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LIQUIDITY At September 30, 2010, the Company had cash of $1,791,845 (2009 - $3,679,914) and a working capital deficiency of $975,436 (2009 – $2,438,396 positive). The Company normally maintains sufficient cash to meet the Company’s business requirements. However, at September 30, 2010 the cash balance of $1,791,845 would not be sufficient to meet the cash requirements for the Company’s administrative overhead, maintain its mineral interests and continue with its exploration and mining program in its next fiscal year. To preserve its cash position, the Company plans to concentrate its efforts on Songjiagou defer exploration expenditures on other projects until the Songjiagou property becomes viable. The Company believes with future common share issuances, the cash proceeds to be received from the sale of the Sawayeardun project and proceeds from gold sales from Songjiagou Mine it will be able to cover its working capital shortfall and have adequate cash to continue supporting its exploration and mining operations on its mineral properties. The Company believes it will be able to continue to raise sufficient capital through private placements and the exercising of warrants and options to finance its future corporate, exploration and mining activities. In October 2010, the Company received proceeds of $9,554,014 from the exercise of 95,540,140 share purchase warrants. period to another is mainly due to the start-up of mining - 10 -In April 8, 2008, the Company issued an unsecured note payable of $2,000,000 to RAB as part of obtaining funding for the purpose of making the Company’s final capital contribution to Yantai Zhongjia Mining Inc., the Chinese joint venture company that holds the rights to the Muping Project, China project. The loan bears interest at the rate of 30% per annum on all principal amounts commencing on September 1, 2008. The note matured on September 30, 2008. The Company is required to pay a $25,000 re-commitment fee at the beginning of each month during which the principal of the loan plus any unpaid interest remains outstanding. In connection with the financing, the Company incurred costs comprised of financing fees of $100,000, legal fees of $20,000 and issued to the lender 6,250,000 performance shares with a fair value of $562,500. These amounts were included in interest and financing costs in the year ended September 30, 2008. During the years ended September 30, 2009 and 2010, RAB made a claim for payment for the outstanding principal of $2,000,000 plus all unpaid interest and outstanding fees. On July 22, 2009, the Company made a partial repayment of the loan principal balance and accrued interest in the amount of $1,250,000. At September 30, 2010, the balance of the loan, including principal, accrued interest and unpaid fees is $2,215,615 (2009 - $1,656,389). On November 3, 2010, the Company repaid the outstanding loan principal balance and accrued interest and fees to RAB in the amount of $2,301,432.
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und die Zahlen sprechen ja schon für sich 