UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-K
☒
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended
April 30,
2019
For the Transition Period from _____ to _____
Commission File Number
000-52711
STAR GOLD
CORP.
(Exact name of small business issuer as specified in its
charter)
|
NEVADA
|
27-0348508
|
|
(State or other jurisdiction of incorporation or
organization)
|
(IRS Employer Identification No.)
|
|
105 N. 4
th
Street, Suite 300
Coeur
d’Alene
,
Idaho
(Address of principal executive office)
|
83814
(Postal Code)
|
(
208
)
664-5066
(Issuer’s telephone number)
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE
ACT:
None
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE
ACT:
Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned
issued, as defined in Rule 405 of the Securities Act:
Yes
☐
No
☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act:
Yes
☐
No
☒
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes
☒
No
☐
Indicate by checkmark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit
and post filed).
Yes
☒
No
☐
Indicate
by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant’s knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of III of this Form 10-K or any amendment to
the Form 10-K.
☒
Indicate
by checkmark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of
“Accelerated filer and large accelerated filer” in Rule
12b-2 of the Exchange Act (Check one):
Large Accelerated
Filer ☐ Accelerated
Filer ☐ Non-Accelerated
Filer ☐
Smaller Reporting Company
☒
Emerging
Growth Company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
The Company had
$Nil
in operating revenue during the
year.
The aggregate market value of the Common Stock held by
non-affiliates (as affiliates are defined in Rule 12b-2 of the
Exchange Act) of the registrant, computed by reference to the
average of the high and low sale price on
October 31, 2018
was
$
4,643,690
.
As of
July 17, 2019
there
were
77,394,841
shares of registrant’s common stock,
$0.01
par
value, issued and outstanding
.
STAR GOLD CORP.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED APRIL 30, 2019
TABLE OF CONTENTS
C
AUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K and the exhibits attached hereto contain
“forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements concern the Company’s anticipated
results and developments in the Company’s operations in
future periods, planned exploration and development of its
properties, plans related to its business and other matters that
may occur in the future. These statements relate to analyses and
other information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of
management.
Any
statement that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always
using words or phrases such as “believes”,
“expects” or “does not expect”, “is
expected”, “anticipates” or “does not
anticipate”, “plans”, “estimates”, or
“intends”, or stating that certain actions, events or
results “may” or “could”,
“would”, “might” or “will” be
taken, occur or be achieved) are not statements of historical fact
and may be forward-looking statements. Forward-looking statements
are subject to a variety of known and unknown risks, uncertainties
and other factors which could cause actual events or results to
differ from those expressed or implied by the forward-looking
statements, including, without limitation:
Risks
related to the Company’s properties being in the exploration
stage;
Risks
related to the mineral operations being subject to government
regulation;
Risks
related to the Company’s ability to obtain additional capital
to develop the Company’s resources, if any;
Risks
related to mineral exploration and development
activities;
Risks
related to mineral estimates;
Risks
related to the Company’s insurance coverage for operating
risks;
Risks
related to the fluctuation of prices for precious and base metals,
such as gold, silver and copper;
Risks
related to the competitive industry of mineral
exploration;
Risks
related to the title and rights in the Company’s mineral
properties;
Risks
related to the possible dilution of the Company’s common
stock from additional financing activities;
Risks
related to potential conflicts of interest with the Company’s
management;
Risks
related to the Company’s shares of common stock;
This
list is not exhaustive of the factors that may affect the
Company’s forward-looking statements. Some of the important
risks and uncertainties that could affect forward-looking
statements are described further under the sections titled
“Risk Factors and Uncertainties”, “Description of
Business” and “Management’s Discussion and
Analysis” of this Annual Report. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those anticipated, believed, estimated or expected. The
Company cautions readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
Star Gold Corp. disclaims any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of
anticipated or unanticipated events, except as required by law. The
Company advises readers to carefully review the reports and
documents filed from time to time with the Securities and Exchange
Commission (the “SEC”), particularly the
Company’s Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K.
As used
in this Annual Report, the terms “we,”
“us,” “our,” “Star Gold,” and
the “Company”, mean Star Gold Corp., unless otherwise
indicated. All dollar amounts in this Annual Report are expressed
in U.S. dollars, unless otherwise indicated.
Management’s
Discussion and Analysis is intended to be read in conjunction with
the Company’s financial statements and the integral notes
(“Notes”) thereto for the fiscal year ending April 30,
2019. The following statements may be forward-looking in nature and
actual results may differ materially.
P
ART I
I
TEM 1.
BUSINESS.
Corporate Background
The
Company was originally incorporated on December 8, 2006, under the
laws of the State of Nevada as Elan Development, Inc. On April 25,
2008, the name of the company was changed to Star Gold Corp. Star
Gold Corp. is a pre-development stage company engaged in the
acquisition and exploration of precious metal deposit properties
and advancing them toward production. The Company is engaged in the
business of exploring, evaluating and acquiring mineral prospects
with the potential for economic deposits of precious and base
metals.
Star
Gold Corp. currently leases with an option to acquire certain
unpatented mining claims located in the State of Nevada which in
part make up what we refer to as the “Longstreet
Property” (or the “Longstreet Project”). The
Longstreet Property in its entirety comprises 125 mineral claims:
75 original optioned claims, of which 70 are unpatented staked
claims and five claims leased from local ranchers, pursuant to the
“Clifford Lease”; as well as 50 claims subsequently
staked by Star Gold. The Longstreet Property covers a total area of
approximately 2,500 acres (1,012 ha). The Longstreet Project is at
an intermediate stage of exploration.
The
Company has no patents, licenses, franchises or concessions which
are considered by the Company to be of importance. The business is
not of a seasonal nature. Because minerals are traded in the open
market, the Company has little to no control over the competitive
conditions in the industry.
Overview of Mineral Exploration and Current Operations
Star
Gold Corp. is an exploration stage mineral company with no
producing mines. Mineral exploration is essentially a research
activity that does not produce a product. The Company acquires
properties which it believes have potential to host economic
concentrations of minerals, particularly gold and silver. These
acquisitions have and may take the form of unpatented mining claims
on federal land, or leasing claims, or private property owned by
others. An unpatented mining claim is an interest, that can be
acquired, in the mineral rights on open lands of the federally
owned public domain. Claims are staked in accordance with the
Mining Law of 1872, recorded with the federal government pursuant
to laws and regulations established by the Bureau of Land
Management. The Company intends to remain in the business of
exploring for mining properties that have the potential to produce
gold, silver, base metals and other commodities.
The
Company will perform basic geological work to identify specific
drill targets on the properties, and then collect subsurface
samples by drilling to confirm the presence of mineralization (the
presence of economic minerals in a specific area or geological
formation). The Company may enter joint venture agreements with
other companies to fund further exploration and/or development
work. It is the Company’s plan to focus on assembling a
high-quality group of mid-stage mineral (primarily gold and silver)
exploration prospects, using the experience and contacts of the
management group. By such prospects, the Company means properties
that have been previously identified by third parties, (including
prior owners and/or exploration companies), as mineral prospects
with potential for economic mineralization. Often these properties
have been sampled, mapped and sometimes drilled, usually with
indefinite results. Accordingly, such acquired projects will have
either prior exploration history or will have strong similarity to
a recognized geologic ore deposit model. Geographic emphasis will
be placed on the western United States.
The
geologic potential and ore deposit models have been defined and
specific drill targets identified the Company’s sole
remaining property. The Company’s property evaluation process
involves using basic geologic fieldwork to perform an initial
evaluation of a property. If the evaluation is positive, the
Company seeks to acquire, either by staking unpatented mining
claims on open public domain, or by leasing the property from the
owner of private property or the owner of unpatented claims. Once
acquired, the Company then typically makes a more detailed
evaluation of the property. This detailed evaluation involves
expenditures for exploration work which may include rock and soil
sampling, geologic mapping, geophysics, trenching, drilling or
other means to determine if economic mineralization is present on a
property.
Portions
of the Company’s mining properties are owned by third parties
and leased to Star Gold as outlined in the following
table:
|
Property name
|
|
Longstreet
|
|
|
Third parties
|
|
Great
Basin Resources, Inc. and Clifford
|
|
|
Number of claims
|
|
125
(1)
|
|
|
Acres (approx.)
|
|
2,500
|
|
|
Agreements/Royalties
|
|
|
|
|
|
Royalties
|
|
3% Net
Smelter Royalty (“NSR”)
|
|
|
Annual
lease payments – total due through 2020
|
|
$130,000
|
|
|
Minimum
exploration expenditures – total due through
2020
|
|
$1,200,000
|
|
|
Stock
options – total due through 2020
|
|
50,000
|
|
|
Annual
advance royalty payment
|
|
$12,000
|
(1)
Great Basin
Resources, Inc. (“Great Basin”) took assignment from
MinQuest, Inc., of the 120 claims which are leased to the Company
under the Longstreet Agreement (which was also assigned to Great
Basin) (Note 3 of the financial statements contained in Item 8) and
Clifford owns 5 claims (also Note 3) which are managed by the
Company.
Compliance with Government Regulations
Continuing
to acquire and explore mineral properties in the State of Nevada
will require the Company to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to
the exploration of minerals in the State of Nevada and the United
States Federal agencies.
United States
Mining
in the State of Nevada is subject to federal, state and local law.
Three types of laws are of particular importance to the
Company’s U.S. mineral properties: those affecting land
ownership and mining rights; those regulating mining operations;
and those dealing with the environment.
Land Ownership and Mining Rights.
On
Federal Lands, mining rights are governed by the General Mining Law
of 1872 (General Mining Law) as amended, 30 U.S.C. §§
21-161 (various sections), which allows the location of mining
claims on certain Federal Lands upon the discovery of a valuable
mineral deposit and proper compliance with claim location
requirements. A valid mining claim provides the holder with the
right to conduct mining operations for the removal of locatable
minerals, subject to compliance with the General Mining Law and
Nevada state law governing the staking and registration of mining
claims, as well as compliance with various federal, state and local
operating and environmental laws, regulations and ordinances. As
the owner or lessee of the unpatented mining claims, the Company
has the right to conduct mining operations on the lands subject to
the prior procurement of required operating permits and approvals,
compliance with the terms and conditions of any applicable mining
lease, and compliance with applicable federal, state, and local
laws, regulations and ordinances.
Mining Operations
The
exploration of mining properties and development and operation of
mines is governed by both federal and state laws.
The
State of Nevada likewise requires various permits and approvals
before mining operations can begin, although the state and federal
regulatory agencies usually cooperate to minimize duplication of
permitting efforts. Among other things, a detailed reclamation plan
must be prepared and approved, with bonding in the amount of
projected reclamation costs. The bond is used to ensure that proper
reclamation takes place, and the bond will not be released until
that time. The Nevada Department of Environmental Protection, which
is referred to as the NDEP, is the state agency that administers
the reclamation permits, mine permits and related closure plans on
the Nevada property. Local jurisdictions (such as Eureka County)
may also impose permitting requirements (such as conditional use
permits or zoning approvals).
Environmental Law
The
development, operation, closure, and reclamation of mining projects
in the United States requires numerous notifications, permits,
authorizations, and public agency decisions. Compliance with
environmental and related laws and regulations requires us to
obtain permits issued by regulatory agencies, and to file various
reports and keep records of the Company’s operations. Certain
of these permits require periodic renewal or review of their
conditions and may be subject to a public review process during
which opposition to the Company’s proposed operations may be
encountered. The Company is currently operating under
various
permits for activities connected to mineral exploration,
reclamation, and environmental considerations. Unless and until a
mineral resource is proved, it is unlikely Star Gold Corp.
operations will move beyond the exploration stage. If in the future
the Company decides to proceed beyond exploration, there will be
numerous notifications, permit applications, and other decisions to
be addressed at that time.
Competition
Star
Gold Corp. competes with other mineral resource exploration and
development companies for financing and for the acquisition of new
mineral properties and for equipment and labor related to
exploration and development of mineral properties. Many of the
mineral resource exploration and development companies with whom
the Company competes have greater financial and technical
resources. Accordingly, competitors may be able to spend greater
amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their
mineral properties. In addition, they may be able to afford greater
geological expertise in the targeting and exploration of mineral
properties. This competition could result in competitors having
mineral properties of greater quality and interest to prospective
investors who may finance additional exploration and development.
This competition could adversely impact Star Gold Corp.’s
ability to finance further exploration and to achieve the financing
necessary for the Company to develop its mineral
properties.
The
Company provides no assurance it will be able to compete in any of
its business areas effectively with current or future competitors
or that the competitive pressures faced by the Company will not
have a material adverse effect on the business, financial condition
and operating results.
Office and Other Facilities
Star
Gold Corp. currently maintains its administrative offices at
105 N. 4
th
Street, Suite 300
, Coeur
d’Alene, ID 83814. The telephone number is (208) 664-5066.
Star Gold Corp. does not currently own title to any real
property.
Employees
The
Company has no employees as of the date of this Annual Report on
Form 10-K. Star Gold Corp. conducts business largely through
independent contractor agreements with consultants.
Research and Development Expenditures
The
Company has not incurred any research expenditures since
incorporation.
Reports to Security Holders
The
Registrant does not issue annual or quarterly reports to security
holders other than the annual Form 10-K and quarterly Forms 10-Q as
electronically filed with the SEC. Electronically filed reports may
be accessed at
www.sec.gov
I
TEM 1A.
RISK
FACTORS.
The
following factors, among others, could cause the actual operating
results to differ materially from those indicated or suggested by
forward-looking statements made in this Form 10-K or presented
elsewhere from time to time.
Estimates
of mineralized material are forward-looking statements inherently
subject to error. Although resource estimates require a high degree
of assurance in the underlying data when the estimates are made,
unforeseen events and uncontrollable factors can have significant
adverse or positive impacts on the estimates. Actual results may
inherently differ from estimates. The unforeseen and uncontrollable
factors include but are not limited to: geologic uncertainties
including inherent sample variability, metal price fluctuations,
variations in mining and processing parameters, and adverse changes
in environmental or mining laws and regulations. The timing and
effects of variances from estimated values cannot be accurately
predicted.
Failure
to successfully address the risks and uncertainties described below
would have a material adverse effect on the Company’s
business, financial condition and/or results of operations, and the
trading price of the Company’s common stock may decline and
investors may lose all or part of their investment. Star Gold Corp.
cannot assure readers that the Company will successfully address
these risks or other unknown risks that may affect its
business.
Risks Related to the Company
The Company has a limited operating history on which to base an
evaluation of the business and prospects
The
Company has not derived any revenue from exploration of its
properties. The Company’s operating history has been limited
to the acquisition and exploration of mineral properties. Such
history does not provide a meaningful basis for an evaluation of
its prospects for success if future determinations are made that
mineral reserves exist and to commence construction and operation
of a mine. Other than through conventional and typical exploration
methods and procedures, the Company has no additional means to
evaluate the likelihood of whether its mineral property contains
any mineral reserve or, if they do, that it will be operated
successfully. The Company anticipates that it will continue to
incur operating costs without realizing any operating revenues
during the period it explores existing and any future acquired
properties.
During
the fiscal year ended April 30, 2019, the Company had a net loss of
$335,704 in connection with the maintenance and exploration of its
mineral properties and the operation of the exploration business.
The Company therefore expects to continue to incur significant
losses into the foreseeable future. The Company recognizes that if
it is unable to generate significant revenues from mining
operations and dispositions of its properties, the Company will not
be able to earn profits or continue operations. At this early stage
of operations, the Company expects to face the risks,
uncertainties, expenses and difficulties frequently encountered by
companies at the development stage of their business. The Company
cannot ensure it will be successful in addressing these risks and
uncertainties and the failure to do so could have a materially
adverse effect on its financial condition. There is no history upon
which to base any assumption as to the likelihood that the Company
will prove successful and the Company can provide investors no
assurance that we will generate any operating revenue or ever
achieve profitable operations.
Investors’ interests in the Company will be diluted and
investors may suffer dilution in their net book value per share if
the Company issues additional employee/director/consultant options
or if the Company sells additional shares to finance its
operation.
The
Company has not generated any operational revenues from the
exploration of any properties. In order to further expand the
Company’s business and meet its objectives, including but not
limited to, obtaining funds to further explore the Company’s
existing properties or to finance any acquisition activity, growth
and/or additional exploration programs, should those opportunities
present themselves, and depending on the outcome of its exploration
programs, additional capital funding may need to be obtained
through the sale and issuance of additional equity, debt or
derivative securities. The Company may also, in the future, grant
to some or all of its directors, officers, insiders and key
employees/consultants, options or other rights to acquire common or
preferred shares in the Company as non-cash incentives. The
issuance of any additional equity securities could cause
then-existing stockholders to experience dilution of their
ownership interests.
Should
the Company issue additional shares to finance its business
activities, investors’ interests in the Company may be
diluted and investors may suffer dilution in their net book value
per share depending on the price at which such securities are sold.
As of the date of the filing of this report there are outstanding
30,654,249 common share purchase warrants exercisable into
30,654,249 shares of common stock, and 6,645,000 options granted
that are exercisable into 6,645,000 shares of common stock. If
these are exercised or converted, these would represent
approximately 32.5% of the Company’s then issued and
outstanding shares. If all the warrants and options are exercised
and the underlying shares issued, such issuance would cause a
reduction in the proportionate ownership and voting power of all
other stockholders. The dilution may result in a decline in the
market price of the Company’s shares.
Conflicts of interest
Certain
of the Company’s officers and directors may be or become
associated with other businesses, including natural resource
companies that acquire interests in properties. Such associations
may give rise to conflicts of interests from time to time. The
Company’s directors are required by law to act honestly and
in good faith with a view to the Company’s best interests and
to disclose any interest, which they may have in any of the
Company’s projects or opportunities. In general, if a
conflict of interest arises at a meeting of the board of directors,
any director in a conflict will disclose his interest and abstain
from voting on such matter or, if he does vote, his vote will not
be counted.
Dependence on Key Management Personnel
The
Company’s ability to continue exploration and development
activities and to develop a competitive edge in the marketplace
depends, in large part, on its ability to attract and maintain
qualified key management personnel. Competition for such personnel
is intense, and there can be no assurance that the Company will be
able to attract and retain such personnel. The Company’s
development now, and in the future, will depend on the effort of
key executives such as Lindsay Gorrill, Kelly Stopher, and
David
Segelov. The loss of any of these key people could have a material
adverse effect on the Company’s business. In addition, the
Company has expanded the provisions of its stock option plan so the
Company can provide incentive for the key personnel.
Failure to obtain additional financing
Unless
and until the Company can generate revenues from operations, the
Company’s main potential continuing source of funds will be
additional debt and/or equity financings which may not be
sufficient to sustain operations. There is no guarantee that the
Company, if needed, will be able to raise additional funds through
debt and/or equity financing or that any such financing will be
able to be obtained on terms beneficial to the Company. If Star
Gold Corp. is unsuccessful in raising additional funds, the Company
will not be able to develop its properties and may be unable to
continue as a going concern.
Company Directors and Officers own 26,681,482 shares of the
Company’s outstanding common stock (34.5%) which may cause
corporate decisions influenced by the Directors and Officers to
appear to be inconsistent with the interests of other
stockholders.
Company
directors and/or officers as a group control a combined 34.5% of
the issued and outstanding shares of the Company’s common
stock. Accordingly, while none of the current directors and/or
officers (individually or collectively) can control, as
shareholders, who is elected to the board of directors, since these
individuals are not simply passive investors but are also active
members of Company management, their interests as directors and/or
officers and shareholders may, at times, be adverse to those
interests of merely passive investors. Where those conflicts exist,
stockholders will be dependent upon management exercising their
fiduciary duties as members of the Board of Directors and/or as an
officer. Also, due to their stock ownership position, members of
the Company’s management team will have: (i) the ability to
substantially influence the outcome of many (if not most) corporate
actions requiring stockholder approval, including amendments to the
Company’s Articles of Incorporation; and (ii) the ability to
substantially influence corporate combinations or similar
transactions that might benefit minority stockholders which may not
be supported by management to the detriment of smaller and/or
passive investors.
There is substantial risk that no commercially viable mineral
deposits will be found due to speculative nature of mineral
exploration,
Exploration
for commercially viable mineral deposits is a speculative venture
involving substantial risk. Star Gold cannot provide investors with
assurance that any of its mining claim contains commercially viable
mineral deposits. The exploration program that the Company will
conduct on its claim may not result in the discovery of
commercially viable mineral deposits. Problems such as unusual and
unexpected rock formations and other conditions are involved in
mineral exploration and often result in unsuccessful exploration
efforts. In such a case, the Company may be unable to complete its
business plan and investors could lose their entire
investment.
Due to the inherent dangers involved in mineral exploration, there
is a risk that the Company may incur liability or damages as it
conducts its business.
The
search for minerals involves numerous hazards. As a result, Star
Gold Corp. may become subject to liability for such hazards,
including pollution, cave-ins and other hazards against which the
Company cannot insure or against which we may elect not to insure.
Star Gold Corp. currently has no such insurance nor does the
Company expect to acquire such insurance for the foreseeable
future. If a hazard were to occur, the costs of rectifying the
hazard may exceed the Company’s asset value and cause
management to liquidate all the Company’s assets resulting in
the loss of a stockholder’s entire investment.
Exploration efforts may be adversely affected by metals price
volatility causing the Company to cease exploration
efforts.
The
Company has no earnings from operations. However, the success of
any exploration effort is derived from the price of metals which
are affected by numerous factors including: 1) expectations for
inflation; 2) investor speculative activities: 3) relative exchange
rate of the U.S. dollar to other currencies; 4) global and regional
demand and production; 5) global and regional political and
economic conditions; and 6) production costs in major producing
regions. These factors are beyond the Company’s control and
are impossible for the Company to accurately predict.
There
is no guarantee that current favorable prices for metals and other
commodities will be sustained. If the market prices for these
commodities fall the Company may suspend or cease exploration
efforts.
Governmental regulation and environmental risks
The
Company’s business is subject to extensive federal, state and
local laws and regulations governing mining exploration,
development, production, labor standards, occupational health,
waste disposal, use of toxic substances, environmental regulations,
mine safety and other matters. New legislation and regulations may
be adopted at any time that results in additional operating
expense, capital expenditures or restrictions and delays in the
exploration, mining, production or development of its
properties
Internal control, fraud detection and financial
reporting
Should
the Company fail to maintain an effective system of internal
controls, it may not be able to detect fraud or report financial
results accurately, which could harm the business and could subject
the Company to regulatory scrutiny.
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002 (“Section
404”), the Company is required to perform an evaluation of
the effectiveness of its internal controls over financial
reporting. The Company is not required to have an independent
registered public accounting firm test and evaluate the design and
operating effectiveness of such internal controls and publicly
attest to such evaluation. Continuing compliance with the
requirements of Section 404 is expected to be expensive and
time-consuming. Failure to implement required new or improved
controls, or difficulties encountered in their implementation,
could harm the Company’s operating results or cause the
Company to fail to meet its reporting obligations.
Risks Associated with the Company’s Common Stock
Star Gold Corp. stock is a penny stock; stockholders will be more
limited in their ability to sell their stock.
The
shares of Star Gold Corp. common stock constitute “penny
stocks” under the Exchange Act. The shares will remain
classified as a penny stock for the foreseeable future. The
classification as a penny stock makes it more difficult for a
broker/dealer to sell the stock into a secondary market, which
makes it more difficult for a purchaser to liquidate his or her
investment. Any broker/dealer engaged by the purchaser for the
purpose of selling his or her shares will be subject to rules 15g-1
through 15g-10 of the Exchange Act. Rather than having to comply
with these rules, some broker-dealers will refuse to attempt to
sell a penny stock.
The
“penny stock” rules adopted by the SEC under the
Exchange Act subjects the sale of the shares of the Company’s
common stock to certain regulations which impose sales practice
requirements on broker/dealers. For example, brokers/dealers
selling such securities must, prior to effecting the transaction,
provide their customers with a document that discloses the risks of
investing in such securities.
Legal
remedies, which may be available to an investor in “penny
stocks,” are as follows:
a)
if “penny
stock” is sold to an investor in violation of his or her
rights listed above, or other federal or states securities laws,
the investor may be able to cancel his or her purchase and get his
or her money back.
b)
if the stocks are
sold in a fraudulent manner, the investor may be able to sue the
persons and firms that caused the fraud for damages
c)
if the investor has
signed an arbitration agreement, however, he or she may have to
pursue his or her claims through arbitration.
If the
person purchasing the securities is someone other than an
accredited investor or an established customer of the
broker/dealer, the broker/dealer must also approve the potential
customer’s account by obtaining information concerning the
customer’s financial situation, investment experience and
investment objectives. The broker/dealer must also decide whether
the transaction is suitable for the customer and whether the
customer has sufficient knowledge and experience in financial
matters to be reasonably expected to be capable of evaluating the
risk of transactions in such securities. Accordingly, the
SEC’s rules may limit the number of potential purchasers of
the shares of Star Gold Corp. common stock.
The Company’s stock price has been volatile and stockholder
investment in the Company’s common stock could suffer a
decline in value.
The
Company’s common stock is quoted via the OTC Markets. The
market price of the Company’s common stock may fluctuate
significantly in response to a number of factors, some of which are
beyond the Company’s control. These factors include price
fluctuations of precious metals, government regulations, disputes
regarding mining claims, broad stock market fluctuations and
economic conditions in the United States.
Although
the Company’s common stock is currently quoted via the OTC
Markets, there are no assurances any public market for the
Company’s common stock will continue. There are also no
assurances as to the depth or liquidity of any such market or the
prices at which holders may be able to sell the shares. An
investment in these shares may be totally illiquid and investors
may not be able to liquidate their investment readily or at all
when they need or desire to sell.
The Company does not intend to pay any dividends on shares of
common stock in the near future.
The
Company does not currently anticipate declaring and paying
dividends to its stockholders in the near future, and any future
decision as to the payment of dividends will be at the discretion
of the board of directors and will depend upon the Company’s
earnings, financial position, capital requirements, plans for
expansion and such other factors as the board of directors deems
relevant. It is the Company’s intention to apply net
earnings, if any, in the foreseeable future to finance the growth
and development of the business.
I
TEM 1B.
UNRESOLVED
STAFF COMMENTS.
None
I
TEM 2.
PROPERTIES.
The Company headquarters are located at 105 N. 4
th
Street, Suite 300, Coeur
d’Alene, Idaho, 83814. The Company believes this office space
and facilities are sufficient to meet the Company’s present
needs, and do not anticipate any difficulty securing alternative or
additional space, as needed, on terms acceptable to the
Company.
The
Company currently does not own any real property. The Company owns
a vehicle for business use in Nevada and other personal property
used in the conduct of the Company’s business at its
headquarters and at its various holdings in Nevada.
The
Company is an exploration stage company with no proven or measured
mineral reserves. There is no assurance that a commercially viable
mineral deposit exists at the Longstreet Property. Further
exploration will be required before any final determination as to
the economic or legal feasibility may be made as to the
Company’s property.
THE LONGSTREET PROPERTY
In
January of 2010 Star Gold signed an agreement (the
“Longstreet Agreement”) to lease with an option to
acquire from MinQuest, Inc. (“MinQuest”), 60 unpatented
mining claims totaling approximately 490 hectares. The Company
completed its first phase of drilling in 2011.
On July 9, 2010, the Company and MinQuest entered
into an amended agreement to add an additional 10 claims and
expanded the total to 70 unpatented claims. In addition, Star Gold
agreed to reimburse MinQuest for 5 claims leased from a third
party, Roy Clifford.
The Longstreet Property comprises 125
mineral claims (75 original optioned claims, of which 70 are
unpatented staked claims and five claims acquired from local
ranchers (Roy Clifford et al)), as well as 50 claims subsequently
staked by Star Gold, covering a total area of approximately 2,500
acres (1,012 ha) (Figure 6-1). The claims are located within
Sections 9-17, 20, and 21 of T6N, R47E, MDB&M (Mount Diablo
Base Line & Meridian), Nye County. The entire 125 claims (the 5
claims covered by the Clifford Lease are not subject to the
Longstreet Agreement) comprise the Longstreet
Property.
On July
25, 2017, MinQuest assigned, conveyed and transferred to Great
Basin Resources, Inc. (“Great Basin”) all of the
rights, title and interest of Minquest in and to the Longstreet
Property and the Longstreet Agreement.
Of the
50 claims staked by Star Gold, 38 are adjacent to the eastern
boundary of the property and were staked with the objective of
providing a site for potential leach pads planned for future
development of the Main Zone (the “Leach Pad Claims”).
The remaining 12 claims staked by Star Gold lie along a corridor
leading from the main Longstreet property to the Leach Pad
Claims.
A list of claims, ownership and Bureau of Land Management (BLM)
serial numbers is shown below:
|
Claim Name
|
Registered
Owner
|
NMC
Number
|
Area
(Acres)
|
Date Located
|
Good Until Date
|
|
|
|||||
|
Original Longstreet Property Claims
|
|||||
|
Longstreet
1A
|
Great Basin
Resources, Inc.
|
799562
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
2A
|
Great Basin
Resources, Inc.
|
799563
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
3A
|
Great Basin
Resources, Inc.
|
799564
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
6A
|
Great Basin
Resources, Inc.
|
799565
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
7A
|
Great Basin
Resources, Inc.
|
799566
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
8A
|
Great Basin
Resources, Inc.
|
799567
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
9A
|
Great Basin
Resources, Inc.
|
799568
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
16A
|
Great Basin
Resources, Inc.
|
799569
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
13
|
Great Basin
Resources, Inc.
|
799570
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
32
|
Great Basin
Resources, Inc.
|
799571
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
34
|
Great Basin
Resources, Inc.
|
799572
|
20
|
22-Jan-1999
|
September 1,
2019
|
|
Longstreet
4A
|
Great Basin
Resources, Inc.
|
836168
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
5A
|
Great Basin
Resources, Inc.
|
836169
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
8
|
Great Basin
Resources, Inc.
|
836170
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
10
|
Great Basin
Resources, Inc.
|
836171
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
10A
|
Great Basin
Resources, Inc.
|
836172
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
28
|
Great Basin
Resources, Inc.
|
836173
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
30
|
Great Basin
Resources, Inc.
|
836174
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
36
|
Great Basin
Resources, Inc.
|
836175
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
37
|
Great Basin
Resources, Inc.
|
836176
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
39
|
Great Basin
Resources, Inc.
|
836177
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
41
|
Great Basin
Resources, Inc.
|
836178
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
43
|
Great Basin
Resources, Inc.
|
836179
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
45
|
Great Basin
Resources, Inc.
|
836180
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
47
|
Great Basin
Resources, Inc.
|
836181
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
49
|
Great Basin
Resources, Inc.
|
836182
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Claim Name
|
Registered
Owner
|
NMC
Number
|
Area
(Acres)
|
Date Located
|
Good Until Date
|
|
Longstreet
101
|
Great Basin
Resources, Inc.
|
836183
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
102
|
Great Basin
Resources, Inc.
|
836184
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
103
|
Great Basin
Resources, Inc.
|
836185
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
104
|
Great Basin
Resources, Inc.
|
836186
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
105
|
Great Basin
Resources, Inc.
|
836187
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
106
|
Great Basin
Resources, Inc.
|
836188
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
107
|
Great Basin
Resources, Inc.
|
836189
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
108
|
Great Basin
Resources, Inc.
|
836190
|
20
|
2-Feb-2002
|
September 1,
2019
|
|
Longstreet
12
|
Great Basin
Resources, Inc.
|
843867
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
14
|
Great Basin
Resources, Inc.
|
843868
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
16
|
Great Basin
Resources, Inc.
|
843869
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
18
|
Great Basin
Resources, Inc.
|
843870
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
20
|
Great Basin
Resources, Inc.
|
843871
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
26
|
Great Basin
Resources, Inc.
|
843872
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
42
|
Great Basin
Resources, Inc.
|
843873
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
44
|
Great Basin
Resources, Inc.
|
843874
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
46
|
Great Basin
Resources, Inc.
|
843875
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
48
|
Great Basin
Resources, Inc.
|
843876
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
50
|
Great Basin
Resources, Inc.
|
843877
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
40
|
Great Basin
Resources, Inc.
|
851568
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
118
|
Great Basin
Resources, Inc.
|
851569
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
119
|
Great Basin
Resources, Inc.
|
851570
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
120
|
Great Basin
Resources, Inc.
|
851571
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
121
|
Great Basin
Resources, Inc.
|
851572
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Claim Name
|
Registered
Owner
|
NMC
Number
|
Area
(Acres)
|
Date Located
|
Good Until Date
|
|
Longstreet
122
|
Great Basin
Resources, Inc.
|
851573
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
123
|
Great Basin
Resources, Inc.
|
851574
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
124
|
Great Basin
Resources, Inc.
|
851575
|
20
|
29-Sep-2003
|
September 1,
2019
|
|
Longstreet
109
|
Great Basin
Resources, Inc.
|
855021
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
110
|
Great Basin
Resources, Inc.
|
855022
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
111
|
Great Basin
Resources, Inc.
|
855023
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
112
|
Great Basin
Resources, Inc.
|
855024
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
113
|
Great Basin
Resources, Inc.
|
855025
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
114
|
Great Basin
Resources, Inc.
|
855026
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
115
|
Great Basin
Resources, Inc.
|
855027
|
20
|
25-Feb-2003
|
September 1,
2019
|
|
Longstreet
56
|
Great Basin
Resources, Inc.
|
1025831
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
57
|
Great Basin
Resources, Inc.
|
1025832
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
58
|
Great Basin
Resources, Inc.
|
1025833
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
59
|
Great Basin
Resources, Inc.
|
1025834
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
60
|
Great Basin
Resources, Inc.
|
1025835
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
61
|
Great Basin
Resources, Inc.
|
1025836
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
62
|
Great Basin
Resources, Inc.
|
1025837
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
63
|
Great Basin
Resources, Inc.
|
1025838
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
64
|
Great Basin
Resources, Inc.
|
1025839
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
65
|
Great Basin
Resources, Inc.
|
1025840
|
20
|
9-Jul-2010
|
September 1,
2019
|
|
Longstreet
11
|
Roy
Clifford et al
|
164002
|
20
|
14-Jun-1980
|
September 1,
2019
|
|
Longstreet
12
|
Roy
Clifford et al
|
164003
|
20
|
14-Jun-1980
|
September 1,
2019
|
|
Longstreet
14
|
Roy
Clifford et al
|
164005
|
20
|
14-Jun-1980
|
September 1,
2019
|
|
Longstreet
15
|
Roy
Clifford et al
|
164006
|
20
|
14-Jun-1980
|
September 1,
2019
|
|
Morning
Star
|
Roy
Clifford et al
|
96719
|
20
|
1-Jul-1957
|
September 1,
2019
|
|
Subtotal
Original
|
75
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
Leach Pad Claims
|
|||||
|
Longstreet
200
|
Great Basin
Resources, Inc.
|
1073640
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
201
|
Great Basin
Resources, Inc.
|
1073641
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
202
|
Great Basin
Resources, Inc.
|
1073642
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Claim Name
|
Registered
Owner
|
NMC
Number
|
Area
(Acres)
|
Date Located
|
Good Until Date
|
|
Longstreet
203
|
Great Basin
Resources, Inc.
|
1073643
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
204
|
Great Basin
Resources, Inc.
|
1073644
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
205
|
Great Basin
Resources, Inc.
|
1073645
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
206
|
Great Basin
Resources, Inc.
|
1073646
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
207
|
Great Basin
Resources, Inc.
|
1073647
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
208
|
Great Basin
Resources, Inc.
|
1073648
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
209
|
Great Basin
Resources, Inc.
|
1073649
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
210
|
Great Basin
Resources, Inc.
|
1073650
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
211
|
Great Basin
Resources, Inc.
|
1073651
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
212
|
Great Basin
Resources, Inc.
|
1073652
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
213
|
Great Basin
Resources, Inc.
|
1073653
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
214
|
Great Basin
Resources, Inc.
|
1073654
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
215
|
Great Basin
Resources, Inc.
|
1073655
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
216
|
Great Basin
Resources, Inc.
|
1073656
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
217
|
Great Basin
Resources, Inc.
|
1073657
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
218
|
Great Basin
Resources, Inc.
|
1073658
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
219
|
Great Basin
Resources, Inc.
|
1073659
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
220
|
Great Basin
Resources, Inc.
|
1073660
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
210
|
Great Basin
Resources, Inc.
|
1073661
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
220
|
Great Basin
Resources, Inc.
|
1073662
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
223
|
Great Basin
Resources, Inc.
|
1073663
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
224
|
Great Basin
Resources, Inc.
|
1073664
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Claim Name
|
Registered
Owner
|
NMC
Number
|
Area
(Acres)
|
Date Located
|
Good Until Date
|
|
Longstreet
225
|
Great Basin
Resources, Inc.
|
1073665
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
226
|
Great Basin
Resources, Inc.
|
1073666
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
227
|
Great Basin
Resources, Inc.
|
1073667
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
228
|
Great Basin
Resources, Inc.
|
1073668
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
229
|
Great Basin
Resources, Inc.
|
1073669
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
230
|
Great Basin
Resources, Inc.
|
1073670
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
231
|
Great Basin
Resources, Inc.
|
1073671
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
232
|
Great Basin
Resources, Inc.
|
1073672
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
233
|
Great Basin
Resources, Inc.
|
1073673
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
234
|
Great Basin
Resources, Inc.
|
1073674
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
235
|
Great Basin
Resources, Inc.
|
1073675
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
236
|
Great Basin
Resources, Inc.
|
1073676
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Longstreet
237
|
Great Basin
Resources, Inc.
|
1073677
|
20
|
22-Jun-2012
|
September 1,
2019
|
|
Subtotal
Leach Pad
|
38
|
|
760
|
|
|
|
|
|
|
|
|
|
|
Corridor Claims
|
|||||
|
Longstreet
66
|
Great Basin
Resources, Inc.
|
1080730
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
238
|
Great Basin
Resources, Inc.
|
1080731
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
239
|
Great Basin
Resources, Inc.
|
1080732
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
240
|
Great Basin
Resources, Inc.
|
1080733
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
241
|
Great Basin
Resources, Inc.
|
1080734
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
242
|
Great Basin
Resources, Inc.
|
1080735
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
243
|
Great Basin
Resources, Inc.
|
1080736
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
244
|
Great Basin
Resources, Inc.
|
1080737
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
245
|
Great Basin
Resources, Inc.
|
1080738
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
246
|
Great Basin
Resources, Inc.
|
1080739
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
247
|
Great Basin
Resources, Inc.
|
1080740
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Longstreet
248
|
Great Basin
Resources, Inc.
|
1080741
|
20
|
5-Sept-2012
|
September 1,
2019
|
|
Subtotal
Corridor
|
12
|
|
240
|
|
|
|
Total
|
125
|
|
2,500
|
|
|
Star
Gold must make annual claim filing fees ($155.00 per claim in 2018)
with the Bureau of Land Management (BLM), and Nevada/Nye County
claim filing fees of $12.00 per claim plus $10.00 for filing with
the Nye County office at Tonopah, NV. The fiscal year ended April
30, 2019 annual claim payments totaled $23,824.
The
terms of the amended Longstreet Agreement required an initial cash
payment of $20,000, the issuance of 25,000 stock options based on
“fair market price” to MinQuest on or about January 16,
2016. The amended Longstreet Agreement also requires cash payments
totaling $230,000 over five years and 160,000 stock options based
on “fair market price” over the same seven-year period.
The Company has agreed to work commitments of $1,650,000 over five
years. Following the fifth anniversary of the amended agreement and
if commitments have been met Star Gold shall receive a quitclaim
deed for a 100% interest in the properties covered by the
Longstreet Agreement, as amended, in consideration of an ongoing 3%
NSR to MinQuest; due to the assignment of the Longstreet Agreement
to Great Basin, Inc., in the future all required issuances of stock
options and payment of sums owed pursuant to the Longstreet
Agreement, will be issued and paid to Great Basin. The Longstreet
Agreement does not cover the 5 claims subject to the Clifford
Lease.
The
Longstreet project is located 48 kilometers southeast of the Round
Mountain Mine in Nevada. Longstreet is a
Round Mountain style volcanic-hosted
gold deposit. The first vein mapping program ever done at
Longstreet was completed in October 2002. This work disclosed that
gold-bearing veins at Main, as well as 6 other targets in the
project area are steeply dipping. Most of the previous drilling was
vertical. This indicates high potential to increase continuity,
tonnage and grade of the resource. Surface geochemical sampling of
veins from all the currently defined targets found gold values up
to 18.1 g/t. As at Round Mountain the property contains strong
potential for both open pit heap-leachable and high-grade millable
ore. No party reading this report should conclude the Longstreet
property has economic mineralization due to Longstreet’s
proximity to Round Mountain. Comparison to this and other historic
or producing mines is strictly informational relative to location
and similar geologic characteristics.
History:
The Longstreet Property was discovered in the early
1900’s but had limited development work until 1929. A 1929
report and maps show development of the “Golden Lion
Mine” on two levels spaced 75 meters apart vertically. The
report indicates development of 300,000 tons of “vein
material” averaging 0.20 oz/ton (6.8 g/t) gold and 8 oz/ton
(274 g/t) silver. A mill was constructed, the remnants of which are
still on the property. However, the small stopes underground
indicate very little mining was done and the operation was
abandoned.
The
property lay idle until 1980 when Keradamex Inc. and E & B
Exploration formed a joint venture to explore the property. The
venture conducted soil and rock chip geochemical surveys, limited
underground sampling and drilled seven angle core holes (one was
abandoned) into the Main mine workings area. This drilling revealed
the presence of fracture related gold mineralization up to 36
meters thick extending into the hanging wall of the vein structure.
In 1982 Minerva Exploration optioned the property and initiated an
underground sampling program. In 1983 a joint venture was formed
with Geomex Canada Resources Ltd. and Derry, Michener, and Booth
were commissioned to assess the property and conducted underground
sampling, bulk sampling and metallurgical testing.
|
Historic Drilling Summary
|
|
|
|
|
|
|
Date
|
Company
|
|
Number of Holes
|
|
Total Footage
|
|
1980
|
Keradamex
|
|
7
|
|
NA
|
|
1982-1983
|
Minerva
|
|
-
|
|
UG Sampling, no drilling
|
|
1984-1997
|
Naneco
|
|
Approx. 500
|
|
NA, RC and air track
|
|
1987
|
Cyprus
|
|
7
|
|
3,000
|
|
2002-2005
|
R.E.M.
|
|
30
|
|
11,000
|
In 1982
Minerva Exploration optioned the property and initiated an
underground sampling program. In 1983 a joint venture was formed
with Geomex Canada Resources Ltd. Derry, Michener, and Booth were
commissioned to assess the property and conducted underground
sampling, bulk sampling and metallurgical testing.
In
early 1984 Naneco Resources Ltd., an Alberta company, acquired all
of the assets of Minerva and an additional 10 percent interest in
the property from Geomex. As operator, Naneco immediately initiated
drilling. In 1985, with over 200 RC holes drilled the venture
announced encouraging results with anomalous grades of gold and
silver throughout its drilling samples.
During
the next few years Naneco increased its interest from 53 percent to
100 percent, conducted additional metallurgy, economic evaluation
and drilling. At least 492 RC holes were drilled, most within the
Main resource area. Unable to raise money because of falling gold
prices and strapped with high land payments to the claim owners,
Naneco relinquished the property in 1998. MinQuest acquired it
shortly thereafter. The Cyprus target, which was evaluated by
Cyprus Minerals Company in 1987 was acquired by MinQuest in early
2002.
The
property was optioned to Rare Earth Metals Corp. (REM) in May of
2002. REM later changed its name to Harvest Gold. Mapping and
geochemical sampling of the 7 targets shown on the attached map was
completed in October 2002. From 2003 through 2005 REM drilled 30
holes into Main totaling 3,350 meters. The drill holes were angled
toward the intersection of the two primary sheeted vein sets.
Results showed a 20% improvement in average grade over vertical
drilling.
Following
the split of REM into Harvest Gold and VMS Ventures, Inc. Harvest
performed no further work at Longstreet after late 2005. The
property was finally returned to MinQuest in August 2009. By
agreement with Minquest, on January 15, 2010 Star Gold Corp.
received an option to acquire the portions of the property covered
by the option.
Star
Gold began drilling in the fall of 2011. A 16-hole program at Main
showed new intercepts at depth in the central portion of the
deposit. Intercept thicknesses of +0.01 oz./ton gold equivalent
values are 65 to 120 feet. Of the 16 holes drilled 8 have +100 feet
thicknesses of +0.01 oz./ton gold equivalent and 4 have +200 feet
thicknesses of +0.01 oz./ton gold equivalent. Drill hole LS-1101
has 305 feet of +0.01 oz./ton gold equivalent. Gold equivalent
values were derived from the following formula:
AuEq oz./ton = Au oz./ton + (Ag
oz./ton)/60.
Drilling results are shown in the table
below.
Drill
samples were sent through a rotating, wet sample splitter attached
to the drill to reduce the sample volume and maintain a
representative sample. Drill helpers, under the supervision of the
project geologist, collected and bagged an ‘A’ and
‘B’ sample on 5-foot intervals. Procedurally, an
‘A’ sample is collected and held by the project
geologist for security purposes until it can be delivered to an
assay facility. The ‘B’ sample then remains on site as
a duplicate or backup sample if needed at a later date. A blank and
two known ‘standard’ pulps are then submitted randomly
spaced with each drill hole. Once assays are
available, they are examined for unexpected high
or low values. If unexpected high or low values are encountered,
the ‘B’ splits may be collected and submitted, or the
lab may be requested to re-assay the pulp or reject in question.
The ‘check’ samples and ‘standard’ are
examined to insure they agree with the original or know within
accepted limits, usually +/- 10%.
ALS
Chemex of Reno, Nevada did all sample preparation, including
crushing, grinding and preparation of the assay pulps. The samples
were never left unattended or unsecured by project geologist,
drilling or laboratory staff nor are they handled by officers,
directors or associates of Star Gold.
Sample
preparation involves crushing the entire sample to -10 mesh,
splitting, then pulverizing 1,000 grams to 75% passing 75-micron
mesh. These pulps are then transferred within the ALS Chemex
facility for assay. Both gold and silver assays are done by fire
assay with an AA finish. The standard Star Gold-Longstreet
submittal to ALS Chemex requests a 30-gram charge for gold fire
assay. Assays which exceed 10 g/ton are automatically subjected to
a gravimetric finish.
Select sample
intervals, usually those near intervals assaying significant gold,
are chosen by the project geologist for re-assay
also.
The
Longstreet Project is affiliated with a paleo-hot springs system in
a caldera associated volcanic setting very similar to the Round
Mountain mine. Round Mountain is an open pit, heap-leach mine that
has produced over 10 million ounces of gold over a 30-year period
with the average grade currently being mined of 0.018 oz./ton gold.
Cut-off grades for Round Mountain and several other oxide ore heap
leach operations in Nevada range from 0.003 to 0.005 oz./ton gold.
Star Gold hopes to develop an open pit, bulk minable, heap
leachable gold/silver mine at Longstreet.
No
party reading this report should conclude the Longstreet property
has economic mineralization due to Longstreet’s proximity to
any historic or producing mines and any information regarding any
such historic or producing mines is strictly informational relative
to location and similar geologic characteristics.
Regional
Geology and Mineralization: The Longstreet Property is located in
the Nevada portion of the Basin and Range Province. This geological
province is characterized by repeated episodes of compressional
deformation in Paleozoic and Mesozoic time followed by extensional
deformation and extensive magmatism and volcanism in Cenozoic time.
Gold deposits are most often described as being associated with
‘mineralization trends’ that reflect deep crustal
structures and magmatism, such as the ‘Walker Lane’ and
the ‘Carlin Trend’. The Longstreet Project is in the
Monitor Range, adjacent to the northwest trending Walker Lane
volcanic-hosted gold trend that includes such world-class deposits
as the Comstock and Goldfields mining camps
The
Monitor Range is a westward-tilted fault block that has been
elevated by normal faults along its eastern front and is typical of
the uplifted mountains of the Basin and Range Province. The ranges
are topographic highs rising above alluvium-filled valleys
generated by Tertiary extensional tectonics. Central Nevada was an
area of intense Oligocene – Miocene ash-flow volcanism that
created numerous calderas and their outflow products. At least 13
calderas that range in age between 32 and 22 Ma have been mapped or
interpreted in the area extending from the Shoshone Mountains
eastward to the Monitor Range. The southern Monitor Range consists
Mainly of Tertiary age volcanic and hypabyssal rocks related to the
eruption of the Big Ten Peak volcano and a nearby unnamed 29 Ma
caldera (Kleinhampl and Ziony, 1985) intruding and overlying
Paleozoic sedimentary and metamorphic rocks.
The
Paleozoic rocks are thrust-faulted marine sedimentary rocks
comprised of quartzite, argillite and limestone of Cambrian,
Ordovician and Silurian age. Minor amounts of Permian marine
sediments are also present in the Georges Canyon area.
In the
southern Monitor Range Tertiary age volcanic rocks comprise more
than 90% of the exposed bedrock. These rocks are more than 1 km
thick and are predominantly flat lying. Early Oligocene to early
Miocene rhyolitic to dacitic ash-flow tuffs, with rhyolitic welded
tuff are the thickest and most extensive units. Most of the
Tertiary intrusions in the region are rhyolitic, but several small
dacitic to andesitic dikes are present in the Georges Canyon
area.
Mineral
deposits in this part of the Basin and Range Province are varied
and widespread and some of them have (had) substantial metal
production. The producing Round Mountain gold deposit is about 25
miles northwest, and the past-producing Manhattan Mining Camp
(gold/silver) is about 20 miles west-northwest of the Longstreet
Property.
The
Round Mountain Mine is a giant among epithermal precious metal
deposits hosted by volcanic rocks, and the mineralization is a
classic example of low sulphidation epithermal gold mineralization
(White and Hedenquist, 1995). Gold deposits were discovered at
Round Mountain in 1906 (Shawe, 1982) and by 1959 about 410 thousand
ounces (troy ounces) of gold had been produced from placer and
narrow vein lode deposits. Current production by open-pit mining
methods commenced in 1977. Kinross (2010) reported an annual
production for 2010 at 184,554 ounces of AuEq, with over 66 million
tons of proven and probable reserves.
The
oxidized ore is described as a closely spaced set of steeply
dipping veins and veinlets following northwest-trending faults and
associated joints over broad areas. Significant gold mineralization
is not found in northeast-trending faults and fractures. The
vein/veinlet system contains quartz, adularia, limonite (oxidized
from pyrite), manganese oxide and associated native free gold. Flat
veins are similar to the steep veins in character and mineral
content, but with more brecciation of the wall rocks. Gold contents
also appear to be higher in the flat veins. The adularia in the ore
related veins is dated at 25.9 to 26.6 Ma, which is
indistinguishable from the age of the enclosing ‘Tuffs of
Round Mountain’ welded ash flow tuffs. These tuffs were
erupted from the Round Mountain caldera and were deposited within
the caldera (Henry, Castor and Elson, 1996).
No
party reading this report should conclude the Longstreet Property
has economic mineralization due to Longstreet’s proximity to
any historic or producing mines and any information regarding any
such historic or producing mines is strictly informational relative
to location and similar geologic characteristics.
Hydrothermal
alteration associated with the bulk mineable ore is evidenced by
silicification and the replacement of magmatic feldspar by
hydrothermal feldspar engendered by a potassium-rich hydrothermal
fluid (Sander, 1988).
The
Manhattan gold / silver camp is located approximately 20 miles
west-northwest of the Longstreet Project and is an example of
Tertiary epithermal mineralization superimposed on Paleozoic
sedimentary rocks. Gold / silver deposits were discovered at
Manhattan in 1905 (Shawe, 1982) and by 1959 about 10,500 kg of gold
and 4,400 kg of silver had been produced from placer and lode
deposits. The lode deposits in the Manhattan district are of a
variety of types, although they occur together in a coherent belt
about 1 km wide, which follows the south side of the Manhattan
caldera for about 10 km. The most productive deposits formed in
strongly faulted argillite and quartzite of the Cambrian age Gold
Hill Formation. The generally north-trending zones of mineralized
fractures are stockworks containing quartz, adularia, pyrite
(oxidized to limonite) and native gold similar to the sheeted zones
at Round Mountain. The silver production recorded for this camp is
related to electrum and various silver-bearing
sulphosalts.
The
Clipper Mine located approximately 5 miles southwest of the
Longstreet Mine near Murphy Camp was discovered in 1903 and was
worked intermittently until 1943. The mine was initially developed
during World War I and included a 175-foot shaft and a 370-foot
adit. Recorded production is about $12,000 (in 1951dollars) from
mineralization having a gold to silver ratio of 1:1 and assaying
from $34-124 per ton (1951 dollars). Host rocks are welded rhyolite
ash-flow tuffs similar to the Longstreet mine. The Little Joe Claim
located 6 miles south-southwest of the Longstreet Mine was
developed by a 75-foot inclined shaft. Gold-bearing veins in
‘rhyolitic tuff’ were mined but production details are
lacking.
At an
un-named mine, located 1.5 miles west of the mouth of Georges
Canyon irregular gold / silver quartz veins and veinlets containing
minor pyrite were exploited from a 25-foot inclined shaft. The vein
system occurs in possible Paleozoic light gray chert and silicified
argillite along a fault. No production details are
available.
Mineralization
on the Last Chance claims located 11 miles west-northwest of the
Longstreet Project and southwest of Big Ten Peak was discovered in
the 1920s. Mineralization consists of argentiferous galena, minor
sphalerite and pyrite occurring in irregular pipes and chimneys
generally at the intersection of cross faults within a
northwest-trending shear zone in pre-Tertiary rocks. This property
was developed by a 30 m two compartment shaft and a 61 m adit.
Production in the late 1920s is recorded as 13.6 tons containing an
average of 720 g/t Ag, 21% Pb and 2% Zn. A further 18.1 tons
produced in 1938 contained 240-275 g/t Ag and 8% Pb.
Metallurgy: 2013 Metallurgical Test Program
The
2013 metallurgical test work program was conducted by McLelland
Laboratories under the direction of a QP metallurgical engineer
contracted by Star Gold. The program included bottle roll tests,
column tests and comminution tests and mineralogical
examination.
Section Sample Assays
A total of 65 underground adit samples weighing 816 pounds (370kg)
and three surface samples weighing 904 pounds (410kg) were
collected for metallurgical testing. Each of these samples were
crushed to 100% -2 inches (50mm) and assayed for gold and silver in
duplicate. Assay results are listed in Table 8.2. Samples were
combined to generate surface and underground composites, as well as
a blended master composite. Triplicate direct assays were conducted
on each composite. Standard deviations between triplicate head
assays were high, particularly for the surface master
composite.
The agreement
between the triplicate splits was not good, however the average of
the triplicate assays is close to what was expected, based on the
section assays. It was noted that the quality control samples all
checked out as well, which indicates that the assays are good and
the gold occurrence in the potentially economic mineralization is
just a little “spotty”.
.1 Gold Head Assays and Head Grade Comparisons
|
Longstreet Composites
|
||||||||
|
|
SMC, g/mt
|
|
UMC, g/mt
|
|
BMC, g/mt
|
|||
|
Determination
|
Au
|
Ag
|
|
Au
|
Ag
|
|
Au
|
Ag
|
|
Direct
Assay, Init.
|
0.21
|
17
|
|
0.70
|
67
|
|
0.57
|
40
|
|
Direct
Assay, Dup.
|
0.67
|
34
|
|
0.82
|
63
|
|
0.66
|
41
|
|
Direct
Assay, Trip.
|
0.37
|
21
|
|
1.09
|
53
|
|
0.77
|
50
|
|
Average
|
0.42
|
24
|
|
0.87
|
61
|
|
0.67
|
44
|
|
Std.
Deviation
|
0.23
|
9
|
|
0.20
|
7
|
|
0.10
|
6
|
A total of twenty pieces of rock from both underground and surface
were selected for comminution testing. The remainder of the samples
were separately stage crushed to 100% -2-inches (-50mm). Each of
the underground and surface samples were then blended to form a
master composite representing both the underground and surface
samples. The blended sample was then split
to
generate a third master composite. Samples were collected for
bottle roll tests. All composites were then further crushed to 80%
-3/4 inch (19mm), blended, then split into 75kg lots for column
testing. Selection sample assay results and detailed blending
procedures are provided in the Appendix to this
report.
Bottle Roll Testing
A bottle roll test was conducted on each of the three composites at
an 80% -10 Mesh (1.7mm) feed size to determine lime requirements
for column leach testing. Gold and silver recoveries were similar
for all three composites. Gold recoveries ranged from 80.6% to
81.9% and silver recoveries ranged from 17.5% to
20.0%.
Additional bottle roll tests, at a cyanide concentration of 1.0g
NaCN/L were conducted on the blended master composite at feed sizes
of 100% -2 inches (50mm), 80% -3/4 inches (19mm) and 80% -1/4 inch
(6.3mm) to determine sensitivity to feed size. The blended master
composite showed a moderate sensitivity to feed size with respect
to gold and silver recovery. Recovery was 18.4% higher for gold,
and 13.9% higher for silver, at a feed size of 80% -1/16 inches
(1.7mm) than at a feed size of 100% -2 inches (50mm).
Silver recovery, for each bottle roll test conducted, was low. In
order to investigate the cause of the low silver recovery, three
additional bottle roll tests were conducted on the blended master
composite to determine response to increased cyanide concentration
(5.0g NaCN/L) at typical heap leach (80% -3/4 inches, 80% -1/4
inches) and milled (80% -200 Mesh (75µm)) feed
sizes.
Results showed that increasing the cyanide concentration did not
significantly increase silver recovery at heap leach feed sizes,
however, silver recovery increased substantially when feed was
finely ground. Silver recovery was 60.6% from the bottle roll test
conducted on 80% -200 mesh material. Gold recovery was also
moderately higher when fine grinding was employed. Mineralogical
analysis of head and tail samples of the blended master composite
confirm that the primary reason for low silver recovery is due to
the very fine-grained nature of the silver sulfide, which when
exposed, is readily leachable. The
silver leach rate at 200 mesh was extremely fast.
Silver recovery was complete within the first two hours, which
suggests that the silver mineralization is very fast leaching once
liberated. In contrast, silver-bearing jarosites tend to be
refractory and are usually unaffected by leaching regardless of the
grind size.
Summary results from bottle roll testing are given in Table 8.3.
Detailed bottle roll test data including leach rate figures, are
provided in the attached spreadsheet.
2 Bottle Roll Test Results, 2013
Both gold and silver recoveries are slightly improved with
increased crush size, the increase in recovery is more pronounced
in the silver as compared to gold when a fine grind is applied.
Figure 8.3 illustrates this. It is important to keep in mind that
in order to reduce the particle size to 80 % passing 75 microns a
conventional comminution circuit employing crushing and grinding
would be required.
Column Leach Testing
Column leach test were conducted on each of the master composites,
utilizing a feed size of 80% -3/4 inch (19 mm) in order to
determine gold and silver recoveries, recovery rates and reagent
requirements under simulated heap leach conditions. Lime additions
were based on bottle roll tests. Test columns were sized at 15 cm
diameter by 3 meters high using PVC piping with material stacked in
the leaching columns in a manner in which to minimize particle
segregation and compaction. Leaching was conducted by applying a
cyanide solution of 1.0g NACN/L over the charge at a feed rate of
12 Lph/m
2
of column cross sectional area. After
leaching, freshwater rinsing was conducted to remove residual
cyanide and to recover dissolved gold and silver
values.
Detail column leach tests data, including screen analysis of the
feed and tails and drain down rates can be found in the Appendix,
identified as McLelland Report No.
3829 titled Heap Leach
Cyanidation Testing Longstreet Project
, dated April 6, 2014.
All three composites were leached for 190 days. Gold and silver
extractions for the surface master composite (SMC) reached 88.9 %
and 20.0 %, respectively. Gold and silver extraction for the
underground master composites (UMC) was 84.6 % for gold and 15.4 %
for silver. The master blend composite (MBC) achieved gold and
silver recoveries of 86.3 and 16.7 respectively. Summary results
from column leach testing are provided in Table 8.4. Detailed
results, including leach rate figures are provided in the
Appendix.
3 Summary Metallurgical Test Results
|
Summary Metallurgical Results, Column Percolation Leach Tests,
Longstreet Mine Composites,
80%-19mm Feed Size
|
|||||||||
|
Sample
I.D.
|
Test
No.
|
Leach/rinse
Time, days
|
mt/mt ore
|
g Au/mt ore
Extracted
|
Average
Head
|
g Ag/mt ore
Extracted
|
Average
Head
|
NaCN
consumed
kg/mt ore
|
Lime added
kg/mt ore
|
|
SMC
|
P-1
|
153
|
4.8
|
0.32
|
0.38
|
5
|
24
|
1.45
|
1.7
|
|
UMC
|
P-2
|
158
|
5.3
|
0.59
|
0.85
|
7
|
60
|
1.90
|
2.7
|
|
BMC
|
P-3
|
158
|
5.2
|
0.63
|
0.68
|
8
|
45
|
1.78
|
2.0
|
Recovery results by size fraction for all three master composites
indicates that finer crushing would not substantially improve gold
recovery. Gold recovery was similar throughout the various size
fractions with only a slightly elevated recovery in the finest size
fraction (-75 microns). Silver recovery on the other hand would
benefit from a finer particle size and would require fine grinding
in order to maximize recovery.
Overall metallurgical results indicate that the Longstreet master
composites are readily amenable to simulated heap leach treatment
at 80 % -19 mm feed size. Gold recoveries for all three composites
were similar and ranged from 84.6 % to 88.9 % in 190 days of
leaching and rinsing. Silver recoveries were similar for all three
samples, with recoveries ranging from 15.4 % to 20.0%.
It is important to note that although the column tests were
conducted over a period of 190 days, gold extraction was
essentially completed in the first 30 days of leaching. Silver
leach rates, on the other hand, were very slow and it is not
expected that they would improve beyond the 190-day
cycle.
Cyanide consumption rates were high and ranged from 1.56 to 1.93 kg
NaCN/t of ore. This was due in part to the long leach times.
Cyanide consumption rates in a commercial operation are typically
much lower.
Figures 8.4, 8.5 and 8.6 diagrammatically illustrate the leach
rates and results for gold and silver.
Figure 8.4 Surface Master composite leach kinetics
Figure 8.5 Underground master composite leach kinetics
Figure 8.6 Master blend composite leach kinetics
Property Geology
: Geologic mapping by MinQuest since 2002
indicates that the majority of the Longstreet Project is underlain
by moderately to poorly welded rhyolite ash-flow tuff
(‘Tat’) containing conspicuous exotic lithic fragments
and pumice (Figures 5, 7, 8 and 9). The ash-flow tuff unit is buff
to gray, and contains <10% quartz phenocrysts, 15% feldspar
phenocrysts, 5-15% pumice and 5-20% other exotic fragments in an
aphanitic groundmass (Liedtke, 1984). Hydrothermal alteration is
prevalent and consists of argillic (bleaching and clay mineral
development), silicic (pervasive silica flooding, or extremely high
veinlet density) and potassic (adularia in quartz veinlets).
Limonite and geothite development are considered to be weathering
phenomena. These felsic ash-flow tuffs of Oligocene age are similar
in age and character to the ‘tuffs of Round Mountain’,
which host the Round Mountain Mine.
The Tat
tuff unit (see Figures 7, 8 and 9) displays horizontal bedding and
may be in the order of 3,000 feet thick. The ash-flow tuff is
intruded by rhyolite porphyry dykes (‘Trp’) exhibiting
various orientations and may represent feeder conduits to
now-eroded rhyolitic lithologies higher in the
stratigraphy.
A thin
discontinuous unit of volcaniclastic and siliceous sediments
(‘Ts’), including sinter is deposited upon the ash-flow
tuff unit. The unit is white, yellowish and light gray, bedded in
part and probably represents a hiatus in volcanism. Siliceous
alteration resulting in the development of sheeted quartz vein
systems affects the Tat, Ts and Trp rock units.
Overlying
the Tat tuff and the Ts sediments is a black to brown strongly
welded ash-flow tuff (‘Trt’) that forms bluffs and caps
ridges. This unit has a distinctive thin (about 10 feet) vitrophyre
zone near its base. This unit is estimated to be 300 to 450 feet
thick and possibly a correlative of the Saulsbury Wash Formation
(21.6 +/- 0.6 Ma).
The
tectonic fabric on the Longstreet Project includes two Main
directions of faulting/fracturing that have an influence on the
mineralization. An east-trending steeply north-dipping system of
fractures and faults has been noted at five of the seven gold /
silver zones on the Property (see Figure 6). Quartz –adularia
– limonite veins / veinlets and ‘rusty fractures’
following this trend contain gold mineralization. The other
important gold / silver-bearing fault/fracture direction is
300-330° with steep north dips and is characterized by sheeted
quartz veins / veinlets and ‘rusty fractures. The vein /
veinlets also contain adularia and iron oxide minerals derived from
the oxidation of sulfide minerals. This mineralized trend occurs at
all seven of the gold / silver zones known on the Longstreet
Project. Major displacement is not a feature of these
structures.
The
Longstreet project is an example of gold / silver mineralization
related to east-trending structures. An east-tending fault dipping
40-55° is associated with the highest-grade gold / silver
mineralization known to date. The bulk of the gold / silver
mineralization in the Longstreet Mine is contained in steeply
dipping multiple vein sets in the hanging wall of the
fault.
Liedtke
(1984) indicates that similar fault directions are known 4,600 feet
south and 2,800 feet north of the Longstreet Project, which may
host similar high-grade gold / silver mineralization.
Targets:
A short description of the 7 currently identified
drilling targets at Longstreet follows:
Main
- The target consists of intersecting high-angle NW and
E-W sheeted vein systems. Completion of an angle drilling program
to the southwest perpendicular to the intersection of the two vein
sets will continue to produce improved continuity and higher
tonnage and grade. Un-drilled extensions of this mineralization are
indicated to the southeast and west.
NE Main
: Approximately 450m N-NE of the Main resource there
is a poorly exposed, un-drilled target that looks identical to
Main. Sampling of surface veins at NE Main reveal anomalous gold
values.
Opal Ridge:
This is an erosional remnant of a sinter apron
that once covered a much larger area. Extensions of the Main
resource are down-dropped approximately 60m with an apparent
displacement to the north of less than 10m. E-W and NW high level
opal-rich veins are exposed in the lower portion of the apron with
anomalous gold values. Although there may be a higher stripping
ratio here, more of the deposit may be preserved.
North:
This is a sheeted vein system with identical vein
attitudes to Main. Values up to 18.1 ppm Au indicate a strong
system, although vein density appears to be less than at Main. The
western end of the target has the strongest exposed
mineralization.
Cyprus Ridge Zone:
Quartz veins up to 5 m thick occur in
this 1.1 km long northwest trending sheeted vein system. Cyprus
Minerals Company completed a 920 m drill program in 1987. All of
the Cyprus holes were vertical or high angle and none tested the
large primary vein set. No high-grade gold was intersected in their
drilling. MinQuest mapped the intricate vein system in 2002 and
collected 41 surface samples that contained anomalous to highly
anomalous (several times background to hundreds of times
background) veins. Due to the abundance of low temperature silica,
MinQuest concluded that the gold values are leakage anomalies from
a deeper boiling zone. The boiling zone is a high priority drill
target.
Red Knob Zone
: Mineralization outcrops as northwest trending
sheeted quartz-adularia veins over an area 150m wide by 300m long.
Surface sampling found anomalous gold values. In addition, a
boulder field on the north side of the target contains
quartz-adularia veins up to 1m in thickness in an area of no
outcrop. Drill intercepts from two holes testing a small portion of
the target revealed anomalous gold values.
Spire
: This is an E-W vertical to steeply north dipping
sheeted vein system. Intersecting NW trending veins are present but
are much less abundant than at Main. Surface sampling at Spire had
detected anomalous gold values.
Star
Gold’s geologists believe sampling and drilling results to
date warrant optimism of one or more economic, near surface,
bulk-mineable, heap leach-recoverable gold-silver deposits at the
Longstreet Project targets described above. In addition, sampling
at surface near the Cyprus target suggests the presence of
higher-grade veins, which may be suitable to underground mining
methods. Situated on a high ridge-top, it could be easily mined
from a canyon elevation adit.
Environmental, plan of operation and reclamation:
To the
Company’s knowledge, there is no known surface disturbance or
groundwater contamination from previous mining activities.
Remediation activities are performed immediately after completion
of exploratory drilling. With respect to historical mining
activities, there is no indication of reclamation at this time and,
therefore, the Company has no plans to remediate. The Longstreet
Property is within Forest Service lands and Star Gold has applied
for and received a Plan of Operation from the Forest Service
allowing exploration drilling. A surface disturbance bond of
$21,600 has been paid and is held by the Forest Service until
reclamation is completed. There are no other significant
environmental requirements.
I
TEM 3.
LEGAL
PROCEEDINGS.
Star
Gold Corp. is not a party to any material legal proceedings and, to
management’s knowledge, no such proceedings are threatened or
contemplated.
I
TEM 4.
MINE
SAFETY DISCLOSURES.
Star Gold Corp. considers health, safety and environmental
stewardship to be a core value for the Company.
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010, issuers that are operators, or
that have a subsidiary that is an operator, of a coal or other mine
in the United States are required to disclose in their periodic
reports filed with the SEC information regarding specified health
and safety violations, orders and citations, related assessments
and legal actions, and mining-related fatalities with respect to
mining operations and properties in the United States that are
subject to regulation by the Federal Mine Safety and Health
Administration (“MSHA”) under the Federal Mine Safety
and Health Act of 1977 (the “Mine Act”). During the
year ended April 30, 2019, the Company’s exploration
properties were not subject to regulation by the MSHA under the
Mine Act.
P
ART II
I
TEM
5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND
ISSUER PURCHASES
OF EQUITY SECURITIES.
General
Star
Gold Corp. authorized capital stock consists of 300,000,000 shares
of common stock, with a par value of $0.001 per share, and
10,000,000 shares of preferred stock, with a par value of $0.001
per share. As of July 25, 2019, there were
77,394,841
shares of Star
Gold Corp. common stock issued and outstanding. The Company has not
issued any shares of preferred stock.
Market Information
The
Company’s shares are quoted via the OTC:QB under the symbol
“SRGZ.”
At
July 17, 2019
, the
price per share quoted on the OTCQB was $0.03.
Transfer Agent:
The
independent stock transfer agent for Star Gold Corp. is Corporate
Stock Transfer located at 3200 Cherry Creek Drive South, Suite 430,
Denver, CO 80209.
Dividends
The
Company has not declared any dividends on its common stock since
inception. There are no dividend restrictions that limit the
Company’s ability to pay dividends on common stock in its
Articles of Incorporation or Bylaws. The Corporation’s
governing statute, Chapter 78 – “Private
Corporations” of the Nevada Revised Statutes (the
“NRS”), does provide limitations on our ability to
declare dividends. Section 78.288 of Chapter 78 of the NRS
prohibits us from declaring dividends where, after giving effect to
the distribution of the dividend:
a)
the Company would
not be able to pay its debts as they become due in the usual course
of business; or
b)
the Company’s
total assets would be less than the sum of its total liabilities
plus the amount that would be needed, if the company were to be
dissolved at the time of distribution, to satisfy the preferential
rights upon dissolution of stockholders who may have preferential
rights and whose preferential rights are superior to those
receiving the distribution (except as otherwise specifically
allowed by the Company’s Articles of
Incorporation).
Securities Authorized for Issuance under Stock Option
Plan
On May
25, 2011, the Board of Directors approved a Stock Option Plan. The
Stock Option Plan is administered by the Board of Directors and
provides for the grant of stock options to eligible individuals
including directors, executive officers and advisors that that have
furnished bona fide services to the Company not related to the sale
of securities in a capital-raising transaction.
The
Stock Option Plan has a maximum percentage of 10% of the
Company’s outstanding shares that are eligible for the plan
pool whereby the number of shares under the Stock Option Plan
increase automatically with increases in the total number of
outstanding common shares. This “Evergreen” provision
permits the reloading of shares that make up the available pool for
the Stock Option Plan, once the options granted have been
exercised. The number of shares available for issuance under the
Stock Option Plan automatically increases as the total number of
shares outstanding increase, including those shares issued upon
exercise of options granted under the Stock Option Plan, which
become re-available for grant subsequent to exercise of option
grants. The number of shares subject to the Stock Option Plan and
any outstanding awards under the Stock Option Plan will be adjusted
appropriately by the Board of Directors if the Company’s
common stock is affected through a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification,
dividend (other than quarterly cash dividends) or other
distribution, stock split, spin-off or sale of substantially all
the Company’s assets.
The
Stock Option Plan also has terms and limitations including without
limitation that the exercise price for stock options granted under
the Stock Option Plan must equal the stock’s fair market
value, based on the closing price per share of common stock, at the
time the stock option is granted.
On
April 30, 2018, the Board of Directors authorized the grant of
1,400,000 options to purchase shares of common stock of the Company
to various directors, officers and consultants. The options have an
exercise price of $0.065 based on the closing price of the
Company’s common stock on the date of grant and vest
immediately. The expiration date of the options is April 30, 2023.
The fair value of the options was $90,923 and has been recognized
as stock-based compensation for the year ended April 30,
2018.
Recent Sales of Unregistered Securities
On
October 12, 2016, the Company issued 14,000,000 shares of its
common stock and warrants to purchase an additional 14,000,000
shares of its common stock to 24 investors pursuant to a private
placement of its securities (the “2016 Offering”). The
2016 Offering consisted of the sale of “units” of the
Company’s securities at the per unit price of $0.05. Warrants
issued pursuant to the 2016 Offering entitled the holders thereof
to purchase shares of common stock for the price of $0.15 per
share. The term of each warrant is for five years commencing with
its issuance date. The Company closed the 2016 Offering having
raised a total of $700,000 ($18,000 in fiscal year ended April 30,
2016 and $682,000 in nine months ended January 31,
2017).
On
October 17, 2017, the Company issued 21,597,698 shares of its
common stock to 34 investors pursuant to a private placement of its
securities (the “2017 Offering”). The 2017 Offering
consisted of the sale of “units” of the Company’s
securities at the per unit price of $0.10. Each unit consisted of
two shares of common stock and one warrants to purchase an
additional share of common stock. The Company raised a total of
$1,079,884. On October 31, 2017, the Company issued 10,798,849
Warrants pursuant to the 2017 Offering entitled the holders thereof
to purchase shares of common stock for the price of $0.15 per
share. The term of each warrant is for three years commencing with
its issuance date.
All
unregistered sales of equity securities during the period covered
by this Annual Report were previously disclosed in the
Company’s current reports on Form 8-K and its Quarterly
Reports on Form 10-Q.
During
the fiscal year ended April 30, 2019, neither the Company nor any
“affiliated purchaser” (as defined in Rule 10b-18(a)(3)
under the Exchange Act) purchased any shares of our common stock,
the only class of the Company’s equity securities registered
pursuant to section 12 of the Exchange Act at the date of this
filing.
I
TEM 6.
SELECTED
FINANCIAL DATA.
Statement of Operations Information:
|
|
For
the years ended
|
|
|
|
April 30,
2019
|
April 30,
2018
|
|
Revenues
|
$
-
|
$
-
|
|
Total operating
expenses
|
337,184
|
427,267
|
|
Loss from
operations
|
(337,184
)
|
(427,267
)
|
|
Other income
(expense)
|
1,480
|
118
|
|
NET
LOSS
|
$
(335,704
)
|
$
(427,149
)
|
|
|
|
|
|
Weighted average
shares of common stock (basic and diluted)
|
76,923,842
|
66,375,222
|
|
|
|
|
|
Income (loss) per
share (basic and diluted)
|
$
(0.00
)
|
$
(0.01
)
|
Balance Sheet Information:
|
|
April 30,
2019
|
April 30,
2018
|
|
Working
capital
|
$
443,915
|
$
759,151
|
|
Total
assets
|
954,425
|
1,306,919
|
|
Accumulated
deficit
|
10,702,743
|
10,367,039
|
|
Stockholders’
equity
|
935,179
|
1,211,008
|
I
TEM 7.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
PLAN OF OPERATION
The
Company maintains a corporate office in Coeur d’Alene, Idaho.
This is the primary administrative office for the Company and is
utilized by Board Chairman Lindsay Gorrill and Chief Financial
Officer Kelly Stopher.
During
the year ended April 30, 2019, the Company completed the
following:
Wildlife and
Biological Baseline Study (WBS)
Cultural and
Archeology Study
Plan of
Operation submitted to US Forestry Service.
For the
upcoming fiscal year ending April 30, 2020, the Company plans to
commence the following activities as it prepares the EIS on the
Longstreet Project:
Hydrology Study (in
progress – dependent on Plan of Operations being
approved)
Geochemical
analysis – design of program for submission to State of
Nevada (in progress)
Plan of
Operations Development (Mine Plan, Civil Engineering
Designs)
Assuming
the results of the above-referenced studies are favorable, the
Company intends to proceed to the preparation of an EIS and plan of
operation for the Longstreet project (the “Longstreet
Plan”). The eventual objective of the EIS and Longstreet Plan
is the issuance, by each governing agency, of the necessary mine
permits to authorize the construction of, and ongoing operations
at, an open pit/heap leach mine at the Longstreet
Property.
The
Company anticipates the aforementioned tasks to be completed in
late 2019, with the EIS prepared in 2020.
Approval
of the Longstreet Plan is subject to governmental agency review and
may require additional remediation activities.
Management
believes it can source additional capital in the investment markets
in the coming months and years. The Company may also consider other
sources of funding, including potential mergers, joint ventures
and/or farm-out a portion of its exploration
properties.
Future
liquidity and capital requirements depend on many factors including
timing, cost and progress of the Company’s exploration
efforts. The Company will consider additional public offerings,
private placement, mergers or debt instruments.
Additional
financing will be required in the future to complete all necessary
steps to apply for a final permit. Although the Company believes it
will be able to source additional financing there are no guarantees
any needed financing will be available at the time needed or on
acceptable terms, if at all. If the Company is unable to raise
additional financing when necessary, it may have to delay
exploration efforts or property acquisitions or be forced to cease
operations. Collaborative arrangements may require the Company to
relinquish rights to certain of its mining claims.
RESULTS OF OPERATIONS
|
|
For the years ended April
30,
|
|
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
|
Mineral exploration
expense
|
$
21,297
|
$
28,369
|
$
(7,072
)
|
(24.9%)
|
|
Pre-development
expense
|
119,975
|
105,945
|
14,030
|
13.2%
|
|
Legal and
professional fees
|
73,267
|
70,788
|
2,479
|
3.5%
|
|
Management and
administrative
|
120,980
|
221,818
|
(100,838
)
|
(45.5%)
|
|
Depreciation
|
1,665
|
347
|
1,318
|
N/A
|
|
Other expense
(income)
|
(1,480
)
|
(118
)
|
(1,362
)
|
1,154.2%
|
|
NET
LOSS
|
$
335,704
|
$
427,149
|
$
(91,445
)
|
(21.4%)
|
|
|
|
|
|
|
The
Company earned no operating revenue in 2019 or 2018 and does not
anticipate earning any operating revenues in the near future. Star
Gold Corp. is an exploration stage company and presently is seeking
other natural resources related business
opportunities.
The
Company will continue to focus its capital and resources toward
exploration and permitting activities at its Longstreet
Property.
Total
net loss for 2019 of $335,704 decreased by $91,445 from 2018 total
net loss of $427,149.
Mineral exploration expense
|
|
For the years ended April
30,
|
|
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
|
Drilling and field
work
|
$
(2,527
)
|
$
3,851
|
$
(6,378
)
|
(165.6%)
|
|
Technical
consultants
|
-
|
800
|
(800
)
|
(100.0%)
|
|
Claims
|
23,824
|
23,718
|
106
|
0.4%
|
|
Total
mineral exploration expense
|
$
21,297
|
$
28,369
|
$
(7,072
)
|
(24.9%)
|
|
|
|
|
|
|
Mineral exploration expense for the year end April 30, 2019
was
$21,297, a decrease of
$7,072 from 2018 exploration and consultants’ expense of
$28,369. The Company’s emphasis has shifted from exploratory
drilling to activities related to pre-development expense including
environmental and anthropological studies associated with building
a Plan of Operations and obtaining a permit for construct a mine at
the Longstreet site.
Pre-development expense
|
|
For the years ended April
30,
|
|
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
|
Flora and fauna
contractor
|
$
8,837
|
$
18,925
|
$
(10,088
)
|
(53.3%)
|
|
Cultural resources
and anthropological
|
6,392
|
7,869
|
(1,477
)
|
(18.8%)
|
|
Environmental and
permitting services
|
-
|
4,093
|
(4,093
)
|
(100.0%)
|
|
Environmental
impact and plan of operations
|
44,096
|
10,634
|
33,436
|
314.7%
|
|
Project
management
|
45,650
|
36,250
|
9,400
|
25.9%
|
|
Water rights
costs
|
15,000
|
12,124
|
2,876
|
23.7%
|
|
Aerial
mapping
|
-
|
16,050
|
(16,050
)
|
(100.0%)
|
|
Total
pre-development expense
|
$
119,975
|
$
105,945
|
$
14,030
|
13.2%
|
|
|
|
|
|
|
Pre-development expense for the year end April 30, 2019 was
$119,975, an increase of $14,030 from 2018 pre-development expense
of $105,945.
Legal and professional fees
|
|
For the years ended April
30,
|
|
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
|
Audit and
accounting
|
$
26,255
|
$
25,808
|
$
447
|
1.7%
|
|
Legal
fees
|
9,488
|
23,707
|
(14,219
)
|
(60.0%)
|
|
Public company
expense
|
17,462
|
18,868
|
(1,406
)
|
(7.5%)
|
|
Investor
relations
|
20,062
|
2,405
|
17,657
|
734.2%
|
|
Total
legal and professional fees
|
$
73,267
|
$
70,788
|
$
2,479
|
3.5%
|
Audit
and accounting fees increased $447 from $25,808 for the year end
April 30, 2018 compared to $26,255 for the year ended April 30,
2019. Management expects audit and accounting fees to remain
relatively constant in the upcoming fiscal year.
Investor
relation expense of $20,062 for the year ended April 30, 2019
increased $17,657 compared to $2,405 for the year ended April 30,
2018 as the Company engaged an investor relations consultant to
build awareness.
The
primary component of public company expense is the annual fee
associated with OTC Markets for the Company’s OTCQB status.
Public company expense decreased $1,406 for the year ended April
30, 2019.
Legal
fees decreased from $23,707 in 2018 to $9,488 in 2019. The decrease
for the year is primarily related to expenses related to legal
costs related to documentation related to private placements and
regulatory filings related to officers for the year ended April 30,
2018. There are no pending legal issues or contingencies as of
April 30, 2019.
General and administrative expense
|
|
For the years ended April
30,
|
|
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
|
Auto and
travel
|
$
24,924
|
$
35,898
|
$
(10,974
)
|
(30.6%)
|
|
General
administrative and insurance
|
36,420
|
37,162
|
(742
)
|
(2.0%)
|
|
Management fees and
payroll
|
52,423
|
49,067
|
3,356
|
6.8%
|
|
Office and computer
expense
|
4,768
|
3,301
|
1,467
|
44.4%
|
|
Rent and lease
expense
|
1,500
|
3,000
|
(1,500
)
|
(50.0%)
|
|
Stock based
compensation
|
-
|
90,923
|
(90,923
)
|
N/A
|
|
Telephone and
utilities
|
945
|
2,467
|
(1,522
)
|
(61.7%)
|
|
Total
general and administrative
|
$
120,980
|
$
221,818
|
$
(100,838
)
|
(45.5%)
|
Total general and administrative expense decreased $100,838 to
$120,980 compared to 2018 expense of $221,818.
The primary difference was attributable to the decrease in
stock-based compensation, a non-cash expense, of $90,923 for the
year ended April 30, 2018.
Auto and travel expense decreased for the fiscal year ending April
30, 2019 by $10,974. Travel is generally related to meetings
associated with capital raises and visits to the exploration site
by Company management and potential financiers.
LIQUIDITY AND FINANCIAL CONDITION
|
WORKING
CAPITAL
|
April 30,
2019
|
April 30,
2018
|
|
Current
assets
|
$
463,161
|
$
855,062
|
|
Current
liabilities
|
19,246
|
95,911
|
|
Working capital
(deficit)
|
$
443,915
|
$
759,151
|
Working
capital will be utilized for the Company’s ongoing
environmental studies at its Longstreet Project scheduled for the
summer of 2019 and general corporate purposes.
The
Company utilized $52,000 in cash from Investing Activities to
exercise its option on claims agreements and utilized for certain
capitalized mineral assets at its Longstreet Project. The Company
intends to continue exploration activities at Longstreet upon
completion of environmental studies and permitting.
As of
April 30, 2019, the Company had cash on hand of $440,316. Since
inception, the sole source of financing has been sales of the
Company’s debt and equity securities. Star Gold Corp. has not
attained profitable operations and its ability to pursue any future
plan of operation is dependent upon our ability to obtain
financing.
Star
Gold Corp. anticipates continuing to rely on sales of its debt
and/or equity securities in order to continue to fund ongoing
operations. Issuances of additional shares of common stock may
result in dilution to the Company’s existing stockholders.
There is no assurance that the Company will be able to complete any
additional sales of equity securities or that it will be able
arrange for other financing to fund its planned business
activities.
The
Company’s continuation as a going concern is dependent upon
its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to obtain additional financing as
may be required, or ultimately to attain profitability. Potential
sources of cash, or relief of demand for cash, include additional
external debt, the sale of shares of the Company’s stock or
alternative methods such as mergers or sale of the Company’s
assets. No assurances can be given, however, that the Company will
be able to obtain any of these potential sources of cash. The
Company currently requires additional cash funding from outside
sources to sustain existing operations and to meet current
obligations and ongoing capital requirements.
The
Company plans for the long-term continuation as a going concern
include financing future operations through sales of our equity
and/or debt securities and the anticipated profitable exploitation
of the Company’s mining properties. These plans may also, at
some future point, include the formation of mining joint ventures
with senior mining company partners on specific mineral properties
whereby the joint venture partner would provide the necessary
financing in return for equity in the property.
OFF-BALANCE SHEET ARRANGEMENTS
The
Company has no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to its
stockholders.
CRITICAL ACCOUNTING POLICIES
The
Company has identified certain accounting policies, described
below, that are most important to the portrayal of its current
financial condition and results of operations. The Company’s
significant accounting policies are disclosed in the notes to the
audited financial statements included in this Annual
Report.
Asset Impairments
Significant
property acquisition payments for active exploration properties are
capitalized. The evaluation of the Company’s mineral
properties for impairment is based on market conditions for
minerals, underlying mineralized material associated with the
properties, and future costs that may be required for ultimate
realization through mining operations or by sale. If no mineable
ore body is discovered, or market conditions for minerals
deteriorate, there is the potential for a material adjustment to
the value assigned to mineral properties.
Mineral Interests
Exploration
costs are expensed in the period in which they occur. The Company
capitalizes costs for acquiring and leasing mineral properties and
expenses costs to maintain mineral rights as incurred. Should a
property reach the production stage, these capitalized costs would
be amortized using the units-of-production method based on periodic
estimates of ore reserves. Mineral interests are periodically
assessed for impairment of value, and any subsequent losses are
charged to operations at the time of impairment. If a property is
abandoned or sold, its capitalized costs are charged to
operations.
I
TEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The
Company does not hold any derivative instruments and does not
engage in any hedging activities.
I
TEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
Index
to Financial Statements:
Audited
financial statements as of April 30, 2019, including:
Report of Independent Registered Public Accounting
Firm
To the shareholders and the board of directors of Star Gold
Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Star Gold Corp.
(the "Company") as of April 30, 2019 and 2018, the related
statements of
operations,
changes in stockholders’ equity and cash flows for the years
then ended, and the related notes (collectively referred to as the
"financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of
the Company
as of
April 30, 2019 and 2018, and the results of
its operations and its cash flows for the years then ended, in
conformity with
accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
/DeCoria, Maichel & Teague, P.S./
DeCoria, Maichel & Teague, P.S.
We have served as the Company's independent auditor since
2011.
Spokane, Washington
July 15, 2019
S
TAR GOLD
CORP.
BALANCE SHEETS
STAR GOLD CORP.
S
TATEMENTS OF
OPERATIONS
S
TAR GOLD
CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the years ended April 30, 2019 and 2018
|
|
Common
Stock
|
|
|
|
|
|
|
Shares
Issued
|
Par Value
$.001 per
share
|
Additional
Paid
in Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
|
BALANCE, April 30,
2017
|
54,836,726
|
$
54,837
|
$
10,350,403
|
$
(9,939,890
)
|
$
465,350
|
|
Common stock and warrants sold at
$0.10 per unit ($0.05 per share)
|
21,597,698
|
21,597
|
1,058,287
|
-
|
1,079,884
|
|
Stock-based
compensation
|
-
|
-
|
90,923
|
-
|
90,923
|
|
Options issued for mining
interest
|
-
|
-
|
2,000
|
-
|
2,000
|
|
Net loss
|
-
|
-
|
-
|
(427,149
)
|
(427,149
)
|
|
BALANCE, April 30,
2018
|
76,434,424
|
$
76,434
|
$
11,501,613
|
$
(10,367,039
)
|
$
1,211,008
|
|
Common stock issued
at $0.06 per share for accounts payable
|
960,417
|
961
|
56,664
|
-
|
57,625
|
|
Options issued for mining
interest
|
-
|
-
|
2,250
|
-
|
2,250
|
|
Net loss
|
-
|
-
|
-
|
(335,704
)
|
(335,704
)
|
|
BALANCE, April 30,
2019
|
77,394,841
|
$
77,395
|
$
11,560,527
|
$
(10,702,743
)
|
$
935,179
|
S
TAR GOLD CORP.
STATEMENTS OF CASH FLOWS
Star
Gold Corp. (the “Company”) was initially incorporated
as Elan Development, Inc., in the State of Nevada on December 8,
2006. The Company was originally organized to explore mineral
properties in British Columbia, Canada but the Company is currently
focusing on gold, silver and other base metal-bearing properties in
Nevada.
The
Company’s core business consists of assembling and/or
acquiring land packages and mining claims the Company believes have
potential mining reserves, and expending capital to explore these
claims by drilling, and performing geophysical work or other
exploration work deemed necessary. The business is a high-risk
business as there is no guarantee that the Company’s
exploration work will ultimately discover or produce any
economically viable minerals.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
This summary of significant accounting policies
is presented to assist in understanding the financial statements.
The financial statements and notes are representations of the
Company’s management, which is responsible for their
integrity and objectivity. These financial statements and related
notes are presented in accordance with accounting principles
generally accepted in the United States.
Use of Estimates
The
preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the dates of the
financial statements, and the reported amounts of revenues and
expenses during the reporting period. Significant areas requiring
the use of management assumptions and estimates relate to
long-lived asset impairments and stock-based compensation
valuation. Actual results could differ from these estimates and
assumptions and could have a material effect on the Company’s
reported financial position and results of operations.
Risks and Uncertainties
The
Company’s operations are subject to significant risks and
uncertainties, including financial, operational, technological and
other risks associated with operating an emerging exploration
mining business, including the potential risk of business
failure.
Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company
considers all highly liquid investments with original maturities of
three months or less when acquired to be cash
equivalents.
Reclamation bond
Reclamation bond constitutes cash held as collateral for the
faithful performance of bond securing exploration permits and are
accounted for on a cost basis.
Financial Instruments
The
Company’s financial instruments include cash and cash
equivalents and reclamation bond. All instruments are accounted for
on a cost basis, which, due to the short maturity of these
financial instruments, approximates fair value at April 30,
2019.
Fair Value Measures
When required to measure assets or liabilities at fair value, the
Company uses a fair value hierarchy based on the level of
independent, objective evidence surrounding the inputs used. The
Company determines the level within the fair value hierarchy in
which the fair value measurements in their entirety fall. The
categorization within the fair value hierarchy is based upon the
lowest level of input that is significant to the fair value
measurement. Level 1 uses quoted prices in active markets for
identical
assets or
liabilities, Level 2 uses significant other observable inputs, and
Level 3 uses significant unobservable inputs. The amount of the
total gains or losses for the period are included in earnings that
are attributable to the change in unrealized gains or losses
relating to those assets and liabilities still held at the
reporting date.
At April 30, 2019 and April 30, 2018, the Company had no assets or
liabilities accounted for at fair value on a recurring or
nonrecurring basis.
Mining Interests and Mineral Exploration Expenditures
Exploration
costs are expensed in the period in which they occur. The Company
capitalizes costs for acquiring and leasing mining properties and
expenses costs to maintain mineral rights as incurred. Should a
property reach the production stage, capitalized costs would be
amortized using the units-of-production method on the basis of
periodic estimates of ore reserves. Mining interests are
periodically assessed for impairment of value, and any subsequent
losses are charged to operations at the time of impairment. If a
property is abandoned or sold, its capitalized costs are charged to
operations.
Pre-development Expenditures
Pre-development
activities involve costs incurred in the exploration stage
that may ultimately benefit production, such as
underground ramp development, which are expensed due to the lack of
evidence of economic development, which is necessary to demonstrate
future recoverability of these costs.
Equipment
Equipment is stated at cost. Significant improvements are
capitalized and depreciated. Depreciation of equipment is
calculated using the straight-line method over the estimated useful
lives of the assets, which range from three to seven years.
Maintenance and repairs are charged to operations as incurred.
Gains or losses on disposition or retirement of property and
equipment are recognized in operating expenses.
Reclamation and Remediation
The
Company’s operations are subject to standards for mine
reclamation that have been established by various governmental
agencies. In the period in which the Company incurs a contractual
obligation for the retirement of tangible long-lived assets, the
Company will record the fair value of an asset retirement
obligation as a liability. A corresponding asset will also be
recorded and depreciated over the life of the asset. After the
initial measurement of an asset retirement obligation, the
liability will be adjusted at the end of each reporting period to
reflect changes in the estimated future cash flows underlying the
obligation. To date, the Company has not incurred any contractual
obligation requiring recording either a liability or associated
asset.
Impairment of Long-lived Assets
The
Company periodically reviews its long-lived assets to determine if
any events or changes in circumstances have transpired which
indicate that the carrying value of its assets may not be
recoverable. The Company determines impairment by comparing the
undiscounted net future cash flows estimated to be generated by its
assets to their respective carrying amounts. If impairment is
deemed to exist, the assets will be written down to fair
value.
Stock-based Compensation
The
Company estimates the fair value of options to purchase common
stock using the Black-Scholes model, which requires the input of
some subjective assumptions. These assumptions include estimating
the length of time employees will retain their vested stock options
before exercising them (“expected life”), the estimated
volatility of the Company’s common stock price over the
expected term (“volatility”), employee forfeiture rate,
the risk-free interest rate and the dividend yield. Changes in the
subjective assumptions can materially affect the estimate of fair
value of stock-based compensation. Options granted have a ten-year
maximum term and varying vesting periods as determined by the Board
of Directors. The value of shares of common stock awards is
determined based on the closing price of the Company’s stock
on the date of the award.
Income Taxes
The Company accounts for income taxes using the liability method.
The liability method requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of
(i) temporary differences between financial statement carrying
amounts of assets and liabilities and their basis for tax purposes
and (ii) operating loss and tax credit carryforwards for tax
purposes. Deferred tax assets are reduced by a valuation allowance
when management concludes that it is more likely than not that a
portion of the deferred tax assets will not be realized in a future
period.
Reclassifications
Certain reclassifications have been made to the 2018 financial
statements in order to conform to the 2019 presentation. These
reclassifications have no effect on net loss, total assets or
accumulated deficit as previously reported.
New Accounting Pronouncements
In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash
Flows (Topic 230): Classification of Certain Cash Receipts and Cash
Payments. The update provides guidance on classification for cash
receipts and payments related to eight specific issues. The update
is effective for fiscal years beginning after December 15, 2017,
and interim periods within those fiscal years, with early adoption
permitted.
There was no impact
to the financial statements upon adoption of this update effective
May 1, 2018.
In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash
Flows (Topic 230): Restricted Cash. The update requires that a
statement of cash flows explain the change during the period in the
total of cash, cash equivalents, and amounts generally described as
restricted cash or restricted cash equivalents. The update is
effective for fiscal years beginning after December 15, 2017, and
interim periods within those fiscal years, with early adoption
permitted. There was no impact to the financial statements upon
adoption of this update effective May 1, 2018.
In January 2017, the FASB issued ASU No. 2017-01 Business
Combinations (Topic 805): Clarifying the Definition of a Business.
The update clarifies the definition of a business with the
objective of adding guidance to assist entities with evaluating
whether transactions should be accounted for as acquisitions (or
disposals) of assets or businesses. The update is effective for
fiscal years beginning after December 15, 2017, and interim periods
within those fiscal years. There was no impact to the financial
statements upon adoption of this update effective May 1,
2018.
In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock
Compensation, Improvements to Nonemployee Share-Based Payment
Accounting. ASU No. 2018-07 expands the scope of the standard for
stock-based compensation to include share-based payment
transactions for acquiring goods and services from nonemployees.
ASU No. 2018-07 will become effective for the Company on May 1,
2019 and early adoption is permitted. The Company is currently
evaluating the impact of this update on its financial statements
and related disclosures.
Other accounting standards that have been issued or proposed by
FASB that do not require adoption until a future date are not
expected to have a material impact on the consolidated financial
statements upon adoption. The Company does not discuss recent
pronouncements that are not anticipated to have an impact on or are
unrelated to its financial condition, results of operations, cash
flows or disclosures.
NOTE 3– EARNINGS PER SHARE
Basic
Earnings Per Share (“EPS”) is computed as net income
(loss) available to common stockholders divided by the weighted
average number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution that could occur from common
shares issuable through stock options and warrants.
The
outstanding securities at April 30, 2019 and 2018, that could have
a dilutive effect are as follows:
|
|
April 30,
2019
|
April 30,
2018
|
|
Stock
options
|
6,645,000
|
6,650,000
|
|
Warrants
|
30,654,249
|
30,654,249
|
|
TOTAL
POSSIBLE DILUTIVE SHARES
|
37,299,249
|
37,304,249
|
|
|
|
|
For the
years ended April 30, 2019 and 2018, respectively, the effect of
the Company’s outstanding stock options and warrants would
have been anti-dilutive and so are excluded in the diluted
EPS.
The
following is a summary of the Company’s equipment and mining
interest at April 30, 2019 and 2018.
|
|
April 30,
2019
|
April 30,
2018
|
|
Equipment
|
$
32,002
|
$
32,002
|
|
Less
accumulated depreciation
|
(29,019
)
|
(27,354
)
|
|
Equipment, net of
accumulated depreciation
|
2,983
|
4,648
|
|
Mining interest -
Longstreet
|
464,124
|
409,874
|
|
TOTAL
EQUIPMENT AND MINING INTEREST
|
$
467,107
|
$
414,522
|
Pursuant
to the Longstreet Property Option Agreement, as amended, (the
“Longstreet Agreement”) entered into by the Company on
or about January 15, 2010, the Company leases, with an option to
acquire, unpatented mining claims located in the State of Nevada
known as the Longstreet Property. Under the agreement, the Company
is required to make minimal lease payments in the form of cash and
options to purchase shares of the Company’s common
stock.
On
December 4, 2018 the Company amended the Longstreet Agreement to
change the due date of certain expenditures required by that
agreement (the “Amendment”). The Amendment extends the
due date of the 2019 expenditures from January 16, 2019 to August
31, 2019 and also extends the due date of the 2020 expenditures
from January 16, 2020 to August 31, 2020. No other provisions of
the Longstreet Agreement, as previously amended, were affected by
the Amendment.
In
addition, the Company is obligated, pursuant to the Longstreet
Agreement, to pay an annual advance royalty payment of $12,000
related to the Clifford claims which the Company paid in each of
the years ended April 30, 2019 and 2018. The Longstreet Agreement
obligates the Company to minimal expenditures to be spent on the
property. All allowable expenditures in excess of the required
annual expenditures are carried over to the subsequent
year.
For the
year ended April 30, 2018, the Company made the annual required
payment to the optioner of $35,000 which is included in
“Equipment and Mining Interest” on the Company’s
balance sheet. The Company also issued options to purchase 40,000
shares of common stock with fair value of $2,000 during the year
ended April 30, 2018.
For the
year ended April 30, 2019, the Company paid the annual $12,000
advance royalty for additional mining interest on the Longstreet
Property related to the Clifford claims. The Company also paid the
annual required payment of $40,000 to the optioner which is
included in “Equipment and Mining Interest”. The
Company also issued options to purchase 45,000 shares of common
stock with a fair value of $2,250 for the year ended April 30,
2019.
The
schedules of future minimum required expenditures, annual payments,
and number of stock options to be issued pursuant to the Longstreet
Agreement are as follows:
|
|
Required
expenditure
|
|
January 17, 2018
through August 31, 2019
|
$
500,000
|
|
September 1, 2019
through August 31, 2020
|
700,000
|
|
TOTAL
|
$
1,200,000
|
|
|
Cash
payment
(1)
|
Stock
options
|
|
January 16,
2020
|
45,000
|
50,000
|
|
Payment due upon
transfer but no later than January 16, 2021
|
85,000
|
-
|
|
TOTAL
|
$
130,000
|
50,000
|
|
|
|
|
As of
April 30, 2019, the Company was in compliance with the expenditure
provisions of the Longstreet Agreement.
NOTE 5 –OTHER ASSETS
On
January 19, 2017, the Company entered into an Option and Lease of
Water Rights with Stone Cabin Company, LLC (the “Stone Cabin
Water Rights Agreement”). In exchange for a one-time payment
of $20,000, the Stone Cabin Water Rights Agreement granted the
Company a three-year option to commence a ten-year lease of certain
water rights in Nevada. The water rights are for use in conjunction
with the Company’s Longstreet Project. Lease payments for the
water rights do not commence unless the Company exercises the
option to lease. The Stone Cabin Water Rights Agreement also
granted the Company the ability to extend, upon additional option
payments, the option to lease for up to an additional three years
and the ability to extend the water rights lease (if exercised) for
an additional ten-year period. The $20,000 payment was deferred as
Other Assets and is being amortized on a straight-line basis over
the three-year option period.
On August 21, 2017, the Company entered into an Option and Lease of
Water Rights, with High Test Hay, LLC (the “High Test Water
Rights Agreement”). In exchange for a one-time payment
of $25,000, the High Test Water Rights Agreement grants the Company
a three-year option to commence a ten-year lease on certain water
rights in Nevada. The water rights are for use in conjunction with
the Company’s Longstreet Project. Lease payments for the
water rights do not commence unless and until the Company exercises
the option to lease. The High Test Water Rights Agreement
also grants the Company the ability to extend, upon additional
option payments, the option to lease for up to an additional three
years and the ability to extend the water rights lease (if
exercised) for up to an additional twenty years.
The
$25,000 payment has been deferred and is being amortized on a
straight-line basis over the three-year option period.
The
following is a summary of the Company’s Other Assets at April
30, 2019 and 2018.
|
|
April 30,
2019
|
April 30,
2018
|
|
Option on water
rights lease agreements, net
|
$
15,735
|
$
30,735
|
|
Prepaid insurance
and other expenses
|
9,667
|
7,636
|
|
Total
|
25,402
|
38,371
|
|
Less Other Assets -
Current
|
(22,845
)
|
(22,636
)
|
|
TOTAL
OTHER ASSETS - NON-CURRENT
|
$
2,557
|
$
15,735
|
|
|
|
|
NOTE 6 - INCOME TAXES
There was no income tax provision (benefit) for the years ended
April 30, 2019 and 2018. The components of the Company’s net
deferred tax assets are as follows:
|
|
April 30,
2019
|
April 30,
2018
|
|
Deferred tax
asset
|
|
-
|
|
Net operating loss
carryforward
|
$
1,438,800
|
$
1,282,300
|
|
Stock-based
compensation
|
200,200
|
200,200
|
|
Equipment and mining
interests
|
296,600
|
365,600
|
|
Other
|
2,900
|
2,900
|
|
Total deferred tax
assets
|
1,938,500
|
1,851,000
|
|
Valuation
allowance
|
(1,938,500
)
|
(1,851,000
)
|
|
NET
DEFERRED TAX
ASSETS
|
$
-
|
$
-
|
Deferred
income taxes arise from timing differences resulting from income
and expense items reported for financial accounting and tax
purposes in different periods. A deferred tax asset valuation
allowance is recorded when it is more likely than not that deferred
tax assets will not be realized. As management of the Company
cannot determine that it is more likely than not that the Company
will realize the benefit of the net deferred tax assets, a
valuation allowance equal to 100% of the deferred tax assets has
been recorded at April 30, 2019 and 2018.
On December 22, 2017, the United States enacted the Tax Cuts and
Jobs Act (the "Act") resulting in significant modifications to
existing law. The Company did not incur any net income tax benefit
or provision for the year ended April 30, 2018 as a result of the
changes to tax laws and tax rates under the Act. The
Company’s net deferred tax asset was reduced by approximately
$680,800 during the year ended April 30, 2018, which consisted
primarily of the remeasurement of federal deferred tax assets from
35% to 21%.
A
reconciliation between the statutory federal income tax rate and
the Company’s tax provision (benefit) is as
follows:
|
|
April 30, 2019
|
April 30, 2018
|
||
|
Amount computed
using the statutory rate
|
$
(70,500
)
|
(21%)
|
$
(129,600
)
|
(35%)
|
|
Effect of state
taxes
|
(18,400
)
|
(6%)
|
(20,500
)
|
(5%)
|
|
Other
|
1,400
|
-
|
2,900
|
1%
|
|
Impact of change in
statutory tax rate
|
-
|
-
|
680,800
|
159%
|
|
Change in valuation
allowance
|
87,500
|
(26%)
|
(533,600
)
|
(125%)
|
|
TOTAL INCOME TAX
PROVISION (BENEFIT)
|
$
-
|
-%
|
$
-
|
-%
|
At
April 30, 2019, the Company had federal and state net operating
loss carry forwards of approximately $5,436,000, $4,845,000 of
which expires between 2013 and 2037
. The remaining balance of $591,000 will
never expire but its utilization is limited to 80% of taxable
income in any future year.
The
Company has no tax position at April 30, 2019 and 2018 for which
the ultimate deductibility is highly certain but for which there is
uncertainty about the timing of such deductibility. It is not
anticipated that unrecognized tax benefits would significantly
increase or decrease within 12 months of the reporting date. The
Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
No such interest or penalties were recognized during the periods
presented. The Company had no accruals for interest and penalties
at April 30, 2019 and 2018. The Company’s federal income tax
returns for fiscal years 2017 through 2019 remain open and subject
to examination.
NOTE 7– RELATED PARTY TRANSACTIONS
The
Company rented office space from Marlin Property Management, LLC
(“Marlin”) an entity owned by the spouse of the
Company’s former President and current Chairman of the Board
of Directors. The lease was on a month-to-month basis as financial
resources were available. The Company terminated the lease
effective November 1, 2018. For the years ended April 30, 2019 and
2018, office rent was $1,500 and $3,000, respectively.
NOTE 8 – STOCKHOLDERS’ EQUITY
On October 17, 2017, the Company issued 21,597,698 shares of its
common stock to 34 investors pursuant to a private placement of its
securities (the “2017 Offering”). The 2017 Offering
consisted of the sale of “units” of the Company’s
securities at the per unit price of $0.10. Each unit consisted of
two shares of common stock and one warrants to purchase an
additional share of common stock. The Company raised a total of
$1,079,884.
On
October 26, 2018, the Company issued 960,417 shares of its common
stock in lieu of cash payment for accounts payable. The value of
the shares issued was $57,625, based on a price of $0.06 per share
which was the fair value on the date of issuance.
NOTE 9 – WARRANTS
On
October 31, 2017, the Company issued 10,798,849 warrants pursuant
to the 2017 Offering which entitled the holders thereof to purchase
shares of common stock for the price of $0.15 per share. The term
of each warrant is for three years commencing with its issuance
date.
The
following is a summary of the Company’s warrants to purchase
shares of common stock activity:
|
|
Warrants
|
Weighted
Average
Exercise
Price
|
|
Balance outstanding at April 30,
2017
|
19,855,400
|
$
0.17
|
|
Issued – October 31, 2017
(Note 7)
|
10,798,849
|
0.15
|
|
Balance outstanding
at April 30, 2018 and April 30, 2019
|
30,654,249
|
$
0.16
|
The
composition of the Company’s warrants outstanding at April
30, 2019 is as follows:
|
Issue
Date
|
Expiration
Date
|
Warrants
|
Exercise
Price
|
Remaining life
(years)
|
|
July 29,
2014
|
July 29,
2019
|
1,614,400
|
$
0.23
|
0.25
|
|
October 12,
2015
|
October 12,
2020
|
4,241,000
|
0.20
|
1.45
|
|
October 12,
2016
|
October 12,
2021
|
14,000,000
|
0.15
|
2.45
|
|
October 31,
2017
|
October 31,
2020
|
10,798,849
|
0.15
|
1.51
|
|
|
30,654,249
|
$
0.16
|
1.87
|
|
NOTE 10 - STOCK OPTIONS
Options issued for mining interest
In
consideration for mining interests (see Note 4), the Company is
obligated to issue stock options to purchase shares of the
Company’s common stock based on "fair market price" which for
financial statement purposes is considered to be the closing price
of the Company's common stock on the issue dates. Those costs are
capitalized as Mining Interests (Note 4).
The
Company estimated the fair value of these option grants using the
Black-Scholes model with the following information and range of
assumptions:
The
following is a summary of the Company’s options issued and
outstanding in conjunction with the Longstreet Agreement for the
years ended April 30, 2019 and 2018, respectively:
(a)
Weighted average exercise price.
As of
April 30, 2019, the remaining weighted average term of the option
grants for mining interest was 4.41 years.
Options issued under the 2011 Stock Option/Restricted Stock
Plan
The
Company established the 2011 Stock Option/Restricted Stock Plan.
The Stock Option Plan is administered by the Board of Directors and
provides for the grant of stock options to eligible individual
including directors, executive officers and advisors that have
furnished bona fide services to the Company not related to the sale
of securities in a capital-raising transaction.
The
Stock Option Plan has a fixed maximum percentage of 10% of the
Company’s outstanding shares that are eligible for the plan
pool, whereby the number of Shares under the plan increases
automatically increases as the total number of shares outstanding
increase. The number of shares subject to the Stock Option Plan and
any outstanding awards will be adjusted appropriately by the Board
of Directors if the Company’s common stock is affected
through a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification dividend (other than quarterly cash
dividends) or other distribution, stock split, spin-off or sale of
substantially all of the Company’s assets.
The
Stock Option plan also has terms and conditions, including without
limitations that the exercise price for stock options granted under
the Stock Option Plan must equal the stock’s fair value,
based on the closing price per share of common stock, at the time
the stock option is granted. The fair value of each option award is
estimated on the date of grant utilizing the Black-Scholes model
and commonly utilized assumptions associated with the Black-Scholes
methodology. Options granted under the Plan have a ten-year maximum
term and varying vesting periods as determined by the
Board.
On
April 30, 2018, the Board of Directors authorized the grant of
1,400,000 options to purchase shares of common stock of the Company
to various directors, officers and consultants. The options have an
exercise price of $0.065 based on the closing price of the
Company’s common stock on the date of grant and vest
immediately. The expiration date of the options is April 30, 2023.
The fair value of the options was $90,923 and was recognized as
stock-based compensation for the year ended April 30, 2018. These
costs are classified as management and administrative
expense
The
Company estimated the fair value of these option grants using the
Black-Scholes model with the following information and
assumptions:
The
following is a summary of the Company’s options issued and
outstanding in conjunction with the Company’s Stock Option
Plan:
(a)
Weighted average exercise price.
The
following table summarizes additional information about the options
under the Company’s Stock Option Plan as of April 30,
2019:
|
|
Options outstanding and
exercisable
|
||
|
Date of
Grant
|
Shares
|
Price
|
Remaining Term
|
|
October 18,
2016
|
4,810,000
|
$
0.06
|
2.47
|
|
April 30,
2018
|
1,400,000
|
0.065
|
4.00
|
|
Total
options
|
6,210,000
|
$
0.06
|
2.90
|
The
total value of stock option awards is expensed ratably over the
vesting period of the employees receiving the awards. As of April
30, 2019, there was no unrecognized compensation cost related to
stock-based options and awards.
Summary:
The
following is a summary of the Company’s stock options
outstanding and exercisable:
|
Options issued
for:
|
|
Expiration
Date
|
Options
|
Weighted AverageExercise
Price
|
|
Mining
interests
|
|
April 11, 2020 to
January 15, 2029
|
435,000
|
$
0.25
|
|
Stock option
plan
|
|
October 18, 2021 to
April 30, 2023
|
6,210,000
|
0.06
|
|
Outstanding
and exercisable at April 30, 2019
|
|
|
6,645,000
|
$
0.07
|
The
aggregate intrinsic value of all options vested and exercisable at
April 30, 2019, was $Nil based on the Company’s closing price
of $0.031 per common share at April 30, 2019. The Company’s
current policy is to issue new shares to satisfy option
exercises.
I
TEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
For the
years ended April 30, 2019 and 2018 there were no disagreements
with our auditors on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure. For the years ended April 30, 2019 and 2018, there were
no
“reportable
events”
as that term is described in Item 304(a)(1)(v)
of Regulation S-K.
I
TEM 9A.
CONTROLS
AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
At the
end of the period covered by this Annual Report on Form 10-K, an
evaluation was carried out under the supervision of and with the
participation of our management, including the Principal Executive
Officer and the Principal Financial Officer of the effectiveness of
the design and operations of our disclosure controls and procedures
(as defined in Rule 13a – 15(e) and Rule 15d – 15(e)
under the Exchange Act) as of the end of the period covered by this
report. Based on that evaluation, the Principal Executive Officer
and the Principal Financial Officer have concluded that our
disclosure controls and procedures were not effective in ensuring
that: (i) information required to be disclosed by the Company in
reports that it files or submits to the Securities and Exchange
Commission under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in
applicable rules and forms and (ii) material information required
to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to our management, including our CEO
and CFO, as appropriate, to allow for accurate and timely decisions
regarding required disclosure.
Disclosure
controls and procedures were not effective due primarily to a
material weakness in the segregation of duties in the
Company’s internal control of financial reporting as
discussed below.
Internal Control over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company (including its
consolidated subsidiaries) and all related information appearing in
our Annual Report on Form 10-K. Our internal control over financial
reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting
principles generally accepted in the United States of
America
Management
conducted an evaluation of the design and operation of our internal
control over financial reporting as of April 30, 2019, based on the
criteria in a framework developed by the Company’s management
pursuant to and in compliance with the criteria established in
Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations (COSO) of the Treadway
Commission. This evaluation included review of the documentation of
controls, evaluation of the design effectiveness of controls,
walkthroughs of the operating effectiveness of controls and a
conclusion on this evaluation. Based on this evaluation, management
has concluded that our internal control over financial reporting
was not effective as of April 30, 2019, because management
identified a material weakness in the Company’s internal
control over financial reporting related to the segregation of
duties as described below.
While
the Company does adhere to internal controls and processes that
were designed and implemented based on the COSO report, it is
difficult with a very limited staff to maintain appropriate
segregation of duties in the initiating and recording of
transactions, thereby creating a segregation of duties weakness.
Due to: (i) the significance of segregation of duties to the
preparation of reliable financial statements; (ii) the significance
of potential misstatement that could have resulted due to the
deficient controls; and (iii) the absence of sufficient other
mitigating controls, we determined that this control deficiency
resulted in more than a remote likelihood that a material
misstatement or lack of disclosure within the annual or interim
financial statements may not be prevented or detected.
Management’s Remediation Initiatives
.
Management has evaluated, and continues to evaluate, avenues for
mitigating our internal controls weaknesses, but mitigating
controls to completely mitigate internal control weaknesses have
been deemed to be impractical and prohibitively costly, due to the
size of our organization at the current time. Management expects to
continue to use reasonable care in following and seeking
improvements to effective internal control processes that have been
and continue to be in use at the Company
Management
is currently evaluating avenues for mitigating the Company’s
internal controls weaknesses but mitigating controls that are
practical and cost effective may not be found based on the size,
structure, and future existence of the organization. Since the
Company has not generated any significant revenues, the Company is
limited in its options for remediation efforts.
Management,
within the confines of its budgetary resources, will engage its
outside accounting firm to assist with an assessment of the
Company’s internal controls over financial reporting during
the fiscal year ending April 30, 2019.
Changes in internal controls over financial reporting
There
were no changes in the Company’s internal control over
financial reporting that occurred prior to the Company’s most
recent financial quarter that materially affected, or are
reasonably likely to materially affect, the Company’s
internal control over financial reporting.
I
TEM 9B.
OTHER
INFORMATION.
None.
P
ART III
I
TEM
10.
DIRECTORS, EXECUTIVE OFFICERS
AND
CORPORATE GOVERNANCE.
The
Company’s executive officers and directors and their age and
titles are as follows:
|
Name
|
Age
|
Position
|
|
Lindsay
Gorrill
|
57
|
Chairman
of the Board
|
|
David
Segelov
|
52
|
President
and Director
|
|
Kelly
Stopher
|
56
|
Chief
Financial Officer and Corporate Secretary/Treasurer
|
|
Paul
Coombs
|
47
|
Director
|
|
Thomas
Power
|
56
|
Director
|
|
Ronald
D. Nilson
|
65
|
Director
|
Set
forth below is a brief description of the background and business
experience of the Company’s officers and
directors:
Lindsay E. Gorrill - Chairman
Mr.
Lindsay Gorrill is a Chartered Accountant and has university
degrees in Finance and Marketing. Mr. Gorrill has a background in
acquisitions, company building, financial markets and world
exposure. Mr. Gorrill has served as a member of the Company’s
Board of Directors since July 2007. Mr. Gorrill currently serves as
the Company’s Chairman of the Board and has in the past
served as the Company’s President and Treasurer. Between July
2007and October 2015, Mr. Gorrill previously served on the Board of
Directors of JayHawk Energy, Inc. which was quoted via the OTC
Markets, and also in the past served as JayHawk Energy,
Inc.’s Chairman, President, Chief Executive Officer and Chief
Financial Officer. Mr. Gorrill has also previously served as a
member of the Board of Directors of Latera Ventures Corp, a company
quoted via the OTC Markets. He has served in the past, as
President, Chief Operating Officer and as a member of the Board of
Directors of Berkley Resources Inc., a company listed on the TSX
Venture Exchange. He has also been, since September 2009, a member
of the Board of Directors of Deer Horn Metals, Inc., a TSX Venture
Exchange listed company.
David Segelov – President and Director
Mr
David Segelov is a Chartered Financial Analyst (CFA) and has a
Masters of Business Administration from Columbia University in New
York and also holds a law degree from Sydney University. He is the
sole partner of Reverse Swing Capital (“Reverse Swing”)
which is a financial consulting firm. Reverse Swing provides
financial analysis of investments and ideas for hedge funds in New
York with a primary focus on resource companies (with an expertise
in gold investments) in the USA, Australia and Canada. Prior to
Reverse Swing Capital, he was analyst at various hedge funds
including Para Partners in New York for five years. He holds no
executive or management positions with any other public
company. From August 2015 till December 2017, Mr. Segelov
held the position of CFO of Driver Digital Holdings, Inc., a
privately held children’s media company based in New York
City. Mr. Segelov has been a Director of Star Gold Corp. since
December 2011 and has in the past served as the Company’s
Chief Executive Officer.
Kelly J. Stopher – Chief Financial Officer and Corporate
Secretary/Treasurer
Mr.
Kelly Stopher was appointed Chief Financial Officer of the Company
on October 20, 2010. Mr. Stopher has 29 years experience in
accounting and finance. Mr. Stopher is the Managing Partner of
Palouse Advisory Partners, providing Chief Financial Officer
services to clients. Mr. Stopher has developed strategies to
implement financial management systems, internal control policies
and procedures, and financial reporting and modeling for small-cap
companies. Mr. Stopher served as Chief Financial Officer and
interim President/ Chief Executive Officer for JayHawk Energy,
Inc., a company quoted via the OTC Markets. Mr. Stopher also served
on the Board of Directors of Jayhawk Energy, Inc. Mr. Stopher holds
a Bachelors degree from Washington State University in Business
Administration - Accounting.
Paul Coombs - Director
Mr.
Coombs has over fifteen years of experience in the exploration and
development of gold mining properties in North America, Europe and
Africa. Mr. Coombs structured and supervised the financial
operations for Falconbridge Ltd, Noranda Inc. and Xstrata
PLC’s North American gold production. At the height of his
responsibility, Mr. Coombs managed responsibilities of hedging,
selling and refining of more than 1 million ounces of gold
annually. More recently, he was CFO of the Canadian company Canada
Fluorspar Inc., which was previously listed on the TSX Venture
Exchange. Mr. Coombs has served as a Director of Star Gold Corp.
since September 2014.
Additionally,
Mr. Coombs has worked extensively in West Africa developing
producing gold mines for Endeavour Mining in Burkina Faso and
exploration projects in Mali, Ghana and Cote d’Ivoire. Mr.
Coombs completed his undergraduate work at Memorial University in
St. John’s, Newfoundland, Canada earning a Bachelor of
Commerce, followed by both C.M.A. and C.G.A designations. After
working for Falconbridge for several years Mr. Coombs completed his
MBA at Laurentian University in Sudbury, Ontario,
Canada.
Ronald D. Nilson - Director
Mr.
Nilson is the President and CEO of Ground Force Worldwide
(“Ground Force”) based in Post Falls, Idaho. Mr. Nilson
has run Ground Force since 2000. Ground Force is an engineering and
manufacturing company, specializing in mining equipment. Ground
Force designs, engineers and manufactures specialized equipment to
be used in open pit and underground mines around the world. It is a
company with global reach - operating three factories in north
Idaho and factories in Newcastle, England and in Lima, Peru. Ground
Force is licensed by Caterpillar Inc. as an OEM Manufacturer and
continues to build many of its products based on
Caterpillars’ chassis. Mr. Nilson has served as a Director of
Star Gold since February 2014.
Thomas Power - Director
Mr.
Power is President and CEO of Sunshine Minting, Inc. He also is
Chairman of the Board of Sunshine Minting International (Shanghai)
Co. Ltd which is a joint venture between Sunshine Minting, Inc. and
Shanghai JinYuan Culture Development Co. Ltd., for the production
of precious metal blanks and products in Shanghai,
China.
Mr.
Power has over 26 years of experience in the precious metals and
minting fields. He began his career in this field with Johnson
Matthey Ltd., the Canadian division of Johnson Matthey PLC based in
the United Kingdom. During his tenure with Johnson Matthey, Mr.
Power held several key management positions in both Operations and
Sales. Mr. Power has served as a Director of Star Gold since March
2015.
TERM OF OFFICE
The
Company’s directors are appointed for a one-year term to hold
office until the next annual general meeting of its stockholders or
until a replacement is duly elected or until removed from office in
accordance with the Company’s Bylaws. The Company’s
officers are appointed by the Board of Directors and hold office
until removed by the board.
SIGNIFICANT EMPLOYEES
The
Company has no employees.
AUDIT COMMITTEE
Star
Gold Corp. is not a listed issuer and as such the Company’s
Board of Directors is not required to maintain a separately
designated standing audit committee. However, the Company has
voluntarily chosen to establish an audit-committee that consists of
directors Lindsay E. Gorrill and Paul Coombs. Although neither
member of the audit committee is independent both have the
requisite educational and professional background to be considered
as financial experts.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT
Section
16(a) of the Exchange Act requires executive officers and
directors, and persons who beneficially own more than 10% of the
Company’s equity securities (collectively, the
“Reporting Persons”), to file reports of ownership and
changes in ownership with the SEC. Reporting Persons are required
by SEC regulation to furnish the Company with copies of all forms
they file pursuant to Section 16(a). Based on the Company’s
review it believes that all required reports of Reporting Persons
were filed for the year ended April 30, 2019.
I
TEM 11.
EXECUTIVE
COMPENSATION.
SUMMARY COMPENSATION TABLE
The
following table sets forth total compensation paid to or earned by
the Company’s named executive officers, as that term is
defined in Item 402(a)(2) of Regulation S-X during the fiscal year
ended April 30, 2019:
|
|
|
|
|
|
|
Non-Qualified
|
|
|
|
|
|
|
|
|
Non-Equity
|
Deferred
|
|
|
|
|
|
|
Stock
|
Option
|
Incentive Plan
|
Compensation
|
All other
|
|
|
|
Salary
|
Bonus (a)
|
Awards
|
Awards
|
Compensation
|
Earnings
|
compensation
|
Total
|
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
Lindsay
Gorrill, Chairman
|
|
|
|
|
|
|
|
|
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
2018
|
-
|
-
|
-
|
22,731
|
-
|
-
|
-
|
22,731
|
|
2017
|
-
|
-
|
-
|
107,976
|
-
|
-
|
-
|
107,976
|
|
David Segelov, President and
director
|
|
|
|
|
|
|
||
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
2018
|
-
|
-
|
-
|
22,731
|
-
|
-
|
-
|
22,731
|
|
2017
|
-
|
-
|
-
|
53,988
|
-
|
-
|
-
|
53,988
|
|
Kelly Stopher, Chief Financial
Officer
|
|
|
|
|
|
|
||
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
30,000
(a)
|
$
30,000
|
|
2018
|
-
|
-
|
-
|
12,989
|
-
|
-
|
30,000
(a)
|
42,989
|
|
2017
|
-
|
-
|
-
|
15,590
|
-
|
-
|
30,000
(a)
|
45,590
|
|
Ronald Nilson,
Director
|
|
|
|
|
|
|
|
|
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
2018
|
-
|
-
|
-
|
9,742
|
-
|
-
|
-
|
9,742
|
|
2017
|
-
|
-
|
-
|
22,495
|
-
|
-
|
-
|
22,495
|
|
Paul Coombs,
Director
|
|
|
|
|
|
|
|
|
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
2018
|
-
|
-
|
-
|
9,742
|
-
|
-
|
-
|
9,742
|
|
2017
|
-
|
-
|
-
|
28,494
|
-
|
-
|
-
|
28,494
|
|
Thomas Power,
Director
|
|
|
|
|
|
|
|
|
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
2018
|
-
|
-
|
-
|
9,742
|
-
|
-
|
-
|
9,742
|
|
2017
|
-
|
-
|
-
|
22,495
|
-
|
-
|
-
|
22,495
|
(a)
Mr. Stopher
provides all services typical of an accounting department for a
small company. Mr. Stopher’s firm, Palouse Advisory Partners,
LLC, is an independent contractor, with business management and
consulting interests with other companies that are independent of
the consulting agreement he currently has in place with the
Company.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
As of
April 30, 2019, the Company did not have any outstanding equity
awards.
EMPLOYMENT CONTRACTS
None.
I
TEM
12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
AND RELATED
STOCKHOLDER MATTERS.
EQUITY COMPENSATION PLANS
The
Company has adopted its 2011 Stock Option/Restricted Stock Plan.
See Note 10 for a discussion on the 2011 Plan and issuances of
options pursuant to the 2011 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information concerning the
number of shares of the Company’s common stock owned
beneficially as of July 15, 2019 by: (i) each person (including any
group) known to it to own more than five percent (5%) of any class
of its voting securities, (ii) each of the Company’s
directors, (iii) each of the Company’s named executive
officers; and (iv) officers and directors as a group. Unless
otherwise indicated, the stockholder listed possesses sole voting
and investment power with respect to the shares shown.
|
Title of Class
|
Name and Address of
Beneficial Owner
|
Amount and
Nature of Beneficial
Ownership
|
Percentage of
Common Stock
|
||
|
DIRECTORS AND EXECUTIVE OFFICERS
|
|
|
|||
|
Common
stock
|
Lindsay
Gorrill
Coeur
d’Alene, ID (Chairman)
|
25,550,826
|
(1) (2))
|
30.9%
|
(3)
|
|
Common
stock
|
David
Segelov
Bergenfeld,
NJ (President and Director)
|
2,059,648
|
|
2.6%
|
(6)
|
|
Common
stock
|
Kelly
Stopher
Spokane,
WA (Chief Financial Officer)
|
1,419,396
|
|
1.8%
|
(7)
|
|
Common
stock
|
Ronald
D. Nilson
Post
Falls, ID (Director)
|
3,125,000
|
|
4.0%
|
(8)
|
|
Common
stock
|
Paul
Coombs
St.
John’s, Newfoundland, Canada (Director)
|
3,576,216
|
|
4.6%
|
(9)
|
|
Common
stock
|
Thomas
Power
Hayden,
ID (Director)
|
6,450,000
|
|
8.1%
|
(10)
|
|
Common
stock
|
All
Directors and Officers as a Group
|
43,050,482
|
|
45.9%
|
(11)
|
(1)
Includes 18,286,222
common shares held directly by Chairman of the Board of Directors
(Direct ownership) of which 3,441,779 common shares are held by the
spouse of the Chairman of the Board of Directors
(2)
Gorrill: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 26,420,222 divided by (77,394,841
+ 5,984,000 + 2,150,000) = 30.9%
(3)
Segelov: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 2,059,648 divided by (77,394,841
+ 300,000+ 1,250,000) = 2.6%
(4)
Stopher: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 1,419,396 divided by (77,394,841
+ 0 + 960,000) = 1.8%
(5)
Nilson: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 3,125,000 divided by (77,394,841
+ 1,000,000 + 525,000) = 4.0%
(6)
Coombs: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 3,576,216 divided by (77,394,841
+ 1,050,000 + 625,000) = 4.5%
(7)
Power: Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 6,450,000 divided by (77,394,841
+ 2,000,000 + 525,000) = 8.1%
(8)
All officers and
directors:
Shares
Beneficially owned divided by (Current common shares outstanding +
Warrants owned + Options owned) = 44,150,500 divided by (76,434,424
+ 11,134,000 + 6,035,000) = 47.2%
|
5% STOCKHOLDERS
|
Amount
and Nature of
Beneficial
Ownership
|
Percentage
of
Common
Stock
|
|
|
Common
stock
|
Lindsay
Gorrill, Coeur d’Alene, ID
|
26,420,222
|
30.9%
|
|
Common
stock
|
Thomas
Power, Hayden, ID
|
6,450,000
|
8.1%
|
|
Common
stock
|
Joshua
H. Landes, New York, NY
|
5,991,933
|
7.5%
|
Notes:
Based on
77,394,841
shares of the Company’s
common stock issued and outstanding as of
July 17, 201
9, Under Rule 13d-3,
certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to
be beneficially owned by a person if the person has the right to
acquire the shares (for example, upon exercise of an option) within
60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of
shares outstanding is deemed to include the amount of shares
beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of
outstanding shares of any person as shown in this table does not
necessarily reflect the person’s actual ownership or voting
power with respect to the number of shares of common stock actually
outstanding on April 30, 2019.
I
TEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Except
as described elsewhere in this report on Form 10-K, none of the
following parties has, since the Company’s date of
incorporation, had any material interest, direct or indirect, in
any transaction with us or in any presently proposed transaction
that has or will materially affect us:
i.
Any of the
Company’s directors or officers;
ii.
Any person proposed
as a nominee for election as a director;
iii.
Any person who
beneficially owns, directly or indirectly, shares carrying more
than 10% of the voting rights attached to the Company’s
outstanding shares of common stock;
iv.
Any of the
Company’s promoters; and
v.
Any relative or
spouse of any of the foregoing persons who has the same house as
such person.
Director Independence
Quotations
for the Company’s common stock are entered via the OTC
Markets inter-dealer quotation system, which does not have director
independence requirements. For purposes of determining director
independence, we have applied the definitions set out in NASDAQ
Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not
considered to be independent if he or she is also an executive
officer or employee of the corporation.
I
TEM 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES.
Audit Fees
The
aggregate fees billed for the two most recently completed fiscal
years ended April 30, 2019 and 2018, for professional services
rendered by the principal accountant for the audit of the
Company’s annual financial statements and review of the
financial statements included the Company’s Quarterly Reports
on Form 10-Q and services that are normally provided by the
accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
|
|
For the years ended April
30,
|
|
|
|
2019
|
2019
|
|
Audit
fees
|
$
24,000
|
$
23,605
|
|
Tax
fees
|
2,255
|
2.203
|
|
All other
fees
|
-
|
-
|
|
Total
audit fees
|
$
26,255
|
$
25,808
|
I
TEM 15.
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
|
|
|
Number
|
Description of Exhibits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S
IGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
|
|
STAR GOLD CORP.
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
July
17, 2019
|
|
/s/
DAVID
SEGELOV
|
|
|
|
|
|
|
|
|
By:
|
David
Segelov
|
|
|
|
|
President
and Director
|
|
|
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
Date:
|
July
17, 2019
|
|
/s/
KELLY J.
STOPHER
|
|
|
|
|
|
|
|
|
By:
|
Kelly
J. Stopher
|
|
|
|
|
Chief
Financial Officer and Corporate Secretary/Treasurer
|
|
|
|
|
(Principal
Financial Officer)
|
In
accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
|
Date:
|
July
17, 2019
|
By:
|
/s/
DAVID
SEGELOV
|
|
|
|
|
|
|
|
|
|
President
and Director
|
|
|
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
Date:
|
July
17, 2019
|
|
/s/
KELLY J.
STOPHER
|
|
|
|
|
|
|
|
|
By:
|
Kelly
J. Stopher
|
|
|
|
|
Chief
Financial Officer and Corporate Secretary/Treasurer
|
|
|
|
|
(Principal
Financial Officer)
|
Page
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