a50272860.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
———————
FORM 10-Q
———————
 
x
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 
 ACT OF 1934
For the quarterly period ended: March 31, 2012
or
   
o
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 
 ACT OF 1934
For the transition period from: _____________ to _____________
 
———————
GOLDEN RIVER RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
———————
 
Delaware
0-16097
98-0079697
(State or Other Jurisdiction
(Commission
(I.R.S. Employer
of Incorporation)
File Number)
Identification No.)
 
Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
 (Address of Principal Executive Office) (Zip Code)
 
011 (613) 8532 2860
 (Registrant’s telephone number, including area code)
 
N/A
 (Former name, former address and former fiscal year, if changed since last report)
———————
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
x
 Yes
o
 No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
o    
Accelerated filer
o  
Non-accelerated filer
o    
Smaller reporting company
x
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulaton S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  x Yes  o No 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
o
 Yes
x
 No
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. There were 56,807,283 outstanding shares of Common Stock as of May 11, 2012.
 
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
  o
 Yes
o
 No
 


 
 

 
 
Table Of Contents
 
 
 
PAGE NO
     
PART I.
FINANCIAL INFORMATION
 
     
2
15
19
19
     
PART II
OTHER INFORMATION
 
     
20
20
20
20
Mine Safety Disclosures
20
20
20
     
     
 
21
     
 
22
     
Exh. 31.1
Certification
23
Exh. 31.2
Certification
24
Exh. 32.1
Certification
25
Exh. 32.2
Certification
26
 
 
1

 
 
 
PART I – FINANCIAL INFORMATION
 
Financial Statements.
 
Introduction to Interim Consolidated Financial Statements.
 
The interim consolidated financial statements included herein have been prepared by Golden River Resources Corporation (“Golden River Resources” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These interim consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011.
 
In the opinion of management, all adjustments, consisting of normal recurring adjustments and consolidating entries, necessary to present fairly the consolidated financial position of the Company and subsidiaries as of March 31, 2012, the results of its consolidated operations for the three and nine month periods ended March 31, 2012 and March 31, 2011, and the changes in its consolidated cash flows for the nine month periods ended March 31, 2012 and March 31, 2011, have been included.  The results of consolidated operations for the interim periods are not necessarily indicative of the results for the full year.
 
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION PRESENTED IS IN CANADIAN DOLLARS.
 
 
2

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Balance Sheet
 
   
March 31,
2012
   
June 30,
2011
 
   
CDN$000’s
   
CDN$000’s
 
             
ASSETS
           
             
Current Assets
           
Cash
    1,073       3,792  
Receivables
    47       152  
Prepaid expenses and deposits
    97       41  
                 
Total Current Assets
    1,217       3,985  
                 
Non Current Assets
               
Cash held for site remediation (note 10)
    109       109  
Property, plant and equipment (note 11)
    748       979  
Receivables – affiliates (note 3)
    68       -  
Mineral rights (note 9)
    6,542       39,763  
                 
Total Non Current Assets
    7,467       40,851  
                 
Total Assets
    8,684       44,836  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current Liabilities
               
Accounts payable and accrued expenses
    341       812  
                 
Note payable
    -       900  
                 
Total Current Liabilities
    341       1,712  
                 
Non Current Liabilities
               
Advances from affiliates (note 3)
    -       54  
Deferred tax liability (note 13)
    -       6,373  
                 
Total Non Current Liabilities
    -       6,427  
                 
Total Liabilities
    341       8,139  
                 
Commitments (Note 6)
               
                 
Stockholders’ Equity:
               
Common Stock: $.0001 par value
               
400,000,000 shares authorized
               
56,807,408 issued and outstanding
    5       5  
Additional paid-in-capital
    52,158       53,578  
Less treasury stock at cost, 125 shares
    (19 )     (19 )
Retained (deficit) during exploration stage
    (26,211 )     (6,464 )
Retained (deficit) prior to exploration stage
    (25,209 )     (25,209 )
                 
Golden River Resources Stockholders’ Equity
    724       21,891  
Non Controlling Interests (note 8)
    7,619       14,806  
                 
Total Equity
    8,343       36,697  
                 
Total Liabilities and Equity
    8,684       44,836  
                 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
3

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Comprehensive Loss
Three and Nine Months Ended March 31, 2012 and 2011 and for the cumulative period
July 1, 2002 (inception of exploration activities) to March 31, 2012
(Unaudited)
 
   
Three
Months
Ended
 March 31, 2012
CDN$000’s
   
Three
Months
Ended
March 31, 2011
 CDN$000’s
   
Nine Months
Ended
March 31, 2012
CDN$000’s
   
Nine Months
Ended
March 31, 2011
 CDN$000’s
   
July 1, 2002
to
March 31, 2012
CDN$000’s
 
                               
Revenues
    $-       $-       $-       $-       $-  
                                         
Costs and expenses:
                                       
                                         
Stock based compensation
    11       134       46       134       2,968  
Exploration expenditure
    278       27       1,681       1,617       10,444  
Depreciation and amortization
    34       103       120       356       1,039  
Interest (income) expense, net
    1       -       4       (65 )     487  
Legal, accounting and professional
    86       107       246       508       2,649  
Administrative expenses
    168       486       917       1,481       8,305  
                                         
Total costs and expenses
    578       857       3,014       4,031       25,892  
                                         
                                         
(Loss) from operations
    (578 )     (857 )     (3,014 )     (4,031 )     (25,892 )
                                         
Foreign currency exchange (loss)
    (56 )     (2 )     (76 )     (149 )     (435 )
Adjustment to fair value on stepped acquisition
    -       -       -       -       7,433  
Gain on bargain purchase
    -       -       -       -       10,305  
Impairment of mineral rights (notes 8 and 9)
    -       -       (33,221 )     -       (33,221 )
Profit on disposal of plant and equipment
    -       -       -       48       48  
Write off on plant and equipment
    -       -       -       (170 )     (170 )
Other Income:
                                       
Profit from sale of equity investment
    -       -       -       -       1,355  
Gain on settlement of guarantee obligation
    -       -       -       -       1,199  
Net gain from sale of subsidiary
    -       -       -       -       641  
Interest (expense) income   – net, related entity
    -       -       -       -       5  
– other
    -       -       -       1       17  
                                         
(Loss) before income tax and equity in (losses) of unconsolidated entities
    (634 )     (859 )     (36,311 )     (4,301 )     (38,715 )
                                         
Benefit/(provision) for deferred income taxes (note 13)
    -       -       6,373       (105 )     -  
                                         
(Loss) before equity in (losses) of unconsolidated entities
    (634 )     (859 )     (29,938 )     (4,406 )     (38,715 )
Equity in (losses) of unconsolidated entities
    -       -       -       -       (26 )
                                         
Net (loss)
    (634 )     (859 )     (29,938 )     (4,406 )     (38,741 )
                                         
Net loss attributable to non-controlling interests
    266       209       10,191       1,004       12,441  
                                         
Net (loss) attributable to Golden River Resources stockholders
    (368 )     (650 )     (19,747 )     (3,402 )     (26,300 )
                                         
Other Comprehensive (Loss):
                                       
Foreign currency translation adjustments
    -       -       -       -       89  
                                         
Comprehensive (loss) attributable to Golden River Resources stockholders
    (368 )     (650 )     (19,747 )     (3,402 )     (26,211 )
                                         
Amounts attributable to Golden River Resources stockholders:
                                       
Basic and diluted net (loss) per common equivalent shares
                                       
Net (loss) per share
    $(0.01 )     $(0.01 )     $(0.35 )     $(0.10 )     $(2.14 )
                                         
Weighted average number of common equivalent shares used per share calculation
    56,807       56,807       56,807       35,068       12,298  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
4

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2012 and 2011 and for the cumulative period
July 1, 2002 (inception of exploration activities) to March 31, 2012
(Unaudited)
 
   
Nine months ended
March 31, 2012
CDN$000’s
   
Nine months ended
March 31, 2011
 CDN$000’s
   
July 1, 2002
to
March 31, 2012
CDN$000’s
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                 
                   
Net (loss)
    (29,938 )     (4,406 )     (38,741 )
                         
Adjustments to reconcile net (loss) to net cash (used) in operating activities
                       
Foreign currency exchange/ loss
    76       149       435  
Impairment of mineral rights
    33,221       -       33,221  
Depreciation/amortization of plant and equipment
    120       356       1,039  
Stock based compensation
    46       134       2,968  
(Benefit)/provision for deferred income tax
    (6,373 )     105       -  
Equity in profits of non-consolidated entities
    -       -       26  
Adjustment to fair value on stepped acquisition
    -       -       (7,433 )
Bargain purchase of controlled entities
    -       -       (10,305 )
Profit from sale of equity investment
    -       -       (1,355 )
Profit on disposal of plant and equipment
    -       (48 )     (48 )
Gain on settlement of guarantee option
    -       -       (1,199 )
Gain on disposal of subsidiary
    -       -       (641 )
Write off of exploration costs
    -       377       377  
Write off of plant and equipment
    -       170       170  
Accrued interest added to principal
    -       -       259  
Net change net of acquisition in:
                       
  Receivables
    105       (6 )     (54 )
  Staking deposit
    -       -       22  
  Prepaid expenses and deposits
    (56 )     10       (127 )
  Accounts payable and accrued expenses
    (470 )     682       (2,049 )
  Accrued site remediation
    -       (200 )     (200 )
                         
Net Cash (Used) in Operating Activities
    (3,269 )     (2,677 )     (23,635 )
                         
CASH FLOW FROM INVESTING ACTIVITIES
                       
                         
Acquisition of majority owned subsidiary net of cash acquired
    (80 )     (1,477 )     (10,142 )
Proceeds of sale of equity investment
    -       -       1,963  
Proceeds of disposal of plant and equipment (net)
    221       76       297  
Proceeds of disposal of subsidiary (net)
    1,617       -       11,420  
Purchase of plant and equipment
    (110 )     (19 )     (480 )
                         
Net Cash Provided/(Used) in Investing Activities
    1,648       (1,420 )     3,058  
                         
CASH FLOW FROM FINANCING ACTIVITIES
                       
                         
Borrowings from affiliates
    358       1,747       9,199  
Repayments to affiliates
    (1,409 )     (1,622 )     (8,565 )
Proceeds from issuance of stock
    -       3,097       13,861  
Repayment of borrowings
    -       -       (139 )
Sale of warrants (net)
    -       -       4,749  
Re-purchase of warrants
    -       -       (579 )
Proceeds from loan payable
    -       -       3,261  
                         
Net Cash (Used)/Provided by Financing Activities
    (1,051 )     3,222       21,787  
                         
Effects of Exchange Rate on Cash
    (47 )     -       (137 )
                         
Net (Decrease)/Increase in Cash
    (2,719 )     (875 )     1,073  
Cash at Beginning of Period
    3,792       957       -  
                         
Cash at End of Period
    1,073       82       1,073  
Supplemental Disclosures
                       
Interest Paid
    4       42       527  
                         
NON CASH FINANCING ACTIVITY
                       
Debt repaid through issuance of shares
    -       -       5,771  
Write-off of plant and equipment
    -       -       170  
Stock options recorded as deferred compensation
    -       -       1,258  
Extinguishment of related party debt
    -       -       593  
Stock issued for acquisition of properties
    -       -       627  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
 
5

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
March 31, 2012
and for the cumulative period July 1, 2002
(inception of exploration activities) to March 31, 2012
(Unaudited)
 
   
Shares
   
Common
Stock
Amount
   
Treasury
Stock, at
Cost
   
Additional
Paid-in
Capital
   
Retained
Profit/(Deficit)
during the
Exploration
 stage
   
Retained
 (Deficit)
prior to
Exploration
Activities
   
Deferred
Compen-
sation
   
Non-
Controlling
Interests
   
Total
 
    000’s    
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
 
                                                       
Balance June 30, 2002
  635     -     $(19 )   $24,061     -     $(25,209 )   -     -     $(1,167 )
                                                       
Net loss
  -     -     -     -     $(639 )   -     -     -     (639 )
                                                       
Balance June 30, 2003
  635     -     $(19 )   $24,061     $(639 )   $(25,209 )   -     -     $(1,806 )
                                                       
Issuance of 175,398 shares and warrants in lieu of debt repayment
  175     -     -     $2,331     -     -     -     -     $2,331  
                                                       
Sale of 167,000 shares and warrants
  167     -     -     $2,221     -     -     -     -     $2,221  
                                                       
Issuance of 694,306 shares on cashless exercise of options
  694     -     -     -     -     -     -     -     $0  
                                                       
Net unrealized (loss) on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net (loss)
  -     -     -     -     $(1,933 )   -     -     -     $(1,933 )
                                                       
Balance June 30, 2004
  1,671     -     $(19 )   $28,613     $(2,572 )   $(25,209 )   -     -     $813  
                                                       
Issuance of 140,000 options under 2004 stock option plan
  -     -     -     $1,646     -     -     $(1,646 )   -     $0  
                                                       
Amortization of 140,000 options under 2004 stock option plan
  -     -     -     -     -     -     $1,095     -     $1,095  
                                                       
Net unrealized (loss) on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net/(loss)
  -     -     -     -     $(3,173 )   -     -     -     $(3,173 )
                                                       
Balance June 30, 2005
  1,671     -     $(19 )   $30,259     $(5,745 )   $(25,209 )   $(551 )   -     $(1,265 )
                                                       
To eliminate deferred compensation against Additional Paid-In Capital
  -     -     -     $(551 )   -     -     $551     -     $0  
                                                       
Issuance of 1,000,000 shares and 2,000,000 options in lieu of debt repayment
  1,000     -     -     $3,321     -     -     -     -     $3,321  
                                                       
Capital gain on shares and options issued in lieu of debt repayment
  -     -     -     $(1,610 )   -     -     -     -     $(1,610 )
                                                       
Sale of 2,000,000 normal warrants
  -     -     -     $827     -     -     -     -     $827  
                                                       
Sale of 1,000,000 special warrants
  -     -     -     $887     -     -     -     -     $887  
                                                       
Amortization of 140,000 options under 2004 stock option plan
  -     -     -     $532     -     -     -     -     $532  
                                                       
Net unrealized gain on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net (loss)
  -     -     -     -     $(1,219 )   -     -     -     $(1,219 )
                                                       
Balance June 30, 2006
  2,671     -     $(19 )   $33,665     $(6,964 )   $(25,209 )   $-     -     $1,473  
 
 
6

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
March 31, 2012
and for the cumulative period July 1, 2002
(inception of exploration activities) to March 31, 2012
 (Unaudited) Continued
 
   
 
 
Shares
   
Common
Stock
Amount
   
Treasury
Stock, at
Cost
   
Additional
Paid-in
Capital
   
Retained
Profit/(Deficit)
during the
Exploration
stage
   
Retained
 (Deficit)
prior to
Exploration
Activities
   
Deferred
Compen-
sation
   
Non-
Controlling
Interests
   
 
 
Total
 
    000’s    
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
 
                                                       
Costs associated with sale of normal and special warrants
  -     -     -     $(3 )   -     -     -     -     $(3 )
                                                       
Amortization of 140,000 options under 2004 stock option plan
  -     -     -     $19     -     -     -     -     $19  
                                                       
Amortization of 465,000 options under 2006 stock option plan
  -     -     -     $510     -     -     -     -     $510  
                                                       
Net unrealized gain on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net (loss)
  -     -     -     -     $(1,917 )   -     -     -     $(1,917 )
                                                       
Balance June 30, 2007
  2,671     $-     $(19 )   $34,191     $(8,881 )   $(25,209 )   $-     -     $82  
                                                       
Amortization of 465,000 options under 2006 stock option plan
  -     -     -     $333     -     -     -     -     333  
                                                       
Net unrealized gain on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net (loss)
  -     -     -     -     $(1,046 )   -     -     -     $(1,046 )
                                                       
Balance June 30, 2008
  2,671     $-     $(19 )   $34,524     $(9,927 )   $(25,209 )   $-     -     $(631 )
                                                       
Amortization of 465,000 options under 2006 stock option plan
  -     -     -     $173     -     -     -     -     173  
                                                       
Sale of 10,000,000 shares
  10,000     $1     -     $681     -     -     -     -     682  
                                                       
Net unrealized loss on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Forgiveness of advances from affiliate
  -     -     -     $588     -     -     -     -     588  
                                                       
Net (loss)
  -     -     -     -     $(1,295 )   -     -     -     $(1,295 )
                                                       
Balance June 30, 2009
  12,671     $1     $(19 )   $35,966     $(11,222 )   $(25,209 )   $-     -     $(483 )
                                                       
Amortization of 465,000 options under 2006 stock option plan
  -     -     -     $39     -     -     -           $39  
                                                       
Sale of 9,960,351 shares
  9,960     $1     -     $10,763     -     -     -     -     $10,764  
                                                       
Issuance of 300,000 shares as part purchase price of mining properties
  300     -     -     $627     -     -     -     -     $627  
                                                       
Re-purchase of warrants
  -     -     -     $(579 )   -     -     -     -     $(579 )
                                                       
Net unrealized gain on foreign exchange
  -     -     -     -     -     -     -     -     $0  
                                                       
Net profit
  -     -     -     -     $10,283     -     -     -     $10,283  
                                                       
Adjustment for  additional investment in consolidated subsidiary
  -     -     -     $1,994     -     -     -     $(1,994 )   -  
                                                       
Fair value of non-controlling interest
  -     -     -     -     -     -     -     $20,552     $20,552  
                                                       
Net loss attributable to non-controlling interests
  -     -     -     -     $1,404     -     -     $(1,404 )   -  
                                                       
Balance June 30, 2010
  22,931     $2     $(19 )   $48,810     $465     $(25,209 )   $-     $17,154     $41,203  
 
 
7

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
March 31, 2012
and for the cumulative period July 1, 2002
(inception of exploration activities) to March 31, 2012
(Unaudited) Continued
 
   
 
 
Shares
   
Common
Stock
Amount
   
Treasury
Stock, at
Cost
   
Additional
Paid-in
Capital
   
Retained
Profit/(Deficit)
during the
Exploration
stage
   
Retained
 (Deficit)
prior to
Exploration
Activities
   
Deferred
Compen-
sation
   
Non-
Controlling
Interests
   
 
 
Total
 
    000’s    
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
   
CDN$000’s
 
                                                       
Issue of 33,875,000 shares
  33,876     $3     -     $3,094     -     -     -     -     $3,097  
                                                       
Amortization of 800,000 options under employee stock option plan
  -     -     -     $162     -     -     -     -     $162  
                                                       
Net (loss)
  -     -     -     -     $(7,775 )   -     -     -     $(7,775 )
                                                       
Adjustment for additional investment in consolidated subsidiary
  -     -     -     $1,512     -     -     -     $(1,512 )   $0  
                                                       
Adjustment due to issue of shares by subsidiary
  -     -     -     -     -     -     -     $10     $10  
                                                       
Net loss attributable to non-controlling interests
  -     -     -     -     $846     -     -     $(846 )   $0  
                                                       
Balance June 30, 2011
  56,807     $5     $(19 )   $53,578     $(6,464 )   $(25,209 )   $-     $14,806     $36,697  
                                                       
Amortization of 1,100,000 options under employee stock option plan
  -     -     -     $46     -     -     -     -     $46  
                                                       
Net (loss)
  -     -     -     -     $(29,938 )   -     -     -     $(29,938 )
                                                       
Adjustment for additional investment in consolidated subsidiary
  -     -     -     $168     -     -     -     $(248 )   $(80 )
                                                       
Adjustment for sale of investment in consolidated subsidiary
  -     -     -     $(1,634 )   -     -     -     $3,252     $1,618  
                                                       
Net loss attributable to non-controlling interests
  -     -     -     -     $10,191     -     -     $(10,191 )   $0  
                                                       
Balance March 31, 2012
  56,807     $5     $(19 )   $52,158     $(26,211 )   $(25,209 )   $-     $7,619     $8,343  
 
       The accompanying notes are an integral part of the consolidated financial statements.
 
 
8

 
 
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
March 31, 2012
 
(1)
Organisation
 
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 companies associated with the President of Golden River Resources and his spouse. These companies owned 96.6% of Golden River Resources as of March 31, 2012.
 
In May 2002, the Company incorporated a new wholly owned subsidiary, Golden Bull Resources Corporation (formerly 4075251 Canada Inc), a corporation incorporated under the laws of Canada. Golden Bull Resources Corporation is undertaking exploration activities for gold in Canada.
 
Golden River Resources, as part of its business strategy, is engaged in gold and base metal exploration activity in Canada. On March 17, 2009, the Company announced that it had reached agreement with Acadian Mining Corporation (TSX: ADA) ("Acadian") to subscribe in a private placement transaction giving Golden River Resources a 68.67% holding of Acadian. As of March 31, 2012, Golden River Resources held 28,210,875 common shares in Acadian for a 52.06% interest. (See Note 8 for a discussion of changes in the Company’s ownership interest in Acadian for the nine months ended March 31, 2011.)  On November 17, 2010, Acadian consolidated its outstanding common shares on the basis of one post-consolidated share for every ten pre-consolidated shares as approved by Acadian shareholders.
 
The financial statements presented herein have been prepared on a consolidated basis to include the accounts of Golden River Resources, Acadian and its other subsidiaries (collectively “the Company”). All intercompany balances and transactions have been eliminated in consolidation.
 
The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Golden River Resources is an exploration stage company which has not yet commenced revenue producing operations and has sustained recurring losses since inception, all of which raises substantial doubt as to its ability to continue as a going concern.
 
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.  Based on discussions with these affiliate companies, the Company believes this source of funding will continue to be available.
 
Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding.  The Company’s ability to continue operations through fiscal 2012 is dependent upon future funding from capital raisings, or its ability to commence revenue producing operations and positive cash flows.
 
(2)
Recent Accounting Pronouncements
 
In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income.  This ASU is intended to increase the prominence of other comprehensive income in financial statements by presenting the components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements.  The new guidance eliminated the current option to report other comprehensive income and its components in the statement of changes in stockholders' equity.  This new guidance was effective for fiscal years and interim periods beginning after December 15, 2011.  While the new guidance changed the presentation of comprehensive income, there were no changes to the components that were recognized in net income or other comprehensive income under current accounting guidance; therefore, adoption of the new guidance in the third quarter of fiscal 2012 did have any impact on the Company's consolidated financial position, results of operations or cash flows.  We adopted this guidance during the third quarter of fiscal 2012 and elected to disclose other comprehensive income in a single continuous statement during interim reporting periods.
 
In September 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-08, Testing Goodwill for Impairment. This ASU is intended to simplify how entities test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. This new guidance is effective for fiscal years, and interim periods within those years beginning after December 15, 2011. The Company does not expect this guidance to have a significant impact on our consolidated financial position, results of operations or cash flows.
 
 
 
9

 
 
In March 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-11, Balance Sheet — Disclosures about Offsetting Assets and Liabilities.  ASU 2011-11 requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments and will be applied retrospectively for all comparative periods presented. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company does not expect this guidance to have a significant impact on our consolidated financial position, results of operations or cash flows.
 
(3)
Affiliate Transactions
 
Golden River Resources advances to and receives advances from various affiliates.  All advances between consolidated affiliates are eliminated on consolidation.
 
The Company has entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company. AXIS is affiliated through common management. The Company is one of ten affiliated companies to which AXIS provides services. Each of the companies has some common Directors, officers and shareholders. Golden River Resources holds a 9.09% interest in AXIS at a cost of A$1 and is accounted for under the cost method. Any profits generated by AXIS are returned to its shareholders in the form of dividends.
 
During the nine months ended March 31, 2011, AXIS advanced the Company CDN$1,260,008 and provided services in accordance with the service agreement of CDN$84,537. During the nine months ended March 31, 2011, the Company repaid CDN$1,622,400. During the nine months ended March 31, 2011, AXIS did not charge interest. The amount owed to AXIS at June 30, 2011 was CDN$54,242 and is reflected in non-current liabilities – advances from affiliates.
 
During the nine months ended March 31, 2012, AXIS advanced the Company CDN$239,395 and provided services in accordance with the service agreement of CDN$221,260. The Company repaid the amount owing to Axis  of CDN$440,109.  During the three months ending March 31, 2012 the Company paid CDN$73,366 for charges and advanced  Axis CDN$69,070. The amount owed by AXIS at March 31, 2012 was CDN$67,648 and is reflected in non current assets – receivables from affiliates.
 
During fiscal 2010, the Company sold shares of common stock to Northern Capital Resources Corp, a Nevada corporation (“NCRC”), pursuant to certain subscription agreements. Mr Joseph Gutnick, the Company’s President, is the Chairman and Chief Executive Officer of NCRC. As of March 31, 2012, NCRC owned approximately 96.6% of the outstanding common stock of the Company.
 
(4)
Issue of Options under Stock Option Plan
 
In October 2004, the Board of Directors and Remuneration Committee of the Company adopted a Stock Option Plan. The Company issued 605,000 options under the plan. At March 31, 2012, the options are fully vested.
 
Since the issue of the options, 120,000 options have lapsed following the termination of participants to the issue.
 
A summary of the options outstanding and exercisable at March 31, 2012 are as follows:
 
 
Outstanding
Outstanding
Exercisable
Exercisable
         
Number of options
80,000
405,000
80,000
405,000
         
Exercise price
CDN$10.00
CDN$3.08
CDN$10.00
CDN$3.08
         
Expiration date
October 15, 2014
October 15, 2016
October 15, 2014
October 15, 2016
 
Acadian
 
At the annual and special meeting of shareholders of Acadian held on June 14, 2007, the shareholders adopted a 10% "rolling" incentive stock option plan (the "Plan"). Options granted under the Plan have a five-year term. Options are granted at a price no lower than the market price of the common shares at the time of the grant. The rules of the Toronto Stock Exchange ("TSX") provide that all unallocated options issuable under a "rolling" stock option plan must be approved by shareholders every three years after institution of the stock option plan. The plan was approved at the Annual General Meeting of Acadian held June 24, 2010. In determining the stock-based compensation expense, in fiscal 2011, the fair value of the options issued were estimated using a Black-Scholes option pricing model with the weighted average assumptions used of risk-free interest rate of 1.50%, expected dividend yield of 0.00% expected stock price volatility of 62%, expected life of options of 5 years and grant date fair value CDN$0.30.
 
Acadian options currently outstanding are:
 
On June 15, 2010, Acadian granted 500,000 Acadian options to one director of Acadian with an exercise price of CDN$0.45 per share expiring June 15, 2015, to be vested one-third on grant date, one-third after 12 months from grant date and one-third after 24 months from grant date. The total value of the options equates to CDN$138,765 and such amount is amortized over the vesting period. For the nine months ending March 31, 2012, stock based compensation expense relating to stock options was CDN$17,346.
 
 
 
10

 
 
A summary of the Acadian options outstanding and exercisable at March 31, 2012 are as follows:
 
   
Outstanding
   
Exercisable
 
Number of options
    500,000       333,333  
Exercise price
 
CDN$0.45
   
CDN$0.45
 
Expiration date
 
June 15, 2015
   
June 15, 2015
 
 
As at March 31, 2012, there was CDN$5,782 of unrecognized compensation cost, before income taxes, related to unvested stock options.
 
On August 18, 2010, Acadian granted 300,000 Acadian options to three directors of Acadian with an exercise price of CDN$0.45 per share expiring August 18, 2015, to be vested one-third on grant date, one-third after 12 months from grant date and one-third after 24 months from grant date. The total value of the options equates to CDN$56,349 and such amount is amortized over the vesting period. For the nine months ending March 31, 2012, stock based compensation expense relating to stock options was CDN$10,174.
 
A summary of the options outstanding and exercisable at March 31, 2012 are as follows:
 
   
Outstanding
   
Exercisable
 
Number of options
    300,000       200,000  
Exercise price
 
CDN$0.45
   
CDN$0.45
 
Expiration date
 
August 18, 2015
   
August 18, 2015
 
 
As at March 31, 2012, there was CDN$3,913 of unrecognized compensation cost, before income taxes, related to unvested stock options.
 
On June 23, 2011, Acadian granted 100,000 options to its Chief Financial Officer with an exercise price of CDN$0.45 per share, expiry date of June 23, 2016 to be vested one third on grant date, one third after 12 months from grant date and one third after 24 months from grant date. The total value of the options equates to CDN$12,338 and such amount is amortized over the vesting period. For the nine months ended March 31, 2012, stock based compensation expense relating to stock options was CDN$4,627.
 
A summary of the options outstanding and exercisable at March 31, 2012 are as follows:
 
   
Outstanding
   
Exercisable
 
Number of options
    100,000       33,333  
Exercise price
 
CDN$0.45
   
CDN$0.45
 
Expiration date
 
June 23, 2016
   
June 23, 2016
 
 
As at March 31, 2012, there was CDN$3,599 of unrecognized compensation cost, before income taxes, related to unvested stock options.
 
On July 13, 2011, Acadian granted an aggregate of 200,000 Acadian options to seven employees of Acadian with an exercise price of $0.45 per share, expiring July 13, 2016, to be vested one third on grant date, one third 12 months from grant date and one third 24 months from grant date. The total value of the options equates to CDN$20,712 and such amount is amortised over the vesting period. For the nine months ending March 31, 2012, stock based compensation expense relating to stock options was CDN$13,808.
 
A summary of the options outstanding and exercisable at March 31, 2012 are as follows:
 
   
Outstanding
   
Exercisable
 
Number of options
    200,000       66,666  
Exercise price
 
CDN$0.45
   
CDN$0.45
 
Expiration date
 
July 13, 2016
   
July 13, 2016
 
 
As at March 31, 2012, there was CDN$6,904 of unrecognized compensation cost, before income taxes, related to unvested stock options.
 
 
11

 
 
(5)
(Loss) per share
 
The Company calculates profit/(loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic profit/(loss) per share is computed based on the weighted average number of common shares outstanding during the period.
 
The following table reconciles the diluted weighted average shares outstanding used for the computation:
 
   
Nine months ended
March 31
 
 
Diluted weighted average shares
   
2012
‘000
     
2011
‘000
 
Basic
    56,807       35,068  
Effect of employee stock based awards
    -       -  
Diluted weighted average shares outstanding
    56,807       35,068  
 
Options to acquire 485,000 shares of common stock were not included in the diluted weighted average shares outstanding as such effects would be anti-dilutive.
 
(6)
Commitments
 
In July 2011, Acadian entered into a lease for an office premises with minimum annual lease payments of CDN$112,682. The lease begins on July 1, 2011 and ends on June 30, 2016 with a right to terminate after June 30, 2013 for a penalty equal to four months base rent.
 
Acadian is committed to minimum annual lease payments of CDN$103,607 on its former office premises until October 2013. Effective September 1, 2010, Acadian has sublet the office premises for a rental equivalent of the lease commitment.
 
Future minimum contractual obligations under operating leases are as follows:
 
   
CDN$
 
2012
    54,072  
2013
    190,387  
2014
    112,682  
2015
    112,682  
2016
    112,682  
      582,505  
 
Total rent expense incurred by the Company amounted to CDN$77,923 for the nine months ended March 31, 2012 and CDN$30,841 for the nine months ended March 31, 2011.
 
Acadian has an obligation to spend CDN$179,000 and issue 29,118 Acadian shares on its exploration properties during fiscal 2012 to maintain its properties.
 
(7)
Fair Value Of Financial Instruments
 
The Company’s financial instruments consist of cash, receivables, prepaid expenses, accounts payable, accrued expenses and advances from affiliates. The carrying amounts of receivables, accounts payable and accrued expenses approximate their respective fair values because of the short maturities of these expenses. The fair values of advances from affiliates are not practicable to estimate as no similar market exists for these instruments and as it does not have a specified date of repayment.
 
(8)
Investments/Subsidiaries
 
At June 30, 2011, the Company’s holding in Acadian was 71.48%. During the nine months ended March 31, 2011, the Company purchased an additional 259,500 shares in Acadian through on-market purchases in the Toronto Stock Exchange, increasing its holding in Acadian to 71.96% at December 31, 2011. The cost to the Company was CDN$79,985. As a result of this transaction, the Company recorded a CDN$168,000 adjustment to additional paid in capital and CDN$248,000 to non-controlling interest, representing the difference between the amount paid for such additional shares and the carry amount of the investment. On January 31, 2012, the Company entered into a share purchase agreement with an arms-length third party to sell 10,783,145 shares in Acadian at a price of CDN$0.15 for proceeds of CDN$1,617,472. Closing occurred on February 6, 2012. Following closing, the Company holds 52.06% of Acadian. As a result of this transaction, the Company recorded a CDN$1,634,000 adjustment to additional paid in capital and CDN$3,252,000 to non-controlling interest.
 
 
 
12

 
 
The amount of revenue of Acadian for the nine months ended March 31, 2012 and March 31, 2011 included in the consolidated statement of comprehensive loss were CDN$nil and CDN$nil and the amount of loss was CDN$2,789,000 and CDN$3,501,000 respectively.
 
(9)
Mineral Rights
 
The fair-value of the mineral rights acquired in the acquisition of Acadian was based upon a valuation report prepared by an investment banking firm with substantial experience in merger and acquisition transactions including provision of fairness opinions and valuations.  Accordingly, the Company had attributed a fair value of CDN$43,790,000 to mineral rights. On May 31, 2011, Acadian sold 100% of its shares in ScoZinc Limited, a wholly owned subsidiary, the attributed fair value of CDN$4,026,855 to ScoZinc mineral rights was included in the assets sold.
 
Following the end of the December 2011 quarter, the Company made an assessment of the carrying value of the mineral rights of Acadian and concluded that it did not expect to be able to realize the carrying value. This assessment took into account various factors including the exploration results from Acadian’s exploration programs since the Company’s initial acquisition of shares in Acadian and the transaction noted in note 8, and the market capitalization of Acadian. As a result, the Company impaired the carrying value of the mineral rights and has recorded an impairment of mineral rights of CDN$33,221,000 and a benefit to deferred tax of CDN$6,373,000 in the Company’s consolidated statement of comprehensive loss.
 
The carrying value of mineral rights at March 31, 2012 is CDN$6,542,000 (2010:CDN$39,763,000).
 
Under US GAAP, exploration expenditure is expensed to the consolidated statement of comprehensive loss as incurred, unless there is a mineral reserve on the property.
 
(10)
Cash held for Site Remediation
 
Acadian has agreed with the relevant authorities in Canada to remediate exploration and mine sites to an agreed status at the end of exploration and/or mining operations at the sites. Currently, Acadian has CDN$109,000 on deposit with the relevant authorities in Canada to cover the cost of this remediation work.
 
(11)
Property, Plant and Equipment
 
Property, plant and equipment is stated at cost.  The Company records depreciation and amortization, when appropriate, using the straight-line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Assets sold or retired, together with the related accumulated depreciation are removed from the appropriate accounts and the resultant gain or loss is included in net income (loss).
 
   
At March 31, 2012
   
At June 30, 2011
 
   
Cost
   
Accumulated
Depreciation
   
Net Book
Value
   
Cost
   
Accumulated
Depreciation
   
Net Book
Value
 
   
CDN$
   
CDN$
   
CDN$
   
CDN$
   
CDN$
   
CDN$
 
                                     
Office
    283,871       (31,807 )     252,064       260,119       (21,986 )     238,133  
Automotive equipment
    93,726       (28,352 )     65,374       93,726       (9,373 )     84,353  
Office fixtures and computer equipment
    425,964       (179,992 )     245,972       339,238       (88,321 )     250,917  
Land
    184,717       -       184,717       405,617       -       405,617  
                                                 
      988,278       (240,151 )     748,127       1,098,700       (119,680 )     979,020  
 
The depreciation expense for the nine months ended March 31, 2012 amounted to CDN$120,000 and for the nine months ended March 31, 2011 amounted to CDN$356,000. Net book value of assets disposed of for the nine months ended March 31, 2012 amounted to CDN$221,000.
 
(12)
Comprehensive Income (Loss)
 
The Company follows ASC Topic 220 Comprehensive Income (“ASC 220”). ASC 220 requires a company to report comprehensive profit/(loss) and its components in a full set of financial statements. Comprehensive profit/(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 adjustments during the nine months ended March 31, 2012 and 2011 amounted to CDN$nil and CDN$nil respectively.  Accordingly, comprehensive (loss) for the nine months ended March 31, 2012 and 2011 amounted to CDN$(19,747,000) and CDN$(3,402,000) respectively.
 
(13)
Income Taxes
 
The Company recognises deferred tax assets or liabilities for the expected future consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
 
 
 
13

 
 
The Company’s net deferred taxes at March 31, 2012 is summarized as follows:
 
   
USA
CDN$000s
   
Canada
CDN$000s
   
Total
CDN$000s
 
                   
Deferred tax assets
                 
  Net operating loss carry-forward
    2,077       252       2,329  
  Exploration expenditure
    552       1,573       2,125  
                         
  Less valuation allowance
    (2,629     (1,825     (4,354
 
Net deferred taxes
    -       -       -  
 
The Company’s net deferred taxes at June 30, 2011 are summarized as follows:
 
   
USA
CDN$000s
   
Canada
CDN$000s
   
Total
CDN$000s
 
                   
Deferred tax assets
                 
  Net operating loss carry-forward
    1,923       218       2,141  
  Exploration expenditure
    805       1,675       2,480  
      2,728       1,893       4,621  
  Less valuation allowance
    (2,728 )     (1,893 )     (4,621 )
      -       -       -  
Deferred tax liability
                       
  Investment in subsidiary
    (6,373 )     -       (6,373 )
Net deferred taxes
    (6,373 )     -       (6,373 )
 
Total available net operating loss carry-forwards in the United States, which are subject to limitations, amount to approximately CDN$5,900,000 at June 30, 2011 and expire in years 2023 through 2030. Net operating loss carry-forwards in Canada do not have a definite expiration date and amounted to CDN$4,869,000.
 
During the three months ended March 31, 2012 the Company paid CDN$26,295 being the liability to the IRS in relation to late filing of prior year tax returns and the Company has recorded a credit for CDN$232,499 being the difference between the estimated the potential maximum liability and the amount paid. As part of the transactions noted on notes 8 and 9, the Company recorded a benefit to deferred tax of CDN$6,373,000.
 
(14)
Subsequent Events
 
The Company has evaluated significant events subsequent to the balance sheet date and has determined that there were no subsequent events or transactions except as described below which would require recognition or disclosure in the consolidated financial statements.
 
 
14

 
 
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
FUND COSTS CONVERSION
 
The consolidated statements of comprehensive loss and other financial and operating data contained elsewhere here in and the consolidated balance sheets and financial results have been reflected in Canadian dollars unless otherwise stated.
 
The following table shows the average rate of exchange of the Canadian dollar as compared to the US dollar and Australian dollar during the periods indicated:
 
9 months ended March 31, 2011      CDN$1.00 = US$1.0283
9 months ended March 31, 2012      CDN$1.00 = US$1.0029
9 months ended March 31, 2011      CDN$1.00 = A$0.9973
9 months ended March 31, 2012      CDN$1.00 = A$0.9656
 
The Company’s financial statements are prepared in Canadian dollars (CDN$). A number of the costs and expenses of the Company are incurred in US and Australian dollars and the conversion of these costs to CDN$ means that the comparison of the three and nine months ended March 31, 2012 to the three and nine months ended March 31, 2011 does not always present a true comparison.
 
GENERAL
 
Golden River Resources as part of its business strategy is engaged in gold exploration activity in Canada. As part of this strategy in fiscal 2009, the Company acquired an interest in Acadian Mining Corporation (“Acadian”), a Canadian gold, lead and zinc exploration corporation. Effective May 31, 2011, Acadian sold its lead and zinc assets, including Scotia Mine for CDN$10 million. During the nine months ended March 31, 2012, the Company purchased an additional 259,500 shares in Acadian at a cost of CDN$79,985. On January 31, 2012, the Company entered into a share purchase agreement with an arms-length third party to sell 10,783,145 shares in Acadian at a price of CDN$0.15 for proceeds of CDN$1,617,472. Closing occurred on February 6, 2012. Following closing, the Company holds 52.06% of Acadian.
 
RESULTS OF OPERATIONS
 
Three Months Ended March 31, 2012 vs. Three Months Ended March 31, 2011
 
As a result of the sale by Acadian of all of the shares in ScoZinc Limited on May 31, 2011, there is a lack of comparability between the Company’s results for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.
 
Costs and expenses decreased from CDN$857,000 in the three months ended March 31, 2011 to CDN$578,000 in the three months ended March 31, 2012.
 
The decrease in costs and expenses is a net result of:
 
a)
a decrease  in stock based compensation from CDN$134,000  for the three months ended March 31, 2011 to CDN$11,000 for the three months ended March 31, 2012 as a result of options issued to Directors and employees of Acadian which are being progressively expensed over the vesting period. See Note 4 concerning the Company’s outstanding stock options.
 
b)
an increase in the exploration expenditure expense from CDN$27,000 for the three months ended March 31, 2011 to CDN$278,000 for the three months ended March 31, 2012. For Golden River Resources, the costs related to consultants providing exploration reviews and advice on the Slave and Committee Bay properties as no field work was undertaken during the three months ended March 31, 2011 or 2012 by the Company. The Company has decided to relinquish the Committee Bay and Slave mineral claims in Canada as it believes that the cost of holding and exploring the claims is excessive given the Company’s financial position. Included within exploration expenditure expense for the three months ended March 31, 2012 is CDN$255,000 for work undertaken by Acadian for field exploration activities on its gold properties compared to CDN$27,000 for the three months ended March 31, 2011. Included within exploration expenditure expense for the three months ended March 31, 2011 was maintenance work undertaken by Acadian on its Scotia mine which was on care and maintenance until its sale on May 31, 2012. There is no comparable amount for the three months ended March 31, 2012 as the Scotia mine was sold in May 2011. During both the three months ended March 31, 2011, exploration on the gold interests of Acadian was limited to planning a field exploration plan, which was subsequently undertaken during the summer field season in the northern hemisphere. During both the three months ended March 31, 2012, exploration on the gold interests of Acadian included the analysis of the results of the exploration program and planning for the follow up exploration program.
 
 
 
15

 
 
c)
a decrease in depreciation and amortization expense from CDN$103,000 for the three months ended March 31, 2011 to CDN$34,000 for the three months ended March 31, 2012. The depreciation and amortization expense relates to the activities of Acadian. For the three months ending March 31, 2011 depreciation and amortization for Acadian included amortization of the ScoZinc mine and mill and equipment which was subsequently sold in May 2011.
 
d)
an increase in interest expense/(income) from CDN$nil for the three months ended March 31, 2011 to CDN$(1,000) for the three months ended March 31, 2012.
 
e)
a decrease in legal, accounting and professional expense from CDN$107,000 for the three months ended March 31, 2011 to CDN$86,000 for the three months ended March 31, 2012. Included within legal, accounting and professional expense for the three months ended March 31, 2012 is CDN$65,000 for costs associated with the Company’s SEC compliance obligations and CDN$21,000 for Acadian which relates to general legal work, audit and stock transfer costs. The decrease is primarily the result of a reduction in secretarial services, financial reporting reviews and taxation services.
 
f)
a decrease in administrative costs including salaries from CDN$486,000 in the three months ended March 31, 2011 to CDN$168,000 in the three months ended March 31, 2012. Included within administrative expense for the three months ended March 31, 2012 is CDN$298,000 for Acadian compared to CDN$462,000 for the three months ended March 31, 2011 , which includes head office salaries, rent, office related costs and travel. The decrease relates to a decrease in head office salaries, office and statutory filing costs.  For the three months ended March 31, 2012 the Company reversed CDN$232,000 in accrued administrative costs on confirmation from the IRS of the amount of the penalties for late filing of prior year tax returns.
 
As a result of the foregoing, the loss from operations decreased from CDN$857,000 for the three months ended March 31, 2011 to CDN$578,000 for the three months ended March 31, 2012.
 
The Company recorded a foreign currency exchange loss of CDN$56,000 for the three months ended March 31, 2012 and CDN$2,000 for the three months ended March 31, 2011, primarily due to revaluation of transactions with affiliates which are denominated in Australian dollars.
 
The loss before income taxes and equity in (losses) of unconsolidated entities for the three months ended March 31, 2012 was CDN$634,000 compared to CDN$859,000 for the three months ended March 31, 2011.
 
The net loss was CDN$634,000 for the three months ended March 31, 2012 compared to CDN$859,000 for the three months ended March 31, 2011.
 
The share of the loss attributable to the non-controlling interests of Acadian amounted to CDN$266,000 for the three months ended March 31, 2012 compared to CDN$209,000 for the three months ended March 31, 2011. At March 31, 2011, the Company’s interest in Acadian was 71.50% and at March 31, 2012, its interest was 52.06%. On January 31, 2012, the Company entered into a share purchase agreement with an arms-length third party to sell 10,783,145 shares in Acadian at a price of CDN$0.15 for proceeds of CDN$1,617,472. Closing occurred on February 6, 2012. In addition to the effect of the decrease of the Company’s interest in Acadian on the amount of the non-controlling interest, the non-controlling interest was also affected by the write down of the carrying value of the mineral rights of Acadian.
 
The net loss attributable to Golden River Resources stockholders amounted to CDN$368,000 for the three months ended March 31, 2012 compared to CDN$650,000 for the three months ended March 31, 2011.
 
Nine Months Ended March 31, 2012 vs. Nine Months Ended March 31, 2011.
 
As a result of the sale by Acadian of all of the shares in ScoZinc Limited on May 31, 2011, there is a lack of comparability between the Company’s results for the nine months ended March 31, 2012 compared to the nine months ended March 31, 2011.
 
Costs and expenses decreased from CDN$4,031,000 in the nine months ended March 31, 2011 to CDN$3,014,000 in the nine months ended March 31, 2012.
 
The decrease in costs and expenses is a net result of:
 
a)
a decrease in stock based compensation from CDN$134,000 for the nine months ended March 31, 2011 to CDN$46,000 for the nine months ended March 31, 2012 as a result of options issued to Directors and staff of Acadian which are being progressively expensed over the vesting period. See Note 4 concerning the Company’s outstanding stock options.
 
b)
an increase the exploration expenditure expense from CDN$1,617,000 for the nine months ended March 31, 2011 to CDN$1,681,000 for the nine months ended March 31, 2012. For Golden River Resources, the costs related to consultants providing exploration reviews and advice on the Slave and Committee Bay properties as no field work was undertaken during the nine months ended March 31, 2011 or 2012 by the Company. The Company has decided to relinquish the Committee Bay and Slave mineral claims in Canada as it believes that the cost of holding and exploring the claims is excessive given the Company’s financial position. Included within exploration expenditure expense for the nine months ended March 31, 2012 is CDN$1,489,000 for work undertaken by Acadian for field exploration activities on its gold properties. During the nine months ended March 31, 2012, Acadian conducting a drilling program on the Fifteen Mile project. Included within exploration expenditure expense for the nine months ended March 31, 2011 is CDN$1,347,000 for certain maintenance work undertaken by Acadian on its Scotia mine which was on care and maintenance until its sale on May 31, 2011. There is no comparable amount for the three months ended March 31, 2011. Acadian conducted minimal gold exploration for the nine months ended March 31, 2011 due to financial constraints.
 
 
16

 
 
c)
a decrease in depreciation and amortization expense from CDN$356,000 for the nine months ended March 31, 2011 to CDN$120,000 for the nine months ended March 31, 2012. The depreciation and amortization expense relates to the activities of Acadian. For the nine months ending March 31, 2011 depreciation and amortization for Acadian included amortization of the ScoZinc mine and mill and equipment, which was sold in May 2011.
 
d)
 a decrease in interest expense/(income) from CDN$(65,000) for the nine months ended March 31, 2011 to CDN$4,000 for the nine months ended March 31, 2012. The interest (income) for the nine months ended March 31, 2011 relates to an accrual for interest payable by Acadian on a third party liability which was subsequently reversed following confirmation of the amount owing by the third party. During May 2011 the debt was settled and satisfied.
 
e)
a decrease in legal, accounting and professional expense from CDN$508,000 for the nine months ended March 31, 2011 to CDN$246,000 for the nine months ended March 31, 2012. Included within legal, accounting and professional expense for the nine months ended March 31, 2012 is CDN$114,000 for costs associated with the Company’s SEC compliance obligations and CDN$132,000 for Acadian which relates to general legal work, audit and stock transfer costs. The decrease is primarily the result of a reduction in secretarial services, financial reporting reviews and taxation services.
 
f)
 a decrease in administrative costs including salaries from CDN$1,481,000 in the nine months ended March 31, 2011 to CDN$917,000 in the nine months ended March 31, 2012. Included within administrative expense for the nine months ended March 31, 2012 is CDN$925,000 for Acadian compared to CDN$1,402,000 for the nine months ended March 31, 2011, which includes head office salaries, rent, office related costs and travel. The decrease relates to the reduction in head office salaries, office and statutory filing costs.  For the nine months ended March 31, 2012 the Company reversed CDN$232,000 in accrued administrative costs on confirmation from the IRS of the amount of the penalties for late filing of prior year tax returns. 
 
As a result of the foregoing, the loss from operations decreased from CDN$4,031,000 for the nine months ended March 31, 2011 to CDN$3,014,000 for the nine months ended March 31, 2012.
 
The Company recorded a foreign currency exchange loss of CDN$76,000 for the nine months ended March 31, 2012 and CDN$149,000 for the nine months ended March 31, 2011, primarily due to revaluation of advances from affiliates which are denominated in Australian dollars.
 
Following the end of the December 2011 quarter, the Company made an assessment of the carrying value of the mineral rights of Acadian and concluded that it did not expect to be able to realize the carrying value. This assessment took into account various factors including the exploration results from Acadian’s exploration programs since the Company’s initial acquisition of shares in Acadian, and the market capitalization of Acadian. As a result, the Company impaired the carrying value of the mineral rights and has recorded an impairment of mineral rights of CDN$33,221,000 (2011: CDN$nil) in the Company’s consolidated statement of comprehensive loss.
 
The Company recorded a profit on disposal of plant and equipment of CDN$48,000 for the nine months ended March 31, 2011 for which there was no comparable amount for the nine months ended March 31, 2012. Acadian disposed of surplus equipment.
 
The Company recorded a write-off of plant and equipment of CDN$170,000 for the nine months ended March 31, 2011 for which there was no comparable amount for the nine months ended March 31, 2012. Acadian wrote down the carrying value of plant and equipment after a physical review.
 
The loss before income taxes and equity in (losses) of unconsolidated entities for the nine months ended March 31, 2012 was CDN$36,311,000 compared to CDN$4,301,000 for the nine months ended March 31, 2011.
 
The Company has recorded a benefit to deferred tax of CDN$(6,373,000) for the nine months ended March 31, 2012 as a result of impairment of mineral rights compared to a provision for tax of CDN$105,000 for the nine months ended March 31, 2011.
 
 
17

 
 
The loss before equity in losses of unconsolidated entities for the nine months ended March 31, 2012 was CDN$29,839,000 compared to CDN$4,406,000 for the nine months ended March 31, 2011.
 
The net loss was CDN$29,938,000 for the nine months ended March 31, 2012 compared to CDN$4,406,000 for the nine months ended March 31, 2011.
 
The share of the loss attributable to the non-controlling interests of Acadian amounted to CDN$10,191,000 for the nine months ended March 31, 2012 compared to CDN$1,004,000 for the nine months ended March 31, 2011. At March 31, 2011, the Company’s interest in Acadian was 71.50% and at March 31, 2012, its interest was 52.06%. During the nine months ended March 31, 2012, the Company purchased a further 259,500 shares in Acadian through on-market purchase in the TSX at a cost of CDN$79,985, which resulted in a decrease in non-controlling interest of CDN$248,000. Further, the impairment of mineral rights referred to above results in a share of the loss of non-controlling interest of Acadian. On January 31, 2012, the Company entered into a share purchase agreement with an arms-length third party to sell 10,783,145 shares in Acadian at a price of CDN$0.15 for proceeds of CDN$1,617,472 which resulted in a increase in non-controlling interest of CDN$3,252,000.
 
The net loss attributable to Golden River Resources stockholders amounted to CDN$19,747,000 for the nine months ended March 31, 2012 compared to CDN$3,402,000 for the nine months ended March 31, 2011.
 
Liquidity and Capital Resources
 
For the nine months ended March 31, 2012, net cash used by operating activities was CDN$3,269,000 primarily consisting of the net loss of CDN$29,938,000; the impairment of mineral rights of CDN$33,221,000 and a corresponding benefit for the adjustment to deferred tax of CDN$6,373,000; a decrease in accounts payable and accrued expenses of CDN$470,000; net cash provided by investing activities of CDN$1,648,000 being the net cost of the additional investment in Acadian of CDN$80,000; proceeds for the sale of land of CDN$221,000; CDN$1,617,000 being the proceeds from the sale of the 10,783,145 shares of Acadian; purchase of plant and equipment of CDN$110,000; and net cash used in  financing  activities of  CDN$1,051,000 consisting of borrowings and repayments to affiliates.
 
As of March 31, 2012, the Company had short-term obligations of CDN$341,000 comprising accounts payable and accrued expenses.
 
We have CDN$1,073,000 in cash at March 31, 2012.
 
Since fiscal 2004, we have undertaken field exploration programs 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 have not had a legal obligation to undertake further exploration on these properties. The Company has decided to relinquish the Committee Bay and Slave mineral claims in Canada as it believes that the cost of holding and exploring the claims is excessive given the Company’s financial position.  Further, Acadian has an obligation to spend amounts on its mineral properties in order to maintain the leases and is required to spend CDN$179,000 and issue 29,118 Acadian shares on gold exploration properties during fiscal 2012. Our budget for general and administration costs for fiscal 2012 is CDN$500,000 and Acadian’s budget for the general and administration costs for fiscal 2012 is CDN$1,530,000. 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 capital raising will be successful, or that even if an offer of financing was received by the Company, it is on terms acceptable to the Company.
 
Information Regarding Forward Looking Statements
 
This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements.
 
Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make.  Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated.  Consequently, no forward-looking statement can be guaranteed.  The potential risks and uncertainties that could affect forward looking statements include, but are not limited to:
 
 
18

 
 
the risks of mineral exploration stage projects,
political risks in foreign countries,
risks associated with environmental and other regulatory matters,
exploration risks and competitors,
the volatility of gold and other mineral prices,
availability of financing,
movements in foreign exchange rates,
increased competition, governmental regulation,
performance of information systems,
ability of the Company to hire, train and retain qualified employees,
the availability of sufficient, transportation, power and water resources, and
our ability to enter into key exploration and supply agreements and the performance of contract counterparties.
 
In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects are described in this report, and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011, including under the heading “Risk Factors” and elsewhere and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company.
 
We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document.  The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements.
 
Quantitative and Qualitative Disclosures About Market Risk.
 
The Company reports in CDN$ and holds cash in Australian dollars. At March 31, 2012, this amounted to CDN$900,000. A change in the exchange rate between the A$ and the CDN$ will have an effect on the amounts reported in the Company’s consolidated financial statements, and create a foreign exchange gain or loss. A movement of 1% in the A$ versus the CDN$ exchange rate will have a CDN$9,000 effect on the consolidated balance sheet and statement of comprehensive loss.
 
Controls and Procedures.
 
(a)
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. Based on that evaluation, such principal executive officer and principal financial officer concluded that, the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report at the reasonable level of assurance.
   
(b)
Changes in Internal Control Over Financial Reporting
   
 
There were no changes in our internal control over financial reporting during the second quarter of fiscal 2012 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
   
(c)
Other
   
 
We believe that a controls system, no matter how well designed and operated, cannot 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.  Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Our disclosure controls and procedures are designed to provide such reasonable assurance of achieving our desired control objectives, and our principal executive officer and principal financial officer have concluded, as of March 31, 2012, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.
 
 
19

 
 
PART II – OTHER INFORMATION
 
Legal Proceedings.
 
Not Applicable
 
Risk Factors.
 
Not Applicable for Smaller Reporting Company
 
Unregistered Sales of Equity Securities and Use of Proceeds.
 
Not Applicable
 
Defaults Upon Senior Securities.
 
Not Applicable
 
Mine Safety Disclosure.
 
Not Applicable
 
Other Information.
 
See Item 2 above.
 
Exhibits.
 
(a)
Exhibit No.
Description
 
 
31.1
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
 
 
31.2
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
 
 
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
 
 
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
 
 
101
The following materials from the Golden River Resources Corporation Quarterly Report on Form 10-Q for the nine months ended March 31, 2012 formatted in Extensible Business Reporting Language (XBRL):  (i) the Consolidated Statements of Comprehensive Loss, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) related notes.
 
   
#101.INS
XBRL Instance Document.
   
#101.SCH
XBRL Taxonomy Extension Schema Document.
   
#101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
   
#101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
   
#101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
   
#101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
   
__________________
 
   
#     Filed herewith.  In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.
 
 
20

 
 
(FORM 10-Q)
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Golden River Resources Corporation
     
 
By:
/s/ Joseph I. Gutnick
     
   
Joseph I. Gutnick
   
Chairman of the Board, President and
   
Chief Executive Officer
   
(Principal Executive Officer)
     
 
By:
/s/ Peter Lee
     
   
Peter Lee
   
Director, Secretary and
   
Chief Financial Officer
   
(Principal Financial Officer)
     
 
Dated:  May 14, 2012
 
 
 
21

 
 
EXHIBIT INDEX
 
Exhibit No.
Description
 
31.1
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
 
31.2
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
 
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
 
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
 
101
The following materials from the Golden River Resources Corporation Quarterly Report on Form 10-Q for the nine months ended March 31, 2012 formatted in Extensible Business Reporting Language (XBRL):  (i) the Consolidated Statements of Comprehensive Loss, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) related notes.
 
 
#101.INS
XBRL Instance Document.
 
#101.SCH
XBRL Taxonomy Extension Schema Document.
 
#101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
 
#101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
 
#101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
 
#101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
 
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#     Filed herewith.  In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.
 
 
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