ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Forward Looking Statements
This quarterly report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or management’s plans and objectives for our future
operations. In some cases, you can identify forward-looking statements by
terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “potential” or “continue” or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled “Risk Factors” and the
risks set out below, any of which may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks include, by way of example and not in limitation:
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risks and uncertainties relating to the interpretation of
sampling results, the geology, grade and continuity of mineral deposits;
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risks and uncertainties that results of initial sampling
and mapping will not be consistent with our expectations;
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mining and development risks, including risks related to
accidents, equipment breakdowns, labor disputes or other unanticipated
difficulties with or interruptions in production;
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the potential for delays in exploration
activities;
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risks related to the inherent uncertainty of
cost estimates and the potential for unexpected costs and expenses;
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risks related to commodity price fluctuations;
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the uncertainty of profitability based upon our
limited history;
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risks related to failure to obtain adequate financing on
a timely basis and on acceptable terms for our planned exploration
project;
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risks related to environmental regulation and
liability;
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risks that the amounts reserved or allocated for
environmental compliance, reclamation, post-closure control measures,
monitoring and on-going maintenance may not be sufficient to cover such
costs;
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risks related to tax assessments;
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political and regulatory risks associated with
mining development and exploration; and
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other risks and uncertainties related to our
mineral property and business strategy.
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This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.
Forward looking statements are made based on management’s
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
“common stock” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our”,
the “Company” and “Lake Victoria” mean Lake Victoria Mining Company, Inc., and
our wholly owned subsidiaries Kilimanjaro Mining Company, Inc. and Lake Victoria
Resources (T) Limited, Chrysos 197 Company Tanzania Ltd. and Jin 179 Company
Tanzania Ltd., unless otherwise indicated.
Recent Corporate Developments
Since the commencement of the three months period ended June
30, 2014, we experienced the following significant corporate developments:
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1.
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On April 1, 2014, the Company was granted a Mining
License ML520/2014 by the Tanzanian Government in respect to the Company’s
proposed Kinyambwiga open-pit gold project in northern Tanzania. The term
of the Mining License is 10 years.
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Our Current Business
We are an exploration stage corporation focused on acquiring,
exploring and developing gold deposits in Tanzania, East Africa. We hold
5
prospective gold projects, consisting of one Mining license,
7
Prospecting Licenses (PLs) and 43 Primary Mining Licenses (PMLs) within our
Tanzania property portfolio, covering 352.39 square kilometers (87,077 acres).
Our main area of interest is acquiring, exploring and
evaluating mineral properties through our ongoing exploration program. Following
exploration, we intend to either advance them to a commercially feasible mining
stage, enter joint ventures to further develop these properties, sell or dispose
of them if the properties do not meet our requirements. Our properties are all
early stage exploration properties. Within our mineral exploration land in
Tanzania our focus is primarily on gold, all uranium prospects in our portfolio
were expired in the last fiscal year.
We have no revenues, we have incurred losses since inception
and we have relied upon the sale of our securities to fund operations. To date,
we have not discovered a NI43-101 compliant commercially viable ore body,
mineral deposit or mineral reserve on any of our properties and we will be
unable to do so until further exploration is done and a comprehensive evaluation
concludes with an economic feasibility study or production is initiated However,
we have achieved environmental (EIA) approval and a Mining License to commence
gold mining on one of our gold projects mineralized target.
Assuming funding is available, we plan to develop and conduct
small-scale gold mining on selected mineral properties within certain areas that
are currently contained within our primary mining licenses and the Mining
License that we have. The production decision or significant development on
these projects will not be based on mineral reserves supported by an NI43-101
compliant technical report. We plan to secure Mining Licenses for each of these
potential mining areas.
Our property portfolio is large, therefore we may interest
other companies in our properties to either participate by means of option or
joint venture agreements in the exploration of them or to finance and establish
production on discovered mineralization.
We maintain our registered agent’s office at The Corporation
Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511 and our
business and administrative office is located at Suite 810 – 675 West Hastings
Street, Vancouver, British Columbia, V6B 1N2, Canada. Our telephone number is
604.248.5750.
Prospective Gold Projects
The following is a brief overview of portfolio of prospective
mineral properties, the exploration developments on them where applicable and
some of the details of the historical option agreements for them. During the
three months ended June 30, 2014, no exploration work was undertaken on any of
the projects.
Prospective Projects and Properties
The following map is a gold project location map
(Map
1).
For a detailed listing see Licenses – Gold Projects and License
List
.
Map 1: Gold Project Location Map, June 2014
Musoma Bunda Murangi Gold Project
The Musoma Bunda Murangi Project is now comprised of 2
Prospecting Licenses covering 33.47 square kilometers. During 2013, the 39 PMLs,
totaling 3.44 square kilometres located on the Kinyambwiga PL PL4653/2007 were
amalgamated and incorporated back within the PL (5 July 2013). This was
undertaken in order to facilitate the application for a Mining Licence
(Map
2).
On August 2, 2013, The Company completed and filed an
Environmental and Social Impact Assessment report for the Kinyambwiga mining
project covering the amalgamated 39 PMLs with the National Environmental
Management Council (NEMC) on August 2, 2013. The Environmental Certificate was
approved by January 7, 2014. This was shortly followed by the submission of the
Mining application to the Ministry of Mines. The Mining Licence was granted by
the Ministry of Mines on April 1, 2014.
No field exploration was undertaken during this reporting
period on the Kinyambwiga (PL4653/2007) nor Suguti (
PL3966/2006
)
Licenses. A trial test pit that was dug by excavator at the proposed Kanunga
Mine site on the Kinyambwiga Project in February 2013 to evaluate the upper
saprolite horizon for geotechnical studies.
Exploration Strategy
The Kinyambwiga License has
been reduced from 30.90 square kilometers to 13.47 square kilometers as part of
the required Government relinquishment of 50 percent of the ground holdings on
License renewal. The southern part of the License area, largely covered by dark
gray to black, clay rich soil and underlain by granitic rocks with no known
artisanal workings, was relinquished. The Company maintained the northern part
of the License which is host to the Kunanga 1, 2 and 3 artisanal or small scale
mine sites. The relinquished area is currently under application on account of a
soil anomaly in the NE corner of the License.
The new artisanal or small scale mining site, located 1
kilometer along strike to the east of Kunanga 2, has been abandoned.
Furthermore, the +500 artisanal miners that were mining the surface quartz
rubble at Kunanga 3 in the northern part of the license have ceased operations
and left the site.
Map2: Plan showing the 24 PMLs plus the 15 additional PMLs
that have now been amalgamated and incorporated within PL 4653/2007 which has
subsequently been included in the Mining Licence.
The Kunanga 1 Prospect has been earmarked for commercial small
scale mining operations that are expected to proceed once necessary funding has
been acquired. The ESIA report, completed by TANSHEQ a local Tanzanian
consulting firm specializing in Environmental Management, has been approved by
the National Environmental Management Council (NEMC) on the December 23, 2013
and the Environmental Certificate issued to Lake Victoria Resources (T) Ltd on
the January 7, 2014. An application for the Mining License, covering the
amalgamated 39 PMLs, together with the required Environmental Certificate, was
submitted to the Ministry of Energy and Minerals early in 2014. A slight
revision of the proposed Mining Licence was requested by the Ministry of Mines
in order to reduce the amount of corner beacons presented by the current PML
layout and which has subsequently increased the surface area to 5.12 square
kilometres
(Map 3).
The Mining License ML520/2014 was offered by the
Ministry of Energy and Minerals of Tanzania (MEM) on April 1, 2014 and
officially received on June 2, 2014.
Map 3: Mining Licence (ML520/2014) shown in purple covering
the Kunanga small scale gold mine site. The outline perimeter of the amalgamated
39 PMLs is shown by the red boundary line.
A study covering metallurgical test work, mine planning, mine
scheduling (details of which were included in the 1st Quarter Report 2013) and a
conceptual financial evaluations has been prepared. A capital investment of
US$3M is an estimated requirement for building the project.
Mine Planning
The Kunanga 1 Prospect consists of a small, conceptual gold
target that is based on 40 meter spaced reverse circulation drill sections and
trenches and may contain gold bearing mineralized material of between 600,000
and 1,000,000 tonnes. The estimated gold grades are between 1.50 and 2.00 g/t.
The mineralized area which lies in three vein structures at Kunanga 1, is within
the first 150 and 200 meters of surface. Continuity of the narrow quartz veins
appears to extend along a strike length for about 500 meters.
The potential quantity and grade of these targets are
conceptual in nature. There has been insufficient exploration to define a
mineral resource and that it is uncertain if further exploration will result in
the target being delineated as a mineral resource. The conceptual target has
been determined on the results of trenching, mapping, geophysics and both RC and
RAB drilling.
It is currently proposed to mine the mineralization by open pit
mining methods using an excavator and trucks to transport the ore to an onsite
processing plant. A vertical test pit to a depth of 8 meters was excavated in
granitic saprolite (host rock) at site using a Caterpillar 320 excavator in a
relatively short time of 3 hours. The results of the test pit proved good
retaining rock wall strength, ease of excavation and the lack of ground
water.
The proposed site plan showing location of pit, waste dumps and
processing plant is shown in
Map 4.
Map 4: Site plan showing the proposed position of the rock
waste dump tailings dam and the pit. 100 meter and 200 meter buffer zone from
the pit and representing an area of non-inhabitation and limited farming
activities, as per requirement by the Mining Act of Tanzania, is
indicated.
Based on the results of the test pit undertaken in the 1st
Quarter, a pit slope of 55-60 degrees was re-modeled for the open pit, using 10
meter and 7 meter benches (
Map 5 & Map 6
). At this time, the last
bench in the 40 meter deep pit would be steeper depending upon the reach of the
equipment and rock strength of the pit walls.
The rock dump and tailings dam have been re-designed (
Map 7
& 8
) to accommodate approximately 1.5M tons and 260,000 tons
respectively; this is the estimated amount of rock to be mined to a depth of 40
meters.
Map 5: Plan view of the open pit on the Kunanga 1 showing
the access ramp and benches
Map 6: Longitudinal and cross sections of the Kunanga 1 Pit
Map 7: Plan and profile section of the rock waste dump
Map 8: Plan and profile section of the tailings dam
The Mining and Mill plan is designed for processing 300 tonnes
per day (
Chart 1
).
Chart 1: Flow sheet diagram showing the conceptual
processing plant
Mining License
The Environmental Impact Assessment (ESIA) report, completed by
TANSHEQ, a local Tanzanian consulting firm specializing in Environmental
Management, was submitted to the Tanzanian Government’s National Environmental
Management Council (NEMC) on the 2
nd
August 2013 and was approved on
the 23
rd
December 2013. The company received the approved report on
January 7
th
, 2014 (see news release dated January 9
th
,
2014). The Company has been awarded the Environmental Certificate of approval,
registration number EC/EIS/1106, issued under the Environmental Management Act
No.20 of 2004 and signed by the Tanzanian Minister of Environment. The EIA
Certificate is valid during the entire life cycle of the project based on the
Company’s compliance with the General and Specific Conditions of its issuance.
The Company has already completed the Mining and Processing
License Application to cover not only the Kunanga Prospect but also the 39
amalgamated Primary Mining Licenses (PMLs) previously held by the Company’s
Tanzanian subsidiary. The area, totalling 5.12 square kilometers also includes
the 2 other known gold occurrences at Kunanga 2 and 3. The Mining application
was submitted to the Ministry of Energy and Minerals in January 2014 and a
Mining License (ML520/2014) was granted on 1
st
April 2014 valid for
an initial period of 10 years.
Future work
With the Mining and Processing application approval and a
Mining License being awarded by the Ministry Energy and Minerals, the Company is
in a position to proceed with the proposed mine plan once the necessary funding
has been obtained.
A prospective exploration area lies to the east of the Kunanga
1 Prospect and is referred to as the Kunanga School Anomaly. With the Mining
License approval, the Company will be in the position to make application for
the area in order to do follow-up investigation of this gold anomaly.
An anomalous stone layer as encountered from previous RAB
(rotary air blast) drilling during 2009 as well as the soil anomaly over the
school zone requires further investigation. A number of auger drill traverses
are planned to test the strike towards the SW where a number of anomalous soil
samples are present (
Map 9
). Since this area was previously relinquished
as part of the government’s requirement to reduce the PL area by 50 percent, an
application to renew the area of “shed-off” was filed with the Ministry of
Mines.
Map 9: Kunanga 1 East and School soil anomalies
The recent influx of +500 artisanal miners at the Kunanga 3
Prospect, situated approximately 1 kilometer to the north of Kunanga 1 (
Map
10
), was short lived. After processing some of the surface quartz gravels,
the miners migrated elsewhere and off the license. The prospect consists of
abundant quartz float covering an area of 200 meters x 200 meters which has been
the site for periodic artisanal activity over the years. Trenching and reverse
circulation drilling intersected a number of narrow discontinuous quartz veins
(
Map 11
).
Map 10: Distribution of recently acquired PMLs (green and
purple blocks) and showing positions of Kunanga 1, 2 and 3 prospects as well as
the Kunanga School gold-in-soil anomaly in the eastern part of the Kinyambwiga
licenses.
Map 11: Kunanga 3 prospect showing results of trenching and
drilling undertaken across the area.
Suguti (PL3966/2006)
No exploration work has been undertaken on the Suguti License
during the Quarter.
The Company decided not to place an application bid in for the
northern part of the Suguti License, preferring to reserve the exploration funds
for more advanced projects within the Company portfolio. The current License is
scheduled to be relinquished.
Singida Gold Project
No exploration work was undertaken during the Quarter
Future exploration
An evaluation of the Reverse Circulation drill results for both
Phase 1 and 2 programs undertaken during 2010 and 2011 has shown that gold
mineralization at the Singida-Londoni project consists of narrow, medium to low
grade and often discontinuous lenses. The shear structures hosting the gold-rich
zones typically “pinch and swell” along strike, which in places, has resulted in
larger pods of limited size as at Sambaru 3 and Sambaru 4 which indicates that
the gold deposits have limited potential to be developed into a major ore
resource contrary to the Company’s vision of discovering substantially larger
and economically viable gold deposits in the short term. In this regard, the
Company believes that the nature and extent of the mineralization revealed thus
far may lend itself towards a small-scale commercial mining operation. The
Company intends to explore the possibilities of undertaking a small scale mining
operation on a number of PMLs once a scoping study has been completed.
Although the Company completed a Technical report in compliance
with Canadian National Instrument 43-101 prior to the June 2010 revised code, it
was not submitted. The report is to be prepared under the revised
guidelines.
Buhemba Gold Projects
The Buhemba Gold projects comprise of the Kiabakari East
(PL7142/2007) and the recently acquired Maji Moto (HQ-P23869) licenses
.
No exploration work was undertaken on either of the Licenses
during the Quarter
Kiabakari East (PL7142/2011)
The Kiabakari East Project is located approximately 55
kilometers southeast of Musoma town, in the Mara Region. The PL, covering 14.94
square kilometers and lying within the central part of the Musoma-Mara
Greenstone Belt, was granted to Lake Victoria Resources by the Ministry of Mines
in April 2011.
Future exploration
Metallurgical test work is to be undertaken on the oxide rock
material taken from artisanal working and trenches on surface as part of the
scoping study to determine the viability of commencing and open pit/underground
small scale mining operation at BIF Hill. Due to the moderate to steep easterly
plunge of the gold zone, a follow-up reverse circulation drill programme has
limited potential other than to evaluate a near surface resource and would be
unable to test the down-dip extensions of the gold shoot. A substantial diamond
drill programme would be required to evaluate the gold mineralization down
plunge.
In order to obtain short term revenue for the project, a small scale
open pit mining operation could be possible once a RC drill programme has
defined a near surface gold resource. Alternatively, in order to get a better
understanding of the geology and gold mineralisation, the Company is considering
developing a north trending adit form the southern side at the base of the hill.
Maji Moto Gold Project (HQ-P23869)
A recent acquisition to the North Mara group of Licenses is the
Maji Moto License that was awarded to the Company by the Ministry of Mines
through application and tender in April 2012. The License is situated in the
North Mara Greenstone Belt (Eastern Musoma Goldfields) approximately 28
kilometers to the SW of African Barrick’s North Mara Gold Mine (
Map 12
).
Map 12: Location map of Maji Moto HQ-P23869
Note: HQ-O23869 is the Application number. The License has yet
to be allocated a PL number by the Ministry.
Artisanal workings
:
Three artisanal sites are present in the northern part of the
License (
Map 23
):
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Located at Kitarahota Hill, some 2 kilometres east of
Maji Moto village is actively being mined by a relatively small group of
artisanal miners. The site, located on the lower slope of the Kitarahota
Hill, consists mostly of surface workings.
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2.
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Nyamarubiti Hill, located in the north-eastern arm of the
License was an active artisanal site in 1980s and is only being worked
sporadically by a handful of artisanal miners.
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3.
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Kebosi Hill, situated on the NW arm of the PL and east of
the much larger Kitengara Hill. This site does not appear to be as
extensively mined as site 2 and is currently not being mined by artisanal
miners.
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Map 13: Geology of HQ-P23869
Other than a reconnaissance visit to the License, exploration
has not yet commenced.
The following exploration strategy (Phase 1) will be followed
as soon as a field camp is established on site:
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Regional ground Magnetic survey
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Regional mapping of the License
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Regional soil sampling on 200 meter x 50 meter
sample grid
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Detailed mapping and soil/rock sampling at and
around the artisanal sites
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Schlumberger profiles across the known
artisanal sites.
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Selective trenching
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Phase 2 will be dependant on the results achieved from the
Phase 1 exploration programme.
Uyowa Gold Project
The Uyowa Gold project, located 120 kilometers northwest of
Tabora town, previously consisted of seven (7) Prospecting Licenses (PLs) that
initially covered a total area of 729.73 square kilometers in the west-central
area of Tanzania. Due to increased Ministerial costs of annual renewals coupled
with the Company’s objective to focus its exploration efforts on more
potentially viable ground holdings, the number of licenses has now been reduced
to
2 PLs amounting to 264.11 square kilometers (
Map 14
).
PL7245/2011 is scheduled to be relinquished.
No exploration work was undertaken on any of the Licenses
during the Quarter.
Map 14: Current license holdings of the Uyowa Project
Future exploration
Interpretation of the ground magnetic survey suggests the
presence of a graben structure that coincides with the last of the artisanal
workings on the western side of the known mineralized zone. The area, unlike the
artisanal site where laterite is often exposed on surface, is overlain by sand
cover for some 500 meters to the west before lateritic soils are again present
suggesting possible continuation of the mineralized shear zone to the west.
GIS studies suggest that the shear zone is a major structure which can be
traced across the length of the licence, covering an additional 11
strike-kilometres and forming a potential target for the continuation of gold
mineralization out beneath the laterite and sand cover (
Map 15
).
Conventional soil sampling is planned across areas of lateritic
soil cover. Initially a RAB program is recommended to test the intervening areas
covered by black cotton soil (“mbuga’). However, prior to embarking on such a
program, an orientation survey using enzyme geochemistry is recommended as a
trial study over a portion of the area to be sampled. Should results be positive
further sampling incorporating this geochemical method will continue to be used
to outline the gold anomaly.
Follow-up investigation using possibly both methods of soil
sampling will be undertaken across a number of ground magnetic targets in order
to prioritize targets for later testing by RAB drilling.
Reverse Circulation infill drilling is recommended on 40 meter
spaced N-S sections across the artisanal site in order to undertake a resource
calculation. Furthermore, part of the program will also focus on testing the
soil anomaly along strike.
Map 15
. Trend of gold-in-soil target along strike
from the area of artisanal mining.
Handeni Gold Project
The Handeni Project,
comprising of the Mkulima East Prospect (PL7148/2011) and covering a total area
of 12.03 square kilometers, is located approximately 240 kilometers by road
north-west of Dar es Salaam and some 30 kilometers south of Handeni town within
the Handeni District (
Map 16
).
Map 16: Location map of the Handeni Project showing
PL7148/2011 in red.
Exploration
No exploration was undertaken on the Handeni Project during the
Quarter. Previous exploration involving stream sediment sampling and soil
sampling programmes outlined 4, northwest trending low threshold gold-in-soil
anomalies, having an overall strike length of 1.5 kilometers , situated on
either side of the NNW trending Mkulima Hill (
Map 17
).
Map 17:
Soil sampling across Mukulima Hill outlining
potential soil anomalies
A brief summary of the status of proposed future exploration of
PL7148/2011 is given:
Future exploration
An infill soil sampling programme on 100 meter x 25 meter grid
is planned across the Mkulima Hill (188 samples) in order to better define the
apparent gold anomalies prior to commencing a trenching programme across the
main anomalous zones. Further soil sampling on 100 meter x 50 meter grid is
proposed around the hill on 200 meter x 50 meter grid (623 samples) to increase
the area of investigation and strike extend of the gold anomalies.
General
The following is a discussion and analysis of our plan of
operation and results of operations for the three month period ended June 30,
2013, and the factors that could affect our future financial condition. This
discussion and analysis should be read in conjunction with our consolidated
unaudited financial statements and the notes thereto included elsewhere in this
quarterly report. Our consolidated financial statements are prepared in
accordance with United States generally accepted accounting principles. All
references to dollar amounts in this section are in United States dollars unless
expressly stated otherwise.
Plan of Operation
As of June 30, 2014, we had approximately cash of $22,000 and
working deficit of $2,038,000. We plan to spend approximately $400,000 for our
property acquisitions and $2,000,000 for development and production of small
scale mining in Kinyambwiga project and exploration activities on other
projects. We will need to raise additional funds to finance the activities on
our projects. There is no assurance that such financing would be available at
this time.
In September 2012, the Company offered a total of up to 120
royalty units to raise a gross amount of $3,000,000 for a small scale mining
operation on the Kinyambwiga property. Each unit will entitle investors to
receive ½ of 1 percent (1%) of the net proceeds of production from the small
scale mining operation at Kinyambwiga. Up to 60% of the net proceeds of gold
production are offered to investors. As of March 31, 2014 the Company received
subscription payments of $1,125,000 for 45 units.
Our estimated expenses over the next twelve months are as
follows:
Cash Requirements during the Next Twelve Months
|
Expense
|
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($)
|
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Property acquisition
and holding costs
|
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400,000
|
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Mine development and production costs
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2,000,000
|
|
Professional fee
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100,000
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General and administration fee
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500,000
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Total
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3,000,000
|
There is no historical financial information about us upon
which to base an evaluation of our performance. We are an exploration stage
corporation and have not generated any revenues from operations. We cannot
guarantee we will be successful in our business operations. Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the exploration of our
properties, possible cost overruns due to price and cost increases for services
and economic conditions. Because we do not currently derive any production
revenue from operations, its ability to conduct exploration and development on
properties is largely based upon its ability to raise capital by equity
funding.
Our exploration objective is to find an economic mineral body
containing gold. Our success depends upon finding mineralized material. This
includes a determination by our contracted consultants and professional staff
whether the property contains resources and/or reserves. Mineralized material is
a mineralized body, which has been delineated by appropriately spaced drilling
or underground sampling to support sufficient tonnage and average percentage
grade of metals to justify removal. If we don’t find mineralized material or we
cannot remove mineralized material, either because we do not have the money to
do so or because it is not economically feasible to do so, we will cease
operations or seek other properties.
In addition, we may not have enough capital to complete
exploration of our properties. If we have not raised sufficient funds to
complete our exploration program, we will try to raise additional funds from
another equity or debt offering or rely on loans from shareholders. If we
require additional funds and are unable to raise the required amounts, we will
have to suspend or cease operations until we succeed in raising the additional
funds.
RESULTS OF OPERATIONS
Three and Nine Month Summary
|
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Three
Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
|
Expenses
|
|
291,612
|
|
|
390,476
|
|
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Other income (expenses)
|
|
(15,905
|
)
|
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182,335
|
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Net Income (Loss)
|
$
|
(307,517
|
)
|
$
|
(208,141
|
)
|
Revenue
We had no operating revenues for the three month period ended
June 30, 2014 and 2013. We anticipate that we will not generate any revenues
until we generate additional financing to support our planned operations.
Operating Costs and Expenses
The major components of our expenses for the three and nine
months ended June 30, 2014 and 2013 are outlined in the table below:
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Three
Months Ended
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June 30,
|
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|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Amortization and
depreciation
|
|
9,617
|
|
|
9,549
|
|
|
Exploration costs
|
|
32,386
|
|
|
42,888
|
|
|
General and
administrative
|
|
67,606
|
|
|
47,319
|
|
|
Impairment of mineral property
acquisition costs
|
|
–
|
|
|
90,000
|
|
|
Management and
director fees
|
|
9,000
|
|
|
9,000
|
|
|
Professional fees
|
|
44,168
|
|
|
61,032
|
|
|
Salaries
|
|
122,829
|
|
|
118,513
|
|
|
Stock-based compensation
|
|
–
|
|
|
–
|
|
|
Travel and accommodation
|
|
6,006
|
|
|
12,175
|
|
|
Total Expenses
|
|
291,612
|
|
|
390,476
|
|
General and Administrative Expenses
The Company reported a loss of $291,612 for the three months
ended June 30, 2014 compared with a loss of $390,476 for same period in fiscal
2014. The decreased loss in the current period is mainly attributed to decreased
exploration costs and no impairment write-downs in the current period.
The $20,287 increase in our general and administrative expenses
for the three month period ended June 30, 2014 as compared to the same period in
fiscal 2014 was primarily due to the increase in promotion and shareholder
relationship expenses.
Liquidity and Capital Resources
Working Capital
|
|
|
June 30, 2014
|
|
|
March 31, 2014
|
|
|
Current Assets
|
$
|
29,624
|
|
$
|
48,620
|
|
|
Current Liabilities
|
|
2,067,341
|
|
|
1,788,436
|
|
|
Working Deficit
|
$
|
(2,037,717
|
)
|
$
|
(1,739,816
|
)
|
Cash Flows
|
|
|
Three Months
Ended
|
|
|
|
|
June 30, 2014
|
|
|
Cash used in Operating
Activities
|
$
|
(183,204
|
)
|
|
Cash used in Investing Activities
|
|
-
|
|
|
Cash provided by Financing
Activities
|
|
171,323
|
|
|
Net Increase (Decrease) in Cash
|
$
|
(11,881
|
)
|
We had a cash balance of $22,141 and working deficit of
$2,037,717 as of June 30, 2014 compared to cash of $34,022 and working deficit
of $1,739,816 as of March 31, 2014. We anticipate that we will incur
approximately $3,000,000 for operating expenses, including professional, legal
and accounting expenses associated with our reporting requirements under the
Exchange Act during the next twelve months. Accordingly, we will need to obtain
additional financing in order to complete our full business plan.
Going Concern
The unaudited financial statements accompanying our quarterly report on Form 10-Q for the quarter ended June 30, 2014 have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its
liabilities and commitments in the normal course of business. Our company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate future. The continuation of
our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations.
As of June 30, 2014, we had a cash balance of approximately $22,000 and we estimate that we will require approximately $500,000 for general and administration costs and professional fees, and $400,000 for property acquisition holding and
small-scale mining evaluation, development and production costs associated with our plan of operation over the next twelve months. We do not have sufficient funds for general and administration activities and planned mineral property acquisition and
exploration activities and therefore we will be required to raise additional funds. No assurance can be given that additional financing will be available, or that it can be obtained on terms acceptable to the Company and its shareholders.
The advancement of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Future Financings
We had a cash balance of approximately $22,000 and we estimate that we will require approximately $500,000 for general and administration costs and professional fees, and $400,000 for property acquisition holding and small-scale mining
evaluation, development and production costs associated with our plan of operation over the next twelve months. Accordingly, we do not have sufficient funds for planned operations and we will be required to raise additional funds for operations. We
intend to raise additional funds from another equity offering or loans. At the present time, we are attempting to raise additional money, but there is no assurance that we will be successful. If we need additional funds and are unable to raise them,
we will have to suspend or cease operations until we succeed in raising additional funds.
Outstanding shares and options
As of August 14, 2014, we have 114,554,067 shares of common stock outstanding, 9,520,000 stock options outstanding and 2,783,334 warrants outstanding.
Off-Balance Sheet Arrangements
We have no 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 stockholders.
Risks and Uncertainties
Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our
management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially
affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.
Risks Associated with Mining
All of our properties are in the exploration stage. There is
no assurance that we can establish the existence of any mineral resource on any
of our properties in commercially exploitable quantities. Until we can do so, we
cannot earn any revenues from operations and if we do not do so we will lose all
of the funds that we expend on exploration. If we do not discover any mineral
resource in a commercially exploitable quantity, our business could
fail.
Despite exploration work on our mineral properties, we have not
established that any of them contain any mineral reserve as defined by NI43-101
regulations and the Securities and Exchange Commission in its Industry Guide 7,
nor can there be any assurance that we will be able to do so. If we do not, our
business could fail.
A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7
) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a “reserve” that meets the requirements of the
Securities and Exchange Commission’s Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any ‘reserve’ and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on one or
more of our properties, there can be no assurance that we will be able to
develop our properties into producing mines and extract those resources. Both
mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.
The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our properties, our business may fail.
We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain them on
reasonable terms. To the extent such approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.
Our business activities are conducted in Tanzania.
Our mineral exploration activities in Tanzania may be affected
in varying degrees by political stability and government regulations relating to
the mining industry and foreign investment in that country. The government of
Tanzania may institute regulatory policies that adversely affect the exploration
and development of properties. Any changes in regulations or shifts in political
conditions in this country are beyond our control and may adversely affect our
business. Investors should assess the political and regulatory risks related to
our foreign country investments. Our operations may be affected in varying
degrees by government regulations with respect to restrictions on production,
price controls, export controls, foreign exchange controls, income taxes,
expropriation of property, environmental legislation and mine safety.
We may not have clear title to our properties.
Acquisition of title to mineral properties is a very detailed
and time-consuming process, and titles to our properties may be affected by
prior unregistered agreements or transfers, or undetected defects. Several of
our prospecting licenses are currently subject to renewal by the Ministry of
Energy and Minerals of Tanzania. As a result, there is a risk that we may not
have clear title to all our mineral property interests, or they may be subject
to challenge or impugned in the future.
If we establish the existence of a mineral resource on any
of our properties in a commercially exploitable quantity, we will require
additional capital in order to develop the property into a producing mine. If we
cannot raise this additional capital, we will not be able to exploit the
resource, and our business could fail.
If we do discover mineral resources in commercially exploitable
quantities on any of our properties, we will be required to expend substantial
sums of money to establish the extent of the resource, develop processes to
extract it and develop extraction and processing facilities and infrastructure.
Although we may derive substantial benefits from the discovery of a major
deposit, there can be no assurance that such a resource will be large enough to
justify commercial operations, nor can there be any assurance that we will be
able to raise the funds required for development on a timely basis. If we cannot
raise the necessary capital or complete the necessary facilities and
infrastructure, our business may fail.
Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.
Mineral exploration, development and production involve many
risks, which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure or against which we may elect not to
insure. Any such event could result in work stoppages and damage to property,
including damage to the environment. We do not currently maintain any insurance
coverage against these operating hazards nor do we expect to get such insurance
for the foreseeable future. If a hazard were to occur, the costs of rectifying
the hazard may exceed our asset value and cause us to liquidate all of our
assets, resulting in the loss of your entire investment in our company.
Mineral prices are subject to dramatic and unpredictable
fluctuations.
We expect to derive revenues, if any, either from the sale of
our mineral resource properties or from the extraction and sale of precious and
base metals such as gold, silver and copper. The price of those commodities has
fluctuated widely in recent years, and is affected by numerous factors beyond
our control, including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates,
global or regional consumptive patterns, speculative activities and increased
production due to new extraction developments and improved extraction and
production methods. The effect of these factors on the price of base and
precious metals, and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.
The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.
The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining operations.
If our costs of exploration are greater than anticipated,
then we may not be able to complete the exploration program for our Tanzanian
properties without additional financing, of which there is no assurance that we
would be able to obtain.
We are proceeding with the initial stages of exploration on our
Tanzanian properties. We are carrying out an exploration program that has been
recommended by a consulting geologist. This exploration program outlines a
budget for completion of the recommended exploration program. However, there is
no assurance that our actual costs will not exceed the budgeted costs. Factors
that could cause actual costs to exceed budgeted costs include increased prices
due to competition for personnel and supplies during the exploration season,
unanticipated problems in completing the exploration program and delays
experienced in completing the exploration program. Increases in exploration
costs could result in our not being able to carry out our exploration program
without additional financing. There is no assurance that we would be able to
obtain additional financing in this event.
Because of the speculative nature of exploration of mining
properties, there is substantial risk that no commercially exploitable minerals
will be found and our business will fail.
We are in the initial stage of exploration of our mineral
property, and thus have no way to evaluate the likelihood that we will be
successful in establishing commercially exploitable reserves of gold, silver or
other valuable minerals on our Tanzanian properties.
The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold, silver or
other valuable minerals in our mineral property. Exploration for minerals is a
speculative venture necessarily involving substantial risk. The expenditures to
be made by us on our exploration program may not result in the discovery of
commercial quantities of ore. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. Problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.
Cost estimates and timing of our Kinyambwiga small scale
mining project and new projects is uncertain, which may adversely affect our
expected production and profitability.
The capital expenditures and time required to develop and
explore our properties are considerable and changes in costs, construction
schedules or both, can adversely affect project economics and expected
production and profitability. There are a number of factors that can affect
costs and construction schedules, including, among others:
|
|
•
|
changes in input commodity prices and labor
costs;
|
|
|
•
|
availability and terms of financing;
|
|
|
•
|
availability of labor, energy, transportation,
equipment, and infrastructure;
|
|
|
•
|
fluctuations in currency exchange rates;
|
|
|
•
|
changes in anticipated tonnage, grade and
metallurgical characteristics of the ore to be mined and processed;
|
|
|
•
|
recovery rates of gold and other metals from
the ore;
|
|
|
•
|
difficulty of estimating construction costs
over a period of years;
|
|
|
•
|
weather and severe climate impacts; and
|
|
|
•
|
potential delays related to social and
community issues.
|
Mineralized targets and other mineralized material
calculations are estimates only, and are subject to uncertainty due to factors
including metal prices, inherent variability of the ore and
recoverability of metal in the mining process. The calculation of mineral
mineralized targets, other mineralized material and grading are estimates and
depend upon geological interpretation and statistical inferences or assumptions
drawn from drilling and sampling analysis, which may prove to be
unpredictable.
There is a degree of uncertainty attributable to the
calculation of mineralized targets and corresponding grades. Until mineralized
targets and other mineralized materials are actually mined and processed, the
quantity of ore and grades must be considered as an estimate only. In addition,
the quantity of mineralized targets and other mineralized materials and ore may
vary depending on metal prices, which largely determine whether mineralized
targets and other mineralized materials are classified as ore (economic to mine)
or waste (uneconomic to mine). A decline in metal prices may result in
previously reported mineralized targets (ore) becoming uneconomic to mine
(waste). Any material change in the quantity of mineralized targets, other
mineralized materials, mineralization, grade or stripping ratio may affect the
economic viability of our properties. In addition, we can provide no assurance
that gold recoveries or other metal recoveries experienced in small- scale
laboratory tests will be duplicated in larger scale tests under on-site
conditions or during production.
We may not achieve our production and/or sales estimates and
our costs may be higher than our estimates, thereby reducing our cash flows and
negatively impacting our results of operations.
We prepare estimates of future production, sales, and costs for
our operations. We develop our estimates based on, among other things, mining
experience, mineralized targets and other mineralized material estimates,
assumptions regarding ground conditions and physical characteristics of ores
(such as hardness and presence or absence of certain metallurgical
characteristics) and estimated rates and costs of mining and processing. All of
our estimates are subject to numerous uncertainties, many of which are beyond
our control. Our actual production and/or sales may be lower than our estimates
and our actual costs may be higher than our estimates, which could negatively
impact our cash flows and results of operations. While we believe that our
estimates are reasonable at the time they are made, actual results will vary and
such variations may be material. These estimates are necessarily speculative in
nature, and it may be the case that one or more of the assumptions underlying
such projections and estimates may not materialize. Investors in our common
stock are cautioned not to place undue reliance on the projections and estimates
set forth in this Form 10-Q.
Because our executive officers have limited experience in
mineral exploration and do not have formal training specific to the
technicalities of mineral exploration, there is a higher risk that our business
will fail.
Our executive officers have limited experience in mineral
exploration and do not have formal training as geologists or in the technical
aspects of management of a mineral resource exploration company. As a result of
this inexperience, there is a higher risk of our being unable to complete our
business plan for the exploration of our mineral property. With no direct
training or experience in these areas, our management may not be fully aware of
many of the specific requirements related to working within this industry. Our
decisions and choices may not take into account standard engineering or
managerial approaches mineral resource exploration companies commonly use.
Consequently, the lack of training and experience of our management in this
industry could result in management making decisions that could result in a
reduced likelihood of our being able to locate commercially exploitable reserves
on our mineral property with the result that we would not be able to achieve
revenues or raise further financing to continue exploration activities. In
addition, we will have to rely on the technical services of others with
expertise in geological exploration in order for us to carry out our planned
exploration program. If we are unable to contract for the services of such
individuals, it will make it difficult and maybe impossible to pursue our
business plan. There is thus a higher risk that our operations, earnings and
ultimate financial success could suffer irreparable harm and our business will
likely fail.
Risks Relating to Our Common Stock
If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.
Our articles of incorporation authorize the issuance of up to
250,000,000 shares of common stock with a par value of $0.00001 per share. Our
board of directors may choose to issue some or all of such shares to acquire one
or more businesses or to provide additional financing in the future. The
issuance of any such shares will reduce the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will reduce the proportionate ownership and voting power of all
current shareholders. Further, such issuance may result in a change of control
of our corporation.
Our common stock is illiquid and shareholders may be unable
to sell their shares.
There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. In addition, stock prices for junior mineral
exploration companies fluctuate widely for reasons that may be unrelated to
their operating results. These fluctuations may adversely affect the trading
price of our common shares.
Penny stock rules will limit the ability of our stockholders
to sell their stock.
The Securities and Exchange Commission has adopted regulations
which generally define “penny stock” to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
“accredited investors”. The term “accredited investor” refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer’s account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer’s confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser’s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholder’s ability
to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer’s financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for its shares.
Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.
Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of identifying, acquiring, exploring and developing
commercial reserves of primarily gold. Our properties are in the exploration
stage only although we have achieved environmental (EIA) approval and a Mining
License to commence gold mining on the mineralized target in one of our gold
projects. This project is not a compliant gold reserve as defined by Canadian
NI43-101 regulations nor the Securities and Exchange Commission in its Industry
Guide 7. We have not generated any revenues nor have we realized a profit from
our operations to date. Any profitability in the future from our business will
be dependent upon locating and developing economic reserves of gold, which
itself is subject to numerous risk factors as set forth herein. Since we have
not generated any revenues, we will have to raise additional monies through the
sale of our equity securities or debt in order to continue our business
operations.
We do not intend to pay dividends on any investment in the
shares of stock of our company.
We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stock’s price. This may never happen and investors
may lose all of their investment in our company.
Risks Related to Our Company
Our by-laws contain provisions indemnifying our officers and
directors.
Our by-laws provide the indemnification of our directors and
officers to the fullest extent legally permissible under the Nevada corporate
law against all expenses, liability and loss reasonably incurred or suffered by
them in connection with any action, suit or proceeding. Furthermore, our by-laws
provide that our board of directors may cause our company to purchase and
maintain insurance for our directors and officers, and we have implemented
director and officer insurance coverage.
Because most of our directors and officers are residents of
other countries other than the United States, investors may find it difficult to
enforce, within the United States, any judgments obtained against our directors
and officers.
Most of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons’ assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our officers or directors, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof.
