Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | TGS International Ltd. | ||
Entity Central Index Key | 0001701859 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Common Stock Shares Outstanding | 14,962,298 | ||
Entity Public Float | $ 5,394,040 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 69,401 | $ 106,850 |
Other receivables | 532,943 | 459,846 |
Prepayments and deposits | 205,169 | 197,995 |
Accounts receivable | 787,023 | 58,825 |
Total current assets | 1,594,536 | 823,516 |
Non-current assets | ||
Property, plant and equipment | 2,307,570 | 2,406,368 |
Intangible assets | 1,097,362 | 1,097,362 |
Right-of-use assets | 0 | 189,456 |
Deposit | 50,299 | 0 |
Total assets | 5,049,767 | 4,516,702 |
Current liabilities | ||
Accounts payable | 457,824 | 9,769 |
Accrued charges | 123,241 | 228,283 |
Other payables | 1,568,875 | 1,304,355 |
Lease liabilities | 0 | 189,456 |
Income tax payable | 22,951 | 0 |
Amount due to a director | 77,964 | 73,950 |
Loan from a related person | 386,916 | 385,158 |
Convertible bond payable, net | 190,954 | 187,995 |
Other loan | 27,837 | 0 |
Total current liabilities | 2,856,562 | 2,378,966 |
Non-current liabilities | ||
Amounts due to stockholders | 376,246 | 872,968 |
Amounts due to directors | 951,569 | 45,045 |
Other loan | 147,326 | 132,423 |
Provision for asset retirement obligations | 35,350 | 33,443 |
Provision for exploration asset compensation | 119,336 | 98,742 |
Total liabilities | 4,486,389 | 3,561,587 |
Commitments | 0 | 0 |
Capital Stock | ||
-Preferred stock, $0.0001 par value; 100,000,000 shares authorized, nil issued and outstanding | 0 | 0 |
-Common stock, $0.0001 par value; 200,000,000 shares authorized, 14,962,298 shares issued and outstanding as of December 31, 2020 and 14,790,896 shares issued and outstanding as of December 31, 2019 | 1,496 | 1,479 |
Additional paid in capital | 11,483,220 | 10,824,927 |
Accumulated deficit | (10,951,630) | (9,733,167) |
Accumulated other comprehensive income/(loss) | 30,292 | (138,124) |
Total stockholders' equity | 563,378 | 955,115 |
Total liabilities and stockholders' equity | $ 5,049,767 | $ 4,516,702 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' equity | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 14,962,298 | 14,790,896 |
Common stock, shares outstanding | 14,962,298 | 14,790,896 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 753,694 | $ 282,857 |
Cost, expenses and other: | ||
Exploration | (467,745) | (737,248) |
Selling and distribution | (102,715) | (105,279) |
Depreciation of factory equipment | (33,478) | (28,898) |
Administrative | (1,252,925) | (1,645,900) |
Loss from operations | (1,103,169) | (2,234,468) |
Other income | 31,958 | 195,576 |
Interest expense | (124,040) | (76,824) |
Loss before provision for income taxes | (1,195,251) | (2,115,716) |
Income taxes | (23,212) | 0 |
Net loss | (1,218,463) | (2,115,716) |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 168,416 | 129,599 |
Comprehensive loss | $ (1,050,047) | $ (1,986,117) |
Net loss per share: | ||
Basic and Diluted net loss per share | $ (0.08) | $ (0.15) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 14,900,748 | 14,532,189 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) | Total | Common Stock | Accumulated Deficit | Additional Paid-In Capital | Accumulated other comprehensive (loss)/income |
Balance, shares at Dec. 31, 2018 | 14,165,000 | ||||
Balance, amount at Dec. 31, 2018 | $ 1,053,486 | $ 1,417 | $ (7,617,451) | $ 8,937,243 | $ (267,723) |
Proceeds from issuance of common stock, shares | 625,896 | ||||
Proceeds from issuance of common stock, amount | 1,887,746 | $ 62 | 0 | 1,887,684 | 0 |
Net loss | (2,115,716) | 0 | (2,115,716) | 0 | 0 |
Foreign currency translation adjustments | 129,599 | $ 0 | 0 | 0 | 129,599 |
Balance, shares at Dec. 31, 2019 | 14,790,896 | ||||
Balance, amount at Dec. 31, 2019 | 955,115 | $ 1,479 | (9,733,167) | 10,824,927 | (138,124) |
Proceeds from issuance of common stock, shares | 171,402 | ||||
Proceeds from issuance of common stock, amount | 658,310 | $ 17 | 0 | 658,293 | 0 |
Net loss | (1,218,463) | 0 | (1,218,463) | 0 | 0 |
Foreign currency translation adjustments | 168,416 | $ 0 | 0 | 0 | 168,416 |
Balance, shares at Dec. 31, 2020 | 14,962,298 | ||||
Balance, amount at Dec. 31, 2020 | $ 563,378 | $ 1,496 | $ (10,951,630) | $ 11,483,220 | $ 30,292 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (1,218,463) | $ (2,115,716) |
Adjustments to reconcile net loss to net cash used in operating activities:- | ||
Depreciation of property, plant and equipment | 48,884 | 51,898 |
Loss on disposal of property, plant and equipment | 4,089 | 0 |
Net foreign exchange losses | 327,779 | 246,346 |
Stock compensation expenses | 0 | 122,100 |
Waiver of consultancy fee | 0 | (34,556) |
Write back of receipt in advance | 0 | (160,542) |
Amortization of right-of-use asset | 202,357 | 206,643 |
Amortization of non-cash interest expenses and bond discount related to convertible bonds | 21,059 | 13,732 |
Non-cash interest expenses related to other loans | 17,603 | 0 |
Changes in assets and liabilities:- | ||
Accounts receivable | (727,979) | (60,314) |
Other receivables | (68,596) | (394,560) |
Prepayments and deposits | (48,607) | (56,795) |
Accrued charges | (125,594) | (40,022) |
Accounts and other payables | 648,012 | 1,196,364 |
Income tax payable | 23,212 | 0 |
Lease liabilities | (202,357) | (206,643) |
Provision for asset retirement obligations | 3,300 | 3,179 |
Provision for exploration asset compensation | 24,877 | 0 |
Net cash used in operating activities | (1,070,424) | (1,228,886) |
Cash flows from investing activities | ||
Proceeds from the sale of property, plant and equipment | 1,065 | 0 |
Acquisition of property, plant and equipment | (56,481) | (976,818) |
Net cash used in investing activities | (55,416) | (976,818) |
Cash flows from financing activities | ||
Advances from stockholders | 726,362 | 517,329 |
Repayment to stockholders | (20,156) | 0 |
Advances from directors | 139,819 | 165,392 |
Repayment to a director | (112,938) | 0 |
Repayment of loan from a related person | 0 | (127,648) |
Proceeds from issuance of common stock | 0 | 825,000 |
Proceeds from new loan - other | 25,641 | 131,663 |
Proceeds from issuance of convertible bonds | 333,332 | 705,128 |
Net cash provided by financing activities | 1,092,060 | 2,216,864 |
Net (decrease)/increase in cash and cash equivalents | (33,780) | 11,160 |
Effect of exchange rate changes on cash and cash equivalents | (3,669) | (2,431) |
Cash and cash equivalents, beginning of year | 106,850 | 98,121 |
Cash and cash equivalents, end of year | 69,401 | 106,850 |
Supplemental disclosures:- | ||
Interest paid | 54,148 | 66,377 |
Income tax paid | 0 | 0 |
Cash paid for amounts included in measurement of lease liabilities | 202,357 | 206,643 |
Non-cash investing and financing transactions:- | ||
Capitalization of advances from stockholders | 261,274 | 0 |
Capitalization of advances from a director | 55,238 | 121,133 |
Capitalization of loans from related persons | 0 | 289,578 |
Recognition of Beneficial Conversion Feature ("BCF") discount at inception of convertible bond | 7,771 | 16,047 |
Conversion of convertible bond and accrued interest into common stock | 334,027 | 513,888 |
Stock compensation expenses | 122,100 | |
Right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 369,874 |
NATURE OF OPERATIONS AND GOING
NATURE OF OPERATIONS AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2020 | |
NATURE OF OPERATIONS AND GOING CONCERN | |
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN | TGS International Ltd. (“TGS”, “the Company”) was incorporated in the state of Nevada, United States on December 1, 2016. On September 14, 2018, the Company entered into a Share Exchange Agreement with Arcus Mining Holdings Limited (“Arcus”) and Chi Kin Loo, Billion Plus Limited, First Fortune Investment Limited, Great Win Limited and Master Value Holdings Limited (the “Selling Stockholders”), pursuant to which the Selling Stockholders agreed to sell all of their ordinary shares of Arcus to the Company in exchange for an aggregate of 7,000,000 shares of common stock of the Company. Arcus, which was incorporated in the Republic of Seychelles on June 17, 2014, and its subsidiaries are engaged in fluorite mining operations in Mongolia, including the processing and sales of fluorite products. Up to December 31, 2020 and the date of this report, the Company owns three mining rights in Mongolia (Mining license numbers: MV-016819, MV-017305 and MV-009918). For the year ended December 31, 2020, the Company has adopted open-pit mining at Mine A which is located in Uulbayansoum, Sukhbaatar province (Mining license number: MV-009918). Due to COVID-19, the Mongolian Government has closed all ports of entry from and into China since early 2020. The Company could not perform any exploration work at Mine B which is located in Bayan-Ovoo soum, Khentii province (Mining license number: MV-016819) during 2020. Going Concern The Company incurred an operating loss of $1,218,463 for the year ended December 31, 2020, and as of that date, the Company’s current liabilities exceeded its current assets by $1,262,026. Notwithstanding the operating loss incurred for the year ended December 31, 2020 and the net current liabilities as of December 31, 2020, the accompanying consolidated financial statements have been prepared on a going concern basis. Since the Company is currently in the exploration stage, it is still in the capital investing period. Management has prepared a business cash flow forecast and it indicates that the Company will have positive cash inflow after the commencement of formal production in 2022. Management believes the Company will have sufficient working capital to meet its financing requirements for the next 12 months based on the financial support of certain stockholders, issuance of new convertible bonds, proceeds from unrelated party loans and upon their experience and their assessment of the Company’s projected performance, production ability and product market. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of consolidation These consolidated financial statements include the accounts of the Company, TGS, and all of the wholly owned subsidiaries of TGS. All intercompany balances have been eliminated in consolidation. Use of estimates in the preparation of consolidated financial statements The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the consolidated financial statements include, but are not limited to, deferred tax valuation allowances, income-tax uncertainties, assumptions used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, depreciation and amortization periods, recoverability of long-lived assets including intangible assets, valuation of warrant equity, and valuation and impairment losses on mining rights and valuation of asset retirement obligations and exploration asset compensation. Concentration and credit risks Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. All of the Company’s cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date. The Company does not require collateral or other securities to support financial instruments that are subject to credit risk. The Company operates principally in the People’s Republic of China (“PRC”) (including Hong Kong) and Mongolia and grants credit to its customers in these geographic regions. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations. As of December 31, 2020 and 2019, the Company had credit risk exposure of uninsured cash and deposits with maturities of less than one year in banks of $25,625 and $96,495, respectively. The net sales to customers representing at least 10% of net total sales are as follows: Year ended December 31, 2020 Amount % Customer A $ 700,762 93 Year ended December 31, 2019 Amount % Customer B $ 40,907 15 Customer C 60,314 21 Customer D 181,636 64 $ 282,857 100 The following customers had balances of at least 10% of the total accounts receivable as follows: Year ended December 31, 2020 Amount % Customer A $ 681,503 87 Customer C 105,520 13 $ 787,023 100 Year ended December 31, 2019 Amount % Customer C $ 58,825 100 Accounts receivable Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in administrative expenses. The Company recognizes an allowance for doubtful receivables to ensure accounts and other receivables are not overstated due to uncollectibility. Allowance for doubtful receivables is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional allowance for individual accounts is recorded when the Company becomes aware of customers’ or other debtors’ inability to meet their financial obligations, such as bankruptcy filings or deterioration in the customer’s or other debtor’s operating results or financial position. If circumstances related to customers or debtors change, estimates of the recoverability of receivables will be further adjusted. Accounts receivable are written off when deemed uncollectible. As of December 31, 2020 and 2019, there were no allowance of accounts receivable. Cash and cash equivalents Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less. As of December 31, 2020 and 2019, the Company’s cash amounted to $69,401 and $106,850, respectively, and there were no cash equivalents. Intangible assets Intangible assets consist of acquired mining rights and are initially measured at fair value as at the date of acquisition. Following the initial recognition, intangible assets are stated at cost less accumulated amortization and impairment losses. Intangible assets are amortized on the units-of-production method utilizing only proven and probable fluorite reserves in the depletion base. Property, plant and equipment (i) Property, plant and equipment are stated at cost less accumulated depreciation. Buildings are depreciated on a straight-line basis over 15 to 40 years, representing the shorter of the remaining term of the mining right or the expected useful life to the Company. (ii) Other categories of property, plant and equipment are recorded at cost and depreciated to their estimated residual values using the straight-line method over their estimated useful lives, as follows: · Leasehold improvements: 5 years or, if shorter, the remaining term of the lease · Furniture and equipment: 3 to 10 years · Motor vehicles: 3 to 10 years · Factory equipment: 3 to 10 years · Mineral properties: Unit-of-production (iii) Normal repairs and maintenance are charged to operating expenses as incurred, while costs incurred that extend the useful life of an asset, improve the safety of our operations, or improve operating efficiency are capitalized. Impairment of long-lived assets The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows or upon an estimate of fair value that may be received in an exchange transaction. Future cash flows are estimated based on quantities of recoverable minerals, expected fluorite prices, production levels and operating costs of production and capital, based upon the projected remaining future fluorite production from each mining site. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of fluorite that will be obtained after taking into account losses during processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, fluorite prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties. As of December 31, 2020 and 2019, there was no impairment of long-lived assets. Income taxes Deferred income taxes are provided using the asset and liability method in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 740, “Income Taxes”. Under this method, deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as a non-current asset or liability. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax assets will not be realized. FASB ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides accounting guidance on de-recognition, classification, interest and penalties, accounting in years, disclosure and transition. Interest and penalties from tax assessments, if any, are included in income taxes in the statements of operations and comprehensive income. A tax position must be more likely than not of being sustained in order to be recognized in the consolidated financial statements. As of December 31, 2020 and 2019, the Company did not have any uncertain tax positions or accrued interest and penalties related to uncertain tax positions. The Company does not expect to have a material change to its income tax provisions in the next year. Restoration and remediation costs (Asset retirement obligations) In Mongolia, the mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its mine projects to the pre-existing mine area average quality after completion of the mining activities. Future reclamation and remediation costs, which include extraction equipment removal and environmental remediation, are accrued at the end of each period based on management’s best estimate of the costs expected to be incurred for each project. Such estimates consider the costs of future surface and groundwater activities, current regulations, actual expenses incurred, and technology and industry standards. In accordance with FASB ASC 410, “Asset Retirement and Environmental Obligations”, the Company capitalizes the measured fair value of asset retirement obligations to mineral properties. The asset retirement obligations are accreted to an undiscounted value until the time at which they are expected to be settled. The accretion expense is charged to earnings and the actual retirement costs are recorded against the asset retirement obligations when incurred. Any difference between the recorded asset retirement obligations and the actual retirement costs incurred will be recorded as a gain or loss in the period of settlement. On a regular basis, the Company reviews the assumptions used to estimate the expected cash flows required to settle the asset retirement obligations, including changes in estimated probabilities, amounts and timing of the settlement of the asset retirement obligations, as well as changes in any regulatory or legal obligations for each of its mineral projects. Changes in any one or more of these assumptions may cause revision of asset retirement obligations for the corresponding assets. Revenue recognition The Company recognizes revenue in accordance with ASC 606 when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue when it satisfies a performance obligation in accordance with the provisions of a customer order or contract. This is achieved when control of the product has been transferred to the customer, which is generally determined when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. The sales of the Company’s products to its customers represent a single performance obligation for which revenue is recognized at a point in time. Based on the foregoing, no significant judgment is required to determine when control of a product has been transferred to a customer. The Company measures revenue based on the consideration it expects to be entitled to receive in exchange for its products. The standard terms and conditions of customer orders and contracts does not provide its customers with the right of return (except for quality), price protection, rebates or discounts. All sales are based on firm customer orders with fixed terms and conditions, which generally cannot be modified. See note 13 regarding the Company’s revenue disaggregated by reporting segment. Provision for exploration asset compensation The Government of Mongolia issued a policy that requires all mining companies to pay compensation to the Government if the exploration work on their mining license area was funded by the Government. The compensation amount for the exploration work done has been estimated by the Mineral Resources and Petroleum Authority of Mongolia. The provision for exploration expenditure is calculated as the discounted net present value of estimated future net cash outflows of the reclamation and closure costs. Exploration costs Exploration costs are expensed as incurred. Costs to identify new mineral resources and to evaluate potential resources are considered exploration costs. Selling and distribution costs Selling and distribution costs included transportation and handling costs related to the movement of finished goods from mines to customer designated locations, security fee, royalty and custom tax. Administrative expenses Administrative expenses include salaries and benefits, consulting, audit, tax, legal, insurance, rent, utilities, net foreign exchange losses, and other general operating expenses. Shipping and handling costs Shipping and handling costs are expensed as incurred. Foreign currency transactions and translations These consolidated financial statements are presented in United States dollars (“USD”), which is different from TGS subsidiaries’ functional currencies. The functional currency of the subsidiaries in Mongolia, Khan Shashir LLC and Shek Hung Gold LLC, is the Mongolian Tugrik (“MNT”). The functional currency of the subsidiary in the People’s Republic of China (“PRC”), Best Metro Import & Export Trading (Inner Mongolia) Limited is the Chinese Renminbi (“RMB”), while the functional currency of all other subsidiaries is the Hong Kong dollar (“HKD”). The functional currency of TGS is the USD. The financial statements of foreign subsidiaries where HKD, MNT and RMB are the functional currencies and which have transactions denominated in non-HKD/MNT/RMB currencies are translated into HKD/MNT/RMB at the exchange rates existing on that date. The translation of local currencies into HKD/MNT/RMB creates transaction adjustments which are included in administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The amounts of foreign currency translation were ($327,779) and ($246,346) for the years ended December 31, 2020 and 2019, respectively. The financial statements of TGS’s foreign subsidiaries, where non-USD currencies are the functional currencies, are translated into USD using exchange rates in effect at period end for assets and liabilities and average exchange rates during each reporting period for the statement of operations. Adjustments resulting from translation of these financial statements are reflected as a separate component of stockholders’ deficit. Comprehensive loss Comprehensive loss is defined as all changes in equity/(deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive loss includes net loss and changes in certain assets and liabilities that are reported directly in equity. Basic and Diluted Loss per Share The Company computes loss per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common stock equivalents outstanding during the period. Dilutive loss per share excludes all common stock equivalents if their effect is anti-dilutive. As of December 31, 2020, the Company had warrants and convertible bonds outstanding which could potentially dilute basic loss per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive due to the net losses. Fair value measurement The Company complies with FASB ASC 820, “Fair Value Measurements”, which clarifies the definition of fair value, prescribes methods for measuring fair value and establishes a fair value hierarchy to classify the inputs used in measuring fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:- Level 1 Level 2 Level 3 Financial instruments are measured as follows:- The notional amounts of financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of balances with related parties have not been determined as the timing of the expected cash flows of these balances cannot be reasonably determined because of the relationship. Conversion Option – Convertible bonds The Company accounts for convertible bond in accordance with the guidelines established by ASC 470-20, “Debt with Conversion and Other Options”. The Company separates the convertible bond into liability and equity components. The Beneficial Conversion Feature ("BCF") of a convertible bond, which is the equity component and recorded as additional paid-in capital, is normally characterized as the convertible portion or feature of certain bonds payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible bond when issued. To determine the effective conversion price, the Company first allocates the proceeds received to the convertible instrument, and then uses those allocated proceeds to determine the effective conversion price. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible instrument on the proceeds allocated to that instrument. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid in capital, resulting in a discount to the convertible instrument. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The discount is amortized to interest expense over the expected term of the convertible bonds using the effective interest method. Warrants ASC 815-40, “Contracts in Entity’s Own Equity”, requires freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of ASC 815-40, a contract designated as an asset or a liability must be carried at fair value on a company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments are required from period to period. Lease The Company determines if an arrangement is a lease at inception of the contract. Leases are recorded in "Right-of-use ("ROU") assets" and "lease liabilities" in the Company's consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date for determining the present value of lease payments. Lease term includes the effects of options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. Recent changes in accounting standards Pending Adoption as at year end In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to ASC 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. ASC 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASC 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes”. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in ASC 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In August 2020, the FASB issued No. ASU 2020-06, “Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815-40)”. This ASU simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company. |
PROPERTY PLANT AND EQUIPMENT
PROPERTY PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY PLANT AND EQUIPMENT | |
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment include the following:- December 31, 2020 December 31, 2019 Buildings $ 152,902 $ 159,364 Leasehold improvements - 120,524 Furniture, fixture and equipment 67,770 66,582 Motor vehicles 314,776 338,320 Factory equipment 216,801 230,290 Mineral properties 1,322,125 1,375,608 Less: accumulated depreciation (431,378 ) (522,609 ) 1,642,996 1,768,079 Construction in progress 664,574 638,289 Total property, plant and equipment $ 2,307,570 $ 2,406,368 Construction in progress is mainly related to a power station under construction and stall cables to be used during the construction of the shaft at the mine sites. During the years ended December 31, 2020 and 2019, depreciation expenses charged to the consolidated statements of operations amounted to $48,884 ($15,406 to administrative expenses and $33,478 to depreciation of factory equipment) and $51,898 ($23,000 to administrative expenses and $28,898 to depreciation of factory equipment), respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
INTANGIBLE ASSETS | |
NOTE 4 - INTANGIBLE ASSETS | Intangible assets consist of acquired mining rights. As of December 31, 2020 and 2019, the Company owned three mining rights in Mongolia. Cost At December 31, 2020 and 2019 $ 1,097,362 Accumulated amortization and impairment loss At December 31, 2020 and 2019 - Net book value At December 31, 2020 $ 1,097,362 At December 31, 2019 $ 1,097,362 As of December 31, 2020, future minimum amortization expenses in respect of intangible assets are as follows: Year ending December 31, 2021 $ - 2022 70,304 2023 75,991 2024 80,854 2025 81,848 Thereafter 788,365 $ 1,097,362 |
LEASING ARRANGEMENT
LEASING ARRANGEMENT | 12 Months Ended |
Dec. 31, 2020 | |
LEASING ARRANGEMENT | |
NOTE 5 - LEASING ARRANGEMENT | The Company leases certain office and warehouse spaces under operating leases in Hong Kong and Mongolia. Operating lease assets and obligations are reflected within right-of-use asset, and current lease liability respectively, on the consolidated balance sheet. The discount rate implicit within the leases is generally not determinable and therefore the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for the leases is determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral. The weighted average discount rate used to measure the operating lease liabilities in 2020 and 2019 was 11%. December 31, 2020 December 31, 2019 Assets Right-of-use assets $ - $ 189,456 Liabilities Current portion of operating lease liabilities $ - $ 189,456 Total lease liabilities $ - $ 189,456 Maturity Analysis of Lease Liabilities: December 31, 2020 December 31, 2019 December 31, 2020 $ - $ 217,033 December 31, 2021 13,284 4,106 Total lease payments, undiscounted 13,284 221,139 Less short-term lease payments (13,284 ) (20,564 ) Less amount of lease payment representing interest - (11,119 ) Total present value of lease payments - 189,456 Less: Current portion of operating leases liabilities - (189,456 ) Non-current operating leases liabilities $ - $ - Lease costs for all operating leases classified under ASC 842 for the years ended December 31, 2020 and 2019 were $202,357 and $206,643 respectively. Supplemental cash flow and other information related to leases is as follows: December 31, 2020 December 31, 2019 Total lease liabilities $ - $ 189,456 Cash payment for amounts included in the measurement of lease liabilities within operating cash flows $ 202,357 $ 206,643 Weighted average remaining lease term (years) - 0.97 Weighted average discount rate 11 % 11 % |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
NOTE 6 - INCOME TAXES | The Company is subject to tax on an entity basis on income arising in or derived from the United States of America, Republic of Seychelles, Mongolia, PRC and Hong Kong. United States Tax The federal income tax rate in the United States is 21%. The Company is subject to income taxes in the United States of America for each of the years ended December 31, 2020 and 2019. Seychelles Tax The statutory tax rate in the Republic of Seychelles is 25% on the first 1 million Seychelles Rupee of taxable income and 33% on the remainder. The Company is subject to income taxes in the Republic of Seychelles for each of the years ended December 31, 2020 and 2019. Hong Kong Tax BMHK, AHK and CAHK are subject to Hong Kong profits tax at the rate of 16.5% on the assessable profits. No provision for Hong Kong profits tax has been made as these companies incurred a loss for each of the years ended December 31, 2020 and 2019. Mongolia Corporate Income Tax KSS and SHG are registered and operate in Mongolia and are subject to Mongolia Corporate Income Tax at the rate of 10% on taxable income below MNT6 billion (2019: MNT3 billion), or MNT600 million (2019: MNT300 billion) plus 25% on taxable income exceeding MNT6 billion for the year ended December 31, 2020 (2019: MNT3 billon). Provision for Mongolia corporate income tax has been made for the year ended December 31, 2020 as SHG generated profits in the current year (2019: Nil). No provision for Mongolia corporate income tax has been made for KSS as it incurred a loss for each of the years ended December 31, 2020 and 2019. PRC Enterprise Income Tax BMIM is subject to PRC Enterprise Income Tax at the statutory rate of 25%. No provision for PRC Enterprise Income Tax has been made as this company incurred a loss for each of the years ended December 31, 2020 and 2019. The Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 are attributable to the following: As of December 31, 2020 December 31, 2019 Tax loss carry forwards $ 406,048 $ 301,091 Less: Valuation allowance (406,048 ) (301,091 ) $ - $ - Changes in valuation allowance are as follows: As of December 31, 2020 December 31, 2019 Beginning balance $ 301,091 $ 287,735 Increase in valuation allowance 100,769 13,011 Exchange difference 4,188 345 Ending balance $ 406,048 $ 301,091 As of December 31, 2020 and 2019, the Hong Kong subsidiaries have tax losses arising in Hong Kong of approximately $2,165,359 (2019: $1,602,522) that are available indefinitely for offsetting against their future taxable profits. The PRC subsidiary has tax losses arising in PRC of approximately $195,057 (2019: $146,700) that are available for offsetting against its future taxable profits, which expire between 2022-2025 and between 2022-2024, respectively. The Company had total accumulated tax losses amounting to approximately $2,360,416 and $1,749,222 (the tax effect thereon being approximately $406,048 and $301,091), respectively, subject to the final agreement by the relevant tax authorities, which may be carried forward and applied to reduce future taxable income which is earned in or derived from the jurisdictions in which the tax losses were incurred. Realization of deferred tax assets associated with tax loss carry forwards is dependent upon generating sufficient taxable income prior to their expiration. A full valuation allowance is established against such tax losses at each balance sheet date since management believes it is more likely than not that such tax losses will not be utilized. A reconciliation of the income tax expense to the amount computed by applying the statutory tax rate of 21% to the loss before income taxes in the consolidated statements of operations and comprehensive loss is as follows:- December 31, 2020 December 31, 2019 Loss before income taxes $ (1,195,251 ) $ (2,115,716 ) Tax loss at the statutory tax rate of 21% (251,003 ) (444,300 ) Effect of different tax rates in other jurisdictions (30,398 ) (12,910 ) Non-deductible items 210,460 488,717 Non-taxable items (5,964 ) (44,518 ) Change in valuation allowance 100,769 13,011 Tax effect of temporary differences not recognized (652 ) - Income tax expense $ 23,212 $ - |
OTHER PAYABLES
OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2020 | |
OTHER PAYABLES | |
NOTE 7 - OTHER PAYABLES | As of December 31, 2020 December 31, 2019 Tax and social insurance payable $ 86,601 $ 53,087 Contract liabilities 296,657 289,786 Temporary receipts 739,948 720,278 Other payables 445,669 241,204 $ 1,568,875 $ 1,304,355 Contract liabilities are consideration received from the customers or billed in advance of providing goods or services promised in the future. The Company defers recognizing this consideration as revenue until it has satisfied the related performance obligation to the customer. Temporary receipts represented the fund received from Yantai Fulin Mining Machinery Co., Ltd, a strategic partner of the Company, to build a refinery factory in Mongolia. |
CONVERTIBLE BONDS
CONVERTIBLE BONDS | 12 Months Ended |
Dec. 31, 2020 | |
CONVERTIBLE BONDS | |
NOTE 8 - CONVERTIBLE BONDS | As of December 31, 2020 and 2019, the Company had the following convertible bond outstanding: As of December 31, 2020 December 31, 2019 Principal Accrued Interest Principal Accrued Interest November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 $ 192,308 $ 10,564 $ 192,308 $ 930 Less: Bond discount (1,354 ) - (4,313 ) - $ 190,954 $ 10,564 $ 187,995 $ 930 For the year ended December 31, 2020, four new convertible bond agreements were entered into between the Company, Arcus and third party investors. All of them matured during the year and were settled by issuing 92,275 common shares at a price stated in the respective agreements, representing loans of HK$2.6 million and interest expenses of HK$5,521, for a total of HK$2,605,521 (equivalent to $334,027) (see note 12). In addition, the Company recognized a beneficial conversion feature discount to the bond of $7,390 that was amortized during the year. Additionally, the Company recognized non-cash interest of $695 on these bonds. For the year ended December 31, 2019, four convertible bond agreements were entered into between the Company, Arcus and third party investors. Three of the bonds matured in 2019 and were settled by issuing 141,782 common shares at a price stated in the respective agreements, representing loans of HK$4 million and interest expenses of HK$8,333, for a total of HK$4,008,333 (equivalent to $513,888) (see note 12). In addition, the Company recognized a beneficial conversion feature discount to the bond of $10,705 that was amortized during the preceding year. Additionally, the Company recognized non-cash interest of $1,068 on these bonds. On November 26, 2019, a convertible bond agreement was signed including a HK$1.5 million (equivalent to $192,308) loan bearing interest of 5% per annum for six months. The convertible bond originally matured on May 25, 2020 with a conversion price of $3.60 per share. In addition, the Company recognized a beneficial conversion feature discount to the bond of $5,342 that is being amortized over the period using the effective interest method. On May 11, 2020, the Company signed an extension letter with the bondholder to extend the maturity date from May 25, 2020 to September 30, 2020. Therefore, the Company recognized an additional beneficial conversion feature discount to the bond of $234 that is being amortized over the period using the effective interest method. On September 11, 2020, the Company signed an extension letter with the bondholder to further extend the maturity date from September 30, 2020 to April 30, 2021. Therefore, the Company further recognized an additional beneficial conversion feature discount to the bond of $147 that is being amortized over the period using the effective interest method. For the year ended December 31, 2020, the Company amortized $3,340 (2019: $1,029) of the discount and recognized non-cash interest of $9,634 (2019: $930) to interest expenses. The unamortized debt discount on the convertible bond as of December 31, 2020 was $1,354 (2019: $4,313). |
OTHER LOANS
OTHER LOANS | 12 Months Ended |
Dec. 31, 2020 | |
OTHER LOANS | |
NOTE 9 - OTHER LOANS | As of December 31, 2020 and December 31, 2019, a loan of $147,326 and $132,423 respectively was borrowed from an unrelated party. The loan is unsecured, has no collateral or guarantee and carries interest at 11.61% per annum and repayable on December 31, 2029. As of December 31, 2020, a loan of HK$217,133 (equivalent to $27,837) was borrowed from an unrelated party. The loan is unsecured, has no collateral or guarantee and carries interest at 10% per annum and repayable on June 23, 2021. |
PROVISION FOR ASSET RETIREMENT
PROVISION FOR ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2020 | |
PROVISION FOR ASSET RETIREMENT OBLIGATIONS | |
NOTE 10 - PROVISION FOR ASSET RETIREMENT OBLIGATIONS | The Company’s asset retirement obligations relate to future remediation and decommissioning activities at the three fluorite mines. At December 31, 2018 31,383 Additions 3,179 Exchange adjustments (1,119 ) At December 31, 2019 33,443 Additions 3,300 Exchange adjustments (1,393 ) At December 31, 2020 $ 35,350 |
PROVISION FOR EXPLORATION ASSET
PROVISION FOR EXPLORATION ASSET COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
PROVISION FOR EXPLORATION ASSET COMPENSATION | |
NOTE 11 - PROVISION FOR EXPLORATION ASSET COMPENSATION | At December 31, 2018 102,127 Exchange adjustments (3,385 ) At December 31, 2019 98,742 Additions 24,877 Exchange adjustments (4,283 ) At December 31, 2020 $ 119,336 |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2020 | |
Capital Stock | |
NOTE 12 - CAPITAL STOCK | For the year ended December 31,2019, the Company issued a second subscription package (the “Second Subscription Package”) of up to $825,000, consisting of 330,000 common shares and 66,000 warrants exercisable at $3.00 to purchase common stock within three years from the respective issuance dates, to accredited investors. The Company also issued to the placement agent 33,000 common shares at a price of $3.70 per common share for the services rendered (equivalent to $122,100). For the year ended December 31, 2019, there were four convertible bond agreements entered into between the Company, Arcus and third party investors. Three of the bonds matured in 2019 and were settled by issuing 141,782 common shares at a price stated in the respective agreements, representing loans of HK$4 million and interest expenses of HK$8,333, for a total of HK$4,008,333 (equivalent to $513,888). On May 15, 2019, the Company issued 88,018 common shares at a price of $3.29 per share to settle the loans from related persons of HK$2 million and accrued interest expenses of HK$258,709, for a total of HK$2,258,709 (equivalent to $289,578). On September 29, 2019, the Company issued 33,096 common shares at a price of $3.66 per share to settle the amount due to a director of HK$944,832 (equivalent to $121,133). For the year ended December 31, 2020, there were a total of four new convertible bond agreements entered into between the Company, a subsidiary of the Company, Arcus Mining Holdings Limited (“Arcus”), and third party investors. On January 2, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On February 1, 2020, the convertible bond matured and was settled by issuing 53,236 common shares at a price of $3.62 per share representing loans of HK$1.5 million and interest expenses of HK$3,185, for a total of HK$1,503,185 (equivalent to $192,708). On January 14, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On February 13, 2020, the convertible bond matured and was settled by issuing 14,196 common shares at a price of $3.62 per share representing loans of HK$400,000 and interest expenses of HK$849, for a total of HK$400,849 (equivalent to $51,389). On February 24, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On March 25, 2020, the convertible bond matured and was settled by issuing 7,098 common shares at a price of $3.62 per share representing loans of HK$200,000 and interest expenses of HK$425, for a total of HK$200,425 (equivalent to $25,695). On February 29, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On March 30, 2020, the convertible bond matured and was settled by issuing 17,745 common shares at a price of $3.62 per share representing loans of HK$500,000 and interest expenses of HK$1,062, for a total of HK$501,062 (equivalent to $64,235). On April 20, 2020, the Company issued 25,641 common shares at a price of $4.00 per share to settle the amount due to a stockholder of HK$800,000 (equivalent to $102,564). On September 14, 2020, the Company issued 39,677 common shares at a price of $4.00 per share to settle the amount due to a stockholder of HK$1,237,941 (equivalent to $158,710). On December 21, 2020, the Company issued 13,809 common shares at a price of $4.00 per share to settle the amount due to a director of HK$430,855 (equivalent to $55,238). |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE | |
NOTE 13 - REVENUE | December 31, 2020 December 31, 2019 Disaggregation of revenue:- Revenue from contract with customers within the scope of ASC 606, types of goods and services Sales of minerals – point in time $ 753,694 $ 282,857 |
SIGNIFICANT TRANSACTIONS WITH R
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | |
NOTE 14 - SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | (a) Loan from a related person As of December 31, 2020 and December 31, 2019, loan from a related person included HK$3 million (equivalent to $386,916 and $385,158 respectively) borrowed from the wife of one of the Company’s stockholders on May 21, 2018. The loan is unsecured, has no collateral or guarantee and carries interest at a monthly rate of 3.08% for the first month and a monthly rate of 1.08% for the rest of the term. The loan originally was due to be repaid on May 20, 2019, however, on April 24, 2019, the repayment date was extended to May 20, 2020. On April 28, 2020, the repayment date was extended to May 20, 2021, and the interest changed to be at a monthly rate of 2.08% for the first month and a monthly rate of 1.08% for the rest of the term. (b) Interest expense paid to related persons For the years ended December 31, 2020 and 2019, interest expense of HK$420,000 (equivalent to $54,148) and HK$462,326 (equivalent to $59,015), respectively, was paid to related persons. (c) Amounts due to stockholders As of December 31, 2020, amounts due to stockholders, Kwong Bun Mak, Xianqin Pan and Kwing Chun Chu, were $376,246; while as of December 31, 2019, amounts due to stockholders, Chi Kin Loo, Kwong Bun Mak, Xianqin Pan and Tak Leung Ho, were $872,968. The Company is currently in the exploration stage, and the stockholders advanced $349,387 working capital to meet the financing requirement in 2020. On April 20, 2020, the Company issued 25,641 common shares at a price of $4.00 per share to settle the amount due to a stockholder of HK$800,000 (equivalent to $102,564) (see note 12). On September 14, 2020, the Company issued 39,677 common shares at a price of $4.00 per share to settle the amount due to a stockholder of HK$1,237,941 (equivalent to $158,710) (see note 12). Amounts due to stockholders are unsecured, interest-free and there are no fixed terms for repayment. The stockholders have agreed not to demand repayment within the next 12 months from the balance sheet date. (d) Amount due to directors As of December 31, 2020 and 2019, amount due to a director, Tak Shing Eddie Wong, of HK$604,500 (equivalent to $77,964) and HK$576,000 (equivalent to $73,950) respectively. The amount is unsecured, has no collateral or guarantee and is interest-free. The amount was fully settled on March 3, 2021. As of December 31, 2019, amount due to a director, Sai Kit Leung, was HK$350,855 (equivalent to $45,045). During the year, he advanced HK$80,000 (equivalent to $10,314) to the Company. On December 21, 2020, the Company issued 13,809 common shares at a price of $4.00 per share to settle the amount due to the director of HK$430,855 (equivalent to $55,238) (see note 12). On December 10, 2020, Mr. Chi Kin Loo was appointed as a director of the Company. As of December 31, 2020, there was an amount due to the director of HK$7,378,106 (equivalent to $951,569). During the year, he advanced HK$3,024,000 (equivalent to $389,868) to the Company. This amount is unsecured, interest-free and there are no fixed terms for repayment. The director has agreed not to demand repayment within 12 months of the balance sheet date. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Net loss per share: | |
NOTE 15 - NET LOSS PER SHARE | Loss per common share is presented under two formats: basic loss per common share and diluted loss per common share. Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common stock equivalents (e.g. stock options, warrants and convertible bonds). Dilutive common stock equivalents consist of the incremental common stock issuable upon exercise of stock options and warrants. The following table sets forth the computation of basic and diluted net loss per share: Years Ended December 31, 2020 December 31, 2019 Numerator: Net loss $ (1,218,463 ) $ (2,115,716 ) Denominator: Weighted-average common stock, basic 14,900,748 14,532,189 Dilutive effect of warrants – – Dilutive effect of convertible bonds – – Incremental dilutive shares – – Weighted-average common stock, diluted 14,900,748 14,532,189 Net loss per share, basic and diluted $ (0.08 ) $ (0.15 ) Note: During the year ended December 31, 2020 and 2019, the Company had warrants and convertible bond outstanding which could potentially be anti-dilutive in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive due to the net losses. |
WARRANT EQUITY
WARRANT EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
WARRANT EQUITY | |
NOTE 16 - WARRANT EQUITY | On November 21, 2018 (“Issuance Date”), the Company issued First Subscription Package of up to $52,500, consisting of 150,000 common shares and 50,000 warrants exercisable at $1.00 (the “Warrants”) to purchase common stock within three years from the Issuance Date, to accredited subscribers. For the year ended December 31, 2019, the Company issued Second Subscription Package of up to $825,000, consisting of 330,000 common shares and 66,000 warrants exercisable at $3.00 to purchase common stock within three years from the respective issuance dates, to accredited subscribers. The two investors in the First Subscription Package, which was completed on November 21, 2018, forfeited their rights to exercise the 25,000 warrant at $1.00 of their own accord. The Company determined that these warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included in the subscriptions. All of the Company’s outstanding warrants are considered to be indexed to the Company’s own stock and are therefore classified as equity under ASC 480. The warrants, in specified situations, provide for certain compensation remedies to a holder if the Company fails to timely deliver the shares underlying the warrants in accordance with the warrant terms. As of December 31, 2019, the Company reviewed the valuation technique and inputs used to determine the fair value of the outstanding warrants. The Company engaged an outside valuation company to calculate the fair value of warrants based on the Binominal Option Pricing Model (“Binomial”). Set out below are the major parameters adopted in the valuation: Grant date January to April 2019 Stock price of the issuer at respective grant dates $ 3.50 Risk-free rate 14.01% to 14.27 % Volatility 54.63% to 56.74 % Dividend yield 0.00 % The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Grant date Warrants Outstanding Fair Value per Share Fair Value $ 2018 50,000 $ 0.07 $ 3,490 2019 66,000 1.91 125,900 Less: warrants forfeited (50,000 ) (0.07 ) (3,490 ) As at December 31, 2019 and 2020 66,000 $ 125,900 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS | |
NOTE 17 - SUBSEQUENT EVENTS | The Company was supposed to resume exploratory and construction work at Mine B in the early second quarter of 2020. However, the global COVID-19 out break has resulted in delays in the resumption of work since the Chinese workers cannot enter into Mongolia until April 30, 2021 at the earliest. The Company is dependent on its workforce, mainly Chinese workers, to perform the mining work. The closure of borders implemented by the Mongolian Government has impacted the Company’s ability to deploy its workforce effectively. While expected to be temporary, prolonged workforce disruptions have negatively impacted sales in Mine B in fiscal year 2020 and the Company’s overall liquidity. If these developments continue throughout 2021, we expect very limited sales and operations in Mine B in 2021 as well. However, the Mongolian office has liaised with the relevant government departments to prepare visa applications for the Chinese workers, in case workers are allowed to enter into Mongolia since April 30, 2021. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for the 2021 fiscal year. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of consolidation | These consolidated financial statements include the accounts of the Company, TGS, and all of the wholly owned subsidiaries of TGS. All intercompany balances have been eliminated in consolidation. |
Use of estimates in the preparation of consolidated financial statements | The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the consolidated financial statements include, but are not limited to, deferred tax valuation allowances, income-tax uncertainties, assumptions used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, depreciation and amortization periods, recoverability of long-lived assets including intangible assets, valuation of warrant equity, and valuation and impairment losses on mining rights and valuation of asset retirement obligations and exploration asset compensation. |
Concentration and credit risks | Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. All of the Company’s cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date. The Company does not require collateral or other securities to support financial instruments that are subject to credit risk. The Company operates principally in the People’s Republic of China (“PRC”) (including Hong Kong) and Mongolia and grants credit to its customers in these geographic regions. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations. As of December 31, 2020 and 2019, the Company had credit risk exposure of uninsured cash and deposits with maturities of less than one year in banks of $25,625 and $96,495, respectively. The net sales to customers representing at least 10% of net total sales are as follows: Year ended December 31, 2020 Amount % Customer A $ 700,762 93 Year ended December 31, 2019 Amount % Customer B $ 40,907 15 Customer C 60,314 21 Customer D 181,636 64 $ 282,857 100 The following customers had balances of at least 10% of the total accounts receivable as follows: Year ended December 31, 2020 Amount % Customer A $ 681,503 87 Customer C 105,520 13 $ 787,023 100 Year ended December 31, 2019 Amount % Customer C $ 58,825 100 |
Accounts receivable | Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in administrative expenses. The Company recognizes an allowance for doubtful receivables to ensure accounts and other receivables are not overstated due to uncollectibility. Allowance for doubtful receivables is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional allowance for individual accounts is recorded when the Company becomes aware of customers’ or other debtors’ inability to meet their financial obligations, such as bankruptcy filings or deterioration in the customer’s or other debtor’s operating results or financial position. If circumstances related to customers or debtors change, estimates of the recoverability of receivables will be further adjusted. Accounts receivable are written off when deemed uncollectible. As of December 31, 2020 and 2019, there were no allowance of accounts receivable. |
Cash and cash equivalents | Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less. As of December 31, 2020 and 2019, the Company’s cash amounted to $69,401 and $106,850, respectively, and there were no cash equivalents. |
Intangible assets | Intangible assets consist of acquired mining rights and are initially measured at fair value as at the date of acquisition. Following the initial recognition, intangible assets are stated at cost less accumulated amortization and impairment losses. Intangible assets are amortized on the units-of-production method utilizing only proven and probable fluorite reserves in the depletion base. |
Property, plant and equipment | (i) Property, plant and equipment are stated at cost less accumulated depreciation. Buildings are depreciated on a straight-line basis over 15 to 40 years, representing the shorter of the remaining term of the mining right or the expected useful life to the Company. (ii) Other categories of property, plant and equipment are recorded at cost and depreciated to their estimated residual values using the straight-line method over their estimated useful lives, as follows: · Leasehold improvements: 5 years or, if shorter, the remaining term of the lease · Furniture and equipment: 3 to 10 years · Motor vehicles: 3 to 10 years · Factory equipment: 3 to 10 years · Mineral properties: Unit-of-production (iii) Normal repairs and maintenance are charged to operating expenses as incurred, while costs incurred that extend the useful life of an asset, improve the safety of our operations, or improve operating efficiency are capitalized. |
Impairment of long-lived assets | The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows or upon an estimate of fair value that may be received in an exchange transaction. Future cash flows are estimated based on quantities of recoverable minerals, expected fluorite prices, production levels and operating costs of production and capital, based upon the projected remaining future fluorite production from each mining site. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of fluorite that will be obtained after taking into account losses during processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, fluorite prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties. As of December 31, 2020 and 2019, there was no impairment of long-lived assets. |
Income taxes | Deferred income taxes are provided using the asset and liability method in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 740, “Income Taxes”. Under this method, deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as a non-current asset or liability. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax assets will not be realized. FASB ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides accounting guidance on de-recognition, classification, interest and penalties, accounting in years, disclosure and transition. Interest and penalties from tax assessments, if any, are included in income taxes in the statements of operations and comprehensive income. A tax position must be more likely than not of being sustained in order to be recognized in the consolidated financial statements. As of December 31, 2020 and 2019, the Company did not have any uncertain tax positions or accrued interest and penalties related to uncertain tax positions. The Company does not expect to have a material change to its income tax provisions in the next year. |
Restoration and remediation costs (Asset retirement obligations) | In Mongolia, the mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its mine projects to the pre-existing mine area average quality after completion of the mining activities. Future reclamation and remediation costs, which include extraction equipment removal and environmental remediation, are accrued at the end of each period based on management’s best estimate of the costs expected to be incurred for each project. Such estimates consider the costs of future surface and groundwater activities, current regulations, actual expenses incurred, and technology and industry standards. In accordance with FASB ASC 410, “Asset Retirement and Environmental Obligations”, the Company capitalizes the measured fair value of asset retirement obligations to mineral properties. The asset retirement obligations are accreted to an undiscounted value until the time at which they are expected to be settled. The accretion expense is charged to earnings and the actual retirement costs are recorded against the asset retirement obligations when incurred. Any difference between the recorded asset retirement obligations and the actual retirement costs incurred will be recorded as a gain or loss in the period of settlement. On a regular basis, the Company reviews the assumptions used to estimate the expected cash flows required to settle the asset retirement obligations, including changes in estimated probabilities, amounts and timing of the settlement of the asset retirement obligations, as well as changes in any regulatory or legal obligations for each of its mineral projects. Changes in any one or more of these assumptions may cause revision of asset retirement obligations for the corresponding assets. |
Revenue recognition | The Company recognizes revenue in accordance with ASC 606 when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue when it satisfies a performance obligation in accordance with the provisions of a customer order or contract. This is achieved when control of the product has been transferred to the customer, which is generally determined when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. The sales of the Company’s products to its customers represent a single performance obligation for which revenue is recognized at a point in time. Based on the foregoing, no significant judgment is required to determine when control of a product has been transferred to a customer. The Company measures revenue based on the consideration it expects to be entitled to receive in exchange for its products. The standard terms and conditions of customer orders and contracts does not provide its customers with the right of return (except for quality), price protection, rebates or discounts. All sales are based on firm customer orders with fixed terms and conditions, which generally cannot be modified. See note 13 regarding the Company’s revenue disaggregated by reporting segment. |
Provision for exploration asset compensation | The Government of Mongolia issued a policy that requires all mining companies to pay compensation to the Government if the exploration work on their mining license area was funded by the Government. The compensation amount for the exploration work done has been estimated by the Mineral Resources and Petroleum Authority of Mongolia. The provision for exploration expenditure is calculated as the discounted net present value of estimated future net cash outflows of the reclamation and closure costs. |
Exploration costs | Exploration costs are expensed as incurred. Costs to identify new mineral resources and to evaluate potential resources are considered exploration costs. |
Selling and distribution costs | Selling and distribution costs included transportation and handling costs related to the movement of finished goods from mines to customer designated locations, security fee, royalty and custom tax. |
Administrative expenses | Administrative expenses include salaries and benefits, consulting, audit, tax, legal, insurance, rent, utilities, net foreign exchange losses, and other general operating expenses. |
Shipping and Handling Costs | Shipping and handling costs are expensed as incurred. |
Foreign currency transactions and translations | These consolidated financial statements are presented in United States dollars (“USD”), which is different from TGS subsidiaries’ functional currencies. The functional currency of the subsidiaries in Mongolia, Khan Shashir LLC and Shek Hung Gold LLC, is the Mongolian Tugrik (“MNT”). The functional currency of the subsidiary in the People’s Republic of China (“PRC”), Best Metro Import & Export Trading (Inner Mongolia) Limited is the Chinese Renminbi (“RMB”), while the functional currency of all other subsidiaries is the Hong Kong dollar (“HKD”). The functional currency of TGS is the USD. The financial statements of foreign subsidiaries where HKD, MNT and RMB are the functional currencies and which have transactions denominated in non-HKD/MNT/RMB currencies are translated into HKD/MNT/RMB at the exchange rates existing on that date. The translation of local currencies into HKD/MNT/RMB creates transaction adjustments which are included in administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The amounts of foreign currency translation were ($327,779) and ($246,346) for the years ended December 31, 2020 and 2019, respectively. The financial statements of TGS’s foreign subsidiaries, where non-USD currencies are the functional currencies, are translated into USD using exchange rates in effect at period end for assets and liabilities and average exchange rates during each reporting period for the statement of operations. Adjustments resulting from translation of these financial statements are reflected as a separate component of stockholders’ deficit. |
Comprehensive loss | Comprehensive loss is defined as all changes in equity/(deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive loss includes net loss and changes in certain assets and liabilities that are reported directly in equity. |
Basic and Diluted Loss per Share | The Company computes loss per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common stock equivalents outstanding during the period. Dilutive loss per share excludes all common stock equivalents if their effect is anti-dilutive. As of December 31, 2020, the Company had warrants and convertible bonds outstanding which could potentially dilute basic loss per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive due to the net losses. |
Fair value measurement | The Company complies with FASB ASC 820, “Fair Value Measurements”, which clarifies the definition of fair value, prescribes methods for measuring fair value and establishes a fair value hierarchy to classify the inputs used in measuring fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:- Level 1 Level 2 Level 3 Financial instruments are measured as follows:- The notional amounts of financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of balances with related parties have not been determined as the timing of the expected cash flows of these balances cannot be reasonably determined because of the relationship. |
Conversion Option - Convertible bonds | The Company accounts for convertible bond in accordance with the guidelines established by ASC 470-20, “Debt with Conversion and Other Options”. The Company separates the convertible bond into liability and equity components. The Beneficial Conversion Feature ("BCF") of a convertible bond, which is the equity component and recorded as additional paid-in capital, is normally characterized as the convertible portion or feature of certain bonds payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible bond when issued. To determine the effective conversion price, the Company first allocates the proceeds received to the convertible instrument, and then uses those allocated proceeds to determine the effective conversion price. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible instrument on the proceeds allocated to that instrument. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid in capital, resulting in a discount to the convertible instrument. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The discount is amortized to interest expense over the expected term of the convertible bonds using the effective interest method. |
Warrants | ASC 815-40, “Contracts in Entity’s Own Equity”, requires freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of ASC 815-40, a contract designated as an asset or a liability must be carried at fair value on a company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments are required from period to period. |
Lease | The Company determines if an arrangement is a lease at inception of the contract. Leases are recorded in "Right-of-use ("ROU") assets" and "lease liabilities" in the Company's consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date for determining the present value of lease payments. Lease term includes the effects of options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. |
Recent changes in accounting standards | Pending Adoption as at year end In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to ASC 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. ASC 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASC 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes”. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in ASC 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In August 2020, the FASB issued No. ASU 2020-06, “Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815-40)”. This ASU simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of net sales to customer | Year ended December 31, 2020 Amount % Customer A $ 700,762 93 Year ended December 31, 2019 Amount % Customer B $ 40,907 15 Customer C 60,314 21 Customer D 181,636 64 $ 282,857 100 Thefollowing customers had balances of at least 10% of the total accounts receivable as follows: Year ended December 31, 2020 Amount % Customer A $ 681,503 87 Customer C 105,520 13 $ 787,023 100 Year ended December 31, 2019 Amount % Customer C $ 58,825 100 |
PROPERTY PLANT AND EQUIPMENT (T
PROPERTY PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY PLANT AND EQUIPMENT | |
Schedule of Property, plant and equipment | December 31, 2020 December 31, 2019 Buildings $ 152,902 $ 159,364 Leasehold improvements - 120,524 Furniture, fixture and equipment 67,770 66,582 Motor vehicles 314,776 338,320 Factory equipment 216,801 230,290 Mineral properties 1,322,125 1,375,608 Less: accumulated depreciation (431,378 ) (522,609 ) 1,642,996 1,768,079 Construction in progress 664,574 638,289 Total property, plant and equipment $ 2,307,570 $ 2,406,368 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | Cost At December 31, 2020 and 2019 $ 1,097,362 Accumulated amortization and impairment loss At December 31, 2020 and 2019 - Net book value At December 31, 2020 $ 1,097,362 At December 31, 2019 $ 1,097,362 |
Schedule of intangible assets future amortization expense | 2021 $ - 2022 70,304 2023 75,991 2024 80,854 2025 81,848 Thereafter 788,365 $ 1,097,362 |
LEASING ARRANGEMENT (Tables)
LEASING ARRANGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASING ARRANGEMENT | |
Schedule of Assets and liabilities | December 31, 2020 December 31, 2019 Assets Right-of-use assets $ - $ 189,456 Liabilities Current portion of operating lease liabilities $ - $ 189,456 Total lease liabilities $ - $ 189,456 |
Schedule of Maturity of Lease Liabilities | December 31, 2020 December 31, 2019 December 31, 2020 $ - $ $217,033 December 31, 2021 13,284 4,106 Total lease payments, undiscounted 13,284 221,139 Less short-term lease payments (13,284 ) (20,564 ) Less amount of lease payment representing interest - (11,119 ) Total present value of lease payments - 189,456 Less: Current portion of operating leases liabilities - (189,456 ) Non-current operating leases liabilities $ - $ - |
Schedule of Supplemental cash flow and other information related to leases | December 31, 2020 December 31, 2019 Total lease liabilities $ - $ 189,456 Cash payment for amounts included in the measurement of lease liabilities within operating cash flows $ 202,357 $ 206,643 Weighted average remaining lease term (years) - 0.97 Weighted average discount rate 11 % 11 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Schedule of deferred tax assets and liabilities | As of December 31, 2020 December 31, 2019 Tax loss carry forwards $ 406,048 $ 301,091 Less: Valuation allowance (406,048 ) (301,091 ) $ - $ - |
Summary of changes in valuation allowance | As of December 31, 2020 December 31, 2019 Beginning balance $ 301,091 $ 287,735 Increase in valuation allowance 100,769 13,011 Exchange difference 4,188 345 Ending balance $ 406,048 $ 301,091 |
Schedule of reconciliation of the income tax expense | December 31, 2020 December 31, 2019 Loss before income taxes $ (1,195,251 ) $ (2,115,716 ) Tax loss at the statutory tax rate of 21% (251,003 ) (444,300 ) Effect of different tax rates in other jurisdictions (30,398 ) (12,910 ) Non-deductible items 210,460 488,717 Non-taxable items (5,964 ) (44,518 ) Change in valuation allowance 100,769 13,011 Tax effect of temporary differences not recognized (652 ) - Income tax expense $ 23,212 $ - |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
OTHER PAYABLES (Tables) | |
Schedule of other payables | As of December 31, 2020 December 31, 2019 Tax and social insurance payable $ 86,601 $ 53,087 Contract liabilities 296,657 289,786 Temporary receipts 739,948 720,278 Other payables 445,669 241,204 $ 1,568,875 $ 1,304,355 |
CONVERTIBLE BONDS (Tables)
CONVERTIBLE BONDS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
CONVERTIBLE BONDS | |
Schedule of convertible bond outstanding | As of December 31, 2020 December 31, 2019 Principal Accrued Interest Principal Accrued Interest November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 $ 192,308 $ 10,564 $ 192,308 $ 930 Less: Bond discount (1,354 ) - (4,313 ) - $ 190,954 $ 10,564 $ 187,995 $ 930 |
PROVISION FOR ASSET RETIREMEN_2
PROVISION FOR ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROVISION FOR ASSET RETIREMENT OBLIGATIONS | |
Schedule of asset retirement obligations | At December 31, 2018 31,383 Additions 3,179 Exchange adjustments (1,119 ) At December 31, 2019 33,443 Additions 3,300 Exchange adjustments (1,393 ) At December 31, 2020 $ 35,350 |
PROVISION FOR EXPLORATION ASS_2
PROVISION FOR EXPLORATION ASSET COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROVISION FOR EXPLORATION ASSET COMPENSATION | |
Summary of provision for exploration asset compensation | At December 31, 2018 102,127 Exchange adjustments (3,385 ) At December 31, 2019 98,742 Additions 24,877 Exchange adjustments (4,283 ) At December 31, 2020 $ 119,336 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE | |
Schedule of revenue | December 31, 2020 December 31, 2019 Disaggregation of revenue:- Revenue from contract with customers within the scope of ASC 606, types of goods and services Sales of minerals – point in time $ 753,694 $ 282,857 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NET LOSS PER SHARE (Tables) | |
Schedule of Net loss per share basic and diluted | Years Ended December 31, 2020 December 31, 2019 Numerator: Net loss $ (1,218,463 ) $ (2,115,716 ) Denominator: Weighted-average common stock, basic 14,900,748 14,532,189 Dilutive effect of warrants – – Dilutive effect of convertible bonds – – Incremental dilutive shares – – Weighted-average common stock, diluted 14,900,748 14,532,189 Net loss per share, basic and diluted $ (0.08 ) $ (0.15 ) |
WARRANT EQUITY (Tables)
WARRANT EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
WARRANT EQUITY | |
Summary of major parameters adopted in valuation | Grant date January to April 2019 Stock price of the issuer at respective grant dates $ 3.50 Risk-free rate 14.01% to 14.27 % Volatility 54.63% to 56.74 % Dividend yield 0.00 % |
Schedule of warrants outstanding and fair values | Grant date Warrants Outstanding Fair Value per Share Fair Value $ 2018 50,000 $ 0.07 $ 3,490 2019 66,000 1.91 125,900 Less: warrants forfeited (50,000 ) (0.07 ) (3,490 ) As at December 31, 2019 and 2020 66,000 $ 125,900 |
NATURE OF OPERATIONS AND GOIN_2
NATURE OF OPERATIONS AND GOING CONCERN (Detail Narrative) - USD ($) | Sep. 14, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Working capital deficit | $ 1,262,026 | ||
Net loss | (1,218,463) | $ (2,115,716) | |
Arcus [Member] | Share Exchange Agreement [Member] | |||
Common stock shares issued for exchange shares | 7,000,000 | ||
Net loss | $ (1,218,463) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net sales | $ 753,694 | $ 282,857 |
Accounts receivable | 787,023 | 58,825 |
Customer A [Member] | ||
Net sales | 700,762 | |
Accounts receivable | $ 681,503 | |
Accounts receivable percentage | 87.00% | |
Net sales percentage | 93.00% | |
Customer B [Member] | ||
Net sales | $ 40,907 | |
Net sales percentage | 15.00% | |
Customer C [Member] | ||
Net sales | $ 60,314 | |
Accounts receivable | $ 105,520 | $ 58,825 |
Accounts receivable percentage | 13.00% | 100.00% |
Net sales percentage | 21.00% | |
Customer D [Member] | ||
Net sales | $ 181,636 | |
Net sales percentage | 64.00% | |
Total [Member] | ||
Net sales | $ 700,762 | $ 282,857 |
Accounts receivable | $ 787,023 | $ 58,825 |
Accounts receivable percentage | 100.00% | 100.00% |
Net sales percentage | 93.00% | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and cash equivalents | $ 69,401 | $ 106,850 | $ 98,121 |
Foreign currency translation | (327,779) | (246,346) | |
Uninsured cash and deposits | $ 25,625 | $ 96,495 | |
Leasehold Improvements [Member] | |||
Estimated useful life | 5 years | ||
Minimum [Member] | |||
Net sales percentage | 10.00% | ||
Minimum [Member] | Building [Member] | |||
Estimated useful life | 15 years | ||
Minimum [Member] | Furniture and Equipment [Member] | |||
Estimated useful life | 3 years | ||
Minimum [Member] | Motor vehicles [Member] | |||
Estimated useful life | 3 years | ||
Minimum [Member] | Factory equipment [Member] | |||
Estimated useful life | 3 years | ||
Maximum [Member] | Building [Member] | |||
Estimated useful life | 40 years | ||
Maximum [Member] | Furniture and Equipment [Member] | |||
Estimated useful life | 10 years | ||
Maximum [Member] | Motor vehicles [Member] | |||
Estimated useful life | 10 years | ||
Maximum [Member] | Factory equipment [Member] | |||
Estimated useful life | 10 years |
PROPERTY PLANT AND EQUIPMENT (D
PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Less: accumulated depreciation | $ (431,378) | $ (522,609) |
Property, plant and equipment | 1,642,996 | 1,768,079 |
Construction in progress | 664,574 | 638,289 |
Total property, plant and equipment | 2,307,570 | 2,406,368 |
Building [Member] | ||
Property, plant and equipment | 152,902 | 159,364 |
Leasehold Improvements [Member] | ||
Property, plant and equipment | 0 | 120,524 |
Furniture, fixture and equipment [Member] | ||
Property, plant and equipment | 67,770 | 66,582 |
Motor Vehicles [Member] | ||
Property, plant and equipment | 314,776 | 338,320 |
Factory And Equipment [Member] | ||
Property, plant and equipment | 216,801 | 230,290 |
Mineral Properties [Member] | ||
Property, plant and equipment | $ 1,322,125 | $ 1,375,608 |
PROPERTY PLANT AND EQUIPMENT _2
PROPERTY PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation of property, plant and equipment | $ 48,884 | $ 51,898 |
Depreciation expenses, total | 33,478 | 28,898 |
Factory And Equipment [Member] | ||
Depreciation expenses, total | 33,478 | 28,898 |
Administrative Expense [Member] | ||
Depreciation expenses, total | $ 15,406 | $ 23,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible assets, net book value | $ 1,097,362 | $ 1,097,362 |
Mining rights [Member] | ||
Intangible assets, net book value | 1,097,362 | 1,097,362 |
Intangible assets, cost | $ 1,097,362 | $ 1,097,362 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
INTANGIBLE ASSETS | ||
2021 | $ 0 | |
2022 | 70,304 | |
2023 | 75,991 | |
2024 | 80,854 | |
2025 | 81,848 | |
Thereafter | 788,365 | |
Intangible Assets | $ 1,097,362 | $ 1,097,362 |
LEASING ARRANGEMENT (Details)
LEASING ARRANGEMENT (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Right-of-use assets | $ 0 | $ 189,456 |
Liabilities | ||
Current portion of operating lease liabilities | 189,456 | |
Total lease liabilities | $ 0 | $ 189,456 |
LEASING ARRANGEMENT (Details 1)
LEASING ARRANGEMENT (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
LEASING ARRANGEMENT | ||
December 31, 2020 | $ 217,033 | |
December 31, 2021 | $ 13,284 | 4,106 |
Total lease payments, undiscounted | 13,284 | 221,139 |
Less short-term lease payments | (13,284) | (20,564) |
Less amount of lease payment representing interest | (11,119) | |
Total present value of lease payments | 0 | 189,456 |
Less: Current portion of operating leases liabilities | (189,456) | |
Non-current operating leases liabilities | $ 0 | $ 0 |
LEASING ARRANGEMENT (Details 2)
LEASING ARRANGEMENT (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
LEASING ARRANGEMENT | ||
Total present value of lease payments | $ 189,456 | $ 0 |
Cash paid for amounts included in the measurement of lease liabilities within operating cash flows | $ 206,643 | $ 202,357 |
Weighted average remaining lease term (years) | 11 months 19 days | |
Weighted average discount rate | 11.00% | 11.00% |
LEASING ARRANGEMENT (Details Na
LEASING ARRANGEMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
LEASING ARRANGEMENT | ||
Weighted average discount rate | 11.00% | 11.00% |
Operating lease cost | $ 202,357 | $ 206,643 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
INCOME TAXES | ||
Tax loss carry forwards | $ 406,048 | $ 301,091 |
Less: Valuation allowance | $ (406,048) | $ (301,091) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
Tax losses carry forward, beginning balance | $ 301,091 | $ 287,735 |
Increase in valuation allowance | 100,769 | 13,011 |
Exchange difference | 4,188 | 345 |
Tax losses carry forward, ending balance | $ 406,048 | $ 301,091 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
Loss before income taxes | $ (1,195,251) | $ (2,115,716) |
Tax loss at the statutory tax rate of 21% | (251,003) | (444,300) |
Effect of different tax rates in other jurisdictions | (30,398) | (12,910) |
Non-deductible items | 210,460 | 488,717 |
Non-taxable items | (5,964) | (44,518) |
Change in valuation allowance | 100,769 | 13,011 |
Tax effect of temporary differences not recognized | (652) | |
Income tax expense | $ 23,212 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating loss carry forward | $ 406,048 | $ 301,091 |
Federal tax rate | 21.00% | 21.00% |
Accumulated tax losses | $ 2,360,416 | $ 1,749,222 |
operating loss carry forward expiration date, description | future taxable profits, which expire between 2022-2025 and between 2022-2024, respectively | future taxable profits, which expire between 2022-2025 and between 2022-2024, respectively |
Hong Kong subsidiaries [Member] | ||
Deferred tax assets, operating loss carry forward | $ 2,165,359 | $ 1,602,522 |
PRC subsidiary [Member] | ||
Deferred tax assets, operating loss carry forward | $ 195,057 | $ 146,700 |
PRC Enterprise [Member] | ||
Income tax rate | 25.00% | 25.00% |
Hong Kong [Member] | ||
Income tax rate | 16.50% | 16.50% |
Mongolia [Member] | ||
Income tax rate, description | Corporate Income Tax at the rate of 10% on taxable income below MNT6 billion (2019: MNT3 billion), or MNT600 million (2019: MNT300 billion) plus 25% on taxable income exceeding MNT6 billion for the year ended December 31, 2020 (2019: MNT3 billon). Provision for Mongolia corporate income tax has been made for the year ended December 31, 2020 | Corporate Income Tax at the rate of 10% on taxable income below MNT6 billion (2019: MNT3 billion), or MNT600 million (2019: MNT300 billion) plus 25% on taxable income exceeding MNT6 billion for the year ended December 31, 2020 (2019: MNT3 billon). Provision for Mongolia corporate income tax has been made for the year ended December 31, 2020 |
OTHER PAYABLES (Details)
OTHER PAYABLES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Other payables | $ 1,568,875 | $ 1,304,355 |
Tax and social insurance payable [Member] | ||
Other payables | 86,601 | 53,087 |
Contract liabilities [Member] | ||
Other payables | 296,657 | 289,786 |
Temporary receipts [Member] | ||
Other payables | 739,948 | 720,278 |
Other payables [Member] | ||
Other payables | $ 445,669 | $ 241,204 |
CONVERTIBLE BONDS (Details)
CONVERTIBLE BONDS (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | May 15, 2019 |
Convertible bond, net | $ 190,954 | $ 187,995 | |
November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 | $ 289,578 | ||
Principal [Member] | |||
November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 | 192,308 | 192,308 | |
Less: Bond discount | (1,354) | (4,313) | |
Convertible bond, net | 190,954 | 187,995 | |
Accrued Interest [Member] | |||
Convertible bond, net | 10,564 | 930 | |
November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 | $ 10,564 | $ 930 |
CONVERTIBLE BONDS (Details Narr
CONVERTIBLE BONDS (Details Narrative) | Sep. 11, 2020USD ($) | May 11, 2020USD ($) | Nov. 26, 2019USD ($)$ / shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2020HKD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019HKD ($)shares | Dec. 21, 2020$ / shares | Sep. 14, 2020$ / shares | Apr. 20, 2020$ / shares | May 15, 2019USD ($)$ / shares |
Conversion of convertible bond and accrued interest into common stock | $ 334,027 | $ 513,888 | |||||||||
Debt instrument face amount | $ 289,578 | ||||||||||
Debt instrument, conversion price | $ / shares | $ 4 | $ 4 | $ 4 | $ 3.29 | |||||||
Four convertible bond agreements [Member] | Arcus and third party investors [Member] | |||||||||||
Non cash interest expenses | $ 5,521 | $ 8,333 | |||||||||
Debt discount, beneficial conversion feature | 7,390 | 10,705 | |||||||||
Loans | $ 2,600,000 | $ 4,000,000 | |||||||||
Non cash interest expenses | $ 695 | $ 1,068 | |||||||||
Debt conversion, converted instrument, share issued | shares | 92,275 | 92,275 | 141,782 | 141,782 | |||||||
Convertible Bond Agreement [Member] | |||||||||||
Non cash interest expenses | $ 9,634 | $ 930 | |||||||||
Debt instrument face amount | $ 192,308 | ||||||||||
Debt instrument, unamortized discount | 1,354 | 4,313 | |||||||||
Additional beneficial conversion feature | $ 147 | ||||||||||
Debt instrument, Maturity date | May 25, 2020 | ||||||||||
Amortization of debt discount | $ 3,340 | $ 1,029 | |||||||||
Debt discount, beneficial conversion feature | $ 234 | $ 5,342 | |||||||||
Extended maturity date | Apr. 30, 2021 | Sep. 30, 2020 | |||||||||
Debt instrument, interest rate | 5.00% | ||||||||||
Debt instrument, conversion price | $ / shares | $ 3.60 |
OTHER LOANS (Details Narrative)
OTHER LOANS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unrelated party [Member] | ||
Loan payable | $ 27,837 | |
Interest rate | 10.00% | |
Maturity date | Jun. 23, 2021 | |
Unrelated party 1 [Member] | ||
Loan payable | $ 147,326 | $ 132,423 |
Interest rate | 11.61% | |
Maturity date | Dec. 31, 2029 |
PROVISION FOR ASSET RETIREMEN_3
PROVISION FOR ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
PROVISION FOR ASSET RETIREMENT OBLIGATIONS (Details) | ||
Asset Retirement Obligation - Beginning balance | $ 33,443 | $ 31,383 |
Additions | 3,300 | 3,179 |
Exchange adjustments | (1,393) | (1,119) |
Asset Retirement Obligation - Ending balance | $ 35,350 | $ 33,443 |
PROVISION FOR EXPLORATION ASS_3
PROVISION FOR EXPLORATION ASSET COMPENSATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
PROVISION FOR EXPLORATION ASSET COMPENSATION | ||
Provision for exploration assets compensation - Beginning balance | $ 98,742 | $ 102,127 |
Additions | 24,877 | |
Exchange adjustment | (4,283) | (3,385) |
Provision for exploration assets compensation - Ending balance | $ 119,336 | $ 98,742 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) | Sep. 14, 2020USD ($)$ / sharesshares | Jan. 14, 2020USD ($)$ / sharesshares | May 15, 2019HKD ($)shares | Dec. 21, 2020USD ($)$ / sharesshares | Apr. 20, 2020USD ($)$ / sharesshares | Mar. 30, 2020USD ($)$ / sharesshares | Mar. 30, 2020HKD ($)shares | Mar. 25, 2020USD ($)$ / sharesshares | Mar. 25, 2020HKD ($)shares | Sep. 29, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020HKD ($)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019HKD ($)shares | Dec. 31, 2020HKD ($) | Mar. 30, 2020HKD ($) | Mar. 25, 2020HKD ($) | Jan. 14, 2020HKD ($) | Dec. 31, 2019HKD ($) | Nov. 26, 2019USD ($)$ / shares | May 15, 2019USD ($)$ / shares | May 15, 2019HKD ($) |
Common stock issued to settle loan, shares | shares | 39,677 | 88,018 | 13,809 | 25,641 | ||||||||||||||||||
Conversion price | $ / shares | $ 4 | $ 4 | $ 4 | $ 3.29 | ||||||||||||||||||
Common stock issued to settle loan, amount | $ 158,710 | $ 2,000,000 | $ 55,238 | $ 102,564 | ||||||||||||||||||
Debt instrument face amount | $ 289,578 | |||||||||||||||||||||
Shares issued during period, value | $ 658,310 | $ 1,887,746 | ||||||||||||||||||||
Placement Agent [Member] | ||||||||||||||||||||||
Share price | $ / shares | $ 3.70 | |||||||||||||||||||||
Shares issued for services, shares | shares | 33,000 | 33,000 | ||||||||||||||||||||
Shares issued for services, amount | $ 122,100 | |||||||||||||||||||||
Convertible Bond Agreement [Member] | ||||||||||||||||||||||
Conversion price | $ / shares | $ 3.60 | |||||||||||||||||||||
Debt instrument face amount | $ 192,308 | |||||||||||||||||||||
Interest expenses | $ 9,634 | $ 930 | ||||||||||||||||||||
Convertible Bond Agreement [Member] | February 1, 2020 [Member] | ||||||||||||||||||||||
Conversion price | $ / shares | $ 3.62 | $ 3.62 | ||||||||||||||||||||
Debt instrument face amount | $ 51,389 | $ 192,708 | ||||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 14,196 | 53,236 | 53,236 | |||||||||||||||||||
Loans Payable | $ 1,500,000 | $ 400,000 | ||||||||||||||||||||
Interest expenses | $ 3,185 | |||||||||||||||||||||
Arcus and third party investor [Member] | Convertible Bond Agreement [Member] | ||||||||||||||||||||||
Conversion price | $ / shares | $ 3.62 | $ 3.62 | ||||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 17,745 | 17,745 | 7,098 | 7,098 | 141,782 | 141,782 | ||||||||||||||||
Loans Payable | $ 500,000 | $ 200,000 | $ 4,000,000 | |||||||||||||||||||
Interest expenses | $ 1,062 | $ 425 | $ 8,333 | |||||||||||||||||||
Debt conversion, converted instrument, amount | $ 64,235 | $ 25,695 | $ 513,888 | |||||||||||||||||||
Related person [Member] | ||||||||||||||||||||||
Debt settlement, accrued interest | $ 258,709 | |||||||||||||||||||||
Accredited subscribers [Member] | ||||||||||||||||||||||
Common stock shares issued | shares | 330,000 | 330,000 | ||||||||||||||||||||
Warrants exercisable | shares | 66,000 | 66,000 | ||||||||||||||||||||
Shares issued during period, value | $ 825,000 | |||||||||||||||||||||
Exercise price | $ / shares | $ 3 | |||||||||||||||||||||
Director [Member] | ||||||||||||||||||||||
Common stock issued to settle loan, shares | shares | 33,096 | |||||||||||||||||||||
Conversion price | $ / shares | $ 3.66 | |||||||||||||||||||||
Common stock issued to settle loan, amount | $ 121,133 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of revenue:- | ||
Sales of minerals - point in time | $ 753,694 | $ 282,857 |
SIGNIFICANT TRANSACTIONS WITH_2
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details Narrative) - USD ($) | Dec. 10, 2020 | Sep. 14, 2020 | Dec. 21, 2020 | Apr. 28, 2020 | Apr. 20, 2020 | May 21, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Loans from related parties | $ 386,916 | $ 385,158 | ||||||
Interest expense | 124,040 | 76,824 | ||||||
Wife of shareholder [Member] | Loans Payable [Member] | ||||||||
Loans from related parties | 386,916 | 385,158 | ||||||
Extended maturity date | May 20, 2021 | |||||||
Variation in interest rate, description | Interest changes to be at a monthly rate of 2.08% for the first month and a monthly rate of 1.08% for the rest of the term | |||||||
Interest rate, description | Interest at a monthly rate of 3.08% for the first month and a monthly rate of 1.08% for the rest of the term | |||||||
Maturity date | May 20, 2019 | |||||||
Mr Chi Kin Loo [Member] | ||||||||
Loans from related parties others | $ 951,569 | |||||||
Advance from related party | $ 389,868 | |||||||
Stockholders [Member] | ||||||||
Loans from related parties | 376,246 | 872,968 | ||||||
Advance Working capital | $ 349,387 | |||||||
Debt conversion, converted instrument, shares issued | 39,677 | 25,641 | ||||||
Debt conversion, converted instrument, amount | $ 158,710 | $ 102,564 | ||||||
Shares issued price per share | $ 4 | $ 4 | ||||||
Debt repayment term, description | The director has agreed not to demand repayment within 12 months of the balance sheet date | |||||||
Tak Shing Eddie Wong [Member] | Loans Payable [Member] | ||||||||
Loans from related parties | $ 77,964 | 73,950 | ||||||
Sai Kit Leung [Member] | ||||||||
Debt repayment term, description | The director has agreed not to demand repayment within 12 months of the balance sheet date | |||||||
Due to related party | $ 10,314 | 45,045 | ||||||
Common stock share issue, shares | 13,809 | |||||||
Common stock share issue, amount | $ 55,238 | |||||||
Share price | $ 4 | |||||||
RelatedParty [Member] | ||||||||
Interest expense | $ 54,148 | $ 59,015 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net loss per share - basic and diluted | ||
Net loss | $ (1,218,463) | $ (2,115,716) |
Weighted-average common stock, basic | 14,900,748 | 14,532,189 |
Dilutive effect of warrants | 0 | 0 |
Dilutive effect of convertible bonds | 0 | 0 |
Incremental dilutive shares | 0 | 0 |
Weighted-average common stock, diluted | 14,900,748 | 14,532,189 |
Net loss per share Basic and diluted (Note) | $ (0.08) | $ (0.15) |
WARRANT EQUITY (Details)
WARRANT EQUITY (Details) | 4 Months Ended |
Apr. 30, 2019$ / shares | |
Stock Price of the Issuer at respective grant dates | $ 3.50 |
Dividend Yield | 0.00% |
Maximum [Member] | |
Risk-free Rate | 14.27% |
Volatility | 56.74% |
Minimum [Member] | |
Risk-free Rate | 14.01% |
Volatility | 54.63% |
WARRANT EQUITY (Details 1)
WARRANT EQUITY (Details 1) | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Warrants outstanding, warrants forfeited | shares | (50,000) |
Fair Value per share, warrants forfeited | $ / shares | $ (0.07) |
Fair value, warrants forfeited | $ | $ (3,490) |
Warrants outstanding | shares | 66,000 |
Fair value | $ | $ 125,900 |
2018 [Member] | |
Warrants outstanding | shares | 50,000 |
Fair value | $ | $ 3,490 |
Fair Value per share | $ / shares | $ 0.07 |
2019 [Member] | |
Warrants outstanding | shares | 66,000 |
Fair value | $ | $ 125,900 |
Fair Value per share | $ / shares | $ 1.91 |
WARRANT EQUITY (Details Narrati
WARRANT EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Nov. 21, 2018 | Dec. 31, 2020 | |
Exercise price | $ 1 | |
Warrants exercise right forfeited | (50,000) | |
First Subscription package [Member] | ||
Exercise price | $ 1 | |
Amount of subscription package issued | $ 52,500 | |
Class of warrants or rights reserved for future issuance | 150,000 | |
Common stock shares reserved for future issuance | 50,000 | |
Term of warrants | 3 years | |
First Subscription package [Member] | November 21, 2018 [Member] | Investor [Member] | ||
Exercise price | $ 1 | |
Warrants exercise right forfeited | 25,000 | |
Second Subscription package [Member] | In, 2019 [Member] | ||
Exercise price | $ 3 | |
Amount of subscription package issued | $ 825,000 | |
Class of warrants or rights reserved for future issuance | 330,000 | |
Common stock shares reserved for future issuance | 66,000 | |
Term of warrants | 3 years |