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NOTE 4 - Mining Properties
Gold River Mines:
On May 5, 2008, the Company acquired eight mining properties from Gold River Exploration Inc. in exchange for 56,555,166 shares of the Company’s common stock and $50,000 in cash. The mines have a total of 102,000 oz. gold resources, 593,000 oz. silver resources, 423,000 oz. probable gold resources and 362,000 oz. probable silver resources. At $1200/oz. gold and $20/oz. silver, the gold reserves total $122,000,000, the silver reserves total $11,000,000, the probable gold resources total $507,000,000 and the probable silver resources total $7,000,000. SFAS 123 specifies that this transaction be recorded on the Company’s books at the fair value of the consideration received or the fair value of the common stock issued, whichever is more reliably measured at the date of the transaction. Since the Company’s stock had little or no activity in the six months preceding the date of the acquisition of the mining properties and since the reserves on the mining properties are well documented and certified by a licensed geologist, the Company has determined that the acquisition should be valued and recorded on the books
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WESTERN SIERRA MINING CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2013 and March 31, 2014
based on the discounted value of the reserves in accordance with SFAS 123. The Company therefore calculated the net value of the reserves, net of estimated production costs and discounted over the recovery period and to reflect uncertainties, to be $18,530,408. On June 8, 2010, the Company sold the Sun Gold and Treasure Gulch Mines to VHGI Holdings, Inc. in exchange for $550,000 cash, 5,000,000 shares of VHGI common stock and a royalty of 2% of gross sales.
The remaining properties have a total of 88,000 oz. gold resources and 755,000 oz. silver resources. At $1,200/oz. gold and $20/oz. silver, the gold resources total $106,000,000 and the silver resources total $15,000,000.
Gold Star:
On October 15, 2011, a shareholder of the company contributed several mining properties including the Gold Star and Gold Crown. The Gold Star consists of 350 acres in central Arizona and has 168,750 oz. of gold resources valued at $203,000,000. The acquisition was recorded on the Company’s books at $3,500,000, the posted selling price of the property.
AI
