Results of Operations
For the year ended September 30, 2016 and September 30, 2015
Revenues
The Company had $141,187 in revenue for the year ended September 30, 2016 and $32,000; for the year ended September 30, 2015. The increase in revenue of $109,187 is attributable to the sale of timber under the management agreement with Paradise Gardens.
Operating expenses
The Company had operating expenses of $ 899,982 for the year ended September 30, 2016 consisting of general and administrative expenses, as compared with operating expenses of $1,121,574 for the year ended September 30, 2015 consisting of general and administrative expenses. The decrease of $221,592 was attributable to the Company focusing primarily on its Logging Operations, a decrease in expenditure on the Koranga Gold Leases, and a decrease in the cost of the derivative financing.
Net Loss
The Company had a net operating loss of $1,301,909 for the year ended September 30, 2016 compared with a net operating loss of $1,290,613 for the year ended September 30, 2015. The decrease of $11,296 was primarily attributable to the improved revenues from the logging operations and a decrease in expenditure at Koranga.
Operating Activities
Net cash used in operating activities was $419,812 for the year ended September 30, 2016 compared to net cash used in operating activities of $925,854 for the year ended September 30, 2015. The decrease of $506,042 was a result improved revenue from the logging operations and a decrease in expenditure on the infrastructure at Koranga.
Investing Activities
Net cash used in investing activities was $92,086 for the year ended September 30, 2016 compared to $17,050 for the year ended September 30, 2015. This increase resulted from the acquisition of Plant and Equipment for the logging operations.
Financing Activities
Net cash provided by financing activities was $317,184 for the year ended September 30, 2016 compared to $809,414 for the year ended September 30, 2015. The decrease of $492,230 was mainly due to a decrease in the cost of derivative financing.
Liquidity and Capital Resources
As of September 30, 2016, the Company had total current assets of $25,221 and total current liabilities of $3,099,080 resulting in a working capital deficit of $3,073,859. As of September 30, 2015, the Company had total current assets of $10,763 and total current liabilities of $1,923,195 resulting in a working capital deficit of $1,912,432. The decrease in working capital deficit arose mainly due to increase in loans owing to related parties, who provided advances to the Company for working capital purposes. The Company had cash as of September 30, 2016 of $221. The Company intends to fund its exploration through the revenues from the logging activities and the sale of its equity securities. However, there can be no assurance that the Company will be successful doing so. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. We currently believe that the Company will need approximately $2,000,000 over the next 12 months to implement our desired expansion of mining activities and logging activities.
