The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding the Company's capital needs, business strategy
and expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expect," "plan,"
"intend," "anticipate," "believe," "estimate,”
"predict," "potential" or "continue", the
negative of such terms or other comparable terminology. Actual events or
results may differ materially. In evaluating these statements, you should
consider various factors, including the risks described below, and, from time
to time, in other reports the Company files with the United States Securities
and Exchange Commission (the “SEC”). These factors may cause the Company's
actual results to differ materially from any forward-looking statement. The
Company disclaims any obligation to publicly update these statements, or
disclose any difference between its actual results and those reflected in these
statements.
As
used in this Annual Report, the terms “we,” “us,” “our,” “Terrace,” and the
“Company” mean Terrace Ventures Inc. and its subsidiaries, unless
otherwise indicated. All dollar amounts in this Annual Report are expressed in
U.S. dollars, unless otherwise indicated.
ITEM 1. BUSINESS.
Overview
We were
incorporated on February 20, 2001 under the laws of the State of Nevada.
Our
business plan is to assemble a portfolio of mineral properties with gold
potential and to engage in the exploration and development of these properties.
We currently have an earn-in agreement to acquire 75% interest in Pengram
Corporation's agreement with Scoonover Exploration LLC and JR Exploration LLC
(the “Underlying Agreement”) to acquire the Golden Snow Property (as described
below).
GOLDEN
SNOW PROJECT
Earn-In Agreement
On April 26, 2011, we entered into an agreement with Pengram
Corporation ("Pengram") dated April 26, 2011, as amended on June 29,
2011, September 20, 2012, November 17, 2012, May 30, 2013 and December 18, 2013
(the "Earn-In Agreement") whereby we will earn up to a 75% interest
in Pengram's agreement with Scoonover Exploration LLC and JR Exploration LLC
(the “Underlying Agreement”) to acquire the Golden Snow Property by paying to
Pengram up to $175,000 and expending up to $1,250,000 to do exploration work on
the Golden Snow Property as follows:
|
(i)
|
The first 25%
interest in the Underlying
Agreement upon the
Company completing cumulative exploration expenditures on the Property
totalling $250,000 by June 30, 2014.
|
|
(ii)
|
An additional 25%
interest in the Underlying
Agreement upon the
Company:
|
|
|
a.
|
paying Pengram $75,000 on or before
June 30, 2014; and
|
|
|
b.
|
completing cumulative exploration
expenditures on the Property totalling $750,000 by December 31, 2014.
|
|
(iii)
|
An additional 25%
interest in the Underlying
Agreement upon the
Company:
|
|
|
a.
|
paying Pengram $100,000 on or before June 30, 2015; and
|
|
|
b.
|
completing exploration expenditures on
the Property totalling $1,250,000 by December 31, 2015.
|
3
The Company is also obligated to pay all advance
royalties, county and BLM claim fees and Nevada state taxes during the currency
of the Earn-In Agreement. There is no assurance that the Company will be able
to perform its obligations under the Earn-In Agreement.
Description of Property
The Golden Snow Project consists of 128 unpatented mining claims
covering approximately 3.5 square miles. The titles to the property will
expire on September 1, 2014 if we do not renew the claims.
Location, Access, and Physiography
The Golden Snow Project is contiguous to the southern end of
Staccato Gold’s Lookout Mountain property, which has identified several
mineralized areas. The Golden
Snow Project is located in the Battle Mountain-Eureka Trend, approximately
eight miles south of the East Archimedes gold deposit where Barrick Gold Corporation
is currently mining a Carlin- type sediment hosted gold deposit. The Eureka
district is at the south end of a northerly trending series of intrusives.
4
Figure 2
Location of Golden Snow Project
5
Property History
Exploration in
the Eureka District commenced in the 1860s. The Company does not have any
records of exploration work conducted on the Golden Snow Project prior to 2006.
In 2006,
Minterra Resources acquired the Golden Snow Project. After its acquisition,
Minterra Resources commenced a gravity survey and a 95 line kilometer ground
magnetic survey across the Golden Snow Project. The gravity data identified
two up-thrown (horst) blocks and the magnetic data indicate a prominent
circular high that is approximately 2,782 feet in diameter and has a similar
signature to Eocene age intrusive and extrusive rocks throughout the Eureka
District. Processing of the gravity data by Wright Geophysics identified a
number of geophysical linears and Wright also interpreted the magnetic data
which shows a prominent circular high that is approximately 2,800 feet in
diameter; this has a signature similar to Eocene age intrusive and extrusive
rocks associated with mineralization throughout the Eureka District.
In 2007, Minterra Resources completed a 932 sample soil geochemistry
program designed to further refine and evaluate the prominent horst-bounding
faults. Analysis of the data produced numerous large, coherent, multipoint
clusters of anomalous gold, arsenic, antimony, mercury, lead, zinc and barite. Anomalous
gold, silver and trace element values from the 2006 soil geochemical program
coincided with fault zones outlined by the geophysical-gravity data.
Geology
Many of the
sediment-hosted gold deposits in Nevada appear to have developed at or near
platform margin/basin margin sites where mineralization is found to be
disseminated along the “low-stands” or karsted zone separated different
stratigraphic units. The Golden Snow Project is positioned along this major
platform margin that extends northwards to Cortez Hills, Pipeline and beyond.
Future study of the location of these platform margins may result in the
discovery of additional world-class gold deposits in Nevada.
Gold
mineralization has come up along the host margin where Devonian age rocks are
in contract with the Cambrian age rocks. The mineralization is not only found
within the feeder fault, but it is also disseminated out along these “low-stand
zones” which are commonly the break between different rock formations. Another
example of the same host margin mineralization can be seen in a cross section
of the mineralization at Lone Tree. Mineralization has also been discovered
along the Wayne Zone Fault, which forms the western edge of the horst, and
spreads out along favorable host rocks. Both styles of mineralization appear
to potentially exist at the Golden Snow Project.
The geology of
the Golden Snow Project has been interpreted to consist of Devonian age rocks
striking north/south and trending southward under pediment cover. It has also
been interpreted that the Cambrian section is possibly in fault contact with
the Devonian section. Both rock types are favorable host rocks for
Carlin-style mineralization throughout Nevada, especially in the Eureka Area.
The following
sets out the geological units exposed on the Golden Snow Project:
Bay State
Dolomite
– The Bay State Dolomite is a massive dark
grey to black to purplish dolomite which is reported to be 600-850 feet thick
in the Eureka Area. The lower portion of this unit is made up of irregular
bedded light-grey, dolomite sandstone. The upper portion is in gradational
contact with the overlying Devils Gate Limestone.
Sentinel
Mountain Dolomite
– The Sentinel Mountain Dolomite
gradationally overlies Oxyoke Canyon. It is composed of alternating,
thick-bedded, coarse-grained, light-gray dolomite and motted, finely laminated,
chocolate brown dolomites with a strong petroliferous odor when broken. It
ranges in thickness from 410 feet to 600 feet.
6
Oxyoke Canyon
– The Oxyoke is predominantly light gray to brown weathering, fine
to medium-grained, quartz sandstone with a dolomatic matrix. It ranges in
thickness of less than 20 feet up to 400 feet thick throughout the Eureka Area.
Sadler Ranch
– The Sadler Ranch locally has been divided up into an upper and
lower dolomite and a middle crinoidal dolomite. The lower dolomite is a medium
to thick-bedded, very finely grained, light gray to yellowish-gray dolomite.
The middle crinoidal dolomite is a light to medium-gray, poorly bedded,
laminated to cross-laminated, crinoidal packstone with thin lenses of mudstone
and packstone. The upper dolomite is a medium to thick-bedded, very
fine-grained, light-gray laminated dolomite. The thickness of this unit varies
from 90 feet to 450 feet.
McColley
Canyon/Bartine Member
– The McColley Canyon is
dominantly a medium to thick bedded gray limestone with interbedded light
brown-gray fossiliferous and organic-rich dolomite. The Bartine is composed of
thin to medium-bedded, medium-gray, fine grained limestone and yellowish
argillaceous limestone with abundant brachiopods. Some people combine these
units whereas others map them as separate units. These rocks vary from 330
feet to 650 feet thick.
Beacon Peak
Dolomite
– This unit is a massive, light gray to
brown, finely laminated dolomite, with local thin beds of finely laminated
dolomite and thin lenses of well rounded, quartz-rich sandstones with a
dolomitic matrix. The average thickness is 328 feet.
Mineralization
Two major target
zones exist on the Golden Snow Project. These primary targets would be eastern
and western boundary of the horst block. Both the eastern and western edge
extends for over 15,000 feet as shown by gravity geophysics. Only drill hole
ELP-8 drilled close enough to the eastern edge of the gravity high to test for
possible mineralization. The remaining holes were either far to east and out
into the abyss, or too far west of the eastern horst fault and on top of the
gravity high.
A magnetic
survey run over the eastern portion of the claim block shows a magnetic high
and has been interpreted to be an intrusive as opposed to volcanics. This area
is also a potential favorable target area for gold and base-metal
mineralization.
Numerous
anomalous zones with large, coherent clusters of anomalous gold, arsenic,
antimony, mercury, lead and barite have been identified on the Golden Snow
Project. The majority of the anomalies appear to be located in the
northeastern and eastern and eastern portion of the claim block because of
surface or near surface bedrock. These values are probably related to
mineralization associated with the buried intrusive. Anomalous arsenic,
antimony and mercury are present in the area of the Ratto Fault. Since these
minerals are usually formed distal to gold in Carlin-style systems the
geochemistry may indicate gold mineralization at depth.
Soil and Rock
Geochemistry
Soil and Rock
Geochemistry
Previous lessors completed a widespread soil geochemical
sampling program on the Golden Snow Project (Minterra Resource Corp./Britannia
Gold). The 2006 program was designed as a follow-up to their gravity and ground
magnetic geophysical programs.
932 soils were
collected on the west half of the property on lines spaced 800 feet apart with
samples taken every 200 feet along each line. The lines were located to bracket
the gravity linears; interpreted by Wright as bounding features of north-south
trending “horst” and “graben” blocks. The linears are also interpreted as
southward continuation(s) of the Ratto Ridge Fault zone which localized the
mineralization drilled by Timberline Resources in the Lookout Pit and South
Adit areas.
Reconnaissance
geology and rock chip sampling during late 2011 and early 2012 identified
“collapse breccia” features within the central portion of the claim block where
it wraps around the Timberline claims. These contact and fault zones are
located in areas not previously sampled and project under colluvial cover into
areas targeted for exploration by the geophysical and 2006 geochemistry.
7
Seventy-two
follow up soils were collected using the same layout as the 2006 samples to
fill in the un- sampled prospective gap where the collapse brecciation was note.
The samples were analyzed using the same protocol as the 2006 sample program.
Key data was
contoured and incorporated with the previous property- wide dataset. The most
significant results are shown by arsenic and gold. These are significant
because the NE trends are parallel to both the favorable Bay State Dolomite
(Dbp)/Oxyoke (Doc) contact along which distinct collapse zones were mapped.
Additionally,
the NE trending faults appear to control these collapse zones as well as
disrupt and offset the favorable host rocks.
There is a
narrow zone of detectable gold which also parallels that trend and is similar
to other gold- bearing contour zones in the north.
Barium shows a
distinct anomalous zone in the new data that lies along the east side of the
arsenic values and suggests zoning. This is what would be expected due to the
barite associated with the gold deposits at Archimedes (Barrick-Ruby Hill) and
the Lookout Pit (Timberline).
Silver and
antimony do not appear to be significant relative to the collapse breccia
features. However, recontouring the silver and antimony did indicate some
distinct zoning peripheral to the magnetic high which Wright interpreted as a
shallow intrusive on the east side of the project.
Gold in rock
chip sampling also is correlative with the magnetically indicated intrusive
margin. Although not spectacular in their magnitude, the data are very
encouraging because all of the samples had detectable gold with a high value of
0.052 ppm Au. Most of the samples were collected from areas with a
preponderance of jasperoid as subcrop or large boulders. These data are
interpreted as representative of nearby bedrock rather than transported
boulders or colluvium.
Current
Exploration Activities
Mapping and
reconnaissance work was conducted in late 2011 and early 2012 and identified
collapse breccia features which have been recently identified in association
with major Carlin-type sediment hosted gold deposits at Cortez Hills. Previous
work by Timberline Resources mineralization was within collapse breccia zones.
Gold is also associated with collapse breccia at the:
-
Meikle Mine
-
Rain Mine
-
Railroad district in the southern Carlin Trend
An additional 72
soil samples were collected to help delineate the possible extension of the
collapse breccia zones on the Golden Snow Project. Fourteen rock samples were
collected to help characterize the area around the magnetically indicated
intrusive.
Our consulting geologist recommends three
reverse circulation drill holes for a total of 3,000 feet are proposed based on
the compilation and evaluation of the data. Two of these holes will test likely
locations for gold-bearing collapse breccias. The third hole will test adjacent
to the probable intrusive indicated by the ground magnetic data.
8
The proposed drill program would cost approximately $175,000,
summarized as follows:
Exploration Program Costs
|
Estimate
|
Rate ($)
|
|
Cost ($)
|
Geology-Senior
|
10
|
$650.00
|
|
$6,500
|
Geology-Junior
|
10
|
$350.00
|
|
$4,000
|
Travel and Related Expenses (includes mileage)
|
|
|
|
$2,700
|
|
|
|
Subtotal
|
$13,200
|
Drilling
|
|
|
|
$115,472
|
Drill Sample Assaying
|
|
|
|
$27,030
|
Drill Supervision (Senior)
|
2
|
$650
|
|
$1,300
|
Drill Geologist
|
13
|
$400
|
|
$5,200
|
Review of Results
|
|
|
|
$0
|
Travel and Related Expenses (includes mileage)
|
|
|
|
$2,700
|
Drill Site Preparation and Reclamation
|
|
|
|
$10,200
|
|
|
|
Subtotal
|
$161,902
|
|
|
|
Total
|
$175,102
|
Compliance with Government Regulations
Exploration and
development activities are all subject to stringent national, state and local
regulations. All permits for exploration and testing must be obtained through
the local Bureau of Land Management (“BLM”) offices of the Department of
Interior in the State of Nevada. The granting of permits requires detailed
applications and filing of a bond to cover the reclamation of areas of
exploration. From time to time, an archaeological clearance may need to be
obtained prior to proceeding with any exploration programs.We plan to secure
all necessary permits for any future exploration.
We have to apply
for and receive permits from the BLM to conduct drilling activities on BLM
administered lands. Mining operations are regulated by the Mine and Safety
Health Administration (“MSHA”). MSHA inspectors periodically visit projects to
monitor health and safety for the workers, and to inspect equipment and
installations for code requirements. Workers must have completed MSHA safety
training and must take refresher courses annually when working on a project. A
safety officer for the project should also on site.
Other regulatory
requirements monitor the following:
|
(i)
|
Explosives
and explosives handling.
|
|
(ii)
|
Use
and occupancy of site structures associated with mining.
|
|
(iii)
|
Hazardous
materials and waste disposal.
|
|
(iv)
|
State
Historic site preservation.
|
|
(v)
|
Archaeological
and paleontological finds associated with mining.
|
We believe that
we are in compliance with all laws and plan to continue to comply with the laws
in the future. We believe that compliance with the laws will not adversely
affect its business operations. There is however no assurance that any change
in government regulation in the future will not adversely affect our business
operations.
9
Each year we
must pay a maintenance fee of $140 per claim to the Nevada State Office of the
Bureau of Land Management and on September 1 of each year we must file an
affidavit and Notice of Intent to Hold the claims in Mineral County. With
respect to the Golden Snow Project, we have paid the required maintenance fees
and filed the affidavits required in order to extend the claims to August 31,
2014.
Compliance with Environmental Regulation
We will have to
sustain the cost of reclamation and environmental remediation for all
exploration work undertaken. Both reclamation and environmental remediation
refer to putting disturbed ground back as close to its original state as
possible. Other potential pollution or damage must be cleaned up and renewed
along standard guidelines outlined in the usual permits. Reclamation is the
process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond completion
of the recommended work program. Because there is presently no information on
the size, tenor, or quality of any resource or reserve at this time, it is
impossible to assess the impact of any capital expenditures on earnings, our
competitive position or us in the event that a potentially economic deposit is
discovered.
Prior to
undertaking mineral exploration activities, we must make application for a
permit, if we anticipate disturbing land. A permit is issued after review of a
complete and satisfactory application. We do not anticipate any difficulties
in obtaining a permit, if needed. If we enter the production phase, the cost
of complying with permit and regulatory environment laws will be greater
because the impact on the project area is greater. Permits and regulations
will control all aspects of the production program if the project continues to
that stage. Examples of regulatory requirements include:
|
(i)
|
Water discharge will have to meet drinking water
standards;
|
|
(ii)
|
Dust generation will have to be minimal or
otherwise re-mediated;
|
|
(iii)
|
Dumping of material on the surface will have to
be re-contoured and re-vegetated with natural vegetation;
|
|
(iv)
|
An assessment of all material to be left on the
surface will need to be environmentally benign;
|
|
(v)
|
Ground water will have to be monitored for any
potential contaminants;
|
|
(vi)
|
The socio-economic impact of the project will
have to be evaluated and if deemed negative, will have to be re-mediated; and
|
|
(vii)
|
There will have to be an impact report of the
work on the local fauna and flora including a study of potentially endangered
species.
|
Competition
We are an
exploration stage company. We compete with other mineral resource exploration
and development companies for financing and for the acquisition of new mineral
properties. Many of the mineral resource exploration and development companies
with whom we compete have greater financial and technical resources than we do.
Accordingly, these competitors may be able to spend greater amounts on
acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they
may be able to afford greater geological expertise in the targeting and
exploration of mineral properties. This competition could result in
competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration and development. This
competition could adversely impact our ability to finance further exploration
and to achieve the financing necessary for us to develop our mineral properties.
Employees
We have no
employees as of the date of this Annual Report on Form 10-K other than our sole
executive officer and director. We conduct our business largely through
agreements with consultants and arms-length third parties.
10
Research And Development Expenditures
We have not incurred any research expenditures since our
incorporation.
Patents And Trademarks
We do not own, either legally or beneficially, any patent or
trademark.
ITEM 1A. RISK FACTORS.
The following are some of
the important factors that could affect our financial performance or could
cause actual results to differ materially from estimates contained in our
forward-looking statements. We may encounter risks in addition to those
described below. Additional risks and uncertainties not currently known to us,
or that we currently deem to be immaterial, may also impair or adversely affect
our business, financial condition or results of operation.
If we do not obtain additional
financing, our business will fail.
As at April 30, 2013, we had cash on hand of $716. Our plan of operation calls for significant expenses in order to meet our
obligations under the Earn-In Agreement. There is no guarantee that we will
exercise our option.
Obtaining financing would be subject to a number
of factors outside of our control, including market conditions and additional
costs and expenses that might exceed current estimates. These factors may make
the timing, amount, terms or conditions of financing unavailable to us in which
case we will be unable to complete our plan of operation on our mineral
properties and to meet our obligations under our option agreements.
We have yet to attain profitable
operations and because we will need to obtain financing to continue our
business operations, our accountants believe that there is substantial doubt
about our ability to continue as a going concern.
We have incurred a net loss of $2,385,215 for the period from February 20, 2001 (inception)
to April 30, 2013 and have no revenues to date. Our future is dependent upon our ability to
obtain financing. Our auditors have expressed substantial doubt about our
ability to continue as a going concern given our accumulated losses and working
capital deficiency. This opinion could materially limit our ability to raise
additional funds by issuing new debt or equity securities or otherwise. If we
fail to raise sufficient capital, we will not be able to complete our business
plan. As a result, we may have to liquidate our business and investors may lose
their investment.
We may conduct further offerings in
the future in which case investors’ shareholdings will be diluted.
Since our inception, we have relied on equity
sales of our common stock to fund our operations. We may conduct additional
equity offerings in the future to finance any future business projects that we
decide to undertake. If common stock is issued in return for additional funds,
the price per share could be lower than that paid by our current stockholders.
We anticipate continuing to rely on equity sales of our common stock in order
to fund our business operations. If we issue additional stock, investors’
percentage interest in us will be diluted. The result of this could reduce the
value of their stock.
Because of the unique difficulties and
uncertainties inherent in mineral exploration ventures, we face a high risk of
business failure.
Investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that
we plan to undertake. These potential problems include, but are not limited
to, unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
11
We have no known mineral reserves and
if we cannot find any, we will have to cease operations.
We have no mineral reserves. If we do not find a
mineral reserve containing gold or if we cannot explore the mineral reserve,
either because we do not have the money to do it or because it will not be
economically feasible to do it, we will have to cease operations and you will
lose your investment. Mineral exploration, particularly for gold, is highly
speculative. It involves many risks and is often non-productive. Even if we
are able to find mineral reserves on our properties, our production capability
is subject to further risks including:
-
|
Costs of bringing
the property into production including exploration work, preparation of
production feasibility studies, and construction of production facilities, all
of which we have not budgeted for;
|
-
|
Availability and costs
of financing;
|
-
|
Ongoing costs of
production; and
|
-
|
Environmental
compliance regulations and restraints.
|
The marketability of any minerals acquired or
discovered may be affected by numerous factors which are beyond our control and
which cannot be accurately predicted, such as market fluctuations, the lack of
milling facilities and processing equipment near our mineral properties, and
such other factors as government regulations, including regulations relating to
allowable production, importing and exporting of minerals, and environmental
protection.
Given the above noted risks, the chances of
finding reserves on our mineral properties are remote and funds expended on
exploration will likely be lost.
Even if we discover proven reserves of
precious metals on our mineral properties, we may not be able to successfully
commence commercial production.
Our mineral properties do not contain
any known bodies of ore. If our exploration programs are successful in
discovering proven reserves on our mineral properties, we will require
additional funds in order to place the mineral properties into commercial
production. The expenditures to be made by us in the exploration of mineral
properties in all probability will be lost as it is an extremely remote
possibility that the mineral claims will contain proven reserves. If our
exploration programs are successful in discovering proven reserves, we will
require additional funds in order to place the mineral properties into
commercial production. The funds required for commercial mineral production
can range from several millions to hundreds of millions. We currently do not
have sufficient funds to place our mineral claims into commercial production.
Obtaining additional financing would be subject to a number of factors,
including the market price for gold and the costs of exploring for or mining
these materials. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. Because we will need
additional financing to fund our exploration activities there is substantial
doubt about our ability to continue as a going concern. At this time, there is
a risk that we will not be able to obtain such financing as and when needed.
We face significant competition in the
mineral exploration industry.
We compete with other mining and exploration
companies possessing greater financial resources and technical facilities than
we do in connection with the acquisition of mineral exploration claims and
leases on precious metal prospects and in connection with the recruitment and
retention of qualified personnel. There is significant competition for
precious metals and, as a result, we may be unable to acquire an interest in
attractive mineral exploration properties on terms we consider acceptable on a
continuing basis.
There is no assurance that we will be able to
comply with our obligations under the Earn-In Agreement.
In order comply with our obligations under the
Earn-In Agreement we are required to make a series of cash payments and meet
the annual claim maintenance fees. In order to meet these payments we will
need to obtain substantial financing. If we are unable to meet these payments,
we will lose our options to acquire these properties.
12
Because our sole director and
executive officer does not have formal training specific to the technicalities
of mineral exploration, there is a higher risk that our business will fail
.
Howard Thomson, our sole director and executive
officer, does not have any formal training as a geologist or in the technical
aspects of managing a mineral exploration company. Mr. Thomson’s lack of
expertise could cause irreparable harm to our operations, earnings, and
ultimate financial success could suffer irreparable harm due to management's
lack of experience in this industry.
Because the prices of metals fluctuate, if the
price of metals for which we are exploring decreases below a specified level,
it may no longer be profitable to explore for those metals and we will cease
operations.
Prices of metals are determined by such factors
as expectations for inflation, the strength of the United States dollar, global
and regional supply and demand, and political and economic conditions and
production costs in metals producing regions of the world. The aggregate
effect of these factors on metal prices is impossible for us to predict. In
addition, the prices of precious metals are sometimes subject to rapid
short-term and/or prolonged changes because of speculative activities. The
current demand for and supply of these metals affect the metal prices, but not
necessarily in the same manner as current supply and demand affect the prices
of other commodities. The supply of these metals primarily consists of new
production from mining. If the prices of the metals are, for a substantial
period, below our foreseeable cost of production, we could cease operations and
investors could lose their entire investment.
The quotation price of our common
stock may be volatile, with the result that an investor may not be able to sell
any shares acquired at a price equal to or greater than the price paid by the
investor.
Our common shares are quoted on the OTC Markets
under the symbol "TVER”. Companies quoted on the OTC Markets have
traditionally experienced extreme price and volume fluctuations. In addition,
our stock price may be adversely affected by factors that are unrelated or
disproportionate to our operating performance. Market fluctuations, as well as
general economic, political and market conditions such as recessions, interest
rates or international currency fluctuations may adversely affect the market
price of our common stock. As a result of this potential volatility and
potential lack of a trading market, an investor may not be able to sell any of
our common stock that they acquire at a price equal or greater than the price
paid by the investor.
Because our stock is a
penny stock, shareholders will be more limited in their ability to sell their
stock.
The SEC has adopted rules that
regulate broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are generally equity securities with a price of less than
$5.00, other than securities registered on certain national securities
exchanges or quoted on the Nasdaq system, provided that current price and
volume information with respect to transactions in such securities is provided
by the exchange or quotation system. Because our securities constitute “penny
stocks” within the meaning of the rules, the rules apply to us and to our
securities. The rules may further affect the ability of owners of shares to
sell our securities in any market that might develop for them. As long as the
trading price of our common stock is less than $5.00 per share, the common
stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock, to
deliver a standardized risk disclosure document prepared by the SEC, that:
1.
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contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading;
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2.
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contains a
description of the broker’s or dealer’s duties to the customer and of the
rights and remedies available to the customer with respect to a violation to
such duties or other requirements of securities laws;
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3.
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contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price;
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4.
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contains a
toll-free telephone number for inquiries on disciplinary actions;
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5.
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defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and
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6.
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contains such
other information and is in such form, including language, type, size and
format, as the SEC shall require by rule or regulation.
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The broker-dealer also must provide,
prior to effecting any transaction in a penny stock, the customer with: (a) bid
and offer quotations for the penny stock; (b) the compensation of the
broker-dealer and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable information
relating to the depth and liquidity of the market for such stock; and (d) a
monthly account statements showing the market value of each penny stock held in
the customer’s account. In addition, the penny stock rules require that prior
to a transaction in a penny stock not otherwise exempt from those rules; the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchaser’s written
acknowledgment of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed and dated copy
of a written suitably statement. These disclosure requirements may have the
effect of reducing the trading activity in the secondary market for our stock.