Overview
As a natural resource exploration company, our focus is to acquire, explore and
develop natural resource properties which may host mineral reserves which may be
economical to extract commercially. With this in mind, we have identified and
secured interests in mining claims with respect to properties in Nevada. Current
cash on hand is sufficient to fund planned operations for 2021 after payment of
accounts payable outstanding at December 31, 2020. Our officers and directors
and advisors, attorneys and consultants will continue to be utilized to support
all operations.
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Plan of Operation
During the twelve-month period ending December 31, 2020, we continued our
evaluation work on our Vernal project, Windy Peak project and Rainbow Mountain
project. Our funds are sufficient to meet all planned activities as outlined
below. The Company expects the short and long-term funding of our operations
going forward to be financed through existing funds.
We do not anticipate a change to our company staffing levels. We remain focused
on keeping the staff compliment, which currently consists of our three
directors. Our staffing in no way hinders our operations, as outsourcing of
legal, accounting, and other operational duties is the most cost effective and
efficient manner of conducting the business of the Company.
We do not anticipate any equipment purchases in the twelve months ending
December 31, 2021.
Results of Operations
The Twelve Months Ended December 31, 2020 compared to the Twelve Months Ended
December 31, 2019
During the years ended December 31, 2020 and 2019, we had revenues of $2,468,078
and $1,310,461, respectively, resulting from the Moss royalty. We are currently
exploring and developing our properties and are actively reviewing new projects.
Net income for the year ended December 31, 2020 was $2,027,293 compared to net
income of $239,663 for the year ended December 31, 2019, for an approximate
$1,788,000 increase in net income. The increase in the net income is primarily
due to the $1,157,617 increase of royalty revenue received from the Moss Mine,
as a result of the Moss Mine's increase in gold/silver production. In addition,
due to a change in the deferred income tax valuation allowance, the Company
recognized an income tax benefit of $1,165,000. This was offset by an
approximate $161,000 increase in stock based compensation expense and a $300,000
charge due to the impairment of the royalty asset.
For the years ended December 31, 2020 and 2019, mineral and exploration expenses
were $271,062 and $253,825, respectively, for an approximate $17,000 increase.
The increase is primarily due to an increase of $83,000 expenditures on the
Rainbow Mountain project, offset by a decrease of $65,000 expenditures on the
Windy Peak project.
For the years ended December 31, 2020 and 2019, general and administrative
expenses were $203,808 and $150,990, respectively, for an approximate $53,000
increase, primarily due to the commencement of paying state income taxes.
For the years ended December 31, 2020 and 2019, other income (expense) was
$($236,574) and 10,080, respectively. The change in other income (expense) is
due to the $300,000 impairment of a royalty interest, offset by an approximated
$50,000 increase in unrealized holding losses on marketable securities.
Liquidity and Capital Resources
We had total assets of $3,691,842 at December 31, 2020 consisting primarily of
$1,124,132 of cash and $221,580 of marketable securities. We had total
liabilities of $233,381 at December 31, 2020, consisting primarily of accounts
payable and accrued expenses.
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We anticipate that we will incur the following during the year ended December
31, 2021:
· $1,000,000 for operating expenses, including working capital and general,
legal, accounting and administrative expenses associated with reporting
requirements under the Securities Exchange Act of 1934 and compliance with
Canadian regulatory authorities.
Cash provided by operations was $873,482 and $279,664 for the years ended
December 31, 2020 and 2019, respectively. The $593,818 increase in cash provided
by operations was primarily due to the increase in royalty revenue, offset by
the change in the deferred tax asset account.
Cash provided by (used in) investing activities for the years ended December 31,
2020 and 2019 were $0 and ($169,167), respectively. Cash used in 2019 related to
the purchase of a royalty interest for Vanadium Oxide, offset by cash received
from the sale of marketable securities.
Financing activities during the years ended December 31, 2020 and 2019 generated
cash of $22,400 and $2,000, respectively, from the exercise of stock options and
warrants.
Management estimates that the Company will not need additional funding for the
next twelve months.
We currently have no agreements, arrangements or understandings with any person
to obtain funds through bank loans, lines of credit or any other sources.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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