These financial statements and related
notes are presented in accordance with accounting principles generally accepted in the United States. The Companys fiscal
year end is December 31.
|(b)||Interim financial statements|
The interim unaudited financial
statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial
information and with the instructions for Securities and Exchange Commission (SEC) Form 10-Q.
They do not include all of the information
and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial
statements should be read in conjunction with the Companys audited financial statements and notes thereto for the year ended
December 31, 2011, included in the Companys Annual Report on Form 10-K filed on April 16, 2012, with the SEC.
The financial statements included
herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are
necessary to present fairly the Companys financial position as at September 30, 2012, and the results of its operations
and cash flows for the three months and nine months ended September 30, 2012 and 2011. The results of operations for the three
months and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for future quarters
or the full year.
The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates
and assumptions related to the recoverability of long-lived assets, donated expenses and deferred income tax asset valuation allowances.
The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes
to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material
differences between the estimates and the actual results, future results of operations will be affected.
|(d)||Cash and Cash Equivalents|
The Company considers all highly
liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
|(e)||Foreign Currency Translation|
The Companys functional and
reporting currency is the United States dollar. Occasional transactions may occur in Canadian dollars and management has adopted
ASC 740, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated
using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies
are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues
and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are
included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.
|(f)||Fair Value of Financial Instruments|
The Companys financial instruments
consist principally of cash, accounts payable and due to related parties. Pursuant to ASC 820, Fair Value Measurements and Disclosures,
and ASC 825, Financial Instruments, the fair value of cash equivalents is determined based on Level 1 inputs,
which consist of quoted prices in active markets for identical assets. The recorded values of other financial instruments approximate
their current fair values because of their nature and respective relatively short maturity dates or durations.
Potential benefits of income tax
losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income
Taxes as of its inception. Pursuant to ASC 740 the Company is required to compute tax asset benefits for net operating losses
carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because
the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
|(h)||Mineral Property Costs|
The Company has been in the exploration
stage since its formation on May 19, 2004 and has not yet realized any revenues from its planned operations. It is primarily engaged
in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs are initially capitalized
when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified
and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition
and budgeted exploration and development expenditures. Mineral property exploration costs are expensed as incurred if the criteria
for capitalization are not met. In the event that a mineral property is acquired through the issuance of the Companys shares,
the mineral property will be recorded at the fair value of the respective property or the fair value of common shares, whichever
is more readily determinable.
When mineral properties are acquired
under option agreements with future acquisition payments to be made at the sole discretion of the Company, those future payments,
whether in cash or shares, are recorded only when the Company has made or is obliged to make the payment or issue the shares. When
it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves
and bankable feasibility, the costs incurred to develop such property are capitalized.
In accordance with ASC 360, Property
Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances
indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited
to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors;
accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with
the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before
the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which
is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal
of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is
not recoverable and exceeds fair value.
|(j)||Asset Retirement Obligations|
The Company follows the provisions
of ASC 440, Asset Retirement and Environmental Obligations, which establishes standards for the initial measurement and
subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising
from the acquisition, construction or development and for normal operations of such assets. The Company did not have any asset
retirement obligations as of September 30, 2012 and December 31, 2011.
|(k)||Basic and Diluted Net Income (Loss) Per Share|
The Company computes net earnings
(loss) per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings
per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net earnings (loss) available
to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining
the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.
ASC 220, Comprehensive Income
establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at
September 30, 2012 and 2011, the Company has no items that represent other comprehensive loss and, therefore, its net loss is the
same as the comprehensive loss in the financial statements.
|(m)||Recently Issued Accounting Pronouncements|
The Company has implemented all
new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results