Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. INTERNATIONAL STAR INC (1100788) 10-Q published on Nov 14, 2011 at 4:07 pm
Reporting Period: Sep 29, 2011
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect our management’s current views with respect to future events and financial performance. Those statements include statements regarding our intent, belief or current expectations, and those of members of our management team, with respect to such matters as, among other things, our anticipated financial performance, business and exploration plans and prospects, possible strategic alternatives, capital and operating expenditures, economic trends and similar matters, as well as the assumptions on which such statements are based. Such statements may be identified by terminology such as “may,” “will,” “should,” “could,” “intend,” “expect,” “anticipate,” “assume,” “hope,” “plan,” “believe,” “seek,” “estimate,” “predict,” “approximate,” “potential,” “continue,” or the negative of such terms, and other similar expressions.
Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements due to a variety of factors. Such factors include, but are not limited to, the availability and cost of debt and equity financing, the availability and reliability of qualified geology, mining and other industry professionals, the impact of competition from other mineral exploration and mining companies, changes in general economic and business conditions in the United States and particularly within the mining industry, changes in market prices of precious and base metals, and the impact of changes in the conditions and regulation of financial markets and public companies. Readers are urged to carefully review and consider the various disclosures made by us throughout this Quarterly Report, as well as in our other reports filed by us with the Securities and Exchange Commission (“SEC”). Important factors not currently known to management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of any future activities will not differ materially from our assumptions.
In 2008, through geology and mining engineer consultants, we developed a program of testing geological samples from our Detrital Wash property for mineralization and mapping the existing geology. Assay results from the initial phases of this program during 2008 and 2009 indicated significant copper and molybdenum mineralization in the areas of our Detrital Wash claims as well as the presence of gold and silver rich zones of mineralization along trends containing historically mined deposits. We converted our placer claims to lode claims in 2008 and since then have progressively modified our claim holdings in the northern Black Mountains based on the ongoing results of our exploration program, which has included drilling, sampling, assays and mapping along with the evaluation of historical exploration data. Our sampling, assays and mapping during 2010 showed gold mineralization to be the most prevalent of the tested minerals in our properties, with some evidence of copper, molybdenum and other minerals. As a result, during 2010 we shifted the primary focus of our exploration program to the establishment of gold reserves.
During the first nine months of 2011, we have recorded claims staked during the fourth quarter of 2010, located and recorded additional claims in areas nearby our existing claims, and acquired the Van Deemen claims by lease agreement as part of our continued effort to focus on the areas that our data indicates hold the most significant potential for mineral reserves. We have also obtained substantial information regarding historical exploration in the Van Deemen area. During the third quarter of 2011, we continued efforts to compile and evaluate this historical information under current industry standards and to compile and evaluate current data through ongoing sampling and assays. See “– Exploration Program” for more information regarding our exploration program.
Net Loss. Our net loss for the quarter ended September 30, 2011, was $117,604, compared to a net loss of $68,622 during the quarter ended September 30, 2010, an increase of 71.37%. This substantial increase in our net loss is due primarily to the more limited operating funds that were on-hand during the the third quarter of 2010 as compared to the third quarter of 2011, which restricted our exploration activity, and thus our exploration expenses, during the 2010 period as compared to the current year period. The increase is also attributable in part to the additional interest costs incurred during the third quarter of 2011 as a result of the funding we obtained in October 2010 and April 2011.
Mineral Exploration Costs Expense. Mineral exploration costs expense for the three-month period ended September 30, 2011, was $60,236, compared to $12,449 for the three-month period ended September 30, 2010, a nearly five-fold increase. This significant increase reflects the increased amount of exploration activity on our Black Mountains Property during the third quarter of 2011 as compared to the third quarter of 2010, primarily due to the additional funds available during the current year quarter as compared to 2010, and the additional land and exploration data that the Company has obtained since the third quarter of 2010. The mineral exploration costs expense amounts for each respective period also include annual maintenance fees paid to the BLM, which were higher in 2011 because of the larger number of recorded mining claims renewed by the Company at September 1, 2011 compared to September 1, 2010, when such fees were due.
During the third quarter of 2011, we continued work on evaluating the historical exploration data regarding our properties under current industry standards and are working with consultants to compile in a digitized format the historical data and the results of our exploration work on the Black Mountains Property. We continued conducting sampling, assay and mapping work to analyze the mineralization of our properties. As part of this ongoing work during the third quarter, we submitted 10 samples to ALS Chemex Labs for metallic screen assays to evaluate the nugget effect reported in some of the historical data. We also continued work on mapping the historical drill holes and determining the locations of the historical drill hole data. As of this report, we have completed mapping the historical drill holes in the Van Deemen area using GPS equipment and have determined the location of most of the historical assay data that we have obtained for that area. We have also located approximately six additional claims in other areas of our Black Mountains Property. The historical data shows significant gold mineralization in the Van Deemen area contained in three small open pits and reported to occur in low angle faults with associated quartz-sericite-hematite-pyrite-clay alteration. However, we have not yet done sufficient work to independently verify this data under current industry standards or to classify this mineralization as a mineral resource or reserve. Subject to available funding, we intend to continue exploration work to independently evaluate the mineral reserve potential of our Black Mountains Property under NI 43-101 standards as part of our ongoing effort to compile sufficient data to attract a joint venture or other opportunity to develop any reserves that are determined to exist on our properties. See “– GENERAL – Plan of Operation.”