Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 24, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Lode-Star Mining Inc. | ||
Entity Central Index Key | 0001319643 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity File Number | 000-53676 | ||
Entity Public Float | $ 1,597,830 | ||
Entity Common Stock, Shares Outstanding | 50,634,536 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current | ||
Cash | $ 12,644 | $ 10,499 |
Prepaid fees | 3,940 | 2,078 |
Total current assets | 16,584 | 12,577 |
Mineral property interest, unproved | 230,180 | 230,180 |
Total assets | 246,764 | 242,757 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 84,181 | 8,014 |
Due to related parties and accrued interest | 2,021,878 | 1,598,114 |
Loans payable and accrued interest | 0 | 5,819 |
Total current liabilities | 2,106,059 | 1,611,947 |
STOCKHOLDERS' DEFICIENCY | ||
Capital stock authorized: 480,000,000 voting common shares with a par value of $0.001 per share 20,000,000 preferred shares with a par value of $0.001 per share Issued: 50,605,965 common shares and no preferred shares at December 31, 2020 and 2019 | 3,425 | 3,425 |
Additional paid-In capital | 1,632,181 | 1,628,646 |
Accumulated deficit | (3,494,901) | (3,001,261) |
Total stockholders' deficiency | (1,859,295) | (1,369,190) |
Total liabilities and stockholders' deficiency | $ 246,764 | $ 242,757 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
STOCKHOLDERS' DEFICIENCY | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 480,000,000 | 480,000,000 |
Common stock, issued | 50,605,965 | 50,605,965 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Operating Expenses | ||
Consulting services | 160,892 | 46,274 |
Corporate support services | 1,869 | 1,835 |
Exploration and evaluation | 18,043 | 0 |
Mineral option fees | 100,000 | 100,000 |
Office, foreign exchange and sundry | 10,425 | 15,567 |
Professional fees | 40,574 | 45,342 |
Transfer and filing fees | 23,929 | 22,793 |
Total operating expenses | 355,732 | 231,811 |
Operating loss | (355,732) | (231,811) |
Other Expense | ||
Impairment | (54,318) | 0 |
Interest, bank and finance charges | (83,590) | (65,076) |
Total other expense | (137,908) | (65,076) |
Net loss for the year | $ (493,640) | $ (296,887) |
Basic and diluted net loss per common share | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - basic and diluted | 50,605,965 | 50,605,965 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities | ||
Net loss for year | $ (493,640) | $ (296,887) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Foreign exchange loss | 30 | 85 |
Stock options issued for services | 3,535 | 10,562 |
Changes in operating assets and liabilities: | ||
Prepaid fees | (1,827) | 0 |
Accounts payable and accrued liabilities | 182,114 | 38,417 |
Due to related parties | 100,000 | 100,000 |
Accrued interest payable | 82,752 | 47,814 |
Net cash used in operating activities | (127,036) | (100,009) |
Financing Activities | ||
Repayment of loans payable | (5,819) | (6,000) |
Proceeds from loans payable - related party | 135,000 | 110,000 |
Net cash provided by financing activities | 129,181 | 104,000 |
Net increase in cash | 2,145 | 3,991 |
Cash, beginning of year | 10,499 | 6,508 |
Cash, end of year | 12,644 | 10,499 |
Supplemental Disclosure Of Cash Flow Information | ||
Cash paid during the period for Interest | 0 | 0 |
Cash paid during the period for Income taxes | 0 | 0 |
Non-cash Financing Activity | ||
Expenses paid by related party on behalf of the Company | $ 105,947 | $ 35,657 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 50,605,965 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 3,425 | $ 1,618,084 | $ (2,704,374) | $ (1,082,865) |
Stock options issued for services | 10,562 | 10,562 | ||
Net loss for the year | (296,887) | (296,887) | ||
Ending balance, shares at Dec. 31, 2019 | 50,605,965 | |||
Ending balance, amount at Dec. 31, 2019 | $ 3,425 | 1,628,646 | (3,001,261) | (1,369,190) |
Stock options issued for services | 3,535 | 3,535 | ||
Net loss for the year | (493,640) | (493,640) | ||
Ending balance, shares at Dec. 31, 2020 | 50,605,965 | |||
Ending balance, amount at Dec. 31, 2020 | $ 3,425 | $ 1,632,181 | $ (3,494,901) | $ (1,859,295) |
1. BASIS OF PRESENTATION AND NA
1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - BASIS OF PRESENTATION AND NATURE OF OPERATIONS | Organization Lode-Star Mining Inc. (“the Company”) was incorporated in the State of Nevada, U.S.A., on December 9, 2004. The Company’s principal executive offices are located in Reno, Nevada. The Company was originally formed for the purpose of acquiring exploration stage natural resource properties. The Company acquired a mineral property interest from Lode-Star Gold INC., a private Nevada corporation (“LSG”) on December 11, 2014 in consideration for the issuance of 35,000,000 common shares of the Company. As a result of this transaction, control of the Company was acquired by LSG. Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The future of the Company is dependent upon its ability to establish a business and to obtain new financing to execute its business plan. As shown in the accompanying financial statements, the Company has had no revenue and has incurred accumulated losses of $3,494,901 as of December 31, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and the related adverse public health developments have adversely affected workforces, economies, and financial markets, leading to a global economic downturn. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID- 19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. All dollar amounts are in U.S. dollars unless otherwise noted. The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: a) Basis of Accounting The Company’s financial statements have been prepared using the accrual method of accounting. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. b) Cash and Cash Equivalents Cash consists of cash on deposit with high quality, major financial institutions. For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of 90 days or less to be cash equivalents. At December 31, 2020 and 2019, the Company had no items that were cash equivalents. c) Foreign Currency Accounting The Company’s functional currency is the U.S. dollar. Branch office activities are generally in Canadian dollars. Transactions in Canadian currency are translated into U.S. dollars as follows: i) monetary items at the exchange rate prevailing at the balance sheet date; ii) non-monetary items at the historical exchange rate; and iii) revenue and expense items at the rate in effect of the date of transactions. Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations. d) Fair Value of Financial Instruments ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include: ■ Level 1 – defined as observable inputs such as quoted prices in active markets; ■ Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and ■ Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, due to related parties, and loans payable. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Accounts payable and accrued liabilities and loans payable are measured using “Level 2” inputs as there are no quoted prices in active markets for identical instruments. The carrying values of cash, accounts payable and accrued liabilities, and loans payable approximate their fair values due to the immediate or short term maturity of these financial instruments. e) Asset Retirement Obligations The Company has no asset retirement obligations, including environmental rehabilitation expenditures, which relate to an existing condition caused by past operations. f) Use of Estimates and Assumptions The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions are determining the fair value of transactions involving related parties and common stock, evaluating impairment of mineral property interest and calculating stock-based compensation. Actual results may differ from the estimates. g) Basic and Diluted Earnings Per Share The Company reports basic earnings or loss per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period. As the Company generated net losses in the periods presented, the impact of including potential shares from outstanding options and warrants would be anti-dilutive and is therefore not part of the net loss per share calculation. h) Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. i) Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC 718 whereby a compensation charge based on the fair value of the equity instruments issued, measured at the grant date, is recorded against earnings over the period during which the employee is required to perform the services in exchange for the award (generally the vesting period). The Company uses the Black-Scholes pricing model as a method for determining the estimated fair value for all stock options awarded to employees, officers, directors and consultants. The expected term of the options is based upon an evaluation of historical and expected future exercise behavior. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the options at the valuation date. Volatility is determined based upon historical volatility of the Company’s stock and adjusted if future volatility is expected to vary from historical experience. The dividend yield is assumed to be none as the Company has not paid dividends nor does the Company anticipate paying any dividends in the foreseeable future.. j) Mineral Property Interest and Impairment Mineral property interests are capitalized and recorded at fair value. The property interests are periodically assessed for impairment of value when facts and circumstances suggest that the carrying amount of the property interest may exceed its recoverable amount. Costs of exploration, evaluation and retaining mineral property interests are expensed as incurred. Once the Company has identified proven and probable reserves in its investigation of its property interests and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capital costs will be amortized, using the units-of-production method over proven and probable reserves. k) Related Party Transactions In accordance with ASC 850, the Company discloses: the nature of the related party relationship(s) involved; a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. l) Recent Accounting Pronouncements The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
3. MINERAL PROPERTY INTEREST
3. MINERAL PROPERTY INTEREST | 12 Months Ended |
Dec. 31, 2020 | |
Mineral Properties, Net [Abstract] | |
NOTE 3 - MINERAL PROPERTY INTEREST | The Company’s mineral property interest is a group of thirty-one claims known as the “Goldfield Bonanza Project” (the “Property”), in the State of Nevada. Pursuant to an option agreement dated October 14, 2014 with Lode-Star Gold INC. (“LSG”), a private Nevada corporation, the Company acquired an initial 20% undivided interest in and to the mineral claims owned by LSG and an option to earn a further 60% interest in the claims. LSG received 35,000,000 shares of the Company’s common stock and is its controlling shareholder. Until the Company has earned the additional 60% interest, the net smelter royalty will be split 79.2% to LSG, 19.8% to the Company and 1% to the former Property owner. To earn the additional 60% interest, the Company was required to fund all expenditures on the Property and pay LSG an aggregate of $5 million in cash in the form of a net smelter royalty, commencing after December 11, 2014. If the Company fails to make any cash payments to LSG within one year of the date of the option agreement, it is required to pay LSG an additional $100,000, and in any subsequent years in which the Company fails to complete the payment of the entire $5 million, it must make quarterly cash payments to LSG of $25,000. On January 11, 2017, LSG agreed to defer payment of all amounts due in accordance with the mineral option agreement until further notice, however $25,000 per quarter plus interest on amounts due will still be accrued. On January 17, 2017, the Company and LSG agreed that as of January 1, 2017, all outstanding balances shall carry a compound interest rate of 5% per annum. It was further agreed that the ongoing payment deferral shall apply to both interest and principal. The total amount of such fees due at December 31, 2020 was $623,913 (2019: $523,913), with total interest due in the amount of $88,716 (2019: $57,414). On October 31, 2019, the Company and LSG executed an amendment (the “Amendment”) to the Option Agreement. Under the Amendment, the exercise of the 60% option was restructured into two separate 30% options, such that the Company may now earn a 30% interest in the Property (for a total of 50%) (the “Second Option”) by completing the following actions: ● paying LSG $5 million in cash from the Property’s mineral production proceeds in the form of a NSR royalty (the “Initial Payment”); ● paying LSG all accrued and unpaid penalty payments under the Option Agreement; ● repaying to LSG (i) all loans, advances or other payments made by LSG to the Company and (ii) all expenditures on the Property funded by or on behalf of LSG until the date on which the Initial Payment has been completed; and ● funding all expenditures on the Property until the date on which the Initial Payment has been completed. Following the exercise of the Second Option, the Company may earn an additional 30% interest in the Property (for a total of 80%) (the “Third Option”) by completing the following actions: ● paying LSG a further $5 million in cash from the Property’s mineral production proceeds in the form of an NSR royalty (the “Final Payment”); and ● funding all expenditures on the Property from the date on which the Second Option is exercised until the date on which the Final Payment has been completed. The primary effect of the Amendment is therefore to increase to the purchase price for the additional 60% interest in the Property from $5 million to $10 million, while at the same time separating it into tranches. On January 22, 2020, the Company executed a toll milling agreement (the “Agreement”) with Scorpio Gold Corporation’s affiliate, Goldwedge LLC. The Agreement allowed for the processing of ore delivered from the Company’s Property to the 400 ton per day Goldwedge milling facility located in Manhattan, Nevada. Based on previous metallurgical testing, the Company’s ore requires gravity combined with flotation for optimal recoveries of contained precious metals. The Goldwedge milling circuit is currently configured with a gravity recovery circuit. Under the terms of the Agreement, the Company would advance funds required for the design, engineering, permitting and modifications to the Goldwedge facility to include the addition of a flotation circuit, supporting reagent tanks/silos, secondary lining of process containment ponds, leak detection and monitoring wells associated with fluid containments. The Agreement provided for the Company to recoup the advanced funds through a reduction in toll milling rates until all advanced funds have been offset. Following that, the toll charges would revert to standard rates. Subsequent to a change in ownership of Scorpio, the Company re-assessed the agreement, concluding that it is unlikely to be completed and that the Company has no commitment to continue with it. Based on that, the total of $54,318 incurred in connection with the agreement and included in prepaid fees has been written off and charged to impairment expense at December 31, 2020. The Company assessed its mineral property interest to the date of issue of these financial statements and concluded that facts and circumstances do not suggest that the mineral property interest’s carrying value exceeds its recoverable amount and therefore no impairment is required. |
4. CAPITAL STOCK
4. CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
NOTE 4 - CAPITAL STOCK | Capitalization The authorized capital of the Company is 500,000,000 shares of capital stock, divided into 480,000,000 shares of common stock with a par value of $0.001 per share, and 20,000,000 shares of preferred stock with a par value of $0.001 per share. The Company reserved 10,000,000 shares of common stock for issuance under its 2016 Omnibus Equity Incentive Plan. The Company has issued 50,605,965 common shares and no preferred shares. No shares were issued during the years ended December 31, 2020 and 2019. Options A total of 10,000,000 options are issued and outstanding, all of which were vested by December 31, 2020. On November 20, 2018, the Company granted 500,000 non-qualified stock options pursuant to the Equity Incentive Plan, to key outside consultants, with 50% vesting after one year and 50% vesting after two years. Each option is exercisable into one share of the Company’s common stock at a price of $0.06 per share, for a term of five years. For the year ended December 31, 2020, $3,535 (2019 - $10,562) was included in consulting services expense, based on fair value estimates determined using the Black-Scholes option pricing model with an average risk-free rate of 2.88%, a weighted average life of 5 years, volatility of 195.37%, and dividend yield of 0%. At December 31, 2020, the options had an intrinsic value of $40,000 ($2019 - $7,000) based on the exercise price of $0.06 per option and a market price of $0.14 per share. On February 14, 2017, the Company granted 9,500,000 non-qualified stock options pursuant to the Equity Incentive Plan, to key corporate officers and outside consultants, with 25% vesting immediately and a further 25% vesting every six months thereafter for eighteen months. Each option is exercisable into one share of the Company’s common stock at a price of $0.06 per share, equal to the closing price of the common stock on the grant date, for a term of five years. The options were fully amortized by the end of 2018, so for the years ended December 31, 2020 and 2019, no related amounts were included in consulting services expense. At December 31, 2020, the options had an intrinsic value of $760,000 (2019 - $133,000) based on the exercise price of $0.06 per option and a market price of $0.14 per share. Summary of option activity in the current year and options outstanding at December 31, 2020: Options Years Issued Vested Weighted Average Expiry Date December 31, 2020 Issued February 14, 2017 9,500,000 9,500,000 February 14, 2022 $760,000 Exercise Price: $0.06 Issued November 20, 2018 500,000 250,000 November 20, 2023 $40,000 Exercise Price: $0.06 Balance December 31, 2019 10,000,000 9,750,000 2.21 Issued / Expired / Exercised - - Vested - 250,000 Balance December 31, 2020 10,000,000 10,000,000 1.21 $800,000 50,000 of the options issued on November 20, 2018 were exercised subsequent to year end, on March 4, 2021 on a cashless basis, resulting in the issuance of 28,571 common shares. Warrants During the years ended December 31, 2020 and 2019, no warrants to purchase shares of common stock were issued and no warrants were exercised. On November 19, 2020, 3,336,060 warrants issued in 2015 expired without being exercised, leaving no intrinsic value at December 31, 2020. At December 31, 2019 they had an intrinsic value of $180,147, based on the exercise price of $0.02 per warrant and a market price of $0.074 per share. Summary of warrant activity in the current year and warrants outstanding at December 31, 2020: Number of Exercise Weighted Weighted Expiry Date Intrinsic Value Balance December 31, 2019 and 2018 3,336,060 $ 0.02 $ 0.02 0.89 November 19, 2020 Issued - - - - - - Expired (3,336,060 ) - - - - - Exercised - - - - - - Balance outstanding and exercisable December 31, 2020 - - - - - - |
5. LOANS PAYABLE
5. LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Loans Payable [Abstract] | |
NOTE 5 - LOANS PAYABLE | During the year ended December 31, 2020, the Company repaid $5,819, which was the outstanding accrued interest due on a non-related party loan. During the year ended December 31, 2019, the Company repaid $14,929 of accrued interest and the remaining $5,000 of principal of that loan. |
6. RELATED PARTY TRANSACTIONS A
6. RELATED PARTY TRANSACTIONS AND AMOUNTS DUE | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
NOTE 6 - RELATED PARTY TRANSACTIONS AND AMOUNTS DUE | At December 31, 2020, the Company had the following amounts due to related parties: i) $353,007 (2019: $247,060): unsecured; interest at 5% per annum; with no specific terms of repayment, due to LSG, the Company’s majority shareholder. Accrued interest payable on the loans at December 31, 2020 was $47,701 (2019: $32,414). During the current year, LSG paid expenses directly on behalf of the Company totaling $105,947 (2019: $35,657). ii) $730,000 (2019: $635,000): unsecured; interest at 5% per annum from January 1, 2015; with no specific terms of repayment, due to LSG, the Company’s majority shareholder. Accrued interest payable on the loan at December 31, 2020 was $132,982 (2019: $98,464). During the current year, the Company borrowed $95,000 (2019: $110,000) from LSG. iii) $3,915 (2019: $3,850): unsecured; non-interest bearing; with no specific terms of repayment, due to the controlling shareholder of LSG. The change in value during the year was due to fluctuation in the US to Canadian dollar exchange rate. iv) $40,000 (2019: $0): unsecured; interest at 5% per annum; with no specific terms of repayment, due to the controlling shareholder of LSG. Accrued interest payable on the loan at December 31, 2020 was $1,644 (2019: $0). At December 31, 2020, total interest accrued on the above related party loans was $182,327 (2019: 130,878). ● During the current year, there was a $65 foreign exchange loss (2019: $185 loss) due to a related party loan amount in non-US currency. ● No stock-based compensation to related parties was incurred during the years ended December 31, 2020 or 2019. ● During the year ended December 31, 2020, the Company incurred $100,000 (2019: $100,000) in mineral option fees payable to LSG, which have been accrued. The total amount of such fees due at December 31, 2020 was $623,913 (2019: $523,913), with total interest due in the amount of $88,716 (2019: $57,414). At December 31, 2020, the total due to related parties of $2,021,878 (2019: $1,598,114) was comprised of the following: ■ Loans and accrued interest - $1,309,249 (2019: $1,016,788) ■ Mineral option fees payable and accrued interest - $712,629 (2019: $581,326) During the year ended December 31, 2020, the Company incurred $100,000 (2019: $12,000) in consulting fees for strategic and mine development, payable to a company controlled by the Company’s President. $83,500 (2019: $0) of those fees was outstanding and included in Accounts Payable at December 31, 2020. A further $422 included in Accounts Payable at that date was owing to the same company controlled by the President, for expenses outstanding (2019: $0). |
7. CONTRACTUAL OBLIGATIONS AND
7. CONTRACTUAL OBLIGATIONS AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 7 - CONTRACTUAL OBLIGATIONS AND COMMITMENTS | See Note 3 for details about the Company’s obligations and commitments. |
8. INCOME TAXES
8. INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
NOTE 8 - INCOME TAXES | In December 2014, the Company underwent a change in control which subjected it to limitations under Internal Revenue Code Section 382. That section restricts post-change annual net operating loss utilization, based on applying an IRS- prescribed rate to the purchase price of the stock acquired in the change in control. The Company accordingly revised its estimates of net operating loss carry forwards, resulting in a reduction in the estimate of losses available for utilization in the amount of approximately $872,000. A reconciliation of income tax benefit to the amount computed at the estimated rate of 34% (2019 – 34%) is as follows: 2020 2019 Expected income tax recovery $ 167,800 $ 100,900 Adjustment for non-deductible amounts (120,900 ) (78,900 ) Increase in valuation allowance (46,900 ) (22,000 ) $ - $ - Significant components of deferred income tax assets are as follows: 2020 2019 Deferred income tax assets Net operating losses carried forward $ 412,300 $ 365,400 Valuation allowance (412,300 ) (365,400 ) $ - $ - The Company has approximately $951,000 (2019: $951,000) in net operating losses carried forward which will expire between 2032 and 2037 if not utilized and approximately $261,000 (2019: $123,000) in net operating losses which will be carried forward indefinitely. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance. Realization of the above losses carried forward is dependent on the Company filing the applicable tax returns with the tax authorities and generating sufficient taxable income prior to expiration of the losses carried forward. Continuing use of the acquired historic business or a significant portion of the acquired assets for two years after a change of control transaction is required, otherwise the annual net operating loss limitation on pre-change losses is zero. The two-year continuing use requirement has been met. |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The Company’s financial statements have been prepared using the accrual method of accounting. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. |
Cash and Cash Equivalents | Cash consists of cash on deposit with high quality, major financial institutions. For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of 90 days or less to be cash equivalents. At December 31, 2020 and 2019, the Company had no items that were cash equivalents. |
Foreign Currency Accounting | The Company’s functional currency is the U.S. dollar. Branch office activities are generally in Canadian dollars. Transactions in Canadian currency are translated into U.S. dollars as follows: i) monetary items at the exchange rate prevailing at the balance sheet date; ii) non-monetary items at the historical exchange rate; and iii) revenue and expense items at the rate in effect of the date of transactions. Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations. |
Fair Value of Financial Instruments | ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include: ■ Level 1 – defined as observable inputs such as quoted prices in active markets; ■ Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and ■ Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, due to related parties, and loans payable. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Accounts payable and accrued liabilities and loans payable are measured using “Level 2” inputs as there are no quoted prices in active markets for identical instruments. The carrying values of cash, accounts payable and accrued liabilities, and loans payable approximate their fair values due to the immediate or short term maturity of these financial instruments. |
Asset Retirement Obligations | The Company has no asset retirement obligations, including environmental rehabilitation expenditures, which relate to an existing condition caused by past operations. |
Use of Estimates and Assumptions | The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions are determining the fair value of transactions involving related parties and common stock, evaluating impairment of mineral property interest and calculating stock-based compensation. Actual results may differ from the estimates. |
Basic and Diluted Earnings Per Share | The Company reports basic earnings or loss per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period. As the Company generated net losses in the periods presented, the impact of including potential shares from outstanding options and warrants would be anti-dilutive and is therefore not part of the net loss per share calculation. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. |
Stock-Based Compensation | Stock-based compensation is accounted for in accordance with ASC 718 whereby a compensation charge based on the fair value of the equity instruments issued, measured at the grant date, is recorded against earnings over the period during which the employee is required to perform the services in exchange for the award (generally the vesting period). The Company uses the Black-Scholes pricing model as a method for determining the estimated fair value for all stock options awarded to employees, officers, directors and consultants. The expected term of the options is based upon an evaluation of historical and expected future exercise behavior. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the options at the valuation date. Volatility is determined based upon historical volatility of the Company’s stock and adjusted if future volatility is expected to vary from historical experience. The dividend yield is assumed to be none as the Company has not paid dividends nor does the Company anticipate paying any dividends in the foreseeable future.. |
Mineral Property Interest and Impairment | Mineral property interests are capitalized and recorded at fair value. The property interests are periodically assessed for impairment of value when facts and circumstances suggest that the carrying amount of the property interest may exceed its recoverable amount. Costs of exploration, evaluation and retaining mineral property interests are expensed as incurred. Once the Company has identified proven and probable reserves in its investigation of its property interests and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capital costs will be amortized, using the units-of-production method over proven and probable reserves. |
Related Party Transactions | In accordance with ASC 850, the Company discloses: the nature of the related party relationship(s) involved; a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Recent Accounting Pronouncements | The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
4. CAPITAL STOCK (Tables)
4. CAPITAL STOCK (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of option activity | Options Years Issued Vested Weighted Average Expiry Date December 31, 2020 Issued February 14, 2017 9,500,000 9,500,000 February 14, 2022 $760,000 Exercise Price: $0.06 Issued November 20, 2018 500,000 250,000 November 20, 2023 $40,000 Exercise Price: $0.06 Balance December 31, 2019 10,000,000 9,750,000 2.21 Issued / Expired / Exercised - - Vested - 250,000 Balance December 31, 2020 10,000,000 10,000,000 1.21 $800,000 |
Summary of warrant activity | Number of Exercise Weighted Weighted Expiry Date Intrinsic Value Balance December 31, 2019 and 2018 3,336,060 $ 0.02 $ 0.02 0.89 November 19, 2020 Issued - - - - - - Expired (3,336,060 ) - - - - - Exercised - - - - - - Balance outstanding and exercisable December 31, 2020 - - - - - - |
8. INCOME TAXES (Tables)
8. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule reconciliation of income tax benefit | 2020 2019 Expected income tax recovery $ 167,800 $ 100,900 Adjustment for non-deductible amounts (120,900 ) (78,900 ) Increase in valuation allowance (46,900 ) (22,000 ) $ - $ - |
Schedule of deferred income tax assets | 2020 2019 Deferred income tax assets Net operating losses carried forward $ 412,300 $ 365,400 Valuation allowance (412,300 ) (365,400 ) $ - $ - |
1. BASIS OF PRESENTATION AND _2
1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated losses | $ (3,494,901) | $ (3,001,261) |
4. CAPITAL STOCK (Details)
4. CAPITAL STOCK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of options,outstanding, beginning | 10,000,000 | 10,000,000 | 9,500,000 |
Number of options, issued | 500,000 | ||
Number of options, expired | |||
Number of options, exercised | |||
Number of options, outstanding, ending | 10,000,000 | 10,000,000 | 10,000,000 |
Weighted average exercise price | $ 0.06 | $ 0.06 | $ 0.06 |
Weighted-average remaining contractual term, outstanding, ending | 1 year 2 months 16 days | 2 years 2 months 16 days | |
Expiry date, outstanding, beginning | Feb. 14, 2022 | ||
Expiry date, issued | Nov. 20, 2023 | ||
Aggregate intrinsic value, outstanding, ending | $ 760,000 | ||
Aggregate intrinsic value, outstanding, ending | $ 800,000 | ||
Vested | |||
Number of options,outstanding, beginning | 9,750,000 | 9,750,000 | 9,500,000 |
Number of options, vested | 250,000 | 250,000 | |
Number of options, outstanding, ending | 10,000,000 | 9,750,000 | 9,750,000 |
4. CAPITAL STOCK (Details 1)
4. CAPITAL STOCK (Details 1) | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of warrants, beginning | shares | 3,336,060 |
Issued | shares | 0 |
Expired | shares | (3,336,060) |
Exercised | shares | 0 |
Number of warrants, ending | shares | 0 |
Exercise price, beginning | $ / shares | $ .02 |
Exercise price, issued | $ / shares | .00 |
Exercise price, expired | $ / shares | .00 |
Exercise price, exercised | $ / shares | .00 |
Exercise price, , ending | $ / shares | $ .00 |
Weighted average life remaining (years), beginning | 10 months 20 days |
Expiry date | Nov. 19, 2020 |
Intrinsic value, beginning | $ | $ 0 |
Intrinsic value, ending | $ | $ 0 |
5. LOANS PAYABLE (Details Narra
5. LOANS PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans Payable [Abstract] | ||
Accrued interest payable | $ 5,819 | $ 14,929 |
6. RELATED PARTY TRANSACTIONS_2
6. RELATED PARTY TRANSACTIONS AND AMOUNTS DUE (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Due to related parties | $ 2,021,878 | $ 1,598,114 |
Loans and accrued interest | 1,309,249 | 1,016,788 |
Mineral option fees payable | 712,629 | 581,327 |
Accrued interest on loan amounts due | 182,327 | 130,878 |
Consulting fees | 100,000 | 12,000 |
Majority Shareholder | ||
Due to related parties | 730,000 | 635,000 |
Accrued interest on loan amounts due | 132,982 | 98,464 |
Majority Shareholder 2 | ||
Due to related parties | 353,007 | 247,060 |
Accrued interest on loan amounts due | 47,701 | 32,414 |
Controlling Shareholder | ||
Due to related parties | 3,915 | 3,850 |
Controlling Shareholder | ||
Due to related parties | 40,000 | 0 |
Mineral option fees payable | 623,913 | 523,913 |
Accrued interest on loan amounts due | $ 88,716 | $ 57,414 |
8. INCOME TAXES (Details)
8. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Expected income tax recovery | $ 167,800 | $ 100,900 |
Adjustment for non-deductible amounts | (120,900) | (78,900) |
Increase in valuation allowance | (46,900) | (22,000) |
Total | $ 0 | $ 0 |
8. INCOME TAXES (Details 1)
8. INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred income tax assets | ||
Net operating losses carried forward | $ 412,300 | $ 365,400 |
Valuation allowance | (412,300) | (365,400) |
Deferred income tax assets, net | $ 0 | $ 0 |
8. INCOME TAXES (Details Narrat
8. INCOME TAXES (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
2032 - 2037 | ||
Net operating loss carryforward | $ 951,000 | $ 951,000 |
Indefinitely | ||
Net operating loss carryforward | $ 261,000 | $ 123,000 |