Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2019 | Sep. 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | STAR GOLD CORP. | |
Entity Central Index Key | 0001401835 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
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 Common Stock, Shares Outstanding | 77,394,841 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 339,620 | $ 440,316 |
Other current assets (NOTE 5) | 20,740 | 22,845 |
TOTAL CURRENT ASSETS | 360,360 | 463,161 |
EQUIPMENT AND MINING INTEREST, net (NOTE 4) | 478,691 | 467,107 |
OTHER ASSETS - NON-CURRENT (NOTE 5) | 457 | 2,557 |
RECLAMATION BOND | 21,600 | 21,600 |
TOTAL ASSETS | 861,108 | 954,425 |
CURRENT LIABILITIES: | ||
Accounts payable | 50,380 | 19,246 |
TOTAL CURRENT LIABILITIES | 50,380 | 19,246 |
TOTAL LIABILITIES | 50,380 | 19,246 |
COMMITMENTS AND CONTINGENCIES (NOTE 4) | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, par value; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common Stock, $.001 par value; 300,000,000 shares authorized; 77,394,841 shares issued and outstanding | 77,395 | 77,395 |
Additional paid-in capital | 11,560,527 | 11,560,527 |
Accumulated deficit | (10,827,194) | (10,702,743) |
TOTAL STOCKHOLDERS' EQUITY | 810,728 | 935,179 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 861,108 | $ 954,425 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 31, 2019 | Apr. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par or stated value per share | $ .001 | $ .001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 77,394,841 | 77,394,841 |
Common stock, shares outstanding | 77,394,841 | 77,394,841 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
OPERATING EXPENSE | ||
Mineral exploration expense | $ 26,630 | $ 24,628 |
Pre-development expense | 29,073 | 45,046 |
Legal and professional fees | 40,260 | 29,895 |
Management and administrative | 28,343 | 31,452 |
Depreciation | 416 | 416 |
TOTAL OPERATING EXPENSES | 124,722 | 131,437 |
LOSS FROM OPERATIONS | (124,722) | (131,437) |
OTHER INCOME (EXPENSE) | ||
Interest expense | (215) | (200) |
Interest income | 486 | 558 |
TOTAL OTHER INCOME (EXPENSE) | 271 | 358 |
NET LOSS | $ (124,451) | $ (131,079) |
Basic and diluted loss per share | $ 0 | $ 0 |
Basic and diluted weighted average number shares outstanding | 77,394,841 | 76,434,424 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Apr. 30, 2018 | 76,434,424 | |||
Beginning balance, amount at Apr. 30, 2018 | $ 76,434 | $ 11,501,613 | $ (10,367,039) | $ 1,211,008 |
Net loss | (131,079) | (131,079) | ||
Ending balance, shares at Jul. 31, 2018 | 76,434,424 | |||
Ending balance, amount at Jul. 31, 2018 | $ 76,434 | 11,501,613 | (10,498,118) | 1,079,929 |
Beginning balance, shares at Apr. 30, 2019 | 77,394,841 | |||
Beginning balance, amount at Apr. 30, 2019 | $ 77,395 | 11,560,527 | (10,702,743) | 935,179 |
Net loss | (124,451) | (124,451) | ||
Ending balance, shares at Jul. 31, 2019 | 77,394,841 | |||
Ending balance, amount at Jul. 31, 2019 | $ 77,395 | $ 11,560,527 | $ (10,827,194) | $ 810,728 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (124,451) | $ (131,079) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation | 416 | 416 |
Changes in operating assets and liabilities: | ||
Other current assets | 2,105 | 7 |
Other assets | 2,100 | 3,781 |
Accounts payable | 31,134 | 62,575 |
Net cash used by operating activities | (88,696) | (64,300) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for equipment and mining interest | (12,000) | (12,000) |
Net cash used in investing activities | (12,000) | (12,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in cash and cash equivalents | (100,696) | (76,300) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 440,316 | 832,426 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 339,620 | $ 756,126 |
NOTE 1 - NATURE OF OPERATIONS
NOTE 1 - NATURE OF OPERATIONS | 3 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | Star Gold Corp. (the “Company”) was initially incorporated as Elan Development, Inc., in the State of Nevada on December 8, 2006. The Company was originally organized to explore mineral properties in British Columbia, Canada but the Company is currently focused on gold, silver and other base metal-bearing properties in Nevada. On April 25, 2008, the name of the company was changed to Star Gold Corp. The Company’s core business consists of assembling and/or acquiring land packages and mining claims the Company believes have potential mining reserves, and expending capital to explore these claims by drilling, and performing geophysical work or other exploration work deemed necessary to move such claims towards development and production. The business is a high-risk business as there is no guarantee that the Company’s exploration work will ultimately discover or produce any economically viable minerals. |
NOTE 2 - SIGNIFICANT ACCOUNTING
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. I n the opinion of the Company’s management, all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair statement of the interim financial statements have been included. The balance sheet at April 30, 2019 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. All amounts presented are in U.S. dollars. Operating results for the three month period ended July 31, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending April 30, 2020. For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended April 30, 2019. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management assumptions and estimates relate to long-lived asset impairments and stock-based compensation valuation. Actual results could differ from these estimates and assumptions and could have a material effect on the Company’s reported financial position and results of operations. Risks and Uncertainties The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging exploration mining business, including the potential risk of business failure. Cash and Cash Equivalents For the purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less when acquired to be cash equivalents. Reclamation bond Reclamation bond constitutes cash held as collateral for the faithful performance of bond securing exploration permits and are accounted for on a cost basis. Financial Instruments The Company’s financial instruments include cash and cash equivalents and reclamation bond. All instruments are accounted for on a cost basis, which, due to the short maturity of these financial instruments, approximates fair value at April 30, 2019. Fair Value Measures When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At July 31, 2019 and April 30, 2019, the Company had no assets or liabilities accounted for at fair value on a recurring or nonrecurring basis. Mining Interests and Mineral Exploration Expenditures Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mining properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mining interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. Pre-development Expenditures Pre-development activities involve costs incurred in the exploration stage that may ultimately benefit production, such as underground ramp development, which are expensed due to the lack of evidence of economic development, which is necessary to demonstrate future recoverability of these costs. Equipment Equipment is stated at cost. Significant improvements are capitalized and depreciated. Depreciation of equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Maintenance and repairs are charged to operations as incurred. Gains or losses on disposition or retirement of property and equipment are recognized in operating expenses. Reclamation and Remediation The Company’s operations are subject to standards for mine reclamation that have been established by various governmental agencies. In the period in which the Company incurs a contractual obligation for the retirement of tangible long-lived assets, the Company will record the fair value of an asset retirement obligation as a liability. A corresponding asset will also be recorded and depreciated over the life of the asset. After the initial measurement of an asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. To date, the Company has not incurred any contractual obligation requiring recording either a liability or associated asset. Impairment of Long-lived Assets The Company periodically reviews its long-lived assets to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted net future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the assets will be written down to fair value. Stock-based Compensation The Company estimates the fair value of options to purchase common stock using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected life”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation. Options granted have a ten-year maximum term and varying vesting periods as determined by the Board of Directors. The value of shares of common stock awards is determined based on the closing price of the Company’s stock on the date of the award. Income Taxes The Company accounts for income taxes using the liability method. The liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of (i) temporary differences between financial statement carrying amounts of assets and liabilities and their basis for tax purposes and (ii) operating loss and tax credit carryforwards for tax purposes. Deferred tax assets are reduced by a valuation allowance when management concludes that it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. Reclassifications C New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Adoption of this update on May 1, 2019 had no impact on the Company’s financial statement. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation, Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of the standard for stock-based compensation to include share-based payment transactions for acquiring goods and services from nonemployees. ASU No. 2018-07 became effective for the Company on May 1, 2019. Adoption of this update on May 1, 2019 had no impact on the Company’s financial statement. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
NOTE 3 - EARNINGS PER SHARE
NOTE 3 - EARNINGS PER SHARE | 3 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and warrants. The outstanding securities at July 31, 2019 and 2018 that could have a dilutive effect are as follows: July 31, 2019 July 31, 2018 Stock options 6,645,000 6,650,000 Warrants 29,039,849 30,654,249 TOTAL POSSIBLE DILUTIVE SHARES 35,684,849 37,304,249 For the three months ended July 31, 2019 and 2018, respectively, the effect of the Company’s outstanding stock options and warrants would have been anti-dilutive and so are excluded in the diluted EPS. |
NOTE 4 - EQUIPMENT AND MINING I
NOTE 4 - EQUIPMENT AND MINING INTEREST | 3 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT AND MINING INTEREST | The following is a summary of the Company’s equipment and mining interest at July 31, 2019 and April 30, 2019: July 31, 2019 April 30, 2019 Equipment $ 4,995 $ 32,002 Less accumulated depreciation (2,428 ) (29,019 ) Equipment, net of accumulated depreciation 2,567 2,983 Mining interest - Longstreet 476,124 464,124 TOTAL EQUIPMENT AND MINING INTEREST $ 478,691 $ 467,107 Pursuant to the Longstreet Property Option Agreement, as amended, (the “Longstreet Agreement”) originally entered into by the Company on or about January 15, 2010, the Company leases, with an option to acquire, unpatented mining claims located in the State of Nevada known as the Longstreet Property. Under the agreement, the Company is required to make minimal lease payments in the form of cash and options to purchase shares of the Company’s common stock. On December 4, 2018, the Company amended the Longstreet Agreement to change the due date of certain expenditures required by that agreement (the “2018 Amendment”). The Amendment extends the due date of the 2019 expenditures from January 16, 2019 to August 31, 2019 and also extends the due date of the 2020 expenditures from January 16, 2020 to August 31, 2020. No other provisions of the Longstreet Agreement, as previously amended, were affected by the Amendment. In addition, the Company is obligated, pursuant to the Longstreet Agreement, to pay an annual advance royalty payment of $12,000 related to the Clifford claims. The Longstreet Agreement obligates the Company to minimal expenditures to be spent on the Longstreet Property. All allowable expenditures in excess of the required annual expenditures are carried over to the subsequent year. During each of the three-month periods ended April 30, 2019 and 2018, the Company paid the annual $12,000 advance royalty, for the Clifford claims. The schedules of future minimum required expenditures, annual payments, and number of stock options to be issued pursuant to the Longstreet Agreement are as follows: Required expenditure January 17, 2018 through August 31, 2019 $ 500,000 September 1, 2019 through August 31, 2020 700,000 TOTAL $ 1,200,000 Cash payment (1) Stock options January 16, 2020 $ 45,000 50,000 Payment due upon transfer but no later than January 16, 2021 85,000 - TOTAL $ 130,000 50,000 (1) Does not include $12,000 annual advance royalty payment related to Clifford claims. As of July 31, 2019, the Company was in compliance with the expenditure provisions of the Longstreet Agreement, as amended. On August 12, 2019, the Company amended the Longstreet Agreement to eliminate the required property expenditure structure and to implement new consideration for the transfer of the Longstreet Property pursuant to that Agreement (Note 10). |
NOTE 5 - OTHER ASSETS
NOTE 5 - OTHER ASSETS | 3 Months Ended |
Jul. 31, 2019 | |
Other Assets [Abstract] | |
OTHER ASSETS | On January 19, 2017, the Company entered into an Option and Lease of Water Rights with Stone Cabin Company, LLC (the “Stone Cabin Water Rights Agreement”). In exchange for a one-time payment of $20,000, the Stone Cabin Water Rights Agreement granted the Company a three-year option to commence a ten-year lease of certain water rights in Nevada. The water rights are for use in conjunction with the Company’s Longstreet Project. Lease payments for the water rights do not commence unless the Company exercises the option to lease. The Stone Cabin Water Rights Agreement also granted the Company the ability to extend, upon additional option payments, the option to lease for up to an additional three years and the ability to extend the water rights lease (if exercised) for an additional ten-year period. The $20,000 payment was deferred as Other Assets and is being amortized on a straight-line basis over the three-year option period. On August 21, 2017, the Company entered into an Option and Lease of Water Rights, with High Test Hay, LLC (the “High Test Water Rights Agreement”). In exchange for a one-time payment of $25,000, the High Test Water Rights Agreement grants the Company a three-year option to commence a ten-year lease on certain water rights in Nevada. The water rights are for use in conjunction with the Company’s Longstreet Project. Lease payments for the water rights do not commence unless and until the Company exercises the option to lease. The High Test Water Rights Agreement also grants the Company the ability to extend, upon additional option payments, the option to lease for up to an additional three years and the ability to extend the water rights lease (if exercised) for up to an additional twenty years. The $25,000 payment has been deferred and is being amortized on a straight-line basis over the three-year option period. The following is a summary of the Company’s Other Assets at July 31, 2019 and April 30, 2019. July 31, 2019 April 30, 2019 Option on water rights lease agreements, net $ 11,954 $ 15,735 Prepaid insurance and other expenses 9,243 9,667 Total 21,197 25,402 Less Other Assets - Current (20,740 ) (22,845 ) TOTAL OTHER ASSETS - NON-CURRENT $ 457 $ 2,557 |
NOTE 6 - RELATED PARTY TRANSACT
NOTE 6 - RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company rented office space from Marlin Property Management, LLC (“Marlin”) an entity owned by the spouse of the Company’s former President and current Chairman of the Board of Directors. The lease was on a month-to-month basis as financial resources were available. The Company terminated the lease effective November 1, 2018. For the three months ended July 31, 2019 and 2018, office rent was $Nil and $750, respectively. During the three months ended April 30, 2019, the Company paid a member of the Company’s Board of Directors for consulting and investor relation services in the amount of $4,000. The balance is included in “Accounts payable and accrued liabilities” at July 31, 2019. There was no payment for such services during the three months ended April 30, 2018. |
NOTE 7 - STOCKHOLDERS' EQUITY
NOTE 7 - STOCKHOLDERS' EQUITY | 3 Months Ended |
Jul. 31, 2019 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
STOCKHOLDERS' EQUITY | On October 26, 2018, the Company issued 960,417 shares of its common stock in lieu of cash payment for accounts payable. The value of the shares issued was $57,625, based on a price of $0.06 per share which was the fair value on the date of issuance. |
NOTE 8 - WARRANTS
NOTE 8 - WARRANTS | 3 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
WARRANTS | The following is a summary of activity for warrants to purchase shares of the Company’s stock through April 30, 2019. Warrants Weighted average exercise price Balance outstanding at April 30, 2018 and April 30, 2019 30,654,249 $ 0.16 Expired (1,614,400 ) (0.23 ) Balance outstanding at July 31, 2019 29,039,849 $ 0.16 There were no warrants to purchase shares of the Company’s common stock issued or exercised during the three months ended July 31, 2019 and 2018, respectively. The composition of the Company’s warrants outstanding at April 30, 2019 is as follows: Issue Date Expiration Date Warrants Exercise Price Remaining life (years) October 12, 2015 October 12, 2020 4,241,000 $ 0.20 1.20 October 12, 2016 October 12, 2021 14,000,000 0.15 2.20 October 31, 2017 October 31, 2020 10,798,849 0.15 1.25 29,039,849 $ 0.16 1.70 |
NOTE 9 - STOCK OPTIONS
NOTE 9 - STOCK OPTIONS | 3 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | Options issued for mining interest In consideration for its mining interest (see Note 4), the Company is obligated to issue stock options to purchase shares of the Company’s common stock based on "fair market price" which for financial statement purposes is considered to be the closing price of the Company's common stock on the issue dates. Those costs are capitalized as Mining Interest (Note 4). No options were issued for mineral interests during the three months ended July 31, 2019 and 2018. Options outstanding for mining interest totaled 435,000 at both April 30, 2019 and July 31, 2019 and are fully vested. As of July 31, 2019, the remaining weighted average term of the option grants for mining interest was 4.16 years. As of July 31, 2019, the weighted average exercise price of the option grants for mining interest was $0.26 per share. Options issued under the 2011 Stock Option/Restricted Stock Plan The Company established the 2011 Stock Option/Restricted Stock Plan. The Stock Option Plan is administered by the Board of Directors and provides for the grant of stock options to eligible individuals including directors, executive officers and advisors that have furnished bona fide services to the Company not related to the sale of securities in a capital-raising transaction. The Stock Option Plan has a fixed maximum percentage of 10% of the Company’s outstanding shares that are eligible for the plan pool, whereby the number of Shares under the plan increases automatically increases as the total number of shares outstanding increase. The number of shares subject to the Stock Option Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company’s common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company’s assets. The Stock Option plan also has terms and conditions, including without limitations that the exercise price for stock options granted under the Stock Option Plan must equal the stock’s fair value, based on the closing price per share of common stock, at the time the stock option is granted. The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology. Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board. The total value of stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of July 31, 2019 and 2018, respectively, there was no unrecognized compensation cost related to stock-based options and awards. No options were issued under the 2011 Plan during the three months ended July 31, 2019 and 2018, respectively. The following table summarizes additional information about the options under the Company’s Stock Option Plan as of July 31, 2019: Options outstanding and exercisable Date of Grant Shares Price Remaining Term October 18, 2016 4,810,000 $ 0.06 2.22 April 30, 2018 1,400,000 0.065 3.75 Total options 6,210,000 $ 0.06 2.67 The total value of stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of April 30, 2019, there was no unrecognized compensation cost related to stock-based options and awards. Summary: The following is a summary of the Company’s stock options outstanding and exercisable: Options issued for: Expiration Date Options Weighted Average Mining interests April 11, 2020 to January 15, 2029 435,000 $ 0.26 Stock option plan October 18, 2021 to April 30, 2023 6,210,000 0.06 Outstanding and exercisable at April 30, 2019 6,645,000 $ 0.07 The aggregate intrinsic value of all options vested and exercisable at July 31, 2019, was $Nil based on the Company’s closing price of $0.045 per common share at July 31, 2019. The Company’s current policy is to issue new shares to satisfy option exercises. |
NOTE 10 - SUBSEQUENT EVENTS
NOTE 10 - SUBSEQUENT EVENTS | 3 Months Ended |
Jul. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On August 12, 2019, the Company and Great Basin Resources, Inc. (“Great Basin”) agreed to amend the Longstreet Agreement (Note 4) to eliminate the required property expenditure structure and to implement new consideration for the transfer of the Property pursuant to that agreement (the “2019 Amendment”). The Amendment eliminated the remainder of the required property expenditures set forth in the Longstreet Agreement, as amended. Furthermore, the Amendment sets forth that upon the Company: a) repricing 435,000 existing options to purchase Company common stock at the exercise price of $0.04; b) issuing an additional 500,000 options to purchase Company common stock at the exercise price of $0.04; c) making a cash payment of $50,000 to Great Basin (paid on August 19 2019) and d) entering into a consulting agreement with Great Basin with a term of eighteen months, Great Basin shall transfer title to the Property to the Company. The Amendment also grants the Company the option, to be exercised no later than six (6) months following the first receipt of proceeds from the sale of ore from the Property, to purchase one-half of Great Basin’s 3.0% Net Smelter Royalty for a payment of $1,750,000. No other provisions of the Longstreet Agreement, as previously amended, were affected by the Amendment. |
NOTE 2 - SIGNIFICANT ACCOUNTI_2
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. I For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended April 30, 2019. |
Use of Estimates | The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management assumptions and estimates relate to long-lived asset impairments and stock-based compensation valuation. Actual results could differ from these estimates and assumptions and could have a material effect on the Company’s reported financial position and results of operations. |
Risks and Uncertainties | The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging exploration mining business, including the potential risk of business failure. |
Cash and Cash Equivalents | For the purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less when acquired to be cash equivalents. |
Reclamation Bond | Reclamation bond constitutes cash held as collateral for the faithful performance of bond securing exploration permits and are accounted for on a cost basis. |
Financial Instruments | The Company’s financial instruments include cash and cash equivalents and reclamation bond. All instruments are accounted for on a cost basis, which, due to the short maturity of these financial instruments, approximates fair value at April 30, 2019. |
Fair Value Measures | When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At July 31, 2019 and April 30, 2019, the Company had no assets or liabilities accounted for at fair value on a recurring or nonrecurring basis. |
Mining Interests and Mineral Exploration Expenditures | Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mining properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mining interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. |
Pre-development Expenditures | Pre-development activities involve costs incurred in the exploration stage that may ultimately benefit production, such as underground ramp development, which are expensed due to the lack of evidence of economic development, which is necessary to demonstrate future recoverability of these costs. |
Equipment | Equipment is stated at cost. Significant improvements are capitalized and depreciated. Depreciation of equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Maintenance and repairs are charged to operations as incurred. Gains or losses on disposition or retirement of property and equipment are recognized in operating expenses. |
Reclamation and Remediation | The Company’s operations are subject to standards for mine reclamation that have been established by various governmental agencies. In the period in which the Company incurs a contractual obligation for the retirement of tangible long-lived assets, the Company will record the fair value of an asset retirement obligation as a liability. A corresponding asset will also be recorded and depreciated over the life of the asset. After the initial measurement of an asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. To date, the Company has not incurred any contractual obligation requiring recording either a liability or associated asset. |
Impairment of Long-lived Assets | The Company periodically reviews its long-lived assets to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted net future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the assets will be written down to fair value. |
Stock-based Compensation | The Company estimates the fair value of options to purchase common stock using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected life”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation. Options granted have a ten-year maximum term and varying vesting periods as determined by the Board of Directors. The value of shares of common stock awards is determined based on the closing price of the Company’s stock on the date of the award. |
Income Taxes | The Company accounts for income taxes using the liability method. The liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of (i) temporary differences between financial statement carrying amounts of assets and liabilities and their basis for tax purposes and (ii) operating loss and tax credit carryforwards for tax purposes. Deferred tax assets are reduced by a valuation allowance when management concludes that it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. |
Reclassifications | Certain reclassifications have been made to the prior year financial statements in order to compare to the current year financial statement presentation.. These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported. |
New Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Adoption of this update on May 1, 2019 had no impact on the Company’s financial statement. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation, Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of the standard for stock-based compensation to include share-based payment transactions for acquiring goods and services from nonemployees. ASU No. 2018-07 became effective for the Company on May 1, 2019. Adoption of this update on May 1, 2019 had no impact on the Company’s financial statement. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
NOTE 3 - EARNINGS PER SHARE (Ta
NOTE 3 - EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Dilutive securities | July 31, 2019 July 31, 2018 Stock options 6,645,000 6,650,000 Warrants 29,039,849 30,654,249 TOTAL POSSIBLE DILUTIVE SHARES 35,684,849 37,304,249 |
NOTE 4 - EQUIPMENT AND MINING_2
NOTE 4 - EQUIPMENT AND MINING INTEREST (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment and mining interest | July 31, 2019 April 30, 2019 Equipment $ 4,995 $ 32,002 Less accumulated depreciation (2,428 ) (29,019 ) Equipment, net of accumulated depreciation 2,567 2,983 Mining interest - Longstreet 476,124 464,124 TOTAL EQUIPMENT AND MINING INTEREST $ 478,691 $ 467,107 |
Future minimum required expenditures, annual payments, and number of stock options | Required expenditure January 17, 2018 through August 31, 2019 $ 500,000 September 1, 2019 through August 31, 2020 700,000 TOTAL $ 1,200,000 Cash payment (1) Stock options January 16, 2020 $ 45,000 50,000 Payment due upon transfer but no later than January 16, 2021 85,000 - TOTAL $ 130,000 50,000 (1) Does not include $12,000 annual advance royalty payment related to Clifford claims. |
NOTE 5 - OTHER ASSETS (Tables)
NOTE 5 - OTHER ASSETS (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Other Assets [Abstract] | |
Other assets | July 31, 2019 April 30, 2019 Option on water rights lease agreements, net $ 11,954 $ 15,735 Prepaid insurance and other expenses 9,243 9,667 Total 21,197 25,402 Less Other Assets - Current (20,740 ) (22,845 ) TOTAL OTHER ASSETS - NON-CURRENT $ 457 $ 2,557 |
NOTE 8 - WARRANTS (Tables)
NOTE 8 - WARRANTS (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Warrant activity | Warrants Weighted average exercise price Balance outstanding at April 30, 2018 and April 30, 2019 30,654,249 $ 0.16 Expired (1,614,400 ) (0.23 ) Balance outstanding at July 31, 2019 29,039,849 $ 0.16 |
Warrants outstanding | Issue Date Expiration Date Warrants Exercise Price Remaining life (years) October 12, 2015 October 12, 2020 4,241,000 $ 0.20 1.20 October 12, 2016 October 12, 2021 14,000,000 0.15 2.20 October 31, 2017 October 31, 2020 10,798,849 0.15 1.25 29,039,849 $ 0.16 1.70 |
NOTE 9 - STOCK OPTIONS (Tables)
NOTE 9 - STOCK OPTIONS (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Additional information about the options | Options outstanding and exercisable Date of Grant Shares Price Remaining Term October 18, 2016 4,810,000 $ 0.06 2.22 April 30, 2018 1,400,000 0.065 3.75 Total options 6,210,000 $ 0.06 2.67 |
Options outstanding and exercisable | Options issued for: Expiration Date Options Weighted Average Mining interests April 11, 2020 to January 15, 2029 435,000 $ 0.26 Stock option plan October 18, 2021 to April 30, 2023 6,210,000 0.06 Outstanding and exercisable at April 30, 2019 6,645,000 $ 0.07 |
NOTE 3 - EARNINGS PER SHARE (De
NOTE 3 - EARNINGS PER SHARE (Details) - shares | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Total possible dilutive shares | 35,684,849 | 37,304,249 |
Stock options | ||
Total possible dilutive shares | 6,645,000 | 6,650,000 |
Warrants | ||
Total possible dilutive shares | 29,039,849 | 30,654,249 |
NOTE 4 - EQUIPMENT AND MINING_3
NOTE 4 - EQUIPMENT AND MINING INTEREST (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Property, Plant and Equipment [Abstract] | ||
Equipment | $ 4,995 | $ 32,002 |
Less accumulated depreciation | (2,428) | (29,019) |
Equipment, net of accumulated depreciation | 2,567 | 2,983 |
Mining interest - Longstreet | 476,124 | 464,124 |
TOTAL EQUIPMENT AND MINING INTEREST | $ 478,691 | $ 467,107 |
NOTE 4 - EQUIPMENT AND MINING_4
NOTE 4 - EQUIPMENT AND MINING INTEREST (Details 1) | Jul. 31, 2019USD ($)shares |
Property, Plant and Equipment [Abstract] | |
January 17, 2018 through August 31, 2019 | $ 500,000 |
September 1, 2019 through August 31, 2020 | 700,000 |
TOTAL | 1,200,000 |
January 16, 2020 | 45,000 |
Payment due upon transfer but no later than January 16, 2021 | 85,000 |
TOTAL | $ 130,000 |
January 16, 2020, stock options | shares | 50,000 |
Payment due upon transfer but no later than January 16, 2021, stock options | shares | 0 |
TOTAL, stock options | shares | 50,000 |
NOTE 5 - OTHER ASSETS (Details)
NOTE 5 - OTHER ASSETS (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Other assets | $ 21,197 | $ 25,402 |
Other assets, current | (20,740) | (22,845) |
Other assets, non-current | 457 | 2,557 |
Option on water rights lease agreements, net | ||
Other assets | 11,954 | 15,735 |
Prepaid insurance and other expenses | ||
Other assets | $ 9,243 | $ 9,667 |
NOTE 6 - RELATED PARTY TRANSA_2
NOTE 6 - RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Rent expense | $ 0 | $ 750 |
NOTE 8 - WARRANTS (Details)
NOTE 8 - WARRANTS (Details) - $ / shares | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Warrants outstanding, beginning | 30,654,249 | 30,654,249 |
Warrants expired | (1,614,400) | (1,614,400) |
Warrants outstanding, ending | 29,039,849 | 29,039,849 |
Weighted average exercise price, beginning | $ 0.16 | $ 0.16 |
Weighted average exercise price expired | (0.23) | (0.23) |
Weighted average exercise price, ending | $ 0.16 | $ 0.16 |
NOTE 8 - WARRANTS (Details 1)
NOTE 8 - WARRANTS (Details 1) - $ / shares | 3 Months Ended | |||
Jul. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | |
Warrants | 29,039,849 | 30,654,249 | 29,039,849 | 30,654,249 |
Exercise price | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 |
Remaining life (years) | 1 year 8 months 12 days | |||
Warrant 1 | ||||
Warrants | 4,241,000 | |||
Exercise price | $ 0.2 | |||
Remaining life (years) | 1 year 2 months 12 days | |||
Warrant 2 | ||||
Warrants | 14,000,000 | |||
Exercise price | $ 0.15 | |||
Remaining life (years) | 2 years 2 months 12 days | |||
Warrant 3 | ||||
Warrants | 10,798,849 | |||
Exercise price | $ 0.15 | |||
Remaining life (years) | 1 year 3 months |
NOTE 9 - STOCK OPTIONS (Details
NOTE 9 - STOCK OPTIONS (Details) | 3 Months Ended |
Jul. 31, 2019$ / sharesshares | |
Options outstanding and exercisable, shares | shares | 6,645,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.07 |
2011 Stock Option/Restricted Stock Plan | |
Options outstanding and exercisable, shares | shares | 6,210,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.06 |
Options outstanding and exercisable, remaining term | 2 years 8 months 1 day |
2011 Stock Option/Restricted Stock Plan | Stock Option 1 | |
Options outstanding and exercisable, shares | shares | 4,810,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.06 |
Options outstanding and exercisable, remaining term | 2 years 2 months 19 days |
2011 Stock Option/Restricted Stock Plan | Stock Option 2 | |
Options outstanding and exercisable, shares | shares | 1,400,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.065 |
Options outstanding and exercisable, remaining term | 3 years 9 months |
NOTE 9 - STOCK OPTIONS (Detai_2
NOTE 9 - STOCK OPTIONS (Details 1) | Jul. 31, 2019$ / sharesshares |
Options outstanding and exercisable, shares | shares | 6,645,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.07 |
Mining Interest | |
Options outstanding and exercisable, shares | shares | 435,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.26 |
2011 Stock Option/Restricted Stock Plan | |
Options outstanding and exercisable, shares | shares | 6,210,000 |
Options outstanding and exercisable, price | $ / shares | $ 0.06 |