DEPOSIT ON ACQUISITION OF ZINCO DO BRASIL MINERACAO LTDA.

6 Months Ended

Nov. 30, 2013

DEPOSIT ON ACQUISITION OF ZINCO DO BRASIL MINERACAO LTDA.

NOTE 4 - DEPOSIT ON ACQUISITION OF ZINCO DO BRASIL MINERACAO LTDA.

On August 14, 2012, the Company agreed with OBH and IMS for the proposed acquisition of 99.9% of ZBM, which will be owned by OBH and IMS. Pursuant to the agreement, the Company will acquire 99.9% of ZBM in exchange for (i) 7,166,667common shares to OBH and (ii) 1,075,000 Series C preferred shares to IMS (the “IMS Shares”). The Company also agreed to raise $17 million which will be used to complete the acquisition of the zinc project.

As of the date of this filing, ZBM has not been formed and the transaction has not been completed, although all of the shares have been issued. The fair value of OBH shares and IMS shares issued as of November 30, 2013 of $240,024 has been recorded as a deposit on the acquisition. Since the above transaction has not yet closed and given that the Company has no existing operations, the fair value of the shares issued were based on the enterprise value done by a valuation expert.

In the event that the acquisition is not consummated, IMS shall have the right to rescind the agreement and the obligations of both parties shall be terminated and the contemplated transaction is voided as if the agreement was never entered into.

On February 13, 2013, Zinco, OBH and IMS entered into a modification of the agreement, dated August 14, 2012, to extend the date by which Zinco is required to raise $6,000,000 or such amount necessary to complete the acquisition of the zinc mine, until June 14, 2013. On June 14, 2013, the agreement was further extended to September 14, 2013. The Company is currently working on a further extension of the agreement.

Zinco do Brasil, Inc. 10-Q/A