We currently do not have sufficient funds to pay our anticipated general operating and corporate expenses for the remainder of the fiscal year and we intent to try to raise funds but there is no assurance that we will be able to raise adequate capital.
Over the remainder of the fiscal year, we plan to raise funds through the sale of our common stock, through loans or convertible debentures. There is no guarantee that we will be successful in arranging the required financing.
Unless we raise funds through the sale of our common stock or through loans, we cannot further explore or develop our properties or pay our anticipated general operating and corporate expenses. There is no assurance that we will be able to raise adequate capital.
Our future success will be materially dependent upon our ability to satisfy additional financing requirements. We are reviewing our options to raise equity capital. It is unlikely that we will begin to realize any revenue in the next twelve months. In order to raise funds, we have held and will continue to conduct negotiations with various investors. We cannot predict whether these negotiations will result in additional investment income for us.
Funding for our operations may not be available under favorable terms, if at all. If adequate funds are not available, we may not be able to continue as a going concern or we may be required to curtail our operations significantly or to obtain funds by entering into arrangements with collaborative partners or others that may require us to relinquish rights that we would not otherwise relinquish.
On or about April 12, 2006, we entered into certain financing transactions with AJW Partners, LLC; AJW Offshore, Ltd.; AJW Qualified Partners, LLC; and New Millennium Capital Partners II, LLC. In connection with those transactions we delivered to those parties certain secured convertible promissory notes. The next interest payments pursuant to those notes are due May 2008. We currently have sufficient funds to pay those interest payments. The secured convertible notes are secured by all of our assets and property. As such, if we default on the secured convertible notes, we could be forced to forfeit all of our assets and property to the noteholders.
On or about January 31, 2008 we exchanged for interest due to New Millennium Capital
Partners II, LLC, AJW Partners, LLC and AJW Master Fund, LTD in the amount of $117,947 Interest Rate debenture notes in the same amount due January 31, 2011 at the rate of 2%. These notes are secured by all of our assets, and are payable quarterly and are
convertible into shares of our common stock at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 50%. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
OUR PLAN OF OPERATIONS FOR NEXT 12 MONTHS
We are an exploration stage company and we do not have any proven or probable reserves on any of our properties.
Arizona Property
We held a 60% interest in the Lucky Boy Prospect, which comprises 14 mineral claims and an 80 acre State Lease located in Gila County, Arizona. Handley Minerals Inc. ("Handley") holds the other 40% interest. The Lucky Boy Prospect is subject to a 3% yellow cake royalty. The Lucky Boy Prospect is situated 13 miles SSW of Globe, Arizona.
On January 29, 2008, we reached an agreement with Rodinia Minerals Inc. ("Rodinia") to dispose of our right to earn an additional 10% for each $100,000 we spent on the Lucky Boy Prospect. By was of this agreement Rodinia also backed-in for 40% interest of our 60% interest in the Lucky Boy Prospect. This leaves us with a total of 36% undivided right, title and interest in and to the Lucky Boy Prospect and gives Rodinia a total acquisition of 24% interest. In consideration, Rodinia agreed to pay the balance of $125,000 owing by us for exploration costs on the project. As part of this agreement, we also received a refund of $9,797 from reclamation bonds and expects the balance of the bonds outstanding, totaling $13,362, to be refunded.
We also hold a 100% interest in an additional 12 lode claims, the Get Lucky Claims, which are located in the same vicinity as the Lucky Boy Prospect. They are also situated 13 miles SSW of Globe, Arizona. We will be exploring for uranium on the Lucky Boy Prospect and the Get Lucky Claims if we commence a work program
In August 2007, we paid $3,250 to the BLM in claims fee to maintain the Lucky Boy Prospect.
We currently do not have the funds to pay for a work program on this property, however Rodinia is obligated to spend $400,000 on the work program while we pay nothing and our interest does not change. Once Rodina spends $400,000 on a work program, then we may enter into a joint venture agreement to continue development the property, at which point we would be responsible for 36% of all exploration and development costs. If we do not come to a contractual agreement with Rodina after they spend $400,000 on a work program, then neither party has the right to perform any further work on the property. Currently, if we do not pay further costs and we will not lose our existing interest, except for $1,170 (which represents out 36% of the total $3,250 in claim fees) for the claim maintenance fees payable to the BLM in August 2008. However if we receive adequate financing we do intend on utilizing them on a work program on the Lucky Boy Prospect. Handley will remain the operator on the property.
A full geological and geochemical report has been prepared and contains the results along with a recommendation for definition drilling which would test to determine the resources of the strike land. The progress report on the geological, radiometric and geochemical investigation and summary of drilling results on the Lucky Boy Prospect also details the results from the Plan of Operations that was completed during the last quarter of 2006. The Plan of Operations included a 25-hole drilling program intended to define economic uranium mineralization. After several months of compiling all the data from various sources it has been determined that a strike length of several hundred feet with a thickness of approximately 5 to 10 feet with intercepted grades of .1% U or greater warrants us to submit a further Plan of Operation to the various state and government agencies for further drilling and to consider small-scale mining. This will include potentially putting the probable and proven
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