NOTE 2 – LIQUIDITY
As of February 29, 2012, we had a working capital deficit of $11.8 million, and for the nine months then ended cash used in operating activities amounted to $2.7 million. To date, we have generated only nominal revenues from operations ($83,260) and have incurred losses since inception resulting in a deficit accumulated during the development stage of $50.1 million through February 29, 2012. Further losses are anticipated as we continue to be in the exploration stage, as defined in ASC Topic 915, Development Stage Entities.
Our ability to continue as a going concern depends upon our ability to generate profitable operations in the future and/or to raise additional funds through equity or debt financing. Since inception, we have raised $24,346,944 through the issuance of equity securities and $17,353,960 through the issuance of debt instruments, which has been used primarily to provide operating funds, repay long-term debt, and acquire mineral interests. Subsequent to February 29, 2012, we have acquired an additional $50,000 through issuance of equity securities, as described more fully in Note 12. On December 1, 2011, the Brigus note (see Note 5) matured and we have not made payment as of the date of these financial statements. There is no assurance that we will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to us or at all. If we cannot obtain needed funds for implementing our mine plan after completion of the feasibility study, we may be forced to curtail or cease our activities. Equity financing, if available, may result in substantial dilution to existing stockholders. All of these factors cause substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue as a going concern.