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Alianza Minerals Ltd. – ‘20FR12G/A’ on 7/25/14

On:  Friday, 7/25/14, at 1:43pm ET   ·   Private-to-Public:  Document/Exhibit ¶  –  Release Delayed   ·   Accession #:  1217160-14-150   ·   File #:  0-55193

Previous ‘20FR12G’:  ‘20FR12G’ on 4/29/14   ·   Latest ‘20FR12G’:  This Filing   ·   1 Reference:  By:  Silver North Resources Ltd. – ‘20-F’ on 2/18/21 for 9/30/20

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/25/14  Alianza Minerals Ltd.             20FR12G/A¶            11:22M                                    AB Korelin & Assocs/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 20FR12G/A   Tarsis 20-F Registration Statement Amendment No. 1  HTML   1.73M 
10: CORRESP   ¶ Comment-Response or Other Letter to the SEC         HTML   2.43M 
11: CORRESP   ¶ Comment-Response or Other Letter to the SEC         HTML     33K 
 2: EX-1.1      Underwriting Agreement --                           HTML      6K 
                certificateofincorporation                                       
 3: EX-1.3      Underwriting Agreement --                           HTML      9K 
                certificateofcontinuation                                        
 4: EX-1.4      Notice of Articles                                  HTML     21K 
 5: EX-1.5      Underwriting Agreement -- certificateofnamechange   HTML     10K 
 6: EX-1.7      Notice of Articles                                  HTML     21K 
 7: EX-4.4      Instrument Defining the Rights of Security Holders  HTML     27K 
                -- pocagreement                                                  
 8: EX-15.1     Auditors Consent                                    HTML      8K 
 9: EX-15.4     Form of Proxy                                       HTML     16K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 20-F/A

Amendment #1

x

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ______________________

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

OR

¨

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report ………………………………

Tarsis Resources Ltd.

(Exact name of Registrant as specified in its charter)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

Suite 1103 – 750 West Pender Street, Vancouver, British Columbia, Canada V6C 2T8

 (Address of principal executive offices)

Securities to be registered pursuant to Section 12(b) of the Act:

None

Securities to be registered pursuant to Section 12(g) of the Act:

Common Shares, without par value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the Company’s classes of capital or common stock as of the close of the period covered by the annual report.                                           43,137,111 Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   

Yes   ¨      No  x

If this report is an annual or a transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No ¨

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.            

Yes ¨  No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    ¨

Accelerated filer    ¨

Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨

International Financial Reporting Standards as issued

Other  ¨

by the International Accounting Standards Board  x

Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17  ¨  Item 18  x

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨   No  x   N/A ¨

Under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), Tarsis is classified as an "Emerging Growth Company". Under the JOBS Act, Emerging Growth Companies are exempt from certain reporting requirements, including the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. Under this exemption, the company’s auditor will not be required to attest to and report on management’s assessment of the company’s internal controls over financial reporting during a five-year transition period.  The Company is also exempt from certain other requirements, including the requirement to adopt certain new or revised accounting standards until such time as those standards would apply to private companies. The Company will remain an Emerging Growth Company for up to five years, although it will lose that status earlier if revenues exceed US$1 billion, or if the Company issues more than US$1 billion in non-convertible debt in a three year period, or if the market value of the common stock held by non-affiliates exceeds US$700 million.

Page 2 of 188

Index to Exhibits on Page 116

Tarsis Resources Ltd.

Form 20-F/A Registration Statement

Table of Contents

METRIC EQUIVALENTS

For ease of reference, the following factors for converting metric measurements into imperial equivalents are provided:

INTRODUCTION

Tarsis Resources Ltd. (“Tarsis” or the “Company”) was incorporated in Alberta under the Business Corporations Act (Alberta) on October 21, 2005 under the name Tarsis Capital Corporation. The Company was originally classified as a Capital Pool Corporation ("CPC") and completed is qualifying transaction on July 16, 2007. On April 25, 2008, Tarsis continued into British Columbia under the Business Corporations Act (British Columbia) and changed its name to the current Tarsis Resources Ltd. on June 17, 2009.

BUSINESS OF TARSIS RESOURCES LTD.

Tarsis Resources is a mineral company engaged in the acquisition and exploration of mineral properties.

There are no known proven reserves of minerals on Tarsis Resources' properties.  All of the Company's properties are currently at the exploration stage. The Company does not have any commercially producing mines or sites, nor is the Company in the process of developing any commercial mines or sites. The Company has not reported any revenue from operations since incorporation.  As such, Tarsis Resources is defined as an “exploration-stage company”.

FINANCIAL AND OTHER INFORMATION

In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

FORWARD-LOOKING STATEMENTS

Certain statements in this document constitute “forward-looking statements”. Some, but not all, forward-looking statements can be identified by the use of words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” statements that an action or event “may,” “might,” “could,” “should,” or “will” be taken or occur, or other similar expressions. Although the Company has attempted to identify important factors that could cause actual results to differ materially from expected results, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Registrant, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following risks: the risks associated with outstanding litigation, if any, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters of the Registrant with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the Registrant’s common share price and volume; and tax consequences to U.S. Shareholders. We are obligated to keep our information current and revise any forward-looking statements because of new information, future events or otherwise.

Part I

Item 1.  Identity of Directors, Senior Management and Advisors

Table No. 1

Company Officers and Directors

The Company’s auditor is Davidson & Company LLP, Chartered Accountants, 1200 - 609 Granville Street, Vancouver, British Columbia, Canada, V7Y 1G5. Davidson & Company LLP has been auditor of the Company since inception.

Item 2.  Offer Statistics and Expected Timetable

Not Applicable

Item 3.  Key Information

As used within this Annual Report, the terms “Tarsis”, “the Company”, “Issuer” and “Registrant” refer collectively to Tarsis Resources Ltd., its predecessors, subsidiaries and affiliates.

SELECTED FINANCIAL DATA

The selected financial data of the Company for the fiscal years ended September 30, 2013 and 2012, and the eleven months ended September 30, 2011, were derived from the consolidated financial statements of the Company which have been audited by Davidson & Company LLP, Chartered Accountants, as indicated in its auditors’ report which is included elsewhere in this Registration Statement. The financial data for the years ended October 31, 2010 and 2009 have also been derived from the consolidated financial statements of the Company as audited by Davidson & Company LLP, although the consolidated financial statements and auditors’ report are not included in this Registration Statement.

The selected financial data should be read in conjunction with the consolidated financial statements and other financial information included elsewhere in the Registration Statement.

The Company has not declared any dividends on its common shares since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings, if any, for use in its operations and the expansion of its business.

Table No. 2 is derived from the financial statements of the Company, which have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company’s transition date to IFRS was October 1, 2011 and this required the restatement for comparative purposes of amount reported by the Company for the eleven months ended September 30, 2011 which is presented in IFRS in the following table. Table No. 2a includes prior years’ statements which were prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

Table No. 2

Selected Financial Data

IFRS

(CDN$ in 000, except per share data)

Table No. 2a

Selected Financial Data

Canadian GAAP

(CDN$ in 000, except per share data)

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).  

Table No. 3 sets forth the rate of exchange for the Canadian Dollar at the end of the five most recent years ended December 31^st, the average rates for the period, and the range of high and low rates for the period. Table No. 3 also sets forth the rate of exchange for the Canadian Dollar at the end of the six most recent months, and the range of high and low rates for these periods.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.

Table No. 3

Canadian Dollar/U.S. Dollar

The exchange rate was $1.11 on March 31, 2014.

Statement of Capitalization and Indebtedness

Table No. 4

Capitalization and Indebtedness

Risk Factors

An investment in the Common Shares of the Company must be considered speculative due to the nature of the Company’s business and the present stage of exploration and development of its non producing mineral properties. In particular, the following risk factors apply:

Risks Associated with Mineral Exploration

The Company is engaged in the mineral exploration business, which is highly speculative and has certain inherent risks which could have a negative effect on the Company.

Mineral exploration is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production.  The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environment protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.

All of the Company's mineral properties are at the exploration stage and all of the Company's exploration expenditures may be lost.

The Company is at the exploration stage on all of its properties and substantial additional work and expenditures will be required in order to determine if any economic deposits occur on the Company’s properties. Mineral Exploration is highly risky, and most exploration properties do not contain any economic deposits of minerals. If a property is determined to not contain any economic reserves of minerals, the entire amount spent on exploration will be lost.

The mineral industry is highly competitive.

The Company will be required to compete in the future directly with other corporations that may have greater resources.  Such corporations could outbid the Company for potential projects or produce minerals at lower costs which would have a negative effect on the Company’s operations.

Commodity prices may not support corporate profit.

The resource industry in general is intensely competitive and there is no assurance that, even if commercial quantities of minerals are discovered and developed, a profitable market will exist for the sale of same.  Factors beyond the control of the Company may affect the marketability of any minerals discovered.  The price of natural resources are volatile over short periods of time, and is affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production. If the Company is unable to economically produce minerals from its projects, it would have a negative effect on the Company’s financial condition, or require the Company to cease operations altogether.

The Company's mineral exploration activities are subject to substantial government regulatory requirements.

Exploration operations are affected by various government regulations relating to resource operations, including the acquisition of land, pollution control and environmental protection, waste disposal and toxic substances, and safety.  Changes in these regulations or in their application are beyond the control of the Company and may adversely affect its operations, business and results of operations.  The requirements to comply with these regulations may result in increased costs, as well as delays in obtaining the permits required to conduct operations. Failure to comply with the conditions set out in any permit or failure to comply with the applicable statutes and regulations may result in orders to cease or curtail operations or to install additional equipment.  The Company may be required to compensate those suffering loss or damage by reason of its operating or exploration activities.

On the Federal, Provincial/Territorial and State level, the Company must comply with exploration permitting requirements which require sound operating and reclamation plans to be approved by the applicable government body prior to the start of exploration. Depending upon the type and extent of the exploration activities, the Company may be required to post reclamation bonds and/or assurances that the affected areas will be reclaimed. If the reclamation requires funds in addition to those already allocated, the Company could be forced to pay for the extra work and it could have a significant negative effect upon the Company’s financial position and operations.

The Company’s title to its properties may be disputed by third parties which could result in the loss of title to its properties.

The Company has only done a preliminary title survey of its exploration properties in accordance with industry standards. These procedures do not guarantee the Company’s title and therefore, in accordance with the laws of the jurisdictions in which these properties are situated, their existence and area could be in doubt. Unregistered agreements or transfers, or native land claims, may affect title.  If title is disputed, the Company will have to defend its ownership through the courts, which would likely be an expensive and protracted process and have a negative effect on the Company’s operations and financial condition. In the event of an adverse judgment, the Company would lose its property rights.

Risks Relating to the Financing of the Company

The Company’s auditors have Expressed a “Going Concern” Opinion.

The Company’s auditor has included a “going concern” opinion in its auditors’ report to the Company's consolidated financial statements for the fiscal year ended September 30, 2013. The qualification was included as a result of the Company's need to obtain additional financing through the issuance of common shares or obtaining joint venture or property sale agreements for one or more properties. If the Company is unable to meet its obligations, it will not be able to fulfill its business plan and be forced to reduce certain operations or cease operations altogether.

The Company will require additional financing which could result in substantial dilution to existing shareholders.

The Company, while engaged in the business of mineral exploration, is dependent on additional financing for planned exploration programs as outlined herein.  Management anticipates being able to raise the necessary funds by means of equity financing.  The ongoing exploration of the Company’s properties is dependent upon the Company’s ability to obtain financing through the joint venturing of projects, debt financing, equity financing or other means. Such sources of financing may not be available on acceptable terms, if at all.  Failure to obtain such financing may result in delay or indefinite postponement of exploration work on the Company’s exploration properties, as well as the possible loss of its interest in such properties. Any transaction involving the issuance of previously authorized but unissued shares of common or preferred stock, or securities convertible into common stock, could result in dilution, possibly substantial, to present and prospective holders of common stock. These financings may be on terms less favorable to the Company than those obtained previously.

The Company has a history of net losses and no operational cash flow to sustain operations and does not expect to begin receiving operating revenue in the foreseeable future.

None of the Company’s properties have advanced to the commercial production stage and the Company has no history of earnings or cash flow from operations.  The Company has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future.  Historically, the only source of funds available to the company has been through the sale of its common shares. Any future additional equity financing would cause dilution to current stockholders. If the Company does not have sufficient capital for its operations, management would be forced to reduce or discontinue its activities which would likely have a negative effect on the stock price.

Risks Relating to an Investment in the Securities of the Company

The market for the Company’s common stock has been subject to volume and price volatility which could negatively effect a shareholder’s ability to buy or sell the Company’s shares.

The market for the common shares of the Company may be highly volatile for reasons both related to the performance of the Company or events pertaining to the industry (e.g. mineral price fluctuation/high production costs/accidents) as well as factors unrelated to the Company or its industry.  In particular, market demand for products incorporating resource commodities fluctuate from one business cycle to the next.  The Company’s common shares can be expected to be subject to volatility in both price and volume arising from market expectations, announcements and press releases regarding the Company’s business, and changes in estimates and evaluations by securities analysts or other events or factors.  

In recent years the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly small-capitalization companies such as the Company, have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values, or prospects of such companies.  For these reasons, the price of the Company’s common shares can also be expected to be subject to volatility resulting from purely market forces over which the Company will have no control.  Further, despite the existence of a market for trading the Company’s common shares in Canada, stockholders of the Company may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in the price of the stock.

The company has a dependence upon key management employees, the loss or absence of which could have a negative effect on the Company’s operations.

The Company strongly depends on the business and technical expertise of its management and key personnel, including President and Chief Executive Officer Marc G. Blythe and Chief Financial Officer Mark Brown.  There is little possibility that this dependence will decrease in the near term.  As the Company’s operations expand, additional general management resources will be required. The Company may not be able to attract and retain additional qualified personnel and this would have a negative effect on the Company’s operations.

Certain officers and directors may have conflicts of interest.

Certain of the directors and officers of the Company are also directors and/or officers and/or shareholders of other natural resource companies.  While the Company is engaged in the business of acquiring and exploring mineral properties, such associations may give rise to conflicts of interest from time to time.  The Directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company.  If a conflict of interest arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on such matter.  In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.

The Company could be deemed a passive foreign investment company which could have negative consequences for U.S. investors.

The Company could be classified as a Passive Foreign Investment Company (“PFIC”) under the United States tax code. If the Company is declared a PFIC, then owners of the Company’s Common Stock who are U.S. taxpayers generally will be required to treat any so-called "excess distribution" received on its  common  shares, or any  gain  realized  upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund ("QEF") election or a mark-to-market election with respect to the Company’s shares. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company’s net capital  gain and  ordinary earnings for any year in which the Company is classified as a PFIC, whether or not the Company distributes any amounts to its shareholders.

U.S. investors may not be able to enforce their civil liabilities against the company or its directors, controlling persons and officers.

It may be difficult to bring and enforce suits against the Company. The Company is a corporation incorporated in Canada under the laws of British Columbia. All of the Company’s directors and officers are residents of Canada and all of the Company’s assets and its subsidiaries are located outside of the United States.  Consequently, it may be difficult for United States investors to effect service of process in the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under United States securities laws.  United States citizens may be required to petition Canadian Courts to enforce civil judgments obtained in the United States. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities under the U.S. Securities Act.

Broker-Dealers may be discouraged from effecting transactions in our common shares because they are considered "Penny Stocks" and are subject to the Penny Stock Rules.

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on FINRA broker-dealers who make a market in "a penny stock".  A penny stock generally includes any equity security that has a market price of less than $5.00 per share that is not registered on certain national securities exchanges or quoted on the NASDAQ system. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.

Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000 in each of the last two years, or US$300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the US Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.

As a “Foreign Private Issuer”, the company is exempt from the Section 14 Proxy Rules and Section 16 of the 1934 Securities Act.

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.

Item 4.  Information on the Company

DESCRIPTION OF BUSINESS

Introduction

Tarsis' executive office is located at:

750 West Pender Street, Suite 1103, Vancouver, British Columbia, Canada V6C 2T8

Telephone: (604) 282-7999

Facsimile: (604) 689-7645

E-Mail: info@tarsis.ca

Website: www.tarsis.ca

The Contact person in Vancouver is Marc Blythe, President and CEO.

The Company currently leases its corporate office space in Vancouver from Almaden Minerals Ltd., a related party, under a month to month, verbal agreement.

The Company’s fiscal year ends September 30^th. From inception through fiscal 2010, the Company’s fiscal year ended October 31^st.

The Company's common shares trade on the TSX Venture Exchange under the symbol "TCC".

The authorized share capital of the Company consists of an unlimited number common shares and unlimited number of preferred shares, issuable in series. As of December 31, 2013, the end of the most recent fiscal quarter, there were 47,973,777 common shares and no preferred shares issued and outstanding.

Corporate Background

The Company was originally incorporated under the Business Corporations Act (Alberta) under the name "Tarsis Capital Corp." on October 21, 2005. The Company continued into British Columbia under the Business Corporations Act (British Columbia) on April 25, 2008 and changed its name to "Tarsis Resources Ltd." on June 17, 2009.

The Company presently has one wholly owned subsidiary, Minera Tarsis S.A. de C.V., incorporated in Mexico.

Currently, the Company conducts mineral exploration in Canada, Mexico and the United States.

History and Development of the Business

The Company was originally incorporated as a Capital Pool Company (“CPC”) under the policies of the TSX Venture Exchange, and began trading on the TSX Venture Exchange on March 1, 2006 under the symbol "TCC".

On April 27, 2007, the Company entered into a Letter of Intent with Almaden Minerals Ltd. and its subsidiary Minera Gavilan SA de CV to acquire certain mineral property interests held by Almaden and Gavilan located in the Yukon Territory and Mexico. These interests included 6 mineral properties (MOR, Cabin Lake, Caribou Creek, Meister River, Tim/Wolf, and Goz Creek) in the Yukon Territory and 1 property (Erika) located in Mexico. Consideration for the acquisition was the issuance of 3,500,000 common shares of Tarsis at a price of $0.40 per share and a net smelter return royalty of 2% on all mineral products discovered on the properties. Tarsis also agreed to issue an additional 500,000 common shares to Almaden if an arms-length third party optioned one of the properties within 24 months of the closing date of the acquisition agreement and agreed to expend a minimum of $500,000 in exploration expenditures. A formal acquisition agreement was dated July 16, 2007, and represented the Company’s Qualifying Transaction under TSX Venture Exchange Policy 2.4. TSX approval was received on July 30, 2007.

In September 2007, the Company announced it had entered into an option agreement with ACME Resources (formerly known as International KRL Resources Corp.) where ACME could earn a 60% interest in the Tim property from Tarsis by issuing Tarsis 1,000,000 common shares of ACME and completing $3,000,000 in exploration expenditures before September 10, 2011. This agreement and ACME's exploration spending triggered the bonus share clause in the acquisition agreement of the Tim property from Almaden. Therefore, an additional 500,000 common shares of Tarsis were issued to Almaden in Fiscal 2008. In November 2010, ACME withdrew from the option agreement and returned the Tim property to Almaden. During the option period ACME increased the size of the property, by staking, to approximately 6,000 hectares and 288 claims.

In June 2008, the Company agreed to acquire a 100% interest in the Prospector Mountain gold-silver-copper property in the Yukon from Almaden Minerals. Consideration for the acquisition was 100,000 common shares of Tarsis, $30,000 cash, and a 2% net smelter royalty to Almaden. Tarsis will also issue an additional 500,000 common shares to Almaden upon receipt of a positive bankable feasibility study for the property. The acquisition of the property was completed in February 2009.

In December 2009, the Company announced that it had signed an option agreement with Silver Quest Resources Ltd. whereupon Silver Quest could earn up to a 70% interest in Tarsis' Prospector Mountain project. Silver Quest could earn an initial 60% interest in the project by spending $4,000,000 in exploration, issuing Tarsis 1,000,000 common shares, and paying Tarsis $300,000 cash, all staged over 4 years. During the fiscal year ended September 30, 2012, the Company and Silver Quest amended the option agreement. Silver Quest assigned all of its rights and interest in the property to Independence Gold Corp in connection with a proposed plan of arrangement between the two companies. Independence returned the property to the Company in April 2012.

In fiscal 2009, Tarsis announced an agreement with Strategic Metals Ltd. to acquire a 100% interest in two mineral properties in the Yukon. The properties are the Highway Property, which is an extension to Tarsis' existing MOR property, and the Cord Property. Consideration for the acquisitions was 10,000 common shares of Tarsis and a 2% NSR to Strategic.

In fiscal 2010, the company acquired a 100% interest in the White River gold property in the Yukon by staking. The Caribou Creek property was written-off as the Company did not carry out an exploration in 2009 and 2010 and determined it was unlikely to attract an exploration partner.

In April 2011, the Company closed a private placement of 2,710,891 common shares for gross proceeds of $1,626,535. The entire placement was sold to Kinross Gold Corp., which represented an approximately 9.9% ownership interest in the Company. The Company also granted Kinross the right to maintain the percentage ownership interest through its participation in any future financings by the Company.

During the eleven months ended September 2011, the Rosie, Burns and Rogue properties in the Yukon were acquired by staking. The Dawson Gold, Cabin Lake, and Cord properties were written-off after the Company’s early stage exploration determined the properties were unlikely to attract an optionee to perform additional exploration. The Dawson Gold project was later transferred to Rackla Metals Inc. for a one-time cash payment of $10,000.

In April 2012, the Company signed an option agreement with Driven Capital Corp. for the White River Property. Driven could earn a 60% interest in the property by completing $4,250,000 in exploration and making cash payments and issuing shares to the Company. Driven completed the first phase of a diamond drill program before returning the property to the Company in February 2013.

In February 2013, the Company optioned its Erika property in Mexico to Osisko Mining Corporation. Osisko can earn up to a 75% interest in the property by expending $4,000,000 on the property over 4 years, making $1,000,000 in cash payments to Tarsis, and funding and delivering a Feasibility Study. In December 2013, Osisko returned the property to the Company.

In June 2013, the Company finalized the purchase of an additional 7 gold exploration properties from Almaden Minerals Ltd. Under the agreement, the company will own a 100% interest in 5 properties in Mexico and 2 in Nevada in exchange for issuing 4,000,000 common shares to Almaden and granting a 2% NSR on any production from the projects. The Company will also issue an additional 200,000 shares to Almaden for each new property acquired within the area of influence surrounding each of the 7 properties, and issue a further 800,000 common shares to Almaden upon the first time disclosure of a mineral resource on each and any of the new properties.

Business Overview

The Company currently has interests in mineral exploration projects located in the Yukon Territory, Canada, the states of Guerrero and Nayarit, Mexico, and Nevada, USA. The Company and all of its properties are at the exploration stage. There is no assurance that a commercially viable resource deposit is present on any of the Company’s properties, and additional exploration is required before it is determined if any property is economically and legally viable.

Operations are not seasonal as the Company can conduct certain exploration activities on its properties year-round. To date, the Company’s revenue has been limited to property option payments from optionees of certain of its mineral properties, interest on its cash balances, and sale of marketable securities and therefore it is not currently dependent upon market prices for its operations, nor is it dependent upon any patents, licenses or manufacturing processes. The Company’s operations are dependent upon exploration rights and claims as well as the terms of option and/or joint venture agreements on those properties. Please see the individual property descriptions below for the details of each of the Company’s current exploration projects.

The Company currently has property interests in Mexico, Canada, and the United States. The following information is an overview of the government requirements which apply to mineral exploration in each nation.

In Canada, mining law is a provincial or territorial matter. Maintaining a mineral property requires annual assessment work or cash in lieu of work. Prior to starting a work program, an application describing the program is submitted to the government authorities and this is then distributed for comment to various departments for review, such as fisheries or forestry that may discern impact from the proposed work. The government has an obligation to consult with First Nation groups in the area that may have a land claim over the mineral claims, but this consultation is often delegated to the Company to handle. A memorandum of understanding may have to be negotiated with the First Nation before the government will issue a permit to work. If there is to be any environmental impact, an appropriate reclamation amount is determined and a bond is posted by the Company for this amount before the permit is issued.

In the U.S., federal mining laws govern mining claims on federal land, including land administered by the Bureau of Land Management (“BLM”). A payment of US$140 per claim is payable to the BLM by September 1 of each year per twenty acre mining claim.  This is filed in advance for the upcoming assessment year.  Prior to any exploration activity, an Exploration Plan is submitted to the BLM that outlines the work program and describes any proposed land disturbance. Reclamation plans are also submitted and an appropriate bond to ensure such reclamation is done may have to be provided before the permit is issued.

In Mexico, mining law is a federal matter.  The government requires annual assessment work and expenditures per hectare which increase with the size and age of the claim.  Under the tax reforms effective January 1, 2014, if a concession holder has not conducted exploration or exploitation activities during a two-year period, the concession holder would have to pay an additional 50% of the taxes payable per hectare if within the last 11 years, and an additional 100% of the taxes payable if after year 12.  Land taxes per hectare also have to be paid by January 31 and July 31 each year.  Both amounts are subject to inflation accounting and the inflation adjustment number for each fiscal period is published in the official gazette. Under the Mexican Constitution and the mining and environmental laws of Mexico, all mining projects are subject to Federal legal control.  This control is exercised from the exploration phase through the closure phase of a mining project. Prior to the initiation of exploration activities, concession owners are required to file a notice of commencement of exploration activities in conformity with Mexican Official Norm 120 (NOM-120); prior to initiation of construction activities (and also in some more intrusive exploration activities), mining projects are required to apply for and obtain an environmental impact authorization and a land use permit from the Mexican Federal environmental agency SEMARNAT (Secretaria de Medio Ambiente y Recursos Naturales). This requires the presentation of an environmental impact manifest and a technical study which deals with the impacts, the environmental mitigation, and habitat compensation to the satisfaction of the authorities having environmental jurisdiction.

Mineral Properties

The Company currently has interests in 12 mineral exploration properties, including 5 properties in the Yukon Territory, Canada; 1 property in Guerrero State, Mexico; 4 properties in Nayarit, Mexico; and 2 properties in Nevada, USA. All of the Company's properties are currently at the exploration stage.

The Erika and Yago Properties have been classified as “Key” properties and are currently subject to the most advanced exploration programs and have the greatest current potential for interest by a mid to large-sized resource company as a venture partner or acquirer. The remaining 10 properties are classified as “Growth Pipeline” properties, as the exploration programs on pipeline properties are at an early stage and/or are being offered to potential optionees.

Key Properties

Erika Property

The Erika Property is located in Guerrero State, Mexico and covers approximately 16,000 hectares. The Company currently has a 100% interest in the property, subject to a 2% Net Smelter Return Royalty (“NSR”).  

The project is at the exploration stage and currently does not contain proven mineral reserves.

How Acquired

The Company acquired a 100% interest in the property in July 2007 through its agreement with Almaden Minerals Ltd. Tarsis acquired 100% interest in 7 properties, including Erika, in exchange for 3,500,000 common shares of Tarsis at a price of $0.40 per share and a net smelter return royalty of 2% on all mineral products discovered on the properties. The property consists of two registered claims held by the Company’s Mexican subsidiary, Minera Tarsis S.A. de C.V. The details of each claim are in the following table:

Option Agreement

Under an option/joint venture agreement dated January 17, 2013, the Company granted Osisko Mining Corporation (“Osisko”) the right to earn up to a 75% interest in the property by funding exploration and making cash payments to the Company.

Osisko could earn an initial 51% interest in the Erika property by making a total of US$1,000,000 in cash payments and US$4,000,000 in cumulative exploration work expenditures under the following schedule:

Osisko could elect to accelerate these payments at its option in order to earn-in their interest sooner. After Osisko earned the initial 51%, they could elect to earn an additional 24% interest (total 75% interest) by funding and delivering a Feasibility Study.

Osisko served as the operator of the project during the initial earn-in phase and during the joint-venture as long as it has at least a 50% interest in the project. On December 18, 2013, Osisko terminated the option agreement.

Location and Access

The property is located in Guerrero State in southern Mexico, approximately 200 kilometers south of Mexico City and 150 kilometers north of Acapulco, in the Guerrero Gold Belt.

Access is provided by the paved Federal Highway 95 which runs through the eastern boundary of the property and connects Mexico City and Acapulco. A network of paved and gravel roads provide vehicle access to approximately 50% of the property. The claims are centered on the village of Coacoyula, and the town of Maxela is also located on the property. Both Coacoyula and Maxela have electric power and a ready workforce. The Company rents storage facilities in Coacoyula and has rented larger buildings when work programs are underway. Water is available from a river several kilometers south of the property and is trucked to drill sites as needed.

Regional Geology

The property lies within the Guerrero Gold Belt, which extends north of Acapulco and hosts several known gold deposits. The property lies on the Guerrero-Morelos Platform, which consists of over 2,000 m of Mesozoic carbonate rocks unconformably overlaying Early Cretaceous to Late Jurassic island arc sequences of Guerrero Terrane. The Guerrero-Morelos Platform is bounded to the south by the Xolapa metamorphic core complex, and to the north it is covered by Trans-Mexican Volcanic Belt magmatic rocks.

Property Geology

Massive and fossiliferous, to locally silty banded limestone of the Cretaceous Morelos Formation are overlain by interbedded sandstones, siltstones, and mudstones of the Mezcala Formation.

The Mesozoic sedimentary sequence strikes generally to the north, and is overlain by a thin package of Tertiary felsic volcanic rocks. The felsic volcanic unit consists of brecciated volcaniclastics containing fine-grained, angular to sub-rounded lithic fragments, quartz phenocrysts, with rare pumice fragments.

Silicification, argillic alteration, and dolomitization are the main styles of hydrothermal alteration on the Property, which includes several areas of intense clay-sulphate alteration, from which clay has been mined for industrial applications, including ceramics. Small-scale mining for mercury is recorded to have taken place in the 1940’s.

Gold mineralization is hosted in a dirty calcareous siltstone-mudstone, which overlies a thick package of Cretaceous aged limestone. Zones with elevated gold response coincide with visually evident decarbonatization, accompanied by multi-phase calcite veining and the presence of arsenic. Medium to coarse-grained crystalline diagenetic pyrite is also disseminated throughout the siltstone. The mineralization appears to be largely stratabound although there are a number of crosscutting structural features in proximity to the decarbonatized and mineralized intervals.

Exploration History

The property was initially staked by Almaden in the early 1990's after prospecting revealed evidence of epithermal mineralization. Mercury was historically mined on the property, and geochemical surveys revealed elevated levels of mercury, arsenic and antimony. Almaden Minerals Ltd. carried out induced polarization (IP) and Natural Source Audio-Frequency Magneto-Teluric (NSAMT) geophysical surveys over areas where prospecting, alteration mapping and soil geochemical surveys outlined mineralization and alteration.

A limited 7 hole drill program was conducted in 1997 targeting IP geophysical anomalies. Up to 1 g/t gold was returned from this drill program. Additional exploration and evaluation suggested that the subsequent NSAMT survey and more comprehensive soil surveys conducted in 2006 were more successful in identifying the targets of interest than the earlier IP work. These targets were drilled during the first phase of a diamond drill program by Tarsis in 2010 and 2011.

During 2008, the Company conducted early stage prospecting and reconnaissance work, including geochemical surveys. The Company completed detailed analysis of the data in order to clearly present the geology, geochemistry, and geophysics, which identified a number of drill ready targets. At the end of March 2011, the Company announced that 9 drill holes totaling 2,546.1 meters had been completed, In addition, a stream sediment sampling was conducted over unexplored areas of the property, and two soil sample grids were completed over areas where anomalous stream sediment response had bee detected for gold and other key pathfinder elements. Due to encouraging geology observed in the drill holes completed to date, the Company extended the drill program with additional drilling. In total, 4,020.8 meters were drilled.

Once on site, Company personnel reviewed historic diamond drill core from a prior operator and identified sediment-hosted gold mineralization (Carlin style). Additional diamond drilling was conducted to try to expand on the historic mineralization which was evident in one part of one hole. Five diamond drill holes were completed on this target and four of them intersected anomalous gold in a sediment-hosted environment. Results from this program included:

 * True widths are interpreted to represent 90% of the reported interval.

In addition to elevated gold response in the drill holes analyzed, coincident key pathfinder elements included arsenic, thallium, mercury, antimony, and molybdenum are moderately to strongly elevated with respect to background levels. Base metal values are very low and generally not anomalous for copper, lead or zinc.

In addition to a ground magnetic survey over prospective parts of the property, soil sampling was conducted over two separate areas known as the Maxela grid and the SW grid. Two distinct gold-in-soil anomalies were outlined within the SW grid south of the current drilling. The larger of the two anomalies measures approximately 1100 by 500 meters and trends northeasterly while the second anomaly covers an area roughly 700 by 300 meters and trends north-northeasterly. The anomalies are 600 meters apart and both contain coincidentally elevated arsenic, thallium, mercury, and antimony. Follow-up prospecting on the SW grid recovered 16 rock samples containing various alteration assemblages. Two of the samples returned anomalous gold values from silicified, hematitic carbonate, strongly fractured, locally brecciated and infilled with white clay alteration.

Prospecting in mid-2012 identified in-situ gold-bearing jasperiod breccias, features that are commonly found in Carlin gold systems. Four samples of hematitic jasperoid breccias were collected from outcrop located within the core of one of four discrete gold-in-soil anomalies measuring approximately 600 meters by 300 meters and returned assays ranging from 0.17 g/t to 0.94 g/t gold. The other three soil anomalies are located 500 meters to 1,500 meters away and have received little to no follow up work since being identified. All four soil anomalies feature coincident anomalous arsenic and thallium and are coarsely defined by 200 meter by 50 meter spaced samples.

Osisko optioned the property in January 2013 and commenced exploration as operator in May 2013. During the summer of 2013, Osisko completed detailed geological mapping and geochemical sampling. The work resulted in the identification of specific drill targets, in addition to drill targets already identified and recommended by the Company. Osisko completed a drill program in the fall of 2013, which consisted of eight holes totaling 2,115 meters.

Osisko spent a total of $339,000 on exploration on the property through September 2013, which was before the commencement of the drill program.

Current and Anticipated Exploration

Osisko’s exploration program included mapping at 1:10,000 scale over the entire property and sampling for geochemical analysis of 251 rock chip samples, 289 soil samples, and 18 stream sediment samples. The program also included eight drill holes. Seven drill holes were reverse circulation (RC) holes totaling 1,713 meters and one hole was a diamond drill hole of 402 meters. Drilling targeted three different styles of mineralization at four separate locations. Three of the holes targeted skarn mineralization, three targeted Carlin-style gold mineralization, and two were focused on separate high-sulphidation epithermal targets.

Three holes were drilled at El Rincon between 150 to 400 meters east of drilling conducted by the Company in 2011. These holes targeted Carlin-style gold mineralization, but only one of the three holes reached the intended target at the contact between the Morelos limestone and the Mezcala sediments where gold is decarbonized Mezcala was previously encountered. Hole EK-RC-02 returned 0.12 g/t gold over 2.0 meters from 264 meters, and included elevated arsenic and mercury values. This intersection is located approximately 200 meters east of 2011 drill hole ER-11-14 in a direction believed to be increasingly distal to the feeder structures sourcing the gold mineralization identified in 2011. The other two RC holes drilled at El Rincon were terminated prematurely due to drilling difficulties.

Data analysis, sampling and prospecting by Osisko idendified a previously unknown zone of skarn alteration at the La Onza prospect. Three holes were drilled at La Onza and encountered Mezcala sediments and minor volcanic but none of the three holes intersected the Morelos limestone which is believed to be the most prospective host for skarn style gold mineralization. One hole intersected a diorite intrusion at depth, although the hole passed through the intrusion and ended in Mezcals. Elsewhere in the district skarn gold deposits are known to occur in Morelos limestone near the contact with intrusive rocks.

Two drill holes were directed at high-sulphidation style epithermal targets at the Tierra Colorada and Cieneguita prospects, located 3.5 kilometers apart in the western portion of the property. While no gold values were detected, moderately anomalous mercury values were returned from hole EK-RC-03 at Cieneguita to a depth of 270 meters.

The Company is currently analyzing the report and will determine the most effective means to advance the project.

Yago Property

The Yago Property is a 15,000 hectares gold-silver exploration project located in Nayarit State, Mexico. The Company has a 100% interest in the property, subject to a 2% NSR.

The project is at the exploration stage and currently does not contain proven mineral reserves.

How Acquired

Under an agreement dated June 10, 2013 between the Company and Almaden Minerals, the Company acquired a 100% interest in 7 mineral properties, including Yago, in exchange for 4,000,000 common shares at a price of $0.055 per share, and a 2% NSR on any production from the properties.

In addition, an area of influence will be outlined in Mexico, where Almaden will provide its proprietary data and concepts to the Company. in return the Company will issue 200,000 common shares to Almaden for each new property acquired within the area of influence. The Company will issue a further 800,000 common shares to Almaden upon the first time disclosure of a mineral resource on each and any of the new properties.

The claims which comprise the property are as follows:

Location and Access

Yago is located in Nayarit State, Mexico, approximately 100 kilometers northeast of Puerto Vallarta and 50 kilometers north of the State capital of Tepic.

Access is via Highway 15, the major north-south highway along Mexico’s West Coast, to the area around the property and the town of Yago via approximately 7 kilometers of paved road from Highway 15. Access to most areas of the property is provided by secondary roads and trails. A main railroad crosses the property, and there is electric service via powerlines from the town of Yago. Limited supplies are available in Yago, while labor and supplies are available from Tepic and the surrounding municipality.

The property lies in the coastal lowlands of Mexico’s west coast. Agriculture is the primary industry in the area, including cattle ranching throughout the area of the property. The climate is tropical and has both wet and dry seasons. The wet season typically begins in late June, and extends to October. Although the weather remains mostly sunny, intense rainstorms, sometimes daily, can lead to large amounts of precipitation and flash flooding.

Regional Geology

The region lies within the Sierra Madre Occidental, a belt of volcanic rocks overlying and intruding Precambrian to Jurassic basement rocks, which runs along western Mexico for approximately 1,500 kilometers and averages 250 kilometers wide. Several large precious metal provinces are located within the Sierra Madre Occidental.

Property Geology

The property covers a large area of hydrothermal alteration and hosts numerous gold-silver bearing, low sulphidation epithermal vein showings and artisanal mine workings which are concentrated in two area of the properties. These areas are known as La Sarda and La Tejona, and both feature a high-level epithermal environment.

At La Sarda, at least four sub-parallel gold-silver bearing quartz-adularia vein structures have been identified within a 2,000 by 1,500 meter area. These vein structures have been mined historically to some degree. At La Tejona, a number of historical shafts and adits have been excavated, but little is known about the historical production.

Exploration History

The property was originally mined during the Spanish period, and then resumed by a Japanese company in the late 1800’s to the early 1900’s. The operations were believed to have ceased due to the Mexican revolution around 1910. Limited underground mining was conducted by a Mexican mining company at La Sarda from 1995 to 2000. Workings extended to a depth of approximately 100 meters below surface.

Almaden acquired the majority of the property in 1997 through both acquisition agreements and staking. The La Sarda portion was purchased by Almaden after mining operations ceased in 2000. Only sporadic exploration has been conducted by optionees between 1997 and 2008.

An optionee completed 7 widely spaced reverse-circulation drill holes totaling 975 meters in 1998 to test known vein structures and anomalous gold soil zones. A brief diamond drill program of 3 holes was conducted in 2000, but the program was discontinued after only 525 meters were completed due to drilling difficulties. Additional diamond drilling was completed in 2002/2003 at La Sarda. A total of 1098 meters in six holes tested the down-dip and strike extent of the La Sarda-San Juan vein. The holes were drilled along the strike of the vein for approximately 450 meters and intersected the vein structure up to 135 meters downdip of the lowest workings on the vein. The structure remained open at depth and extended approximately 170 meters northwest of the known workings.

In 2007, a 3000 meter diamond drill program was planned, but only 10 shallow holes totaling 945 meters were completed due to technical difficulties. The program returned intercepts of between 0.90 to 2.40 meters grading 0.24-1.29 g/t gold and 2.1 to 152 g/t silver. The results were interpreted to be the upper level of a gold-silver epithermal system. Trenching also discovered new silver-rich gold veins in the Sagitario area of the property

Current and Anticipated Exploration

The work performed by Almaden and the various optionees at La Sarda and La Tejona has identified surface and subsurface mineralization intermittently over 3 square kilometers and 2.5 square kilometers, respectively. The Company commenced exploration on both historical locations on the project in August 2013.

La Tejona Prospect

The La Tajona Prospect is defined by a fairly well constrained gold-in-soil geochemical anomaly which trends north-easterly for approximately 1,700 meters and is open along strike to the southwest. Anomalous response tapers to the northeast into a valley bottom and beneath cover rocks. Prospecting along the surface trace of the main gold anomaly by prior operators indentified intermittent accumulations of quartz vein float, subcrop and outcrop in excess of 10 meter widths at a number of locations. The largest concentrations of this material are contained within the southern portion of the anomaly but very little to sampling of this material is documented. A possible reason is that most material appears to be chalcedonic/opalescent in character and more indicative of silica disposition above the gold rich zones in these types of systems.

At the northeast end of the main anomalous trend, a 55 meter outcrop exposure of quartz vein material obliquely bisects the gold-in-soil anomaly along a narrow drainage. The vein zone strikes north-northeast to northeast and dips moderately to steeply toward the southeast between 53 and 72 degrees.

The Company collected two series of sawn channel samples across partial outcrop exposures of banded and brecciated epithermal quartz vein material. Significant assay results include:

* Sawn sample widths are believed to represent approximately 85% of the true vein thickness

The two sample sites were located 12 meters apart and started at or near the hanging wall contact of the vein. LT-13-01 contained 10 samples totaling 5.29 meters while LT-13-02 contained 9 samples for a total of 6.17 meters. Each channel ended in vein material and both series of samples returned elevated gold values in from the last sample collected toward the footwall, indicated that additional sampling is required. Mapping during the site visit suggests the vein zone at this particular location could exceed 15 meters true thickness and the samples collected by the Company only tested a limited portion of the mineralization near the hanging wall contact.

Cursory prospecting was conducted roughly 1,200 meters southwest along trend of the main gold-in-soil anomaly within an area previously mapped to contain a significant concentration of quartz vein float. However, no previous sampling of the material is documented. An examination of the area by the Company identified a combination of chalcedonic/opalescent quartz and silicified/hydrothermally altered wallrock containing moderate limonite and hematization across an approximate 15 meter section of the slope. Two 6 meter composite samples were collected across the float train and one of these composites returned 0.42 g/t gold.

La Sarda

At La Sarda, at least four sub-parallel northeast trending vein structures have been identified and intermittently explored by prior operators. The La Experanza Vein was the focus of the Company’s 2013 orientation at La Sarda and was designed to follow up a number of recent chip samples taken along strike from the site of historical gold-silver production. Of the three veins previously mined, the La Esperanza was the least developed with reported production of approximately 3,000 tonnes. The average width of the vein mined was 1.2 meters and the average grade was reported to be 8.13 g/t gold and 68.73 g/t silver based on 308 samples collected underground. The La Esperanza Vein exhibits steep dips ranging from 70 to 80 degrees to the southeast.

Three historical sample sites were located along a 600 meter section of the La Esperanza Vein which has a known extent of 1,200 meters. Sites Esp A and C are located 500 meters along strike from the known past production and site Esp 67 is located 150 meters southwest of the production adits.

Sawn channel samples were completed along vein zones ranging from between 0.55 and 3.55 meters. Significant assay results include:

* Sawn sample widths are believed to represent true vein thickness

Sawn samples were approximately 4 centimeters in width, resulting in relatively large samples per interval, which the Company believes improves the reliability of the sampling. Samples were delivered to ALS Minerals at Guadalajara for sample preparation and all analyses were completed in North Vancouver, British Columbia. Gold values were determined using 30 gram fire assay and other elements were analyzed using 51 element ICPMS techniques.

The Company will be conducting exploration at Yago during fiscal 2014 in order to upgrade the Yago Gold Targets to attract more potential partners for further exploration work. The Company’s geological team has identified priority targets that can be advanced geologically with additional work. Community relations work has also been started in the area to maintain good relationships with the local stakeholders. The budget for the 2014 program is expected to be approximately $150,000.

Growth Pipeline Properties

Yukon, Canada Growth Pipeline Properties

White River Property

The White River Property is located in the western portion of the Yukon Territory. Currently, the property consists of 308 mineral claims (approximately 6,400 hectares). The Company has a 100% interest in the property.

The project is at the exploration stage and currently does not contain proven mineral reserves.

White River Property Location Map

How Acquired

During fiscal 2010, the Company acquired the White River property through staking. Additional claims were staked in the first quarter of fiscal 2011.

The details of the claims which comprise the property are included in the following table: