Note 2. Summary of Significant Accounting
a) Basis of
These financial statements and related
notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S.
b) Use of Estimates
The preparation of financial
statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
c) Basic and
Diluted Net Income (Loss) Per Share
The Company computes net income (loss)
per share in accordance with Accounting Standards Codification (“ASC”) Topic 260, "Earnings per Share".
ASC Topic 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic
EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during
the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise
of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
ASC Topic 220, “Comprehensive
Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial
statements. For the years ended April 30, 2012 and 2011 and for the period March 14, 2006 (inception) to April 30, 2012, except
for net loss, the Company had no items that represent comprehensive income (loss) and, therefore, has not included a schedule of
comprehensive income (loss) in the financial statements.
e) Cash and
The Company considers all highly
liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
f) Mineral Claim
Mineral claim acquisition costs are
capitalized and reviewed periodically for impairment. Exploration costs are expensed as incurred. When it has been determined that
a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to
develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life
of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to
The fair values of financial instruments,
which include cash, accounts payable and accrued liabilities and due to related party, approximate their carrying values due to
the immediate or short-term maturity of these financial instruments. The Company’s operations are outside the United States
which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s
operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company
does not use derivative instruments to reduce its exposure to foreign currency risk.
h) Income Taxes
Potential benefits of income tax
losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC Topic 740, “Income
Taxes”, as of its inception. Pursuant to ASC Topic 740, the Company is required to compute tax asset benefits for net
operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future
i) Foreign Currency
The Company’s functional and
reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated
in accordance with ASC Topic 830, “Foreign Currency Matters”, using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the
date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.