MINERAL EXPLORATION PROPERTY

9 Months Ended

Jan. 31, 2013

NOTE 4 – MINERAL EXPLORATION PROPERTY

LB/Vixen Property Acquisition

On May 1, 2011, the Company executed a property option agreement (the “Agreement”) with Nevada Mine Properties II, Inc. (“NMP”) granting the Company the right to acquire 100% of the mining interests of a Nevada mineral exploration property currently controlled by NMP, a natural resource exploration company. The property known as the LB/Vixen Property is located in Humboldt County, Nevada and currently consists of 82 unpatented claims (the ‘Property”). Annual option payments and minimum annual exploration expenditures under Agreement are as noted below:


	Property		Work
	Payments		Expenditures
Upon Execution of the Agreement	$	20,000	$	-
By May 1, 2012		20,000		200,000
By May 1, 2013		60,000		200,000
By May 1, 2014		45,000		200,000
By May 1, 2015		60,000		250,000
By May 1, 2016		70,000		250,000
By May 1, 2017		80,000		300,000
By May 1, 2018		90,000		300,000
By May 1, 2019		100,000		350,000
By May 1, 2020		100,000		400,000
By May 1, 2021		250,000		750,000
	$	895,000	$	3,200,000

Upon execution of the Agreement, we paid NMP $20,000 and reimbursed them $7,065 in claim fees and property holding costs. In addition, on May 1, 2012 we made an option payment of $20,000. As a result of the LB/Vixen property not containing any known resources or reserves, the Company has written down its aggregate property option payments of $40,000 in the statements of operations and comprehensive loss at January 31, 2013.

Since the Company’s payment obligations are non-refundable, if it does not make any payments under the Agreement it will lose any payments made and all its rights to the Property. If all said payments under the Agreement are made, then the Company will acquire all mining interests in the Property. If the Company fails to make any payment when due the Agreement gives the Company a 60-day grace period to pay the amount of the deficiency. NMP retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the Property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties.

The Company shall have the one time right exercisable for 90 days following completion of a bankable feasibility study to buy up to two thirds (66.7%) of NMP’s royalty (i.e. an amount equal to 2% of the royalty) for $3,000,000.

Both the Company and NMP have the right to assign, sell, mortgage or pledge their rights in each respective Agreement or on each respective Property. In addition, any mineral interests staked, located, granted or acquired by either the Company or NMP which are located within a 1 mile radius of the Property will be included in the option granted to the Company. The Agreement will terminate if the Company fails to comply with any of its obligations in the Agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The Agreement provides that all disputes shall be resolved by a sole arbitrator under the rules of the Arbitration Act of Nevada. The Company also has the right to terminate the Agreement by giving notice to NMP.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Grizzly Gold Corp. 10-Q