Item 1. Business
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. 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”, that 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.
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.
Our consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms "we", "us" and "our" mean Big Bear Mining Corp., a Nevada corporation, unless otherwise indicated.
General Overview
We were incorporated in the State of Nevada on April 14, 2005. At inception, we were an exploration stage company engaged in the acquisition, exploration and development of mineral properties. In December 2005, Mr. Aaron Hall, our former President, acquired a mineral claim known as the Holy Cross Property which comprised 500 hectares located 145 kilometers west of Prince George, British Columbia, Canada. Mr. Hall as a licensed free miner staked the claims on our behalf. On February 20, 2006, we reimbursed Mr. Hall $1,000 for the Holy Cross Property. Based on the information available to us, we determined that the Holy Cross Property did not, in all likelihood, contain a commercially viable mineral deposit, and we therefore abandoned any further exploration on the property.
As a result, we investigated several other business opportunities to enhance shareholder value.
On September 9, 2008, Aaron Hall resigned as our director and president. On September 9, 2008, Dwayne Skellern was elected director and appointed president of our company.
In January, 2010 the Company received $50,000 as subscription for private placement of 250,000 shares of the Company’s common stock at $0.20 per share. The related common shares were not issued by December 31, 2010 and the date of this filing.
Effective January 21, 2010, the Nevada Secretary of State effected a forward stock split of our authorized and issued and outstanding shares of common stock on a one (1) old for fifty (50) new basis, such that our authorized capital increased from 30,000,000 shares of common stock with a par value of $0.001 to 1,500,000,000 shares of common stock with a par value of $0.001 and, correspondingly, our issued and outstanding shares of common stock increased from 2,779,000 shares of common stock to 138,950,000 shares of common stock. All share amounts have been adjusted to present the stock-split retroactively.
On March 16, 2010 our board of directors appointed Steve Rix as a director, President, Secretary and Treasurer of our company. On March 16, 2010 Dwayne Skellern resigned as our President, Secretary, Treasurer and director.
Effective April 1, 2010, we entered into a property purchase option agreement (the “Rubicon Option Agreement”) with Perry English for Rubicon Minerals Corp. (“Rubicon”) for the right and option to acquire from Rubicon up to 100% interest in a total of 14 mining claims (the “Rubicon Claims”) in the Red Lake Mining Division of Northwestern Ontario, Canada. Considerations for the 100% interest are as follows:
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Initial cash payment of $20,000 (paid);
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Cash payment of $15,000 and issuance of common shares of our company valued at $30,000 on April 1, 2011;
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Cash payment of $20,000 and issuance of common shares of our company valued at $30,000 on April 1, 2012;
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Cash payment of $25,000 and issuance of common shares of our company valued at $30,000 on April 1, 2013; and
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Cash payment of $30,000 on April 1, 2014.
In accordance with the Rubicon Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which our company has the option to purchase with cash payment of $1,000,000. The work commitment on the Rubicon claims is $56,400 per year.
On March 31, 2010, we entered into a Financing Agreement (the "Agreement") with Intosh Services Limited, ("Intosh"), whereby we had the right to request Intosh to purchase up to $1,400,000 of our securities until March 31, 2011, unless extended by either our company or Intosh for an additional twelve (12) months.
Under the terms of the Agreement, we had the right to from time to time request a purchase from Intosh up to $200,000 (each, an "Advance") per request for operating expenses, acquisitions, working capital and general corporate activities. Following receipt of any Advance, we were required to issue shares of our common stock at $0.70 per share.
As of June 30, 2010, in accordance with the Financing Agreement the Company received Advances of $1,400,000 for which the shares were issued on September 7, 2010.
Effective April 11, 2010, we entered into a property purchase option agreement (the “Sol d’or Option Agreement”) with Perry English for Rubicon Minerals Corp. (“Rubicon”), whereby we are entitled to acquire from Rubicon up to 100% interest in nine claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the property. Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of $16,000 (paid) and issuance of 20,000 shares of the Company’s common stock (issued on August 11, 2010);
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Cash payment of $15,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2011;
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Cash payment of $20,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2012;
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Cash payment of $25,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2013; and
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Cash payment of $35,000 on April 11, 2014.
In accordance with the Sol d’or Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which we have the option to purchase with cash payment of $1,000,000. The work commitment on the Sol d’or property is $41,700 per year.
Effective April 13, 2010, we entered into a property purchase option agreement (the “Stevens Lake Option Agreement”) with Perry English for Rubicon Minerals Corp. (“Rubicon”), whereby we are entitled to acquire up to 100% interest in three claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the Property.
Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of $7,000 (paid) and issuance of 20,000 shares of the Company’s common stock (issued on August 11, 2010);
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Cash payment of $12,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2011;
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Cash payment of $15,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2012;
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Cash payment of $20,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2013; and
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Cash payment of $30,000 on April 13, 2014.
In accordance with the Stevens Lake Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which we have the option to purchase with cash payment of $1,000,000. The work commitment for the Stevens Lake property is $9,600 per year.
Effective August 2, 2010, we entered into a property purchase option agreement (the “Rattlesnake Hills Option Agreement”) with John Glasscock, a director of our company, whereby we are entitled to acquire up to 100% interest in 452 mineral claims located in Natrona County, Wyoming. Considerations for the 100% interest in the claims are as follows:
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Initial cash payment of $250,000 (paid);
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Issuance of 1,000,000 shares of our common stock within 30 days of the agreement (issued);
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Issuance of second 1,000,000 shares of our common stock on or before the first anniversary of the agreement;
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Issuance of third 1,000,000 shares of our common stock on or before the second anniversary of the agreement;
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Payments for all property costs which include annual lease payments estimated at $63,000 required by the State of Wyoming.
In accordance with the Rattlesnake Hills Option Agreement, Mr. Glasscock retains a royalty of 2% of the net smelter returns, 50% of which we have the option to purchase with cash payment of $1,000,000.
The work commitment on Rattlesnake Hills Property in accordance with the Option Agreement is $800,000 during the first year, $1,200,000 during the second year and $1,600,000 during the third year.
On April 19, 2010, Steve Rix, the officer and director of our company, acquired a total of 30,000,000 shares of the common stock from Aaron Hall, our former officer and director, in a private transaction for approximately $2,000. The funds used for this share purchase were Mr. Rix personal funds.
On April 27, 2010, we entered into a share cancellation/return to treasury agreement with Aaron Hall, our former officer and director. Pursuant to the agreement, Mr. Hall has agreed to the return and cancel of 66,750,000 shares of our common stock currently held by him. We did not provide Mr. Hall with any compensation for such cancellation. Post cancellation, Mr. Hall continues to hold 250,000 shares of common stock.
On July 20, 2010, we issued 450,000 common shares to Vista Partners LLC pursuant to our letter agreement with Vista Partners LLC dated June 10, 2010 (the “Letter Agreement”). The securities issued under the Letter Agreement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. These shares were issued pursuant to an exemption from registration in section 4(2) of the Securities Act of 1933.
On September 9, 2010, in accordance with our company’s Rattlesnake Hills Option Agreement dated August 2, 2010, 1,000,000 shares of our company’s common stock were issued as consideration for the property.
On December 16, 2010 upon renewal of the consulting agreement with VISTA we issued further 450,000 shares of the Company’s common stock after the Board of Directors’ approval. The securities issued under the Letter Agreement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. These shares were issued pursuant to an exemption from registration in section 4(2) of the Securities Act of 1933.
Our fiscal year end is December 31.
Our Current Business
We are engaged in the acquisition and exploration of mining properties. We maintain our statutory registered agent's office at 1859 Whitney Mesa Drive , Henderson, Nevada 89014 and our business office is located at 60 E Rio Salado Parkway, Suite 900, Tempe, Arizona 85281.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Since we are an exploration stage company, there is no assurance that a commercially viable mineral reserve exists on any of our current or future properties, To date, we do not know if an economically viable mineral reserve exists on our property and there is no assurance that we will discover one. Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine 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.
We appointed Billiken Management to perform compilation work on all our claims in Western Ontario.
Our current operational focus is to complete the terms of the Rattlesnake Hills Option Agreement, Rubicon Option Agreement, the Sol D’or Option Agreement and the Stevens Lake Option Agreement and to conduct exploration activities on each of the properties.
Competition
We are a mineral resource exploration company. We compete with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.
Governmental Regulations
We currently hold options to acquire properties in the state of Wyoming and the province of Ontario. Our mineral exploration program will be subject to regulations similar to the following:
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Locating claims
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Posting claims
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Working claims
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Reporting work performed
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Reclamation work performed on claims
Prior to proceeding with any exploration work, we must apply for a notice of work permit. Additionally, the properties we are acquiring in the Rattlesnake Hills region have some split estate land where we have to create contracts with the surface land owners.
We are committed to complying with and are, to our knowledge, in compliance with, all governmental and environmental regulations applicable to our company and our properties. Permits from a variety of regulatory authorities are required for many aspects of mineral exploration and reclamation. We cannot predict the extent to which these requirements will affect our company or our properties if we identify the existence of minerals in commercially exploitable quantities. In addition, future legislation and regulation could cause additional expense, capital expenditure, restrictions and delays in the exploration of our properties.
Research and Development
We have incurred $Nil in research and development expenditures over the last two fiscal years.
Employees
Currently, we do not have any employees. Our directors, executive officers and certain contracted individuals play an important role in the running of our company. We do not expect any material changes in the number of employees over the next 12 month period. We do and will continue to outsource contract employment as needed.
We engage contractors from time to time to consult with us on specific corporate affairs or to perform specific tasks in connection with our exploration programs.
Subsidiaries
We incorporated our wholly owned Golden Bear Mining Corp. on April 1, 2010. As at the date of this document there has been no activity in Golden Bear Mining Corp.
Intellectual Property
We do not own, either legally or beneficially, any patent or trademark.
Item 1A.
Item 1A. Risk Factors
Our business operations are subject to a number of risks and uncertainties, including, but not limited to those set forth below:
We need to continue as a going concern if our business is to succeed, if we do not we will go out of business.
Our independent registered public accounting firm’s report on our audited consolidated financial statements for the year ended December 31, 2010 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.
Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. 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. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations.
Because we have commenced limited business operations, we face a high risk of business failure.
We have limited business operations, accordingly, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on April 14, 2005 and have been involved primarily in organizational activities and the acquisition of our mineral properties. We have not earned any revenues.
Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from development of the mineral claims and the production of minerals from the claims, we will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
We lack an operating history and we expect to have losses in the future.
We have not started our proposed business operations or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon the following:
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Our ability to locate a profitable mineral property;
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Our ability to generate revenues; and
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Our ability to reduce exploration costs.
Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
We have no known ore reserves and we cannot guarantee we will find any gold or if we find gold, that production will be profitable. Even if we are successful in discovering gold or other mineralized material we may not be able to realize a profit from its sale. If we cannot make a profit, we may have to cease operations.
We have no known ore reserves. We have not identified any gold on the mineral claims and we cannot guarantee that we will ever find any gold. Even if we find that there is gold on our mineral claims, we cannot guarantee that we will be able to recover the gold. If we cannot find gold or it is not economical to recover the gold, we will have to cease operations.
Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.
The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material. If we do not find mineralized material, we will cease operations.
Because we are small and do not have much capital, we must limit our exploration. Because we may have to limit our exploration, we may not find mineralized material, although our mineral claims may contain mineralized material. If we do not find mineralized material, we will cease operations.
If we become subject to onerous government regulation or other legal uncertainties, our business will be negatively affected.
There are several governmental regulations that materially restrict mineral property exploration and development. Under the mining laws of the jurisdictions in which our properties are located, we are required to obtain work permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. While these current laws do not affect our current exploration plans, if we proceed to commence drilling operations on the mineral claims, we will incur modest regulatory compliance costs.
In addition, the legal and regulatory environment that pertains to the exploration of ore is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for ore deposits. The growth of demand for ore may also be significantly slowed. This could delay growth in potential demand for and limit our ability to generate revenues. In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been applied. These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed.
We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations.
Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals.
We plan to continue to source exploration mineral claims. The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that additional exploration on our properties will establish that additional commercially exploitable reserves of gold exist on our properties Problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and often result in exploration efforts being unsuccessful. The additional potential problems include, but are not limited to, unanticipated problems relating to exploration and attendant additional costs and expenses that may exceed current estimates. These risks may result in us being unable to establish the presence of additional commercial quantities of ore on our mineral claims with the result that our ability to fund future exploration activities may be impeded.
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934, which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. In particular, prior to selling a penny stock, broker/dealers must give the prospective customer a risk disclosure document that: contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; contains a description of the broker/dealers' duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of Federal securities laws; contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask prices; contains the toll free telephone number for inquiries on disciplinary actions established pursuant to section 15(A)(i); defines significant terms used in the disclosure document or in the conduct of trading in penny stocks; and contains such other information, and is in such form (including language, type size, and format), as the SEC requires by rule or regulation. Further, for sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement before making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
Rain and snow may make the road leading to our property impassable. This will delay our proposed exploration operations and could prevent us from working.
While we do not plan to conduct our exploration year round, it is possible that when we plan to proceed with exploration that snow or rain could cause roads leading to our claims to be impassable. When roads are impassable, we are unable to work.
Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material. If we do not find mineralized material, we will cease operations.
Because we are small and do not have much capital, we must limit our exploration. Because we may have to limit our exploration, we may not find mineralized material, although our property may contain mineralized material. If we do not find mineralized material, we will cease operations.
As we face intense competition in the mining industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees.
The mining industry is intensely competitive in all of its phases. Competition includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified employees, our exploration and development programs may be slowed down or suspended.
Trading of our stock may be restricted by the SEC's Penny Stock Regulations which may limit a stockholder's ability to buy and sell our stock.
The U.S. 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 SEC 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.
Anti-Takeover Provisions
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
Our By-laws contain provisions indemnifying our officer and directors against all costs, charges and expenses incurred by them.
Our By-laws contain provisions with respect to the indemnification of our officer and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officer.
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.
Item 1B.
Item 1B. Unresolved Staff Comments
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2.
Item 2. Properties
Our executive, administrative, and operating offices are located at 60 E Rio Salado Parkway, Suite 900, Tempe, Arizona 85281. We currently lease approximately 268 square feet at a monthly cost of $2,219.00. We believe these facilities are adequate for our current needs and that alternate facilities on similar terms would be readily available if needed.
Property held by us: As of the date of this current report on Form 8-K, we hold options to acquire interests in the Rubicon Property, the Sol d’or Property and the Stevens Lake Property as well as the Rattlesnake Hills Property. For a description of the option agreements, please see the section entitled “Business” above.
Rubicon Option Agreement: Shabu Lake - Skinner Claims
Our Red Lake Property consists of 14 claims comprising approximately 6,680 acres in the prolific Red Lake Mining Division of Northwestern Ontario, Canada. These claims are located in the Shabu Lake area and are accessible by road. This property has multiple reported gold occurrences on it (Ontario Geological Survey Open File Report 5835) as well as multiple documented copper/nickel occurrences (Preliminary Map P973 Shabumeni River - Narrow Lake area).
Previous exploration was hampered by inaccessibility but the construction of an all-season logging road in recent years has alleviated this and enhanced the possibility of discovering new gold and base metal zones. In addition, follow up work on previous occurrences is now more economically viable.
Location and Access
The property lies in northwest part of the Birch-Confederation Lakes greenstone belt some 75 km east-northeast of Red Lake straddling the Skinner township / Shabu Lake area boundary. It comprises a contiguous group of claims (~175 units, 6,988 acres) extending 11.5 km from Leonard Lake in the east to Shabu Lake in the northwest.
The east part of the property is road accessible from Highway 105 in Ear Falls, eastwards towards Gold Pines on Lac Seul on Highway 653, then northeastwards along the South Bay Road and finally north on the Joyce Road which crosses the southeast extremity of the property. The South Bay and Joyce Roads are both well maintained, gravel logging access roads.
Northwest parts of the property are accessible by float plane available at the South End of Confederation Lake (Kabeelo’s; ~30 km), Ear Falls (several; 75 km) and Red Lake (e.g, Greens, 75 km).
Title
The properties are all unpatented mining claims in good standing with the Ontario Ministry of Northern Development, Mines and Foresty (MNDMF) registered to Perry English. Perry English has granted an option to Big Bear Mining which requires cash and stock payments, the terms of which are set out in the section entitled “Business”. In order to maintain ownership of the property we must maintain the option agreement in good standing and meet the work requirements of the MNDMF which are annual requirements calculated on the property size. On an annual basis the MNDMF requires eligible work to be carried out on the property with a cash value of $56,400.
Figure 1. Shabu-Skinner Claims (outlined in red; UTM Zone 15; NAD’83). Joyce Road (access in brown).
History
Parker and Atkinson (1993) record several gold showings on the property dating from 1926. Past work in the area has focused on the Bathurst Mine on Carr Lake which lies on the adjoining property south and east.
Parker and Atkinson (1993; Appendix A) provide detailed descriptions and histories of specific showings. Table 1 below lists work reported in the Shabu lake map area (NTS 52N07SW). Available data suggest that there is a significant and varied base of work on which to design further exploration programs. In recent work (circa 2004) by Fronteer, completed only on the Leonard Lake portion of the property, can be effectively applied to the central and western portions.
Table 1. Assessment files in the Shabu Lake map area (NTS 52N07SW).
AFRI File
Year
AFRO ID
Performed For
Drilling
Geology
Geochem
Geophysics
52N07SW0008
DDH 10
FLINT ROCK MINES LTD
x
52N07SW0007
DDH 11
MADSEN RL AU MINES LTD
x
52N07SW0005
DDH 13
G J CIGLEN
x
52N07SW0006
DDH 12
FLINT ROCK MINES LTD
x
52N07SW0003
2.7641
SUMMIT RED L GOLD MINES LTD
x
x
52N07SW0002
63.519
FLINT ROCK MINES LTD
x
x
AFRI File
Year
AFRO ID
Performed For
Drilling
Geology
Geochem
Geophysics
52N07SW0004
DDH 14
SHABU GOLD MINES LTD
x
52N07SW9913
2.1494
ASARCO EXPL CO OF CAN LTD
x
x
52N07SW2001
2.25014
FRONTEER DVLPMT GROUP INC
x
x
x
52N08NE2003
2.27483
JILBEY ENTERPRISES LTD
x
x
52N07SW2002
2.27325
FRONTEER DVLPMT GROUP INC
x
52N07SW2003
2.27924
FRONTEER DVLPMT GROUP INC
x
Property Status
The property is presently vacant exploration ground with no known reserves or resources and no known liabilities.
The registrant proposes a program of reconnaissance prospecting and sampling of the historical showings and trenches. If successful the next phase would include further stripping/trenching, detailed sampling/prospecting, linecutting and ground geophysics.
Existing or potential economic significance
The property represents an early stage gold exploration property containing several gold-in-quartz showings whose known extent is limited.
Appendix 1. Showings on (SB-1 to 3) and adjacent to (SB-4, SK-1 to 4) property
Figure 2. Gold showings on and near Skinner-Shabu Claim Group (Parker and Atkinson, 1993)
SHABU LAKE AREA (NTS 52N07SW)
Code
Name
SB-1
Flint Rock Mines Ltd. Occurrence (Shabu Lake Occurrence)
SB-2
Leonard Lake Occurrences
SB-3
Madsen Red Lake Gold Mines Occurrence
SB-4
Sheehan Lake Prospect
SKINNER TOWNSHIP (52N07SW)
SK-1
Bathurst Mine
SK-2
Dunkin Prospect
SK-3
Noramco Explorations Inc., Skinner Township Occurrences
SK-4
Price-Logan Occurrence
Code
SB-1
Name
FLINT ROCK MINES LTD. OCCURRENCE (SHABU LAKE OCCURRENCE)
Map area
SHABU LAKE AREA
NTS
52N07SW
LOCATION
The Flint Rock Mines Ltd. occurrence is situated on leased mining claims KRL 51180 to 51191 inclusive. The main No. l vein is located about 1.2 km due west of Shabu Lake on leased claims KRL 51184 and 51186.
DESCRIPTION
Regional Structures
Fyon and ODonnell (1986) noted that the main structure at Shabu Lake is a complex or refolded fold. According to Fyon and ODonnell (1986): "A tight syncline with a highly strained (possibly sheared) core trends northwest, parallel to the northwestern arm of the lake. A second fold axial trace trends north-northeast, and defines a broad syncline in the southeastern section of the lake.”
Geology
Northeast-trending, fine-grained metasediments are intercalated with minor metavolcanic flows of the Cycle n metavolcanic sequence (Thurston 1986) and are intruded by granodioritic rocks of the Mainprize Lake granitoid complex.
Mineralization
No. l vein
The No. l vein occurs along the southern claim boundaries of leased claims KRL 51184 and 51186. The east-trending quartz vein has been traced by diamond drilling along the contact between biotite granodiorite and a diorite dike, for a strike length of 800 m. The vein is 0.1 to 0.6 m wide and contains sparse amounts of disseminated galena, pyrite, chalcopyrite and visible gold (Pryslak 1974).
No. 2 vein
The No. 2 vein is approximately 460 m northwest of the No. l vein and is situated on leased mining claim KRL 51188. The east-trending vein dips 90 and is 5 cm to 30 cm wide with a strike length of 47 m. The vein is hosted by a narrow inclusion of metasediments and by biotite granodiorite and gabbro. Pryslak (1974) reported that the vein contained up to 10% galena and 2% chalcopyrite.
Alteration and deformation
Alteration and deformation associated with the quartz veins is very minimal and consists of silicification, epidotization and hematization with very minor shearing.
OWNERSHIP AND DEVELOPMENT
Prospectors Airways Ltd. conducted trenching, channel sampling and diamond drilled 28 holes totalling 6500 feet on the No. l Vein zone.
Flint Rock Mines Ltd. diamond drilled 7 holes totalling 1999 feet on the No. l and No. 2 veins.
Flint Rock Mines diamond drilled 2 holes totalling 950 feet to test the base metal potential of a pyritic zone on the west shore of Shabu Lake (leased claim KRL 51180).
Flint Rock Mines conducted linecutting and induced polarization and resistivity surveys over the property and diamond drilled 6 holes totalling 2217.6 feet.
Code
SB-2
Name
LEONARD LAKE OCCURRENCES
Map area
SHABU LAKE AREA
NTS
52N07SW
LOCATION
The Leonard Lake occurrences consist of 5 separate showings situated in the immediate vicinity of Leonard Lake in the Shabu Lake area.
North
The North showing is situated 805 m due north of Leonard Lake;
West
West showing occurs 1.7 km west of the lake;
East
East showing is situated 2 km due east of the lake;
Shore
Shore showing is located on the southwest shore of Leonard Lake; and
South
South showing is located 500 m southwest of the lake. Leonard Lake is situated immediately north of the Skinner Township boundary line.
DESCRIPTION
Regional Structures
The northwest-trending Swain Lake fault extends from Swain Lake through the southeastern end of Leonard Lake (Pryslak 1972, 1974).
Geology
East-trending, intermediate to mafic metavolcanic rocks are intercalated with abundant fine-grained metasediments of the Cycle II sequence (Thurston 1986) and are intruded by gabbro and granodioritic rocks of the Mainprize Lake granitoid complex.
North and West
The North and West showings consist of test pits sunk on quartz veins within granodioritic rocks at the contacts between granodiorite and metasediments and granodiorite and mafic metavolcanic rocks.
East
The East showing consists of quartz veins hosted by fine-grained metasediments consisting of greywacke, siltstone and argillite.
Shore
The Shore showing consists of several trenches sunk on quartz veins hosted by intermediate pyroclastic rocks which have been altered to chlorite-sericite schist (Pryslak 1974).
Shore
The Shore showing is situated on the extreme northwest extension of the Swain Lake fault.
South
The South showing (formerly situated on claim KRL 4841) consists of 3 separate east-trending quartz veins dipping between 60 and 80 to the south. The veins are hosted by narrow shear zones up to 4 feet wide in coarse-grained diorite/gabbro. The quartz veins range in strike length from 20 to 110 feet (Bruce 1929).
South showing
The quartz veins at the South showing have been reported (Bruce 1929) to contain massive arsenopyrite in "considerable quantities". Bruce (1929) reported that "gold occurs with the arsenopyrite".
West showing
Pryslak (1974) reported arsenopyrite in quartz veins at the West showing.
OWNERSHIP AND DEVELOPMENT
Leonard Narrow Lake Mines Ltd. conducted extensive stripping and trenching in the vicinity of Leonard Lake. The most promising showing on the property was the South showing situated on mining claims KRL 4841.
A portion of the property was staked by Madsen Red Lake Gold Mines Ltd.
Madsen Mines conducted electromagnetic and magnetic surveys over the area.
C.C. Huston and Associates flew airborne electromagnetic, magnetic and radiometric surveys over the area.
Canadian Eagle Exploration Inc. flew airborne electromagnetic, magnetic and resistivity surveys over a portion of the area.
ECONOMIC FEATURES
West, North & East
Pryslak (1974) has indicated the presence of gold at the West, North and East showings on map P. 973, but no specific gold values have been reported.
South
Bruce (1929) also reports the presence of gold at the South showing.
Code
SB-3
Name
MADSEN RED LAKE GOLD MINES OCCURRENCE
Map area
SHABU LAKE AREA
NTS
52N07SW
LOCATION
The Madsen Red Lake Gold Mines prospect consists of several sulphide shownings situated on the south and southeast shore of Shabu Lake.
DESCRIPTION
Regional Structures
A syncline with a highly strained core trends northwest, parallel to the northwestern arm of Shabu Lake and a second fold axial trace trends north-northeast, and defines a broad syncline in the southeastern section of Shabu Lake (Fyon and OT)onnell 1986).
Geology
Northwest-trending, pillowed and massive mafic metavolcanic flows outcrop on the east shore of Shabu Lake. A 400- to 500-foot thick marble unit (Pryslak 1974) which extends along the southeast shore of Shabu Lake is overlain to the east by fine-bedded, siliceous metasediments which are 200 feet thick (Pryslak 1974). The supracrustal rocks are part of the Cycle II metavolcanic sequence (Thurston 1986). The metasediments and metavolcanic rocks are intruded by porphyritic, biotite granodiorite of the Mainprize Lake granitoid comples.
Mineralization
The marble and siliceous metasediments host abundant disseminated and massive sulphide mineralization consisting of pyrite and pyrrhotite, with minor chalcopyrite, sphalerite and galena. Lenses of massive sulphides are up to 10 feet wide.
OWNERSHIP AND DEVELOPMENT
A contiguous group of 79 mining claims was staked by Madsen Red Lake Gold Mines Ltd.
Madsen Mines conducted linecutting, electromagnetic and magnetic surveys trenching, sampling and diamond drilled 10 holes totalling 3370 feet.
C.C. Huston and Associates flew airborne electromagnetic, magnetic and radiometric surveys over the area.
Canadian Eagle Exploration Inc. (formerly Shabu Gold Mines Ltd.) flew airborne electromagnetic, resistivity and magneti surveys over the area.
ECONOMIC FEATURES
Four drill holes completed by Madsen Red Lake Gold Mines Ltd. intersected narrow sections of anomalous gold mineralization in siliceous metasediments and marble hosting variable amounts of pyrrhotite and pyrite. Some of the drill intersections were:
Code
SB-4
Name
SHEERAN LAKE PROSPECT
Area
SHABU LAKE AREA
NTS
52N07SW
LOCATION
The Sheehan Lake prospect consists of 35 trenches located about 400 m due south of Sheehan Lake (local name) in the Shabu Lake area. Sheehan Lake is a small lake situated along the Shabumeni River and is approximately 6.6 km due west of Shabumeni Lake.
DESCRIPTION
Regional Structures
No major regional structures have been identified in the vicinity of the Sheehan Lake prospect.
Geology
The Sheehan Lake prospect is hosted by hornblende granodiorite of the Mainprize Lake granitoid complex. The occurrence is about 500 m due north of the contact between the granitoid rocks and a thick unit of fine-grained metasediments. Pryslak (1974) located 35 trenches which range from 2 m to 36 m in length. The trenches occur at intervals of 9 m in a west-northwest direction for a strike length of 270 m.
Mineralization
Gold mineralization occurs within a sheared alteration zone consisting of silicified, carbonatized and variably pyritic, hornblende granodiorite. The alteration zone contains 10% to 20% iron carbonate, 2% to 8% disseminated pyrite (Prylak 1974) and minor galena and chalcopyrite.
OWNERSHIP AND DEVELOPMENT
Prospectors Airways Ltd. staked 15 mining claims at Sheehan Lake and conducted trenching, stripping and 3500 feet of diamond drilling.
Noranda Exploration Co. Ltd. conducted ground magnetic and electromagneticsurveys in the vicinity of the prospect.
Staked by P. Henniston.
Dome Exploration visited and sampled the property.
Summit Red Lake Gold Mines Ltd. conducted ground magnetic and electromagnetic surveys and humus and lithogeochemical surveys.
Shabu Gold Mines Ltd. conducted an electromagnetic survey and diamond drilled 23 holes totalling 10 437.7 feet.
Canadian Eagle Exploration Inc. (formerly Shabu Gold Mines Ltd.) flew airborne magnetic, electromagnetic and resistivity surveys over the property.
ECONOMIC FEATURES
Diamond drilling conducted by Shabu Gold Mines Ltd. in 1987 intersected 0.078 ounce Au per ton across 24.8 feet, while 4 other narrow intersections assayed up to 0.06 ounce Au per ton (The Northern Miner, April 6, 1987, p. 7). Numerous sections with high silver values such as, 1.83 ounces Ag per ton across 17.5 feet, were also intersected in drill core.
Six chip samples ranging in length from 1.2 m to 6 m were taken from the trenches by A.P. Pryslak (1974) and assayed between 0.01 and 0.07 ounce Au per ton.
Code
SB-2
Name
LEONARD LAKE OCCURRENCES
Map Area
SHABU LAKE AREA
NTS
52N/7 SW
LOCATION
The Leonard Lake occurrences consist of 5 separate showings situated in the immediate vicinity of Leonard Lake in the Shabu Lake area. The North showing is situated 805 m due north of Leonard Lake; the West showing occurs 1.7 km west of the lake; the East showing is situated 2 km due east of the lake; the Shore showing is located on the southwest shore of Leonard Lake; and the South showing is located 500 m southwest of the lake. Leonard Lake is situated immediately north of the Skinner Township boundary line.
Code
SK-1
Name
BATHURST MINE
Map area
SKINNER TOWNSHIP
NTS
52N07SW
LOCATION
The Bathurst Mine is located on leased mining claim KRL 321974 (formerly KRL 4758) which is part of a group of 12 contiguous leased claims situated between Bathurst and Car lakes in the northwest corner of Skinner Township. Numerous pits and trenches are located on several of the leased claims.
DESCRIPTION
Regional Structures
The Bathurst Mine property is situated within the contact strain aureole of the Trout Lake batholith in the east-northeast-trending Swain Lake deformation zone (Fyon and Lane 1986).
Geology
Mafic, massive and pillowed metavolcanic flows of the Cycle II sequence (Thurston 1985) are intruded by coarse-grained gabbroic and dioritic sills and dikes and by wide felsite dikes commonly striking between 090 and 110° and dipping 75° to the south. The Bathurst Mine is approximately 600 m east of the contact between mafic metavolcanic rocks and granitic rocks of the Trout Lake batholith. Mafic, metavolcanic rocks commonly contain abundant green, fibrous, amphibole. The metavolcanic rocks are commonly foliated in a northerly direction, parallel to the contact of the Trout Lake batholith.
Mineralization
Mineralized quartz veins are hosted by numerous discrete, east- and east-southeast- trending shear zones in excess of 3 m wide. Shear and fracture zones commonly occur along the contacts of felsite dikes and also within the dikes.
The sheared wall rocks are chloritized and/or talcose and host calcite-filled extension veins. Wall rocks immediately adjacent to the quartz veins are commonly silicified. Alteration is confined to the shear zones.
Numerous trenches and pits have been sunk on 12 mineralized shear zones hosting fine-grained, white, sugary quartz veins and a few pale blue vitreous veins. The quartz veins contain minor amounts of disseminated pyrite associated with iron carbonate and chloritic wall rock fragments. Quartz veins may also contain sphalerite, chalcopyrite, galena, arsenopyrite, pyrrhotite and spectacular, coarse, visible gold. Sulphides are commonly concentrated within the quartz at quartz vein/wall rock contacts and are finely disseminated in the sheared wall rocks.
The quartz veins range between 2 and 9 feet in width with some strike lengths in excess of 1000 feet. Many of the quartz veins have been deformed and are folded and flat-lying (Bruce 1929; Fyon and O'Donnell 1986). The folded veins commonly have a shallow plunge to the southwest. The shaft was sunk on the No. l, 2, 3 and 4 veins on leased mining claim KRL 321974 (formerly KRL 4758). These veins were the most important on the property and contained the most abundant visible gold.
Mineralization
Ruff Lake
Gold mineralization at the Ruff Lake zone occurs within sheared intermediate pyroclastic rocks hosting minor quartz veins. The sheared wall rocks host disseminated arsenopyrite with minor galena. Quartz veins within the shear zone contain minor amounts of visible gold.
Lac Mousseau
At the Lac Mousseau zone, gold is associated with stratabound, disseminated to semi-massive sulphide mineralization consisting of pyrite, chalcopyrite and pyrrhotite. A northeast-trending shear zone which intersects the sulphide mineralization hosts disseminated arsenopyrite and minor quartz veins.
OWNERSHIP AND DEVELOPMENT
Belle Isle Mining Co. held mining claims in the vicinity of Mousseau Lake.
Stripping was conducted on mining claims west of Mosier Lake.
Selco Exploration Company Ltd. diamond drilled 3 holes totalling 1109.5 feet in the vicinity of the Lac Mousseau zone.
Noramco Explorations Inc. conducted airborne and ground magnetic and electromagnetic surveys over the property as well as an induced polarization survey, prospecting, stripping, trenching, sampling and geological mapping.
Noramco Explorations Inc. conducted airborne and ground magnetic and electromagnetic surveys over the property as well as an induced polarization survey and geological mapping; the company diamond drilled 2 holes totalling 509 m at the Ruff Lake zone and 4 holes totalling 662.1 m at the Lac Mousseau zone.
The Price-Logan occurrence is approximately 1.6 km east of the contact between mafic metavolcanic rocks and granitic rocks of the Trout Lake batholith.
A 5 m wide shear zone striking 075 and dipping steeply to the north hosts gold mineralization at the Price-Logan occurrence. Mafic metavolcanic wall rocks within the shear zone are fissile, chloritized and talcose. Some wall rocks adjacent to the quartz veins have been silicified. The shear zone extends along the contact of a wide, sericitized, quartz porphyry dike.
Mineralization
Large pits and trenches have been sunk along a 1.5 m wide quartz-carbonate stringer zone within the shear zone. The discontinuous quartz-carbonate stringers are less than 20 cm wide and pinch and swell along strike. The quartz stringers contain minor amounts of disseminated pyrite, galena and fine visible gold. Sulphides are also disseminated amongst the sheared and altered wall rocks.
ECONOMIC FEATURES
Six grab samples taken B.T. Atkinson from the trenches at the Price-Logan occurrence analyzed 660 ppb Au, 4820 ppb Au, 7430 ppb Au, 26 ppb Au, 45 ppb Au, and 0.54 ounce Au per ton (Geoscience Laboratories Section, Ontario Geological Survey, Toronto).
Sol D’Or Mine Option Agreement
Location and Logistics
Each of the properties is located in the Red Lake area of Northwestern Ontario, Canada, in the Patricia administrative district, NTS Mapsheet 52N, the property is centred near 51° 16' 35" N; 92° 31' 33" W. A location map is appended to this document.
Green Airways’ Poplar Grove fishing camp situated near the western end of Birch Lake, and lying ~100 km ENE of Red Lake. The Sol d’Or Property can be reached by traveling 7½ km S by boat to the South Bay of Birch Lake and over a short portage to Grace Lake and a further 4 km to the Sol d’Or site.
Gawley’s Little Beaver has a cabin on Grace Lake about 4 km east of the Sol d’Or area. Doug Gawley (807-222-333) indicates that the cabin was available August 25 to 28 and September 6 onward. The property lies 48 miles NNE of Kabeelo’s where room and board are available for $90 / day. Work needs to be scheduled to minimize conflict with their tourist business.
Title and Ownership
The properties are all unpatented mining claims in good standing with the Ontario Ministry of Northern Development, Mines and Foresty (MNDMF) registered to Perry English. Perry English has granted an option to Big Bear Mining which requires cash and stock payments, the terms of which are set out in the section entitled “Business”. In order to maintain ownership of the property Big Bear must maintain the option agreement in good standing and meet the work requirements of the MNDMF which are annual requirements calculated on the property size. On an annual basis the MNDMF requires eligible work to be carried out on the property with a cash value of $41,200.
History
Company Year
Reference(s)
Description of Work
T.W. Bathurst Syndicate 1927
The original Sol D'Or claims were staked in 1927 for the T.W. Bathurst Syndicate. They were then taken over by the newly organized Rainbow Lake Gold Mining Company Limited in 1927, renamed Rainbow Lake Gold Mines Limited in 1932. A camp was erected and development of the mine site consisted of a small shaft 10.4 m deep. The claims lapsed.
Earl McDougall, 1932
Restaked property
Company Year
Reference(s)
Description of Work
T.W. Bathurst 1932-1933
Leased property from McDougall. A 3-ton Jack Nutt mill was installed
Over the 1932 - 1933 winter 100 tons of were treated and $l,500 worth of gold was shipped to the mint in Ottawa.
Sol d'Or Gold Mines Limited 1935
Acquired property. Installed a 5 ton Straub Mill with amalgamation plates and concentrating table. Mining operations were almost exclusively confined to the open-cut veins.
By July, 1935, ~400 tons of ore were milled yielding $7,500 worth of gold.
Klatt (2002) estimated that the averaged mined grade was 1.11 ounce gold per ton.
During this period a 164 foot deep, 3 compartment shaft and 1000 feet of lateral work were completed [mainly] on the 150’ level.
Midco Minerals Limited 1941
Tilsley, 1986 52N08SE0026
Held property. No work mentioned.
Selco 1969
South Bay Mine, Dent Township discovered.
Cyril Williams 1969
Cyril Williams held 5 claims covering a portion of the southern part of the Sol D'Or claim block, discovering the Williams Occurrence comprising an auriferous quartz vein in medium grained, carbonized gabbro (Parker, J.R. and Atkinson, B.T, 1992). Johns (1979) reported 0.27 opt Au from a grab sample quartz taken from a deep water filled pit.
Long Lac Mineral Expl. 1969
Firth 1969 52N08SE0056
Broad airborne magnetic and radiometric survey, flown on east-west lines, included the Sol D'Or area in NE corner.
Rhonda Copper ML 1974
Ogden 1976 52N07SE0047
IP survey over claims including the Sol d'Or mine area outlined two east-west trending anomalous zones. Additional IP in 1975. Geological mapping (1974) and 5 ddh (?)
Harry Shlesinger 1980
Shlesinger, 1980
Completed 18 holes; two near the Sol d'Or mine and 16 around the Cyril Williams gold showing ~1 km W of the Sol D'Or mine. One hole cut a sediment hosted pyrite (~3%) horizon.
Rand Hodgson
Hodgson 1985 52N08SW0053
Geology SE shore of Grace Lake opposite Sol d’Or.
Parflo Mines & Energy Corp 1986
Tilsley, 1986 52N08SE0026
Humus geochemical survey, geological mapping, VLF-EM, and magnetic surveys over the Sol D'Or property.
Kidd Creek ML / Falconbridge 1987-1989
Bosowec, 1987, Falconbridge, 1988,
Hodges & Lutz, 1989
Drilled hole HO-1 and HO-2 ~40 m apart testing a conductor located near the center of the Sol D'Or property. HO-1 cut ≤55% pyrite and pyrrhotite in intermediate to felsic tuff and lapilli tuff. HO-2 cut two pyrite-pyrrhotite zones (l - 5% combined) hosted in intermediate agglomerate and lapilli tuff/agglomerate. Geological mapping, rock and soil geochemistry (Cu, Zn, Au) also completed.
Maple Minerals 1996
Patrie, 1996 52N07SE0013
Linecutting and an IP survey over the Sol D'Or property defining a chargeability anomaly along the southern part of the property and extending into Grace Lake.
Perry English 2001
Klatt, 2003
Staked and subsequently optioned the property to Red Lake Resources.
Fronteer Development 2002
Klatt, 2003 52N08SW2002
Dighem AEM & AMag
Soil & MMI geochem
Sampling
Diamond drilling
Present state of Property
The property is presently vacant exploration ground with no known reserves or resources. The registrant proposes a program of reconnaissance prospecting and sampling of the historical showings and trenches. If successful the next phase would include further stripping/trenching, detailed sampling/prospecting, linecutting and ground geophysics.
Potential economic Significance
"This group of claims is situated in the western part of Grace Lake. The rocks are basalts, acidic tuffs, and a small body of diorite. Seven veins were examined; six lie in the central and northern part of claim KRL10790, and the last in the northeast corner of KRL10788.
No. l vein strikes N80°E, and dips 67°N. It is exposed continuously for 300 feet [90m], varies in width from 5 to 18 inches [13 to 46 cm], and is composed of a moderately coarse-grained, glassy, light grey quartz cemented by a finer quartz and siderite. In narrow sections considerable orthoclase occurs. A trace of gold was found.
No. 2 veins (sic) is about 400 feet [120m] long and lies 55 feet north of No. l and approximately parallels it, dipping 60 N. It cuts a small, dark grey diorite dike.
No. 3 vein is about 1000 feet [300m] long, strikes N70°E, and dips 45°N. At the west end it consists of a number of stringers about 2 inches [5cm] wide, which appear to be barren, but contain a small amount of tourmaline. A few chains east the vein is about 2 feet [0.6m] wide and follows the south or foot wall of a dioritic sill. The vein contains inclusions of the diorite, which, in turn, contains inclusions of the rhyolitic wall rock. A pit shows the vein to be about a foot [0.3m] wide in the diorite, which is about 6 feet [1.8m] wide. The cribbing obscures a deformation zone in which the east portion of the vein is offset 4 feet [1.2m] north. Several irregular quartz stringers occur in this zone and unite immediately to form the easterly continuation of the vein. The vein carries some fine pyrite as does the diorite hanging wall. In this section the J the vein is exposed almost continuously for a distance of 150 feet [45.7m]. Farther east it becomes a series of small stringers and also a vein breccia.
Vein Nos. 4, 5, and 6 are quite small and have been exposed for a length of only a few feet.
Vein No. 7 has been tested by several trenches and three pits over a length of 800 feet [240m]. At the west end of this vein is a rusty, carbonated silicified zone in chlorite schist, striking about S25°E and dipping about 80°S. The central part of the zone is a silicified yellowish" schist, slightly mineralized with fine pyrite and arsenopyrite. Two chains east, siderite stringers in schist are cut by minute quartz veinlets carrying pyrite. At the east end, a pit 20 feet [6m] deep shows at the bottom a shear zone 2 feet [0.6m] wide in a carbonated and silicified yellowish grey schist. Traces of chalcopyrite, pyrite, and arsenopyrite occur, and gold is reported from the pit. A 2½ foot [0.67m] chip sample taken from the bottom assayed one-tenth of an ounce gold."
Stevens Lake Option Agreement - Central/Goodall Claims
Location and Access
The property lies to the west and north of Woman Lake (figure 1). The reported showings lie around Stevens Lake, a small lake situated a kilometre east of Woman Lake (figure 2).
Logging roads, extending northwards from the old South Bay Mine site, lie within two kilometres of the east property boundary, however, several small lakes and connecting creeks complicate access from this direction. Logging roads along the west side Woman Lake (Joyce and Spud roads) reach within 500 m of Shanty Bay on the SW side of the lake. This option requires a 50 km drive, half kilometre walk to the lake and a further 10 km up the lake to the property.
Kabeelo’s lodge (807-222-3246), lying ~20 km to southsouthwest on the westernmost tip of Confederation Lake, offers Beaver charters and accommodation, including meals. Docking may be problematic if there are significant southwesterly or westerly winds. Alternatively a boat and motor can be rented from Woman River Camp, a 10 km drive west of Kabeelo’s, (Paul & Debbie; Info@WomanRiver.com, Phone 807-221-6570 (party line) or cell 807-221-6570 (leave a message)). Estimated travel time is about 45 minutes. Numerous beaver slides on the east shore of Woman Lake opposite the showings provide convenient landing spots.
Cover comprises first growth black spruce with thick moss under cover with local areas of blow-down. Old stumps and occasional plastic pipe indicate areas of historic exploration activity which are obscured by second growth. Three of four showing areas sought were located with little difficulty, however, only one “shear” was located due to a thick moss cover.
Description of title
The properties are all unpatented mining claims in good standing with the Ontario Ministry of Northern Development, Mines and Foresty (MNDMF) registered to Perry English. Perry English has granted an option to Big Bear Mining which requires cash and stock payments, the terms of which are set out in the section entitled “Business”. In order to maintain ownership of the property we must maintain the option agreement in good standing and meet the work requirements of the MNDMF which are annual requirements calculated on the property size. On an annual basis the MNDMF requires eligible work to be carried out on the property with a cash value of $9,600.
History
Holder Year
Reference(s)
Summary
Hurley Claims 1935
2.3754 OGS P1216
Earliest recorded exploration the Hurley Claims which include the current Goodall Property.
Gold-bearing quartz veins and shears were found in the vicinity of Stevens and MacDonald Lakes. Visible gold and panned colours was noted in many cases. No assays reported.
Ben Rouillard
2.3754 OGS P1216
Trenching and sampling of mineralized quartz veins and shears between MacDonald and Washagomis Lakes [to the east of the current property]. Visible gold was reported in all trenches.
Work focused on the "Kelly Vein", a shear zone, hosted quartz vein near a diorite-metavolcanic contact which was traced for 4,000’.
Gold assays to 1.86 oz. gold per ton were reported.
Holder Year
Reference(s)
Summary
Andy Hagar
Private Files1
Mr. Hagar collected 12 mineralized rock samples from trenches and pits on the property.
J. L. Morton (Madsen RL GML) reported:
·0.23 and 0.17 oz/T Au in two pyrite and arsenopyrite-bearing of dark sheared rock samples of assayed. gold per ton. Another sample rich in returned
·5.14 oz/T Au from a sample containing sphalerite and chalcopyrite.
The remaining samples returned assays ranging nil to 0.12 oz. gold per ton.
The showings are situated on current claims 509733 to 509734.
Madsen Red Lake Gold Mines Ltd 1958-1961
2.3754 Norton's Report
16 trenches or pits sunk on a “series of shears” over an 800’ strike length.
This company carried out some sampling of trenches/pits as well as limited diamond drilling on claims KRL 509733, 734.
Quartz veins up to 2 ft. thick were reportedly hosted by rhyolite or silicified metavolcanics. Arsenopyrite and pyrite are ubiquitous to the quartz.
Twenty-three samples were collected of which 80% assayed on average 0.03 oz. gold per ton. The best chip-channel sample assayed 0.08 oz. gold per ton over 5.8 ft. (Pit. J). A grab sample of dump material near Pit D returned 0.15 oz. gold per ton.
A 178-foot diamond drill hole in the area intersected 15 ft. of 0.046 oz. gold per ton. (Hole 1959-1). 8.
Madsen Red Lake Mines also sampled a 6-foot wide shear zone in a trench on Claim KRL509737. Assays of 1.00 to 1.84 oz.
gold per ton over narrow vein widths (2") and host rock (andesite) assays of 0.01 to 0.06 oz. gold per ton over widths of up to 0.8 ft. were reported.
Lionel Dion 1959
DDH 10 OGS P1216
3 DDH (480’); two located ~400 m. NE of Stevens Lake, the third NW of MacDonald Lake.
The holes were drilled to test shears-quartz vein zones.
Hole 2 intersected 9 ft. of sheared dacite mineralized with disseminated pyrite and arsenopyrite. In the same hole a 4-foot quartz-carbonate (vein) zone containing pyrite and arsenopyrite is reportedly hosted by rhyolite.
Falconbridge Nickel Limited 1969
63.2789, OGS P1216
A fixed wing AEM survey over the W½ of the property detected four low order EM-conductors; two attributed to the abandoned power line. Two in the NW reflect a gabbro-metavolcanic contact.
Falconbridge Nickel Limited 1971
2.406 OGS P.1216
Ground magnetics and Afmag-Aflec EM detected three conductors to the NW attributing them to:
1) graphitic argillite containing disseminated magnetite and/or pyrrhotite and
2) shear zones within magnetite-bearing andesite.
Minorex Limited 1980
2.3754
Mapping, resampling of trenches and pits, VLF-EM and mag surveys and diamond drilling on the entire current Goodall Property.
Six gold-bearing shear zones were mapped in some detail.
Minorex Limited 1981
2.4674
2.4336
2.4176
Mapping and VLF extended over newly staked claims, and additional diamond drilling.
Seven diamond drill holes (1,028’) various gold zones on the Hagar Option.
Hole 6 (Zone 1) intersected 12.1 ft. of brecciated and carbonatized andesite, dacite which contained scattered quartz veining and 2 to 5% pyrite, arsenopyrite. The following assays were reported.
Inlet Resources Ltd. 1987-88
52N07SE9868
Related companies Inlet Resources , Western Pacific Energy and Noramco held a large property centred on Swain lake whose southern tip included the western part of the current property.
__________________
1 Morton, J.L. 1958 Report on Geological Examination on claims 41889 and 41891, Goodall Township "made available to Willoughby by Andy Hagar in February, 1987.
Present condition
The property is presently vacant exploration ground with no known reserves or resources. The registrant proposes a program of reconnaissance prospecting and sampling of the historical showings and trenches. If successful the next phase would include further stripping/trenching, detailed sampling/prospecting, linecutting and ground geophysics.
Existing or potential economic significance
ZONE 1 (on Claims KRL 509733, 34 and KRL 526683)
This zone has been exposed over a length of 3,800 feet by 16 trenches. In 1958, Madsen Red Lake GML drilled one hole under “Trenches A-D”, totalling 178 feet cutting the shear zone 60 feet below surface (0.046 oz/T Au over 15 feet). Between trenches A to K, the trend of the shear changes from an E-W strike west of trench D to N75°E between trench D-J and finally to N60°E east of trench J. The dip remains nearly vertical.
The shear is generally well silicified and locally, as in pit H and G, a silicified-feldspar zone reaches 13 feet wide and in pit J, the quartz-ankerite vein is six feet wide. Arsenopyrite and pyrite mineralization occurs throughout the shear, especially in the sheared andesite near the quartz veins or silicified sections. Arsenopyrite needles measuring 2 cm are present in pit L, 200 feet east of pit K.
Gold is found in all trenches but its grade is generally low (less than 0.05 oz/T). The highest gold values obtained seem to be closely related to the points of inflexion, that is, where the shear changes in direction, as in the vicinity of trenches D-E and of trench J. Three ore shoots, of unknown width and length are observed from surface sampling.
These are:
i) Trenches A and B area, over a 30 foot long (open to the west) and a possible width of at least six feet.
ii) Trenches D and E area, 75 feet east of (i), has a possible length of 60 feet and 15 feet breath. Hole 59-1 (Madsen, 19) cut 0.046 oz/T Au. over 15 feet.
iii) Trenches J and L area, of unknown extent but with a minimum width of six feet.
Five short diamond drill holes (G-80-1 to 5; 761’) were completed over a 1,300-foot strike length.
·
Hole G-80-1 intersected a 30 foot silicified shear (103 to 134 feet) zone which returned a 15 foot section at 0.06 oz/T Au.
·
Holes G-80-2, 3 and 4 intersected the shear zone, but with no or only low values and narrow sections of gold bearing rock.
·
Hole G-80-5 intersected a carbonated shear zone from 91 to 109 feet with up to 201 sulphides (pyrite and minor arsenopyrite). This zone assayed only trace of gold. A section, from 135 to 201 feet is characterized by narrow shear zones and quartz-carbonate veins with minor pyrite. A 22 inch section returned .05 oz/T Au at 159 feet.
The results obtained from these five holes give only an objective comprehension of the gold occurrences in this zone, which seems to be controlled by the degree of silicification and of sulphide content.
ZONE 2 (On common boundary of Claim KRL 509733-34)
This zone is only exposed in two trenches covering an area of approximately 50 feet. It is located 500 feet north of Zone 1 and is very similar in nature.
The shear zone is three feet wide and is almost completely replaced by a quartz-ankerite vein. The host rock is a coarse grained andesite with 3-5% pyrite and minor pyrrhotite, chalcopyrite, sphalerite and galena.
Interesting gold and silver values have been obtained from two grab samples.
ZONE 3 (On Claim KRL 509737)
This zone is exposed at two localities by trenches for a strike length of 1,000 feet. The shear varies in strike from N62° to 72°E and dips from 70 to 85°N. The zone consists of schistose, friable, fine grained andesite and spherulitic andesite with several quartz-ankerite veins varying from l inch to over one foot wide.
Hole 59-7 of Madsen was drilled to test this vein at a depth of 25 feet below surface. J.L. Morton (Madsen Red Lake GML) reported that a six-foot wide shear zone was exposed in the trench. Quartz veining on the shear contact assayed from 1.00 to 1.84 oz/T Au over approximately 2 inches while the sheared andesite assayed 0.01 oz/T Au. The best values obtained in hole 59-7 was 0.06 oz/T Au over 9 inches.
ZONE 4 (On Claim KRL 509739)
This zone is the west extension of the Ben Rouillard showing. (Refer to sketches 3 and 4). The zone has been followed for 1,100 feet on strike by trenches. The strike varies from N82°E to S80°2 and dips from 77°N to vertically. The zone consists of sheared andesite varying from 2.5 to 5 feet wide with several narrow quartz stringers containing from 5 to 25% sulfides (pyrite-arsenopyrite).
ZONE 5 (On Claim boundary of KRL 509738 and KRL 526684)
A 100 foot long by one foot wide shear zone in fine grained, dark green, carbonatized intermediate andesite is exposed for approximately 40 feet by trenches. In the trenches, a 3 inch quartz vein, at its maximum width, is well mineralized with fine grained sphalerite, galena and free gold. It seems the previous work here involved some high-grading.
The shear strikes N64°E and dips vertically to 70°S. To the northeast, the quartz vein splits into several quartz stringers. To the southwest, the shear lies under the overburden.
Zones 3 and 5 are on strike to each other, and the possibility of them being the same should be investigated.
ZONE 6 (On Claim KRL 526684)
This 5 to 8 foot wide sheared andesite-rhyolite zone strikes N60-66°W and dips 60°NE. The shear includes 5-8% sulphides and quartz veins and silicified sections. To the northwest, a one foot offshoot of the main shear has been stripped and exposed several quartz stringers.
The gold values are common to the shear as a whole (6-8 feet) and is consistent over a length of at least 50 feet.
Rattlesnake Hills
The Location and Access to the property.
The Rattlesnake Hills Property is located 50 miles (80 km) west of Casper, Wyoming; the Property is accessed by driving 65 miles (104 km) west from Casper on State Route 220, then north between 12 and 20 miles (20 to 30 km) on the Dry Creek county road to various parts of the Property.
The Property is comprised of a number of separate claim and lease blocks totaling approximately 9,240 acres located in various parts of T 31 N, R 88 W; T 32 N, R 86 W; T 32 N, R 87 W; and T 32 N, R 88 W, all of the Sixth Principal Meridian (Figure 1) as described in Tables 1 and 2 below. The center of the Property which forms a broad, arcuate pattern is approximately centered at Universal Transverse Mercator (UTM) coordinates 310000 N, 4732500 E, Zone 13, 1927 North American Datum (NAD27), Continental United States. The Barlow Gap, Blackjack Ranch, Garfield Peak, Saddle Rock, and Stinking Water Creek 7 1/2’, 1:24,000 scale topographic map sheets of the United States Geological Survey cover the Property. All these 7 1/2’ topographic map sheets fall within the Rattlesnake Hills 1:100,000 topographic sheet of the USGS.
Description of title
The properties consist of 452 Federal Lode Mining Claims with exclusive mineral rights as defined in the amended U.S. Mining Law of 1873. All claims are located on U. S. public lands administered by the BLM, except for:
·
The BM claim block (12 claims) and the DC claim block (34 claims) which is located on split estate land where the surface is owned by Mr. Charles Sylvester, Circle Bar Ranch, Inc., PO Box 607, La Salle, CO 80605. Mineral rights for these properties have been obtained by John W. Glasscock, PO Box 2498, Laramie, WY 82073.
·
The RR claim block (12 claims) which is located on split estate land where the surface is owned by Sandra D. Spano, Trustee, 2090 E. 104th Ave., Thornton, CO 80233. Mineral rights for these properties have been obtained by John W. Glasscock, PO Box 2498, Laramie, WY 82073.
·
The MF claim block (18 claims) which is located on split estate land where the surface is owned by Jerry D. Street, PO Box 1013, Glenrock, WY 82637. Mineral rights for these properties have been obtained by John W. Glasscock, PO Box 2498, Laramie, WY 82073.
Big Bear Mining optioned the mining properties from John W. Glasscock as described in an agreement dated July, 7, 2010 (attached). Big Bear has an option to earn a 100% interest by spending $3,600,000.00 on exploration over three years and the issuance of 3.0 M shares. The optionor also maintains a 2% Net Smelter Return. Big Bear is obligated to maintain the status of claims and leases through filing appropriate documentation and remitting rent to the US Bureau of Land Management and the Wyoming State Land Department annually.
BLM Rent
Rent on mining claims registered with the BLM is due by September 1 annually, as shown below:
·
2010 - 2011
452 claims
$140/claim
$63,280
·
2011 - 2012
452 claims
$140/claim
$63,280
·
2012 - 2013
452 claims
$140/claim
$63,280
Wyoming State Leases
State of Wyoming Gold, Silver and Precious Metals Lease numbers 0-42519 and 0-42520 are paid annually at a rate of $1 per acre for years 1 - 5 ($200.00 total per year) and $2 per acre in years 6 - 10 ($400.00 total per year). Annual rentals are payable in advance for the first year and each year thereafter. No notice of rent due will be sent, however if no rent is received in the Wyoming Office of State Lands and Investments, a notice of default will be sent and a penalty of $.50 per acre will be assessed.
The royalty rate for gold, silver, diamonds and other precious metals and minerals will be determined by agreement between the Board of Land Commissioners and the lessee prior to conducting commercial mining operations.
Reclamation to re-establish native grasses, forbs and shrubs and a final reclamation to achieve cover, species composition and life form commensurate with the surrounding plant community or desired condition is required. Land owners should be consulted on desired plant mix on private lands. All activity may be subject to less restrictive stipulations on a case-by-case basis.
History
The Rattlesnake Hills were prospected in the late 1800s and early 1900’s when a number of pits and shallow workings were dug. Not much of interest was found, as no mining district was ever organized in this are, nor were the Rattlesnake Hills included in any other mining district.
Modern prospecting activity in the Rattlesnake Hills began in 1982 when anomalous gold was found associated with sulfide hosted in a metachert exhalite at the Lost Muffler prospect along UT Creek by a Wyoming State geologist (Hausel and Jones, 1982). Gold was also found in quartz veins, breccias, and stockworks hosted in Archean rocks. Later investigations found Tertiary volcanic rocks and breccias to be gold-bearing also. According to Hausel (1996) several companies investigated gold potential in the Rattlesnake Hills after 1982 but only two, Newmont Exploration (“Newmont”) and American Copper and Nickel (“ACNC”) continued with sustained exploration programs leading to drill testing. Between 1983 and 1987 ACNC is reported to have drilled 9825 ft. in 32 drill holes. Newmont completed 14 drill holes totaling 10,705 ft between 1993 and 1995. By the end of Newmont’s interest in the Rattlesnake Hills, a low grade, non-compliant “resource” had reportedly been outlined (Hausel, 1996).
It is believed that virtually all the work including drilling was confined to the area where claims and leases are now held by Evolving Gold Corp. It is unknown whether any of the geochemical sampling completed by ACNC or Newmont occurred on ground now under option to Big Bear Mining.
Glasscock optioned the properties to Crescent Resources in August, 2009. Crescent completed a preliminary work program consisting of reconnaissance geology and sampling, orientation soil sampling, and stream sediment and ground magnetic surveys on parts of the property.
In the 1950’s the igneous petrology of the Tertiary alkaline and calc-alkaline plugs in the Rattlesnake Hills was investigated first by Carey (1954, 1959) and later by Pekarek (1974, 1977), both of whom were graduate students at the University of Wyoming, Laramie. More recently Hoch and Frost (1993) described the igneous petrology of nearly 50 mid-Tertiary sills, dikes, stocks, and plugs in the Rattlesnake Hills. In 1994 G. Langstaff of the Colorado School of Mines, Golden, Colorado conducted geologic mapping as a graduate student. This work led to publication of several maps by the Wyoming State Geological Survey (WSGS) (see Langstaff, 1994a, 1994b, 1994c, and 1994d).
Beginning in 1982 the Wyoming State Geological Survey (WSGS) investigated the potential for gold mineralization in the Rattlesnake Hills as part of regional work funded by the University of Wyoming’s Mining and Mineral Resource and Research Institute (Hausel and Jones, 1982). In 1992 and 1993 supracrustal rocks and Tertiary volcanic and subvolcanic rocks of the Rattlesnake Hills were geologically mapped by the WSGS (Hausel, 1996). At the same time, reconnaissance and prospect rock geochemical sampling was conducted. Most of the samples were collected south of the Crescent Property but at least one sample was collected on ground now part of the RHN Property. WSGS compilations of regional geologic mapping of the Rattlesnake Hills were initially published by Hausel and Sutherland (2003) and more recently a geologic map of the Barlow Gap Quadrangle (see Figure 1 for location) was completed in cooperation with the US Geological Survey (Sutherland and Hausel, 2005).
Present Condition
The abbreviated 2010 work program was exploratory in nature with the objectives to refine geologic models and provide supporting surface geochemistry to enable drillhole targeting. Geologic mapping on both local and regional scales has been conducted by a team of experienced geologists focusing on structure, alteration and prospect sampling. The Company is currently evaluating data obtained from soil samples, mapping, detailed evaluation and preliminary drill results (core samples) from its 2010 exploration season to develop highly focused drill targets for 2011.
Existing or potential economic significance
The Rattlesnake Hills Properties were initially acquired because they ground encompass what was thought to be geologically similar to rocks hosting the historic Newmont showing and then emerging news released by Evolving Gold.
Crescent Resources conducted a reconnaissance - level exploration program September - November, 2009 focusing primarily on the DC, SR, QL, and BG claim blocks.
Significant indicators of interest include rock and soil sample geochemical anomalies.
DC Claims
The DC claims encompass three large and three smaller Eocene - aged phonolite intrusives and one trachyte intrusive emplaced into Archean suprucrustal rocks. Contacts are covered by extensive talus and alluvial areas in most cases. Reconnaissance rock samples were collected. Three volcanic breccia samples thought to possibly represent diatreme contained 32 ppb to 42 ppb Au. An additional sample of Archean metabasalt limonitic fault breccia contained 452 ppb Au. Two soil geochemistry lines (43 samples) identified two anomalous Au intervals with samples containing up to 27 ppb and 43 ppb Au.
BG Claims
The BG claims encompass a quartz latite intrusive complex intruded into Archean - aged granitic gneiss.
Twenty-nine reconnaissance rock samples were collected. Two samples contained 25 ppb and 30 ppb Au, four samples contained values between 0.5 ppm and1.3 ppm Ag, four samples contained 2.8 ppm to 7.7 ppm Ag, and three more samples contained 16.3 ppm to 58.3 ppm Ag. Five of these samples also were enriched in Pb (87 ppm - 507 ppm) and zinc (192 ppm - 909 ppm). Anomalous Ag (+/- Pb+Zn+Au) samples were collected from weakly to moderately silicified quartz latite porphyry along two structural zones.
QL Claims
The QL claims cover approximately 2,000 acres and encompass an area where two regional faults intersect, the northeast trending UT Creek Fault and the East trending North Granite Mountain Fault. A quartz latite stock is intruded along the UT Creek Fault. Rock samples were collected from iron-oxidized, fractured metabasalts and graywackes lying adjacent to UT Creek including the western edge of the quartz latite stock. Forty six reconnaissance rock samples were collected from the claim block; One sample from an easterly trending fault contained 739 ppb Au and three samples collected adjacent to the quartz-latite stock contained gold values of 234, 56, and 28 ppb Au. Anomalous Cu values were widespread; 19 samples contained greater than 60 ppm including seven samples ranging from 248 ppm to 776 ppm, three samples ranging from 1,225 ppm to 3,470 ppm and three more containing values from 14,550 ppm to 33,370 ppm copper.
Item 3.
Item 3. Legal Proceedings
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.
Item 4.
Item 4. (Removed and Reserved)
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Through February 22, 2011our common shares were quoted on the OTCBB under the symbol “BGBR.” Effective February 23, 2011 our common shares are quoted on the OTCQB under the same symbol. The following quotations, obtained from Yahoo Finance, reflect the high and low bids for our common shares based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The high and low bid prices of our common stock for the periods indicated below are as follows:
(1) Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.
(2) No trades occurred during this period.
Our common shares are issued in registered form. Empire Stock Empire Stock Transfer Inc., 1859 Whitney Mesa Dr Henderson, NV 89014 (Telephone: (702) 818-5898; Facsimile: (702) 974-1444) is the registrar and transfer agent for our common shares.
On March 31, 2011, we had 13 registered shareholders and 81,890,000 common shares outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
Equity Compensation Plan Information
We have not approved or adopted any equity compensation plans.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
We sold the following equity securities which were not registered under the Securities Act during the year ended December 31, 2010 that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended December 31, 2010.
On July 20, 2010, we issued 450,000 common shares to Vista Partners LLC pursuant to our letter agreement with Vista Partners LLC dated June 10, 2010 (the “Letter Agreement”). The securities issued under the Letter Agreement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. These shares were issued pursuant to an exemption from registration in section 4(2) of the Securities Act of 1933.
On September 9, 2010, in accordance with our company’s Rattlesnake Hills Option Agreement dated August 2, 2010, 1,000,000 shares of our company’s common stock were issued as consideration for the property.
Effective November 12 and November 18, 2010, we issued 1,000,000 shares of our common stock respectively in a private placement at a purchase price of $0.25 raising gross proceeds of $500,000. We have issued all of the shares to non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On December 16, 2010 upon renewal of the consulting agreement with VISTA we issued further 450,000 shares of the Company’s common stock after the Board of Directors’ approval. The securities issued under the Letter Agreement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. These shares were issued pursuant to an exemption from registration in section 4(2) of the Securities Act of 1933.
On December 30, 2010 the Company issued 3,750,000 common shares of the Company to the Company’s directors, officers and the project manager after the Board of Directors’ approval. The securities issued under the consulting agreements have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. These shares were issued pursuant to an exemption from registration in section 4(2) of the Securities Act of 1933.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended December 31, 2010.
Item 6.
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 8 of this annual report.
Our audited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
The following information should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this report. Statements contained herein which are not historical facts are forward-looking statements, including statements relating to our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking statements made by us are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.
Results of Operations
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended December 31, 2010 and 2009.
Our operating results for the years ended December 31, 2010 and 2009 are summarized as follows:
Expenses
Our total expenses for the years ended December 31, 2010 and December 31, 2009 are outlined in the table below:
Expenses during the year ended December 31, 2010 significantly increased to $1,992,338 from $16,592 in 2009, because prior to fiscal 2010 the Company was inactive, while during the year ended December 31, 2010 the Company acquired mineral interests in Ontario, Canada and Wyoming, USA and carried out significant exploration activities during the year, which also caused a significant increase in general and administrative expenses as well as consulting and management fees.
Revenue
We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter. Interest income during the year ended December 31, 2010 is $823 vs. $Nil in 2009.
Liquidity and Financial Condition
We will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through draw downs from equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses. Additionally, there is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.
Liquidity and Capital Resources
The report of our auditors on our audited consolidated financial statements for the fiscal year ended December 31, 2010, contains a going concern explanatory paragraph as we have suffered losses since our inception. We have minimal assets and have achieved no operative revenues since our inception. We have depended on loans and sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations. We will be required to raise additional capital over the next twelve months to meet our ongoing expenses.
Plan of Operation and Cash Requirements
Estimated Net Expenditures During the Next Twelve Months
We intend to conduct exploration activities on our newly optioned properties over the next twelve months. We estimate our operating expenses and working capital requirements for the next twelve month period to be as follows:
Specifically, we estimate our operating expenditure requirements for the next 12 months to be as follows:
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, over the next 12 months to pay for our ongoing expenses. These expenses include general and administrative, exploration costs, property payments and future property acquisitions. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. 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.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
As of December 31, 2010, the Company has accumulated losses of $2,047,783 since inception, has a working capital of $183,687 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2011. The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Please see our audited financial statements include all critical accounting policies.
Recent Accounting Pronouncements
Management does not expect the future adoption of any recently issued accounting pronouncement to have a significant impact on its financial position, results of operations, or cash flows.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 8.
Item 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Big Bear Mining Corp.
(An Exploration Stage Company)
Tempe, Arizona
We have audited the accompanying consolidated balance sheets of Big Bear Mining Corp. (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years then ended and for the period from April 14, 2005 (inception) through December 31, 2010. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Big Bear Mining Corp. as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended, and for the period from April 14, 2005 (inception) through December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the consolidated financial statements, the Company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2011 raise substantial doubt about its ability to continue as a going concern. The 2010 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
LBB & Associates Ltd., LLP
Houston, Texas
March 28, 2011
BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
See accompanying notes to financial statements
BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December, 2010 and 2009
and the Period from April 14, 2005 (Inception) through December 31, 2010
See accompanying notes to financial statements
BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Period from April 14, 2005 (Inception) through December 31, 2010
See accompanying notes to financial statements
BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December, 2010 and 2009
and the Period from April 14, 2005 (Inception) through December 31, 2010
See accompanying notes to financial statements
BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010
NOTE 1 - NATURE OF BUSINESS
Nature of Business
Big Bear Mining Corp. ("Big Bear" or the “Company”) was incorporated in Nevada on April 14, 2005. Big Bear is a gold and mineral exploration company which engages in acquiring, exploring and evaluating mineral properties and is currently focused on its mineral property interests located in northern Ontario, Canada and the state of Wyoming. The company is in the exploration stage and has earned no revenues from its mining properties or claims. On April 1, 2010 the Company incorporated its wholly owned Golden Bear Mining Corp. (“Golden Bear”), a private company registered in Nevada. As of December 31, 2010 and the date of this filing, there has been no activity in Golden Bear.
Going concern
Big Bear's consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Big Bear has incurred net losses of $2,047,783 since inception. This condition raises substantial doubt about Big Bear's ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.
The business of exploring for gold and other minerals involves a high degree of risk and there can be no assurance that planned exploration and development programs will result in profitable mining operations. The recoverability of amounts shown for mineral properties and the Company’s ability to continue as a going concern is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain financing to complete their development, and/or the realization of proceeds from the sale of one or more of its properties.
Big Bear is working to secure additional financing to fund its mineral exploration and development activities and to meet its obligations and working capital requirements over the next twelve months.
There are no assurances that Big Bear will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support Big Bear's working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, Big Bear will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to Big Bear. If adequate working capital is not available Big Bear may be required to curtail its operations.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements included all of the accounts of the Company and its wholly-owned subsidiary, Golden Bear Mining Corp., a Nevada Corporation. All intercompany transactions have been eliminated.
Exploration Stage Company
The Company complies with Accounting Standard Codification (“ASC”) 915 for its characterization of the Company as an Exploration Stage Company.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Foreign Currency Translation
The consolidated financial statements are presented in United States dollars. In accordance with ASC 830, ‘‘Foreign Currency Translation’’, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.
Mineral Interest
Mineral property acquisition costs are capitalized in accordance with ASC 932. Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. To date the Company has not established any reserves on its mineral properties.
Impairment of Long-Lived Assets
The Company reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in the Company’s current business model. For purposes of recognition and measurement of an impairment loss, a long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.
Environmental Costs
The Company is engaged in mineral exploration and may become subject to certain liabilities as they relate to environmental cleanup of well sites or other environmental restoration procedures as they relate to the drilling of mining site. Should it be determined that a liability exists with respect to any environmental cleanup or restoration, the liability to cure such a violation could fall upon the Company. During the year ended December 31, 2010, the Company recorded estimated environmental restoration costs as other liability.
Asset Retirement Obligations
The Company is engaged in mineral exploration and may become subject to certain liabilities as they relate to environmental cleanup of drilling sites.
The Company accounts for asset retirement obligations in accordance with ASC 410-20, Asset Retirement and Environmental Obligations. The asset retirement obligations represent the estimated present value of the amounts expected to be incurred to plug, abandon, and re-mediate the producing properties at the end of their productive lives, in accordance with state laws, as well as the estimated costs associated with the reclamation of the surrounding property. The Company determines the asset retirement obligations by calculating the present value of estimated cash flows related to the liability. The asset retirement obligations are recorded as a liability at the estimated present value as of the asset’s inception, and as exploration costs.
The estimated liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of the mining property, and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligations. Revisions to the asset retirement obligations are recorded with an offsetting change to exploration costs. Because of the subjectivity of assumptions, the costs to ultimately restore the Company’s site may vary significantly from prior estimates.
Use of Estimates
The preparation of financial statements in conformity generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the period. Actual results may differ from those estimates.
Basic Loss per Share
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. The weighted average number of shares outstanding during the periods has been retroactively restated to reflect a forward stock split of 50 shares for 1 share, effective January 21, 2010.
Income Taxes
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Financial Instruments
As of December 31, 2010, the Company's financial instruments consist primarily of cash and restricted cash. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Fair value of financial instruments
Under the Financial Accounting Standards Board (FASB”) issued Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, the Company is permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Consistent with Fair Value Measurement Topic of the FASB ASC, we implemented guidelines relating to the disclosure of our methodology for periodic measurement of our assets and liabilities recorded at fair market value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
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Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
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Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
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Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable.
The Company’s Level 1 assets primarily include cash, cash equivalents and restricted cash. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. The carrying amounts of accounts payable, amounts due to related parties, and shareholder loans, approximate their fair values due to the immediate or short-term maturities of these financial instruments. We have no level 2 or 3 assets or liabilities.
Newly Adopted Accounting Pronouncements
Management does not expect the future adoption of any recently issued accounting pronouncement to have a significant impact on its financial position, results of operations, or cash flows.
NOTE 3 - RESTRICTED CASH
Restricted cash of $54,200 as of December 31, 2010 consists of cash deposited by the Company with the Department of Environmental Quality of the State of Wyoming as reclamation cash bond. The full amount of $54,200 was repaid to the Company on March 1, 2011 when the cash bond was replaced by a surety bond.
NOTE 4 - MINERAL RIGHTS
During the year ended December 31, 2010 the Company incurred exploration costs of $25,834 on evaluation of potential mineral rights acquisition.
Red Lake Properties, Ontario, Canada
Rubicon Option Agreement
Effective April 1, 2010, the Company entered into a property purchase option agreement (the “Rubicon Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”) for the right and option to acquire from Rubicon up to 100% interest in a total of 14 mining claims (the “Rubicon Claims”) in the Red Lake Mining Division of Northwestern Ontario, Canada. Considerations for the 100% interest are as follows:
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Initial cash payment of $20,000 (paid);
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Cash payment of $15,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2011;
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Cash payment of $20,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2012;
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Cash payment of $25,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2013; and
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Cash payment of $30,000 on April 1, 2014.
In accordance with the Rubicon Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000. The Rubicon Option Agreement is in good standing as of December 31, 2010 and the date of this filing.
Sol d’or Option Agreement
Effective April 11, 2010 the Company entered into a property purchase option agreement (the “Sol d’or Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”), whereby the Company is entitled to acquire from Rubicon up to 100% interest in nine claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the property. Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of $16,000 (paid) and issuance of 20,000 shares of the Company’s common stock (issued);
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Cash payment of $15,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2011;
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Cash payment of $20,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2012;
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Cash payment of $25,000 and issuance of 20,000 shares of the Company’s common stock on April 11, 2013; and
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Cash payment of $35,000 on April 11, 2014.
In accordance with the Sol d’or Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000. The Sol d’or Option Agreement is in good standing as at December 31, 2010 and the date of this filing.
Stevens Lake Option Agreement
Effective April 13, 2010 the Company entered into a property purchase option agreement (the “Stevens Lake Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”), whereby the Company is entitled to acquire up to 100% interest in three claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the Property.
Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of $7,000 (paid) and issuance of 20,000 shares of the Company’s common stock (issued);
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Cash payment of $12,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2011;
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Cash payment of $15,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2012;
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Cash payment of $20,000 and issuance of 20,000 shares of the Company’s common stock on April 13, 2013; and
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Cash payment of $30,000 on April 13, 2014.
In accordance with the Stevens Lake Option Agreement, Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000. The Stevens Lake Option Agreement is in good standing as at December 31, 2010 and the date of this filing.
The Company must meet the following work commitments on the Red Lake properties each year:
From April 1, 2010 to December 31, 2010, the Company incurred total exploration costs of $170,099 on the three Red Lake mineral interests, which met the work commitments required by the government of Ontario for the year ended December 31, 2010.
Rattlesnake Property, Wyoming, USA
Rattlesnake Hills Option Agreement
Effective August 2, 2010 the Company entered into a property purchase option agreement (the “Rattlesnake Hills Option Agreement”) with John Glasscock, a director of the Company, whereby the Company is entitled to acquire up to 100% interest in 452 mineral claims located in Natrona County, Wyoming. Considerations for the 100% interest in the claims are as follows:
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Initial cash payment of $250,000 (paid);
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Issuance of 1,000,000 shares of the Company’s common stock within 30 days of the agreement (issued);
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Issuance of second 1,000,000 shares of the Company’s common stock on or before the first anniversary of the agreement;
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Issuance of third 1,000,000 shares of the Company’s common stock on or before the second anniversary of the agreement;
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Payments for all property costs which include annual lease payments estimated at $63,000 required by the State of Wyoming (2010 payments were made).
In accordance with the Rattlesnake Hills Option Agreement Mr. Glasscock retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000.
The work commitment on Rattlesnake Hills Property in accordance with the Option Agreement is $800,000 during the first year, $1,200,000 during the second year and $1,600,000 during the third year. The Rattlesnake Hills Option Agreement is in good standing as at December 31, 2010 and the date of this filing.
From August 2, 2010 to December 31, 2010, the Company incurred total exploration costs of $721,124 on the Rattlesnake mineral interest.
The Company has recorded a liability for the estimated reclamation costs from the initial work performed on the Rattlesnake property. The liability was estimated to be $23,615 as at December 31, 2010.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 2010 the Company paid management and consulting fees of $74,000 to the President of the Company, management and consulting fees of $70,000 to the Company’s Vice President of Exploration, management and consulting fees of $29,623 to a director of the Company, and $21,000 to a director and CFO of the Company respectively.
During the year ended December 31, 2010 the Company entered into a property purchase option agreement with a director of the Company (Note 4).
During the year ended December 31, 2010 the Company incurred $447,177 of geological consulting fees, travel costs to the Company’s mining sites, field supplies and other exploration related costs to a private company of which a director of the Company is a principal. As at December 31, 2010 the Company has a balance of $109,438 owed to this private company.
During the year ended December 31, 2010 the Company issued 3,500,000 shares of the Company’s common stock to directors and officers of the Company for services rendered with a total value of $315,000 based on the closing trading price of the Company’s common shares on the date of Board approval (Note 7).
Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment.
Prior to the Company’s office rental agreement signed on April 15, 2010, an officer provided office services without charge. Such costs are immaterial to the consolidated financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
NOTE 6 - COMMITMENTS
Office Rent
On April 15, 2010 the Company entered into an office rent agreement at $1,187 per month for office space in Arizona, which on August 2, 2010 was amended to $1,999 per month due to increased office space. The lease was amended again to increase rent to $2,219, with a one year term ending May 31, 2012. The term of the agreement is one year ending April 30, 2011. A total deposit of $5,730 was paid upon signing and amendment of the agreement.
Consulting Agreement with VISTA
On June 10, 2010 the Company entered into a consulting agreement with VISTA Partners LLC (“VISTA”), whereby VISTA provides consulting services as the Company’s capital market advisor. The term of the agreement is six months, renewed automatically for an additional six months at the end of the term. Consideration for the six month term is cash payments of $10,000 per month and 450,000 common shares of the Company issuable within 30 days after the signing of the agreement (issued).
On December 16, 2010 the Company renewed the consulting agreement with VISTA and issued 450,000 common shares of the Company for the renewal.
Director and Officer Compensation
On December 30, 2010 the Company entered into a consulting agreement with a director of the Company for remuneration of $3,000 per month for the term of June 2, 2010 to June 2, 2011.
On December 30, 2010 the Company entered into a consulting agreement with a director of the Company for remuneration of $3,000 per month for the term of December 20, 2010 to December 20, 2011.
On December 30, 2010 the Company entered into a consulting agreement with a director and the Chief Financial Officer of the Company for the term of July 20, 2010 to July 20, 2012, with remuneration of $3,000 per month for July to November, 2010, which upon his appointment as the Chief Financial Officer of the Company increased to $6,000 per month from December, 2010 to the end of the term.
On December 30, 2010 the Company entered into a consulting agreement with a director and the President of the Company for the term of March 16, 2010 to March 16, 2012, with remuneration of $4,000 per month for April to July, 2010 and $10,000 per month from August, 2010 to the end of the term. In the event that the consulting agreement is terminated by the Company prior to expiration of the term without cause, the director and President will receive a payment equivalent to two years of consulting fees at $10,000 per month.
On December 30, 2010 the Company entered into a consulting agreement with the project manager of the Company for the term of August 16, 2010 to August 16, 2012, with remuneration of $3,500 per month for September to November, 2010 and $4,250 per month from December, 2010 to the end of the term.
NOTE 7 - COMMON STOCK
On January 21, 2010, the Nevada Secretary of State effected a forward stock split of the Company’s authorized and issued and outstanding shares of common stock on a one (1) old common shares for fifty (50) new common share basis, such that the Company’s authorized capital increased from 30,000,000 shares of common stock with a par value of $0.001 to 1,500,000,000 shares of common stock with a par value of $0.001 and, correspondingly, the Company’s issued and outstanding shares of common stock increased from 2,779,000 shares of common stock to 138,950,000 shares of common stock. The stock split is presented retroactively in these consolidated financial statements.
In January, 2010 the Company received $50,000 as subscription for private placement of 250,000 shares of the Company’s common stock at $0.20 per share. The related common shares were not issued by December 31, 2010 and the date of this filing.
In accordance with the Company’s Sol d’or Option Agreement dated April 11, 2010, 20,000 common shares of the Company valued at $29,200 were issued as consideration for the property.
In accordance with the Company’s Stevens Lake Option Agreement dated April 13, 2010, 20,000 common shares of the Company valued at $15,800 were issued as consideration for the property.
On April 19, 2010 Steve Rix, an officer and director of the Company, acquired a total of 30,000,000 shares of the Company’s common stock from Aaron Hall, the Company’s former officer and director, in a private transaction for approximately $2,000.
On April 27, 2010, the Company entered into a share cancellation agreement with Aaron Hall, whereby Mr. Hall agreed to return to the Company and cancel 66,750,000 shares of the common stocks held by him. The shares were returned to treasury and cancelled by the Company on May 21, 2010.
In accordance with the consulting agreement with VISTA dated June 10, 2010, the Company issued 450,000 shares of the Company’s common stock on July 20, 2010 to VISTA. The related shares are valued at $130,500 based on the closing trading price of the Company’s common shares on the date of the agreement.
On September 9, 2010, in accordance with the Company’s Rattlesnake Hills Option Agreement dated August 2, 2010, 1,000,000 shares of the Company’s common stock were issued as consideration for the property. The related shares were valued at $200,000 based on the closing trading price of the Company’s common shares on the date of the agreement.
On November 18, 2010 the Company issued 1,000,000 shares of the Company’s common stock at $0.25 per share for gross proceeds of $250,000.
On December 16, 2010 upon renewal of the consulting agreement with VISTA the Company issued an additional 450,000 shares of the Company’s common stock after the Board of Directors’ approval. The shares were valued at $40,500 based on the closing trading price of the common stock on the date of the issuance.
On December 30, 2010 the Company issued 3,750,000 common shares of the Company to the Company’s directors, officers and the project manager after the Board of Directors’ approval. The related shares were valued at $337,500 based on the closing trading price of the common stock on the date of the Board approval.
On November 12, 2010 the Company issued 1,000,000 common shares of the Company at $0.25 per share for gross proceeds of $250,000.
Intosh Financing Agreement
Effective March 31, 2010, the Company entered into a financing agreement (the "Financing Agreement") with Intosh Services Limited ("Intosh"), whereby the Company had the right to request Intosh to purchase up to $1,400,000 of the Company's securities until March 31, 2011, unless extended by either the Company or Intosh for an additional 12 months.
Under the terms of the Financing Agreement, the Company had the right from time to time request a purchase from Intosh up to $200,000 (each, an "Advance") per request to fund the Company’s operating expenses, acquisitions, working capital and general corporate activities. Following receipt of any Advance, the Company should issue Intosh common stocks of the Company at $0.70 per share. In accordance with the Financing Agreement the Company received Advances of $1,400,000 for which 2,000,000 shares were issued on September 7, 2010.
NOTE 8 - INCOME TAXES
The Company follows Statement of ASC 740 "Accounting for Income Taxes." Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized.
The provision for refundable Federal income tax consists of the following:
The main differences between the statutory rate of 34% and the Company’s effective rate of 0% are non-deductible stock-based compensation and the change in valuation allowance.
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
At December 31, 2010, Big Bear had an unused net operating loss carryover approximating $1,515,000 that is available to offset future taxable income; it expires beginning in 2025.
NOTE 9 - SUBSEQUENT EVENT
In March, 2011 the Company entered into a financing agreement with Intosh. The agreement allowed for up to $500,000 of common stock at $0.15 per share to be purchased by Intosh through March 31, 2011. The Company received $250,000 for 1,666,667 shares. The shares have not been issued as of the date of this filing.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods.
Item 9A.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive and financial officers concluded that our disclosure controls and procedures are effective to ensure the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed and reported within the time periods specified in the SEC’s rules and forms.
Management’s Annual Report on Internal Control over Financial Reporting
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2010.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report.
There has been no change in our internal controls over financial reporting during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B.
Item 9B. Other Information
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
Name
Position Held
with the Company
Age
Date First Elected or Appointed
Steve Rix
President, Secretary, Treasurer and Director
March 16, 2010
John Glasscock
Director, VP of Exploration
April 19, 2010
James G. Baughman
Director
June 1, 2010
Michael Schifsky
Interim Chief Financial Officer and Director
July 1, 2010
Henry W. Konerko
Director
December 21, 2010
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Steve Rix - President, Secretary, Treasurer and Director
Steve Rix has over 25 years of business experience in emerging markets and start up endeavors. His resume includes working in not less than 12 different industry sectors in both public and private companies. He has provided external consulting services to a number of small and medium size businesses. He also has provided internal leadership in companies in the roles of National Sales Director, Vice President of Development, President, and CEO
From 2004 until 2007 Mr. Rix actively built Foundations Financial, a full service asset management firm. The company began with 7 people and grew to over 700. While there, Mr. Rix orchestrated the amalgamation of 5 companies to form a new entity PERSONNIQ which was prepared for a reverse merger on the NASDAQ OTCBB.
In late 2007 until 2009 Mr. Rix co-founded Blu Financial Network. While there his company specialized in high level confidential introductions between capital sources and economic opportunities. Capital sources included private equity firms, private family offices, hedge funds, and high net-worth individuals. Amongst others, the economic opportunities included, but were not limited to, health care, hospitality, movies, natural resources, multi-family residential, and gaming.
Simultaneous to those efforts until 2010 Mr. Rix was actively consulting with a number of small companies. Focusing primarily on work out strategies for struggling businesses and transition planning for businesses looking to revamp their efforts in the present economy; through Rix Solutions Consulting he was able to effectively direct not less than 8 companies to greater productivity from 2007 until 2010.
Mr. Rix currently resides in Tempe, AZ where he serves in the role of President & CEO of Big Bear Mining Corp.
John Glasscock - Director
John Glasscock is a geologist with over 25 years of experience in the mineral exploration industry including involvement with the startup of four junior mining companies. He is the founder of Cowboy Exploration which for over 15 years has had extensive experience generating and managing projects throughout the Western US, Mexico, and China. Mr. Glasscock resides in Laramie, Wyoming.
Since 2008, Mr. Glasscock and Cowboy Exploration have been primarily involved in the generation, marketing, and exploration of two projects: Rattlesnake Hills Gold properties in Wyoming and Paradox Basin and Holbrook Basin Potash properties in Utah and Arizona. The Wyoming gold properties were optioned to Crescent Resources who funded preliminary exploration directed by Cowboy Exploration (2009-2010). The Arizona and Utah Potash properties were optioned to American Potash Corp. for whom Mr. Glasscock remains a principal consultant.
Cowboy Exploration, under the direction of Mr. Glasscock, assembled a package of uranium properties in Wyoming which were optioned to Tournigan Energy Corp. (2005). Cowboy Exploration subsequently provided direction and technical support to Tournigan Energy Corp., USA by producing an extensive uranium property position in Wyoming, Arizona, and South Dakota. Exploration programs were conducted including the drilling of several projects between 2005 and 2008.
James G. Baughman - Director
Mr. Baughman has worked as a geologist for more than 25 years in mining operations and mineral exploration projects for precious, base metals, and uranium. Mr. Baughman has provided technical services and project management for a number of major and junior mining companies.
From September 2010 to Present Mr. Baughman has been employed by Terra Mining Corp. as Chief Operating Officer.
From July of 2004 to May of 2006, Mr. Baughman was the co-founder, President and Chief Executive Officer of High Plains Uranium Corp, where he managed the company’s corporate finance, accounting, legal and regulatory requirements. He also managed a successful initial public offering on the TSX.
From May of 2006 to October of 2006, Mr. Baughman was the Chief Executive Officer of Kenai Resources, formerly known as Triumph Gold Corp., where he managed the company's properties in Venezuela and Oregon. He also managed the consulting engineers and geologists, and prepared engineering reports.
From October of 2006 to the September 2010, Mr. Baughman led an acquisition of mineral rights on uranium properties, hired professional staff, developed company presentation and conducted road shows to investors and potential investors for US Uranium Corp., a company he co-founded. Mr. Baughman also served as Chief Operating Officer and a Director in March 2010 of American Mining Corporation.
James Baughman is a Director of Big Bear Mining Corp. Mr. Baughman is currently assisting several private mining development companies and is on the Advisory Board of a Canadian exploration company. In July of 1983, Mr. Baughman received a Bachelor of Science degree in Geology from the University of Wyoming, Laramie. He is a registered professional geologist in the State of Wyoming. Mr. Baughman resides in Aurora, Colorado.
Michael J. Schifsky - Interim Chief Financial Officer and Director
Michael Schifsky is a seasoned professional with over 25 years of financial and operational management experience and has served as a Chief Financial Officer with both public and private companies. His background includes significant roles in organizations ranging from large established public companies to small and mid-sized rapid growth enterprises where he gained critical experience in leadership and organizational development, capital formation, mergers and acquisitions, SEC financial reporting, Sarbanes-Oxley compliance requirements and corporate governance.
As a Chief Financial Officer, he has played critical roles in the successful growth of closely held and private equity backed organizations in the manufacturing and distribution industries. Mr. Schifsky also has served in consulting and financial advisory roles for such notable companies as American Express, Apollo Group, and Amcor Limited.
From 2006 to 2007, Mr. Schifsky served as Chief Financial Officer and director for Clear Choice Financial, Inc. From 2008 to August 2009, he was an independent consultant providing financial advisory services and served as interim Chief Financial Officer for MD Helicopters. From September of 2009 to present, Mr. Schifsky has served as Chief Financial Officer for Millennium Energy Group, an early stage high tech energy storage solutions provider for the alternative energy and telecommunications industries. He began his career in the Philadelphia office of Ernst & Young, a Big Four accounting firm where he earned his CPA. Mr. Schifsky graduated from Villanova University in 1983 with a B.S. Accountancy. Mr. Schifsky resides in Chandler, Arizona.
Henry W. Konerko - Director
Mr. Konerko has more than 40 years of experience in corporate and private business ventures. In 1998, he retired from a twenty-year career as President of Phelps Dodge Mining Corp., (now part of FreeportMcMoRan Copper and Gold, NYSE ticker FCX), where he was responsible for the domestic and international copper mining, smelting, refining and rod and wire manufacturing operations. He remains active in many business endeavors including an Arizona-based venture capital firm where investment and banking relationships exist with Goldman Sachs, Merrill Lynch, Fidelity, Smith Barney, Goldwater Bank, Chase Bank and Compass Bank. He is also currently the owner/manager of a residential and commercial real estate investment company and a medical infusion medication company. In addition, he serves as CEO and board member of a non-profit medical health care organization named Mission of Mercy serving the areas of Maryland, Pennsylvania, Texas and Arizona. Mr. Konerko has undergraduate degrees in accounting and business administration. His advanced degrees include an MS in management and a Ph.D. in international management. He has also completed the Advanced Management Program at Harvard Business School. Mr. Konerko resides in Scottsdale, Arizona.
Consulting Agreements
Other than as set out below, we have no formal employment agreements with any of our employees, directors or officers.
Effective March 16, 2010, Steve Rix entered into a consulting agreement to act as both an officer and director of our company. The agreement for his role as officer is a 24 month term with an option for renewal. As compensation for his role as officer, Mr. Rix receives payment of $7,000 per month for the duration of his contract term. He also received a relocation package. The agreement for his role as director is for a 24 month term with an option for renewal. As compensation for his role as director, Mr. Rix receives $3,000 per month for the duration of his contract term, coverage under the company’s D&O insurance policy and reimbursement for all company-related travel expenses. In the event that the consulting agreement is terminated by the Company prior to the expiration of the term without cause, Mr. Rix will receive a payment equivalent to two years of consulting fees at $10,000 per month.
Effective June 1, 2010, James G. Baughman entered into a consulting agreement to act as a director of our company for a 12 month term with an option for renewal. As compensation for his role as director, Mr. Baughman received 1,000,000 restricted shares of company stock as well as payment of $3,000 per month for the duration of his contract term, coverage under the company’s D&O insurance policy and reimbursement for all company-related travel expenses.
Effective July 20, 2010, Michael Schifsky entered into a consulting agreement to act as a director and CFO of our company for a 24 month term with an option for renewal. As compensation for his role as director, Mr. Schifsky received 1,000,000 restricted shares of company stock as well as payment of $3,000 per month for the duration of his contract term, $3,000 per month and 500,000 shares of common stock for his role as CFO coverage under the company’s D&O insurance policy and reimbursement for all company-related travel expenses.
Effective December 20, 2010, Henry W. Konerko entered into a consulting agreement to act as a director of our company for a 12 month term with an option for renewal. As compensation for his role as director, Mr. Konerko received 1,000,000 restricted shares of company stock as well as payment of $3,000 per month for the duration of his contract term, coverage under the company’s D&O insurance policy and reimbursement for all company-related travel expenses.
Family Relationships
There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
Mr. Rix underwent Chapter 7 bankruptcy proceeding in Arizona in 2009. It was filed in April and discharged in August. It was a personal bankruptcy for over $5,000,000 dollars in personal liability and guarantees. There are no outstanding issues relating to the bankruptcy or the discharge.
Other than the bankruptcy proceeding listed above, none of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:
1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity
ii.
Engaging in any type of business practice; or
iii.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.
Any Federal or State securities or commodities law or regulation; or
ii.
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended December 31, 2010, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with, with the exception of the following.
Name
Number of Late Reports
Number of Transactions Not Reported on a Timely Basis
Failure to File Required Forms
Michael Schifsky
1(1)
N/A
James G. Baughman
1(1)
N/A
John Glasscock
1(1)
N/A
(1) The director or officer was late filing a Form 3, Initial Statement of Beneficial Ownership.
Code of Ethics
Effective November 15, 2006, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company's president (being our principal executive officer) and our company's secretary (being our principal financial and accounting officer and controller), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
(1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
(3) compliance with applicable governmental laws, rules and regulations;
(4) the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and
(5) accountability for adherence to the Code of Business Conduct and Ethics.
Our Code of Business Conduct and Ethics requires, among other things, that all of our company's personnel shall be accorded full access to our president and secretary with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of our company's personnel are to be accorded full access to our company's board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by our president or secretary.
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our company's president or secretary. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the president or secretary, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another.
Our Code of Business Conduct and Ethics is filed herewith with the Securities and Exchange Commission as Exhibit 14.1 to this annual report. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Big Bear Mining Corp, 60 E. Rio Salado Parkway, Suite 900, Tempe, Arizona 85281.
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended December 31, 2010. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Nomination Process
As of December 31, 2010, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.
Audit Committee
Currently our audit committee consists of our entire board of directors. We do not have a standing audit committee as we currently have limited working capital and no revenues. With our recent management change however, we have positioned ourselves with an audit committee financial expert and independent directors should we be able to raise sufficient funding to execute our business plan. With success we will form an audit, compensation committee and other applicable committees utilizing our directors expertise.
Audit Committee Financial Expert
Our board of directors has determined that it has one member, Mike Schifsky, of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.
Item 11.
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
(a)
our principal executive officer;
(b)
each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended December 31, 2010 and 2009; and
(c)
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended December 31, 2010 and 2009,
who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
(1)
Mr. Rix was appointed the President, Treasurer, Secretary and a director of our company on March 16, 2010.
(2)
Mr. Skellern resigned as President, Treasurer, Secretary and a director of our company on March 16, 2010.
(3)
Mr. Schifsky was appointed a director of our company on July 20, 2010 and interim Chief Financial Officer on December 21, 2010.
(4)
Mr. Baughman was appointed a director of our company on June 1, 2010.
(5)
Mr. Konerko was appointed a director of our company on December 20, 2010.
(6)
Mr. Glasscock was appointed a director of our company on April 19, 2010.
Other than set out previously in this filing there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
2010 Grants of Plan-Based Awards
There were no grants of plan based awards during the year ended December 31, 2010.
Outstanding Equity Awards at Fiscal Year End
There were no outstanding equity awards at the year ended December 31, 2010.
Option Exercises and Stock Vested
During our Fiscal year ended December 31, 2010 there were no options exercised by our named officers.
Compensation of Directors
Other than as set out below, we do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of March 31, 2011, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
Percentage
of Class(1)
Steve Rix
Scottsdale, AZ
30,000,000
36.63%
John Glasscock
Laramie WY
1,000,000
1.22%
James G. Baughman
Aurora, CO
1,000,000
1.22%
Michael Schifsky
Tempe, AZ
1,500,000
1.83%
Henry W. Konerko
Scottsdale, AZ
1,000,000
1.22%
Directors and Executive Officers as a Group(1)
34,500,000 common shares
42.12%
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on March 31, 2011. As of March 31, 2011 there were 81,890,000 shares of our company’s common stock issued and outstanding
Changes in Control
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended December 31, 2010, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.
Director Independence
We currently act with five (5) directors, consisting of Steve Rix, John Glasscock, James G. Baughman, Michael Schifsky and Henry W. Konerko.
We have determined that James. G. Baughman and Henry W. Konerko are independent directors, as that term is used in Rule 4200(a)(15) of the Rules of National Association of Securities Dealers.
Currently our audit committee consists of our entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
Our board of directors has determined that it has one member of its audit committee, Michael Schifsky, who qualifies as an “audit committee financial expert” as defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.
From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.
Item 14.
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended December 31, 2010 and for fiscal year ended December 31, 2009 for professional services rendered by the principal accountant for the audit of our annual consolidated financial statements and review of the consolidated financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
(a)
Consolidated Financial Statements
(1)
Consolidated Financial statements for our company are listed in the index under Item 8 of this document
(2)
All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)
Exhibits
* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
BIG BEAR MINING CORP.
(Registrant)
Dated: March 31, 2011
/s/ “Steve Rix”
Steve Rix
President, Secretary, Treasurer and Director
(Principal Executive Officer)
Dated: March 31, 2011
/s/ “Michael Schifsky”
Michael Schifsky
Chief Financial Officer and Director
(Principal Financial Officer and Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: March 31, 2011
/s/ “Steve Rix”
Steve Rix
President, Chief Executive Officer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Dated: March 31, 2011
/s/ “Michael Schifsky”
Michael Schifsky
Chief Financial Officer and Director
(Principal Financial Officer and Principal Accounting Officer)
Dated: March 31, 2011
/s/ “John Glasscock”
John Glasscock
Director
Dated: March 31, 2011
/s/ “James G. Baughman”
James G. Baughman
Director
Dated: March 31, 2011
/s/ “Henry Konerko”
Henry Konerko
Director