Item 1. Business
The Company changed its business focus during 2007 and in 2008 and completed the changeover to mining exploration and development, which was the concept utilized when the Company was incorporated. In order to complete the transformation, the Company completed a reverse stock split during 2008, settled the majority of its liabilities through a share exchange for debt and acquired a privately held Canadian mining corporation with a single mining asset, former Gold Producer, The Bullmoose Mine, located in the Northwest Territory of Canada. In 2009 and 2010, the company completed a limited program on the mining properties in Canada, sufficient to maintain the lease and mineral claims in good standing.
The Company has since entered into a Settlement Agreement to rescind its interest in Bullmoose (see Item 3 - Legal Proceedings).
Item 1A.
Item 1A. Risk Factors
We are subject to a number of risks and uncertainties that could materially harm our business or inhibit our strategic plans. Before investing in our common stock, you should carefully consider the following:
·
we have a history of losses and may not be able to operate profitably or sustain positive cash flow in future periods;
·
we face competition in our markets and we expect this competition to intensify; and
·
we received a going concern opinion from our independent auditors report accompanying our December 31, 2011 and December 31, 2010 consolidated financial statements.
·
The Company is subject to a cease trade order, which was pronounced by the British Columbia Securities Commission on August 18, 2009 by reason of the Company’s failure to
file financial statements in British Columbia. The Company has applied to rescind the Order, however, until the Order is rescinded, the Company is prohibited from issuing securities. There is no assurance that the Company will be successful on its application to rescind the cease trade order.
Item 1B.
Item 1B. Unresolved Staff Comments
There are no unresolved issues with SEC Staff to the best knowledge of the directors.
Item 2.
Item 2. Properties
The Company's wholly owned Canadian subsidiary, Bullmoose Mines Ltd. (“Bullmoose”), owns Mineral Lease # 2775 and four (4) located mineral claims, Big Boo # 5, 6, 7 and 8, located in the Southwest Mackenzie Mining District (NTS 85 1/7) approximately 53 miles east south east of Yellowknife, NT Canada.
Item 3.
Item 3. Legal Proceedings
On October 22, 2010, the Company initiated a claim in the Supreme Court of British Columbia against a former officer of the Company and certain other companies controlled directly or indirectly by the former officer, to assert its interest in Bullmoose. On October 14, 2008, the Company had acquired Bullmoose as described in Note 3 to the attached consolidated financial statements. However, on or about August 10, 2010, the Company and its directors and officers other than the defendant discovered that that Defendant had apparently taken steps to sell the Company’s interest in Bullmoose to a third party in which that Defendant had a significant interest.
On or about December 15, 2010, the Company entered into a settlement agreement underwhich the Company’s acquisition of Bullmoose will be rescinded (the “Settlement Agreement”). More particularly, the 6,000,000 shares issued by the company as consideration for the acquisition will be cancelled and $75,000 of the $85,000 as part consideration for the acquisition, will be returned to the Company. The Company continues to retain title to Bullmoose as of December 31, 2011.
On the Closing Date (July 3, 2012, the first business day after June 30 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company, tendered signed Settlement documents. As a result, the Company cancelled the 6,000,000 shares and commenced an action in the Supreme Court of British Columbia to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to the mineral properties through its ownership of all issued Bullmoose shares.
We know of no other material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any other 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 interest.
Item 4.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common shares are quoted on the PinkSheets under the symbol “NTMG”. The following quotations reflect the high and low bids for our common stock 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 for our common shares (obtained from www.otcmarkets.com) for each full financial quarter for the two most recent full fiscal years were as follows:
Item 6.
Item 6. Selected Financial Data
No disclosure is required hereunder as NT Mining is a "smaller reporting company," as defined in Item 10(f) of Regulation S-K. Please see our audited consolidated financial statements included in this annual report on Form 10-K for detailed financial information.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
THE FOLLOWING MANAGEMENT DISCUSSION AND ANALYSIS (“MDA&A”) PROVIDES INFORMATION ON THE ACTIVITIES OF NT MINING CORPORATION (“NTMG” OR THE “COMPANY”) AND SHOULD BE READ IN CONJUNCTION WITH THE COMPANHY’S AUDITED CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO CONTAINED ELSEWHERE IN THE FORM 10-K. READERS ARE CAUSTIONED THAT MANAGEMENT DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS ANT THAT ACTUAL EVENTS MAY VARY SIGNIFICANTLY FROM MANAGAGEMENT’S EXPECTIONS.
Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
NT Mining was incorporated in the state of Nevada on February 10, 1997. Its wholly owned subsidiary, Bullmoose Mines Ltd. (“BML”), was incorporated in the Northwest Territories, Canada on February 29, 2000. On October 14, 2008, the Company acquired BML.
The Company was formerly named Clear Water Mining, Inc. (to March 11, 1999), E-Casino Gaming Corporation (to June 21, 1999), E-Vegas.com Inc. (to July 20, 2000), 1st Genx.com Inc. (to October 18, 2001), Oasis Information Systems, Inc. (to January 27, 2005), and 777 Sports Entertainment, Corp. (to September 26, 2008). On December 15, 2007, the Company’s former president died and the Company then discontinued its business operations.
Our Current Business
The Company changed its business focus during 2007 and in 2008 and completed the changeover to mining exploration and development, which was the concept utilized when the Company was incorporated. In order to complete the transformation, the Company completed a reverse stock split during 2008, settled the majority of its liabilities through a share exchange for debt and acquired a privately held Canadian mining corporation with a single mining asset, former Gold Producer "The Bullmoose Mine", located in the Northwest Territory of Canada. In 2009 and 2010, the company completed a limited program on the mining properties in Canada, sufficient to maintain the lease and mineral claims in good standing.
In 2011, the Company settled litigation it had initiated to assert its interest in the Bullmoose Mine. Under the settlement the Company’s acquisition of Bullmoose will be rescinded. More particularly, the 6,000,000 shares issued by the company as consideration for the acquisition will be cancelled and $75,000 of the $85,000 paid as part consideration for the acquisition, will be returned to the Company. The closing date has been set for June 30, 2012. Until that date and afterwards, if the settlement does not close, the Company continues to retain title to Bullmoose.
As noted above, the Company is currently subject to a cease trade order, which prohibits it from issuing any securities.
Results of Operation - For the year ended December 31, 2011 and 2010
Revenue - NT Mining has not generated any revenues since inception.
Expenses - Total expenses in the amount of $209,426 were recorded for the year ended December 31, 2011, as compared to expenses of $190,507 for the year ended December 31, 2010. The decrease in expenses for the year ended December 31, 2011, as compared to the year ended December 31, 2010, is primarily attributable to the reduction in exploration and field expenses. The costs can be subdivided into the following categories.
1.
Selling, general and administrative expenses: $173,426 in general and administrative expenses was incurred for the year ended December 31, 2011 as compared to $130,213 for the year ended December 31, 2010, an increase of $43,213, due to increase in legal fees and management fees offset by reduction in consulting, accounting, administration and promotional services.
2.
Exploration and field expenses: The Company incurred exploration and field expenses of $Nil for the year ended December 31, 2011 as compared to $24,294 for the year ended December 31, 2010, a decrease of $24,294, due to the fact that acquisition of Bullmoose will be rescinded.
3.
Royalty expenses: $36,000 in royalty expenses was incurred for the year ended December 31, 2011 as compared to $36,000 for the year ended December 31, 2010.
NT Mining plans to carefully control its expenses and overall costs. The Company does not have any employees and engages personnel through outside consulting contracts or agreements or other such arrangements.
Liquidity and Capital Resources
As noted above, the Company is currently subject to a cease trade order, prohibiting it from issuing any securities.
During the year ended December 31, 2011, NT Mining satisfied its working capital needs by carefully managing its cash flow and deferring payments to its services vendors. As December 31, 2011, the Company had cash and cash equivalents on hand in the amount of $1,136 (2010 - $956) and current payable and accrued liabilities of $1,073,784 (2010 - $787,292). As at December 31, 2011, NT Mining has $317,783 (2010 - $220,209) in accounts payable and accrued liabilities, $469,785 (2010 - $349,821) in current portion of debentures payable, $172,973 (2010 - $157,973) in note payable, and an additional $113,243 (2010 - $59,289) payable to related parties. Given the proposed business activities of NT Mining, management does not expect that the current level of cash on hand will be sufficient to fund its operation for the next twelve month period.
To achieve our goals and objectives for the next 12 months, we plan to reduce operating expenses, delay exploration and mining expenditures, negotiate with creditors to defer payments.
Cash Used in Operating Activities
Operating activities for the year ended December 31, 2011 and 2010 used cash of $53,774 and $170,850 net of foreign exchange effect, respectively, which reflect our recurring operating losses. Our net losses of $189,741 and $2,865,147 for the years ended December 31, 2011 and 2010, respectively, were the primary reasons for our negative operating cash flow in both years. Our reporting negative operating cash flows for the year ended December 31, 2011 was offset by imputed interest of $23,145 on debenture and accrued interest of $46,995. We reported a write-off of accounts payable in the amount of $90,000 during the year ended 31 December 2011 related to a mineral property option agreement dated June 22, 2010 in which the Company could acquire 100% interest in certain mineral property interest located in Vancouver, British Columbia, Canada (the “Valentine Gold Claim”). Our reporting negative operating cash flows for the year ended December 31, 2010 was offset by imputed interest of $45,669 on debenture, accrued interest of $18,015, write-down of accounts receivable of $4,985, write-down of furniture, fixture and office equipment of $5,165 and write-down of mineral property of $2,593,199.
Cash Used in Investing Activities
For the year ended December 31, 2011, we used $Nil in investing activities as compared to $10,000 for the year ended December 31, 2010. The $10,000 was related to acquisition of the Valentine Gold Claim.
Cash from Financing Activities
Net cash flows provided by financing activities for the year ended December 31, 2011 was $53,954, mainly from related parties. Net cash flows provided by financing activities for the year ended December 31, 2010 was $179,682 mainly from issuance of shares and note payable and subscription received in advance.
Off-Balance Sheet Arrangement
As of December 31, 2011 and 2010, NT Mining did not have any off-balance sheet arrangements.
Capital Expenditure
Capital expenditures for the years ended December 31, 2011 and 2010, amounted to $Nil. NT Mining does not anticipate any significant purchase or sale of equipment over the next 12 months.
Requirement for Additional Financing
The Company is in the mineral exploration and development business and has incurred losses since its inception. The Company has no revenue generating operations and has funded its operations primarily through trade credit. As noted, the Company is currently subject to a cease trade order, which prohibits it from raising additional funds to explore and develop its mineral properties, to acquire additional exploration properties, or to acquire and develop other business opportunities. The Company has applied to revoke the cease trade order; however, there is no assurance that it will be successful. If it is, there can be no assurances that the Company will be able to secure acceptable financing to conduct is activities.
Going Concern
The Company has incurred net losses for the period from inception on February 10, 1997 to December 31, 2011 of $10,370,029 and has no source of revenue. The continuity of the Company’s future operations is dependent on its ability to obtain financing and upon future acquisition, exploration and development of profitable operations from its mineral properties.
As noted above, the Company is currently subject to a cease trade order, which prohibits it from issuing any securities. The Company has applied to rescind the order, however, until the order is rescinded, the Company is prohibited from issuing securities and obtaining financing to fund its ongoing needs.
These factors create substantial doubt as to the Company’s ability to continue as a going concern.
Critical Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary BML from the date of its acquisition on October 14, 2008. All significant intercompany balances and transactions have been eliminated in consolidation.
Foreign Currency Translation
The Company’s functional and reporting currency is U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters.” Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Long-Lived Assets
Long-lived assets, including mining property, are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets.
Income Taxes
Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.
Comprehensive Income (Loss)
ASC 220, “Comprehensive Income”, establishes standards for the reporting and disclosure of comprehensive income (loss) and its components in the financial statements. As at December 31, 2011, the Company has items that represent a comprehensive loss and, therefore, has included a schedule of comprehensive loss in the consolidated financial statements.
Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.
Financial instruments
The carrying values of cash and cash equivalents, accounts payable, debenture payable, note payable and due to related parties approximate fair values due to the short term maturity of these financial instruments.
Credit Risk
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions as determined by rating agencies. As a result, credit risk is considered insignificant.
Currency Risk
The Company’s major expenses and payables are in United States currency and are expected to continue to incur in United States currency. Fluctuations in the exchange rate between the United States dollar and other currency may have a material effect on the Company’s business, financial condition and results of operations. The Company does not actively hedge against foreign currency fluctuations.
Interest Rate Risk
The Company has non-interest paying cash balances and interest-bearing debt with interest rates fixed at 10% to 12%. It is management’s opinion that the Company is not exposed to significant interest risk arising from these financial instruments.
Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by continuously monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. As at December 31, 2011, the Company had a working capital deficit of $1,072,607 (2010 - $786,295). The Company plans to improve its financial condition by obtaining new financing through loans. There is no assurance that the Company will be successful in accomplishing this objective.
Acquisition of Bullmoose Mines Ltd.
In 2008, the Company acquired all of the outstanding common shares of a Canadian corporation, Bullmoose Mines Ltd, which holds title to the former Gold Producer, the Bullmoose Mine, located in the Northwest Territory for cash, shares and the assumption of debt.
On October 22, 2010, the Company initiated a Claim in the Supreme Court of British Columbia against a former officer of the Company and certain other companies controlled directly or indirectly by the former officer, to assert its interest in Bullmoose. On October 14, 2008, the Company had acquired Bullmoose as described in Note 3 to the attached consolidated financial statements. However, on August 10, 2010, the Company and its directors and officers, other than the Defendant discovered that the Defendant had apparently taken steps to sell the Company’s interest in Bullmoose to a third party in which that Defendant had a significant interest.
On or about December 15, 2010, the Company entered into a Settlement Agreement underwhich the Company’s acquisition of Bullmoose will be rescinded. More particularly, the 6,000,000 shares issued by the Company as consideration for the acquisition will be cancelled and $75,000 of the $85,000 as part consideration for the acquisition, will be returned to the Company.
On the Closing Date (July 3, 2012, the first business day after June 30, 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company, tendered signed Settlement documents. As a result, the Company cancelled the 6,000,000 shares and commenced an action to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to the mineral properties through its ownership of all issued Bullmoose shares.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
As a “smaller reporting company” (as defined in Item 10(f) of Regulation S-K), our Company is not required to provide information required by this Item.
Item 8.
Item 8. Financial Statements and Supplementary Data
See our audited consolidated financial statements immediately following the signature page of this Form 10-K.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no disagreements on accounting or financial disclosure matters with the Company’s independent accountants or auditors to report under this Item 8.
Item 9A.
Item 9A. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, 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 Chief Executive Officer and our Chief Financial Officer, Carman Parente, to allow for timely decisions regarding required disclosure. Our Chief Executive Officer and our Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for our Company.
Carman Parente, our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of December 31, 2011. Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were not effective as of December 31, 2011. However, the Company has since taken steps to remedy certain identified deficiencies in its disclosure controls and procedures.
There were no changes in our internal control over financial reporting that occurred during the last quarter of our fiscal year ended December 31, 2011, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
Identification of Directors and Executive Officers
The following table sets forth the names of all directors and executive officers of the Company as of July 25, 2012 and December 31, 2011. These persons will serve until the next annual meeting of the stockholders or until their successors are elected or appointed and qualified, or their prior resignation or termination.
Name
Position
Date Appointed
Jordan S. Wangh
Director
April 28, 2006
Richard A. Fesiuk
Director
December 12, 2007
Carman Parente
President, CEO, CFO, Treasurer and Director
May 16, 2011
Mr. Carman Parente
Mr. Carman Parente is a business and financial consultant and since 1993 has been working with numerous Canadian and US private and public venture capital companies, in a variety of industries which include manufacturing, internet technology, precious mineral exploration and oil and gas drilling, specifically in the area of financing. Mr. Parente currently owns and operates a nutrecuticle distribution company operating throughout Canada as well as being a managing partner in a functional food processing venture. Mr. Parente is also a partner in a five and half acre greenhouse facility in the Vancouver lower mainland. As well Mr. Parente is currently president and director of Carbon Products Industries, Inc., a US based non-trading company exploring the carbon trading markets with specific focus on local based initiatives for creating carbon credits. Mr. Parente holds a Diploma of Technology in Operations Management from British Columbia Institute of Technology as well as his C.I.M. Designation, Canadian Institute of Management, Ottawa.
Jordan S. Wangh
Mr. Jordan S. Wangh has been the Chief Executive Officer and President of World Web Publishing.com Corp., since January 4, 2008. Mr. Wangh serves as the President/Owner of Omnexis Consulting Corporation, which he founded in 2005 to provide financial and public company consulting services. He served as the Chief Executive Officer of NT Mining Corp. since April 28, 2006 until May 16, 2011. He served as the President of NT Mining Corp. from September 2008 to May 16, 2011. ... In the past five years, he has held a variety of positions in sales, management, software development and IT consulting. From 2002 to 2005, he served as the North America Sales Manager of Comony Enterprise. As a Software Designer and Developer for Sony Electronics from 2000 to 2003, Mr. Wangh designed, built and developed customized product systems based on client consultation. He has been a Director of World Web Publishing.com Corp., since January 4, 2008. Mr. Wangh holds a BS in Computer Engineering from Santa Clara University in 1999.
Richard A. Fesiuk
Mr. Richard Albert Fesiuk serves as the President of Atrypa Gold Corp. Mr. Fesiuk served as the Chief Financial Officer and Secretary of NT Mining Corp. from December 12, 2007 to May 16, 2011. Previously, he served as a Director or Officer of several TSX Venture-listed companies, including General Energy Corp. and Avance International Inc. He served as Treasurer of NT Mining Corp. from September 2008 to May 16, 2011. His experience in the mining industry is extensive, ... encompassing all phases of exploration, development and production throughout North and South America. He has conducted research for innovative mineral extraction methods involving jigs of various types and has constructed and repaired mineral concentration equipment through his previous experience as a heavy duty mechanic. Mr. Fesiuk has been a Member of Advisory Board at Auric Mining Company since April 29, 2011.
Significant Employees
We have no significant employees other than our officers and our directors.
Family Relationships
There are currently no family relationships between any of the members of our board of directors or our executive officers.
Item 11.
Item 11. Executive Compensation.
Summary of Compensation of Executive Officers
The following table summarizes the compensation paid to our President and Chief Executive Officer during the last three complete fiscal years. No other officer or director received annual compensation in excess of $8,000 during the last three complete fiscal years.
As of the date of this annual report, we have no compensatory plan or arrangement with respect to any officer that results or will result in the payment of compensation in any form from the resignation, retirement or any other termination of employment of such officer's employment with our Company, from a change in control of our Company or a change in such officer's responsibilities following a change in control.
Compensation of Directors for Year Ended December 31, 2011
Set forth below is a summary of the compensation paid to each person that served as a director in the year ended December 31, 2011.
Director Compensation
Name
Fees Earned Or Paid in Cash
($)
Stock Award
($)
Option Award
($)
All Other
Compensation
($) (2)
Total
($)
Jordan S. Wangh
Nil
Nil
Nil
Nil
Nil
Richard A. Fesiuk
Nil
Nil
Nil
Nil
Nil
Carman Parente (1)
Nil
Nil
Nil
33,600
33,600
Notes:
(1)
Mr. Carman Parente was appointed to serve as a director on May 16, 2011.
(2)
The amounts listed under the Column entitled “All Other Compensation” in the “Director Compensation” table relate to management fees earned during the period reported by the officers, or entities controlled by the officers.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information, to the best knowledge of the Company as of July 25, 2012 with respect to each director and officer and management as a group and any holder owning more than 5% of the outstanding common stock.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
As at December 31, 2011, the amount due to related parties includes $23,080 (2010 - $24,630) payable to Atrypa Gold Corp., a company controlled by Mr. Richard A. Fesiuk, for exploration and field expenses paid on behalf of the Company.
As at December 31, 2011, the amount due to related parties includes $11,625 (2010 - $11,711) payable to Mr. Richard A. Fesiuk related to unpaid consulting fees.
As at December 31, 2011, the amount due to related parties includes $2,948 (2010 - $2,948) payable to Omnexis Consulting Corporation, a company controlled by Mr. Jordan S. Wangh, related unpaid management fees.
As at December 31, 2011, the amount due to related parties includes $20,000 (2010 - $20,000) payable to Mr. Jordan S. Wangh related unpaid management fees.
As at December 31, 2011, the amount due to related parties include $100 (2010 - $Nil) payable to 627073 BC Ltd., a company controlled by Mr. Carman Parente related to expenses paid on behalf of the Company.
As at December 31, 2011, the amount due to related parties include $21,890 (2010 - $Nil) payable to Mr. Carman Parente related to expenses paid on behalf of the Company.
As at December 31, 2011, the amount due to related parties include $33,600 (2010 - $Nil) payable to 567147 BC Ltd., a company controlled by Mr. Carman Parente related to unpaid management fees.
During the year ended December 31, 2011, the Company paid or accrued consulting fees of $Nil (2010 - $12,000, 2009 - $8,000) to Mr. Richard A. Fesiuk, a director of the Company.
During the year ended December 31, 2011, the Company paid or accrued management fees of $Nil (2010 - $15,000, 2009 - $Nil) to Mr. Jordan S. Wangh, a director of the Company.
During the year ended December 31, 2011, the Company paid or accrued management fees of $Nil (2010 - $21,000, 2009 - $31,500) to Omnexis Consulting Corporation, a company controlled by Mr. Jordan S. Wangh.
During the year ended December 31, 2011, the Company paid or accrued management fees of $33,600 (2010 - $Nil, 2009 - $Nil) to 567147 BC Ltd., a company controlled by Mr. Carman Parente, Chief Executive Officer of the Company.
During the year ended 31 December 2010, the Company accepted a loan from a company owned by a family member of a director of the Company in the amount of $150,000 bearing interest at a rate of 10% per annum.
Item 14.
Item 14. Principal Accounting Fees and Services
The following table is a summary of the fees billed to the Company by the auditors for professional services for the fiscal years ended December 31, 2011 and 2010.
Fee Category
Fiscal
2011 Fees
Fiscal
2010 Fees
($)
($)
Audit Fees
9,813
10,000
Audit-Related Fees
-
-
Tax Fees
-
-
All Other Fees
-
-
Total Fees
9,813
10,000
The Company has no full time staff performing accounting services for the Company. It contracts out its accounting to a local financial services company.
Pre-Approval Policies and Procedures
Our policy is to engage the auditor for audit services only, so as to ensure that the auditor’s duty to the shareholders is not compromised or apparently compromised. The Board of Directors (performing the function of the audit committee) approved all services that our independent accountants provided to us in the past two fiscal years.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
Exhibit Number and Exhibit Title
Certificate of CEO and CFO as Required by Rule 13a-14(a)/15d-14
Certificate of CEO and CFO as Required by Rule 13a-14(b) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
Consent of independent Registered Public Accounting Firm
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, thereunto duly authorized.
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.
NT MINING CORPORATION Index to Financial Statements
Report of Independent Registered Public Accounting Firm
Financial Statements:
Consolidated Balance Sheets as of December 31, 2011 and 2010
Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009 and for the period from the date of inception on February 10, 1997 to December 31, 2011 (unaudited)
Consolidated Statements of Changes in Stockholders’ Deficiency for the years ended December 31, 2005 through 2011
Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 and for the period from the date of inception on February 10, 1997 to December 31, 2011 (unaudited)
Notes to Consolidated Financial Statements
NT MINING CORPORATION
(An Exploration Stage Company)
Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
JAMES STAFFORD
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
NT Mining Corporation
(An Exploration Stage Company)
We have audited the accompanying consolidated balance sheets of NT Mining Corporation (An Exploration Stage Company) (the “Company”) as of 31 December 2011 and 2010 and the related consolidated statements of operations, changes in stockholders’ deficiency and cash flows for the years then ended. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as, evaluating the overall financial statement presentation. We believe 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 financial position of the Company as of 31 December 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, conditions exist which raise substantial doubt about the Company’s ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Management’s plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ James Stafford
Chartered Accountants
Vancouver, Canada
25 July 2012
NT MINING CORPORATION
(An Exploration Stage Company)
Consolidated Balance Sheets
(Expressed in U.S. Dollars)
Nature and Continuance of Operations (Note 1), Commitments and Contingencies (Note 11) and Subsequent Event (Note 14)
On behalf of the Board:
“Carman Parente”
Director
Carman Parente
The accompanying notes are an integral part of these consolidated financial statements.
NT MINING CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Operations
(Expressed in U.S. Dollars)
The accompanying notes are an integral part of these consolidated financial statements.
NT MINING CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Changes in Stockholders’ Deficiency
(Expressed in U.S. Dollars)
The accompanying notes are an integral part of these consolidated financial statements.
NT MINING CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
Supplemental Disclosures with Respect to Cash Flows (Note 12)
The accompanying notes are an integral part of these consolidated financial statements.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS
NT Mining Corporation (“the Company”) was incorporated in the state of Nevada on February 10, 1997. Its wholly owned subsidiary, Bullmoose Mines Ltd. (“BML”), was incorporated in the Northwest Territories, Canada on February 29, 2000. On October 14, 2008, the Company acquired BML (Note 3).
The Company was formerly named Clear Water Mining, Inc. (to March 11, 1999), E-Casino Gaming Corporation (to June 21, 1999), E-Vegas.com Inc. (to July 20, 2000), 1st Genx.com Inc. (to October 18, 2001), Oasis Information Systems, Inc. (to January 27, 2005) and 777 Sports Entertainment, Corp. (to September 26, 2008). On December 15, 2007, the Company’s former president passed away and the Company then discontinued its business operations.
BML owns Mineral Lease #2775 plus 4 mineral claims located in the South MacKenzie Mining District, Northwest Territories, Canada (the “Bullmoose Gold Mine Property”). According to a geological report issued May 6, 2008, from 1985 until shutdown in January 1987, approximately 54,000 tons of ore were mined and milled to produce approximately 20,001 ounces of gold by a former owner of the Bullmoose Gold Mine Property.
As part of the acquisition of BML, the Company is obligated to pay annual royalties of $36,000 and to pay down a debenture liability as disclosed in Note 7. Since the Company continues to retain title to Bullmoose Gold Mine Property as at December 31, 2011, these obligations continue to be reflected in the consolidated financial statements of the Company.
On or about December 15, 2010, the Company entered into an agreement to settle litigation related to the ownership of BML and to rescind its acquisition of BML (the “Settlement Agreement”). More particularly, the 6,000,000 common shares issued by the Company in consideration for the acquisition will be cancelled and $75,000 of the $85,000 paid as part consideration for the acquisition will be returned to the Company. The closing date was set for June 30, 2012 (the “Closing Date”). As at December 31, 2011, the Company retains title to BML.
On the Closing Date (July 3, 2012, the first business day after June 30, 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company tendered signed settlement documents. As a result, the Company cancelled the 6,000,000 common shares and commenced an action to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to Bullmoose Gold Mine Property through its ownership of all issued shares of BML (Notes 3, 4, 7, 8, 11 and 14).
The Company is an exploration stage enterprise, as defined in Accounting Standards Codification (the “Codification” or “ASC”) 915-10, “Development Stage Entities”. The Company is devoting all of its present efforts in securing and establishing a new business, and its planned principle operations have not commenced, and, accordingly, no revenue has been derived during the organization period.
The consolidated financial statements as at December 31, 2011 and for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a loss of $189,741 for the year ended December 31, 2011 (2010 - $2,865,147, 2009 - $202,692) and has working capital deficit of $1,072,607 at December 31, 2011 (2010 - $786,295).
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
The Company is subject to a cease trade order, which was pronounced by the British Columbia Securities Commission on August 18, 2009, by reason of the Company’s failure to file financial statements in British Columbia. The Company has applied to rescind the order, however, until the order is rescinded, the Company is prohibited from issuing securities and obtaining financing to fund its ongoing needs.
These factors create substantial doubt as to the Company’s ability to continue as a going concern. There is no assurance that the Company will be successful in rescinding the cease trade order or otherwise carrying on its business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Effective February 2, 2005, the Company effected a one (1) for three hundred (300) reverse stock split. Effective September 11, 2008, the Company effected a one (1) for two thousand (2,000) reverse stock split. Effective March 15, 2010, the Company effected a two (2) for one (1) forward stock split. All share and warrant amounts presented in the consolidated financial statements and in the notes thereto have been adjusted to reflect the reverse and forward stock splits (Note 8).
Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or until the cease trade order is rescinded, raise additional debt and/or equity capital. However, if the cease trade order is rescinded, based on its prior demonstrated ability to raise capital, management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy during the fiscal year ending 2012. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
At December 31, 2011, the Company has suffered losses from exploration stage activities to date. Although management is currently attempting to obtain an order revoking the cease trade order and subsequently implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, the Company must rely on its management to perform essential functions without compensation until a business operation can be commenced. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary BML from the date of its acquisition on October 14, 2008. All significant intercompany balances and transactions have been eliminated in consolidation.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
Basis of Presentation
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable for an exploration stage company for financial information and are expressed in U.S. dollars.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
Foreign Currency Translation
The Company’s functional and reporting currency is U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters.” Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Long-Lived Assets
Long-lived assets, including mining property, are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets.
Income Taxes
Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
Comprehensive Income (Loss)
ASC 220, “Comprehensive Income”, establishes standards for the reporting and disclosure of comprehensive income (loss) and its components in the financial statements. As at December 31, 2011, the Company has items that represent a comprehensive loss and, therefore, has included a schedule of comprehensive loss in the consolidated financial statements.
Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.
Recently Issued Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-12, “Comprehensive Income”. This update amends certain pending paragraphs in ASU No. 2011-05 “Presentation of Comprehensive Income”, to effectively defer only those changes that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. ASU No. 2011-12 is effective during interim and annual periods beginning after December 15, 2011.
In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income”. This update presents an entity with the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU No. 2011-05 is to be applied retrospectively and is effective during interim and annual periods beginning after December 15, 2011. As ASU 2011-05 relates only to the presentation of comprehensive income, the Company does not expect that the adoption of this update will have a material effect on its consolidated financial statements.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement” to amend the accounting and disclosure requirements on fair value measurements. This ASU limits the highest-and-best-use measure to nonfinancial assets, permits certain financial assets and liabilities with offsetting positions in market or counterparty credit risks to be measured at a net basis, and provides guidance on the applicability of premiums and discounts. Additionally, this update expands the disclosure on Level 3 inputs by requiring quantitative disclosure of the unobservable inputs and assumptions, as well as description of the valuation processes and the sensitivity of the fair value to changes in unobservable inputs. ASU No. 2011-04 is to be applied prospectively and is effective during interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of this update will have a material effect on its consolidated financial statements.
NOTE 3 - ACQUISITION OF BULLMOOSE MINES LTD.
In accordance with ASC 805, “Business Combinations”, acquisitions are accounted for under the purchase method of accounting. Under the purchase method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair values. Goodwill is recorded to the extent the purchase price consideration, including certain acquisition and closing costs, exceeds the fair value of the net identifiable assets acquired at the date of the acquisition.
On October 14, 2008, the Company acquired BML in exchange for $12,000 cash, 6,000,000 shares of the Company common stock valued at $3,000 (Notes 8 and 11), a debenture in the face amount of $480,624 valued at fair value of $359,371 (Note 7) or for total consideration of $374,371.
The purchase price allocation has been determined as follows:
Assets purchased:
$
Cash and cash equivalents
Prepaid expenses
Mineral property interests
421,199
Total assets acquired
421,390
Liabilities assumed:
Accounts payable
47,019
Net assets acquired
374,371
Purchase price
374,371
The related share purchase agreement also provides for payment of future royalties to the seller of BML equivalent to 6% of the Net Smelter Returns, as defined, from Bullmoose Gold Mine Property, with minimum royalty payments of $36,000 payable each year in advance on May 1. The seller of BML was Hughes Maritime Corp. (“HMC”), owner of approximately 12.61% of the issued and outstanding common stock of the Company at December 31, 2011.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
During the year ended December 31, 2010, the Company filed a lawsuit against HMC related to its interest in BML. The Company has entered into the Settlement Agreement to settle litigation related to the ownership of BML and to rescind its acquisition of BML. More particularly, the 6,000,000 common shares issued by the Company in consideration for the acquisition will be cancelled and $75,000 of the $85,000 paid as part consideration for the acquisition will be returned to the Company.
On the Closing Date (July 3, 2012, the first business day after June 30, 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company tendered signed settlement documents. As a result, the Company cancelled the 6,000,000 common shares and commenced an action to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to Bullmoose Gold Mine Property through its ownership of all issued shares of BML (Notes 1, 4, 7, 8, 11 and 14).
NOTE 4 - MINERAL PROPERTY INTERESTS
Bullmoose Gold Mine Property
On October 14, 2008, the Company acquired BML for total consideration of $374,371. BML owns Mineral Lease #2775 plus 4 mineral claims located in the South MacKenzie Mining District, Northwest Territories, Canada.
During the year ended December 31, 2010, the Company filed a lawsuit against HMC related to its interest in BML. The Company has entered into the Settlement Agreement underwhich the Company would rescind its acquisition of BML in exchange for the return of the 6,000,000 common shares previously issued to HMC and $75,000 of the $85,000 the Company had paid in consideration for the acquisition (Notes 1, 3, 7, 8, 11 and 14).
During the year ended December 31, 2011, the Company has recorded a provision for mineral property write-down of $Nil (2010 - $343,199, 2009 - $Nil) to a carrying value of $78,000 related to the Bullmoose Gold Mine Property (Note 12).
Valentine Gold Claim
On June 22, 2010, the Company enter into a mineral property option agreement with Mill Bay Ventures Inc. (“Mill Bay”) in which the Company could acquire 100% interest in certain mineral property interest located in Vancouver, British Columbia, Canada (the “Valentine Gold Claim”).
In order to exercise the option agreement and to earn its interest in the Valentine Gold Claim, the Company shall:
i.
Issue 5,000,000 common shares to Mill Bay within 21 business days of approval of the agreement (issued) (Notes 8 and 12);
ii.
Issue 1,500,000 common shares to Mill Bay on the 1st anniversary date of the signing of the agreement;
iii.
Make cash payment of $10,000 on the execution date (paid);
iv.
Make $90,000 within 21 business days of approval of the agreement;
v.
Incur $25,000 expenditure on or before June 30, 2011;
vi.
Incur $500,000 within one year from July 1, 2011; and
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
vii.
Incur $750,000 within one year from July 1, 2012.
The Company has given up the interest in the Valentine Gold Claim and has cancelled the 5,000,000 common shares issued (Notes 8 and 12).
During the year ended December 31, 2011, the Company has recorded a provision for mineral property write-down of $Nil (2010 - $2,250,000, 2009 - $Nil) to a carrying value of $Nil related to the Valentine Gold Claim (Note 12).
During the year ended December 31, 2011, the Company recorded write-off of accounts payable in the amount of $90,000 (2010 - $Nil, 2009 - $Nil) related to the Valentine Gold Claim (Notes 5 and 12).
NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED LIABILITES
Included in accounts payable and accrued liabilities is accrued interest of $52,485 related to debenture payable (2010 - $20,490) (Note 7).
Accounts payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.
During the year ended December 31, 2011, the Company recorded write-off of accounts payable in the amount of $90,000 related to the Valentine Gold Claim (2010 - $Nil, 2009 - $Nil) (Notes 4 and 12).
NOTE 6 - NOTE PAYABLE
December 31, 2011
December 31, 2010
$
$
On June 20, 2010, the Company accepted a loan from a company owned by a family member of a director of the Company in the amount of $150,000 bearing interest at a rate of 10% per annum (Note 9). The loan is unsecured and is due on demand. During the year ended December 31, 2011, the Company accrued interest expense of $15,000 (2010 - $7,973, 2009 - $Nil) related to the note payable. The balance as at December 31, 2011 consists of principal of $150,000 (2010 - $150,000) and accrued interest of $22,973 (2010 - $7,973).
172,973
157,973
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
NOTE 7 - DEBENTURE PAYABLE
Debenture payable at December 31, 2011 consists of:
$
Amount due October 14, 2009
120,624
Amount due October 14, 2010
120,000
Amount due October 14, 2011
120,000
Amount due October 14, 2012
120,000
Total face amount
480,624
Initial present value discount of $121,253
less accumulated amortization of $110,414
(10,839)
Net value as at December 31, 2011
469,785
Current portion
469,785
Non-current portion
-
On October 14, 2008, the Company recorded the debenture at the $359,371 present value (discounted at a 12% annual interest rate) of the $480,624 total payments due and is amortizing the $121,253 debt discount as interest expense using the interest method over the four year term of the debenture.
During the year ended December 31, 2011, the Company recorded interest expense of $23,145 (2010 - $45,669, 2009 - $43,868) related to amortization of the discount. As at December 31, 2011, the present value of the debenture is $469,785 (2010 - $446,640).
The Company did not meet the repayment schedule as noted above. Interest is accrued on the overdue principal amounts at 12% per annum from the due dates. During the year ended December 31, 2011, the Company accrued interest expense of $31,995 (2010 - $17,475, 2009 - $3,016) (Note 5).
The debenture is secured by the assets of the Company, including the issued and outstanding shares of BML, which were sold to the Company, and the Bullmoose Gold Mine Property.
The debenture is convertible at the option of the holders into Units of the Company at a conversion rate of $0.50 per Unit; each Unit consists of one share of the Company common stock and one warrant exercisable into one share of the Company common stock at a price of $0.60 per share at any time from the exercise of the Conversion Option to two years thereafter. There were no beneficial conversion features related to the Conversion Option.
During the year ended December 31, 2010, the Company filed a lawsuit against HMC to protect its interest in BML. The Company is in the process of settling the lawsuit by rescinding the October 14, 2008 agreement under which the Company acquired BML. More particularly, 6,000,000 common shares issued by the Company in consideration for the acquisition will be cancelled and $75,000 of the $85,000 paid as part consideration for the acquisition will be returned to the Company. In addition, as part of the rescission, the debenture obligation of the Company to the seller of BML, will be released on closing.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
On the Closing Date (July 3, 2012, the first business day after June 30, 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company tendered signed settlement documents. As a result, the Company cancelled the 6,000,000 common shares and commenced an action to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to Bullmoose Gold Mine Property through its ownership of all issued shares of BML (Notes 1, 3, 4, 8, 11 and 14).
NOTE 8 - CAPITAL STOCK
Effective February 2, 2005, the Company effected a one (1) for three hundred (300) reverse stock split. Effective September 11, 2008, the Company effected a one (1) for two thousand (2,000) reverse stock split. Effective March 15, 2010, the Company effected a two (2) for one (1) forward stock split (Note 1). All share and warrant amounts presented in the consolidated financial statements and in the notes thereto have been adjusted to reflect the reverse and forward stock splits.
Authorized
Authorized capital stock consists of 400,000,000 common shares with par value of $0.001 per share.
Share Issuance
i.
During the year ended December 31, 2007, the Company issued 75,168 common shares to settle debt in the amount of $485,805.
ii.
During the year ended December 31, 2008, the Company issued 40,412,692 common shares (including 6,000,000 common shares issued to companies controlled by directors of the Company) to settle debt in the amount of $332,876.
iii.
On November 26, 2008, the Company issued 560,000 common shares to three investors at a price of $0.55 per common share for total cash proceeds of $154,000.
iv.
During the year ended December 31, 2008, the Company issued 6,000,000 common shares at a valued at $3,000 related to the acquisition of BML (Notes 1, 3, 4, 7, 11 and 14).
v.
During the year ended December 31, 2009, the Company issued 220,000 common shares to four investors at a price of $0.14 per common share for cash proceeds of $30,500.
vi.
On January 15, 2010, the Company issued a total of 304,000 common shares valued at $0.125 per common share for cash proceeds of $38,000. These shares were restricted from trading for a period of one year as defined by Rule 144 of the United States Securities Act of 1933.
vii.
On June 22, 2010, the Company issued 5,000,000 common shares valued at $0.43 per common shares for $2,150,000 for in relation to the Valentine Gold Claim (Notes 4 and 12).
viii.
On August 16, 2011, the Company cancelled 5,000,000 common shares issued on June 22, 2010 in relation to the Valentine Gold Claim (Notes 4 and 12).
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
Shares to Be Issued
During the year ended December 31, 2010, the Company received $60,000 for the purchase of 200,000 common shares in the Company. These shares were yet to be issued by the Company as at December 31, 2011.
NOTE 9 - DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS
Amounts due to related parties are non-interest bearing, unsecured and due on demand.
As at December 31, 2011, the amount due to related parties includes $23,080 (2010 - $24,630) payable to a company controlled by a director of the Company for exploration and field expenses paid on behalf of the Company.
As at December 31, 2011, the amount due to related parties includes $11,625 (2010 - $11,711) payable to a director of the Company related to unpaid consulting fees.
As at December 31, 2011, the amount due to related parties includes $2,948 (2010 - $2,948) payable to, a company controlled by a director of the Company related unpaid management fees.
As at December 31, 2011, the amount due to related parties includes $20,000 (2010 - $20,000) payable to a director of the Company related to unpaid management fees.
As at December 31, 2011, the amount due to related parties include $100 (2010 - $Nil) payable to a company controlled by the Chief Executive Officer of the Company related to expenses paid on behalf of the Company.
As at December 31, 2011, the amount due to related parties include $33,600 (2010 - $Nil) payable to a company controlled by the Chief Executive Officer of the Company related to unpaid management fees.
As at December 31, 2011, the amount due to related parties include $21,890 (2010 - $Nil) payable to the Chief Executive Officer of the Company related to expenses paid on behalf of the Company.
During the year ended December 31, 2011, the Company paid or accrued consulting fees of $Nil (2010 - $12,000, 2009 - $8,000) to a director of the Company.
During the year ended December 31, 2011, the Company paid or accrued management fees of $Nil (2010 - $15,000, 2009 - $Nil) to a director of the Company.
During the year ended December 31, 2011, the Company paid or accrued management fees of $Nil (2010 - $21,000, 2009 - $31,500) to a company controlled by a director of the Company.
During the year ended December 31, 2011, the Company paid or accrued management fees of $33,600 (2010 - $Nil, 2009 - $Nil) to a company controlled by the Chief Executive Officer of the Company.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
During the year ended 31 December 2010, the Company accepted a loan from a company owned by a family member of a director of the Company in the amount of $150,000 bearing interest at a rate of 10% per annum (Note 6).
NOTE 10 - INCOME TAXES
The Company has losses carried forward for income tax purposes to December 31, 2011. There are no current or deferred tax expenses for the year ended December 31, 2011 due to the Company’s loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.
The provision for refundable federal income tax consists of the following:
For the year ended December 31, 2011
For the year ended December 31, 2010
For the year ended December 31, 2009
$
$
$
Deferred tax asset attributable to:
Current operations
64,512
974,150
68,915
Less: Change in valuation allowance
(64,512)
(974,150)
(68,915)
Net refundable amount
-
-
-
The composition of the Company’s deferred tax assets as at December 31, 2011 and 2010 are as follows:
As at December 31, 2011
As at December 31, 2010
$
$
Net income tax operating loss carryforward
10,370,029
10,180,288
Statutory federal income tax rate
34%
34%
Effective income tax rate
0%
0%
Deferred tax assets
3,525,810
3,461,298
Less: Valuation allowance
(3,525,810)
(3,461,298)
Net deferred tax asset
-
-
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
The potential income tax benefit of these losses has been offset by a full valuation allowance.
As at December 31, 2011, the Company has an unused net operating loss carry-forward balance of approximately $10,370,029 that is available to offset future taxable income. This unused net operating loss carry-forward balance expires between 2017 and 2031.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
On October 14, 2008, the Company and HMC entered into a share purchase agreement in which the Company acquired 100% of the issued and outstanding shares of BML in exchange of $15,000 on execution, by $12,000 in cash and 6,000,000 shares of the Company’s common stock valued at $3,000 (Notes 3, 8 and 14) (the “Share Purchase Agreement”). Under the Share Purchase Agreement, the Company assumed the liabilities of BML totalling $535,126 to be paid over four years from the sale of the shares. HMC could repossess BML shares if the Company failed to pay for the liabilities assumed.
On June 23, 2010, the Company acted to its detriment and made an $85,000 payment to HMC under the Share Purchase Agreement, implying the understanding that it was and would remain in good standing and HMC thereby waived any such default and is estopped from claiming otherwise.
On or about August 10, 2010, HMC purportedly sold the BML shares it previously had sold to the Company to Maple Management Investments Ltd. (“Maple”) in exchange for cash and shares of Maple.
On October 22, 2010, the Company has filed a lawsuit against HMC, Maple, a former officer of the Company and certain other companies controlled directly or indirectly by the former officer (the “Claim”) in which the Company seeks a declaration that the Company is the legal and beneficial owner of all issued and outstanding shares of BML.
On November 17, 2010, HMC, a former officer of the Company and certain other companies controlled directly or indirectly by the former officer filed a counter claim against the Company and one of its directors (the “Counterclaim”). The Counterclaim alleges that the Company owes HMC, the sum of $32,765 under a service contract entered into in 2006. HMC also alleges that the Company defaulted on the Share Purchase Agreement. The Company entered into the Settlement Agreement, the particulars of which are set out in Note 4. As a result, no accrual has been recorded related to the alleged amounts due to HMC.
On the Closing Date (July 3, 2012, the first business day after June 30 2012) all parties to the Settlement Agreement, except those responsible to return the $75,000 to the Company, tendered signed Settlement documents. As a result, the Company cancelled the 6,000,000 shares and commenced an action in the Supreme Court of British Columbia to recover the $75,000. The Company takes the position that until this sum is paid, it continues to hold title to the mineral properties through its ownership of all issued Bullmoose shares (Notes 1, 3, 4, 7, 8 and 14).
As at December 31, 2011, the Company was still the owner of BML until the settlement closes.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
NOTE 12 - SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS
During the year ended December 31, 2010, the Company recorded a provision for mineral property write-down of $2,250,000 and $343,199 related to the Valentine Gold Claim and the Bullmoose Gold Mine Property, respectively (Note 4).
During the year ended December 31, 2011, the Company recorded write-off of accounts payable in the amount of $90,000 (2010 - $Nil, 2009 - $Nil) related to the Valentine Gold Claim (Notes 4 and 5).
On August 16, 2011, the Company cancelled 5,000,000 common shares issued on June 22, 2010 in relation to the Valentine Gold Claim. This amount is recorded as an increase in additional paid-in capital (Notes 4 and 8).
NOTE 13 - FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, accounts payable, debenture payable, note payable and due to related parties approximate fair values due to the short term maturity of these financial instruments.
Credit Risk
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions as determined by rating agencies. As a result, credit risk is considered insignificant.
NT MINING CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in U.S. Dollars)
December 31, 2011
Currency Risk
The Company’s major expenses and payables are in United States dollars and are expected to continue to incur in United States dollars. Fluctuations in the exchange rate between the United States dollar and other currency may have a material effect on the Company’s business, financial condition and results of operations. The Company does not actively hedge against foreign currency fluctuations.
Interest Rate Risk
The Company has non-interest paying cash balances and interest-bearing debt with interest rates fixed at 10% to 12% (Notes 6 and 7). It is management’s opinion that the Company is not exposed to significant interest rate risk arising from these financial instruments.
Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by continuously monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. As at December 31, 2011, the Company had a working capital deficit of $1,072,607 (2010 - $786,295). The Company plans to improve its financial condition by obtaining new financing through loans. There is no assurance that the Company will be successful in accomplishing this objective.
NOTE 14 - SUBSEQUENT EVENT
The following event occurred during the period from the year ended December 31, 2011 to the date the consolidated financial statements were available to be issued on July 25, 2012:
On July 5, 2012, the Company cancelled 6,000,000 common shares issued during the year ended December 31, 2008 in relation to the acquisition of BML (Notes 1, 3, 4, 7, 8 and 11).
Exhibit 31
CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES- OXLEY ACT OF 2002
I, Carman Parente, certify that:
1. I have reviewed this annual report on Form 10-K of NT Mining Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared:
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: July 25, 2012
/s/ Carman Parente
Carman Parente
President, Principal Executive Officer, Principal Financial Officer, Secretary, Treasurer and Director
Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002
In connection with the Annual Report of NT Mining Corporation. on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carman Parente, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
/s/ Carman Parente
Carman Parente
President, Principal Executive Officer, Principal Financial Officer, Secretary, Treasurer and Director
July 25, 2012
JAMES STAFFORD
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation of our report dated 25 July 2012, relating to the consolidated balance sheets of NT Mining Corporation as of 31 December 2011 and 2010 and the related consolidated statements of operations, changes in stockholders’ deficiency and cash flows for the years then ended in this Annual Report on Form 10-K dated 25 July 2012.
/s/ James Stafford
Chartered Accountants
Vancouver, Canada
25 July 2012
Endnotes James Stafford, Inc.
Chartered Accountants
Suite 350 - 1111 Melville Street
Vancouver, British Columbia
Canada V6E 3V6
Telephone +1 604 669 0711
Facsimile +1 604 669 0754
www.JamesStafford.ca
James Stafford, Inc.
Chartered Accountants
Suite 350 - 1111 Melville Street
Vancouver, British Columbia
Canada V6E 3V6
Telephone +1 604 669 0711
Facsimile +1 604 669 0754
www.JamesStafford.ca