United
States
Securities
and Exchange Commission
Washington
D.C. 20549
FORM
10-KSB
Annual
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
(Mark
one)
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[x]
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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For
the
fiscal year ended June 30,
2007 or
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[
]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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For
the
transition period from ________________ to
_______________
Commission
File Number 0-16097
GOLDEN
RIVER RESOURCES CORPORATION
(Exact
name of Registrant as specified in its charter)
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Delaware
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98-0079697
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(State
or other jurisdiction of
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(IRS
Employer
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incorporation
or organisation)
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Identification
No.)
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Level
8,
580 St Kilda Road Melbourne, Victoria,
3004, Australia
(Address
of principal executive
offices) (Zip
Code)
Registrant’s
telephone number, including area code 011 (613) 8532
2860
Securities
registered pursuant to Section 12 (b) of the Act:
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Title
of each class
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Name
of each exchange
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on
which registered
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N/A
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N/A
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Securities
registered pursuant to Section 12(g) of the Act:
Common
stock, par value $.0001 per share
(Title
of
Class)
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
the
past 90 days.
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Yes X
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No
[
]
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment
to
this Form 10-KSB.T
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)
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Yes [
]
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No X
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State
Issuer’s Revenues for its most recent fiscal year.
None
The
aggregate market value based on the average bid and asked price on the
over-the-counter market of the Registrant’s common stock, (“Common Stock”) held
by non-affiliates of the Company was US$2,730,027 as at June 30,
2007.
There
were
26,711,630 outstanding shares of Common Stock as of September 21,
2007. (Does not include 10,000,000 shares of Common Stock that are
issuable upon exercise of Special Warrants, without the payment of any
additional consideration. See Item 6. “Management’s
Discussion and Analysis of Financial Condition or Plan of Operation – Liquidity
and Capital Resources.”)
DOCUMENTS
INCORPORATED BY REFERENCE
Not
Applicable
Transitional
Small Business Issuer
Yes:___ No:_X_
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TABLE
OF CONTENTS
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PAGE
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Our
name
is Golden River Resources Corporation and we sometimes refer to ourselves in
this Annual Report as “Golden River Resources”, the “Company” or as “we,” “our,”
or “us.” We changed our name from Bay Resources Ltd to Golden River Resources in
March 2006. We are an exploration stage mining company. Our objective
is to exploit our interest in the mineral claims in Nunavut, Canada which are
in
the Slave Craton and in the Committee Bay Greenstone Belt. Our
principal exploration target is for gold and we are seeking to determine whether
adequate gold reserves are present on the property covered by our claims to
develop an operating mine. We are in the initial stages of our
exploration program and have not yet identified any ore reserves.
We
hold
the interests in the Slave Craton directly and our wholly owned subsidiary
named
“Golden Bull Resources Corporation” (formerly 4075251 Canada Inc.) holds the
interests in the Committee Bay Greenstone Belt. Our wholly-owned
subsidiary is referred to in this Annual Report as “Golden Bull”.
We
sometimes refer to our claims collectively in this Annual Report as either
the
“Slave Properties” or the “Committee Bay Properties”. Our claims are
registered in the Mining Recorders Office in the Mining District of Nunavut
and
give us the right to explore and mine minerals from the property covered by
the
claims.
We
were
incorporated in the State of Delaware on February 1, 1973. We
commenced our mineral exploration activities in 2002. Prior thereto,
we were engaged in a number of other business activities that have been
discontinued. Our executive offices are at Level 8, 580 St. Kilda
Road, Melbourne, Victoria 3004 Australia and we have an office at 1 Yonge
Street, Suite 1801, Toronto, Ontario M5E 1W7, Canada. Our website location
is
www.goldenriverresources.com. Information included on our
website shall not be deemed to be incorporated in this Annual
Report. Our wholly owned subsidiary, Golden Bull, was incorporated on
May 27, 2002 in the Province of Ontario, Canada and is licensed to do business
in the Northwest Territories and Nunavut Canada.
Currency.
We
use the
Australian dollar as our reporting currency, since we are headquartered in
Australia and our administrative expenses are incurred in Australian
dollars. References to dollars are to Australian dollars (A$) unless
otherwise indicated as being Canadian dollars (CDN$) or United States dollars
(US$). For the convenience of the reader, the Australian Dollar figures for
the
year ended June 30, 2007 have been translated into United States Dollars (“US$)
using the rate of exchange at June 30, 2007 of A$1.00=US$0.8488.
History
of the Company
Our
predecessor corporation, Bayou Oil, was incorporated under the laws of Minnesota
in 1973 and since that time it had a number of activities that have been
ceased.
On
February 13, 1998, we incorporated a 100% owned subsidiary, Baynex.com Pty
Ltd
(formerly Bayou Australia Pty Ltd), a corporation incorporated under the laws
of
Australia.
On
June
29, 1999 we undertook a reverse stock split on a 1:20 basis and amended our
Articles of Incorporation to amend the par value of our shares from US$0.15
cents to US$0.0001 cents per share. On September 27, 1999 we changed our name
from Bayou International, Ltd to Baynet, Ltd.
In
May
2000, we commenced work on the development of a B2B mining portal however,
this
was abandoned as it was considered uneconomic.
On
August
21, 2000 we incorporated a new wholly owned subsidiary, Bay International Pty
Ltd (now known as Bay Resources (Asia) Pty Ltd), a corporation incorporated
under the laws of Australia. In October 2000, we changed our name to Bay
Resources Ltd, and in March 2006, we changed it to Golden River Resources
Corporation.
During
fiscal 2001, we conducted a due diligence review of St. Andrew Goldfields Ltd
(“St. Andrew”) with a view to taking a substantial investment in St.
Andrew. Following the conclusion of the review, we decided not to
proceed with the investment.
4
In
May
2002, we incorporated a new wholly owned subsidiary, Golden Bull Resources
Corporation (formerly 4075251 Canada Inc.), a corporation incorporated under
the
laws of Canada. Golden Bull is the vehicle that will be used by the Company
to
undertake exploration activities for gold on the Committee Bay Properties in
Canada.
During
the
2002 fiscal year we continued to expand our gold exploration business
by:
(i) entering
into an agreement to explore for gold on Tahera’s extensive property interests
on the Slave Craton in northern Canada; and
(ii) making
application via a new 100% owned subsidiary, Golden Bull (previously known
as
4075251 Canada Inc), for properties in the highly prospective Committee Bay
Greenstone Belt in Nunavut, Canada.
In
October
2002 we entered into an agreement (via our wholly owned subsidiary Bay Resources
(Asia) Pty Ltd) with the Tibet Bureau of Geology and Minerals Exploration
Development, China to earn a minimum 51% interest in the Xigaze copper belt
running in a 200 kilometer east-west trend either side of Lhasa. However, in
February 2003 we decided to withdraw from these arrangements as a result of
further hurdles being placed before us by the Chinese authorities that were
not
known at the time of entering into the agreement.
It
is the
policy of our Board of Directors that we will not engage in any activities
which
would subject us to registration and reporting requirements of the Investment
Company Act of 1940.
Description
Of Business
Introduction
We
are an
exploration stage company engaged in the identification, acquisition,
exploration and development of mining prospects believed to have gold
mineralization. The main objective is to explore, identify, and develop
commercially viable prospects over which we have rights that could produce
revenues. These types of prospects may also contain mineralization of metals
often found with gold, such as platinum and silver and other ‘base metals’
(copper, nickel, lead, zinc) which also may be worth processing. Exploration
and
development for commercially viable mineralization of any metal includes a
high
degree of risk which careful evaluation, experience and factual knowledge may
not eliminate, and therefore, we may never produce any revenues.
We
hold
properties in Nunavut, Canada. Golden River Resources holds interests in the
Slave Craton area within Nunavut and our currently owned 100% subsidiary; Golden
Bull Resources holds various prospects in the Committee Bay Greenstone Belt
in
Nunavut. We are in the initial stages of exploration programs and have not
yet identified any ore reserves.
Please
note that the Glossary in Appendix A to the Annual Report contains definitions
for the geological and other specialized terms used in this
section.
Slave
Craton Properties
During
2002, we reached an agreement with the Canadian company, Tahera Diamond
Corporation, to explore for gold on Tahera’s extensive properties on the Slave
Craton in Nunavut, Canada. At that time, Tahera’s Slave land package included
177 properties and 11 Inuit Owned Land (“IOL”) Concessions covering
approximately 471,000 acres. Tahera is a diamond mining company
conducting diamond exploration in the northern Slave Craton and brought its
Jericho diamond pipe into production in 2006.
The
exploration properties of Tahera that the Company has access to are grouped
into
two main areas, the High Lake Volcanic Belt and the Contwoyto Formation, both
of
which are located in the Slave craton, Mackenzie District of
Nunavut.
The
exploration properties in the High Lake Volcanic Belt consist of the Hood River
mineral properties and Inuit Owned Land (“IOL”) concessions located in the
northwest section of the Slave Structural Province. The land holdings
include four mining properties totaling 10,330 acres, and the Hood River
CO-20-00-03R IOL concession which encompasses 6,254 acres. The high
grade, Hood River gold showings identified to date occur within a 9 by 5
kilometer area in the west-central portion of the High Lake Greenstone
Belt. Four main mineralized areas are known to occur; the North Fold
Nose, Penthouse, Crown and Blackridge prospects.
The
exploration properties within the Contwoyto Formation consist of the
CO-08-00-01,03,03 and 05 IOL Concessions which are located on the east side
of
Contwoyto Lake. The original CO-08-00-01,03,03 and 05 Concession
Agreement totaled 65,250 acres but has subsequently been reduced to cover
3,379.77 acres. Mineralization specific to the properties includes a
number of significant banded iron formation hosted gold prospects including
the
R44-R47, R43-R45, the 4-2 grid, , and the 5-5 grid prospects.
5
The
agreement with Tahera dated March 7, 2002 gives us rights of access to
exploration data of Tahera covering gold, silver and base metal potential on
properties 100% held by Tahera or properties which are adjacent to or in the
area of the Tahera properties. Tahera has an extensive database of data to
which
we have access, including geophysical surveys, overburden and bedrock mapping,
overburden sampling and drilling data. We have agreed to pay them a two percent
net smelter return royalty on any production from gold and base metals we
discover having used Tahera’s extensive database.If during our exploration for
gold, silver or base metals on the 100% Tahera held mineral properties, we
discover diamonds, Tahera retains the rights to the diamonds. Under the
agreement, if we wish to conduct exploration on the properties, we need to
seek
access to the properties and enter into an access agreement with Tahera,
suitable to Tahera, which sets out the terms of our access. Our access cannot
interfere with Tahera’s operations on the properties. Tahera has the sole and
unfettered discretion to sell, transfer, assign, encumber, mortgage, pledge,
hypothecate, allow to lapse, forfeit, surrender or in any way dispose of its
interest in the properties. Should Tahera sell, transfer, assign the properties,
we would then need to negotiate access with the new holder of the properties.
We
undertake exploration at our sole risk. Subject to Tahera’s rights, we have the
right to exploit opportunities for gold, silver or base metals on the
properties. In return, GRR has granted Tahera a 2% net smelter return royalty
on
any mineral deposit discoveries that GRR may identify.
We
have
entered into access agreements with Tahera for the 2004 to 2006 exploration
programs. No field exploration was undertaken during 2007 and therefore we
did
not enter into an access agreement for 2007.
Each
of
the properties has minimum exploration expenditure commitments on an annual
basis to retain the rights for the property. The minimum commitments can be
met
by actual exploration expenditure or by making a cash payment in lieu of
exploration expenditure. Expenditures by both Tahera and GRR are counted towards
the commitment. In 2004 and 2006, the commitments were met by a mixture of
exploration expenditure and cash payments by both Tahera and GRR.
Exploration
work undertaken by GRR is subject to the Mining Land Use Regulations of the
Indian and Northern Affairs Canada Mining Act. This Act requires GRR to obtain
permits prior to performing significant exploration programs and sets standards
that must be met for development and reclamation.
On
April
1, 1999, the Nunavut Land Claims Agreement, dated May 28, 1993, between the
Inuit of Canada’s eastern arctic region and Her Majesty the Queen in right of
Canada, came into force. Under this agreement, the Inuit were granted ownership
of approximately 360,000 square kilometers of land in an area referred to as
the
Nunavut Settlement Area, including ownership of subsurface rights in
approximately 37,500 square kilometers of those lands. Third party
interests in lands in the Nunavut Settlement Area created on or after April
1,
1999 are granted, in the case of surface rights, by the appropriate regional
Inuit association and, in the case of subsurface rights, by Nunavut Tungavik
Incorporated (“NTI”) which will hold subsurface title to Inuit owned lands and
will be additionally responsible, in consultation with the appropriate regional
Inuit associations, for the administration and management of those subsurface
rights. The Tahera Inuit Owned Lands property CO-20-00-03R is
administered by the NTI. All non-IOL properties are administered by
the Federal Government of Canada.
A
list of
the mining properties that are covered under the Tahera/GRR agreement appears
as
Appendix B to this Annual Report. Exploration interest is currently
focused on the CO-20-00-03R IOL concession.
The
claims
are maintained in good standing by applying an annual work commitment or a
payment in lieu of work. Fees and exploration expenditures associated
with the maintenance of Tahera Corporation’s ground covered under the Slave
Craton Agreement with Golden River Resources are the responsibility of
Tahera.
Location
Hood
River
Ground
The
Hood
River mineral properties and Inuit Owned Land Concessions are in the High Lake
Volcanic Belt located in the northwest section of the Slave Structural Province
in the Mackenzie District of Nunavut. The land holdings include 4 mining
properties totalling 10,330 acres, and the Hood River CO-20-00-03R IOL
concession which encompasses 15,454 acres. Only the IOL concession is
within the greenstone component of the High Lake Volcanic Belt and therefore
of
exploration interest to us. The approximate center of the Inuit Concessions
is
about 45 kilometers north of the Arctic Circle, and 530 kilometers
north-northeast of Yellowknife. The IOL Concessions are held 50:50 by Benachee
Resources Inc. and Snowpipe Resources Ltd. (both wholly owned by Tahera). There
are no known encumbrances on the concessions.
6
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FIGURE
1.
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Location
of the Project Area within Nunavut and the Slave Structural
Province.
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7
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FIGURE
2. –
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Location
of the Properties Covered By the Tahera / Golden River Resources
Agreement. Lakes and rivers are shown in blue; the
Contwoyto IOL concession blocks are indicated by the green filled
polygons. The Hood IOL concession is indicated as black filled
polygons and labeled as the “Hood Group” (modified: January 18,
2007)
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Contwoyto
Lake Ground
The
CO-08
IOL Concession is underlain by the Contwoyto Formation on the east side of
Contwoyto Lake. The original C0-08 Concession Agreement totalled 65,250 acres
and is located in the Mackenzie District of Nunavut. The approximate
center of the C0-08 Concession is about 100 kilometers south of the Arctic
Circle, 100 kilometers north-northwest of Lac de Gras, and 380 kilometers
north-northeast of Yellowknife. The C0-08 Concession Agreement is held 50:50
by
Benachee Resources Inc. and Snowpipe Resources Ltd. (both wholly owned by
Tahera). There are no known encumbrances on the concessions.
Access,
Infrastructure, Local Resources
Access
to
all the areas in the Slave Craton is by aircraft. In summer months, float
equipped aircraft may land on local lakes of appropriate size including
Contwoyto Lake, Napatulik Lake, Penthouse Lake (unofficial name), and Carat
Lake. In addition, airstrips are available for fixed wing aircraft equipped
with
tundra tires at the Lupin mine site, the Ulu mine site, and Tahera’s Carat Camp
(Jericho). Helicopter support is needed to mobilize personnel from camp sites
to
the property areas. The winter road which links Yellowknife to the Lupin mine
site on Contwoyto Lake has historically been used for economical transportation
of supplies in winter months. This road has since been extended to Tahera’s
Carat Camp.
Tahera’s
properties are located in the treeless Arctic within the zone of permafrost.
The
weather in the property areas is typical of the continental barren lands which
experience cool summers and extremely cold winters. Winter temperatures can
reach -45 degrees. Summer temperatures are generally in the 5 to 10
degree Celsius range but can reach the high 20's degrees Celsius. Average annual
snowfall rarely exceeds 1 meter, most of which falls during autumn and spring
storms. Small lakes are clear of ice usually by the third week in June and
start
freezing over again in late September.
8
The
topography of the area consists of low rolling hills with areas of low-lying
swampy muskeg. Local relief is low, rarely exceeding 150
meters.
The
closest community with regularly scheduled air service is Kugluktuk (formerly
Coppermine) which is 145 kilometers northwest of the Anuri/Rockinghorse
concessions and 200 kilometers northwest of the Hood River concessions. First
Air has scheduled flights everyday from Yellowknife to Kugluktuk. The main
centre for transportation to the properties is through Yellowknife, 530
kilometers southwest of the Hood River concessions, and 410 kilometers southwest
of the Contwoyto concessions. Fixed wing and helicopter charter services are
available in Yellowknife, as are all supplies (groceries, lumber, fuel, etc.)
and expediting services. Additional existing infrastructure to help service
the
land holdings includes Tahera’s Jericho minesite and Woldens’ Lupin and Ulu
minesites. There is currently no infrastructure on the Contwoyto IOL
concessions.
Exploration
History
There
are
currently no known gold, silver or base metal mineral reserves identified on
the
Hood or Contwoyto IOL concessions. All work undertaken in the past
has been strictly exploratory in nature.
All
previous work reported by companies is quoted from open file government
assessment reports. For the Slave Craton land holdings non diamond-related
exploration activities are emphasized as these relate to our interest and
exploration agreement with Tahera. Specifically, previous exploration work
on
the Hood River/High Lake and Contwoyto Lake land holdings are detailed as these
are deemed to be most prospective for gold.
Hood
River/ High Lake Belt
Exploration
around and directly within the Hood River properties began in 1965
and over the years has included sampling, mapping, trenching, and
drilling, as well as ground and airborne geophysical
surveys.
In
1989
the Ulu gold deposit was discovered. Previous efforts directly on our Hood
properties have outlined several key areas of anomalous gold mineralization
which include the Penthouse, Blackridge, Crown and the North Fold Nose
areas.
In
1999
the Nunavut Land Claims Agreement came into effect and granted surface ownership
of about 360,000 square kilometers of land to the Inuit, of which they have
the
subsurface rights for approximately 37,500 square kilometers. Nunavut Tungavik
Incorporation (NTI) is the entity through which these subsurface rights are
administered. The Hood River area around the Ulu deposit (CROWN, DEN, FIDO
and
ULU) in which Golden River Resources has an exploration interest was ultimately
incorporated into NTI lands, with the exception of the original ULU
claim.
In
March,
2003, Strongbow Resources Inc. and Nunavut Tungavik Incorporated announced
an
agreement whereby Strongbow could explore a large parcel of land which covers
all the south half of the High Lake Greenstone Belt and borders Tahera’s IOL
concession on the east, south, and west.
Contwoyto
Formation
Following
the discovery of the Lupin Mine on the western shore of Contwoyto Lake in 1960,
exploration for additional Lupin-style banded iron formation hosted gold
deposits commenced throughout the Contwoyto Formation. This resulted in the
discovery of a number of prospects many of which occur on Tahera’s Contwoyto
properties.
Significant
results that substantiate the gold prospectivity of the region have been
reported on several key areas which include the R43-R45, the R44-R47 and the
5-5
prospects.
Diamond
exploration began in the area in 1993. Discovery of several
kimberlite bodies prompted a helicopter-borne EM and magnetic survey over 110
square kilometers in the Contwoyto Lake area. A part of the Tahera data set
this
survey has delineated a number of prospective iron formations.
Geological
Setting
The
Slave
Structural Province encompasses an elliptical area 500 kilometers wide by 750
kilometers long and is located between Great Slave Lake to the south and
Coronation Gulf to the north.
9
The
Yellowknife Supergroup, important for ore deposits, occurs as twenty-six linear
volcanic belts surrounded by granitic batholiths. These belts are typically
isoclinally folded and largely range in age from 2715-2671 million years. The
belts have been divided in the literature into mafic volcanic-dominated
(Yellowknife-type) and felsic volcanic-dominated (Hackett River-type).
Yellowknife-type volcanic belts are dominated by massive to pillowed basalt
flows with lesser amounts of felsic volcanic and volcaniclastic rocks, clastic
sedimentary rocks and occasionally synvolcanic conglomerate and carbonate units.
The Hackett River-type belts are defined by the abundance of calc-alkaline
felsic and intermediate volcanic rocks intercalated with turbidite.
At
least
five episodes of Proterozoic diabase dyke “swarms” (2400 million years – 600
million years) have been recorded in the Slave Structural Province. These dyke
sets form local positive relief where they intrude easily eroded lithologies
such as the metaturbidites and negative relief in areas where they are
juxtaposed with granites and gneisses.
No
known
gold, silver or base metal mineral reserves are known on our land. All previous
programs have been exploratory in nature.
Prospects
Hood
River
Ground
High
grade
gold prospects are found within a 9 by 7 kilometer block in the west-central
portion of the High Lake belt. Four main mineralized areas occur; the North
Fold
Nose, Penthouse, Crown and Blackridge. The mineral prospects on the properties
occur in rocks of the same age and nature as at the Ulu gold deposit where
gold
occurs in brecciated basaltic wallrock clasts which are replaced by acicular
arsenopyrite + quartz + K-feldspar.
There
is a
spatial relationship between the gold bearing zones of the Ulu deposit with
the
axial trace of the ULU anticline. The properties cover the northern most two
kilometers of this important fold axis. Several gold bearing zones have been
previously identified in this area. In one area along the axis, a one
meter wide quartz vein, outcrops for over 40 meters and contains arsenopyrite,
pyrite, pyrrhotite, chalcopyrite, and native copper. Highly anomalous silver
and
bismuth were also returned from these samples.
Further
mineralized zones were discovered in the central fold of the North Fold Nose.
A
highly anomalous gold value was produced within the prospect area from narrow
quartz-pyrite vein rubble.
Previous
exploration has outlined five zones of gold mineralization on the Crown prospect
(now largely within the properties). At the “Main Zone”, several highly
anomalous gold values were returned from an 800 meter long silicified
basalt/biotite schist contact. Seven trenches were dug in the Main Zone area.
Silicified zones up to 6 meters wide with arsenopyrite were noted. The “B” zone
is parallel to and 80 meters east of the Main Zone. The structural setting
and
mineralogy here is similar to the Main Zone. Elevated gold values
have been identified over a distance of 450 meters and the zone is reported
open
to the north. Elevated gold values were also reported from grab samples of
silicified basalt and sediments with arsenopyrite in the “Western Zone” and in
the folded stratigraphy of the “Eastern” and “Fold” zones.
To
the
northwest of the Crown prospects are the Penthouse prospects. The original
sampling on the South Penthouse grid returned anomalous gold values. The highest
grade sample was from a silicified north-trending shear zone which was traceable
for 200 meters. A northeast trending shear, traceable for 250 meters on the
North Penthouse area returned significant gold result from narrow arsenopyrite
bearing veins. Additional highly prospective zones of mineralization have been
identified in the Penthouse area.
Polymetallic
quartz veins in the area contain highly elevated silver values along with
anomalous zinc, lead, cadmium, and antimony values. This style of mineralization
is very similar to the auriferous polymetallic quartz vein at the Northern
Fold
Nose on the historic ULU 2 claim.
Five
principal styles of mineralization were identified by BHP on the Penthouse
grid,
namely i) Auriferous silicified zones with arsenopyrite in sediments; ii)
Auriferous arsenopyrite-bearing quartz veins at mafic volcanic-sediment
contacts; iii) Auriferous polymetallic quartz veins transecting the mafic
volcanic stratigraphy; iv) Stratabound massive sulphide mineralization at the
mafic volcanic-sediment contact; and v) Auriferous polymetallic quartz veins
hosted by sediments adjacent to the same mafic volcanic-sediment
contact.
Massive
sulphide mineralization is present as discontinuous pods up to 1.5 meters thick
along the western basalt-sediment contact on the south Penthouse
grid. Historically, anomalous values of gold, silver, copper lead and
zinc were returned from surface grab sampling. No drilling was carried out
on
this prospect.
10
South
of
the Crown prospects, across the southeastern edge of a granitic intrusion is
the
Blackridge prospect last worked by Aber Resources Ltd. The mineralization here
consists of an altered and locally brecciated gabbro-hosted silicified zone.
The
principal mineralized zone has been traced for at least 700 meters northeast
and
is 2.5 - 3.5 meters wide. Anomalous gold values have been identified along
this
structure.
Contwoyto
Property
More
than
100 iron formation-hosted gold occurrences occur in the Point Lake - Contwoyto
Lake meta-sediment sequence. The most notable gold-bearing iron formation in
the
vicinity is the Lupin gold mine. Mineralization specific to the properties
includes a number of significant iron formation hosted gold prospects including
the R43-R45, the R44-R47, the 4-2 grid, the Ox, and the 5-5 grid
prospects.
The
R43-R45 prospect is hosted by a Z-shaped folded iron formation up to 10 meters
wide and traceable for over 1.3 kilometers. The area is mainly unsampled. The
geology, mineralization, alteration and structure are extremely similar to
the
Lupin gold mine (located just 28 kilometers to the west) where gold
mineralization is in a “Z” folded iron formation with pyrrhotite and
arsenopyrite. The R43-R45 “Z” fold is of the same magnitude as Lupin. No
drilling has ever been reported here.
11
The
R44-R47 prospect is hosted by an iron formation up to 5 meters wide and
traceable on surface for 1.9 kilometers. Significant gold values have been
returned from surface sampling; however, no drilling has been
reported.
On
the 4-2
prospect, previous explorers have traced a sulphide-rich iron formation, in
boulders up to 2 meters in size, on surface for 200 meters. Significant gold
assays have been returned; however, no follow-up drilling appears to have been
done.
On
the 5-5
prospect, several east-west trending, 300 to 2,700 meters long EM conductors
have been outlined. A total of six iron formations have been identified, four
of
which are coincident with the EM conductors. Sulphide rich boulders of iron
formation at the southwest section of Grid 5-5 yielded gold values. The “Fox A”
prospect is also within the 5-5 Grid area and the iron formation is 33 meters
wide and 220 meters long and has returned gold values. Drilling in 1987, on
the
5-5 prospect, included 8 holes totaling 942 meters. All eight holes intersected
iron formation and returned gold from a section containing pyrite, arsenopyrite
and pyrrhotite. Four short drill holes on the 5-5 grid in 1988 tested a folded
iron formation as outlined by an IP survey. DDH 88-4, drilled 225 meters west
of
an earlier high grade intercept, intercepted a further significant gold
intersection in pyrite-rich siliceous iron formation. A further high grade
surface prospect in arsenopyrite and quartz- rich iron formation boulders was
apparently not drilled. The other drill holes intersected siliceous +/-
sulphidic iron formation ranging from 5.7 to 15.0 meters thick.
Work
Programs
The
first
phase of the Company’s planned exploration programs over the Hood River and
Contwoyto IOL claim groups was carried out in August 2004 and consisted of
exploration mapping, sampling and prospecting. This initial program was designed
to follow up and assess geophysical and geological anomalies reported by
previous workers with a focus on targeting and expanding areas for phase two
work.
Hood
River
Ground
Golden
River Resources spent $104,446 on exploration on the Hood River IOL Concessions.
Four key areas warrant further investigation.
Northern
Fold Nose - This zone is located approximately 3 kilometers north of the
ULU deposit and is thought to be part of the major fold structure which hosts
the ULU deposit. Additional mineralized zones were discovered within the
Northern Fold Nose area than previously described. Acicular arsenopyite was
noted in narrow shears within silicified basalt just south of the Northern
Fold
Nose. Chip sampling of the exposed veins during the 2004 field season yielded
several samples carrying anomalous gold values.
Penthouse
- The Penthouse prospects are underlain by a geologically and structurally
complex package of mafic volcanic and metasediments. The metasediments are
thought to form the conduit for mineralizing fluids. Gabbroic sills occur within
the mafic volcanics and sediments and form marker horizons outlining the
structural complexity of the area.
A
total of
65 samples were taken in the North Penthouse area; 36 per cent of the samples
taken from this area yielded anomalous gold assays.
A
total of
53 samples were taken from the South Penthouse area with 15 per cent returning
anomalous gold values. In both of the Penthouse areas, the samples exhibited
a
strong, positive arsenic-gold relationship.
Analysis
of airborne geophysical data suggests that the South and North Penthouse areas
are actually one zone that is over 2 kilometers in strike length.
Crown
- The 2004 field work consisted largely of examining and sampling of the
trenches in this area. A total of 60, 1.0 meter to 1.5 meter chip samples were
taken from these trenches and 32 per cent of these samples returned with
anomalous gold values.
Blackridge
area - The main prospect occurs along a gabbro-sediment contact. The
previously described linear mineralized contact zone was extended to slightly
over 750 meters.
Anomalous
results were returned from siliceous metavolcanics and metasediments with the
highest gold values being returned from trenches cut into the gabrro -
metavolcanic/metasediment contact zone. A total of 39 samples were taken from
this area. Elevated gold and copper values were noted. A total of 40 per cent
of
the samples taken returned anomalous gold values. Overall, our 2004 results
were
an improvement over the reported historical results.
12
Contwoyto
IOL Concessions
We
spent
CDN$109,057 on exploration on the Contwoyto IOL Concessions. Some key areas
that
warrant further investigation include:
Grid
5-5 Area - Field work revealed the area to be underlain by a package of
amphibole-rich, silicate facies iron formation This area produced the best
gold
results in the Contwoyto concessions. Geophysics indicated the zone
trends west, off shore, into the lake proximal to the Grid 5-5
zone.
An
airborne geophysical survey has outlined a number of strong magnetic anomalies
that have no surface expression. These areas require further
investigation.
Further
Exploration
Subsequent
to the completion of the 2004 exploration program, the IOL concession area
in
the Contwoyto Lake was dramatically reduced from 65,250.8 acres to 21,533.1
acres. All prospective ground was retained. The area reduction was done in
conjunction with Tahera and it served to also greatly reduce the amount of
exploration assessment requirement for this area. A program of approximately
$63,300 would be required to maintain the ground into 2006. A small
portion of the Hood River IOL Concession area was also reduced with all
prospective ground retained for further exploration. Due to large exploration
expenditures by Tahera within these concessions prior to 2005, there was no
exploration assessment spending required during 2005 to maintain this
ground.
As
a
result of the 2004 field season, several areas have emerged as having a strong
potential for hosting gold mineralization, based on geological, mineralogical
and structural criteria and as such require further examination.
In
late
July 2006, Golden River Resources mobilized equipment and personnel to further
prospect, assess and evaluate the Contwoyto Lake and Hood River areas. The
work
program was to follow up Golden River Resources’ highly successful 2004
examination with a focus on highlighting key areas for drilling in the planned
winter drill program.
13
During
the
2006 summer field program, 901 samples were taken and several areas were
targeted as key regions for future work based on current geological modelling,
the re-assessment of historical work and sample results from the 2004 program.
All samples were sent for preparation and analysis by Acme Analytical
Laboratories Ltd. Samples will be analysed with a 36 element geochemical
procedure and gold Fire Assays will be conducted where warranted.
The
field
program and sampling was under the direct supervision of Bruce Goad, P. Geo.,
a
Qualified Person under the applicable Canadian disclosure regulations for
mineral exploration companies.
Our
most
recent results from 343 rock outcrop samples collected primarily in three
prospective sectors continue to show encouraging results. Of the 343 samples;117
returned values greater than 0.5 g/t gold and 33 contained 3.0 g/t to 60.0g/t
gold
Significant
results are presented in table format below.
|
Sample
No
|
Property
|
Gold
ppb
|
Gold
g/t
|
Silver
g/t
|
|
167468
|
Penthouse
South
|
>100,000
|
62.18
|
12.9
|
|
167470
|
Penthouse
South
|
20,926
|
39.79
|
4.4
|
|
150361
|
Penthouse
South
|
28,317.7
|
38.68
|
5.3
|
|
150205
|
Penthouse
South
|
5,275.3
|
9.41
|
0.9
|
|
147250
|
Penthouse
North
|
5,940
|
8.88
|
2.4
|
|
BR040
|
Penthouse
North
|
2,831.9
|
8.73
|
3.3
|
|
150226
|
Penthouse
South
|
8,501.7
|
7.8
|
6.4
|
|
150238
|
Penthouse
North
|
8,283.7
|
7.49
|
3.5
|
|
150216
|
Penthouse
South
|
5,703.7
|
5.81
|
76
|
|
150218
|
Penthouse
South
|
5,595.5
|
5.68
|
57.3
|
|
167474
|
Penthouse
South
|
3,623
|
5.33
|
19.2
|
The
Penthouse prospect covers a large structurally controlled 3 kilometer long
zone
of sheared and brecciated siliceous basalts and sediments that may be directly
analogous to the nearby Ulu deposit. Arsenopyrite mineralization is abundant
over a 500 metre wide by 2,700 metre long area proximal to the volcanic-sediment
contact.
The
results indicate the need for follow up drill investigation. These surface
results will be combined with our geophysical data to form the basis for new
drill targets in 2007.
|
Sample
No
|
Property
|
Gold
ppb
|
Gold
g/t
|
Silver
g/t
|
|
150241
|
North
Fold Nose
|
57793.2
|
70.46
|
29.3
|
|
150245
|
North
Fold Nose
|
40704.4
|
46.06
|
85.1
|
|
185863
|
North
Fold Nose
|
17578.2
|
19.79
|
6.8
|
|
185851
|
North
Fold Nose
|
16562
|
16.75
|
4.8
|
|
150242
|
North
Fold Nose
|
14444
|
18.44
|
10.9
|
|
150246
|
North
Fold Nose
|
5526.9
|
6.48
|
10.8
|
|
150248
|
North
Fold Nose
|
4537.3
|
5.7
|
2.2
|
|
150249
|
North
Fold Nose
|
4257.2
|
4.91
|
1.9
|
|
185852
|
North
Fold Nose
|
3098.2
|
5.01
|
1.5
|
These
samples were collected over an area measuring 400 metres by 800 metres. The
North Fold Nose zone is located approximately 3 km north of the ULU deposit
and
is thought to be part of the same major fold structure which hosts the ULU
deposit.
With
the
use of recent airborne geophysical surveys and new structural data, Golden
River
Resources has outlined numerous zones of banded iron formations with strike
lengths of over several kilometres on the Contwoyto concessions.A total of
381
samples were collected from the six Contwoyto concession subsections. To date
the scope of work has been limited to a more regional nature in this area.
The
majority of the best values (between 600 and 14,000 ppb gold) come from folded
and faulted deformation zones within several of the iron formation horizons.
The
size and nature of at least these areas appear similar to the nearby Lupin
Mine.
Several new claims were staked over some of the most promising areas. Further
detailed work is required over the principle areas of the Contwoyto
concession.
14
Contwoyto
Lake Area
Numerous
new zones of banded iron formations were identified in this summers’ program.
Principle areas within the property include thick sequences of banded iron
formation with strike lengths of over several kilometres. With the use of recent
airborne geophysical surveys and new structural data, Golden River has outlined
favourable gold-bearing deformation zones of the iron formation that appear
similar to the nearby Lupin Mine.
Hood
River Area
Several
areas within the High Lake area returned anomalous gold results collected during
our sampling program in 2004 and 2006.
Several
prospective zones were re-examined; however, the Penthouse area became the
main
focus of the 2006 Hood River assessment. Here, a large 3 kilometer zone of
sheared and brecciated siliceous basalts and sediments occurs that may be
analogous to the nearby Ulu deposit. Arsenopyrite mineralization is abundant
and
appears structurally controlled.
Golden
River is very encouraged by the 2006 exploration program which was successful
in
finding new locations of strong mineralization this field season. Following
the
field investigation program, the characteristics and prospectivity of the
Penthouse zone are better understood and the area presents an excellent drill
target.
Committee
Bay Belt
In
June
2002, we staked land in the highly prospective Committee Bay Greenstone
Belt. Golden River Resources owns 100% of the Committee Bay Area
properties. All claims are on federally owned ground and mineral
title is administered by the federal government.
The
Committee Bay Greenstone Belt is located approximately 240 kilometers northeast
of Baker Lake in Nunavut, Canada and is believed to represent the largest
under-explored greenstone belt in North America, with potential to host
world-class gold deposits.
The
geology is highly prospective for banded iron formation hosted gold
mineralization (as in the 3 million ounce Meadowbank and the 4.6 million ounce
Meliadine gold deposits located to the south of the properties, north the
hamlets of Baker Lake and Rankin Inlet, respectively). Our properties protect
several auriferous iron formations. In addition to the banded iron formation
hosted gold targets, this belt has potential for shear-hosted lode gold,
Witswaterstrand style gold, komatiite hosted stratiform nickel-copper (Kambalda
analogy), and platinum group elements (“PGE’s”) in layered igneous complexes
(Laughland Lake Anorthosite Suite).
Originally
29 properties were staked comprising a land area of 71,694 acres in the
Committee Bay Greenstone Belt in central Nunavut, Canada. These properties
were
recorded on October 16, 2002. From the original area we retained a total of
49,439.48 acres on 21 properties. To keep the properties in good standing,
we
needed to spend a total of CDN$197,798 of assessment work by October 16, 2004.
A
total of CDN$98,879 (CDN$2 per acre) is required in each subsequent year up
to
2012 (at which point a decision to bring the properties to lease must be
made). During the 2004 field season, we spent CDN$1.567 million on
exploration and all amounts in excess of the commitment can be offset against
future commitments. As a result of the amount we spent during 2004, we have
already met the expenditure commitment until 2012. We have included a list
of
our mining properties in the Committee Bay Greenstone Belt in Appendix B to
this
Annual Report.
Location
The
Committee Bay Claims are located 245 to 365 kilometers northeast of the town
of
Baker Lake (Qamani’tuaq), Nunavut, Canada, or 210 to 320 kilometers west to
southwest of the town of Repulse Bay (Ngoldjat). The community of Kagaaruk
(formerly Pelly Bay) is 190 to 305 kilometers northeast of the claim groups.
Our
land holdings in the Committee Bay Greenstone Belt include 21 properties in
10
claim blocks. These properties total approximately 49,439.48 acres and all
were
recorded on October 16, 2002.
15
Figure
5. – Location of Committee Bay Area Properties
Access,
Infrastructure, Local Resources
Access
to
the properties is by fixed wing aircraft. Alternatively, float equipped planes
have the option of landing at some of the larger lakes (Laughland Lake for
example) or on sections of the Hayes River. Helicopter support is required
to
mobilize personnel from camp to the property areas.
The
Committee Bay Greenstone Belt lies within the zone of permafrost. The mean
annual temperature of -20oC reflects
its Arctic
location (the Arctic Circle transects the property area). The climate is typical
of the Eastern Arctic with average temperatures in the winter months of -30oC to -35oC,
and +10oC to +12oC
in the summer. The
ground remains snow covered for more than 250 days a year (generally September
to June). Rivers break up in June and lakes are ice bound until mid
July.
The
project area is on the northern section of the Wager Plateau, a shield area
that
has been significantly modified by glacial processes. Elevations range from
122
meters above sea level in the southwest to 560 meters above sea level in the
northeast.
The
closest community with regularly scheduled air service is Baker Lake, about
350
kilometers to the southwest. Canadian North and First Air flights arrive from
Yellowknife and Iqaluit. Calm Air flies from Winnipeg to Rankin Inlet
(Kangiqliniq) and then on to Baker Lake daily except Sundays. Kivalliq Air
flies
from Cambridge Bay (Qaluktuuttiaq) to Baker Lake enroute to Rankin Inlet. Fuel
and expediting services are available in Baker Lake. There is little
infrastructure in the claim area apart from the Committee Bay Resources Hayes
River camp which has a winter airstrip and fairly regular supply
flights.
16
Property
History
All
previous work reported by companies is quoted from open file government
assessment reports.
Following
the release of Heywood’s original geology map of the area in 1961, several
exploration companies performed work in the Committee Bay Greenstone Belt.
The
nickel-copper potential of ultramafic rocks was the primary target of this
first
exploration wave. In 1969 to 1970, explorers mapped, sampled and conducted
limited geophysical surveys on areas now covered by our A and E properties.
This
program outlined several electromagnetic conductors coincident with surface
mineralization. The best trenched nickel value occurred on the “EE” properties
within a 1.46 kilometer long conductor.
Further
exploration was undertaken during the general nickel-copper reconnaissance
in
1970 and 1974 and more detailed work in 1975 and 1976. Geologic mapping, ground
magnetic and EM surveys were conducted in the Hayes River area. Although
prospective rock units with nickel and copper values were found, no further
follow up was recommended.
In
1986,
reconnaissance rock samples were taken within the current Pickle properties
area.
Southwest
of the central tonalite, in the area of our Pickle properties, several permits
were granted to the Committee Bay Joint Venture (CBJV) in 1993. Sampling by
CBJV
returned gold values in sheared banded iron formation with pyrite +
arsenopyrite. Although CBJV’s Pickle 1 claim was staked in 1995, no follow-up
work was reported. The iron formation at this site is 70–100 meters thick and
traceable for 1.5 kilometers.
In
1992,
reconnaissance sampling in the Committee Bay area was undertaken on behalf
of
the CBJV. Several highly anomalous gold values were returned from rock samples
taken. Follow-up work was performed in 1993. High gold values corresponded
with
banded iron formation with quartz veining and/or silicification and pyrite
+
pyrrhotite ± arsenopyrite. In 1995, further rock samples were taken, and eight
drill holes totaling 811.41 meters completed. This work exclusively focused
on
the Bluff properties in Hayes River area and the Inuk area further to the
northeast. In 1996, the CBJV flew a 13,262 line kilometer detailed geophysical
survey (magnetics and VLF), collected additional rock samples and drilled 6
holes at Three Bluffs. Approximately CDN$5.4 million was collectively spent
on
the Committee Bay Greenstone Belt between 1992 and 2001 by explorers. This
exploration focused on three areas: Laughland Lake, Hayes River and Curtis
River.
Numerous
gold occurrences were discovered by the CBJV between 1992 and 2001. Of
particular note are the Pickle, Four Hills, Cop, Ghost Coyote, Ridge, Bluff
group and West Plains prospects.
Our
five
Wrench properties were previously within prospecting permits granted to the
CBJV
in 1994. Reconnaissance sampling by the CBJV returned a series of gold anomalies
over approximately three kilometers in sheared, oxide banded, iron formation
in
their northern part of their BLUFF claim block.
The
Committee Bay Greenstone Belt was the subject of two separate 3 year (2000-2003)
government targeted Geoscience initiatives (“TGI”). These TGIs were a
collaboration between the Geological Survey of Canada, Canada-Nunavut Geoscience
Office and university partners. The stated objective of the TGI was to increase
the level and cost-effectiveness of private sector exploration for mineral
resources. Government work in the Committee Bay Greenstone Belt included
1:100,000 scale geologic mapping, prospecting, surficial mapping, drift
prospecting, and airborne geophysics. Airborne magnetic surveys (400 meter
flight line spacing) were carried out and released as total field maps in 2002.
Quaternary research involved multimedia sampling for gold and base metals and
this drift prospecting/sampling was carried out between 2001 and
2003.
Committee
Bay Resources Limited (“CBR”) is the largest landholder in our claim area. At
Three Bluffs, CBR’s drilling defined gold mineralization for at least one
kilometer along strike and to a depth of 320 meters from surface. A
current summary of their results can be found on the CBR website.
The
government aeromagnetic survey shows a continuation of the Three Bluffs iron
formation for at least three kilometers onto our Wrench properties. Government
sampling in 2001 on this trend returned gold intersections from sulphide bearing
(pyrite + pyrrhotite), quartz-veined intervals of oxide banded iron formation
on
the GRR Wrench Property.
Numerous
other prospective gold targets (West Plains, Four Hills, Coyote, etc) are the
subject of ongoing investigation by CBR. Our properties border or are along
strike of CBR’s prospects.
17
Geologic
Setting
The
Prince
Albert Group (“PAG”) incorporates a series of Archean-aged greenstone belts that
stretch approximately 600 kilometers northeast from the Aylmer Shear Zone in
the
south to the eastern tip of Melville Peninsula in the north. A 300 kilometers
long section southwest of Committee Bay is referred to as the Committee Bay
Greenstone Belt.
The
stratigraphy of the Committee Bay Greenstone Belt includes banded iron formation
up to 50 meters thick, komatiite volcanic flows, basalts, intermediate to felsic
tuffs, and quartz-cobble conglomerates. Deformation is recorded by major shear
zones, second order faults, complex folding, and felsic intrusions. Numerous
gold prospects are spread out over a 260 x 40 kilometer area including the
Inuk
zone in northeast Committee Bay and the Three Bluffs zone in the Hayes River
area.
The
approximate age of the Committee Bay Greenstone Belt ranges from 2.718 billion
years to 2.732 billion year old.
Younger
plutonic intrusions include the 1830 Million year old Hudson monzo-granites.
Laterally continuous, northeast trending, quartz-feldspar porphyry dykes, 0.5
meter to 10 meter wide, are traceable for hundreds of meters in the Three Bluffs
area. Age dates for these porphyry dykes are not currently
available.
Prospects
The
Committee Bay Greenstone Belt is prospective for a number of mineral deposit
types including banded iron formation hosted gold, shear-hosted lode gold,
komatiite hosted, stratiform, nickel-copper (Kambalda analogy) mineralization,
and platinum group elements in layered igneous complexes.
Examples
of iron formation hosted gold mineralization include GRR’s Wrench properties
where government sampling in 2001 returned gold intersections from sulphide
bearing (pyrite + pyrrhotite), quartz-veined intervals of oxide banded iron
formation. This section of iron formation is over 6.5 kilometers long.
Additional kilometer-scale segments of iron formation with anomalous gold are
present further to the east within the Wrench claim block.
18
Other
iron
formation hosted gold examples include mineralization on our Pickle properties.
The iron formation here is 70–100 meters thick and traceable for 1.5 kilometers.
The gold values are found in sulphide-rich sections (arsenopyrite and pyrite)
of
the sheared, oxide + silicate banded, iron formation over a distance of 1.35
kilometers. In addition, gold values in iron formation are also found
on our NN1 and NN2 properties.
An
example
of shear-hosted, gold mineralization in the Committee Bay Greenstone Belt is
CBR’s Coyote prospect where high-grade gold values were returned from an
intensely sheared gabbro with quartz veins, pyrite + pyrrhotite + chalcopyrite
+
visible gold. The hosting structure is a splay off the east-west Walker Lake
Shear Zone and is a classic setting for shear-hosted gold. GRR holds
title to a claim on either side of the Coyote claim prospect.
Komatiite
hosted (Kabalda-style) nickel potential exists on our three EE properties (EE
1-3). These properties cover anomalous nickel values spread over 930 meters
along a contact between a thick ultramafic body and sediments. Elevated copper
values were also reported. A second ultramafic/sediment contact on the western
edge of the western E claim also has anomalous nickel over a similar strike
length. The folded stratigraphy in the centre of the EE claim block is also
prospective for gold.
The
Laughland Lake Anorthosite Suite (“LLAS”) has good PGE potential. Rusty zones
defined by sulphide gossans of up to 100 meters wide and 500 meters long have
been reported in this area. Moderately anomalous platinum, palladium nickel
and
copper values have been reported from sampling of these zones.
Work
Program
A
total of
CDN$1.567 million was spent on our Committee Bay Greenstone Belt 2004 program.
A
large portion of the expense went to establishing a re-usable base-camp into
this fairly remote location. All field, office, and camp supplies, as well
as
fuel, were flown in. All field activities were helicopter
supported.
Between
June 2004 and early September 2004, a regional, grassroots-type
prospecting/mapping program was undertaken to explore all of our mineral
properties in the Committee Bay Greenstone Belt. Each of our 21
properties holds significant promise of a mineral deposit. In some localities
outcrop was not abundant or even observed; however, many of the claim sites
were
selected to cover key magnetic anomalies identified from the government regional
airborne survey.
A
total of
1,476 rock samples were removed and analyzed from the 21 properties. In
addition, a small soil grid was established on the Wrench property and 658
soil
samples were collected. Anomalous to ore grade gold was returned from
sampling on several of the claim areas. Of particular note were the results
from
the Wrench property which cover an area adjacent to the CBR’s Three Bluffs
deposit and were found to hold identical structures and lithologies. Sampling
along exposed banded iron formation produced high gold values within the 1.5
kilometer strike length of the targeted iron formation horizon.
Our
exploration program began in late May 2004 with a geophysical program on the
Wrench property. This is covered in the “Geophysical Surveys”
section.
Geophysical
Surveys
Wrench
Property
An
eighty
six line grid was established over the Wrench Claims by Aurora Geosciences
Ltd.
of Yellowknife, NWT. Grid point control was accomplished using GPS
technology. Lines were spaced every one hundred meters and in total
the grid was comprised of 176.46 line kilometers. Subsequently, two geophysical
surveys were undertaken. Total field magnetic surveying was carried
out with readings obtained at 6.25 meter stations. Horizontal loop
electromagnetic (HLEM) surveying was also undertaken. Readings for
this survey were spaced at twenty five meter intervals.
The
Wrench
claim group comprises five contiguous properties covering approximately 4,900
hectares. A government aeromagnetic survey confirms that the Wrench iron
formation is directly connected with and along strike from CBR’s Three Bluffs
iron formation hosted gold deposit.
The
geophysical program served a number of purposes. The magnetics accurately traced
the iron formation and delineated important structural information such as
faulting and folding. The HLEM component highlighted where the conductive
pyrrhotite-rich sections of the iron formation are located and, in conjunction
with the magnetics, may define trenching and drill targets.
19
The
magnetic survey outlined a strong, six kilometer long, northeast-trending,
magnetic anomaly along the western half of the grid. In the
southeastern portion of the grid, two additional strong, parallel, magnetic
anomalies were recorded. The HLEM survey outlined 17 distinct conductive
trends/anomalies, most of which are coincident with, or flank, very strong
magnetic features.
Field
verification of the magnetic anomalies indicated that the magnetic anomalies
are
a result of the presence of continuous banded iron formation units that underlie
the grid area.
Proposed
Work
We
did not
conduct any exploration activities on our Committee Bay prospects during fiscal
2007 as we concentrated our efforts on our Slave craton prospects.
With
the
large assessment credit excess from the 2004 program, we have already met our
expenditure commitments until 2012 for most properties (see Appendix B). However
due to the gold potential and interest in the Committee Bay Greenstone Belt,
further work is being planned.
Future
exploration programs will involve further geophysical surveys, mapping,
prospecting, sampling, and drilling. Identifying and defining drill targets
will
be the primary objective.
Three
areas present themselves as likely drill targets, the Wrench prospect which
is
along strike of CBR’s Three Bluffs deposit; the Pickle claim iron formation
which has the thickest intervals of sheared banded iron formation and the West
claim which has the same geophysical anomalies as CBR’s West Plains drill
area.
We
have
not scheduled the timing of these future exploration activities, which will
depend on the availability of funds and developments on our Slave Craton
prospects.
Regulation
Mining
in Canada
The
mining
industry in Canada operates under both federal and provincial or territorial
legislation governing the exploration, development, production and
decommissioning of mines. Such legislation relates to the method of acquisition
and ownership of mining rights, labour, health and safety standards, royalties,
mining and income taxes, exports, reclamation and rehabilitation of mines,
and
other matters. The mining industry in Canada is also subject to legislation
at
both the federal and provincial or territorial levels concerning the protection
of the environment. Legislation imposes high standards on the mining industry
to
reduce or eliminate the effects of waste generated by extraction and processing
operations and subsequently deposited on the ground or emitted into the air
or
water. The design of mines and mills, and the conduct of extraction and
processing operations, are subject to the regulatory restrictions. The
exploration, construction, development and operation of a mine, mill or refinery
require compliance with environmental legislation and regulatory reviews, and
the obtaining of land use and other permits, water licenses and similar
authorizations from various governmental agencies. Legislation is in place
for
lands under federal jurisdiction or located in certain provinces and territories
that provide for the preparation of costly environmental impact assessment
reports prior to the commencement of any mining operations. These reports
require a detailed technical and scientific assessment as well as a prediction
of the impact on the environment of proposed mine exploration and
development.
Failure
to
comply with the requirements of environmental legislation may result in
regulatory or court orders being issued that could result in the cessation,
curtailment or modification of operations or that could require the installation
of additional facilities or equipment to protect the environment. Violators
may
be required to compensate those suffering loss or damage by reason of mining
activities and the violators, including our officers and directors, may be
fined
or, in some cases, imprisoned if convicted of an offence under such
legislation. Provincial and territorial mining legislation
establishes requirements for the decommissioning, reclamation and rehabilitation
of mining properties that are closed. Closure requirements relate to the
protection and restoration of the environment and the protection of public
safety. Some former mining properties must be managed for a long time following
closure in order to fulfill regulatory closure requirements. The cost of closure
of existing and former mining properties and, in particular, the cost of
long-term management of open or closed mining properties can be
substantial.
20
Government
Regulations
We
are
committed to complying and, to our knowledge, are in compliance with all
governmental and environmental regulations. Permits from a variety of regulatory
authorities are required for many aspects of mine operation and reclamation.
Our
exploration work is subject to the Mining Land Use Regulations of the Indian
and
Northern Affairs Canada Mining Act. This Act requires us to obtain permits
prior
to performing significant exploration programs.
We
cannot
predict the extent to which future legislation and regulation could cause
additional expense, capital expenditures, restrictions, and delays in the
development of our Canadian properties, including those with respect to mining
properties. Our activities are not only subject to extensive federal, provincial
and local regulations controlling the mining of and exploration for mineral
properties, but also the possible effects of such activities upon the
environment. We will be obligated to take steps to ensure that such
streams draining the property do not become contaminated as a result of our
activities on the property. We are not aware of any environmental problems
on
the property as of the date of this Annual Report.
The
mining
industry in Nunavut, where our exploration properties are situated, operates
under Canadian federal and territorial legislation governing prospecting,
development, production, environmental protection, exports, income taxes, labour
standards, mine safety and other matters. We believe our Canadian
operations are operating in substantial compliance with applicable
law.
Our
exploration works is subject to environmental regulation primarily by the
Federal Department of Indian Affairs and Northern Development and the Nunavut
Water Board. The Department of Fisheries & Oceans (Canada) and
the Department of the Environment (Canada) have an enforcement role in the
event
of environmental incidents, but presently have no direct regulatory role in
relation to exploration activity.
On
April
1, 1999, the Nunavut Land Claims Agreement, dated May 28, 1993, between the
Inuit of Canada’s eastern arctic region and Her Majesty the Queen in right of
Canada, came into force. Under this agreement, the Inuit were granted ownership
of approximately 360,000 square kilometers of land in an area referred to as
the
Nunavut Settlement Area, including ownership of subsurface rights in
approximately 37,500 square kilometers of those lands. Third party
interests in lands in the Nunavut Settlement Area created prior to April 1,
1999
are protected under the Nunavut Land Claims Agreement. Where a third
party was granted a mining lease under the Canada Mining Regulations in lands
comprising the Nunavut Settlement Area, that interest continues in accordance
with the terms and conditions on which it was granted, including any rights
granted under the legislation that give rise to the
interest. However, where any successor legislation has the effect of
diminishing the rights afforded to the federal government, it will not bind
the
Inuit without its consent. The Inuit are entitled to receive whatever
compensation is payable by the interest holder for the use of exploitation
of
mineral rights. The federal government continues to administer the
third party interest on behalf of the Inuit, unless the third party and the
Inuit enter into an agreement under which the third party agrees to the
administration of their interest by the Inuit. In the event such an
agreement is reached, the applicable legislation will cease to apply to the
third party interest. Subsurface interests in such lands continue to
be administered in accordance with applicable legislation relating to those
interests and are not affected by the Nunavut Land Claims
Agreement.
Third
party interests in lands in the Nunavut Settlement Area created on or after
April 1, 1999 are granted, in the case of surface rights, by the appropriate
regional Inuit association and, in the case of subsurface rights, by Nunavut
Tungavik Incorporated which will hold subsurface title to Inuit owned lands
and
will be additionally responsible, in consultation with the appropriate regional
Inuit associations, for the administration and management of those subsurface
rights.
Government
Requirements for Maintenance of Claims
Slave
Craton
Fees
and
exploration expenditures associated with the maintenance of Tahera Corporation’s
ground covered under the Slave Craton Agreement with Golden River Resources
is
the responsibility of Tahera.
Committee
Bay Greenstone Belt
The
Nunavut Government has granted our interest in the 21 mineral properties in
the
Committee Bay Greenstone Belt described in this Report.
21
To
keep
the 21 properties in good standing, we were required to spend a total of
CDN$197,798 of qualifying assessment work by October 16, 2004. Assessment work
must be filed with the Mining Recorder within 30 days of the claim’s anniversary
date or within 60 days of the lapsing notice date.
A
total of
CDN$98,879 (CDN$2 per acre) is required in each subsequent year up to 2012
(at
which point a decision to bring the properties to lease must be
made).
In
2004 we
spent a total of CDN$1,566,962 of on our properties. All assessment work was
filed and the excess of CDN$1,369,164 was used to offset the expenditure
requirement in following years. As a result we have already met our
commitment until 2012 for most properties (see Appendix B).
Employees
We
use
temporary employees in our field exploration programme. The services
of our Chief Executive Officer, Joseph Gutnick and Chief Financial Officer
and
Secretary, Peter Lee, as well as clerical employees are provided to us on a
part-time as needed basis pursuant to a Service Agreement dated November 25,
1988 (the “Service Agreement”) between us and AXIS Consultants Pty Limited
(“AXIS”). AXIS also provides us with office facilities, equipment,
administration and clerical in Melbourne Australia pursuant to the Service
Agreement. The Service Agreement may be terminated by written notice by either
party.
Other
than
this, we rely primarily upon consultants to accomplish our exploration
activities. We are not subject to a union labour contract or collective
bargaining agreement.
Risk
Factors
You
should
carefully consider each of the following risk factors and all of the other
information provided in this Annual Report before purchasing our common
stock. An investment in our common stock involves a high degree of
risk, and should be considered only by persons who can afford the loss of their
entire investment. The risks and uncertainties described below are not the
only
ones we face. There may be additional risks and uncertainties that are not
known
to us or that we do not consider to be material at this time. If the events
described in these risks occur, our business, financial condition and results
of
operations would likely suffer. Additionally, this Annual Report contains
forward-looking statements that involve risks and uncertainties. Our actual
results may differ significantly from the results discussed in the
forward-looking statements. This section discusses the risk factors that might
cause those differences.
Risk
Factors
Risks
of Our Business
We
Lack an Operating History And Have Losses Which We Expect To Continue Into
the
Future.
To
date we have no source of revenue.
We have no operating history as a mineral exploration or mining company upon
which an evaluation of our future success or failure can be made. Our ability
to
achieve and maintain profitability and positive cash flow is dependent
upon:
|
-
|
exploration
and development of the property covered by our mineral
claims;
|
|
-
|
our
ability to locate economically viable mineral reserves in the property
covered by our mineral claims;
|
|
-
|
our
ability to raise the capital necessary to conduct exploration and
preserve
our interest in the mineral claims, increase our interest in the
mineral
claims and continue as an exploration and mining company;
and
|
|
-
|
our
ability to generate revenues and profitably operate a mine on the
property
covered by our mineral claims.
|
We
Have No Known Gold Or Other Mineral Reserves And We Cannot Assure You That
We
Will Find Such Reserves. If We Develop A Gold Or Other Mineral Reserve, There
Is
No Guarantee That Production Will Be Profitable.
We
have not identified any gold or
other commercial mineral reserves on the properties covered by our mineral
claims and we cannot guarantee we will ever find any. Also, to the
extent that commercial mineral reserves have been identified by other companies
on properties that are adjacent to or within the same geographic region as
our
exploration properties, this does not mean that we will be successful in
identifying commercial mineral reserves on our properties. Even if we find
a
gold or other commercial minerals reserve, there is no assurance that we will
be
able to mine them. Even if we develop a mine, there is no assurance that we
will
make a profit. If we do not find gold or other commercial minerals you could
loose part or all of your investment.
22
We
Will Need Additional Financing To Determine If There Is Gold Or Other Commercial
Minerals And To Maintain The Mineral Claims.
Our
success will depend on our
ability to raise additional capital. We have met our legal exploration
commitments on the Committee Bay Properties until 2012 and Tahera is required
to
fulfill the minimum exploration commitments on the Slave
Properties. However, at this time, we have not found a gold deposit
and further exploration is required. There is no assurance whatsoever
that funds will be available from any source or, if available, that they can
be
obtained on terms acceptable to us to make these investments. If funds are
not
available in the amounts required to maintain an interest, we will be unable
to
proceed further on the Committee Bay Properties and Slave Properties and our
operations would be severely limited, and we would be unable to reach our
objective. This could cause the loss of all or part of your
investment.
There
Are Risks Associated With Our Agreement With Tahera
The
agreement with Tahera dated March
7, 2002 gives us rights of access to exploration data of Tahera covering gold,
silver and base metal potential on properties held by Tahera or properties
which
are adjacent to or in the area of the Tahera properties. If during
our exploration for gold, silver or base metals, we discover diamonds, Tahera
retains the rights to the diamonds. Under the agreement, if we wish
to conduct exploration on the properties, we need to seek access to the
properties and enter into an access agreement with Tahera, suitable to Tahera,
which sets out the terms of our access. Our access cannot interfere
with Tahera’s operations on the properties. Tahera has the sole and
unfetted discretion to sell, transfer, assign, encumber, mortgage, pledge,
hypothecate, allow to lapse, forfeit, surrender or in any way dispose of its
interest in the properties. If Tahera were to sell, transfer or assign the
properties, we would have to negotiate access with the new owners of the
properties and there can be no assurance we would receive access. We undertake
exploration at our sole risk. Subject to Tahera’s rights, we have the
right to exploit opportunities for gold, silver or base metals on the
properties. We have granted Tahera a 2% net smelter return
royalty.
The
Report Of Our Independent Registered Public Accounting Firm Contains An
Explanatory Paragraph Questioning Our Ability To Continue As A Going
Concern.
The
report of our independent
registered public accounting firm on our consolidated financial statements
as of
June 30, 2007 and for the years ended June 30, 2007 and 2006 and for the period
July 1, 2002 (inception of exploration stage) through June 30, 2007 includes
an
explanatory paragraph questioning our ability to continue as a going
concern. This paragraph indicates that we have not yet commenced
revenue producing operations and have a retained deficit of A$34,518,000 which
conditions raise substantial doubt about our ability to continue as a going
concern. Our consolidated financial statements do not include any
adjustment that might result from the outcome of this uncertainty.
We
Are A Small Operation And Do Not Have Significant Capital.
Because
we will have limited working
capital, we must limit our exploration. If we are unable to raise the capital
required to undertake adequate exploration, we may not find gold or other
commercial minerals even though our property may contain gold or other
commercial minerals. If we do not find gold or other commercial minerals we
may
be forced to cease operations and you may lose your entire
investment.
We
May Not Find Any Ore Reserves That Are Economical
If
we are unable to raise the
required capital or we do not find gold or other commercial minerals on the
properties or we cannot remove the gold or other commercial minerals discovered
economically, we may have to look for other mineral rights on other properties
in Canada or other parts of the world. Alternatively, we may cease operations
altogether and you may lose your entire investment.
Weather
Interruptions In Nunavut May Affect And Delay Our Proposed Exploration
Operations.
We
can only work above ground at our
mineral claims in Nunavut, Canada from late May until early October and from
mid
December to March of each year. Once we are able to work underground, we plan
to
conduct our exploration year round, however, it is possible that snow or rain
could cause roads leading to our claims to be impassible. This could impair
our
ability to meet our objectives and may increase our costs beyond our ability,
if
any, to secure financing, which would adversely affect the value of your
investment and our ability to carry on business.
23
If
Our Officers And Directors Stopped Working For Us, We Would Be Adversely
Impacted.
None
of our other officers or
directors works for us on a full-time basis. There are no proposals or
definitive arrangements to compensate our officers and directors or to engage
them on a full-time basis. They each rely on other business activities to
support themselves. They each have a conflict of interest in that they are
officers and directors of other companies. You must rely on their skills and
experience in order for us to reach our objective. We have no employment
agreements or key man life insurance policy on any of them. The loss
of some or all of these officers and directors could adversely affect our
ability to carry on business and could cause you to lose part or all of your
investment.
We
Could Encounter Delays Due To Regulatory And Permitting
Delays.
We
could face delays in obtaining
mining permits and environmental permits. Such delays, could jeopardize
financing, if any, in which case we would have to delay or abandon work on
the
properties.
Gold
Price Fluctuations.
If
we are successful in developing a
gold ore reserve, our ability to raise the money to put it into production
and
operate it at a profit will be dependant on the then existing market price
of
gold. Declines in the market prices of gold may render reserves containing
relatively low grades of ore uneconomic to exploit, and we may be required
to
discontinue exploration, development or mining on the properties, or write
down
our assets. If the price of gold is too low we will not be able to raise the
money or produce any revenue. We cannot predict the future market
price of gold. A sustained decline in the market price of gold could cause
a
reduction in the value of your investment and you may lose all or part of your
investment.
There
Are Uncertainties Inherent In The Estimation Of Gold Or Other Mineral
Reserves.
Based
upon our preliminary study of
the properties we believe that the potential for discovering gold reserves
exists, but we have not identified such gold reserves and we are not able to
estimate the probability of finding recoverable gold ore. Such estimates cannot
be calculated from the current available information. Reserve estimates,
including the economic recovery of gold ore, will require us to make assumptions
about recovery costs and gold market prices. Reserve estimation is, by its
nature, an imprecise and subjective process and the accuracy of such estimates
is a function of the quality of available data and of engineering and geological
interpretation, judgment and experience. The economic feasibility of the
properties will be based upon our estimates of the size and grade of ore
reserves, metallurgical recoveries, production rates, capital and operating
costs, and the future price of gold. If such estimates are incorrect or vary
substantially it could effect our ability to develop an economical mine and
would reduce the value of your investment.
If
We Define An Economic Ore Reserve And Achieve Production, It Will Decline In
The
Future. An Ore Reserve Is A Wasting Asset.
Our
future ore reserve and
production, if any, will decline as a result of the exhaustion of reserves
and
possible closure of any mine that might be developed. Eventually, at
some unknown time in the future, all of the economically extractable ore will
be
removed from the properties, and there will be no ore remaining. This is called
depletion of reserves. Ultimately, we must acquire or operate other properties
in order to continue as an on going business. Our success in continuing to
develop reserves, if any, will affect the value of your investment.
There
Are Significant Risks Associated With Mining Activities.
The
mining business is generally
subject to risks and hazards, including quantity of production, quality of
the
ore, environmental hazards, industrial accidents, the encountering of unusual
or
unexpected geological formations, cave-ins, flooding, earthquakes and periodic
interruptions due to inclement or hazardous weather conditions. These
occurrences could result in damage to, or destruction of, our mineral properties
or production facilities, personal injury or death, environmental damage,
reduced production and delays in mining, asset write-downs, monetary losses
and
possible legal liability. We could incur significant costs that could adversely
affect our results of operation. Insurance fully covering many
environmental risks (including potential liability for pollution or other
hazards as a result of disposal of waste products occurring from exploration
and
production) is not generally available to us or to other companies in the
industry. What liability insurance we carry may not be adequate to cover any
claim.
24
We
Are Subject To Significant Environmental And Other Governmental Regulations
That
Can Require Substantial Capital Expenditure, And Can Be
Time-Consuming.
We
are required to comply with
various Canadian laws and regulations pertaining to exploration, development
and
the discharge of materials into the environment or otherwise relating to the
protection of the environment, all of which can increase the costs and time
required to attain operations. We will have to obtain exploration, development
and environmental permits, licenses or approvals that may be required for our
operations. There can be no assurance that we will be successful in obtaining,
if required, a permit to commence exploration, development and operation, or
that such permit can be obtained in a timely basis. If we are unsuccessful
in
obtaining the required permits it may adversely affect our ability to carry
on
business and cause you to lose part or all of your investment.
Mining
Accidents Or Other Adverse Events At Our Property Could Reduce Our Production
Levels.
If
and when we reach production it
may fall below estimated levels as a result of mining accidents, cave-ins or
flooding on the properties. In addition, production may be unexpectedly reduced
if, during the course of mining, unfavorable ground conditions or seismic
activity are encountered, ore grades are lower than expected, or the physical
or
metallurgical characteristics of the ore are less amenable to mining or
processing than expected. The happening of these types of events would reduce
our profitably or could cause us to cease operations which would cause you
to
lose part or all of your investment.
The
acquisition of gold mineral
properties is subject to substantial competition. If we must pursue alternative
properties, companies with greater financial resources, larger staffs, more
experience, and more equipment for exploration and development may be in a
better position than us to compete for properties. We may have to undertake
greater risks than more established companies in order to compete which could
affect the value of your investment.
We
are substantially dependent upon AXIS To Carry Out Our
Activities
We
are substantially dependent upon
AXIS for our senior management, financial and accounting, corporate legal and
other corporate headquarters functions. For example, each of our
officers is employed by AXIS and, as such, is required by AXIS to devote
substantial amounts of time to the business and affairs of the other
shareholders of AXIS.
Pursuant
to a services agreement,
AXIS provides us with office facilities, administrative personnel and services,
management and geological staff and services. No fixed fee is set in
the agreement and we are required to reimburse AXIS for any direct costs
incurred by AXIS for us. In addition, we pay a proportion of AXIS
indirect costs based on a measure of our utilization of the facilities and
activities of AXIS plus a service fee of not more than 15% of the direct and
indirect costs. AXIS has charged us a service fee of 15% for this fiscal year.
This service agreement may be terminated by us or AXIS on 60 days’
notice. See “Certain Relationships and Related Party
Transactions.”
Future
Sales of Common Stock Could Depress The Price Of Our Common
Stock
Future
sales of substantial amounts
of common stock pursuant to Rule 144 under the Securities Act of 1933 or
otherwise by certain stockholders could have a material adverse impact on the
market price for the common stock at the time. There are presently
22,955,659 outstanding shares of our common stock held by stockholders which
are
deemed “restricted securities” as defined by Rule 144 under the Securities
Act. Under certain circumstances, these shares may be sold without
registration pursuant to the provisions of Rule 144. In general,
under rule 144, a person (or persons whose shares are aggregated) who has
satisfied a one-year holding period may, under certain circumstances, sell
within any three-month period a number of restricted securities which does
not
exceed the greater of one (1%) percent of the shares outstanding or the average
weekly trading volume during the four calendar weeks preceding the notice of
sale required by Rule 144. In addition, Rule 144 permits, under
certain circumstances, the sale of restricted securities without any quantity
limitations by a person who is not an affiliate of ours and has satisfied a
two-year holding period. Any sales of shares by stockholders pursuant
to Rule 144 may have a depressive effect on the price of our common
stock.
Our
Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of
The
Full Value Of Their Shares
Our
common stock is quoted via the
Over The Counter Bulletin Board (OTCBB). As such, our common stock
may have fewer market makers, lower trading volumes and larger spreads between
bid and asked prices than securities listed on an exchange such as the New
York
Stock Exchange or the NASDAQ Stock Market. These factors may result
in higher price volatility and less market liquidity for the common
stock.
25
Our
common
stock is currently trading at a price substantially below $5.00 per share,
subjecting trading in the stock to certain SEC rules requiring additional
disclosures by broker-dealers. These rules generally apply to any
equity security that has a market price of less than $5.00 per share, subject
to
certain exceptions (a “penny stock”). Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith and impose
various sales practice requirements on broker-dealers who sell penny stocks
to
persons other than established customers and institutional or wealthy
investors. For these types of transactions, the broker-dealer must
make a special suitability determination for the purchaser and have received
the
purchaser’s written consent to the transaction prior to the sale. The
broker-dealer also must disclose the commissions payable to the broker-dealer,
current bid and offer quotations for the penny stock and, if the broker-dealer
is the sole market maker, the broker-dealer must disclose this fact and the
broker-dealer’s presumed control over the market. Such information
must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must
be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stock. The
additional burdens imposed upon broker-dealers by such requirements could
discourage broker-dealers from effecting transactions in our common
stock.
The
Market Price Of Your Shares Will Be Volatile.
The
stock
market price of gold mining exploration companies like us has been volatile.
Securities markets may experience price and volume volatility. The market price
of our stock may experience wide fluctuations that could be unrelated to our
financial and operating results. Such volatility or fluctuations could adversely
affect your ability to sell your shares and the value you might receive for
those shares.
The
Company occupies certain executive and office facilities in Melbourne, Victoria,
Australia which are provided to it pursuant to the Service Agreement with AXIS.
See “Item 1- Business- Employees” and “Item 12- Certain
Relationships and Related Transactions”. The Company believes
that its administrative space is adequate for its current needs.
In
addition, we have an office in North America at Suite 1801, 1 Yonge Street,
Toronto ON Canada. The office receives mail, couriers and facsimiles
on our behalf and forwards any documents received to us. The lease is
for six months and can be renewed on a month to month basis. We pay a
fee of CDN$30 per month. This is a temporary arrangement whilst we
determine whether to open a permanent office.
There
are
no pending legal proceedings to which the Company is a party, or to which any
of
its property is the subject, which the Company considers material.
Item
4 Submission of Matters
to a Vote of
Security
Holders
Not
Applicable
26
|
Market
for Common Equity and Related Stockholder Matters
|
Our
common
stock is traded in the over-the-counter market and quoted on the OTC-Bulletin
Board under the symbol “GORV”. The trading for the common stock has
been sporadic and the market for the common stock cannot be classified as an
established trading market.
The
following table sets out the high and low bid information for the common stock
as reported by the OTC Bulletin Board for each period/quarter indicated in
US$:
|
Calendar
Period
|
High
Bid(1)
|
Low
Bid(1)
|
|
|
2005
|
|||
|
First
Quarter
|
2.50
|
1.01
|
|
|
Second
Quarter
|
1.75
|
0.65
|
|
|
Third
Quarter
|
1.25
|
1.00
|
|
|
Fourth
Quarter
|
1.25
|
1.00
|
|
|
|
|||
|
2006
|
|||
|
First
Quarter
|
1.75
|
0.40
|
|
|
Second
Quarter
|
0.50
|
0.16
|
|
|
Third
Quarter
|
0.30
|
0.15
|
|
|
Fourth
Quarter
|
0.30
|
0.11
|
|
|
|
|||
|
2007
|
|||
|
First
Quarter
|
0.14
|
0.12
|
|
|
Second
Quarter
|
0.12
|
0.12
|
|
|
(1) The
quotations set out herein reflect inter-dealer prices without retail
mark-up, mark-down or commission and may not necessarily reflect
actual
transactions.
|
As
of
September 21, 2007, there are 26,714,130 shares of common stock issued. We
have
(i) 10,000,000 special warrants on issue, each of which is exercisable at any
time until June 9, 2016, to acquire without the payment of further consideration
one share of common stock, at which time all special warrants that have not
been
exercised will automatically convert into shares of common stock; and (ii)
40,000,000 warrants outstanding which expire on April 30, 2011, each of which
is
exercisable to purchase one share of common stock for a purchase price of A$0.20
(US$0.1542). The warrants contain a cashless exercise provision whereby the
holder, at its option, may exercise the warrants by surrender and cancellation
of a portion of the shares of our common stock issuable upon the exercise of
the
warrants based on the then current market price of our common stock. If the
holder of the warrants elected to exercise the warrants pursuant to this
provision, we would not receive any proceeds from the exercise of the
warrants.
To
date we
have not paid any dividends on our common stock and we do not expect to declare
or pay any dividends on our common stock in the foreseeable future. Payment
of
any dividends will depend upon our future earnings, if any, our financial
condition, and other factors deemed relevant by the Board of
Directors.
Shareholders
As
of
August 31, 2007 the Company had approximately 130 shareholders of
record.
Dividend
Policy
It
is the
present policy of the Board of Directors to retain earnings, when incurred,
for
use in our business. We have not declared any cash dividends to the
holders of its Common Stock and do not intend to declare such dividends in
the
foreseeable future.
Transfer
Agent
Our
United
States Transfer Agent and Registrar is BNY Mellon Stockowner
Services.
27
|
Management’s
Discussion and Analysis of Financial
Condition or Plan of
Operation
|
General
The
following discussion and analysis of our financial condition and plan of
operation should be read in conjunction with the Financial Statements and
accompanying notes and the other financial information appearing elsewhere
in
this report. This report contains numerous forward-looking statements
relating to our business. Such forward-looking statements are identified by
the
use of words such a s believes, intends, expects, hopes, may, should, plan,
projected, contemplates, anticipates or similar words. Actual operating
schedules, results of operations, ore grades and mineral deposit estimates
and
other projections and estimates could differ materially form those projected
in
the forward-looking statements.
We
are an
exploration stage mining company. Our objective is to exploit out
interest in the mineral claims in Nunavut, Canada. Our principal
exploration target is for gold and we are seeking to determine whether adequate
gold reserves are present on the property covered by our claims to develop
an
operating mine. We are in the initial stages of our exploration
program and we have not yet identified any ore reserves. We have not
generated any revenues from operations.
Selected
Financial Data
Our
selected consolidated financial data presented below for each of the years
in
the two-year period ended June 30, 2007, and the balance sheet data at June
30,
2006 and 2007 have been derived from consolidated financial statements, which
have been audited by PKF, Certified Public Accountants, a Professional
Corporation. The selected financial data should be read in conjunction with
our
consolidated financial statements for each of the years in the two-year period
ended June 30, 2007, and Notes thereto, which are included elsewhere in this
Annual Report.
28
|
(Consolidated
Statement of
Operations Data)
|
||||||||||||
|
(in
thousands, except per share data)
|
||||||||||||
|
Year
ended June 30
|
||||||||||||
|
|
Conv. | |||||||||||
|
|
Transl. | |||||||||||
|
2006
|
2007
|
2007
|
||||||||||
|
A$
|
A$
|
US$
|
||||||||||
|
Revenues
|
-
|
-
|
-
|
|||||||||
|
Costs
and expenses
|
1,312
|
1,686
|
1,431
|
|||||||||
|
Loss
from operations
|
(1,312 | ) | (1,686 | ) | (1,431 | ) | ||||||
|
Other
income (loss)
|
(16 | ) | (98 | ) | (83 | ) | ||||||
|
Profit
(loss) before income
|
||||||||||||
|
taxes
|
(1,328 | ) | (1,784 | ) | (1,514 | ) | ||||||
|
Provision
for income taxes
|
-
|
-
|
-
|
|||||||||
|
Net
profit (loss) from
|
(1,328 | ) | (1,784 | ) | (1,514 | ) | ||||||
|
Continuing
Operations
|
||||||||||||
|
Net
loss from
|
-
|
-
|
-
|
|||||||||
|
Discontinued
Operations
|
||||||||||||
|
Net
profit (loss)
|
(1,328 | ) | (1,784 | ) | (1,514 | ) | ||||||
|
A$
|
A$
|
US$
|
||||||||||
|
Net
profit (loss) per share
|
||||||||||||
|
On
continuing operations
|
(.07 | ) | (.06 | ) | (.05 | ) | ||||||
|
Weighted
average number
|
||||||||||||
|
of
shares outstanding (000’s)
|
18,260
|
27,823
|
27,823
|
|||||||||
|
Consolidated
Balance Sheet Data
|
||||||||||||
|
A$
|
A$
|
US$
|
||||||||||
|
Total
assets
|
2,113
|
420
|
357
|
|||||||||
|
Total
liabilities
|
542
|
333
|
283
|
|||||||||
|
Stockholders’
equity (deficit)
|
1,571
|
87
|
74
|
|||||||||
29
|
|
Foreign
Currency Translation
|
The
majority of our administrative operations are in Australia and, as a result,
our
accounts are reported in Australian dollars. The income and expenses of its
foreign operations are translated into Australian dollars at the average
exchange rate prevailing during the period. Assets and liabilities of the
foreign operations are translated into Australian dollars at the period-end
exchange rate. The following table shows the period-end rates of exchange
of the
Australian and Canadian dollar compared with the US dollar during the periods
indicated.
Year
ended
June
30
|
2006
|
A$1.00
|
=
|
US$0.7301
|
|
CDN$1.00
|
=
|
US$0.8931
|
|
|
2007
|
A$1.00
|
=
|
US$0.8488
|
|
CDN$1.00
|
=
|
US$0.8991
|
The
exchange rate between the A$ and US$ has moved by 16.3% between June 30,
2006
and 2007. Accordingly, a direct comparison of costs between fiscal
2007 and 2006 is not necessarily a true comparison.
Results
of Operations
Year
ended June 30, 2007 versus Year ended June 30, 2006
Total
costs and expenses have increased from A$1,312,000 for the year ended June
30,
2006 to A$1,686,000 (US$1,431,000) for the year ended June 30,
2007. The increase was a net result of:
|
i)
|
An
increase in exploration expenditure written off from A$236,000
in fiscal
2006 to A$502,000 (US$426,000) in fiscal 2007. In fiscal 2007,
we
conducted field and sampling programs on the Company’s Slave exploration
properties. The expenditure incurred included consulting fees for
geologists, field staff, logistic support and laboratory analysis.
In
fiscal 2006, no field exploration was undertaken during the 2006
field
season due to high level of field exploration in the fiscal 2005
field
season and limited funding. The costs incurred represent the salary
and
benefits of the Vice President Exploration (until his resignation)
and
maintenance costs of the Slave and Committee Bay Properties. The
Committee
Bay and Slave Properties are in Nunavut in an isolated area and
exploration can only be undertaken between June and August each
year due
to ground conditions. Exploration is costly as we were required
to hire
and construct a temporary camp which also had to be transported
by charter
flight. All supplies and casual employees also needed to be transported
to
the temporary camp by charter flights and/or helicopter. The properties
are located approximately 100 kilometers from the camp and employees
are
transported by helicopter daily from camp to the exploration
site.
|
|
ii)
|
A
decrease in interest expense from A$113,000 in fiscal 2006 to A$4,000
(US$3,000) in fiscal 2007. AXIS provides management and geological
services to us pursuant to a Service Deed dated November 25, 1988.
AXIS
charged us A$4,000 in interest for fiscal 2007. AXIS charged interest
at a
rate between 9.60% to 10.10% for fiscal 2007. The amount of A$140,000
(US$119,000) owing to AXIS at June 30, 2007 represents part of
the charges
for the three months ended June 30, 2007 and is included in accounts
payable and accrued expenses. During fiscal 2006, we borrowed A$1,241,000
from Wilzed, a company which our President and CEO is a Director
and
shareholder and in May 2006, the total debt of A$2,000,000 was
repaid
through the issue of shares of common stock and options. Wilzed
charged us
A$83,000 in interest at a rate of 9.35% during fiscal 2006 and
AXIS
charged us A$21,000 in interest for fiscal 2006. AXIS charged interest
at
a rate of 9.35% during fiscal 2006. For fiscal 2006, A$9,000 general
interest was charged on outstanding amounts payable
liabilities.
|
|
iii)
|
An
increase in legal, accounting and professional costs from A$124,000
in
fiscal 2006 to A$135,000 (US$114,000) in fiscal 2007. During fiscal
2007,
we incurred legal expenses of A$59,000 (US$50,000) for the preparation
of
the registration statement (SB-2) to register the warrants issued
to RAB
and general legal work; audit fees of A$48,000 (US$41,000) for
professional services in relation to financial statements, the
quarterly
Form 10-QSBs and annual Form 10-KSB and reviewing the Form SB-2;
and
A$28,000 (US$24,000) from our stock transfer agent for management
of the
share transfer. During fiscal 2006, we incurred legal expenses
of A$16,000
in relation to the proposed listing on the Toronto Venture Exchange;
A$30,000 in relation to financing documents, employment contracts
and
general legal work; which was reduced by A$11,000 of legal expenses
no
longer payable in relation to an arrangement in Tibet in China;
audit fees
of A$59,000 for professional services in relation to financial
statements,
the quarterly form 10-QSB’s and annual Form 10-KSB; and reviewing the Form
SB-2 and A$29,500 from our stock transfer agent for management
of the
share register.
|
30
|
iv)
|
An
increase in administrative costs from A$647,000 in fiscal 2006
to
A$745,000 (US$632,000) in fiscal 2007. During fiscal 2007, AXIS
charged us
A$677,000 (US$575,000) for management and service fees and Director’s fees
and salaries incurred on behalf of the Company which relate to
fees paid
to an independent director, President and Chief Executive Officer,
Director, Secretary and Chief Financial Officer and other staff
of AXIS
who provide services to the Company; A$19,000 (US$16,000) for lodgement
of
company filings and A$15,000 (US$13,000) for overseas travel. During
fiscal 2006, AXIS charged us A$469,000 for management and service
fees,
and Director’s fees and salaries incurred on behalf of the Company which
relates to fees paid to an independent Director, President and
Chief
Executive Officer, Director, Secretary and Chief Financial Officer
and
other staff of AXIS who provide services to the Company. One independent
director who resigned during the year charged the Company $4,600.
During
fiscal year 2006, we incurred in total A$122,000 in salary costs
for the
Chief Operating Officer who resigned in April
2006.
|
|
v)
|
An
increase in stock based compensation from A$191,000 for fiscal
2006 to
A$300,000 (US$255,000) for fiscal 2007. Following shareholder
approval on January 27, 2005 the Company issued 1,400,000 options
at an
exercise price of US$1.00 per option pursuant to the 2004 Stock
Option
Plan. Of the total 1,400,000 options issued, 350,000 vested
immediately following shareholder approval, 50,000 vested on March
31,
2005, 333,331 vested on July 27, 2005, 333,334 vested on January
27, 2006
and the balance vest on July 27, 2006. The exercise price of US$1.00
was
derived from the issue price of common stock from the placement
of shares
on March 31, 2004 and was considered by the Company’s Directors to be the
fair value of the common stock. The options expire on October 15,
2014.
The Company accounted for all options issued in 2004 based upon
their fair
market value using the Black Scholes pricing model. There were
no employee stock options issued by the Company prior to 2004 or
in 2005
or 2006. The Company calculated the fair value of the options at
US$0.3185
per option using the Black Scholes valuation method. The total
value of the options equates to A$575,100 and was amortized over
the
vesting period. For fiscal 2007, the amortization amounted to A$7,000
(US$6,000).
|
On
October
19, 2006, the Directors of the Company issued a further 4,650,000 options
under
the Stock Option Plan. The options have no issue price, an exercise price
of
US30.84 cents, and a latest exercise date of October 19, 2016. The options
vest
1/3 on October 19, 2007 (“T1”), 1/3 on October 19, 2008 (“T2”) and 1/3 on
October 19, 2009 (“T3”). The Company obtained an external valuation of the
options from an unrelated third party. The Company has calculated the fair
value
of the 4,650,000 options at US$0.109 per option for T1, US$0.113 for T2 and
US$0.117 for T3 using the binomial option pricing model. The total value
of the
options equates to A$696,976 (US$525,450) and is being amortized over the
vesting periods. For fiscal 2007, the amortisation amounted to A$293,000
(US$249,000).
Accordingly,
the loss from operations increased from A$1,312,000 for the year ended June
30,
2006 to A$1,686,000 (US$1,431,000) for the year ended June 30,
2007.
The
net
loss amounted to A$1,784,000 (US$1,514,000) for the year ended June 30, 2007
compared to a net loss of A$1,328,000 for the year ending June 30, 2006.
The net
loss per common equivalent share in 2007 was A$0.06 (US$0.05) compared with
a
net loss with a common equivalent share price of A$0.07 in the prior
year.
Liquidity
and Capital Resources
For
the
fiscal year 2007, net cash used in operating activities was A$1,554,000
(US$1,319,000) primarily consisting of amounts spent on exploration of A$502,000
(US$426,000), and administration A$745,000 (US$632,000), a decrease in
receivables of A$12,000 (US$10,000), and prepayments and deposits for the
exploration programme of A$6,000 (US$5,000) and a decrease in accounts payable
and accrued expenses of A$201,000 (US$171,000).
Effective
as of June 9, 2006, Golden River Resources, entered into
a Subscription Agreement with RAB Special Situations Fund
(Master) Limited (“RAB”)
pursuant to which the Company issued to RAB
in a private placement transaction (the ”Private Placement”) for an aggregate
purchase price of A$2,000,000 (US$1,542,000): (i)10,000,000 special warrants
(the “Special Warrants”), each of which is exercisable at any time to acquire,
without additional consideration, one (1) share (the “Special Warrant Shares”)
of Common Stock, US$0.001 par value (“Common Stock"), of the Company, and (ii)
warrants (the “Warrants”) for the purchase of 20,000,000 shares of Common Stock,
US$0.001 par value (the “Warrant Shares”), at an exercise price
of A$0.20 (US$0.1542) to be exercisable until April 30,
2011.
31
The
Company agreed to prepare and file with the Securities and Exchange Commission
a
registration statement covering the resale of the shares of Common Stock
issuable upon exercise of the Special Warrants and the Warrants which
registration statement was declared effective on October 17, 2006.
The
Company is obligated to keep such registration statement effective until
the
earlier of (i) the date that all of the Registrable Securities have been
sold
pursuant to such registration statement, (ii) all Registrable Securities
have
been otherwise transferred to persons who may trade such shares without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing
a
restrictive legend, or (iii) all Registrable Securities may be sold at any
time,
without volume or manner of sale limitations pursuant to Rule 144(k) or any
similar provision then in effect under the Securities Act; or (iv) 2 years
from
the effective date.
As
of June
30, 2007 we had short-term obligations of A$333,000 (US$283,000) consisting
mainly of accounts payable and accrued expenses.
We
have
A$349,000 (US$296,000) in cash at June 30, 2007.
During
fiscal 2004 and 2005, we undertook a field exploration program on our Committee
Bay and Slave Properties. In relation to the Committee Bay Properties, this
was
more than the minimum required expenditure and as a result, we do not have
a
legal obligation to undertake further exploration on those properties during
their life. However our properties are prospective for gold and other
minerals. We undertook further exploration in August 2006 on the
Slave Properties and a summary of the results is set out in Item 1. The cost
for
the 2006-2007 exploration program was A$502,000 (US$426,000) and subject
to
funding, we may consider a drilling program in early 2008. At this stage,
we
have not prepared a budget for this drilling program. Our budget for general
and
administration for fiscal 2008 is A$0.9 million. We are currently
investigating capital raising opportunities which may be in the form of either
equity or debt, to provide funding for working capital purposes and future
exploration programs. There can be no assurance that such a capital
raising will be successful, or that even if an offer of financing is received
by
the Company, it is on terms acceptable to the Company.
Cautionary
“Safe Harbour” Statement under the United States Private Securities Litigation
Reform Act of 1995.
Certain
information contained in this Form 10-KSB are forward-looking statements
within
the meaning of the Private Securities Litigation Reform Act of 1995 (“the Act”),
which became law in December 1995. In order to obtain the benefits of the
“safe
harbor” provisions of the Act for any such forward-looking statements, we wish
to caution investors and prospective investors about significant factors
which,
among others, have in some cases affected our actual results and are in the
future likely to affect our actual results and cause them to differ materially
from those expressed in any such forward-looking statements. This Form 10-KSB
contains forward-looking statements relating to future financial results.
Actual
results may differ as a result of factors over which we have no control,
including, without limitation, the risks of exploration and development stage
projects, political risks of development in foreign countries, risks associated
with environmental and other regulatory matters, mining risks and competitors,
the volatility of gold prices and movements in foreign exchange
rates.
Impact
of Australian Tax Law
Australian
resident corporations are subject to Australian income tax on their non-exempt
worldwide assessable income (which includes capital gains), less allowable
deductions, at the rate of 30%. Foreign tax credits are allowed where tax
has
been paid on foreign source income, provided the tax credit does not exceed
30%
of the foreign source income.
Under
the
U.S./Australia tax treaty, a U.S. resident corporation such as us is subject
to
Australian income tax on net profits attributable to the carrying on of a
business in Australia through a “permanent establishment” in Australia. A
“permanent establishment” is a fixed place of business through which the
business of an enterprise is carried on. The treaty limits the Australian
tax on
interest and royalties paid by an Australian business to a U.S. resident
to 10%
of the gross interest or royalty income unless it relates to a permanent
establishment. Although we consider that we do not have a permanent
establishment in Australia, it may be deemed to have such an establishment
due
to the location of its administrative offices in Melbourne. In addition we
may
receive interest or dividends from time to time.
Impact
of Australian Governmental, Economic, Monetary or Fiscal
Policies
Although
Australian taxpayers are subject to substantial regulation, we believe that
our
operations are not materially impacted by such regulations nor is it subject
to
any broader regulations or governmental policies than most Australian
taxpayers.
32
Impact
of Recent Accounting Pronouncements
For
a
discussion of the impact of recent accounting pronouncements on the Company’s
financial statements, see Note 2 to the Company’s Consolidated Financial
Statements which are attached hereto.
Quantitative
and Qualitative Disclosures about Market Risk
At
June
30, 2007, the Company had no outstanding borrowings under Loan
Facilities.
See
F Pages
|
Changes
in and Disagreements with Accountants on
Accounting and Financial
Disclosure
|
None
|
(a)
|
Evaluation
of disclosure controls and
procedures.
|
Our
principal executive officer and our principal financial officer evaluated
the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended)
as of
the end of the period covered by this report. Such disclosure controls and
procedures are designed to ensure that information required to be disclosed
by
the Company is accumulated and communicated to the appropriate management,
including the principal executive and financial officers, on a basis that
permits timely decisions regarding timely disclosure. Based on that evaluation,
such principal executive officer and principal financial officer concluded
that,
the Company’s disclosure control and procedures as of the end of the period
covered by this report have been designed and are functioning effectively
to
provide reasonable assurance that the information required to be disclosed
by
the Company in reports filed under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms.
|
(b)
|
Change
in Internal Control over Financial
Reporting.
|
No
change
in our internal control over financial reporting occurred during our most
recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect our internal control over financial reporting.
|
(c)
|
Other.
|
We
believe
that a controls system, no matter how well designed and operated, can not
provide absolute assurance that the objectives of the controls system are
met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been
detected.
In
preparation for the annual report of management regarding our evaluation
of our
internal controls that is required to be included in our annual report for
the
year ended June 30, 2008 by Section 404 of the Sarbanes-Oxley Act of 2002,
we
will need to assess the adequacy of our internal control, remediate any
weaknesses that may be identified, validate that controls are functioning
as
documented and implement a continuous reporting and improvement process for
internal controls. We may discover deficiencies that require us to improve
our
procedures, processes and systems in order to ensure that our internal controls
are adequate and effective and that we are in compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act. If the deficiencies are not adequately
addressed, or if we are unable to complete all of our testing and any
remediation in time for compliance with the requirements of Section 404 of
the
Sarbanes-Oxley Act and the SEC rules under it, we would be unable to conclude
that our internal controls over financial reporting are designed and operating
effectively, which could adversely affect our investor confidence in our
internal controls over financial reporting.
33
PART
III
The
following table sets forth our directors and officers, their ages and all
offices and positions with our company. Officers and other employees
serve at the will of the Board of Directors.
|
Name
|
Age
|
Position(s)
Held
|
|
Joseph
Gutnick
|
55
|
Chairman
of the Board, President, Chief
Executive
Officer and Director
|
|
David
Tyrwhitt
|
69
|
Director
|
|
Peter
Lee
|
50
|
Director,
Secretary, Chief Financial Officer
and
Principal Accounting Officer
|
|
Mordechai
Gutnick
|
29
|
Director
|
|
|
Joseph
Gutnick
|
Mr
Gutnick
has been Chairman of the Board, President and Chief Executive Officer since
March 1988. He has been a Director of numerous public listed
companies in Australia specialising in the mining sector since 1980 and is
currently a Director of Astro Diamond Mines N.L., Great Gold Mines N.L.,
and
Quantum Resources Limited and President and CEO of Legend International Holdings
Inc, a US corporation listed on the OTC market and President and CEO of Northern
Capital Resources Corporation, Yahalom International Resources Corporation
and
Calvert River Resources, Inc., US corporations. Mr. Gutnick was
previously Executive Chairman of Tahera Diamond Corporation, a company that
is
listed on Toronto Stock Exchange from May 2000 to October 2003 and has
previously been a Director of the World Gold Council. He is a Fellow
of the Australasian Institute of Mining & Metallurgy and the Australian
Institute of Management and a Member of the Australian Institute of Company
Directors.
David
Tyrwhitt
Dr
Tyrwhitt was appointed a Director in November 1996. He is a geologist, holding
a
Bachelor of Science and PhD degrees and has 40 years experience in mineral
exploration and management development and operation of gold mines in
Australia. Since 1996, Mr. Tyrwhitt has served as a consulting
geologist through David S. Tyrwhitt & Associates (June 2002 to present) and
Auminex Sdn. Bhd. (1996 to June 2002). Dr Tyrwhitt has been a Director of
numerous public listed companies in Australia in the mining industry and
is
currently a Director of Astro Diamond Mines N.L., Great Gold Mines N.L.,
and
Quantum Resources Limited listed on the Australian Stock Exchange and Legend
International Holdings Inc, a US corporation listed on the OTC
market.
Peter
Lee
Mr
Lee has
been Chief Financial Officer and Principal Accounting Officer since August
1989
and was appointed a Director in February 1996. Mr Lee is a Member of the
Institute of Chartered Accountants in Australia, a Fellow of Chartered
Secretaries Australia Ltd., a Member of the Australian Institute of Company
Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne
Institute of Technology. He has over 25 years commercial experience and is
currently General Manager Corporate and Company Secretary of several listed
public companies in Australia and CFO and Secretary of Legend International
Holdings Inc, a US corporation listed on the OTC market.
Mordechai
Gutnick
On
September 14, 2005, Mr Gutnick was elected a non-executive Director. He is
a
businessman and long-term investor in the mining industry. From April
2001 to June 2002, Mr. Gutnick served as a project advisor for AXIS, which
provides services to the Company; from July 2002 to April 2003, Mr. Gutnick
was
a private investor; and since May 2003, Mr. Gutnick has served as a
non-executive director of the following companies: Astro Diamond
Mines N.L., Great Gold Mines N.L. and Quantum Resources Limited. Mr
Gutnick has been appointed to the Audit and Remuneration Committee’s, effective
September 14, 2005. Mr Mordechai Gutnick is the son of Mr Joseph
Gutnick.
Mr
Craig
Alford has resigned as Vice President Exploration but continues to provide
ad-hoc consulting services to the Company.
34
All
Directors have been appointed for a one-year term which expires in November
2007.
Directors
need not be stockholders of the company or residents of the State of Delaware.
Directors are elected for an annual term and generally hold office until
the
next Directors have been duly elected and qualified. Directors may receive
compensation for their services as determined by the Board of Directors.
A
vacancy on the Board may be filled by the remaining Directors even though
less
than a quorum remains. A Director appointed to fill a vacancy remains a Director
until his successor is elected by the Stockholders at the next annual meeting
of
Shareholder or until a special meeting is called to elect
Directors.
Board,
Audit Committee and Remuneration Committee Meetings
Our
Board
of Directors consists of four members, of whom two have been, and continue
to
be, independent under applicable regulations. During fiscal 2007, our Board
of
Directors met three times. The Board of Directors also uses resolutions in
writing to deal with certain matters, and during fiscal 2007, one resolution
in
writing was signed by all Directors.
We
do not
have a nominating committee. Historically our entire Board has selected nominees
for election as directors. The Board believes this process has worked well
thus
far particularly since it has been the Board's practice to require unanimity
of
Board members with respect to the selection of director nominees. In determining
whether to elect a director or to nominate any person for election by our
stockholders, the Board assesses the appropriate size of the Board of Directors,
consistent with our bylaws, and whether any vacancies on the Board are expected
due to retirement or otherwise. If vacancies are anticipated, or otherwise
arise, the Board will consider various potential candidates to fill each
vacancy. Candidates may come to the attention of the Board through a variety
of
sources, including from current members of the Board, stockholders, or other
persons. The Board of Directors has not yet had the occasion to, but will,
consider properly submitted proposed nominations by stockholders who are
not
directors, officers, or employees of Golden River Resources on the same basis
as
candidates proposed by any other person.
Audit
Committee
Dr
David
Tyrwhitt and Mr. Mordechai Gutnick constitute our Audit Committee. It is
the
opinion of the Board of Directors that each of them is an independent director
as defined in Rule 10A-3 of the Securities Exchange Act of 1934. In addition,
the Board believes that Mr Tyrwhitt would meet the director independence
requirements of the Nasdaq Stock Market if we were listed on such Market,
but
that Mr. Mordechai Gutnick would not meet such Nasdaq independence requirements
in light of his family relationship with Mr. Joseph Gutnick who is our Chief
Executive Officer. Our Audit Committee does not include a "financial expert"
as
defined in Item 401 (e) of Regulation S-B. The Company only has two independent
Directors and neither of these independent Directors has a finance background.
The Audit Committee met once during fiscal 2007 and the Chair of the Audit
Committee met with the external auditors on three occasions during fiscal
2007
in respect to quarterly reports prior to the reports being filed.
Remuneration
Committee
The
Board
has a Remuneration Committee comprised of two independent directors. During
fiscal 2007, the Remuneration Committee did not meet.
Code
of Ethics
We
have
adopted a Code of Conduct and Ethics and it applies to all Directors, Officers
and employees. A copy of the Code of Conduct and Ethics is posted on
our website and we will provide a copy to any person without
charge. If you require a copy, you can download it from our website
or alternatively, contact us by facsimile or email and we will send you a
copy.
Stockholder
Communications with the Board
Stockholders
who wish to communicate with the Board of Directors should send their
communications to the Chairman of the Bord at the address listed
below. The Chairman of the Board is responsible for forwarding
communications to the appropriate Board members.
Mr.
Joseph
Gutnick
Golden
River Resources Corporation
PO
Box
6315 St. Kilda Road
Central
Melbourne, Victoria 8008 Australia
35
Section
16(a) Beneficial Ownership Reporting Compliance
Pursuant
to Section 16(a) of the Securities Exchange Act of 1934, our Directors,
executive officers and beneficial owners of more than 10% of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission concerning their ownership of and transactions in our Common Stock
and are also required to provide to us copies of such reports. Based
solely on such reports and related information furnished to us, we believe
that
in fiscal 2007 all such filing requirements were complied with in a timely
manner by all Directors and executive officers
The
following table sets forth the annual salary, bonuses and all other compensation
awards and pay outs on account of our Chief Executive Officer for services
rendered to us during the fiscal years ended June 30, 2007, 2006 and
2005. No other executive officer received more than US$100,000 per
annum during this period.
Summary
Compensation Table
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All
Other Compensation
|
Total
|
|
Joseph
Gutnick, Chairman of the Board, President and CEO (1)(2)(3)(4)
|
2007
2006
2005
|
A$111,285
A$114,281
A$110,602
|
-
-
-
|
-
-
-
|
A$226,000
-
A$154,250
|
-
-
-
|
-
-
-
|
-
-
-
|
A$371,285
A$114,281
A$264,852
|
________________________________
|
1.
|
The
amounts listed were paid by us to AXIS, which provides the services
of Mr.
J I Gutnick and Mr Lee as well as certain other officers and employees
to
the Company.
|
|
2.
|
Excludes
options granted to Kerisridge Pty Ltd and Fast Knight Nominees
Pty Ltd of
which Mr JI Gutnick is a Director and Shareholder (see Item 13
– Certain
Relationships and Related Party
Transactions)
|
|
3.
|
Includes
amounts paid by AXIS to an accumulation superannuation plan on
behalf of
Joseph Gutnick.
|
|
4.
|
Includes
500,000 options that have vested and 666,666 options that vest
on October
19, 2007, 666,667 options that vest on October 19, 2008 and 666,667
options that vest on October 19,
2009.
|
|
5.
|
Includes
150,000 options that are vested and 166,666 options that vest on
October
19, 2007, 166,667 options that vest on October 19, 2008 and 166,667
options that vest on October 19,
2009.
|
|
6.
|
Mr
Alford resigned as a full time employee in March 2007 but continues
to
provide ad-hoc consulting services to the
Company.
|
|
7.
|
Mr
Althaus was a consultant for the period to October 2004 and at
that time
was appointed as an employee. The salary disclosed includes the
consulting fees for the period July to October 2004 and the salary
for the
period November 2004 to June 2005.
|
|
8.
|
Includes
250,000 options that are vested. Mr Althaus resigned on April 4,
2006 and
the options expired on July 4,
2006.
|
For
additional information about the Service Agreement and the Consulting Agreement
see “Item 1 - Business - Employees” and “Item 12 - Certain
Relationships and Related Transactions”.
We
have a
policy that we will not enter into any transaction with an officer, Director
or
affiliate of the Company or any member of their families unless the transaction
is approved by the Audit Committee and the Audit Committee determines that
the
terms of the transaction are no less favourable to us than the terms available
from non-affiliated third parties or are otherwise deemed to be fair to the
Company at the time authorised.
36
Outstanding
Equity Awards at Fiscal Year-End
|
Option
Awards
|
Stock
Awards
|
||||||||
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
That Have Not Been Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested ($)
|
|
Joseph
Gutnick, Chairman of the Board, President and CEO
|
-
-
|
-
-
|
500,000
2,000,000
|
US$1.00
US$0.3084
|
10/15/14
10/19/11
|
-
-
|
-
-
|
-
-
|
-
-
|
2004
Stock Option Plan
The
2004
Plan provides for the granting of options. The maximum number of shares
available for awards is 10% of the issued and outstanding shares of common
stock
on issue at any time (on a fully diluted basis). If an option expires
or is cancelled without having been fully exercised or vested, the remaining
shares will generally be available for grants of other awards.
The
2004
Plan is administered by the Remuneration Committee of the Board comprised
solely
of directors who are not employees or consultants to Golden River Resources
or
any of its affiliated entities.
Any
employee, director, officer, consultant of or to Golden River Resources or
an
affiliated entity (including a company that becomes an affiliated entity
after
the adoption of the 2004 Plan) is eligible to participate in the 2004 Plan
if
the Committee, in its sole discretion, determines that such person has
contributed significantly or can be expected to contribute significantly
to the
success of Golden River Resources or an affiliated entity. During any one
year
period, no participant is eligible to be granted options to purchase more
than
5% shares of our issued and outstanding common stock or if they provide investor
relations activities, or are a consultant to the Company, 2% of the issued
and
outstanding shares of common stock in any 12 month period.
Options
granted under the 2004 Plan are to purchase Golden River Resources common
stock. The term of each option will be fixed by the Remuneration
Committee, but no option will be exercisable more than 10 years after the
date
of grant. The option exercise price is fixed by the Remuneration
Committee at the time the option is granted. The exercise price must
be paid in cash. Options granted to participants vest and have a term of
10
years, unless otherwise decided by the Board of Directors at the time of
issue.
No
award
is transferable, or assignable by the participant except upon his or her
death.
The
Board
may amend the 2004 Plan, except that no amendment may adversely affect the
rights of a participant without the participant’s consent or be made without
stockholder approval if such approval is necessary to qualify for or comply
with
any applicable law, rule or regulation the Board deems necessary or desirable
to
qualify for or comply with.
Subject
to
earlier termination by the Board, the 2004 Plan has an indefinite term except
that no ISO may be granted following the tenth anniversary of the date the
2004
Plan is approved by stockholders.
None
of
the proposed recipients have received any stock options or other equity based
forms of compensation from us for at least the last three years.
Other
than
the issue of these Options, there are no other current plans or arrangements
to
grant any options under the 2004 Plan.
37
Compensation
Pursuant to Plans
The
Company does not have any pension or profit sharing plans. The
Company’s Vice President Exploration and temporary staff employed in the
exploration programme in Canada are subject to Canadian requirements for
contributions to pension plans. At June 30, 2007, the Company has an
obligation to pay A$nil. Contributions to employee benefit or health
plans during the year ended June 30, 2007 were A$nil.
Compensation
to Directors
|
Name
|
Fees
Earned or Paid in Cash (US$)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All
Other Compensation ($)
|
Total
(US$)
|
|
David
Tyrwhitt
|
15,600
|
-
|
-
|
-
|
-
|
-
|
15,600
|
|
Peter
Lee
|
32,621
|
-
|
113,000
|
-
|
-
|
-
|
145,621
|
|
Mordechai
Gutnick
|
15,600
|
-
|
84,750
|
-
|
-
|
-
|
100,350
|
It
is our
policy to reimburse Directors for reasonable travel and lodging expenses
incurred in attending Board of Directors meetings. Commencing January
2005, non-management Directors are paid Directors fees of A$20,000 (US$15,600)
per annum.
Securities
authorized for issuance under equity compensation plans
The
following table sets forth, as of June 30, 2007, information regarding options
under our 2004 stock option plan, our only active plan. The 2004
stock option plan has been approved by our stockholders. Outstanding
options under this plan that are forfeited or cancelled will be available
for
future grants. All of the options are for the purchase of our common
stock.
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding
options
(a)
|
Weighted
average Exercise price of outstanding options
(b)
|
Number
of securities remaining available for future issuances under equity
compensation plans (excluding securities reflected in column
(a)
(c)
|
|||
|
Equity
compensation
plans
approved by
security
holders
|
5,750,000(1)
|
US$1.00
|
1,921,413(2)
|
|||
|
Equity
compensation
plans
not approved
by
security holders
|
-
|
-
|
-
|
|||
|
Total
|
5,750,000(1)
|
US$1.00
|
1,921,413(2)
|
|
(1)
|
On
July 4, 2006, 250,000 were
cancelled following the resignation of the Chief Operating Officer.
As a
result, a further 250,000 options are available for future
grants.
|
|
(2)
|
The
maximum number of shares
available for issuance under the 2004 stock option plan is equal
to 10% of
the issued and outstanding shares (on a fully diluted basis) of
common
stock, at any time.
|
Principal
Officers Contracts
The
principal officers do not have any employment contracts.
38
Item
11. Security Ownership
of
Certain Beneficial Owners and Management and Related Stockholder Matters.
The
following table sets forth certain information regarding the beneficial
ownership of our common stock by each person or entity known by us to be
the
beneficial owner of more than 5% of the outstanding shares of common stock,
each
of our directors and named executive officers, and all of our directors and
executive officers as a group as of June 30, 2007.
|
Title
of
Class
|
Name
and Address
of
Beneficial Owner*
|
Amount
and nature of Beneficial Owner
|
Percentage
of
class (1)
|
|
Shares
of common stock
|
Joseph
and Stera Gutnick
|
41,866,891(2)(3)(4)
(5)(6)(7)(8)
|
72.33
|
|
Shares
of common stock
|
RAB
Special Situations (Master) Fund Limited
1
Adam Street
London
WC2N 6LE
United
Kingdom
|
31,670,000 (9)(14)
|
55.84
|
|
Shares
of common stock
|
David
Stuart Tyrwhitt
|
50,000 (2)(3)(8)
|
**
|
|
Shares
of common stock
|
Mordechai
Zev Gutnick
|
250,000(3)(10)(12)
|
|
|
Shares
of common stock
|
Peter
James Lee
|
583,334
(2)(3)(11)
|
2.14
|
|
All
officers and Directors
as
a
group
|
42,750,225 (13)
|
72.75
|
|
*
|
Unless
otherwise indicated, the
address of each person is c/o Golden River Resources Corporation,
Level 8, 580 St. Kilda Road, Melbourne, Victoria 3004
Australia
|
**
less than
1%
Notes:
|
(1)
|
Based
on 26,711,630 shares outstanding as of June 30,
2007.
|
|
(2)
|
Does
not include:
|
(i) 8,949
shares of Common Stock beneficially owned by Great Gold Mines NL
or
|
|
(ii)
|
1,918
shares of Common Stock beneficially owned by Quantum Resources
Limited
|
or
(iii) 229,489
shares of Common Stock beneficially owned by AXIS,
of
which
companies Messrs JI Gutnick, Lee, and Dr. Tyrwhitt are officers and/or
Directors, as they disclaim beneficial ownership of those shares.
|
(3)
|
Does
not include 2,500 shares of Common Stock beneficially owned by
us.
|
|
(4)
|
Includes
5,394,590 shares of Common Stock owned by Edensor Nominees Pty
Ltd.,
1,753,984 shares of Common Stock owned by Kerisridge Pty Ltd.,
1,500,000
shares of Common Stock owned by Surfer Holdings Pty Ltd, 30,000,000
shares
of Common Stock owned by Fast Knight Nominees Pty Ltd (including
20,000,000 shares issuable upon exercise of warrants at an exercise
price
of US$0.1542 per share), 2,000,000 shares of Common Stock owned
by
Kalycorp Pty Ltd and 26,000 shares of Common Stock owned by Pearlway
Investments Proprietary Limited, of which Mr Joseph Gutnick, Stera
M.
Gutnick and members of their family are officers, Directors and
principal
stockholders.
|
|
(5)
|
Includes
500,000 shares issuable upon exercise of stock options owned by
Mr.
Gutnick.
|
|
(6)
|
Joseph
Gutnick is the beneficial owner of 25,650 shares of Common Stock
that are
registered in his own name.
|
|
(7)
|
Joseph
Gutnick and Stera Gutnick are husband and
wife.
|
39
|
(8)
|
Includes
666,667 shares issuable upon exercise of stock options
that vest on October 19, 2007. Does not include 666,667 that vest
on
October 19, 2008 and 666,666 that vest on October 19,
2009.
|
|
(9)
|
RAB
owns 1,670,000 shares of common stock and warrants exercisable
to acquire
an additional 30,000,000 shares of common stock, including 10,000,000
shares of common stock issuable upon exercise of Special Warrants,
without
the payment of any additional consideration and 20,000,000 shares
of
common stock issuable upon exercise of Warrants with an exercise
price of
US$0.1542 per share. Notwithstanding anything contained therein
to the
contrary, the Special Warrants and Warrants are not exercisable
by the
holder, in whole or in part, and the Company shall not give effect
to any
such exercise of the Special Warrants and Warrants, if, after giving
effect to such exercise, the holder, together with any affiliate
of the
holder (including any person or company acting jointly or in concert
with
the holder) would in the aggregate beneficially own, or exercise
control
or direction over that number of voting securities of the Company
which is
9.99% or greater of the total issued and outstanding voting securities
of
the Company, immediately after giving effect to such exercise;
provided,
however, that upon a holder of the Special Warrants or Warrants
providing
the Company with sixty-one (61) days notice that such holder would
like to
waive this limitation with regard to any or all shares of common
stock
issuable upon exercise of the Special Warrants or Warrants, this
limitation will be of no force or effect with regard to all or
a portion
of the Special Warrant or Warrants referenced in the waiver
notice.
|
|
(10)
|
Does
not include:
|
|
|
(i)
|
8,949
shares of Common Stock beneficially owned by Great Gold Mines
N.L.
|
or
|
|
(ii)
|
1,918
shares of Common Stock beneficially owned by Quantum Resources
Limited
|
of
which
companies Mr MZ Gutnick is a Director as he disclaims beneficial ownership
of
these shares.
|
(11)
|
Includes
250,000 shares issuable upon exercise of stock options which are
exercisable and 333,334 shares issuable upon exercise of stock
options
that vest on October 19, 2007. Does not include 333,334 that vest
on
October 19, 2008 and 333,333 that vest on October 19,
2009.
|
|
(12)
|
Includes
250,000 shares issuable upon exercise of stock options that vest
on
October 19, 2007. Does not include 250,000 that vest on October
19, 2008
and 250,000 that vest on October 19,
2009.
|
|
(13)
|
Includes
2,050,001 shares that are issuable upon exercise of stock options,
of
which 800,000 are vested, and 1,250,001 will vest on October 19,
2007.
Does not include 1,250,000 that vest on October 19, 2008 and 1,249,999
that vest on October 19, 2009.
|
|
(14)
|
RAB
is organized under the laws of the Cayman Islands. Phillip Richards
has
sole investment and voting control over the securities owned by
RAB.
|
Item
12. Certain Relationships
and Related
Transactions
We
are one
of five affiliated companies of which four are Australian public companies
listed on Australian Stock Exchange. Each of the companies have some
common Directors, officers and shareholders. In addition, each of the
companies owns equity in and is substantially dependent upon AXIS for its
senior
management and certain mining and exploration staff. The Company owns
9.09% of the outstanding shares of AXIS. A number of arrangements and
transactions have been entered into from time to time between such
companies. It has been the intention of the affiliated companies and
respective Boards of Directors that each of such arrangements or transactions
should accommodate the respective interest of the relevant affiliated companies
in a manner which is fair to all parties and equitable to the shareholders
of
each. Currently, there are no material arrangements or planned
transactions between the Company and any of the other affiliated companies
other
than AXIS.
AXIS
is
paid by each company for the costs incurred by it in carrying out the
administration function for each such company. Pursuant to the
Service Agreement, AXIS performs such functions as payroll, maintaining employee
records required by law and by usual accounting procedures, providing insurance,
legal, human resources, company secretarial, land management, certain
exploration and mining support, financial, accounting advice and
services. AXIS procures items of equipment necessary in the conduct
of the business of the Company. AXIS also provides for the Company
various services, including but not limited to the making available of office
supplies, office facilities and any other services as may be required from
time
to time by the Company as and when requested by the Company.
40
We
are
required to reimburse AXIS for any direct costs incurred by AXIS for the
Company. In addition, we are required to pay a proportion of AXIS’s
overhead cost based on AXIS’s management estimate of our utilisation of the
facilities and activities of AXIS plus a service fee of not more than 15%
of the
direct and overhead costs. AXIS has charged the 15% service fee to us
during fiscal 2007. Amounts invoiced by AXIS are required to be paid by
us. We are also not permitted to obtain from sources other than AXIS,
and we are not permitted to perform or provide ourselves, the services
contemplated by the Service Agreement, unless we first requests AXIS to provide
the service and AXIS fails to provide the service within one month.
The
Service Agreement may be terminated by AXIS or ourselves upon 60 days prior
notice. If the Service Agreement is terminated by AXIS, we would be
required to independently provide, or to seek an alternative source of
providing, the services currently provided by AXIS. There can be no
assurance that we could independently provide or find a third party to provide
these services on a cost-effective basis or that any transition from receiving
services under the Service Agreement will not have a material adverse effect
on
us. Our inability to provide such services or to find a third party
to provide such services may have a material adverse effect on our
operations.
In
accordance with the Service Agreement AXIS provides the Company with the
services of our Chief Executive Officer, Chief Financial Officer and clerical
employees, as well as office facilities, equipment, administrative and clerical
services. We pay AXIS for the actual costs of such facilities plus a maximum
service fee of 15%. The Company paid AXIS A$612,000 (being A$591,550 in respect
to the current year and A$20,450 being the amount owing at June 30, 2006)
in
respect of the Service Agreement for the fiscal year ended June 30, 2007
and
A$825,939 (being A$529,175 in respect to the 2006 and A$296,764 in respect
to
the 2005 year) in respect of the Service Agreement for the fiscal year ended
June 30, 2006.
During
2007, AXIS loaned the Company A$53,000 and A$108,000 during 2006. At June
30,
2007 and 2006, the Company owed AXIS A$140,585 and A$296,764 respectively
for
services provided in accordance with the Service Agreement. During fiscal
2007
and 2006, AXIS Consultants charged interest of A$3,788 and A$13,879 respectively
on outstanding balances. AXIS charged interest rates at 9.35% for fiscal
2006
and between 9.60% and 10.10% for fiscal 2007. During fiscal 2007, AXIS paid
interest net of tax of A$5,270. The amount owing to AXIS at June 30, 2007
is
included within accounts payable and accrued expenses.
Wilzed
Pty
Ltd, a company associated with the President of the Company, Joseph Gutnick,
has
provided loan funds to enable the Company to meet its
liabilities. During the 2005 fiscal year, Wilzed loaned A$644,633 and
charged A$31,235 in interest. We repaid $396. At June 30,
2005, the Company owed Wilzed A$675,472. Wilzed charged interest
during fiscal 2005 at rates between 9.10% and 9.35%. During the 2006 fiscal
year, Wilzed loaned A$1,241,836 and charged A$83,243 in interest and we repaid
$550. Wilzed charged interest during fiscal 2006 at the rate of 9.35%. In
May,
2006, we agreed to issue to Fast Knight Nominees up to 10 million shares
of
common stock at an issue price of A$0.20 (US$0.1542) and 20 million options
with
an exercise price of A$0.20 per share with a latest expiry date of April
30,
2011, as repayment of A$2 million in loans from Wilzed to the Company. Wilzed
agreed to accept the shares and options as satisfaction of the loan and
instructed us to issue the shares and options to Fast Knight Nominees, a
company
that is also associated with Mr. Gutnick.
Mr
Joseph
Gutnick, the President of the Company, advanced us the initial deposit to
open a
US Dollar bank account. The amount of A$1,329 (US$1,000) was repaid in July,
2006.
Kerisridge
Pty Ltd, a company associated with our President, Mr J I Gutnick, loaned
us
A$2,273,186 in March 2004 for the purpose of repaying our long term
debt. On March 31, 2004, Kerisridge agreed to convert all of the debt
we owed to it into common stock and warrants in us. We issued
1,753,984 shares of common stock and 1,753,984 warrants exercisable at US$1.30
and at any time up to March 31, 2006 in full repayment of the amount owing
to
Kerisridge. Kerisridge did not exercise the warrants prior to the expiry
date.
Transactions
with Management.
We
have a
policy that we will not enter into any transaction with an Officer, Director
or
affiliate of us or any member of their families unless the transaction is
approved by a majority of our disinterested non-employee Directors and the
disinterested majority determines that the terms of the transaction are no
less
favourable to us than the terms available from non-affiliated third parties
or
are otherwise deemed to be fair to us at the time authorised.
41
|
(a)
|
Consolidated
Financial Statements and Notes
thereto.
|
The
Consolidated Financial Statements and Notes thereto listed on the Index at
page
44 of this Annual Report on Form 10-KSB are filed as a part of this Annual
Report.
|
(b)
|
Exhibits
|
The
Exhibits to this Annual Report on Form 10-KSB are listed in the Exhibit Index
at
page 44 of this Annual Report.
|
(c)
|
Form
8-K
|
Not
Applicable
The
following table shows the audit fees we were billed by PKF for fiscal 2007
and
2006.
|
2007
|
|
2006
|
|
|
|
Audit
fees
|
A$49,351
|
|
A$45,494
|
|
|
Audit
related fees*
|
15,295
|
|
13,697
|
|
|
Tax
fees
|
-
|
|
-
|
|
|
Total
|
A$64,646
|
|
A$59,191
|
|
*
The
audit-related services relate to work on the Form SB-2 Registration
Statement.
Audit
fees
were for the audit of our annual financial statements, review of financial
statements included in our 10-QSB quarterly reports, and services that are
normally provided by independent auditors in connection with our other filings
with the SEC. This category also includes advice on accounting
matters that arose during, or as a result of, the audit or review of our
interim
financial statements.
As
part of
its duties, our Audit Committee pre-approves audit and non-audit services
performed by our independent auditors in order to assure that the provision
of
such services does not impair the auditors’ independence. Our Audit
Committee does not delegate to management its responsibilities to pre-approve
services performed by our independent auditors.
42
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of
1934, the Registrant has caused this Annual Report to be signed on its behalf
by
the undersigned, thereunto duly authorised.
| Golden River Resources Corporation | |||
| (Registrant) | |||
|
Dated:
September 26, 2007
|
By:
|
/s/ Peter J Lee | |
| Peter J Lee | |||
| Director, Secretary, Chief Financial Officer | |||
| and Principal Financial and Accounting Officer | |||
43
FORM
10-KSB Signature Page
Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has
been
signed below by the following persons in the capacities and on the dates
indicated.
|
Signature
|
Title
|
Date
|
||
|
/s/
Joseph Gutnick
|
Chairman
of the Board,
|
September
26, 2007
|
||
|
Joseph
Gutnick
|
President and Chief Executive Officer | |||
| (Principal Executive Officer), and Director. | ||||
|
/s/
David Tyrwhitt
|
Director.
|
September
26, 2007
|
||
|
David
Tyrwhitt
|
||||
|
/s/
Peter Lee
|
Director,
Secretary, Chief Financial Officer and
|
September
26, 2007
|
||
|
Peter
Lee
|
Principal Financial and Accounting Officer. | |||
| /s/ Mordechai Gutnick | Director | September 26, 2007 | ||
| Mordechai Gutnick | ||||
44
EXHIBIT
INDEX
Incorporated
by Exhibit
Reference
to: No Exhibit
|
(1)
|
Exhibit
3.1
|
3.1
|
Certificates
of Incorporation of the Registrant
|
|
(1)
|
Exhibit
3.2
|
3.2
|
By-laws
of the Registrant
|
|
(2)
|
Exhibit
A
|
3.3
|
Amendment
to Certificate of Incorporation dated July 17, 1999
|
|
(3)
|
3.4
|
Amendment
to Certificate of Incorporation dated October 17, 2000
|
|
|
3.5
|
Amendment
to Certificate of Incorporation dated April 6, 2005
|
||
|
(9)
|
Exhibit
3.1
|
3.6
|
Amendment
to Certificate of Incorporation dated March 10, 2006
|
|
(4)
|
99.3
|
4.1
|
Warrant
to purchase 1,670,000 shares of common stock
|
|
(4)
|
99.4
|
4.2
|
Warrant
to purchase 1,783,984 shares of common stock
|
|
(5)
|
Exhibit
10.5
|
10.4
|
Service
Agreement dated November 25, 1988, by and between the Registrant
and AWI
Administration Services Pty Limited
|
|
(6)
|
Exhibit
10.6
|
10.5
|
Agreement
with Tahera Corporation
|
|
(4)
|
Exhibit
|
10.6
|
Subscription
Agreement with RAB Special Solutions LP
|
|
(7)
|
10.7
|
Employment
Agreement between the Registrant and C. Alford
|
|
|
(8)
|
10.8
|
Employment
Agreement between the Registrant and P Althaus.
|
|
|
(7)
|
10.9
|
Sponsorship
Agreement with Canaccord Capital
|
|
|
(10)
|
Exhibit
99.2
|
10.10
|
Subscription
Agreement with RAB Special Solutions (Master) Fund
Limited
|
|
(10)
|
Exhibit
99.3
|
10.11
|
Special
Warrant
|
|
(10)
|
Exhibit
99.4
|
10.12
|
Warrant
|
|
*
|
21
|
List
of Subsidiaries as at June 30, 2007.
|
|
|
*
|
31.1
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
302 of
the Sarbanes-Oxley Act of 2002 by Peter James Lee.
|
|
|
*
|
31.2
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
302 of
the Sarbanes-Oxley Act of 2002 by Joseph Isaac Gutnick.
|
|
|
*
|
32.1
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002 by Joseph Issac Gutnick.
|
|
|
*
|
32.2
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002 by Peter James
Lee
|
*Filed
herewith
45
Financial
Statements for the years ended June 30, 2006 and 2007.
Golden
River Resources Corporation and
its Subsidiaries
|
|
Audited
Consolidated Financial Statements for the Company and its Subsidiaries
for
the year ended June 30, 2006 and Audited Consolidated Financial
Statements
for the Company for the year ended June 30,
2007.
|
(1) Registrant’s
Registration Statement on Form S-1 (File No. 33-14784).
(2) Registrant’s
Definitive Information Statement dated August 11, 1999.
|
(3)
|
Registrant’s
Definitive Information Statement dated October 17,
2000.
|
(4) Registrant’s
Form 8-K filed on April 8, 2004.
|
(5)
|
Registrant’s
Annual report on Form 10-K for the fiscal year ended June 27,
1989.
|
|
(15)
|
Registrant’s
Quarterly Report on Form 10-Q for the quarter ended March 31,
2002.
|
|
(16)
|
Registrant’s
Annual Report on Form 10-KSB for the year ended June 30,
2004.
|
|
(17)
|
Registrant’s
Annual Report on Form 10-KSB for the year ended June 30,
2006.
|
|
(18)
|
Registrant’s
Quarterly Report on Form 10-OSB for the quarter ended March 31,
2006.
|
|
(19)
|
Registrant’s
Current Report on Form 8-K filed on June 15,
2006.
|
46
Financials:
|
CONTENTS
|
|
|
Page
|
|
| Notes to Consolidated Financial Statements | |
F-1
To
the
Board of Directors and Stockholders of
Golden
River Resources Corporation
We
have
audited the accompanying consolidated balance sheet of Golden River Resources
Corporation and Subsidiaries (An Exploration Stage Company) as of June
30, 2007,
and the related consolidated statements of operations, stockholders’ equity
(deficit) and cash flows for the years ended June 30, 2007 and 2006 and
the
cumulative period from July 1, 2002 (inception of exploration activities)
through June 30, 2007. These financial statements are the
responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on
our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In
our
opinion, the consolidated financial statements referred to above present
fairly,
in all material respects, the financial position of Golden River Resources
Corporation and Subsidiaries at June 30, 2007, and the results of its
operations
and its cash flows for the years ended June 30, 2007 and 2006 and the
cumulative
period from July 1, 2002 (inception of exploration activities) through
June 30,
2007 in conformity with accounting principles generally accepted in the
United
States of America.
The
accompanying consolidated financial statements have been prepared assuming
the
Company will continue as a going concern. As described in note 1, at
June 30, 2007 the Company had not yet commenced revenue producing operations
and
had a retained deficit of A$34,518,000 (US$29,299,000). These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern. The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty. Management’s plans in regard to these matters are also
discussed in note 1.
|
PKF
|
|
|
Certified
Public Accountants
|
|
|
A
Professional Corporation
|
|
New
York, NY
|
|
|
September
26, 2007
|
(An
Exploration Stage Company)
June
30,
2007
|
A$000’s
2007
|
Convenience
Translation
US$000’s
2007
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets:
|
||||||||
|
Cash
|
349
|
296
|
||||||
|
Receivables
|
21
|
18
|
||||||
|
Prepayments
and Deposits
|
48
|
41
|
||||||
|
Total
Current Assets
|
418
|
355
|
||||||
|
Non
Current Assets:
|
||||||||
|
Property
and Equipment, net
|
2
|
2
|
||||||
|
Total
Non Current Assets
|
2
|
2
|
||||||
|
Total
Assets
|
420
|
357
|
||||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
Payable and Accrued Expenses
|
333
|
283
|
||||||
|
Total
Current Liabilities
|
333
|
283
|
||||||
|
Total
Liabilities
|
333
|
283
|
||||||
|
Commitments
and Contingencies (note 6)
Stockholders’
Equity:
Common
stock: $.0001 par value
100,000,000
shares authorised,
26,714,130
shares issued
|
3
|
3
|
||||||
|
Less
Treasury Stock, at Cost, 2,500 shares
|
(20 | ) | (17 | ) | ||||
|
Additional
Paid-in-Capital
|
34,628
|
29,392
|
||||||
|
Other
Comprehensive loss
|
(6 | ) | (5 | ) | ||||
|
Retained
Deficit during exploration stage
|
(8,116 | ) | (6,889 | ) | ||||
|
Retained
Deficit prior to exploration
|
(26,402 | ) | (22,410 | ) | ||||
|
Total
Stockholders’ Equity
|
87
|
74
|
||||||
|
Total
Liabilities and Stockholders’ Equity
|
420
|
357
|
||||||
|
See
Notes to Consolidated Financial Statements
|
||||||||
(An
Exploration Stage Company)
Consolidated
Statements of Operations
For
the
years ended June 30, 2006 and 2007
and
for
the cumulative period July 1, 2002
(inception
of exploration activities) to June 30, 2007
|
Convenience
Translation
|
July
1, 2002 to June 30,
|
|||||||||||||||
|
A$000's
|
A$000's
|
US$000’s
|
2007
|
|||||||||||||
|
2006
|
2007
|
2007
|
A$000’s
|
|||||||||||||
|
Revenues
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
|
Cost
and expenses
|
||||||||||||||||
|
Stock
Based Compensation
|
191
|
300
|
255
|
868
|
||||||||||||
|
Exploration
Expenditure
|
236
|
502
|
426
|
3,164
|
||||||||||||
|
Loss
on disposal of equipment
|
1
|
-
|
1
|
1
|
||||||||||||
|
Interest
Expense net
|
113
|
4
|
3
|
416
|
||||||||||||
|
Legal,
Accounting and Professional
|
124
|
135
|
114
|
622
|
||||||||||||
|
Administrative
|
647
|
745
|
632
|
2,934
|
||||||||||||
|
1,312
|
1,686
|
1,431
|
8,005
|
|||||||||||||
|
(Loss)
from Operations
|
(1,312 | ) | (1,686 | ) | (1,431 | ) | (8,005 | ) | ||||||||
|
Foreign
Currency Exchange Gain (Loss)
|
(16 | ) | (106 | ) | (90 | ) | (119 | ) | ||||||||
|
Other
Income
|
||||||||||||||||
|
Interest –
net related entity
|
-
|
5
|
4
|
5
|
||||||||||||
|
–
other
|
-
|
3
|
3
|
3
|
||||||||||||
|
(Loss)
before Income Tax
|
(1,328 | ) | (1,784 | ) | (1,514 | ) | (8,116 | ) | ||||||||
|
Provision
for Income Tax
|
-
|
-
|
-
|
-
|
||||||||||||
|
Net
(Loss)
|
(1,328 | ) | (1,784 | ) | (1,514 | ) | (8,116 | ) | ||||||||
|
Basic
net (Loss) per Common Equivalent Shares
|
(0.07 | ) | (0.06 | ) | (0.05 | ) | (0.52 | ) | ||||||||
|
Weighted
Number of Common Equivalent
Shares
Outstanding (000’s)
|
18,194
|
27,823
|
27,823
|
15,709
|
||||||||||||
|
See
Notes to Consolidated Financial Statements
|
||||||||||||||||
(An
Exploration Stage Company)
Consolidated
Statements of Stockholders’ Equity (Deficit)
June
30,
2006 and 2007
and
for
the cumulative period July 1, 2002
(inception
of exploration activities) to
June 30, 2007
|
Shares
|
Common
Stock
Amount
|
Treasury
Stock,
at
Cost
|
Additional
Paid-in
Capital
|
Retained
Earnings (Deficit)
(during
the Exploration stage)
|
Retained
Earnings
(Deficit)
(prior
to Exploration stage)
|
Deferred
Compe-
nsation
|
Other
Compre-
hensive
Loss
|
Total
|
||||||||||||||||||||||||||||
|
000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
||||||||||||||||||||||||||||
|
Balance
June 30, 2002
|
6,347
|
$ |
1
|
$ | (20 | ) | $ |
25,175
|
-
|
$ | (26,402 | ) |
-
|
-
|
$ | (1,246 | ) | |||||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
(681 | ) |
-
|
-
|
-
|
(681 | ) | |||||||||||||||||||||||||
|
Balance
June 30, 2003
|
6,347
|
$ |
1
|
$ | (20 | ) | $ |
25,175
|
$ | (681 | ) | $ | (26,402 | ) |
-
|
-
|
$ | (1,927 | ) | |||||||||||||||||
|
Issuance
of 1,753,984 shares and warrants in lieu of debt repayment
|
1,754
|
-
|
-
|
2,273
|
-
|
-
|
-
|
-
|
2,273
|
|||||||||||||||||||||||||||
|
Sale
of 1,670,000 shares and warrants
|
1,670
|
-
|
-
|
2,253
|
-
|
-
|
-
|
-
|
2,253
|
|||||||||||||||||||||||||||
|
Issuance
of 6,943,057 shares on cashless exercise of options
|
6,943
|
1
|
-
|
(1 | ) |
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
|
Net
unrealised loss on foreign exchange
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(9 | ) | (9 | ) | |||||||||||||||||||||||||
|
Net
(loss)
|
-
|
-
|
-
|
-
|
$ | (1,723 | ) |
-
|
-
|
-
|
(1,723 | ) | ||||||||||||||||||||||||
|
Balance
June 30, 2004
|
16,714
|
$ |
2
|
$ | (20 | ) | $ |
29,700
|
$ | (2,404 | ) | $ | (26,402 | ) |
-
|
(9 | ) | $ |
867
|
|||||||||||||||||
|
Issuance
of 1,400,000 options under 2004 stock option plan
|
-
|
-
|
-
|
575
|
-
|
-
|
(575 | ) |
-
|
-
|
||||||||||||||||||||||||||
|
Amortisation
of 1,400,000 options under 2004 stock option plan
|
-
|
-
|
-
|
-
|
-
|
-
|
377
|
-
|
377
|
|||||||||||||||||||||||||||
|
Net
unrealised gain on foreign exchange
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
6
|
|||||||||||||||||||||||||||
|
Net(loss)
|
-
|
-
|
-
|
-
|
(2,600 | ) | (0 | ) |
-
|
-
|
(2,600 | ) | ||||||||||||||||||||||||
|
Balance
June 30, 2005
|
16,714
|
$ |
2
|
$ | (20 | ) |
30,275
|
$ | (5,004 | ) | (26,402 | ) | (198 | ) | (3 | ) | (1,350 | ) | ||||||||||||||||||
|
To
eliminate deferred compensation against Paid-In Capital
|
-
|
-
|
-
|
(198 | ) |
-
|
-
|
198
|
-
|
-
|
||||||||||||||||||||||||||
|
Issuance
of 10,000,000 shares and 20,000,000 options in lieu of debt
repayment
|
10,000
|
1
|
-
|
1,999
|
-
|
-
|
-
|
-
|
2,000
|
|||||||||||||||||||||||||||
|
Sale
of 20,000,000 normal warrants
|
-
|
-
|
-
|
997
|
-
|
-
|
-
|
-
|
997
|
|||||||||||||||||||||||||||
|
Sale
of 10,000,000 special warrants
|
-
|
-
|
-
|
1,069
|
-
|
-
|
-
|
-
|
1,069
|
|||||||||||||||||||||||||||
|
Amortisation
of 1,400,000 options under 2004 stock option plan
|
-
|
-
|
-
|
191
|
-
|
-
|
-
|
-
|
191
|
|||||||||||||||||||||||||||
|
Net
unrealised loss on foreign exchange
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(8 | ) | (8 | ) | |||||||||||||||||||||||||
|
Net
(loss)
|
-
|
-
|
-
|
-
|
(1,328 | ) |
-
|
-
|
-
|
(1,328 | ) | |||||||||||||||||||||||||
|
Balance
June 30, 2006
|
26,714
|
$ |
3
|
$ | (20 | ) | $ |
34,333
|
$ | (6,332 | ) | $ | (26,402 | ) | $ |
-
|
$ | (11 | ) | $ |
1,571
|
|||||||||||||||
|
See
Notes to Consolidated Financial Statements
|
||||||||||||||||||||||||||||||||||||
GOLDEN
RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An
Exploration Stage Company)
Consolidated
Statements of Stockholders’ Equity (Deficit)
June
30,
2006 and 2007
and
for
the cumulative period July 1, 2002
(inception
of exploration activities) to
June 30, 2007
(Continued)
|
Shares
|
Common
Stock
Amount
|
Treasury
Stock,
at
Cost
|
Additional
Paid-in
Capital
|
Retained
Earnings (Deficit)
(during
the Exploration stage)
|
Retained
Earnings
(Deficit)
(prior
to Exploration stage)
|
Deferred
Compensation
|
Other
Compre-
hensive
Loss
|
Total
|
||||||||||||||||||||||||||||
|
000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
A$000’s
|
||||||||||||||||||||||||||||
|
Costs
associated with sale of normal and special warrants
|
-
|
-
|
-
|
(5 | ) |
-
|
-
|
-
|
-
|
(5 | ) | |||||||||||||||||||||||||
|
Amortization
of 1,400,000 options under 2004 stock option plan
|
-
|
-
|
-
|
7
|
-
|
-
|
-
|
-
|
7
|
|||||||||||||||||||||||||||
|
Amortization
of 4,650,000 options under 2004 stock option plan
|
-
|
-
|
-
|
293
|
-
|
-
|
-
|
-
|
293
|
|||||||||||||||||||||||||||
|
Net
unrealized gain on foreign exchange
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
5
|
5
|
|||||||||||||||||||||||||||
|
Net
(loss)
|
-
|
-
|
-
|
-
|
(1,784 | ) |
-
|
-
|
-
|
(1,784 | ) | |||||||||||||||||||||||||
|
Balance
June 30, 2007
|
26,714
|
$ |
3
|
$ | (20 | ) | $ |
34,628
|
$ | (8,116 | ) | $ | (26,402 | ) | $ |
-
|
$ | (6 | ) | $ |
87
|
|||||||||||||||
|
See
Notes to Consolidated Financial Statements
|
||||||||||||||||||||||||||||||||||||
F-6
(An
Exploration Stage Company)
Consolidated
Statements of Cash Flows
For
the
Years Ended June 30, 2006 and 2007
and
for
the cumulative period July 1, 2002
(inception
of exploration activities) to June 30, 2007
|
Convenience
Translation
|
July
1, 2002 to June 30,
|
|||||||||||||||
|
A$000’s
|
A$000's
|
US$000’s
|
2007
|
|||||||||||||
|
2006
|
2007
|
2007
|
A$000’s
|
|||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||||||
|
Net
(Loss)
|
$ | (1,328 | ) | $ | (1,784 | ) | $ | (1,514 | ) | (8,116 | ) | |||||
|
Adjustments
to reconcile net (loss) to net cash (used) in operating
activities:
|
||||||||||||||||
|
Foreign
Exchange
|
4
|
106
|
90
|
107
|
||||||||||||
|
Depreciation
of plant and equipment
|
8
|
8
|
7
|
26
|
||||||||||||
|
Stock
based compensation
|
191
|
300
|
255
|
868
|
||||||||||||
|
Accrued
interest added to principal
|
-
|
-
|
-
|
184
|
||||||||||||
| Net Change In : | ||||||||||||||||
| Receivables | 93 | 12 | 10 | (21 | ) | |||||||||||
| Staking Deposit | - | - | - | 23 | ||||||||||||
| Prepayments and Deposits | 28 | 6 | 5 | (48 | ) | |||||||||||
| Accounts Payable and Accrued Expenses | (76 | ) | (201 | ) | (171 | ) | (121 | ) | ||||||||
| Short - Term Advance – Affiliates | 1 | (1 | ) | (1 | ) | (36 | ) | |||||||||
|
Net
Cash used in Operating Activities
|
(1,079 | ) | (1,554 | ) | (1,319 | ) | (7,134 | ) | ||||||||
|
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
||||||||||||||||
|
Purchase
of Property and Equipment
|
-
|
-
|
-
|
(27 | ) | |||||||||||
|
Net
Cash used in Investing Activities
|
-
|
-
|
-
|
(27 | ) | |||||||||||
|
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
||||||||||||||||
|
Net
borrowing (repayments) from Affiliates
|
1,028
|
-
|
-
|
1,031
|
||||||||||||
|
Sale
of Warrants (net)
|
2,065
|
(7 | ) | (6 | ) |
4,311
|
||||||||||
|
Proceeds
from loan payable
|
-
|
-
|
-
|
2,273
|
||||||||||||
|
Net
Cash Provided by Financing Activities
|
3,093
|
(7 | ) | (6 | ) |
7,615
|
||||||||||
|
Effects
of Exchange rate on cash
|
-
|
(106 | ) | (90 | ) | (106 | ) | |||||||||
|
Net
Increase (Decrease) in Cash
|
2,014
|
(1,667 | ) | (1,415 | ) |
348
|
||||||||||
|
Cash
at Beginning of Year
|
2
|
2,016
|
1,711
|
1
|
||||||||||||
|
Cash
at End of Year
|
2,016
|
349
|
296
|
349
|
||||||||||||
|
Supplemental
Disclosures
|
||||||||||||||||
|
Interest
Paid
|
104
|
4
|
3
|
363
|
||||||||||||
|
NON
CASH FINANCING ACTIVITY
|
||||||||||||||||
|
Debt
repaid through issuance of shares
|
2,000
|
-
|
-
|
4,273
|
||||||||||||
|
Stock
Options recorded as Deferred Compensation
|
-
|
-
|
-
|
575
|
||||||||||||
|
See
Notes to Consolidated Financial Statements
|
||||||||||||||||
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(1) ORGANIZATION
AND BUSINESS
Golden
River Resources Corporation. ("Golden River Resources” or the “Company") is
incorporated in the State of Delaware. The principal shareholders of
Golden River Resources are Joseph and Stera Gutnick, Australian residents
who
own [79.36%] of Golden River Resources as of June 30, 2007. During
fiscal 1998, Golden River Resources incorporated a subsidiary, Baynex.com
Pty
Ltd (formerly Bayou Australia Pty Ltd), under the laws of
Australia. Baynex.com has not traded since
incorporation. On August 21, 2000 the Company incorporated a new
wholly owned subsidiary, Bay International Pty Ltd, (now known as Bay
Resources
(Asia) Pty Ltd), a corporation incorporated under the laws of Australia.
In May
2002, the Company incorporated a new wholly owned subsidiary, Golden
Bull
Resources Corporation (“Golden Bull”) (formerly 4075251 Canada Inc), a
corporation incorporated under the laws of Canada. Golden Bull is the
vehicle
that will be used by the Company to undertake exploration activities
for gold on
the Committee Bay Properties in Canada.
During
the
2002 fiscal year, Golden River Resources expanded its gold exploration
business
by entering into an agreement to explore for gold on extensive property
interests in northern Canada held by Tahera Corporation; and making application
via a new 100% owned subsidiary, Golden Bull Resources Corporation, for
properties in the highly prospective Committee Bay Greenstone Belt in
Nunavut,
Canada.
Golden
River Resources originally applied for 29 claims totaling 71,694 acres
in the
Committee Bay Greenstone Belt in central Nunavut, Canada. These claims
were
recorded on October 16, 2002. From the original area, Golden River
Resources retained a total of 49,439.48 acres on 21 claims. To keep
the claims in good standing, Golden River Resources needed to spend a
total of
CN$197,798 of assessment work was required to be completed by the anniversary
date of October 16, 2004. A total of CDN$98,879 is required in each subsequent
year up to 2012 (at which point a decision to bring the claims to lease
must be
made). Golden River Resources spent more than the minimum requirement
and the excess spent can be used to offset the expenditure requirements
in
following years. As a result, Golden River Resources has already met
its commitment until 2012.
The
accompanying consolidated financial statements have been prepared in
conformity
with accounting principles generally accepted in the United States of
America,
which contemplates continuation of Golden River Resources as a going
concern. However, Golden River Resources is an exploration stage
company which has not yet commenced revenue producing operations and
has
sustained recurring losses since inception.
In
addition, Golden River Resources has historically relied on loans and
advances
from corporations affiliated with the President of Golden River Resources
and
fund raising through the sale of equity instruments.
The
Company’s ability to continue operations through fiscal 2007 is dependent upon
future funding from capital raisings, or its ability to commence revenue
producing operations and positive cash flows.
The
Company raised A$2,253,000 in April 2004 through the issuance of shares
under a
Private Placement and has used that funding to commence exploration activity
in
Canada and A$2,065,000 in June 2006 through the issuance of normal and
special
warrants under a private placement and used the funds to continue exploration
activity in Canada and for working capital purposes.
(2) RECENT
ACCOUNTING PRONOUNCEMENTS
In
May
2005, the FASB issued SFAS no. 154, "Accounting Changes and Error Corrections
("SFAS No. 154") which replaces APB Opinion No. 20, "Accounting Changes"
and
SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements-An
Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance on the
accounting for and reporting of accounting changes and error
corrections. Specially, this statement requires "retrospective
application" of the direct effect for a voluntary change in accounting
principle
to prior periods' financial statements, if it is practical to do so.
SFAS No.
154 also strictly defines the term "restatement" to mean the correction
of an
error revising previously issued financial statements. SFAS No. 154 is
effective
for accounting changes and correction of errors made in fiscal years
beginning
after December 15, 2005 and has been adopted by the Company in the first
quarter
of fiscal year 2007.
GOLDEN
RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(2) RECENT
ACCOUNTING PRONOUNCEMENTS (continued)
In
July
2006, the FASB issued FASB Interpretation No. 48 “Accounting for Uncertainty in
Income Taxes”– an interpretation of FASB Statement No. 109 (FIN 48), which
provides clarification related to the process associated with accounting
for
uncertain tax positions recognized in consolidated financial statements.
FIN 48
prescribes a more-likely-than-not threshold for financial statement recognition
and measurement of a tax position taken, or expected to be taken, in
a tax
return. FIN 48 also provides guidance related to, among other things,
classification, accounting for interest and penalties associated with
tax
positions, and disclosure requirements. FIN 48 is effective for fiscal
years
beginning after December 15, 2006. The adoption of this statement is
not
expected to have a material effect on the Company’s future reported financial
position or results of operations.
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” which
provides enhanced guidance for using fair value to measure assets and
liabilities. SFAS No. 157 provides a common definition of fair value
and
establishes a framework to make the measurement of fair value in generally
accepted accounting principles more consistent and comparable. SFAS No.
157 also
requires expanded disclosures to provide information about the extent
to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of fair value
measures on
earnings. SFAS No. 157 is effective for financial statements issued in
fiscal
years beginning after November 15, 2007 and for interim periods within
those
fiscal years. The Company is currently in the process of evaluating the
effect,
if any, the adoption of SFAS No 157 will have on the results of operations,
financial position, or cash flows.
In
September 2006, the Securities and Exchange Commission issued Staff Accounting
Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements”. SAB No 108
was issued in order to eliminate the diversity in practice surrounding
how
public companies quantify financial statement misstatements. SAB No 108
requires
that registrants quantify errors using both a balance sheet (iron curtain)
approach and an income statement (rollover) approach then evaluate whether
either approach results in a misstatement amount that, when all relevant
quanitative and qualitative factors are considered, is material. SAB
No 108 is
effective for the fiscal year ending after November 15, 2006, and is
not
expected to materially impact our financial position or results of
operations.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities – Including an Amendment of FASB
Statement No. 115”, which permits companies to choose to measure many financial
instruments and certain other items at fair value. SFAS 159 is effective
for
fiscal years beginning after November 15, 2007 and interim periods within
those
fiscal years. The Company does not expect SFAS 159 to have a material
impact on
its results of operations or financial position.
(3) ACCOUNTING
POLICIES
The
following is a summary of the significant accounting policies followed
in
connection with the preparation of the consolidated financial
statements.
(a)
Consolidation
The
consolidated financial statements include the accounts of Golden River
Resources
and the 100% interest it holds in Baynex.com Pty Ltd, Bay Resources (Asia)
Pty
Ltd and Golden Bull Resources Corporation. All significant
intercompany transactions and balances have been eliminated in
consolidation.
(b) Foreign
Currency Translation
The
majority of Golden River Resources’ administrative operations are in Australia
and as a result the reporting currency of its consolidated accounts are
maintained in Australian dollars. The functional currency of the
Company‘s Canadian subsidiary is the Canadian dollar. The income and
expenses of operations are translated into Australian dollars at the
average
exchange rate prevailing during the period. Assets and liabilities of
the
Canadian subsidiary are translated into Australian dollars at the period-end
exchange rate. The resulting translation adjustments are accumulated
in a separate component of Stockholders Equity. Foreign currency
translation adjustments have not been material for all periods
presented.
F-9
GOLDEN
RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(3) ACCOUNTING
POLICIES (continued)
(b) Foreign
Currency Translation (continued)
Foreign
currency exchange loss in 2007 amounted to A$106,000 (US$90,000). The
Company
holds a bank account in US dollars. The US dollar has moved against the
A$ for
the twelve months by 16.3%.
(c)
Financial Instruments
The
Company’s cash, receivables, payables and short term borrowings represent
financial instruments whose carrying amounts reasonably approximate their
fair
value.
(d) Comprehensive
Income (Loss)
The
Company follows Financial Accounting Standards No. 130 (SFAS 130) “Reporting
Comprehensive Income”. SFAS 130 requires a company to report
comprehensive income (loss) and its components in a full set of financial
statements. Comprehensive income (loss) is the change in equity
during a period from transactions and other events and circumstances
from
non-owner sources, such as unrealized gains (losses) on foreign currency
translation adjustments. Changes in unrealized foreign currency
translation gains or (losses) during fiscal 2007 and 2006 amounted to
A$5,000
and (A$8,000), respectively. Accordingly, comprehensive loss for the
years ended June 30, 2007 and 2006 amounted to A$1,779,000 and A$1,336,000,
respectively.
(e) Property
and Equipment
Property
and equipment is stated at cost. Depreciation is computed over a
period covering the estimated useful life of the applicable property
and
equipment. Accumulated depreciation and depreciation expense as of
and for the year ended June 30, 2007 amounted to A$21,052 (2006 A$15,261)
and
A$6,806 (2006 $7,925) respectively.
(f) Cash
Equivalents
Golden
River Resources considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash
equivalents. For the periods presented there were no cash
equivalents.
(g)
Federal Income Tax
The
Company follows the provisions of Financial Accounting Standards Board
Statement
No. 109, Accounting for Income Taxes. The Company accounts for income
taxes
pursuant to the provisions of the Financial Accounting Standards Board
Statement
No. 109, "Accounting for Income Taxes", which requires an asset and liability
approach to calculating deferred income taxes. The asset and
liability approach requires the recognition of deferred tax liabilities
and
assets for the expected future tax consequences of temporary differences
between
the carrying amounts and the tax basis of assets and liabilities. For
the period
presented, there was no taxable income. There are no deferred income
taxes
resulting from temporary differences in reporting certain income and
expense
items for income tax and financial accounting purposes. Golden River
Resources,
at this time, is not aware of any net operating losses which are expected
to be
realised.
(h) Loss
per share
Basic
(loss) per share is computed based on the weighted average number of
common
shares outstanding during the period. Dilutive loss per share has not
been
presented as the effects of common stock equivalents are anti-dilutive.
The
Company has on issue 10,000,000 special warrants which are exercisable
at any
time until expiration and for no consideration. However, there is a restriction
in the subscription agreement that does not allow the Company to process
a
warrant exercise notice if the holder (and its associates) would hold
more than
9.99% of the shares of common stock. Accordingly, the Company
F-10
GOLDEN
RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(3) ACCOUNTING
POLICIES (continued)
(h) Loss
per share (continued)
has
included 1,109,000 shares issuable by exercise of the special warrants
in the
weighted number of common equivalent shares outstanding.
Earnings
per share
The
Company calculates loss per share in accordance with SFAS No. 128, “Earnings per
Share”.
The
following table reconciles the weighted average shares outstanding used
for the
computation:
|
Weighted
average shares
|
2006
‘000
|
2007
‘000
|
||||||
|
Outstanding
- basic
|
18,194
|
26,714
|
||||||
|
-
Warrants
|
-
|
1,109
|
||||||
|
Weighted
average shares outstanding
|
18,194
|
27,823
|
(i) Exploration
Expenditure
Exploration
expenditure consisting of prospecting and exploration costs are written
off into
operations as incurred.
(j) Accounting
for Stock Options
For
the
issuances of stock options, the Company follows the fair value provisions
of
Financial Accounting Standards No. 123(R) “Share Based
Payments”. SFAS 123(R) requires the company to measure the cost of
employee services received in exchange for an award of equity instruments
based
on grant date fair value. The cost will be recognised over the period
during which an employee is required to provide service in exchange for
the
award – usually the vesting period. In the case where there is no
required service period, the fair value of the equity instruments is
expensed
immediately. As stock-based compensation expense recognized in the Statement
of
Operations for the year ended is based on awards ultimately expected
to vest, it
has been reduced for estimated forfeitures. SFAS 123(R) requires forfeitures
to
be estimated at the time of grant and revised, if necessary, in subsequent
periods if actual forfeitures differ from those estimates.
(k) Pension
Plans
The
Company does not have any pension or profit sharing plans. The
Company’s Vice President Exploration and temporary staff employed in the
exploration programme in Canada are subject to Canadian requirements
for
contributions to pension plans. Contributions to employee benefit or
health plans during the year ended June 30, 2007 and 2006 were A$nil
and A$8,528
respectively.
(l)
Concentrations of credit risk
The
Company monitors its position with, and the credit quality of, the financial
institution it invests with. As of the balance sheet date, and periodically
throughout the year, the Company has maintained balances in various operating
accounts in excess of federally insured limits.
(m)
Convenience Translation to US$
The
consolidated financial statements as of and for the year ended June 30,
2007
have been translated into United States dollars using the rate of exchange
of
the United States dollar at June 30, 2007 (A$1.00=US$0.8488). The translation
was made solely for the convenience of readers in the United
States.
F-11
GOLDEN
RIVER RESOURCES CORPORATION. AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(3) ACCOUNTING
POLICIES (continued)
(n) Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management
to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates. Significant estimates required to be made by management
include the fair value of options and other equity instruments
issued.
(o) Comparative
Figures
Where
necessary, comparative figures have been restated to be consistent with
current
year presentation.
(4) INVESTMENT
SECURITIES
The
Company has several small historical cost based investments that it has
provided
a full valuation for diminution and carry’s at a $nil value at June 30, 2007 and
2006.
(5) AFFILIATE
TRANSACTIONS
Golden
River Resources advances to and receives advances from various
affiliates. All advances between consolidated affiliates are
eliminated on consolidation.
Included
in accounts payable and accrued liabilities at June 30, 2007 was A$140,585
due
to AXIS, an affiliated management company. The Company paid AXIS A$612,000
(being A$591,550 in respect to the current year and A$20,450 being the
amount
owing at June 30, 2006) in respect of the Service Agreement for the fiscal
year
ended June 30, 2007, and A$825,939 (being A$529,175 in respect to the
current
year and A$296,764 being the amount owing at June 30, 2005) in respect
of the
Service Agreement for the fiscal year ended June 30, 2006. During 2007,
AXIS
loaned the Company A$53,000 and A$108,000 during 2006. At June 30, 2007
and
2006, the Company owed AXIS A$140,585 and A$296,764 respectively for
services
provided in accordance with the Service Agreement. During fiscal 2006
and 2007,
AXIS charged interest of A$13,879 and A$3,788 respectively on outstanding
balances. During fiscal 2007, AXIS paid interest net of tax of A$5,270.
AXIS
charged interest at a rate of 9.35% for fiscal 2006 and between 9.60%
to 10.10%
for fiscal 2007.
Wilzed
Pty
Ltd, a company associated with the President of the Company, Joseph Gutnick,
has
provided loan funds to enable the Company to meet its
liabilities. During the 2005 fiscal year, Wilzed loaned A$644,633 and
charged A$31,235 in interest and we repaid $396. At June 30, 2005, the
Company
owed Wilzed A$675,472. During the 2006 fiscal year, Wilzed loaned A$1,241,836
and charged A$83,243 in interest and we repaid $550. In May 2006, the
Company
announced the issue of up to 10,000,000 shares of common stock at an
issue price
of A$0.20 (US$0.1542) and 20,000,000 options with an exercise price of
A$0.20
(US$0.1542) per share and a latest exercise date of April 30, 2011 as
repayment
of the outstanding balance of A$2,000,000. Wilzed agreed to accept the
shares
and options as satisfaction of the loan and instructed us to issue the
shares
and options to Fast Knight Nominees, a company that is also associated
with Mr
Gutnick. Wilzed charged interest at rates between 9.10% and 9.35% for
fiscal
2005, and at 9.35% for fiscal 2006. At June 30, 2006, the amount owned
by the
Company to Wilzed was nil.
Mr
Joseph
Gutnick, the President of the Company advanced the Company the initial
deposit
on opening of a US Dollar bank account. The amount of A$1,329 (US$1,000)
was
repaid in July 2006.
Interest
expense incurred on loans and advances due to affiliated entities approximated
A$3,800 and A$104,000 in fiscal 2007 and 2006, respectively. Interest
income net
of tax earned on an advance to an affiliated entity was approximately
$5,300 in
fiscal 2007.
F-12
GOLDEN
RIVER RESOURCES CORPORATION. AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(6) CONTINGENT
LIABILITY
The
Company has received an invoice from a corporation that conducted the
pegging of
the claims in Canada on behalf of the Company. A number of claims that
were
pegged were not ultimately issued to the Company due to a number of errors
by
the pegging Company. The Company had advised the pegging company that
it does
not believe any further payments are due to the pegging company as a
result of
the economic loss incurred by Golden River Resources. The Company believes
that
if it is unsuccessful in defending any claim that is brought against
it, the
maximum potential liability is C$59,000 (A$66,218). No accrued
liability has been recorded in the accompanying financial statement pending
the
ultimate disposition of this matter.
|
(7)
|
INCOME
TAXES
|
Golden
River Resources files its income tax returns on an accrual
basis. Golden River Resources should have carry-forward losses of
approximately US$22.6 million as of June 30, 2007 which will expire in
the years
2007 through 2025. Golden River Resources will need to file tax
returns for those years having losses on which returns have not been
filed to
establish the tax benefits of the net operating loss carry forwards.
Due to the
uncertainty of the availability and future utilization of those operating
loss
carry-forwards, management has provided a full valuation against the
related tax
benefit. The valuation allowance did not change being US$7.5 million
at June 30,
2006 and US$7.5 million at June 30, 2007
(8) STOCKHOLDERS
EQUITY
In
February and March 2004, holders of options to acquire 8,000,000 shares
of the
common stock informed the Company of their intentions to exercise the
cashless
exercise feature of their option agreement. As a result the Company
issued 6,943,057 shares of its common stock.
In
March
2004, the Company raised US$1,670,000 (A$2,253,000) through a private
placement
by issuing 1,670,000 shares of common stock and warrants to purchase
1,670,000
shares of common stock at US$1.30 per share. The warrants expire in
two years from the date of issuance.
In
March
2004, the Company received a loan from an affiliated entity in the amount
of
A$2,273,000 (US$1,754,000) which was used to repay other outstanding
amounts due
to affiliated entities. This loan was later satisfied through the
issuance of 1,753,984 shares of common stock and warrants to purchase
1,753,984
shares of common stock at $1.30 per share. The warrants expire in two
years from the date of issuance.
At
June
30, 2005 the Company has outstanding stock options as detailed in footnote
10. At June 30, 2005 the Company had warrants outstanding to purchase
3,423,984 shares of common stock at US$1.30 per share. All of the
warrants expired in 2006.
In
May
2006, the Company issued 10,000,000 shares of common stock at an issue
price of
A$0.20 (US$0.1542) and 20,000,000 warrants with an exercise price of
A$0.20
(US$0.1542) and a latest exercise date of April 30, 2011 as repayment
of a debt
of A$2,000,000 to an affiliated entity.
In
June
2006, the Company raised US$1,542,000 (A$2,065,499) through a private
placement
of 20,000,000 normal warrants and 10,000,000 special warrants. The normal
warrants have a time to expiry date of April 30, 2011 and an exercise
price of
US$0.1542 (A$0.20). The special warrants can be exercised any time up
to June 9,
2016 without any consideration, at which time all special warrants that
have not
been exercised will automatically convert into shares of common stock.
The
Company was required to file a Registration Statement with the SEC for
the
20,000,000 normal warrants and 10,000,000 special warrants. The Company
was
required to prepare and file with the SEC within sixty (60) calendar
days after
the Closing Date a registration statement which registration statement
was
declared effective on October 17, 2006.
The
Company is obligated to keep such registration statement effective until
the
earlier of (i) the date that all of the Registrable Securities have been
sold
pursuant to such registration statement, (ii) all Registrable Securities
have
been otherwise transferred to persons who may trade such shares without
restriction under the Securities Act, and the Company has delivered a
new
certificate or other evidence of ownership for such securities not bearing
a
restrictive legend, or (iii) all Registrable Securities may be sold at
any time,
without volume or manner of sale
F-13
GOLDEN
RIVER RESOURCES CORPORATION. AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(8) STOCKHOLDERS
EQUITY (continued)
limitations
pursuant to Rule 144(k) or
any similar provision then in effect under the Securities Act; or (iv)
2 years
from the effective date.
(9) ISSUE
OF OPTIONS UNDER STOCK OPTION PLAN
On
July 1, 2006, the Company adopted
revised SFAS No.123, Share-Based payment, which addresses the accounting
for
share-based payment transactions in which a company receives employee
services
in exchange for (a) equity instruments of that company or (b) liabilities
that
are based on the fair value of the company’s equity instruments or that may be
settled by the issuance of such equity instruments.
Because
the Company had previously adopted the fair value recognition provisions
of SFAS
No. 123, the revised standard did not have a material impact on its financial
statements.
The
Company has accounted for all options issued based upon their fair market
value
using either the Black Scholes or Binomial option pricing method. Prior
to 2006,
the Company used the Black Scholes option pricing method to determine
the fair
market value of options issued. In 2006, the Company changed from using
the
Black Scholes option pricing method to the Binomial option pricing model.
The
Binomial option pricing model breaks down the time to expiration into
a number
of steps or intervals and can therefore be used to value American style
options,
taking into account the possibility of early exercise and reflect changing
inputs over time. The options issued in 2006 have three vesting periods
and
therefore, the Company believed the Binomial option pricing model was
a more
accurate measure of the fair value of the options.
In
October
2004, the Board of Directors and Remuneration Committee of the Company
adopted a
Stock Option Plan and agreed to issue 1,400,000 options and up to a further
500,000 options to acquire shares of common stock in the Company, at
an exercise
price of US$1.00 per option, subject to shareholder approval which was
subsequently received on January 27, 2005. Of the total 1,400,000
options issued, 350,000 vest immediately following shareholder approval,
50,000
vested on March 31, 2005, 333,331 vested on July 27, 2005, 333,334 vested
on
January 27, 2006 and the balance of 333,335 vested on July 27,
2006. An additional 500,000 options were not granted as the proposed
recipient had resigned prior to the date on which the options were issuable.
The
exercise price of US$1.00 was derived from the issue price of common
stock from
the placement of shares on March 31, 2004 and is considered by the Company’s
Directors to be the fair value of the common stock. The options
expire on October 15, 2014.
The
Company has calculated the fair value of the 1,400,000 options using
the Black
Scholes valuation method using a share price of US$1.00, strike price
of
US$1.00, maturity period of 5 years 7 ½ months, risk free interest rate of 5.15%
and volatility of 20%. This equates to a value of US31.85 cents per
option. The total value of the options equates to A$575,100
(US$438,200) and is being amortised over the vesting period. For
fiscal 2007, the amortization amounted to A$6,771 (US$5,747). At June
30, 2007,
the options were fully vested.
Consistent
with the provisions of APB No.25, the Company recorded the fair value
of stock
option grants in stockholders equity. Under SFAS No.123R an equity instrument
is
not considered to be issued until the instrument vests. Accordingly,
as provided
in SFAS No.123R effective July 1, 2005, the Company has reversed A$198,000
(US$150,876) being the unamortized restricted stock compensation at June
30,
2005 included in stockholders equity for the unvested portions of stock
option
grants awarded prior to the effective date of SFAS No.123R.
During
fiscal 2006, 50,000 options lapsed when Mr P. Ehrlich resigned as a Director,
and 250,000 options lapsed on July 4, 2006 following Mr P Althaus’ resignation
as Chief Operating Officer.
A
summary
of the options outstanding and exercisable at June 30, 2007 are as
follows:
|
Outstanding
|
Exercisable
|
|
|
Number
of options
|
1,100,000
|
1,100,000
|
|
Exercise
price
|
US$1.00
|
US$1.00
|
|
Expiration
date
|
October
15, 2014
|
October
15, 2014
|
F-14
GOLDEN
RIVER RESOURCES CORPORATION. AND SUBSIDIARIES
(An
Exploration Stage Company)
Notes
to
Consolidated Financial Statements
June
30,
2007 and 2006
(9) ISSUE
OF OPTIONS UNDER STOCK OPTION PLAN (continued)
On
October
19, 2006, the Directors of the Company agreed to offer a further 4,650,000
options under the Stock Option Plan. The options have no issue price,
an
exercise price of US30.84 cents, and a latest exercise date of October
19, 2016.
The options vest 1/3 on October 19, 2007 (“T1”), 1/3 on October 19, 2008 (“T2”)
and 1/3 on October 19, 2009 (“T3”). The Company obtained an external valuation
on the options from an unrelated third party. The Company has calculated
the
fair value of the 4,650,000 options using the binomial option pricing
model
using a fair value share price of US$0.166, exercise price of US30.84
cents,
expected life T1 - 5 years 6 months, T2 - 6 years, T3 - 6 years 6 months,
risk-free interest rate of 4.75% and volatility of 90%. The total value
of the
options equates to A$696,976 (US$525,450) and is being amortized over
the
vesting periods. For fiscal 2007, the amortization amounted to A$293,037
(US$248,730). At June 30, 2007, the unamortized deferred compensation
related to
these 4,650,000 options amounted to A$403,939 (US$342,863).
When
aggregated with the amortization of the options issued in October 2004,
for
fiscal 2007, the total amortization amounted to $299,808
(US$254,477).
A
summary
of the options outstanding and exercisable at June 30, 2007 are as
follows:
|
Outstanding
|
Exercisable
|
|
|
Number
of options
|
4,650,000
|
0
|
|
Exercise
price
|
US$0.308
|
US$0.308
|
|
Expiration
date
|
October
19, 2016
|
October
19, 2016
|
In
October
2004, the Company calculated the fair value of the options issued at
that time
using the Black Scholes valuation method and in October 2006, the Company
calculated the fair value of the options issued in October 2006 using
the
binomial valuation method.
Management
utilized the services of an external consultant to calculate the fair
value of
the options issued in October 2006. The external consultant recommended
the use
of the binomial option pricing model instead of the Black Scholes option
pricing
model. It was the consultant’s and the management’s view that given the options
three vesting periods, the binomial option pricing model was a more accurate
measure of the fair value rather than the Black Scholes option pricing
model.
The
binomial methodology breaks down the time to expiration into a number
of steps
or intervals and can therefore be used to value American style options,
taking
into account the possibility of early exercise and reflect changing inputs
over
time. This is the preferred methodology as it is able to capture the
valuation impact of any market-based performance hurdles, for example
target
share price, that may not be captured by the Black Scholes option pricing
model.
Under
SFAS
154, the change in option pricing model from Black Scholes to binomial
is a
change in an accounting estimate. The Company has also calculated the
fair value
of the options issued in October 2006 using the Black Scholes method
and there
is no difference between the fair value under both methods.
F-15
In
this
Form 10-KSB, we use certain capitalized and abbreviated terms, as well
as
technical terms, which are defined below.
|
AMPHIBOLE
|
A
family of silicate minerals forming prism or needlelike
crystals. Amphibole minerals generally contain iron, magnesium,
calcium and aluminum in varying amounts, along with
water.
|
|
ANOMALY
|
Pertaining
to the data set resulting from geochemical or geophysical surveys;
a
deviation from uniformity or regularity.
|
|
ANTICLINE
|
An
upward-curving (convex) fold in rock that resembles an
arch. The central part contains the oldest section of
rock.
|
|
ARCHEAN
|
The
time interval between 3800-2500 million years ago. The Archean
is one of the Precambrian time intervals.
|
|
ARSENOPYRITE
|
A
tin-white or silver-white to steel-grey mineral
(FeAsS).
|
|
ASSAY
|
To
analyze the proportions of metals in a specimen of rock or
other
geological material. Results of a test of the proportions of
metals in a
specimen of rock or other geological material.
|
|
BEDROCK
|
A
general term for the rock, usually solid, that underlies soil
or other
unconsolidated superficial material.
|
|
BIOTITE
|
A
dark brown to dark green or black mica mineral.
|
|
BRECCIA
|
A
rock that is composed of larger than sand size angular fragments
that are
cemented together by a finer grained matrix; in this sense
the
fragmentation is usually a result of movement on nearby or
adjoining fault
or fracture zones.
|
|
CHALCOPYRITE
|
Copper
iron sulfide mineral (CuFeS2). Color
is brassy yellow.
|
|
CHIP
SAMPLE
|
A
sample of a vein or other mineralized structure that is collected
by way
of small pieces of rock taken at regular and frequent intervals
on a
transect across the structure; intended to be a relatively
accurate
representation of the tenor of mineralization.
|
|
CRATON
|
The
relatively stable nucleus of a continent. Cratons are made up
of a shield-like core of Precambrian Rock and a buried extension
of the
shield.
|
|
DYKE
|
A
tabular igneous intrusion that cuts across the bedding or foliation
of the
country rock.
|
|
FAULT
|
A
fracture or fracture zone in rock along which there has been
displacement
of the two sides relative to each other and parallel to the
fracture
plane.
|
|
GABBRO
|
A
dark, coarse-grained intrusive igneous rock. Gabbro is made of
calcium-rich plagioclase, with amphibole and/or pyroxene, and
is
chemically equivalent to basalt.
|
|
GEOPHYSICAL
SURVEY
|
In
mineral exploration, the collection of seismic, gravitational,
electrical,
radiometric, density or magnetic data to aid in the evaluation
of the
mineral potential of a particular
area.
|
A-1
|
GRAB
SAMPLE
|
A
specimen of mineralized bedrock or float, usually about fist-sized,
that
may be collected as a representation of the mineralized zone
as a whole.
Because of bias, either unintended or otherwise, and because
of the
generally high natural variability typical of gold-silver vein
mineralization, grades of grab samples should not be considered
as a
reliable estimation of a mineralized zone as a whole but they
nonetheless
serve to establish the presence of mineralization with grades
of economic
interest.
|
|
GRANITE
|
A
coarse grained intrusive igneous rock with at least 65%
silica. Quartz, plagioclase feldspar and potassium feldspar
make up most of the rock and give it a fairly light
color. Granite has more potassium feldspar than plagioclase
feldspar.
|
|
GRANODIORITE
|
A
coarse grained igneous plutonic rock intermediate in composition
between
quartz diorite and quartz monzonite; containing quartz, plagioclase,
and
potassium feldspar, with biotite and hornblende as the dominant
mafic
components.
|
|
GREENSTONE
|
A
metamorphic rock derived from basalt or chemically equivalent
rock such as
gabbro. Greenstones contain sodium-rich plagioclase feldspar,
chlorite, and epidote, as well as quartz.
|
|
GPT
|
Abbreviation
for gram per tonne; equivalent to one part per million
(ppm).
|
|
IGNEOUS
|
Said
of a rock or mineral that solidified from molten or partly
molten
material; also applied to processes leading to, or resulting
from the
formation of such rocks.
|
|
INTRUSION
|
Emplacement
of magma (molten rock) into pre-existing rock. Dikes, sills and
batholiths are intrusions.
|
|
IP
|
A
type of geophysical survey method called Induced
Polarisation.
|
|
IRON
FORMATION
|
A
chemical sedimentary rock containing at least 15% iron and
commonly
containing chert. The iron may be present as oxide, silicate,
carbonate, or sulfide.
|
|
KOMATIITE
|
An
igneous suite of basaltic and ultramafic lavas.
|
|
MAFIC
|
Pertaining
to or composed dominantly of the ferromagnesian rock forming
silicates;
said of some igneous rocks and their constituent
minerals.
|
|
MASSIVE
|
Said
of a stratified rock that occurs in very thick, homogenous
beds.
|
|
METALLIC
|
A
mineral chiefly composed of, or containing, one or more metals
as a
primary constituent.
|
|
MINERALIZATION
|
The
process or processes by which a mineral or minerals are introduced
into a
rock, resulting in an enriched deposit; or the result of these
processes.
|
|
MINERALIZED
|
Rock
that has undergone the process of mineralization.
|
|
NET
SMELTER
|
|
|
RETURN
ROYALTY
|
A
general term for a residual benefit that is a percentage of
the value for
which a smelter will reimburse the provider of ore to the smelter,
after
deduction for various smelting fees and penalties and, often
after cost of
transportation has been deducted.
|
|
ORE
|
The
naturally occurring material from which a mineral or minerals
of economic
value can be extracted profitably or to satisfy social or political
objectives.
|
A-2
|
OUTCROP
|
The
part of a rock formation that appears at the surface of the
ground.
|
|
OVERBURDEN
|
Loose
soil, sand, gravel, broken rock, etc. that lies above the
bedrock.
|
|
PERMAFROST
|
A
permanently frozen layer of soil or subsoil, or even bedrock,
which occurs
to variable depths below the Earth's surface in arctic or subarctic
regions.
|
|
PPB
|
Abbreviation
for part per billion.
|
|
PPM
|
Abbreviation
for part per million.
|
|
PROSPECTING
|
Pertaining
to the search for outcrops or surface exposures of mineral
deposits,
primarily by nonmechanical methods.
|
|
PYRITE
|
Iron
sulfide mineral (FeS). Forms silvery to brassy metallic cubes
or masses.
|
|
QUARTZ
|
A
glassy silicate and common rock forming mineral (SiO2).
|
|
RESERVE
|
An
estimate within specified accuracy limits of the valuable metal
or mineral
content of known deposit that may be produced under current
economic
conditions and with present technology.
|
|
RESOURCE
|
Pertaining
to the quantity or bulk of mineralized material without reference
to the
economic viability of its extraction (see reserve).
|
|
SEDIMENT
|
Fragmental
material that originates from weathering of rocks and that
is transported
by air, water, ice or other natural agents, and that forms
in layers on
the Earth's surface at ordinary temperatures in a loose, unconsolidated
form; e.g. silt, sand, gravel, etc.
|
|
SCHIST
|
A
strongly foliated rock, formed by dynamic metamorphism, that
can be split
into thin flakes or slabs due to well developed parallelism
of more than
50% of the minerals.
|
|
SHEARED
|
A
descriptive term for rock that is deformed as a result of stresses
that
cause or tend to cause parts of a body to slide relative to
each other
along their plane of contact.
|
|
STRIKE
|
The
course or bearing of the outcrop of an inclined bed, vein or
fault plane
on a level surface; the direction of a horizontal line perpendicular
to
the dip.
|
|
STRUCTURAL
MAPPING
|
Geological
mapping that focusses in collection of data pertaining to the
orientation
of beds, faults and fractures as well as other structures that
modify the
distribution of bedrock and mineralized zones.
|
|
SULPHIDE
MINERAL
|
A
mineral compound characterized by the linkage of sulphur with
a metal or
semimetal.
|
|
TRACE
|
Pertaining
to assay values; as used in this report, this term refers to
gold grades
of less than 0.01 oz/ton (0.3 gpt).
|
|
ULTRAMAFIC
|
Igneous
rocks made mostly of the mafic minerals hypersthene, augite,
and/or
olivine.
|
|
VEIN
|
An
epigenetic mineral filling of a fault or other fracture in
a host rock, in
tabular or sheetlike form, often as a precipitate from a hydrothermal
fluid.
|
A-3
The
following is a list of the mining claims that are covered under our agreement
with Tahera:
|
Next
|
||||||
|
Tag#
|
Claim
|
NTS
|
Acres
|
Registered
|
Anniversary
|
Type
of Property
|
|
Jericho
Mining Claims
|
||||||
|
ML3793
|
DJB
19
|
076-L-04
|
344.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
ML3794
|
JD
94
|
076-L-04
|
2524.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
ML3795
|
JD
313
|
076-L-04
|
2515.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
ML3796
|
OD
44
|
076-L-04
|
422.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
ML3797
|
OD
45
|
076-L-04
|
325.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
ML3798
|
OD
61
|
076-L-04
|
508.0
|
09-Jun-99
|
09-Jun-04
|
Lease
|
|
6,638.0
|
||||||
|
Jericho
Group
|
||||||
|
F31092
|
JD
92
|
076-L-04
|
2,272.60
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31093
|
JD
93
|
076-L-04
|
2,569.60
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31095
|
JD
95
|
076-L-04
|
2,363.10
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31096
|
JD
96
|
076-L-04
|
2,582.50
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31310
|
JD
310
|
076-L-03
|
632.70
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31311
|
JD
311
|
076-L-03
|
890.90
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31312
|
JD
312
|
076-L-03
|
1,144.00
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31314
|
JD
314
|
076-L-03
|
2,118.10
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
F31315
|
JD
315
|
076-L-03
|
2,117.60
|
26-Jan-93
|
26-Jan-04
|
Lease
Applied For
|
|
16,691.10
|
||||||
|
F35015
|
OD
25
|
076-E-13
|
2,255.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35016
|
OD
26
|
076-E-13
|
2,255.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35017
|
OD
27
|
076-E-13
|
2,165.40
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35018
|
OD
28
|
076-E-13
|
375.10
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35019
|
OD
29
|
076-E-13
|
444.20
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35020
|
OD
30
|
076-E-13
|
2,509.60
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35021
|
OD
31
|
076-E-13
|
2,548.70
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35022
|
OD
32
|
076-E-13
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35031
|
OD
41
|
076-E-13
|
2,435.90
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35032
|
OD
42
|
076-E-13
|
2,435.90
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35033
|
OD
43
|
076-E-13
|
2,420.80
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35036
|
OD
46
|
076-E-13
|
2,066.00
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35037
|
OD
47
|
076-E-13
|
2,029.90
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35038
|
OD
48
|
076-E-13
|
2,029.90
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35048
|
OD
58
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35049
|
OD
59
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35050
|
OD
60
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35052
|
OD
62
|
076-E-14
|
508.60
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35053
|
OD
63
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35055
|
OD
65
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
F35065
|
OD
75
|
076-E-14
|
2,582.50
|
18-Jun-93
|
18-Jun-04
|
Lease
Applied For
|
|
44,558.50
|
||||||
|
F45947
|
DJB
17
|
076-L-03
|
160.10
|
06-Jul-94
|
06-Jul-04
|
Lease
Applied For
|
|
Jericho
Exploration
|
||||||
|
F45635
|
INU
3
|
076-E-11
|
77.50
|
08-Jun-94
|
08-Jun-04
|
Mineral
Claim
|
|
F44915
|
INU
5
|
076-E-11
|
217.00
|
08-Jun-94
|
08-Jun-04
|
Mineral
Claim
|
|
F44916
|
INU
6
|
076-E-11
|
77.50
|
08-Jun-94
|
08-Jun-04
|
Mineral
Claim
|
|
372.00
|
||||||
|
F48871
|
PT
3
|
076-M-02
|
2,066.0
|
16-Dec-94
|
16-Dec-04
|
Mineral
Claim
|
|
F48872
|
PT
4
|
076-M-02
|
1,833.5
|
16-Dec-94
|
16-Dec-04
|
Mineral
Claim
|
|
3,899.5
|
||||||
|
F65378
|
KIM
1
|
076-L-04
|
67.40
|
04-Sep-98
|
04-Sep-04
|
Mineral
Claim
|
|
F76144
|
TA
1
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76145
|
TA
2
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76146
|
TA
3
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76147
|
TA
4
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76148
|
TA
5
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76149
|
TA
6
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76150
|
TA
7
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76151
|
TA
8
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76152
|
TA
9
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76153
|
TA
10
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76154
|
TA
11
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76155
|
TA
12
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76156
|
TA
13
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76157
|
TA
14
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76158
|
TA
15
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76159
|
TA
16
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76160
|
TA
17
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76161
|
TA
18
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76162
|
TA
19
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76163
|
TA
20
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76164
|
TA
21
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76165
|
TA
22
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76166
|
TA
23
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76167
|
TA
24
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76168
|
TA
25
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76169
|
TA
26
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
F76170
|
TA
27
|
86-I-01
|
2582.5
|
06-Jun-02
|
06-Jun-04
|
Mineral
Claim
|
|
69,727.5
|
||||||
|
CONTWOYTO
INUIT OWNED LANDS
|
||||||
|
Next
|
||||||
|
Tag#
|
Claim
|
NTS
|
Acres
|
Registered
|
Anniversary
|
Type
of Property
|
|
CO-08-00-01
|
076-E-15
|
20,968.62
|
01-Jan-95
|
31-Dec-04
|
Mineral
Claim
|
|
|
CO-08-00-02
|
076-E-15
|
19,518.16
|
01-Jan-95
|
31-Dec-04
|
Mineral
Claim
|
|
|
CO-08-00-03
|
076-E-15
|
12,181.86
|
01-Jan-95
|
31-Dec-04
|
Mineral
Claim
|
|
|
CO-08-00-05
|
076-E-15
|
4,971.58
|
31-Dec-99
|
31-Dec-04
|
Mineral
Claim
|
|
|
CO-08-00-06
|
076-E-15
|
7,610.58
|
31-Dec-00
|
31-Dec-04
|
Mineral
Claim
|
|
|
65,250.80
|
||||||
|
HOOD
RIVER CLAIMS
|
||||||
|
F64824
|
Hood
3
|
76-L-10
|
2582.5
|
24-Jun-98
|
24-Jun-06
|
Mineral
Claim
|
|
F64825
|
Hood
4
|
76-L-10
|
2582.5
|
24-Jun-98
|
24-Jun-06
|
Mineral
Claim
|
|
F64828
|
Hood
12
|
76-L-13
|
2582.5
|
24-Jun-98
|
24-Jun-08
|
Mineral
Claim
|
|
F64829
|
Hood
14
|
76-L-13
|
2582.5
|
24-Jun-98
|
24-Jun-08
|
Mineral
Claim
|
|
10,330.00
|
||||||
|
F48875
|
PT
7
|
76-L-15
|
263.37
|
16-Dec-94
|
16-Dec-03
|
Mineral
Claim
|
|
CO
20 - 00 - 01
|
76-L-15
|
6653.08
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
CO
20 - 00 - 03 (a)
|
76-L-14
|
3008.90
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
CO
20 - 00 - 03 (b)
|
76-L-15
|
2164.74
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
CO
20 - 00 - 04
|
76-L-15
|
2901.85
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
CO
20 - 01 - 01
|
76-L-15
|
6653.08
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
21,381.64
|
||||||
|
ICE
CLAIMS
|
||||||
|
F22432
|
ICE032
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
F22433
|
ICE033
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
F22464
|
ICE064
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
F22534
|
ICE334
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
F22535
|
ICE335
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
F22537
|
ICE337
|
76-E-06
|
2582.5
|
01-Apr-92
|
01-Apr-04
|
Lease
Applied For
|
|
ML3464
|
ICE336
|
76-E-06
|
2665.0
|
14-Feb-96
|
14-Feb-04
|
Lease
|
|
18,160.0
|
||||||
|
DOLLY
VARDEN CLAIMS
|
||||||
|
F23152
|
DIA
52
|
76-E-01
|
2,582.50
|
28-Apr-04
|
28-Apr-04
|
Lease
Applied For
|
|
ROCKINGHORSE
CLAIMS
|
||||||
|
F60840
|
WC
156
|
86-I-02
|
413.2
|
11-Dec-96
|
11-Dec-04
|
Mineral
Claim
|
|
F60841
|
WC
157
|
86-I-02
|
1601.15
|
11-Dec-96
|
11-Dec-03
|
Mineral
Claim
|
|
F60844
|
WC
160
|
86-I-02
|
826.4
|
11-Dec-96
|
11-Dec-06
|
Mineral
Claim
|
|
F60846
|
WC
162
|
86-I-02
|
154.95
|
11-Dec-96
|
11-Dec-03
|
Mineral
Claim
|
|
F60847
|
WC
163
|
86-I-02
|
464.85
|
11-Dec-96
|
11-Dec-06
|
Mineral
Claim
|
|
3,460.55
|
||||||
|
F50064
|
SKY
1
|
86-I-02
|
2,582.50
|
20-Aug-99
|
20-Aug-09
|
Mineral
Claim
|
|
F58889
|
PUD
4
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-05
|
Mineral
Claim
|
|
F58890
|
PUD
5
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-05
|
Mineral
Claim
|
|
F56909
|
PUD
24
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-05
|
Mineral
Claim
|
|
F66955
|
PUD
36
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-06
|
Mineral
Claim
|
|
F67117
|
PUD
39
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-04
|
Mineral
Claim
|
|
F67118
|
PUD
40
|
86-I-14
|
2582.5
|
14-Jun-99
|
14-Jun-04
|
Mineral
Claim
|
|
15,495.0
|
||||||
|
F58677
|
DD
24
|
86-I-13
|
2,582.50
|
11-Apr-96
|
11-Apr-04
|
Mineral
Claim
|
|
F62383
|
KE
5
|
86-I-10
|
447.63
|
14-May-97
|
14-May-05
|
Mineral
Claim
|
|
F62941
|
KE
6
|
86-I-10
|
416.63
|
14-May-97
|
14-May-05
|
Mineral
Claim
|
|
F63306
|
KE
22
|
86-I-7
|
378.77
|
14-May-97
|
14-May-05
|
Mineral
Claim
|
|
1,243.03
|
||||||
|
F85901
|
KEN
1
|
86-I-09
|
2582.5
|
20-Apr-99
|
12-Mar-09
|
Mineral
Claim
|
|
F66045
|
KEN
5
|
86-I-09
|
2100.35
|
20-Apr-99
|
12-Mar-09
|
Mineral
Claim
|
|
4,682.85
|
||||||
|
F74768
|
NAP
1
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74769
|
NAP
2
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74770
|
NAP
3
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74771
|
NAP
4
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74772
|
NAP
5
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74773
|
NAP
6
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74774
|
NAP
7
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74775
|
NAP
8
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74776
|
NAP
9
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74777
|
NAP
10
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74778
|
NAP
11
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74779
|
NAP
12
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74780
|
NAP
13
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F74781
|
NAP
14
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75430
|
NAP
15
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75431
|
NAP
16
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75432
|
NAP
17
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75433
|
NAP
18
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75434
|
NAP
19
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75435
|
NAP
20
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75436
|
NAP
21
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75437
|
NAP
22
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75438
|
NAP
23
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75439
|
NAP
24
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75440
|
NAP
25
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75441
|
NAP
26
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75442
|
NAP
27
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75443
|
NAP
28
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75444
|
NAP
29
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75445
|
NAP
30
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75446
|
NAP
31
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75447
|
NAP
32
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75448
|
NAP
33
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75449
|
NAP
34
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75450
|
NAP
35
|
86-I-10
|
831.67
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75451
|
NAP
36
|
86-I-10
|
1514.99
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75452
|
NAP
37
|
86-I-10
|
1477.12
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75453
|
NAP
38
|
86-I-10
|
509.58
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75454
|
NAP
39
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75455
|
NAP
40
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75456
|
NAP
41
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75457
|
NAP
42
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75458
|
NAP
43
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75459
|
NAP
44
|
86-I-10
|
263.74
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75461
|
NAP
46
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75462
|
NAP
47
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75463
|
NAP
48
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75464
|
NAP
49
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75465
|
NAP
50
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75466
|
NAP
51
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75467
|
NAP
52
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75468
|
NAP
53
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75469
|
NAP
54
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75470
|
NAP
55
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75471
|
NAP
56
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75472
|
NAP
57
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75473
|
NAP
58
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75474
|
NAP
59
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
F75475
|
NAP
60
|
86-I-10
|
2582.5
|
11-Jun-02
|
11-Jun-04
|
Mineral
Claim
|
|
144,052.10
|
||||||
|
F74338
|
TL
8
|
86-I-11
|
2029.57
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74352
|
TL
22
|
86-I-11
|
2582.5
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74353
|
TL
23
|
86-I-11
|
1019.73
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74354
|
TL
24
|
86-I-11
|
378.53
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74355
|
TL
25
|
86-I-11
|
2582.5
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74356
|
TL
26
|
86-I-11
|
2582.5
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74366
|
TL
36
|
86-I-11
|
64.72
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74367
|
TL
37
|
86-I-11
|
255.23
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74368
|
TL
38
|
86-I-11
|
469.09
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
F74369
|
TL
39
|
86-I-11
|
471.17
|
24-Jun-93
|
13-Mar-04
|
Mineral
Claim
|
|
12,435.54
|
||||||
|
CO44
-00-01
|
86-I-11
|
414.0
|
01-Jan-97
|
01-Jan-05
|
IOL
- Mineral Claim
|
|
|
F38623
|
OK
123
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38627
|
OK
127
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38628
|
OK
128
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
KCEI
Lease
|
|
F38629
|
OK
129
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38648
|
OK
148
|
86-I-11
|
2169.3
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38649
|
OK
149
|
86-I-11
|
2169.3
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38652
|
OK
152
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38653
|
OK
153
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38654
|
OK
154
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
F38665
|
OK
165
|
86-I-11
|
2582.5
|
18-Jun-93
|
18-Jun-03
|
Applied
for Lease
|
|
24,998.60
|
||||||
|
Total
|
471,765.71
|
|||||
Committee
Bay Greenstone Belt Claims
The
following is a list of our claims in the Committee Bay Greenstone
Belt:
|
Claim
name
|
Claim
No.
|
NTS
Sheet
|
Recording
Date
|
Anniversary
Date
|
|
Pick
1
|
F54799
|
56K/03
|
16-Oct-02
|
16-Oct-10
|
|
Pick
2
|
F54798
|
56K/03
|
16-Oct-02
|
16-Oct-10
|
|
Pick
3
|
F54760
|
56K/03
|
16-Oct-02
|
16-Oct-10
|
|
EE
1
|
F54757
|
56K/06
|
16-Oct-02
|
16-Oct-11*
|
|
EE
2
|
F54756
|
56K/06
|
16-Oct-02
|
16-Oct-11*
|
|
EE
3
|
F54758
|
56K/06
|
16-Oct-02
|
16-Oct-12*
|
|
K
1
|
F60304
|
56K/11
|
16-Oct-02
|
16-Oct-10*
|
|
K
2
|
F60305
|
56K/11
|
16-Oct-02
|
16-Oct-10*
|
|
CAY
1
|
F60252
|
56K/09
|
16-Oct-02
|
16-Oct-12*
|
|
CAY
3
|
F60254
|
56K/09
|
16-Oct-02
|
16-Oct-12*
|
|
AA
1
|
F60249
|
56J/13
|
16-Oct-02
|
16-Oct-10
|
|
AA
2
|
F60250
|
56J/13
|
16-Oct-02
|
16-Oct-10
|
|
NN
1
|
F60307
|
56K/16
|
16-Oct-02
|
16-Oct-12*
|
|
NN
2
|
F60251
|
56O/04
|
16-Oct-02
|
16-Oct-12*
|
|
WREN
1
|
F60231
|
56J/11
|
16-Oct-02
|
16-Oct-12*
|
|
WREN
2
|
F60232
|
56J/14
|
16-Oct-02
|
16-Oct-12*
|
|
WREN
3
|
F60233
|
56J/14
|
16-Oct-02
|
16-Oct-12*
|
|
WREN
4
|
F60234
|
56J/14
|
16-Oct-02
|
16-Oct-12*
|
|
WREN
5
|
F60235
|
56J/14
|
16-Oct-02
|
16-Oct-12*
|
|
WEST
|
F60212
|
56K/03
|
16-Oct-02
|
16-Oct-10
|
|
HOST
|
F54800
|
56K/03
|
16-Oct-02
|
16-Oct-10
|
|
·
|
as
confirmed by the mining recorder
|
one
small
additional claim GB-1 will be ours after Bruce Goad transfers the
claim.