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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lode Star Mining Inc (PK) | USOTC:LSMG | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.008 | 0.008 | 0.008 | 0.00 | 01:00:00 |
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018
|
NEVADA
|
47-4347638
|
(State or other jurisdiction of incorporation or
organization)
|
(IRS Employer Identification No.)
|
Securities registered pursuant to Section 12(b) of the
Act:
|
Securities registered pursuant to section 12(g) of the
Act:
|
NONE
|
Common Stock, $0.001 par value
|
|
Large Accelerated Filer
|
☐
|
Accelerated Filer
|
☐
|
|
Non-accelerated Filer
|
☐
|
Smaller Reporting Company
|
☑
|
|
|
|
PART I
|
||
Item 1.
|
Business.
|
3
|
Item 1A.
|
Risk Factors.
|
4
|
Item 1B.
|
Unresolved Staff Comments.
|
7
|
Item 2.
|
Properties.
|
7
|
Item 3.
|
Legal Proceedings.
|
11
|
Item 4
|
Mine Safety Disclosure
|
11
|
PART II
|
||
Item 5
|
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.
|
12
|
Item 6.
|
Selected Financial Data.
|
13
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition
and Results of Operation.
|
13
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market
Risk.
|
41
|
Item 8.
|
Financial Statements and Supplementary Data.
|
42
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
|
43
|
Item 9A.
|
Controls and Procedures.
|
43
|
Item 9B.
|
Other Information.
|
44
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate
Governance.
|
44
|
Item 11.
|
Executive Compensation.
|
47
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
|
49
|
Item 13.
|
Certain Relationships and Related Transactions, and Director
Independence.
|
50
|
Item 14.
|
Principal Accounting Fees and Services.
|
51
|
PART IV
|
||
Item 15.
|
Exhibits and Financial Statement Schedules.
|
52
|
ITEM 1.
|
BUSINESS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 1A.
|
RISK FACTORS
(continued)
|
ITEM 1A.
|
RISK FACTORS
(
continued)
|
ITEM 1A.
|
RISK FACTORS
(
continued)
|
ITEM 1 B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 2.
|
PROPERTIES
(continued)
|
ITEM 2.
|
PROPERTIES
(continued)
|
Claim
Name
|
U.S. Survey
No.
|
Combination No.
3
|
2375
|
August
|
2916
|
Great Western
|
2525
|
Gold Coin
|
2525
|
February
|
2941
|
Mohawk No. 1
|
2283
|
Side Line
Fraction
|
2567
|
January
|
2941
|
Silver Pick
|
2203
|
Silver Pick
Fraction
|
2203
|
Deserted
(1)
|
2203
|
Pipe Dream
|
2203
|
North End
(2)
|
2203
|
Hazel Queen
|
2375
|
Fraction
|
2844
|
White Horse
|
2844
|
White Rock
|
2844
|
Yellow Jacket
|
2844
|
Firelight
|
2749
|
Emma Fraction
|
2360
|
S.E. 2/3 Red King (more or
less)
|
2361
|
S.E. 1/2
(Cornishman)
|
2750
|
Kewana #3
|
2565
|
Blue Jay
|
2375
|
Combination No. 1 Claim
(3)
|
2375
|
Combination No 2 Claim
(4)
|
2844 (19/24th
interest)
|
Omega
|
2844 (19/24th
interest)
|
Apazaca
|
2844 (19/24th
interest)
|
Alpha
|
2844 (19/24th
interest)
|
Jim Fraction
|
4096 (19/24th
interest)
|
O.K. Fraction
|
2560 (¾ of ½
interest)
|
ITEM 2.
|
PROPERTIES
(continued)
|
ITEM 2.
|
PROPERTIES
(continued)
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
2018
|
2017
|
||
Quarter Ended
|
High
|
Low
|
High
|
Low
|
March
31
|
$
0.038
|
$
0.022
|
$
0.09
|
$
0.04
|
June
30
|
$
0.035
|
$
0.0249
|
$
0.083
|
$
0.02
|
September
30
|
$
0.033
|
$
0.025
|
$
0.065
|
$
0.03
|
December
31
|
$
0.05
|
$
0.022
|
$
0.05
|
$
0.032
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
(continued)
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Year
|
Ore (tons)
|
Gold (ounces)
|
●
Silver (ounces)
|
|
|
|
|
1903
|
|
3,419
|
●
287
|
1904
|
8,000
|
113,293
|
●
19,954
|
1905
|
11,700
|
91,088
|
●
8,589
|
1906
|
59,628
|
339,890
|
●
15648
|
1907
|
101,136
|
406,756
|
●
71,710
|
1908
|
88,152
|
236,082
|
●
30,823
|
1909
|
297,199
|
453,915
|
●
33,164
|
1910
|
339,219
|
538,760
|
●
117,598
|
1911
|
390,431
|
497,637
|
●
126,406
|
1912
|
362,777
|
301,848
|
●
125,736
|
1913
|
364,785
|
242,815
|
●
153,984
|
1914
|
367,166
|
227,612
|
●
129,830
|
1915
|
418,935
|
212,337
|
●
165,305
|
1916
|
383,456
|
128,250
|
●
129,781
|
1917
|
339,488
|
91,917
|
●
78,184
|
1918
*
|
264,237
|
58,685
|
●
90,560
|
1919
|
16,435
|
35,810
|
●
39,912
|
1920
|
6,571
|
7,536
|
●
6,081
|
1921
|
1,903
|
7,101
|
●
1,761
|
1922
|
5,619
|
12,773
|
●
5,755
|
1923
|
3,137
|
4,471
|
●
3,613
|
1924
|
7,352
|
4,336
|
●
3,982
|
1925
|
2,773
|
5,053
|
●
2,369
|
1925-1960
|
129,705
|
168,616
|
●
88,967
|
Total
|
3,958,104
|
4,190,000
|
●
1,450,000
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Conventional surface sampling of outcrops and soils on the
Lode-Star claims is not useful due to poor exposures and
contamination by waste dumps and tailings. However, biogeochemical
sampling has been shown to be effective in indicating areas of
anomalous gold and other gold-related trace metal values below the
Seibert gravels.
In August 2011, ICN personnel sampled rabbit brush in an area
measuring approximately 4000 feet (1200 m) by 2000 feet (600 m) in
the northern and central portions of the property, including in the
Silver Pick shaft area and in the NE Corridor target area. The
program was designed, and the data interpreted by Shea Clark Smith
of Minerals Exploration & Environmental Geochemistry (Smith,
2012). Large areas that are defined by gold concentrations from 2
– 60 ppb are significant and attest to the volume (and
possibly grade) of mineralized rock in contact with groundwater in
these areas. Smith states that metal uptake in rabbit brush is not
overwhelmed by mineralized dust that might have masked the metal
concentrations in plant tissues of less well endowed (by gold)
areas.
The Figure to the right displays the gold-mineralized areas
indicated by the biogeochemical data. The anomalies cluster in
areas of historically mined mineralization near the Phelan,
Sheets-Ish and Silver Pick shafts. Most importantly multiple
clusters occur in the Northeast Corridor area, which includes the
Newmont Lode and especially the Church Zone. Of particular note is
the cluster of anomalies that exist to the northwest of the NE
Corridor, correlating closely with interpreted northwest-trending
structures. Thus, the biogeochemical data confirms the conclusions
from drilling and underground geologic work as shown on Figure 8
above. Overall the biogeochemical anomalies were found in four
areas of the property that have had no drilling, as
follows:
1.
the area
immediately east of the Church Zone coinciding with a CSAMT
anomaly;
2.
several grouped
anomalies immediately northwest of the Newmont Lode and the
January-Whiterock shaft;
3.
a northwest
trending series of anomalies extending 400 meters to the northwest
of the Church discovery zone; and,
4.
three separate
anomalies located to the west of the Silver Pick shaft and to the
east of the Phelan shaft in the northern portion of the claim
group. In general, all of the drill holes with anomalous gold
values fall within biogeochemical anomalies and all those holes
with no significant gold intercepts are outside the biogeochemical
anomalies.
|
|
Figure 9
Biogeochemical Interpretive Map
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
|
Red Hills, Decline Zone:
The
Company is planning for 6,000 combined feet of deep core drilling
for the Red Hills and Decline Zone.
Anticipated Cost
$400,000. See Table 11a.
Church Zone:
The
Company is planning for 6,400 combined feet of drilling for the
Church Zone.
Anticipated Cost
$400,000 See Table 11b.
Newmont Zone:
Future planning
for an initial 22,200 combined feet of surface drilling in the
Newmont Zone.
Anticipated Cost
(Surface) $1,000,000 See Table 11c.
Anticipated Cost
(Underground) $1,000,000 See Table 11c.
|
Red
Hills Surface
|
Hole
Depth
|
$/ft
|
Cost/Hole
|
# of
Holes
|
Cost
|
TTl
ft Drilled
|
|
|
Core Drilling
|
1000 avg.
|
60.00
|
$ 60,000
|
6
|
$ 360,000
|
6,000
|
|
Contingency
|
|
|
|
|
$ 40,000
|
|
|
Total Budget
|
|
|
|
6
|
$ 400,000
|
6,000
|
Church Zone
Surface
|
Hole
Depth
|
$/ft
|
Cost/Hole
|
# of
Holes
|
Price
|
TTl
ft Drilled
|
|
|
Core Drilling
|
300
|
50.00
|
$ 15,000
|
8
|
$ 120,000
|
2,400
|
|
Core Drilling
|
1000
|
60.00
|
$ 60,000
|
4
|
$ 240,000
|
4,000
|
|
Contingency
|
|
|
|
|
$ 40,000
|
|
|
Total Budget
|
|
|
|
12
|
$ 400,000
|
6,400
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Newmont Zone
Surface
|
Hole
Depth
|
$/ft
|
Cost/Hole
|
# of
Holes
|
Price
|
TTl
ft Drilled
|
|
|
RC Drilling
|
1000
|
38.00
|
$ 38,000
|
10
|
$ 380,000
|
10,000
|
|
RC Drilling
|
500
|
38.00
|
$ 19,500
|
10
|
$ 190,000
|
5,000
|
|
Core Drilling
|
1000
|
60.00
|
$ 60,000
|
4
|
$ 240,000
|
4,000
|
|
Core Drilling
|
400
|
50.00
|
$ 20,000
|
8
|
$ 160,000
|
3,200
|
|
Contingency
|
|
|
|
|
$ 30,000
|
|
|
Surface Budget
|
|
|
|
32
|
$ 1,000,000
|
22,200
|
|
Underground Budget
|
Newmont Underground - Yet to be Determined
|
$1,000,000
|
|
|
Combined 11a & 11b
|
Drilling
|
$800,000
|
|
|
|
Analytical Fees
|
$200,000
|
|
|
Total
|
|
$1,000,000
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Target Area 1.
North-south oriented CSAMT gradient that indicates extension of the
known high-grade gold in the Red Hills Vein Zone.
Target Area 2.
Several Refractive Seismic responses along a north-northwest
oriented alignment, suggesting the existence of one (or more)
siliceous zones, likely below the 1,700 meter search
horizon.
The pronounced south-pointing protruding gradient at the south end
of this linear, which is similar to the northeast pointing gradient
in the Red Hills. This is indicative of the existence of a
siliceous zone.
Target Area 3.
A major northwest oriented CSAMT gradient trending similar to
numerous historic ore zones in the main district (note the repeated
spacing of the prominent NW historic ore zones).
Intersection of this northwest oriented gradient with the southern
projection of the NE Corridor, that correlates with the existence
of biogeochemical anomalies.
Target Area 4.
A
north-northeast oriented CSAMT gradient adjacent to the NE Corridor
with coincident Refractive Seismic responses and biogeochemical
anomalies.
A sharp
embayment and protruding CSAMT gradient with coincident RS
responses and biogeochemical anomaly.
Target Area 5.
Several
Refractive Seismic responses along a north-northwest oriented
alignment, suggesting the existence of one (or more) siliceous
zones, likely below the 1,700 meter search horizon.
The
intersection of RS responses with CSAMT gradient.
Target Area 6.
A major
northwest oriented CSAMT gradient trending similar to numerous
historic ore zones in the main district coincident with
biogeochemical anomalies.
|
Figure
12 - Seismic Survey
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Production Mining Method
We intend to maximize profitability through a disciplined approach
involving the separation of high-grade gold ore from waste rock
during the mining stage, thus avoiding the additional cost of
pre-shipment concentration. In order to maintain the highest grade
of ore production the blast holes will be sampled during drilling,
then assayed to determine ore boundaries prior to blasting. The
current plan is to ship ore directly from the mine to an offsite
mill employing a toll-milling arrangement. A summary of the mining
methodology is as follows:
●
Timbered
raises
●
Cut &
Fill/Resuing Narrow Vein Stoping (described below)
●
Mechanized internal
decline
|
Figure
M1. - A typical blast pattern to extract the ore from waste using
two detonations.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Item
|
Description
|
Cost
|
1.
|
Equipment &
Materials
|
$500,000
|
2.
|
Remaining
Underground Rehab
|
$15,000
|
3.
|
Secondary
Escape
|
$750,000
|
4.
|
Ore
Grade Control
|
$50,000
|
5.
|
Red
Hills Vein Zone Mining
|
$800,000
|
6.
|
Mine
Development Drilling (required to fully assess our
resource)
|
$1,000,000
|
7.
|
Corporate &
General Admin.
|
$720,835
|
|
Total
|
$3,835,835
|
Description
|
Cost
|
Quantity
|
Total
|
a.
Blasting Materials and Storage
|
$30,000
|
N/A
|
$30,000
|
b.
Pneumatic Jackleg new
|
$4,000
|
4
|
$16,000
|
c.
Pneumatic Slusher/w bucket used
|
$20,000
|
2
|
$40,000
|
d.
Pneumatic Tugger used
|
$5,000
maint.
|
1
|
$5,000
|
e.
Stopers/Buzzies
|
$2,000
|
2
|
$4,000
|
f.
1-yard used Scoop
|
$210,000
|
1
|
$210,000
|
g.
Compressor
|
$30,000
|
1
|
$30,000
|
h.
Hoist Rehab and Retrofitting
|
$100,000
|
1
|
$100,000
|
i.
Ancillary
|
$55,000
|
1
|
$55,000
|
Contingency
|
|
|
$10,000
|
Total Equipment Items and Cost
|
|
|
$500,000
|
Location
|
Description
|
Costs
|
Comments
|
300
Ft Level
|
Labor
|
$15,000
|
Mainly
Labor
|
Location
|
Description
|
Costs
|
Comments
|
300
Ft Level
|
Labor +
Equipment
|
$750,000
|
MSHA
Mandated
|
Location
|
Description
|
Costs
|
Comments
|
Off
Site
|
Lab
Analyses
|
$50,000
|
Assays
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
Description
|
Costs
|
Comments
|
Labor
Related
|
$400,000
|
5-man crew @ 10
hours per day, estimated 15 months to complete
|
Ore
Grade Control
|
$50,000
|
Sampling time
and logistics
|
Timber
|
$15,000
|
Timber Prep,
crib, man-way & service raise timbers
|
Equipment
Maintenance
|
$30,000
|
0.5
man-hours. $2,000=Tire wear, service & diesel
consumption
|
Ground
Support
|
$13,000
|
4'
Split Set w/plate& monster mat. Estimated 1,000
bolts
|
Explosives
|
$75,000
|
Ongoing Blasting
Materials
|
Fuel
|
$105,000
|
15
months @ $7,000/month
|
Backfill
Material
|
$47,000
|
Limestone
|
Consumables
|
$5,000
|
Small hand tools
(Fin hoes, drill steel, bits, drivers, axes, nails,
etc.)
|
Utilities
|
$5,000
|
24"
vent bag, 2" water & 2" air pipe
|
Contingency
|
$55,000
|
|
Total
|
$800,000
|
|
Description
|
Cost
|
Comments
|
Red
Hills / Decline
|
$400,000
|
Budgeted
|
Church
Zone
|
$400,000
|
Budgeted
|
Analytical
Fees
|
$200,000
|
Budgeted
|
Total
|
$1,000,000
|
|
Description
|
Cost
|
Comments
|
Newmont Surface
|
$1,000,000
|
Planned for the future. Not accounted for.
|
Newmont Underground
|
$1,000;000
|
Planned for the future. Not accounted for.
|
Total
|
$2,000,000
|
|
Description
|
Cost
|
Comments
|
Personnel
|
$304,168
|
Budgeted
|
Regulatory
|
$166,667
|
Budgeted
|
General
|
$250,000
|
Budgeted
|
Total
|
$720,835
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
|
Years
Ended December 31
|
Increase/(Decrease)
|
||
|
2018
|
2017
|
Amount
|
Percentage
|
Revenue
|
$
-
|
$
-
|
$
-
|
-
|
Operating
Expenses
|
273,431
|
646,008
|
(372,577
)
|
(58
%)
|
Operating
Loss
|
(273,431
)
|
(646,008
)
|
372,577
|
(58
%)
|
Other
Expense
|
(59,175
)
|
(45,620
)
|
(13,555
)
|
30
%
|
Net
Loss
|
$
(332,606
)
|
$
(691,628
)
|
$
359,022
|
(52
%)
|
|
Years
Ended December 31
|
Increase/(Decrease)
|
||
|
2018
|
2017
|
Amount
|
Percentage
|
Consulting
services
|
$
82,375
|
$
466,715
|
$
(384,340
)
|
(82
%)
|
Corporate
support services
|
1,904
|
1,913
|
(9
)
|
-
|
Exploration
and evaluation
|
-
|
3,190
|
(3,190
)
|
(100
%)
|
Interest,
bank and finance charges
|
59,175
|
45,620
|
13,555
|
30
%
|
Mineral
option fees
|
100,000
|
100,000
|
-
|
-
|
Office,
foreign exchange and sundry
|
16,947
|
7,593
|
9,354
|
123
%
|
Professional
fees
|
49,348
|
44,876
|
4,472
|
10
%
|
Transfer
and filing fees
|
22,857
|
21,721
|
1,136
|
5
%
|
Total
Operating and Other Expenses
|
$
332,606
|
$
691,628
|
$
(359,022
)
|
(52
%)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
|
December
31
|
Change
|
||
|
2018
|
2017
|
Amount
|
Percentage
|
Cash
|
$
6,508
|
$
818
|
$
5,690
|
696
%
|
Prepaid
fees
|
$
1,979
|
$
3,725
|
$
(1,747
)
|
(47
%)
|
Accounts
payable and accrued liabilities
|
$
5,254
|
$
8,048
|
$
(2,794
)
|
(35
%)
|
Due
to related parties and accrued interest
|
$
1,286,011
|
$
1,036,569
|
$
249,442
|
24
%
|
Loans
payable and accrued interest
|
$
30,267
|
$
47,055
|
$
(16,788
)
|
(36
%)
|
Capital
Stock
|
3,425
|
1,947
|
1,478
|
76
%
|
Additional
Paid-In Capital
|
1,618,084
|
1,512,872
|
105,212
|
7
%
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
|
December
31
|
Increase/(Decrease)
|
||
|
2018
|
2017
|
Amount
|
Percentage
|
Current
Assets
|
$
8,487
|
$
4.543
|
$
3,944
|
87
%
|
Current
Liabilities
|
1,321,532
|
1,091,672
|
229,860
|
21
%
|
Working
Capital (Deficiency)
|
$
(1,313,045
)
|
$
(1,087,129
)
|
$
(225,916
)
|
21
%
|
|
Year
Ended December 31
|
Increase/(Decrease)
|
||
|
2018
|
2017
|
Amount
|
Percentage
|
Cash
Flows Provided By (Used In):
|
|
|
|
|
Operating
Activities
|
$
(79,309
)
|
$
(59,316
)
|
$
19,993
|
(34
%)
|
Financing
Activities
|
85,000
|
55,000
|
30,000
|
55
%
|
Net
increase (decrease) in cash
|
$
5,691
|
$
(4,316
)
|
$
10,007
|
232
%
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
|
ITEM 7A
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Vancouver, Canada
|
“Morgan & Company LLP”
|
|
|
March 26, 2019
|
Chartered Professional Accountants
|
|
YEARS ENDED DECEMBER 31
|
|
|
2018
|
2017
|
|
|
|
Revenue
|
$
-
|
$
-
|
|
|
|
Operating Expenses
|
|
|
Consulting
services
|
82,375
|
466,715
|
Corporate
support services
|
1,904
|
1,913
|
Exploration
and evaluation
|
-
|
3,190
|
Mineral
option fees
|
100,000
|
100,000
|
Office,
foreign exchange and sundry
|
16,947
|
7,593
|
Professional
fees
|
49,348
|
44,876
|
Transfer
and filing fees
|
22,857
|
21,721
|
Total operating expenses
|
273,431
|
646,008
|
|
|
|
Operating Loss
|
(273,431
)
|
(646,008
)
|
|
|
|
Other Expenses
|
|
|
Interest,
bank and finance charges
|
(59,175
)
|
(45,620
)
|
|
|
|
Net Loss For The Year
|
$
(332,606
)
|
$
(691,628
)
|
|
|
|
Basic And Diluted Net Loss Per Common Share
|
$
(0.01
)
|
$
(0.01
)
|
|
|
|
Weighted Average Common Shares Outstanding – Basic and
Diluted
|
49,241,217
|
49,127,825
|
|
YEARS ENDED DECEMBER 31
|
|
|
2018
|
2017
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
Net
loss for the year
|
$
(332,606
)
|
$
(691,628
)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Foreign
exchange loss
|
362
|
7
|
Stock
options issued for services
|
57,912
|
442,808
|
Changes
in operating assets and liabilities:
|
|
|
Prepaid
fees
|
1,746
|
(3,725
)
|
Accounts
payable and accrued liabilities
|
34,679
|
48,274
|
Due
to related parties
|
100,000
|
100,000
|
Accrued
interest payable
|
58,597
|
44,948
|
Net
cash used in operating activities
|
(79,310
)
|
(59,316
)
|
|
|
|
Financing Activities
|
|
|
Repayment
of loans payable
|
(20,000
)
|
(20,000
)
|
Proceeds
from loans payable – related party
|
105,000
|
75,000
|
Net
cash provided by financing activities
|
85,000
|
55,000
|
|
|
|
Net Increase (Decrease) In Cash
|
5,690
|
(4,316
)
|
|
|
|
Cash, Beginning Of Year
|
818
|
5,134
|
|
|
|
Cash, End Of Year
|
$
6,508
|
$
818
|
|
|
|
Supplemental Disclosure Of Cash Flow Information
|
|
|
Cash
paid during the year for:
|
|
|
Interest
|
$
-
|
$
-
|
Income
taxes
|
$
-
|
$
-
|
|
|
|
Non-cash Financing Activity
|
|
|
Expenses
paid by related party on behalf of the Company
|
$
37,473
|
$
59,242
|
|
NUMBER OF COMMON SHARES
|
PAR VALUE
|
ADDITIONAL PAID-IN CAPITAL
|
ACCUMULATED DEFICIT
|
TOTAL
|
|
|
|
|
|
|
Balance,
December 31, 2016
|
49,127,825
|
$
1,947
|
$
1,070,064
|
$
(1,680,140
)
|
$
(608,129
)
|
|
|
|
|
|
|
Stock
options issued for services
|
-
|
-
|
442,808
|
-
|
442,808
|
|
|
|
|
|
|
Net
loss for the year
|
-
|
-
|
-
|
(691,628
)
|
(691,628
)
|
|
|
|
|
|
|
Balance,
December 31, 2017
|
49,127,825
|
1,947
|
1,512,872
|
(2,371,768
)
|
(856,949
)
|
|
|
|
|
|
|
Stock
options issued for services
|
-
|
-
|
57,912
|
-
|
57,912
|
|
|
|
|
|
|
Shares
issued in exchange for debt
|
1,478,140
|
1,478
|
47,300
|
-
|
48,778
|
|
|
|
|
|
|
Net
loss for the year
|
-
|
-
|
-
|
(332,606
)
|
(332,606
)
|
|
|
|
|
|
|
Balance, December 31, 2018
|
50,605,965
|
$
3,425
|
$
1,618,084
|
$
(2,704,374
)
|
$
(1,082,865
)
|
1.
|
BASIS OF PRESENTATION AND NATURE OF OPERATIONS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
a)
|
Basis of Accounting
|
|
b)
|
Cash and Cash Equivalents
|
|
c)
|
Foreign Currency Accounting
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
d)
|
Fair Value of Financial Instruments
|
|
e)
|
Asset Retirement Obligations
|
|
f)
|
Use of Estimates and Assumptions
|
|
g)
|
Basic and Diluted Earnings Per Share
|
|
h)
|
Income Taxes
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued
)
|
|
i)
|
Stock-Based Compensation
|
|
j)
|
Mineral Property Interest and Impairment
|
|
k)
|
Related Party Transactions
|
|
l)
|
Recent Accounting Pronouncements
|
3.
|
MINERAL PROPERTY INTEREST
|
3.
|
MINERAL PROPERTY INTEREST
(Continued)
|
4.
|
CAPITAL STOCK
|
4.
|
CAPITAL STOCK
(Continued)
|
|
Options
|
Exercise Price
|
Weighted Average Exercise Price
|
Weighted Average Life Remaining (Years)
|
Expiry Date
|
Intrinsic Value
|
|
Issued
|
Vested
|
||||||
Balance
December 31, 2017
|
9,500,000
|
4,750,000
|
$0.06
|
$0.06
|
4.12
|
February
14, 2022
|
-
|
Issued
|
500,000
|
-
|
$0.06
|
$0.06
|
4.89
|
November
20, 2023
|
-
|
Expired
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Balance December 31, 2018
|
10,000,000
|
9,500,000
|
$0.06
|
$0.06
|
3.21
|
|
-
|
|
Number
of Warrants
|
Exercise
Price
|
Weighted
Average Exercise Price
|
Weighted
Average Life Remaining (Years)
|
Expiry
Date
|
Intrinsic
Value
|
Balance December
31, 2017
|
3,336,060
|
$
0.02
|
$
0.02
|
2.88
|
November 19,
2020
|
$
40,033
|
Issued
|
-
|
-
|
-
|
-
|
-
|
-
|
Expired
|
-
|
-
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
-
|
-
|
Balance
outstanding and exercisable at December 31, 2018
|
3,336,060
|
$
0.02
|
$
0.02
|
1.88
|
November 19, 2020
|
$
6,672
|
5.
|
LOANS PAYABLE
|
6.
|
RELATED PARTY TRANSACTIONS AND AMOUNTS DUE
|
7.
|
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
|
8.
|
INCOME TAXES
|
|
2018
|
2017
|
Expected
income tax recovery
|
$
113,100
|
$
235,200
|
Adjustment
for non-deductible amounts
|
(22,600
)
|
(152,200
)
|
Increase
in valuation allowance
|
(90,500
)
|
(83,000
)
|
|
$
-
|
$
-
|
|
2018
|
2017
|
Deferred
income tax assets
|
|
|
Net
operating losses carried forward
|
$
413,900
|
$
323,400
|
Valuation
allowance
|
(413,900
)
|
(323,400
)
|
|
$
-
|
$
-
|
2032
|
$
116,010
|
2033
|
6,445
|
2034
|
6,445
|
2035
|
315,203
|
2036
|
263,003
|
2037
|
244,111
|
2038
|
266,265
|
|
$
1,217,482
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING
AND FINANCIAL
DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
Position
|
Mark Walmesley
|
|
61
|
|
President, Chief Executive Officer, Chief Financial Officer,
Treasurer, Director
|
Thomas Temkin
|
|
65
|
|
Chief Operating Officer, Director
|
Pam Walters
|
|
69
|
|
Secretary
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Years Ended
December 31
|
Salary
($)
|
Option Awards
($)
|
Total
($)
|
|||
Mark Walmesley, CEO
(1)
|
2018
|
|
-
|
|
39,357
|
|
39,357
|
|
2017
|
|
-
|
|
251,283
|
|
251,283
|
Thomas Temkin, Director and COO
(2)
|
2018
|
|
-
|
|
12,594
|
|
12,594
|
|
2017
|
|
-
|
|
80,410
|
|
80,410
|
Pam Walters, Secretary
(3)
|
2018
|
|
-
|
|
6,295
|
|
6,295
|
|
2017
|
|
-
|
|
40,209
|
|
40,209
|
ITEM 11.
|
EXECUTIVE COMPENSATION
(continued)
|
(1)
|
Mark Walmesley was appointed as our Chief Financial Officer,
Treasurer and director on September 22, 2014, and our President and
Chief Executive Officer on the December 11, 2014. Mr.
Walmesley has been LSG’s Director of Operations since 2005
and a director of the company since March 2009.
On February 14, 2017 Mr. Walmesley was granted 5,000,000
non-qualified stock options pursuant to our Equity Incentive Plan,
with 25% vesting immediately and a further 25% vesting every six
months thereafter for eighteen months. Each option is exercisable
into one share of the Company’s common stock at a price of
$0.06 per share, equal to the closing price of the common stock on
the grant date, for a term of five years. The options had an
estimated grant date fair value of $290,640. For the year ended
December 31, 2018, $39,357 has been included in Consulting services
expense, based on fair value estimates determined using the
Black-Scholes option pricing model. At December 31, 2018, the
options had an intrinsic value of $0 based on the exercise price of
$0.06 per option and a market price of $0.022 per
share.
|
(2)
|
Thomas Temkin
was appointed as
our
Chief Operating Officer and
director on January 19, 2015.
On February 14, 2017 Mr. Temkin was granted 1,600,000 non-qualified
stock options pursuant to our Equity Incentive Plan, with 25%
vesting immediately and a further 25% vesting every six months
thereafter for eighteen months. Each option is exercisable into one
share of the Company’s common stock at a price of $0.06 per
share, equal to the closing price of the common stock on the grant
date, for a term of five years. The options had an estimated grant
date fair value of $93,004. For the year ended December 31, 2018,
$12,594 has been included in Consulting services expense, based on
fair value estimates determined using the Black-Scholes option
pricing model. At December 31, 2018, the options had an intrinsic
value of $0 based on the exercise price of $0.06 per option and a
market price of $0.022 per share.
|
(3)
|
Pam Walters was appointed as our Secretary on April 22,
2015.
On February 14, 2017 Ms. Walters was granted 800,000 non-qualified
stock options pursuant to our Equity Incentive Plan, with 25%
vesting immediately and a further 25% vesting every six months
thereafter for eighteen months. Each option is exercisable into one
share of the Company’s common stock at a price of $0.06 per
share, equal to the closing price of the common stock on the grant
date, for a term of five years. The options had an estimated grant
date fair value of $46,504. For the year ended December 31, 2018,
$6,295 has been included in Consulting services expense, based on
fair value estimates determined using the Black-Scholes option
pricing model. At December 31, 2018, the options had an intrinsic
value of $0 based on the exercise price of $0.06 per option and a
market price of $0.022 per share.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
|
|
Number of
|
Percentage of
|
Name and Address of Beneficial Owner
(1)
|
Common Shares
|
Ownership
(2)
|
Mark Walmesley
(3)
|
2,703,140
|
5.34
%
|
|
|
|
Thomas Temkin
(4)
|
20,000
|
0.04
%
|
|
|
|
All
executive officers and directors as a group (2
persons)
|
2,723,140
|
5.38
%
|
|
|
|
Lode Star Gold INC.
(5)
|
35,000,000
|
69.16
%
|
|
|
|
Lonnie S. Humphries Non-Exempt Trust
(5)
|
200,000
|
0.40
%
|
|
|
|
Lonnie
S. Humphries
|
1,369,756
|
2.71
%
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
2018
|
|
$
|
20,644
|
|
Morgan & Co LLP
|
2018
|
|
$
|
3,000
|
|
Malone Bailey LLP (a)
|
2017
|
|
$
|
16,000
|
|
Malone Bailey LLP (a)
|
2018
|
|
$
|
0
|
|
Morgan & Co LLP
|
2017
|
|
$
|
0
|
|
Morgan & Co LLP
|
2018
|
|
$
|
0
|
|
Morgan & Co LLP
|
2017
|
|
$
|
0
|
|
Morgan & Co LLP
|
2018
|
|
$
|
0
|
|
Morgan & Co LLP
|
2017
|
|
$
|
0
|
|
Morgan & Co LLP
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
Incorporated by reference
|
|
||
Exhibit
|
Document Description
|
Form
|
Date
|
Number
|
Filed herewith
|
3.1
|
Articles of Incorporation.
|
SB-2
|
3/04/05
|
3.1
|
|
3.2
|
Bylaws.
|
SB-2
|
3/04/05
|
3.2
|
|
3.3
|
Amended and Restated Articles of Incorporation
|
14-C
|
11/24/14
|
3.3
|
|
3.4
|
Omnibus Equity Incentive Plan
|
14-C
|
11/24/15
|
3.4
|
|
4.1
|
Specimen Stock Certificate.
|
SB-2
|
3/04/05
|
4.1
|
|
10.1
|
Mining Claim.
|
S-1/A-5
|
2/08/08
|
10.1
|
|
10.2
|
Bill of Sale.
|
SB-2
|
3/04/05
|
10.2
|
|
10.3
|
Trust Agreement.
|
SB-2
|
12/19/07
|
10.3
|
|
10.4
|
Consulting Agreement with Woodburn Holdings Ltd.
|
8-K
|
2/21/12
|
10.1
|
|
10.5
|
Mineral Option Agreement with Lode Star Gold INC.
|
8-K
|
10/09/14
|
10.1
|
|
10.6
|
Settlement Agreement
|
8-K
|
12/16/14
|
10.2
|
|
10.7
|
Acquisition of Mineral Property Interest
|
10-K/A2
|
1/11/2017
|
10.7
|
|
14.1
|
Code of Ethics.
|
10-K
|
4/15/11
|
14.1
|
|
31.1
|
Certification of Principal
Executive and Principal Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
|
|
|
|
X
|
32.1
|
Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
Executive and Chief Financial Officer.
|
|
|
|
X
|
99.1
|
Subscription Agreement.
|
SB-2
|
3/04/05
|
99.1
|
|
99.2
|
Charter Audit Committee
|
10-K
|
4/15/11
|
99.2
|
|
99.3
|
Disclosure Committee
|
10-K
|
4/15/11
|
99.3
|
|
101.INS
|
XBRL Instance Document
|
10-K
|
4/14/14
|
101.INS
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
10-K
|
4/14/14
|
101.SCH
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
10-K
|
4/14/14
|
101.CAL
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
10-K
|
4/14/14
|
101.DEF
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
10-K
|
4/14/14
|
101.LAB
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
10-K
|
4/14/14
|
101.PRE
|
|
|
LODE-STAR MINING INC.
|
||
|
|
|
|
|
By:
|
/s/
Mark
Walmesley
|
|
|
|
Mark Walmesley
|
|
|
|
President, Principal Executive Officer, Treasurer, Principal
Financial Officer, and Principal Accounting Officer
|
|
|
|
|
|
Signature
|
Title
|
Date
|
|
|
|
/s/
Mark
Walmesley
|
Director, President, Chief Executive Officer and Chief Financial
Officer
|
March 26, 2019
|
Mark Walmesley
|
|
|
1 Year Lode Star Mining (PK) Chart |
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