could enable our competitors to
acquire mineral exploration properties of greater quality and interest to
prospective investors who may choose to finance their additional exploration and
development. Such competition could adversely impact our ability to attain the
financing necessary for us to acquire further mineral exploration interests or
explore and develop our current or future mineral exploration properties.
We also compete with other junior mineral exploration companies
for financing from a limited number of investors that are prepared to invest in
such companies. The presence of competing junior mineral exploration companies
may impact our ability to raise additional capital in order to fund our
acquisition or exploration programs if investors perceive that investments in
our competitors are more attractive based on the merit of their mineral
exploration properties or the price of the investment opportunity. In addition,
we compete with both junior and senior mineral exploration companies for
available resources, including, but not limited to, professional geologists,
land specialists, engineers, camp staff, helicopters, float planes, mineral
exploration supplies and drill rigs.
General competitive conditions may be substantially affected by
various forms of energy legislation and/or regulation introduced from time to
time by the governments of the Philippines, the United States and other
countries, as well as factors beyond our control, including international
political conditions, overall levels of supply and demand for mineral
exploration.
In the face of competition, we may not be successful in
acquiring, exploring or developing profitable gold or mineral properties or
interests, and we cannot give any assurance that suitable gold or mineral
properties or interests will be available for our acquisition, exploration or
development. Despite this, we hope to compete successfully in the gold or
mineral industry by:
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keeping our costs low;
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relying on the strength of our managements contacts; and
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using our size and experience to our advantage by
adapting quickly to changing market conditions or responding swiftly to
potential opportunities.
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Intellectual Property
None.
Research and Development
We have not incurred any research and development expenses
since our inception.
Reports to Security Holders
We are subject to the reporting and other requirements of the
Exchange Act and we intend to furnish our shareholders annual reports containing
financial statements audited by our independent registered public accounting
firm and to make available quarterly reports containing unaudited financial
statements for each of the first three quarters of each fiscal year. We may also
file additional documents with the Commission if they become necessary in the
course of our companys future operations.
The public may read and copy any materials that we file with
the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. The address
of that site is www.sec.gov.
Environmental Regulations
We are not aware of any material violations of environmental
permits, licenses or approvals that have been issued with respect to our future
operations. We expect to comply with all applicable laws, rules and regulations
relating to our business, and at this time, we do not anticipate incurring any
material capital expenditures to comply with any environmental regulations or
other requirements.
While our intended projects and business activities do not
currently violate any laws, any regulatory changes that impose additional
restrictions or requirements on us or on our potential customers could adversely
affect us by increasing our operating costs or decreasing demand for our
products, which could have a material adverse effect on our results of future
operations.
Please consider the following risk factors before deciding
to invest in our common stock.
Any investment in our common stock involves a high degree of
risk. You should consider carefully the risks and uncertainties described below,
and all other information contained in this report, before you decide whether to
purchase our common stock. The occurrence of any of the following risks could
harm our business. You may lose part or all of your investment due to any of
these risks or uncertainties. These are speculative stocks and should be
purchased by only those who can afford to lose their entire investment.
Risks Related to Our Business
Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern.
We incurred a net loss for the year ended March 31, 2018 and we
expect to incur further losses in the development of its business, all of which
raises substantial doubt about the Companys ability to continue as a going
concern. We are in the exploration stage and have yet to attain profitable
operations and in their report on our financial statements for the period from
inception to March 31, 2018, our independent auditors included an explanatory
paragraph regarding the substantial doubt about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that led to this disclosure by our independent
auditors.
We are governed by only two people, Mr. Cortez and Mr. Soo,
which may lead to faulty corporate
governance.
We have only one director and two executive officers who make
all the decisions regarding corporate governance. This includes their
(executive) compensation, accounting overview, related party transactions and so
on. They will also have full control over matters that require Board of
Directors approval. This may introduce conflicts of interest and prevent the
segregation of executive duties from those that require Board of Directors
approval. This may lead to ineffective disclosure and accounting controls.
Noncompliance with laws and regulations may result in fines and penalties. They
would have the ability to take any action as they themselves review them and
approve them. They would exercise control over all matters requiring shareholder
approval including significant corporate transactions. We have not implemented
various corporate governance measures nor have we adopted any independent
committees as we presently do not have any independent directors.
Our sole director and executive officers own a substantial
amount of common stock and will have
substantial influence over our
future operations denying an investor an effective voice.
Our executive officers own 50% of our stock.
Our director and officers are not residents of the United
States making the enforcement of liabilities against
them
difficult.
The director and executive officers reside outside the United
States and in the Republic of the Philippines. If a shareholder had a desire to
sue them for damages, the shareholder would have to serve a summons and
complaint. Even if personal service is accomplished and a judgment is entered
against that person, the shareholder would then have to locate the assets of
that person, and register the judgment in the foreign jurisdiction where the
assets are located.
Our executive officers have other business interests which
may limit the amount of time they can devote to
our Company.
Our executive officers have other business interests, meaning
they may not have enough time to devote to our business operations. This could
cause business failure. They each have been devoting and in the future plan to
each devote only a few hours per month to company affairs which may lead to
sporadic exploration activities and periodic interruptions of business
operations. Unforeseen events may cause this amount of time to become even less.
See Directors and Executive Officers.
Mr. Cortez, our president and director, has other time
commitments that will prevent him from devoting
full-time to our
operations, which may affect our future operations.
Because Mr. Cortez, who is responsible for some of our business
activities, does not devote his full working time to our operation and
management, the implementation of our business plans may be impeded. Mr. Cortez
has other obligations and time commitments, which may slow our future operations
and impact our financial results. Additionally, when Mr. Cortez becomes unable
to handle the daily operations on his own, we may not be able to hire additional
qualified personnel to replace him in a timely manner. If this event should
occur, we may not be able to implement our business plan in a timely manner or
at all. See Directors and Executive Officers.
We are recently formed, lack an operating history and have
yet to make any revenues. If we cannot
generate any profits, you may lose
your entire investment.
We are a recently formed company and have yet to generate any
revenues. No profits have been made to date and if we fail to make any then we
may fail as a business and an investment in our common stock will be worth
nothing. We have no operating history and thus no way for you to measure
progress or potential future success. Success has yet to be proved. Currently,
there are no operations in place to produce revenue. We are in pre-exploration
and have yet to find or produce sellable product. Financial losses should be
expected to continue in the near future and at least until such time that we
enter the production stage. As a new business we face all the risks of a
start-up venture including unforeseen costs, expenses, problems, and
management limitations and difficulties. There is no guarantee, unfortunately,
that we may ever be able to turn a profit or locate additional opportunities,
hire additional management and other personnel.
Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of its development. We
are engaged in the business of exploring and, if warranted, developing
commercially exploitable reserves of gold and silver. Our properties are in the
pre-exploration stage only and are without known reserves of gold and silver.
Accordingly, we have not generated any revenues nor have we realized a profit to
date and there is little likelihood that we will generate any revenues or
realize any profits in the short term. Any profitability in the future from our
business will depend upon locating and developing economic reserves of gold,
silver or other minerals, which itself is subject to numerous risk factors as
set forth herein. Since we have not generated any revenues, we will have to
raise additional monies through the sale of our equity securities or debt in
order to continue our future business operations.
The probability of a mineral claim having profitable
reserves is very rare and our claim, even with large
investments, may
never generate a profit.
We are dependent upon our mining property for success. All
anticipated future revenues would come directly from the Palayan Gold Claim.
Should we fail to extract and sell gold from this property, our business will
fail. Mineral deposit estimates are imprecise and subject to error, and resource
calculations when made may prove unreliable. Assumptions made regarding the
supporting data may prove inaccurate and unforeseen events may lead to further
inaccuracies. Sample variability, mining and processing adjustments, environmental changes, metal price fluctuations,
and law and regulation changes are all factors that could lead to deviances from
the original estimations. No assurances can be given that any mineral deposit
estimate will ever be reclassified as a reserve. We have no known ore reserves.
Despite future investment in exploration activities, there is no guarantee we
will locate a commercially viable ore reserve. Most exploration projects do not
result in discovery of commercially viable mineable deposits. With little
capital available, we will have to limit our exploration which decreases the
chances of finding a commercially viable ore body. Even if gold is identified,
the Palayan Gold Claim may not be put into production due to high extraction
costs, low gold prices, or inadequate amount and reduced recovery rates. If the
exploration activities do not suggest a commercially successful prospect then we
may altogether abandon plans to develop the property.
The exploration and prospecting of minerals is speculative
and extremely competitive which may make
success difficult.
We face strong competition from other mining companies for the
acquisition of new properties. New properties increase the probability of
discovering a profitable reserve. Most companies have greater financial and
managerial resources than we do and can acquire and explore attractive new
mining properties. We will face similar difficulties raising new capital to
expand operations against the larger, better capitalized competitors. Limited
supply and unforeseen demand from larger, more competitive companies may make
secure all necessary equipment and materials difficult and may result in
periodic interruptions or even business failure. Success depends on a
combination of many factors including but not limited to: the quality of
management, technical (geological) expertise, quality of land available for
exploration and the capital available for exploration.
International operations in the Philippines are subject to
inherent risks.
Political instability, uncertainty of the economic climate,
currency fluctuations, exchange controls and taxation laws may be significant.
Access to all of the equipment, supplies and materials necessary to begin
exploration may not be available and delay such activity. We have not yet
attempted to locate or negotiate with any suppliers of products, equipment or
materials but plan to do so when exploration begins. Exchange rate changes
between the Philippine Peso (PHP) and the US dollar may also adversely affect
success.
Our future operations may be adversely affected by future
governmental and environmental regulations and
permitting.
Environmental regulations may negatively affect the progression
of operations and these regulations may become stricter in the future. In the
Philippines, all mining is regulated by Federal and Provincial level government
agencies. Obtaining licenses and permits from these agencies as well as an
environmental impact study for each mining property must be completed before
starting mining activities. These are expensive and affect the timing of
operations. Pollution can be anticipated with mining activities. If we are
unable to comply with current or future regulations, this may expose us to
fines, penalties and litigation that could cause our business to fail.
Further, the laws, regulations, policies or current
administrative practices of any government body, organization or regulatory
agency in the Republic of the Philippines or any other jurisdiction, may be
changed, applied or interpreted in a manner which will fundamentally alter the
ability of our company to carry on our business.
The actions, policies or regulations, or changes thereto, of
any government body or regulatory agency, or other special interest groups, may
have a detrimental effect on us. Any or all of these situations may have a
negative impact on our ability to operate and/or our profitably.
We are subject to inherent mining hazards and risks that may
result in future financial obligations.
Risks and hazards associated with the mining industry may
adversely affect our future operations such as but not limited to: political and
country risks, industrial accidents, labor disputes, inability to retain
necessary personnel or equipment, environmental hazards, unexpected geologic
formations, cave-ins, landslides, flooding and monsoons, fires, explosions, power
outages, processing problems. Personal injury and death could result as well as
property damage, delays in mining, environmental damage, legal liability and
monetary loss. We may not be able to obtain insurance to cover these risks at
economically reasonable premiums. We do not carry any sort of insurance and may
have difficulties obtaining such once operations start as insurance is generally
sparse and cost prohibitive.
We do not expect positive cash flow from future operations
in the near term. If we are unable to obtain
financing in the amounts and
on terms deemed acceptable to us, we may be unable to continue our business
and as a result may be required to scale back or cease operations for our
business.
We do not expect positive cash flow from future operations in
the near term. There is no assurance that actual cash requirements will not
exceed our estimates. In particular, additional capital may be required in the
event that:
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drilling, exploration and completion costs for our
Palayan Gold Claim increase beyond our expectations; or
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we encounter greater costs associated with general and
administrative expenses or other costs.
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The occurrence of any of the aforementioned events could
adversely affect our ability to meet our business plans.
We will depend almost exclusively on outside capital to pay for
the continued exploration and development of our properties. Such outside
capital may include the sale of additional stock and/or commercial borrowing. We
can provide no assurances that any financing will be successfully completed.
Capital may not continue to be available if necessary to meet
these continuing development costs or, if the capital is available, that it will
be on terms acceptable to us. The issuance of additional equity securities by us
would result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.
If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business and as
a result may be required to scale back or cease future operations for our
business, the result of which would be that our stockholders would lose some or
all of their investment.
As our property is in the exploration and development stage
there can be no assurance that we will establish
commercially viable
discoveries on our properties.
Exploration for mineral reserves is subject to a number of risk
factors. Few properties that are explored are ultimately developed into
producing mines. Our property is only in the exploration and development stage
and is without proven mineral reserves. We may not establish commercially viable
mineral reserves on our property (or on any future properties) and, if we do,
there is no guarantee that we will be able to extract or sell such minerals
profitably or at all, which could cause our business to fail.
Because we anticipate our operating expenses will increase
prior to our earning revenues, we may never
achieve
profitability.
Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our mineral claim, we will not be able to earn profits or
continue future operations. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and we can
provide no assurance that we will generate any revenues or ever achieve
profitability. If we are unsuccessful in addressing these risks, our business
will most likely fail.
Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability
or damages as we
conduct our business.
The search for valuable minerals involves numerous hazards. As
a result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we cannot insure or against
which we may elect not to insure. At the present time we have no coverage to
insure against these hazards. The payment of such liabilities may have a
material adverse effect on our financial position.
If our exploration costs are higher than anticipated, then
our profitability will be adversely affected.
We are currently proceeding with exploration of our mineral
properties on the basis of estimated exploration costs. If our exploration costs
are greater than anticipated, then we will not be able to carry out all the
exploration of the properties that we intend to carry out. Factors that could
cause exploration costs to increase are: adverse weather conditions, difficult
terrain and shortages of qualified personnel.
The price of gold is volatile and a decrease in gold prices
could cause us to incur losses.
The profitability of gold exploration and production is
directly related to the prevailing market price for gold. The market prices of
metals, including the gold market, fluctuate significantly and are affected by a
number of factors beyond our control, including, but not limited to, the rate of
inflation, the exchange rate of the dollar to other currencies, interest rates,
and global economic and political conditions. Price fluctuations in gold market
from the time exploration is undertaken and the time production can commence can
significantly affect the profitability of a mine. Accordingly, we may begin to
develop a gold property at a time when the price of gold or other related
mineral make such exploration economically feasible and, subsequently, incur
losses because prices have decreased. For example, since reaching an all time
high during 2011, the price of gold has declined, and significant further
decline may occur. Adverse fluctuations of metals market prices or the continued
decline in the gold market, generally, may force us to curtail or cease our
business operations.
Our By-laws contain provisions indemnifying our officers and
directors against all costs, charges and
expenses incurred by
them.
Our By-laws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of his being or having been one
of our directors or officers.
Investors interests in our company will be diluted and
investors may suffer dilution in their net book value
per share if we
issue additional shares for significant amount of services or raise funds
through the sale of
equity securities.
Our incorporating documents authorize the issuance of
75,000,000 shares of common stock with a par value of $0.001. In the event that
we are required to issue any additional shares or enter into private placements
to raise financing through the sale of equity securities, investors interests
in our company will be diluted and investors may suffer dilution in their net
book value per share depending on the price at which such securities are sold.
If we issue any such additional shares, such issuances also will cause a
reduction in the proportionate ownership and voting power of all other
shareholders. Further, any such issuance may result in a change in our control.
Risks Related to the Ownership of Our Stock
Because there is no public trading market for our common
stock, you may not be able to resell your shares.
There is currently no public trading market for our common
stock. Therefore, there is no central place, such as stock exchange or
electronic trading system, to resell your shares. If you do wish to resell your
shares, you will have to locate a buyer and negotiate your own sale. As a
result, you may be unable to sell your shares, or you may be forced to sell them
at a loss.
We intend to engage a market maker to apply to have our common
stock quoted on the OTCBB. The application must be made on our behalf by a
market maker. If our common stock becomes listed and a market for the stock
develops, the actual price of our shares will be determined by prevailing market
prices at the time of the sale. We do not currently meet the existing
requirements to be quoted on the OTCBB and there is no assurance that we will
ever be able to meet those requirements.
We cannot assure you that there will be a market in the future
for our common stock. The trading of securities on the OTCBB is often sporadic
and investors may have difficulty buying and selling our shares or obtaining
market quotations for them, which may have a negative effect on the market price
of our common stock. You may not be able to sell your shares at their purchase
price or at any price at all. Accordingly, you may have difficulty reselling any
shares you purchase from the Selling Security Holders.
The continued sale of our equity securities will dilute the
ownership percentage of our existing stockholders
and may decrease the
market price for our common stock.
Given our lack of revenues and the doubtful prospect that we
will earn significant revenues in the next several years, we will require
additional financing for the next 12 months, which may require us to issue
additional equity securities. We expect to continue our efforts to acquire
financing to fund our planned development and expansion activities, which may
result in dilution to our existing stockholders.
We do not intend to pay dividends and there will thus be
fewer ways in which you are able to make a gain
on your
investment.
We have never paid dividends and do not intend to pay any
dividends for the foreseeable future. To the extent that we may require
additional funding currently not provided for in our financing plan, our funding
sources may prohibit the declaration of dividends. Because we do not intend to
pay dividends, any gain on your investment will need to result from an
appreciation in the price of our common stock. There will therefore be fewer
ways in which you are able to make a gain on your investment.
Because the SEC imposes additional sales practice
requirements on brokers who deal in shares of penny
stocks, some brokers
may be unwilling to trade our securities. This means that you may have
difficulty
reselling your shares, which may cause the value of your
investment to decline.
Our shares are classified as penny stocks and are covered by
section 15(g) of the Securities Exchange Act of 1934 (the Exchange Act) which
imposes additional sales practice requirements on brokers-dealers who sell our
securities. For sales of our securities, broker-dealers must make a special
suitability determination and receive a written agreement prior from you to
making a sale on your behalf. Because of the imposition of the foregoing
additional sales practices, it is possible that broker-dealers will not want to
make a market in our common stock. This could prevent you from reselling your
shares and may cause the value of your investment to decline.
FINRA sales practice requirements may limit your ability to
buy and sell our common stock, which could
depress the price of our
shares.
FINRA rules require broker-dealers to have reasonable grounds
for believing that an investment is suitable for a customer before recommending
that investment to the customer. Prior to recommending speculative low-priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status and investment objectives, among other things. Under interpretations
of these rules, FINRA believes that there is a high probability such speculative
low-priced securities will not be suitable for at least some customers. Thus,
FINRA requirements make it more difficult for broker-dealers to recommend that
their customers buy our common stock, which may limit your ability to buy and
sell our shares, have an adverse effect on the market for our shares, and
thereby depress our share price.
Our security holders may face significant restrictions on
the resale of our securities due to state blue sky
laws.
Each state has its own securities laws, often called blue sky
laws, which (i) limit sales of securities to a states residents unless the
securities are registered in that state or qualify for an exemption from
registration, and (ii) govern the reporting requirements for broker-dealers
doing business directly or indirectly in the state. Before a security is sold in
a state, there must be a registration in place to cover the transaction, or the
transaction must be exempt from registration. The applicable broker must be
registered in that state.
We do not know whether our securities will be registered or
exempt from registration under the laws of any state. A determination regarding
registration will be made by those broker-dealers, if any, who agree to serve as
the market-makers for our common stock. There may be significant state blue sky
law restrictions on the ability of investors to sell, and on purchasers to buy,
our securities. You should therefore consider the resale market for our common
stock to be limited, as you may be unable to resell your shares without the
significant expense of state registration or qualification.
Our compliance with the Sarbanes-Oxley Act and SEC rules
concerning internal controls will be time-consuming, difficult, and costly.
It will be time-consuming, difficult and costly for us to
develop and implement the internal controls, processes and reporting procedures
required by the Sarbanes-Oxley Act. We may need to hire additional personnel to
do so, and if we are unable to comply with the requirements of the legislation
we may not be able to obtain the independent accountant certifications that the
Sarbanes-Oxley Act requires publicly traded companies to obtain.
We are an emerging growth company under the JOBS Act of
2012, and we cannot be certain if the
reduced disclosure requirements
applicable to emerging growth companies will make our common stock
less
attractive to investors.
We are an emerging growth company, as defined in the JOBS
Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not
emerging growth companies including, but not limited to, not being required to
comply with the auditor attestation requirements of section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously
approved. We cannot predict if investors will find our common stock less
attractive because we may rely on these exemptions. If some investors find our
common stock less attractive as a result, there may be a less active trading
market for our common stock and our stock price may be more volatile. We will
remain an emerging growth company for up to five years, although we will lose
that status sooner if our revenues exceed $1 billion, if we issue more than $1
billion in non-convertible debt in a three year period, or if the market value
of our common stock that is held by non-affiliates exceeds $700 million.
Because we have elected to use the extended transition
period for complying with new or revised
accounting standards for an
emerging growth company our financial statements may not be comparable
to companies that comply with public company effective dates.
We have elected to use the extended transition period for
complying with new or revised accounting standards under Section 102(b)(1) of
the JOBS Act. This election allows us to delay the adoption of new or revised
accounting standards. As a result of this election, our financial statements may
not be comparable to public companies that comply with public company effective
dates. Because our financial statements may not be comparable to companies that
comply with public company effective dates, investors may have difficulty
evaluating or comparing our business, performance or prospects in comparison to
other public companies, which may have a negative impact on the value and
liquidity of our common stock.
Item 1B.
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Unresolved Staff Comments
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None.
Description of Property
Our principal executive offices are located at 223 De La Cruz
Road, Pasay, Metro Manila, Philippines. Our telephone number is (63)(914) 269
9345
Palayan Gold Claim Property
Location and Access
The Palayan Gold Claim consists of an 82.7 hectare, eight-unit
claim block located near Nueve Ecija, the Philippines, at 15 degrees 53 33
north, 121 degrees 08 33 east.
Description of Claim
The mineral claim was assigned to us by Verdasco Enterprises
LLC (an unrelated company) and the said assignment was filed with the Mines and
Geosciences Bureau (MGB) of the Department of Environment and Natural Resources
of the Philippines (DENR). We own 100% of this claim with no encumbrance on the
claim.
There are no known environmental concerns or parks designated
for any area contained within the claims. As advanced exploration proceeds there
may be bonding requirements for reclamation.
The primary identifying information of the Palayan Gold Claim
is a Parcel Identifier as registered with the Department of Environmental and
Natural Resources Mines and Geosciences. The Parcel Identifier of the Palayan
Gold Claim is 217-119-862 as recorded both with the above authority and the
Office of the Register of Land Title for the Province of Nueva Ecija. The area
of the claim is 82.7 hectares. In order to obtain a mining license in the
Philippines, an applicant company must apply with the Department of Environment
and Natural Resources Mines and Geosciences. The above authority then conducts
a search of the local titles office and its own records to verify that the
applicant company is the owner and rights holder of the claim. Once that has
been verified, the Department of Environment and Natural Resources Mines and
Geosciences issues a license and permit for Mining and Exploration. The license
usually takes seven to ten business days to obtain and is valid for one year.
Except as described above, there are no material terms of the
land or mineral rights securing agreements with respect to the Palayan Gold
Claim.
The mining license described above is the only permit in order
to explore or mine the Palayan Gold Claim.
A map of the Palayan Gold Claim is set forth below:
Royalty Obligations and Other Underlying Agreements
None.
Accessibility, Climate, Local Resources, Infrastructure, and
Topography
The Palayan Gold Claim is located approximately 10 km southwest
of Palayan City, the capital of Nueva Ecija province in the Philippines. It is
about 12 km northwest of the city of Cabanatuan, and Manila is a five-hour drive
away.
Palayan City is classified as Type 2 climate zone characterized
by distinct dry and wet seasons. Rainy season typically starts from May to early
December with peak rainfall in the months of July and August. The average amount
of rain is 1,597 mm annually and peaks to around 3,304 mm in the month of
August. Average temperatures range from 22 degrees to 36 degrees Celsius. We
anticipate that exploration work and production, if any, can be carried out
throughout the year, although production, if any, may be slower during heavy
monsoon rains.
Transportation infrastructure in the area is modern and
developed in that there is a network of all-weather roads, highways, and
bridges, that make the Palayan Gold Claim highly accessible.
There have been confirmed reports that communist rebels have
been sighted near the borders of Nueva Vizcaya, Nueva Ecija and Aurora
provinces, near Kasibu town where a number of mining exploration activities are
ongoing. The New Peoples Army, the armed wing of the Communist Party of the
Philippines has made threats to mining companies, which they view as exploiting
the countrys natural resources. The Philippine Army has given assurances that
they will protect mining companies from communist guerillas. However, there can
be no assurance that the Philippine Army will be able to do so.
General Geology and Topography
The lithology of the area in which the Palayan Gold Claim is
located is composed of alluvium deposits formed by the Agno River.
The Palayan Gold Claim sits atop a bedrock of native gold
occurrences and numerous relatively small alluvial gold deposits. Mineralization
was discovered in the area in the early 1920s and since then has been the site
of multiple small to mid-scale placer operations. Alluvial gold deposits appear
to be widespread in the region and these types of deposits have been the main
target of small-scale individual miners. Native gold is readily panned from the
surrounding areas, generally in areas of minor excavations and mine workings and also from creeks. Grains of native gold
up to 4 mm in size have been observed in rock samples from the project.
Present Condition of the Property and Current State of
Exploration
Our company is preparing to conduct Phase 1 exploration work on
the Palayan Gold Claim, once sufficient cash is raised to support the
exploration work.
There has been no previous work on the Palayan Gold Claim
including any attempts to drill. Records indicate that no detailed exploration
has been completed on the Palayan Gold Claim.
Geological Setting
Regional Geology of the Area
The following are the main
stratigraphic units in the region.
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Caraballo Formation
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Pantabangan Formation
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Guadalupe Formation
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Caraballo Formation
The Caraballo Formation is located in the northeastern part of
San Jose City, Nueva Ecija. It is the most extensively exposed rocks in the
Northern Sierra Madre, previously designated as Caraballo Group, and subdivided
into Formations I, II and III. This formation is composed of a proximal and
distal volcano-sedimentary facies and is dated in the Late Cretaceous to Late
Eocene which is widely distributed in the Caraballo Mountains.
The distal facies of the Caraballo Formation are well-exposed
along the eastern side of the Northern Sierra Madre range, in Divilacan Bay,
west and south of Dinapique, south and east of San Ildefonso Peninsula and north
of Dingalan. These facies consists of well bedded red and green mudstones,
siltstones, sandstones, and pyroclastic rocks, with occasional fragmental flows
and conglomerates. On the western side of the northern Sierra Madre, from San
Jose to Digdig, Nueva Ecija, red and green siltstones and mudstones are overlain
by gray to black tuffs and conglomerates which coarsen upwards and become
intercalated with pillow basalts.
Pantabangan Formation
The Pantabangan Formation is facing the highlands located east
of San Jose City, Nueva Ecija. This formation is a series of sandstone, mudstone
and polymictic conglomerates forming the gently rolling hills in the area of
Pantabangan Basin. A uniqueness separates this formation from the underlying
Palali and Santa Fe formations.
An increase in the amount of conglomerates towards the south
and east suggests its origin from this direction. The formation is believed to
be partly equivalent to the PlioPleistocene Ilagan Formation of the Cagayan
Valley Basin. A dating of 1.3 Ma (Pleistocene) for a biotite extracted from an
andesite intruding the Pantabangan Formation was found. Furthermore, correlation
of this formation to the Tartar Formation on the western flank of the Southern
Sierra Madre dates as PlioPleistocene from benthonic foraminifera. It is
estimated to attain a thickness of 1000m.
Guadalupe Formation
The Guadalupe Formation is found beneath the highland eastern
parts of Cabanatuan City, Nueva Ecija. It has been called the Guadalupe Tuffs or
the Guadalupe Formation with a lower Alat Conglomerate member and an upper
Diliman Tuff member. The formation overlies Miocene rocks and on the basis of
the presence of Stegodon fossils and other vertebrates remains, leaf imprints
and artifacts, it is assigned a Pleistocene age.
The Alat Conglomerate was first mapped and named by Alvir after
marine littoral conglomerate exposed along Sapang Alat about 3 km north of the
Novaliches reservoir near Novaliches town where it overlies Miocene lavas. The
Alat consists of massive conglomerate, deeply weathered silty mudstone and
tuffaceous sandstone. The most common rock type, the poorly sorted conglomerate,
consists of well rounded pebbles and small boulders of the underlying
igneous, metamorphic and sedimentary rocks cemented by a coarse-grained,
calcareous sandy matrix. The interbedded sandstone is massive to poorly-bedded,
tuffaceous fine to medium grained, loosely-cemented, friable and exhibits
cross bedding. The mudstone is medium to thin bedded, soft, sticky, silty and
tuffaceous. The maximum estimated thickness of this member is 200 m.
The whole series is flat-lying, medium to thin bedded and
consists of fine grained vitric tuffs and welded pyroclastic breccias with minor
fine to medium grained tuffaceous sandstone. Dark mafic minerals and bits of
pumiceous and scoriaceous materials are dispersed in the glassy tuff matrix. The
thickness of the Diliman Tuff is 1,300-2,000 m.
Tectonic Setting
The major structural element recognized in the area of Nueva
Ecija is the Dingalan Cabaldon Rift which is part of the Philippine Fault. The
fault appears to be the major factor that influences the formation of Gabaldon
Valley. It trends N 40°W and branches out into numerous secondary faults of
minor magnitude that the northeastern part, cutting the Cretaceous-Paleogene
rock series. These secondary faults appear to have sliced the rocks into a
series of parallel fault blocks. The orientation of these faults, together with
the schistocity and fold axes appears to be closely related to the major
northwest structure.
The Philippine Fault Zone is a major left-lateral strike-slip
fault zone that has a mapped length of 1,200 km from the eastern part of
Mindanao to Northern Luzon. Slip on the Philippine Fault Zone accommodates a
significant portion of oblique convergence between the Philippine Sea and
Eurasian Plates. The Philippine Fault Zone trends northwest from Dingalan Bay
just east of Gabaldon to the southern end of the Central Cordillera. Northwest
of Gabaldon, the Philippine Fault splays into the Digdig Fault and the San Jose
Fault The convergence rate of the Philippine Plate relative to Eurasia falls in
the range of 8.0 cm/yr. The movement is accommodated on three main parallel
zones:
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The westward verging subduction zones running through the
Taiwan Mindoro-Panay trenches
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The Philippine Plate at the eastern side, subducting
westward along the Philippine Trench; and
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In between the two, the Philippine Fault, an active
left-lateral strike-slip which runs from Southern Mindanao to Northern
Luzon.
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The subduction at the Philippine Trench and the Philippine
Fault are young features, initiated in late Early Pliocene, probably in response
to increasing blockage by collisions along Eurasia's boundary. Most of the
oblique convergence would have since been partitioned between the two
structures. In Luzon, the South China Sea plate is subducted eastward along the
Manila Trench while at the eastern side; the Philippine Trench is indented by
the Benham Rise. A strike slip fault zone along the East Luzon Trough, borders
the latter. The area of Northern Luzon is wedged and compressed by the two
opposing subduction zones.
Mineralization
No mineralization has been reported for the area of the
property but structures and shear zones affiliated with mineralization on
adjacent properties pass through it.
Exploration
Previous exploration work has not included any attempt to drill
the structure on the Palayan Gold Claim. Records indicate that no detailed
exploration has been completed on the property.
Drilling Summary
No drilling has been reported on the Palayan Gold Claim.
Sampling Method, Sample Preparation, Data Verification
All the exploration conducted to date has been conducted
according to modernly accepted exploration procedures, methods and practices.
Preliminary samples have also been prepared in ways that adhere to current
procedures. No comment as to the quality of the samples taken can be presented.
Appropriate measures of quality control were in place, though
no comment can be made on the lack of any additional measure of such
controls.
Report Recommendations
At the present time, the exact mineralization of the Palayan
Gold Mine has not been sufficiently explored as previous work has been
inconsistent and limited. A two-phased, intensive exploration program to further
determine the production potential, if any, of the Palayan Gold Claim is
recommended.
The first phase would consist of
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Aerial photography to locate structures and understand
the topography;
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Detailed geological mapping of the region in addition to
the Palayan Gold Claim in order to more broadly understand its geological
setting;
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Geophysical survey using magnetic and electromagnetic
instrumentation of both the region and main area for exploration; and
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Geochemical soil sample of the Palayan Gold Claim to
determine areas of most significant mineral wealth and more exactly
determine the mineralization of the site.
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Phase 1 exploration work should determine the exact
mineralization of the property and whether Phase 2 work, consisting of
geochemical surveying and surface sampling, is justifiable.
Budget
The proposed budget for the recommended work is PHP 880,000
(approximately $16,800) as follows (in order of priority)
Operations
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Cost (PHP)
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Estimated Timeframe
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Phase I
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Geological Mapping
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275,000
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3 to 5 weeks from
beginning of operation
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Geophysical Surveying
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130,000
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5 to 6 weeks from
beginning of operation
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Phase II
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Geochemical surveying and surface
sampling
(includes sample collection and assaying)
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475,000
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3 to 4 months from
beginning of operation
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Total of Phases I &II
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880,000
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We currently do not have the necessary funding to complete both
phases above. We believe that sufficient funding will be available from
additional borrowings and private placements to meet our business bjectives,
including anticipated cash needs for working capital, for a reasonable period of
time. However, there can be no assurance that we will be able to obtain
sufficient funds to continue the development of our business operation, or if
obtained, upon terms favorable to us.
Glossary of Mining Terms
Amphibolite
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a class of metamorphic rock composed mainly of amphibole
with some quartz.
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Anorthosite
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a phaneritic, intrusive igneous rock characterized by a
predominance of plagioclase feldspar.
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Aplite
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a fine-grained granitic rock composed mostly of quartz
and feldspars.
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Argillite
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a rock derived either from siltstone, claystone or shale
that has undergone a somewhat higher degree of induration than is present
in those rocks.
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Auriferous
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refers to gold (AU) or gold equivalents (AUEQ).
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Basalt
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a hard rock of varied mineral content; volcanic in
origin, it makes up much of the Earths crust.
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Bauxite
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the principal ore of aluminium; a clay-like mineral,
being a mixture of hydrated oxides and hydroxides.
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Caldera
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a large circular volcanic depression often originating
due to collapse.
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Charnockites
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any orthopyroxene-bearing granite, composed mainly of
quartz, perthite or antiperthite and orthopyroxene (usually hypersthene),
as an end-member of the charnockite series .
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Chert
|
massive, dull-colored and opaque quartzite, hornstone,
impure chalcedony or other flint-like mineral. By general usage in
mineralogy and geology, a chert does not have a conchoidal fracture. In
North American archeology the term chert occasionally is still used for
various siliceous minerals (including flint) that have a conchoidal
fracture; this leads to confusion between the terms flint and chert in
some archeology texts.
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Clay
|
a mineral substance made up of small crystals of silica
and alumina, that is ductile when moist; the material of pre-fired
ceramics; an earth material with ductile qualities.
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Clinopyroxene
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any pyroxene that has a monoclinic crystal structure.
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Coal
|
a readily combustible black or brownish-black sedimentary
rock normally occurring in rock strata in layers or veins called coal
beds. The harder forms, such as anthracite coal, can be regarded as
metamorphic rock because of later exposure to elevated temperature and
pressure. Coal is composed primarily of carbon along with variable
quantities of other elements, chiefly sulfur, hydrogen, oxygen and
nitrogen.
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Copper
|
a chemical element with the symbol Cu (Latin: cuprum) and
atomic number 29. It is a ductile metal with very high thermal and
electrical conductivity. Pure copper is rather soft and malleable, and a
freshly-exposed surface has a pinkish or peachy color.
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Cretaceous age
|
a geological period and system from 145 to 65 million
years ago.
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Crystalline
|
a solid material, whose constituent atoms, molecules, or
ions are arranged in an orderly repeating pattern extending in all three
spatial dimensions; ie. crystals.
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Dolerite
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A fine-grained basaltic rock.
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Dynamothermal
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rock formed at variable temperatures.
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Extrusive
|
the mode of igneous volcanic rock formation in which hot
magma from inside the Earth flows out (extrudes) onto the surface as lava
or explodes violently into the atmosphere to fall back as pyroclastics or
tuff. This is opposed to intrusive rock formation, in which magma does not
reach the surface. The main effect of extrusion is that the magma can cool
much more quickly in the open air or under seawater, and there is little
time for the growth of crystals. Often, a residual portion of the matrix
fails to crystallize at all, instead becoming an interstitial natural
glass or obsidian.
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Fault
|
a break in the continuity of a body of rock. It is
accompanied by a movement on one side of the break or the other so that
what were once parts of one continuous rock stratum or vein are now
separated. The amount of displacement of the parts may range from a few
inches to thousands of feet.
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Feldspar
|
any of a large group of rock-forming minerals that,
together, make up about 60% of the earths outer crust. The feldspars are
all aluminum silicates of the alkali metals sodium, potassium, calcium and
barium. Feldspars are the principal constituents of igneous and plutonic
rocks.
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Flatmake
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flat-dipping fractures.
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Fold
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a curve or bend of a planar structure such as rock stata,
bedding planes, foliation, or cleavage.
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Foliation
|
A general term for a planar arrangement of textural or
structural features in any type of rock; esp., the planar structure that
results from flattening of the constituent grains of a metamorphic rock.
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Formation
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a distinct layer of sedimentary rock of similar
composition.
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Gabbro
|
a group of dark-colored, basic intrusive igneous rocks
composed principally of basic plagioclase (commonly labradorite or
bytownite) and clinopyroxene (augite), with or without olivine and
orthopyroxene; also, any member of that group. It is the approximate
intrusive equivalent of basalt. Apatite and magnetite or ilmenite are
common accessory minerals.
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Gneiss
|
a foliated rock formed by regional metamorphism, in which
bands or lens-shaped strata or bodies of rock of granular minerals
alternate with bands or lens-shaped strata or bodies or rock in which
minerals having flaky or elongate prismatic habits predominate.
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Gold
|
chemical element with the symbol Au (from Latin: aurum,
shining dawn) and an atomic number of 79. It has been a highly
sought-after precious metal for coinage, jewelry, and other arts since the
beginning of recorded history. The metal occurs as nuggets or grains in
rocks, in veins and in alluvial deposits. Gold is dense, soft, shiny and
the most malleable and ductile pure metal known. Pure gold has a bright
yellow color and luster traditionally considered attractive, which it
maintains without oxidizing in air or water. Gold is one of the coinage
metals and has served as a symbol of wealth and a store of value
throughout history. Gold standards have provided a basis for monetary
policies. It also has been linked to a variety of symbolisms and
ideologies.
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Granite
|
highly felsic igneous plutonic rock, typically light in
color; rough plutonic equivalent of rhyolite. Granite is actually quite
rare in the U.S.; often the term is applied to any quartz- bearing
plutonic rock.
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Granodiorite
|
a group of coarse-grained plutonic rocks intermediate in
composition between quartz diorite and quartz monzonite, and potassium
feldspar, with biotite, hornblende, or more rarely, pyroxene, as the mafic
component.
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Granulite
|
fine to mediumgrained metamorphic rocks that have
experienced high temperatures of metamorphism, composed mainly of
feldspars sometimes associated with quartz and anhydrous ferromagnesian
minerals, with granoblastic texture and gneissose to massive structure.
They are of particular interest to geologists because many granulites
represent samples of the deep continental crust. Some granulites
experienced decompression from deep in the Earth to shallower crustal
levels at high temperature; others cooled while remaining at depth in the
Earth.
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Graphite
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one of the allotropes of carbon. Unlike diamond (another
carbon allotrope), graphite is an electrical conductor, a semimetal, and
can be used, for instance, in the electrodes of an arc lamp. Graphite
holds the distinction of being the most stable form of carbon under
standard conditions.
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Gypsum
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a mineral consisting of the hydrated calcium sulphate.
When calcined, it forms plaster of Paris.
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Hydrothermal
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Heavy mineral sands ore deposits a class of ore deposit
which is an important source of zirconium, titanium, thorium, tungsten,
rare earth elements, the industrial minerals diamond, sapphire, garnet,
and occasionally precious metals or gemstones. Heavy mineral sands are
placer deposits formed most usually in beach environments by concentration
due to the specific gravity of the mineral grains. It is equally likely
that some concentrations of heavy minerals (aside from the usual gold
placers) exist within streambeds, but most are of a low grade and are
relatively small. creation of rock with fluid at high temperatures.
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Igneous
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resulting from, or produced by, the action of great heat;
with rocks, it could also mean formed from lava/magma; granite and basalt
are igneous rocks.
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Intrusions
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masses of igneous rock that, while molten, were forced
into other rocks.
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Iron
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chemical element with the symbol Fe (Latin: ferrum) and
atomic number 26. It is a metal in the first transition series. Like other
group 8 elements, it exists in a wide range of oxidation states. Iron and
iron alloys (steels) are by far the most common metals and the most common
ferromagnetic materials in everyday use. Fresh iron surfaces appear
lustrous silvery-gray, but oxidize in air. Iron is the most common element
in the earth, albeit the fourth most common one in the earths crust.
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Khondalite
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a granulite-facies metasedimentary rock.
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Laterite
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a red hard or gravel-like soil or subsoil formed in the
tropics that has been leached of soluble minerals leaving insoluble iron
and aluminium oxides and hydroxides; used to make bricks and roads.
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Leptynite
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a granulite.
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Lignite
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a low-grade, brownish-black coal.
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Limestone
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An abundant rock of marine and fresh-water sediments;
primarily composed of calcite (calcium carbonate); it occurs in a variety
of forms, both crystalline and amorphous.
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Marble
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a non foliated metamorphic rock
composed mostly of calcite, a crystalline form of calcium carbonate. It is
formed from carbonate rocks, often limestone. It is extensively used for
sculpture and as a building material.
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Magnetite
|
a ferrimagnetic mineral with chemical formula
Fe
3
O
4
, one of several iron oxides and a member of
the spinel group.
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Metamorphic
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the mineralogical, chemical, and structural adjustment of
solid rocks to physical and chemical conditions that have generally been
imposed at depth below the surface zones of weathering and cementation,
and that differ from the conditions under which the rocks in question
originated.
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Metasediment
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a metamorphosed sedimentary rock.
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Mica
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the name of a group of hydrous aluminosilicate minerals
characterized by highly perfect cleavage, so that they readily separate
into very thin leaves, more or less elastic.
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Monzonite
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an intermediate igneous intrusive rock composed of
approximately equal amounts of sodic to intermediate plagioclase and
orthoclase feldspars with minor amounts of hornblende, biotite and other
minerals.
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Ore
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the natural occurring mineral from which a mineral or
minerals of economic value can be extracted profitable or to satisfy
social or political objectives.
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Oxides
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a chemical compound containing at least one oxygen atom
as well as at least one other element. Most of the Earths crust consists
of oxides. Oxides result when elements are oxidized by oxygen in air.
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Paragneisses
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a gneiss from sedimentary rock.
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Pegmatite
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a very coarse-grained, intrusive igneous rock composed of
interlocking grains usually larger than 2.5 cm in size; such rocks are
referred to as pegmatitic. Most pegmatites are composed of quartz,
feldspar and mica; in essence a granite. Rarer intermediate composition
and mafic pegmatites containing amphibole, Ca-plagioclase feldspar,
pyroxene and other minerals are known, found in recrystallised zones and
apophyses associated with large layered intrusions.
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Phosphatic nodules
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black to brown, rounded mass, variable in size from a few
millimeters to 30 or more centimeters. Usually consists of coprolites,
corals, shells, and bones, more or less enveloped in crusts of collophane.
Found in many horizons of marine origin. Also covering the ocean floors at
manylocations around the world.
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Placers
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an accumulation of valuable minerals formed by deposition
of dense mineral phases in a trap site.
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Precious metals
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a rare, naturally occurring metallic chemical element of
high economic value, which is not radioactive (excluding natural polonium,
radium, actinium and protactinium). Chemically, the precious metals are
less reactive than most elements, have high lustre, are softer or more
ductile, and have higher melting points than other metals. Historically,
precious metals were important as currency, but are now regarded mainly as
investment and industrial commodities. Gold, silver, platinum, and
palladium each have an ISO 4217 currency code.
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Production
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a production stage project is actively engaged in the
process of extraction and beneficiation of mineral reserves to produce a
marketable metal or mineral product.
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Pyrite
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a yellow iron sulphide mineral of little value and
referred to as fools gold.
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Pyrrhotite
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a bronze-colored, magnetic iron sulphide mineral.
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Quartz
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a common rock-forming mineral consisting of silicon and
oxygen.
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Quartzite
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a hard metamorphic rock which was originally sandstone.
Sandstone is converted into quartzite through heating and pressure usually
related to tectonic compression within orogenic belts. Pure quartzite is
usually white to grey, though quartzites often occur in various shades of
pink and red due to varying amounts of iron oxide. Other colors, such as
yellow and orange, are due to other mineral impurities.
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Reserve
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the term reserve refers to that part of a mineral
deposit which could be economically and legally extracted or produced at
the time of the reserve determination. Reserves must be supported by a
feasibility study done to bankable standards that demonstrates the
economic extraction. (Bankable standards implies that the confidence
attached to the costs and achievements developed in the study is
sufficient for the project to be eligible for external debt financing.) A
reserve includes adjustments to the in-situ tons and grade to include
diluting materials and allowances for losses that might occur when the
material is mined.
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Schist
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any crystalline rock having a foliated structure and
hence admitting of ready division into slabs or slates.
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Shear
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a form of strain resulting from stresses that cause or
tend to cause contiguous parts of a body of rock to slide relatively to
each other in a direction parallel to their plane of contact.
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Silica
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the chemical compound silicon dioxide, also known as
silica (from the Latin silex), is an oxide of silicon with a chemical
formula of SiO
2
and has been known for its hardness since
antiquity. Silica is most commonly found in nature as sand or quartz, as
well as in the cell walls of diatoms. Silica is the most abundant mineral
in the Earths crust.
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Stockwork
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a complex system of structurally controlled or randomly
oriented veins. Stockworks are common in many ore deposit types and
especially notable in greisens. They are also referred to as stringer
zones.
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Stratum
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one of several parallel horizontal layers of material
arranged one on top of another. A layer of sedimentary rock having
approximately the same composition throughout
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Sulphides
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an anion of sulfur in its lowest oxidation number of −2.
Sulfide is also a slightly archaic term for thioethers, a common type of
organosulfur compound that are well known for their bad odors.
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Telluride
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a compound of a metal with tellurium; metal salts of
tellurane. Any organic compound of general formula R
2
Te (R
not = H), the tellurium analogues of ethers. Another name for sylvanite.
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Tonalite
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an igneous, plutonic (intrusive) rock, of felsic
composition, with phaneritic texture. Feldspar is present as plagioclase
(typically oligoclase or andesine) with 10% or less alkali feldspar.
Quartz is present as more than 20% of the rock. Amphiboles and
pyroxenes are common accessory minerals.
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Vein
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a thin, sheet-like body of hydrothermal mineralization,
principally quartz.
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Wollastonite
|
a calcium inosilicate mineral (CaSiO
3
) that
may contain small amounts of iron, magnesium, and manganese substituting
for calcium. It is usually white. It forms when impure limestone or
dolostone is subjected to high temperature and pressure sometimes in the
presence of silica-bearing fluids as in skarns or contact metamorphic
rocks. Associated minerals include garnets, vesuvianite, diopside,
tremolite, epidote, plagioclase feldspar, pyroxene and calcite. It is
named after the English chemist and mineralogist William Hyde Wollaston
(17661828).
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Item 3.
|
Legal Proceedings
|
None.
Item 4.
|
Mine Safety Disclosures
|
No information concerning mine safety violations or other
regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR
229.104) is required to be disclosed herein because we are not the operator of
any mine (we have no subsidiaries).
PART III
Item 10.
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Directors, Executive Officers and Corporate
Governance
|
Directors and Officers
Our bylaws state that our authorized number of directors shall
be not less than one and shall be set by resolution of our Board of Directors.
Our Board of Directors has fixed the number of directors at one, and we
currently have only one director.
Our current director and officers are as follows:
Name
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Age
|
Position
|
Joel Dulatre Cortez
|
42
|
President and Director
|
Mark Christian Soo
|
32
|
Secretary and Treasurer
|
Siva Nadar
|
42
|
Vice President
|
Our director will serve in that capacity until our next annual
shareholder meeting or until his successor is elected and qualified. Officers
hold their positions at the will of our Board of Directors. There are no
arrangements, agreements or understandings between non-management security
holders and management under which non-management security holders may directly
or indirectly participate in or influence the management of our affairs.
Joel Dulatre Cortez, Director and President, Manila, the
Republic of the Philippines
Mr. Cortez is a citizen of the Philippines and obtained his
Bachelor of Commerce and Master in Commerce degrees from Ateneo University in
1996 and 2000, respectively. Mr. Cortezs principal occupation after 2011 to the
present has been president of PAL MicroFinancial, the fifth largest micro
lending institution in the Philippines, which offers short-term loans to
businesses that need quick access to capital. From 2007 to 2011, Mr. Cortez was
on the board of directors and was responsible for overseeing all its commercial
lending matters and collection procedures.
Mr. Cortez has been Director and President of our company since
its inception.
Mark Christian Soo, Quezon City, the Republic of the
Philippines
Mr. Soo is a citizen of the Philippines and obtained his
Bachelor of Science degree in 2006 from the University of the Far East. Mr.
Soos principal occupation after 2010 to the present has been senior consulting
geologist in charge of a team of ten geologists who conduct field work on
prospective gold and silver mining sites and prepare reports on the results,
which Mr. Soo reviews and recommends whether or not a particular site merits
further exploration. From 2006 to 2010, Mr. Soo was a consulting geologist
responsible for field work and assays and recommending whether a property
merited further exploration.
Mr. Soo has been Secretary and Treasurer of our company since
its inception.
Siva Nadar, Vice President, Mumbai India
Mr. Nadar is a citizen of India and obtained a Masters in
Commerce from Narsee Monjee College of Commerce and Economics in 2002. Since
2008, he has been a senior lender for Mitesh Financial Group, meeting with
clients and reviewing their loan applications.
Mr Nadar has been a Vice President of our company since April
6, 2015
39
Other Directorships
Our director holds no other directorships in any company with a
class of securities registered pursuant to section 12 of the Exchange Act or
subject to the requirements of section 15(d) of such Act or any company
registered as an investment company under the Investment Company Act of
1940.
Board of Directors and Director Nominees
Since our Board of Directors does not include a majority of
independent directors, the decisions of the Board regarding director nominees
are made by persons who have an interest in the outcome of the determination.
The Board will consider candidates for directors proposed by security holders,
although no formal procedures for submitting candidates have been adopted.
Unless otherwise determined, at any time not less than 90 days prior to the next
annual Board meeting at which the slate of director nominees is adopted, the
Board will accept written submissions from proposed nominees that include the
name, address and telephone number of the proposed nominee; a brief statement of
the nominees qualifications to serve as a director; and a statement as to why
the security holder submitting the proposed nominee believes that the nomination
would be in the best interests of our security holders. If the proposed nominee
is not the same person as the security holder submitting the name of the
nominee, a letter from the nominee agreeing to the submission of his or her name
for consideration should be provided at the time of submission. The letter
should be accompanied by a résumé supporting the nominees qualifications to
serve on the Board, as well as a list of references.
The Board identifies director nominees through a combination of
referrals from different people, including management, existing Board members
and security holders. Once a candidate has been identified, the Board reviews
the individuals experience and background and may discuss the proposed nominee
with the source of the recommendation. If the Board believes it to be
appropriate, Board members may meet with the proposed nominee before making a
final determination whether to include the proposed nominee as a member of the
slate of director nominees submitted to security holders for election to the
Board.
Some of the factors which the Board considers when evaluating
proposed nominees include their knowledge of and experience in business matters,
finance, capital markets and mergers and acquisitions. The Board may request
additional information from each candidate prior to reaching a determination.
The Board is under no obligation to formally respond to all recommendations,
although as a matter of practice, it will endeavor to do so.
Conflicts of Interest
Our directors and officers are not obligated to commit their
full time and attention to our business and, accordingly, they may encounter a
conflict of interest in allocating their time between our future operations and
those of other businesses. In the course of their other business activities,
they may become aware of investment and business opportunities which may be
appropriate for presentation to us as well as other entities to which they owe a
fiduciary duty. As a result, they may have conflicts of interest in determining
to which entity a particular business opportunity should be presented. They may
also in the future become affiliated with entities, engaged in business
activities similar to those we intend to conduct.
In general, officers and directors of a corporation are
required to present business opportunities to a corporation if:
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the corporation could financially undertake the
opportunity;
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the opportunity is within the corporations
line of business; and
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it would be unfair to the corporation and its
stockholders not to bring the opportunity to the attention of the
corporation.
|
Significant Employees
Other than as described above, we do not expect any other
individuals to make a significant contribution to our business.
40
Legal Proceedings
To the knowledge of our company, during the past ten years,
none of our director or executive officers:
(1)
|
has filed a petition under the federal bankruptcy laws or
any state insolvency law, nor had a receiver, fiscal agent or similar
officer appointed by the court for the business or property of such
person, or any partnership in which he was a general partner at or within
two years before the time of such filings;
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(2)
|
was convicted in a criminal proceeding or named subject
of a pending criminal proceeding (excluding traffic violations and other
minor offenses);
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(3)
|
was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or otherwise
limiting, the following activities:
|
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(i)
|
acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the foregoing,
or as an investment advisor, underwriter, broker or dealer in securities,
or as an affiliate person, director or employee of any investment company,
or engaging in or continuing any conduct or practice in connection with
such activity;
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(ii)
|
engaging in any type of business practice; or
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(iii)
|
engaging in any activities in connection with the
purchase or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodities
laws;
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(4)
|
was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than 60 days
the right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such
activities;
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(5)
|
was found by a court of competent jurisdiction in a civil
action or by the SEC to have violated any federal or state securities law,
and the judgment in such civil action or finding by the SEC has not been
subsequently reversed, suspended, or vacated.
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(6)
|
was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding
by the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
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(7)
|
Such person was the subject of, or a party to, any
Federal or State judicial or administrative order, judgment, decree, or
finding, not subsequently reversed, suspended or vacated, relating to an
alleged violation of:
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(i)
|
Any Federal or State securities or commodities law or
regulation; or
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(ii)
|
Any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order; or
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(iii)
|
Any law or regulation prohibiting mail or wire fraud or
fraud in connection with any business entity;
or
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(8)
|
Such person was the subject of, or a party to, any
sanction or order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
|
Except as set forth in our discussion below in Certain
Relationships and Related Transactions, and Director Independence Transactions
with Related Persons, none of our directors, director nominees or executive
officers has been involved in any transactions with us or any of our directors,
executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the SEC.
Audit Committee
We do not currently have an audit committee or a committee
performing similar functions. The Board of Directors as a whole participates in
the review of financial statements and disclosure.
41
Family Relationships
There are no family relationships among our officers,
directors, or persons nominated for such positions.
Code of Ethics
We have adopted a code of ethics that applies to our officers,
directors and employees.
Item 11.
|
Executive Compensation
|
We have no standard arrangement to compensate our director or
officers for their services in their respective capacity as directors or
officers. The director and officers are not paid for meetings attended. All
travel and lodging expenses associated with corporate matters are reimbursed by
us, if and when incurred. Currently, the director and officers receive and have
received no funds or other cash considerations. There are no financial
agreements with our executive officers at this time although we will reimburse
them for reasonable expenses incurred during their performance. We will not pay
compensation for attendance at meetings. The table below summarizes
compensation:
Summary Compensation Table
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NonEquity
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Name and
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Year
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Stock
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Options
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Incentive Plan
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All
Other
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Principal
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Ended
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Compensation
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Position
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March 31,
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($)
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($)
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($)
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(Number)
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($)
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($)
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Total ($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(j)
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Mr. Cortez,
President and Director
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2016
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2017
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2018
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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Mr. Soo,
Secretary and Treasurer
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2016
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2017
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2018
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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Mr. Nadar,
Vice President
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2016
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2017
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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2018
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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-0-
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Employment Agreements
We have no employment agreements with any of our executive
officers.
Equity Compensation Plans, Stock Options, Bonus Plans
No such plans or options exist. None have been approved or are
anticipated. No Compensation Committee exists either.
42
Compensation of Directors
We have no formal plan for compensating our directors for their
services in the future in their capacity as directors, although such directors
are expected in the future to receive options to purchase shares of our common
stock as awarded by our Board of Directors or by any compensation committee that
may be established.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits to our directors or executive officers. We have
no material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the Board of Directors or
a committee thereof.
Compensation Committee
We do not currently have a compensation committee of the Board
of Directors or a committee performing similar functions. The Board of Directors
as a whole participates in the consideration of executive officer and director
compensation.
Item 12.
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Security Ownership of Certain Beneficial
Owners and Management
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The following table sets forth, as of March 31, 2018 the total
number of shares owned beneficially by each of our director, officers and key
employees and the present owner of 5% or more of our total outstanding shares.
The shareholders listed below have direct ownership of their shares and possess
sole voting and dispositive power with respect to the shares. Except as
indicated in the footnotes to these tables, and as affected by applicable
community property laws, all persons listed have sole voting and investment
power for all shares shown as beneficially owned by them.
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Amount of
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Beneficial
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Percent of
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Title or Class
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Name and Address of
Beneficial Owner
(1)
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Ownership
(2)
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Class
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Common Stock
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Joel Dulatre
Cortez (President and Director),
223 De La Cruz Road, Pasay, Metro
Manila,
Philippines
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10,000,000
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33.3 %
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Common Stock
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Mark Christian
Soo (Secretary and Treasurer),
2551 Scout Rallos Avenue, Quezon City,
Philippines
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5,000,000
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16.7 %
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Total
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15,000,000
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50 %
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(1)
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Unless otherwise noted, the security ownership disclosed
in this table is of record and beneficial.
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(2)
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Under Rule 13-d of the Exchange Act, shares not
outstanding but subject to options, warrants, rights, conversion
privileges pursuant to which such shares may be acquired in the next 60
days are deemed to be outstanding for the purpose of computing the
percentage of outstanding shares owned by the person having such rights,
but are not deemed outstanding for the purpose of computing the percentage
for such other persons. None of our officers or director has options,
warrants, rights or conversion privileges
outstanding.
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We have no knowledge of any arrangements, including any pledge
by any person of our securities, the future operation of which may at a
subsequent date result in a change in our control.
We are not, to the best of our knowledge, directly or
indirectly owned or controlled by another corporation or foreign government.
Item 13.
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Certain Relationships and Related
Transactions Relationships
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Our executive officers are not related.
43
Transactions with related persons, promoters and certain
control persons
To this date, and aside from the following completed
transactions, there have been no agreements or transactions with the
director/officers, nominees for election as directors, any principal security
holders, or any relative or spouse of such named persons. There have been no
transactions, or proposed transactions, which have materially affected or will
materially affect us in which any director, executive officer, or beneficial
holder of more than 10% of the outstanding common stock, or any of their
respective relatives, spouses, associates or affiliates has had or will have any
direct or material indirect interest, except as follows:
As of the date of this report, there have been 15,000,000
shares issued to Mr. Cortez, director and president, and Mr. Soo, secretary and
treasurer, at the price of $0.001 per share, for an aggregate consideration of
$15,000.
The shares issued to the officers were in consideration of
their agreeing to take the initiative in developing and implementing the
business plan of our company, including, among other things, providing the
initial seed capital to allow our company to engage a professional geologist to
assist in identifying a mineral prospect considered worthy of exploration thus
enabling our company to implement its business plan
The company paid the expenses in connection with a registration
statement it filed in order to permit certain of the officers to sell their
company shares.
Mr. Cortez has lent us $117,000, which loan is unsecured,
non-interest bearing, and due on demand
Corporate Governance
Director Independence
We have determined that we do not have a director that would
qualify as an independent director as defined by Nasdaq Marketplace Rule
4200(a)(15).
We do not have a standing audit, compensation or nominating
committee, but our entire Board of Directors acts in such capacities. We believe
that our Board of Directors is capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting. The Board of Directors of our company does not believe that it is
necessary to have a standing audit, compensation or nominating committee because
we believe that the functions of such committees can be adequately performed by
the Board of Directors. Additionally, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.
Item 14.
|
Principal Accounting Fees and Services
|
We have engaged Sadler, Gibb
& Associates, LLC, as our auditors since 2014. For fiscal years ended March
31, 2018 and 2017, total audit fees were $8,500 and 8,500, respectively. We made
no other payments to our auditors.
44