What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-21 compared with 2014-03-04 · 93 added, 95 removed, 70 unchanged (73% of the section changed)

12 unchanged sentences

Business Overview

The Company is a Nevada company that conducts business operations in Pahang Malaysia through Champmark Sdn Bhd (“CSB”), a privately limited liability company incorporated in Malaysia which is a deemed subsidiary under the management control of our 100% subsidiary GBL.

The Company is a Nevada corporation that conducts business operations in Pahang Malaysia through Champmark Sdn Bhd (“CSB”), a privately limited liability company incorporated in Malaysia which is a deemed subsidiary under the management control of our 100% subsidiary GBL.

On October 25, 2013, we entered into an Assignment Agreement For the Assignment of Management Right in Merapoh Gold Mines in Malaysia (“Assignment Agreement”) with Federal Mining Resources Limited (“FMR”), a company incorporated under the laws of the British Virgin Islands.

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CSB is the Mining Contractor of the Mining Lease for Site IV-1 at the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit Holder of the Mining Lease.

Under the terms of the Assignment Agreement, FMR will assign its management rights of CSB’s mining operation in the Mining Lease to the Company, through its wholly-owned subsidiary Gold Billion Global Limited (“GBL”), in exchange for 80,000,000 shares of the Company’s common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition .

GBL was setup on February 7, 2013 by the Board of Directors of FMR to monitor the CSB operation.

Under the terms of the Assignment Agreement, FMR assigned its management rights of CSB’s mining operation in the Mining Lease to the Company, through its wholly-owned subsidiary Gold Billion Global Limited (“GBL”), in exchange for 80,000,000 shares of the Company’s common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition.

GBL was established on February 7, 2013, by the Board of Directors of FMR to monitor the CSB operation.

The acquisition of 100% of the issued and outstanding capital stock of GBL was agreed upon on October 18, 2013, and completed on October 25, 2013, subject to the approval of the Board of Directors and the audit of GBL.

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Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL.

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

Corporate History and Structure

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was incorporated on April 22, 2010, in the State of Nevada, U.S.A.

On October 17, 2013, Stephen Spalding and Michael Stiege resigned from all of their positions as officers and directors of the Company that complies with the requirements of Section 14f-1 of the Exchange Act.

In addition, the following persons were appointed to serve as directors and to assume the responsibilities of officers on October 17, 2013.

Wu Ming Ding, as President,and Director;

Balakrishnan B S Muthu as Treasurer Chief Financial Officer, General Manager and Director;

Liang Wai Keen as Secretary.

Muthu were added to the Board of Directors.

On October 17, 2013, the Company provided written notice to Gold Explorations, LLC, that the Purchase Agreement dated May 17, 2010, amended February 8, 2012, and further amended May 17, 2013 (the “Purchase Agreement”), has been cancelled according to the terms of the Purchase Agreement.

By providing this notification, the Company has no further obligations under the Purchase Agreement and has released any interest in the mineral claims located in Esmeralda County, Nevada.

On April 1, 2014, the Board of Directors of Gold Billion Global Limited (“GBL”) notified Federal Mining Resources Limited (“FMR”) upon the decision to exercise the right of option to purchase 85% equity interest of Champmark Sdn Bhd (“CSB”) under Management Agreement Section 3.2.4 dated July 1, 2013, between GBL and FMR.

This acquisition was completed on April 1, 2014, with consideration of US$1, and GBL then became 85% shareholder of CSB.

Effective February 20, 2016, Mr.

Chen Ching was appointed Director of the Company, and the entire Board of Directors now consists of Mr.

Balakrishnan B S Muthu and Mr.

Effective February 2, 2018, the Company s Articles of Incorporation were amended to increase the authorized shares of the Company from 250,000,000 shares of common stock to 10,000,000,000 shares of common stock.

A copy of the Certificate of Amendment was filed with the Nevada Secretary of State.

Effective March 31, 2021, Mr.

Craven was appointed Director of the Company and the entire Board of Directors now consists of Mr.

Balakrishnan B S Muthu, Mr.

Chen Ching and Mr.

The Form 8-K announcing the change in officers and directors were filed with SEC on April 1, 2021.

The following diagram illustrates our current corporate structure:

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Our exploration and mining business is currently provided through contractual arrangements with CSB through our wholly-owned subsidiary GBL.

CSB, the VIE of GBL, sells gold bullion directly to the registered gold trading company in Malaysia.

CSB, the VIE of GBL, sells gold minerals directly to the registered gold trading company in Malaysia.

We have been and are expected to continue to be dependent on our VIE to operate our exploration and mining business.

entered into contractual arrangements with its VIE, which enable us to exercise effective control over the VIE, receive substantially all of the economic benefits from the VIE, and have the option to purchase equity interests in the VIE.

GBL has entered into contractual arrangements with its VIE, which enable us to exercise effective control over the VIE, receive substantially all of the economic benefits from the VIE, and have the option to purchase equity interests in the VIE.

On July 1, 2013, the Company’s subsidiary GBL entered into a series of agreements (“VIE agreements”) with FMR and details of the VIE agreements are as follows :

Management Agreement, FMR entrusted the management rights of its subsidiary CSB to GBL that include:

i) management and administrative rights over the day-to-day business affairs of CSB and the mining operation at Site IV-1 of the Merapoh Gold Mine;

ii) final right for the appointment of members to the Board of Directors and the management team of CSB;

iii) act as principal of CSB;

iv) obligation to provide financial support to CSB;

v) option to purchase an equity interest in CSB;

vi) entitlement to future benefits and residual value of CSB;

vii) right to impose no dividend policy;

viii) human resources management.

Debt Assignment, FMR assigned to GBL the sum of money in the amount of US Dollars Three Hundred Nine Thousand Three Hundred Thirty One And Cents Ninety Two Only (US$ 309,331.92), now due to GBL from CSB under the financing obligation from the FMR to CSB.

With the above agreements, GBL demonstrates its ability to control CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements for the six months ended December 31, 2013.

management and administrative rights over the day-to-day business affairs of CSB and the mining operation at Site IV-1 of the Merapoh Gold Mine;

final right for the appointment of members to the Board of Directors and the management team of CSB;

act as principal of CSB;

obligation to provide financial support to CSB;

option to purchase an equity interest in CSB;

entitlement to future benefits and residual value of CSB;

right to impose no dividend policy;

human resources management.

Debt Assignment, FMR assigned to GBL the sum of money in the amount of US Dollars Three Hundred Nine Thousand Three Hundred Thirty One And Ninety Two cents (US$ 309,331.92), now due to GBL from CSB under the financing obligation from the FMR to CSB.

With the above agreements, GBL controls CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements for the nine months ended March 31, 2014.

CSB holds the operating right to Merapoh Gold Mine (the “Mine”) with all regulatory and government operating licenses in Malaysia.

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

Stage of Operation

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The Company is undertaking natural mineral resource extraction management services.

The Company is going to hire a mine management team to supervise the mineral resource extraction activities to ensure that the operations can be carried out without significant problems.

According to the United States Industry Guide 7 (a) (4) on mining operations, the Merapoh Gold Mine is currently in production stage where the mine has produced approximately 10 kilogram gold from July to December 2013.

According to ASC 930-330-20 Glossary, the production phase is defined as “when saleable minerals are extracted (produced) from an ore body, regardless of the level of production”.

However, the production is limited to a small part of the site, and extraction is alluvial gold only.

The objective of the Company is preparing to improve the productivity of the mines to ensure that the operation will be carried out effective and efficiency at minimum cost.

The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

For the period between January 2020 to December 2020, there was no production at the Merapoh Gold Mine.

The objective of the Company is to improve the productivity at the new mine to ensure that the operation will be carried out effectively and efficiently at minimum cost.

Current Mining Property and Location

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The Merapoh Gold Mine is located in northern Pahang, with convenient road access through Kelantan directly to mine site and is about 400 kilometers away from Kuala Lumpur.

The Mine is located in the middle of Malaysia gold metallogenic belt.

The central gold belt is the source of the majority of the gold deposits in the peninsula.

It lies between the western and eastern tin belts and extends from Kelantan (Sungai Pergau, Sungai Galas) to Pahang (Merapoh, Kuala Lipis, Raub), Terengganu (Lubuk Mandi), Negri Sembilan and Johor (Gunung Ledang).

Description of the Mining Process

A planned sequence of events is involved in mining a pit:

Ÿ Identifying the resource

Ÿ Creating access to the ore body

Ÿ Removing the ore from the ore body

Ÿ Refining of the concentrate

Our in-house exploration team identifies target and undertake exploration.

Before any hole is drilled or rock mined, much planning goes into making sure the mining sequence runs smoothly and safely as possible.

The process of creating access to the possible ore body includes possible ore excavation, possible ore assessment and possible ore segregation.

Process for removing ore concentrates from the ore body

The ore body is transported to the treatment plants in vehicles capable of hauling huge, heavy loads.

The ore body is separated into Ore Type 1 Stockpile and Ore Type 2 Stockpile.

The monitor washes finer gold bearing material off larger rocks which is screened on an inclined coarse wire screen.

An excavator is used to turn over the rocks so wash is removed from all sides of the coarse material.

A monitor pushes the rock down the inclined coarse screen where the course is removed and stockpiled at the bottom.

Finer material passes through the mesh screen into the sluice system and runs over the sluice.

The carpets are removed and taken to refining facility for gold recovery.

A suction pipe recovers water of the fine tailings pond for use in the system.

Refining of the concentrate

The carpets holding concentrate from the sluice are brought to a shed in the camp site where the gold refined.

The first stage of the refining is to wash the gold containing concentrate into large bins.

This is pumped to a jig and shaking table.

Nuggets are handpicked from the coarse fraction and the fine fraction is amalgamated to remove the gold.

After distillation gold from the amalgam and the coarse are melted with flux and the gold is poured into small bars.

Current State of Exploration:

As of the date of this report, the Merapoh Gold Mine property is without significant known reserves.

The Merapoh Gold Mine commenced exploratory operation in alluvia mining and achieved its first gold pour in July 2011.

Through the years of operation, the Company has performed ongoing exercises to improve upon the matching of processing method with the types of ore in order to optimize cost to recovery ratio.

In July 2013, production was outsourced to a reputable subcontractor, and developed a resource management system to match ore against processes to achieve the most cost efficient and highest recovery production procedure.

There was no gold ore extraction of the Merapoh Gold Mine and no gold concentrate sold for the period between January 1, 2020 and December 31, 2020.

Our revenues have been derived from gold production from the Merapoh Gold Mine, but currently there is no production from that mine and we are not certain that there will be production in the coming future.

Management continues to search for mining opportunities to generate revenues for the Company in the future.

Results of Operations

We have generated $172,978 and $0 revenues for the three months ended December 31, 2013 and 2012, and have recorded a gross loss of $229,992 and $0 for the three months ended December 31, 2013 and 2012.

We have incurred

$154,975 and $19,463 in operating expenses through December 31, 2013 and December 31, 2012.

We have other income $22,466 and $0 for the three months ended December 31, 2013 and 2012.

The following table provides selected financial data about our company for the three months ended December 31, 2013 and December 31, 2012.

For the three months ended March 31, 202 1 and 20 20 :

We have generated $14,326 and $0 revenues for the three months ended March 31, 2021 and 2020, and have recorded a gross profit of $14,326 and gross profit of $0 for the three months ended March 31, 2021 and 2020.

We have incurred $81,605 and $96,858 in operating expenses through March 31, 2021 and March 31, 2020.

We have other income $0 and $0 for the three months ended March 31, 2021 and 2020.

The following table provides selected financial data about our company for the three months ended March 31, 2021 and March 31, 2020.

Statement of Operation

Cost of revenue

Gross Profit (Loss)

Operating Expenses

For the three months ended December 31, 2012, the Company did not generate or realize any revenues from its business operations as an exploration-stage company.

With the assignment of mining right and the VIE agreements in 2013, the operating results of the VIE is included in the condensed consolidated financial statements.

We have generated $344,730 and $0 revenues for the six months ended December 31, 2013 and 2012, and have recorded a gross loss of $475,425 and $0 for the six months ended December 31, 2013 and 2012.

We have incurred $210,672 and $28,939 in operating expenses through December 31, 2013 and December 31, 2012.

We have other income $54,836 and $0 for the six months ended December 31, 2013 and 2012.

The following table provides selected financial data about our company for the six months ended December 31, 2013 and December 31, 2012.

For the nine months ended March 31, 202 1 and 20 20 :

We have generated $14,326 and $0 revenues for the nine months ended March 31, 2021 and 2020, and have recorded a gross profit of $14,326 and gross profit of $0 for the nine months ended March 31, 2021 and 2020.

We have incurred $180,398 and $276,904 in operating expenses through March 31, 2021 and March 31, 2020.

We have other income $0 and $0 for the nine months ended March 31, 2021 and 2020.

The following table provides selected financial data about our company for the nine months ended March 31, 2021 and March 31, 2020.

Statement of Operation

Cost of revenue

S G & A Expenses

For the six months ended December 31, 2012, the Company did not generate or realize any revenues from its business operations as an exploration-stage company.

With the assignment of mining right and the VIE agreements in 2013, the operating results of the VIE is included in the condensed consolidated financial statements.

Gross Profit (Loss)

Operating Expenses

The revenue was derived from the sales of wash sand to customers in Malaysia.

The increase of revenue for the three months period ended March 31, 2021, was mainly due to seeking new customer of wash sand sales during the three months period.

Operating expenses comprised mainly of salaries, office costs, legal and professional fees and travelling expenses.

The decrease in operating expenses for the three months period was mainly due to the decrease of salaries during the period.

The revenue derived from the sales of wash sand to customers in Malaysia.

The increase of revenue for the nine months period ended March 31, 2021, was mainly due to seeking new customer of wash sand sales during the last three months period.

Operating expenses comprised mainly of salaries, office costs, legal and professional fees, consultancy service fee, stock-based compensation and travelling expenses.

The operating expenses were mainly denominated in MYR and decrease compared with nine months period ended March 31, 2021.

Moreover, the average rate of MYR :USD for nine months March 31, 2021 and March 31, 2020 was 0.2430 and 0.2395 respectively.

Plan of Operation

Our Industry and Principal Markets

Based on the forecast of Business Monitor International, a leading independent proprietary data provider, Malaysia’s mining industry is anticipated to reach US$38.7bn by 2017, growing at an annual average rate of 2.5% from 2011 levels.

The bulk of this growth will be led by the country’s nascent gold mining sector, which has attracted a number of foreign investors in recent years.

Our mineral exploration activities are subject to extensive national and local government regulations in Malaysia, which regulations may be revised or expanded at any time.

Generally, compliance with these regulations requires the company to obtain the permits issued by government regulatory agencies.

Certain permits require periodic renewal or review of their conditions.

Malaysia provides an attractive mining legislative environment for foreign investors but there is the risk that these laws will change once the country is able to attract enough foreign money.

Third-Party Subcontractor

In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd (“CSB”) entered into an Operation Term Sheet (“OTS”) agreement in July 2013 to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a third party subcontractor Borneo Oil & Gas Corporation Sdn Bhd (“BOG”).

The report by BMI Research states that global gold mine output growth will pick up in the next few years, supported by higher gold prices and solid projects in key countries.

BMI Research forecasts global gold production to increase from 105moz in 2018 to 125moz by 2026, averaging 2.3% annual growth.

While a steady pace of growth, this represents a slight deceleration in growth rate compared with the previous eight-year average of 3.1%.

Subcontractor

In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd (“CSB”) entered into an Operation Term Sheet (“OTS”) agreement in July 2013 to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a subcontractor Borneo Oil & Gas Corporation Sdn Bhd (“BOG”).

BOG has the experience and local knowledge in managing the exploitation of alluvial gold at the Merapoh Gold Mine.

The Company currently intends to continue to outsource the exploitation of alluvial gold at our mine site to BOG as our third party subcontractor.

The Company will provide necessary disclosure when any significant agreements have been made with the sub-contractor in the future.

The Company will provide necessary disclosure when any significant agreements have been made with sub-contractors in the future.

BOG became the Company’s shareholder in January 29, 2014, and was no longer a third party subcontractor.

Expansion Plans

At present, we are well positioned working with our third party subcontractor, who has the experience and local knowledge, in managing our exploitation of alluvial gold at the Merapoh Gold Mine.

The Company believes that there are excellent growth opportunities for its business outside of Malaysia.

The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

The leasing premium has been paid but the mining lease certificate will only be issued upon clearance from the Malaysia Forest Department, which is expected around mid-2021 subject to review on COVID-19 “Movement Control Order” by the Malaysian government.

The Company believes that there are excellent growth opportunities for its business outside Malaysia.

We are constantly exploring for potential acquisition of mining projects in other parts of the world.

As our business is affected by the fluctuations of gold prices, the Company intends to diversify its product line by acquiring mining projects with potential for different mineral resources other than gold.

We are currently holding discussion with several mining companies for potential collaboration to carry out exploration and exploitation works on other mineral resources in Southeast Asia regions.

We continue to hold discussions with other mining companies for potential collaboration to carry out exploration and exploitation works on other mineral resources in Southeast Asia regions.

Apart from the mining industry, the Company is taking steps to look into investment opportunities in the non-mining areas that include the bioenergy industry and the food & beverage sector.

Limited Operating History;

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There is no historical financial information about us upon which to base an evaluation of our performance.

We are an exploration stage corporation and have not generated any revenues from operations.

We cannot guarantee we will be successful in our business operations.

Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we must conduct the research and exploration of our properties before we start production of any minerals we may find.

We will require equity and/or debt financing to provide for the capital required to implement our research and exploration phase.

We will require additional funds to operate for the next year.

We have no assurance that future financing will be available to us on acceptable terms.

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Liquidity and Capital Resources

The following table provides selected cash flow data about our company for the six months ended December 31, 2013 and December 31, 2012.

The following table provides selected cash flow data about our company for the nine months ended March 31, 2021 and March 31, 2020.

Cash Flow Date

Net Loss from operation

Net Profit (Loss) from operation

Net Cash Generated/(Used) from operating activities

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Net Cash Generated/(Used) from financing activities

For the six months ended December 31, 2013, the Company had incurred net loss from operation of $631,261 which posted a negative impact to the company’s cash flow in 2013.

The reconcile on non-cash items such as depreciation, proceeds from disposal of plant and equipment, reorganization and issuance of common stock all provide negative impact on cash.

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

For the nine months ended March 31, 2021, the Company had incurred net loss from operation of $166,072, which posted a negative impact to the company’s cash flow.

The reconciliation on non-cash items such as depreciation and amortization provide positive impact on cash.

In the operation analysis, the net cash used in operating activities decreased from $319,588 to $116,928.

The major reason was the increased in current assets, such as accounts receivable and deposits were smaller than the increased in current liabilities, such as accounts payable, accrued liabilities and advanced from sub-contractor & related parties which provided positive cash flow effect but not enough to offset the negative effect from loss in operation with some non-cash reconciliation that made the company’s operating cash flow down.

Although the proceeds from disposal of plant and equipment, net proceeds from bank loans and shareholders loans waived show a positive cash flow of $139,797 and $95,938, the positive factors ware not enough to offset the negative operating cash flow.

Besides, the net decrease in exchange rate effect of $54,286 can only provide a little positive cash flow.

Overall speaking, the cash flow situation was not in a good position to allow the operation in the coming next 12 months and the Company needs to increase cash flow supplies with long term plan until the company makes profits and have a positive cash flow.

Otherwise, loans from related parties may be the temporary solution to keep the company moving.

The $166,072 net loss was partially offset by the noncash expense such as $9,417 in depreciation and amortisation.

In the operating assets and liabilities, the net increase in current assets, such as trade receivables was $14,326, whereas the net increase in current liabilities, such as accounts payable, accrued liabilities and advanced from related parties was $54,053, which provided positive cash flow effect to the $166,072 loss in operation.

The final result of the cash flow from operating activities was a negative cash flow effect.

In the investing and financing cash flow analysis, there was no change for the nine months ended March 31, 2021.

Besides, the net increase in exchange rate effect of $120,530 provided a positive cash flow effect.

The cash and cash equivalents at the end of March 31, 2021, was increased by $3,602 with $27,629 as a closing balance.

The cash flow situation will not allow for operations in the coming next 12 months by self-generated cash provided from operating activities.

The Company needs to increase cash flow supplies with a long term plan until the Company makes sustainable profits and has a positive cash flow.

Otherwise, loans from related parties may be a temporary solution, although we have no written loan agreements.

There is no guarantee that we will be able to secure adequate financing.

If we fail to secure sufficient funds, our business activities may be curtailed, or we may cease to operate.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q/A

Item 2. Management’s Discussion and Analysis