UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington D.C. 20549





FORM 10-K/A
 (Amendment No. 1)


x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2011


Or


o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934


For the transition period from _____________ to _____________








STRATEGIC MINING CORPORATION


(Name of small business issuer specified in its charter)





Wyoming

000-53961

88-0432539(State or other jurisdiction

(Commission File No.)

(I.R.S. Employerof incorporation)



Identification No.)





36 Toronto Street, suite 1170


Toronto, ON, Canada  M5C 2C5


(Address of principal executive offices)





(former name or former address, if changed since last report)





416 840-9843


(Registrant’s telephone number)





Securities registered pursuant to Section 12(g) of the Act:





Common stock, $0.001 par value





(Title of class)





Indicate by check mark is the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  oYes xNo





Indicated by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  oYes xNo





Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  xYes    oNo





Indicate by checkmark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files.    oYes     xNo





Indicate by checkmark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K(section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporate by reference in Part III of this From 10-K or any amendment to this Form 10-K._____










Indicate by checkmark wither the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
 ̈
Accelerated filer
 ̈Non-accelerated filer
 ̈
Smaller reporting company
x(Do not check if a smaller reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)


oYes  xNo





The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of registrant’s most recently completed second fiscal quarter, June 30, 2011was approximately $6,333,731





The number of shares outstanding of each of the registrant’s classes of common stock, as of May 14, 2012 was 250,895,851 shares.







Explanatory Note
  On May 16, 2012, Strategic Mining Corporation, a Wyoming corporation (the “Company”), filed its annual report on Form 10-K for the fiscal year ended December 31, 2011 (the “Annual Report”).  On October 15, 2012, the Company received comments from the U.S. Securities and Exchange Commission relating to the Annual Report.  This amendment to the Annual Report is being filed in response to such comments.  Specifically, this amendment is being furnished to revise Item 9A – Controls and Procedures, in accordance with Item 308(a)(3) of Regulation S-K.  No other items of the Annual Report were affected by these amendments and as such, all other items contained in this amended report speak to the original date of filing, May 16, 2012.








TABLE OF CONTENTS





PART IITEM 1 –
BUSINESS
1ITEM 1A –
RISK FACTORS
9ITEM 1B –
UNRESOLVED STAFF COMMENTS
13ITEM 2 –
PROPERTIES
13ITEM 3 -
LEGAL PROCEEDINGS
13ITEM 4 –
MINE SAFETY DISCLOSURES
13PART IIITEM 5 –
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
14ITEM 6 –
SELECTED FINANCIAL DATA
16ITEM 7 –
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
16ITEM 7A –
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
20ITEM 8 –
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
F-1ITEM 9 –
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
21ITEM 9A –
CONTROLS AND PROCEDURES
21ITEM 9B –
OTHER INFORMATION
22PART IIIITEM 10 –
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNACE
23ITEM 11 –
EXECUTIVE COMPENSATION
23ITEM 12 –
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
25ITEM 13 -
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
26ITEM 14 –
PRINCIPAL ACCOUNTING FEES AND SERVICES
27PART IVITEM 15 -
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
27










Item 1.    BUSINESS





FORWARD LOOKING STATEMENTS





This annual report and the exhibits attached hereto contain "forward-looking statements". Such forward-looking statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned exploration of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.





Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “believes” or “does not believe”, "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:





–risks related to our mineral operations being subject to government regulation;





–risks related to our ability to obtain additional capital to develop our resources, if any;





–risks related to mineral exploration activities;





–risks related to the fluctuation of prices for precious and base metals, such as gold, silver and copper;





–risks related to the competitive industry of mineral exploration;





–risks related to our title and rights in our mineral properties;





–risks related to the possible dilution of our common stock from additional financing activities; and





–risks related to fluctuations of the price of our shares of common stock.





BUSINESS DEVELOPMENT





Strategic Mining Corporation (the “Company”) was originally incorporated in Delaware on August 24, 1995 as Infocenter Inc. On February 28, 2000, the Company changed its name to Green Dolphin Systems Corp. and new corporate officers were appointed. On January 10, 2006, the Board of Directors adopted a resolution authorizing the assignment of all the assets of Green Dolphin Systems Corp. to Penta Deltex, Ltd., a Canadian corp., in exchange for the forgiveness of $263,717 in debt owing to Nicholas Plessas and an additional $153,683 owing to Penta Deltex, and assumption by Penta Deltex of all obligations owed by Green Dolphin Systems Corp. to suppliers and on other accounts payable.  As the result of the above settlements of debts, Green Dolphin Systems Corp. effectively ceased operations on January 10, 2006.





On April 26, 2004, the SEC temporarily suspended trading of the common stock of the Company on the over-the–counter bulletin board, because it appeared to the SEC that “there was a lack of current and accurate information concerning the securities of (the Company) because of questions regarding the accuracy of assertions by (the company) and by others, in press releases and public statements to investors concerning, among other things, (the company’s) business relationship with a national restaurant chain.”





The Company cooperated with the SEC in its investigation, and the investigation was subsequently closed with no enforcement action taken.  All records obtained by the SEC in the investigation have been returned to the Company.  The Company subsequently filed new public information disclosures with FINRA, and now trades on the over-the-counter bulletin board under the trading symbol SMNG.




1





The Company, under former management, stopped filing reports with the Securities and Exchange Commission in the first quarter of 2006.  On August 16, 2006, it filed a form 15-12g to terminate its registration under the 1934 Act.





On December 1, 2006, the Company changed its name to Gold Coast Mining Corp. and new corporate officers were appointed shortly after.  On November 13, 2009, the Company changed its domicile and was reincorporated in the State of Wyoming.   On November 23, 2009, the Company changed its name to Strategic Mining Corporation.  The Company’s fiscal year end is December 31.  The Company has never been in bankruptcy or receivership.





On January 17, 2007 the Company issued 97,100,000 shares of its common stock to unrelated parties in exchange for various mining rights.  The issuance of the 97,100,000 represented approximately 97.5% of the then outstanding shares.  The transaction resulted in a change in control of the entity.





The issuance of shares and change in control has been accounted for as a reverse acquisition followed by a recapitalization of the Company’s equity structure.  The stockholders obtaining control in the transaction is considered the accounting acquirer for financial reporting purposes.  Accordingly, the equity section of the financial statements have been presented displaying the recapitalization of shares held by the individuals obtaining control followed by the issuance of shares to the minority stockholders.





In February 2010, the Company amended its articles of incorporation to authorize 25 million shares of preferred convertible stock. On March 4, 2010 the board of directors designated rights and preferences of the preferred stock as “Series A Convertible Preferred Stock,” with voting rights per preferred share equal to ten shares of common stock and conversion rights of each preferred share to convert to one share of preferred common stock.





BUSINESS





The Company is an exploration stage mining company engaged in the exploration of gold mining properties in the regions of Vietnam and Guinea, West Africa. The Company has generated no revenues to date and have incurred losses of $2,707,794 from January 17, 2007 (inception) to December 31, 2011.  There can be no assurance that any economically producible mineral deposits exist, and further exploration will be required before a final evaluation as to the economic and legal feasibility of each property is determined.






2


Properties
 
 Guinea, West Africa
 
 Siguiri Property









On January 14, 2007, the Company entered into an joint venture agreement with Gold River of Africa Corporation (“Gold River”), whereby the Company acquired certain exploration equipment and a mining claim in Guinea, West Africa, in exchange for 50,000,000 shares of Company’s common stock (the “Siguiri Exploration Permit” and the “Siguiri project”).  This resulted in Gold River holding more than 10% of Company stock and becoming a related party for reporting purposes.  The Company’s interest in the joint venture remains at 100% as long as all costs associated with the joint venture are paid directly by the Company or indirectly through Gold River.  The Siguiri Exploration Permit comprises 103 square kilometers in the Prefecture of Siguiri of Guinea, approximately 492 kilometers north east of the of Conakry, the capital of the country, near the city of Siguiri.  The permit area is centered on 11 degrees 16 minutes 20 seconds north, 9 degrees, 36 minutes 20 seconds west in the Prefecture of Siguiri in north central Guinea.  Siguiri is the second largest city in Guinea and is the supply center for the mining industry in northern Guinea.





The Company holds 100% interest in the joint venture’s two-year Siguiri Exploration Permit issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River. The Guinea government is entitled to a 15% royalty on all extracted minerals. Exploration permits are issued for two years and a one-time fee is paid for the permit.  Otherwise, there are no annual fees for the permit, but taxes are due annually to the government.




3





The Company applied for an extension of the Siguiri permit in May 2011 to allow further evaluation work and preparation for mining of placer gold deposits.  During the change in governments in Guinea and related turmoil in 2011, the extension was put on hold by the government and the Company’s permit and rights to the property through the joint venture remained in question until the matter could be resolved with the new government.  The permit extension was granted in April 2012 after government review of all outstanding exploration permits and activities in those permit areas.  Receipt of the permit document from Guinea is pending.





In 2007, the Company commissioned an independent geologist to conduct due diligence sampling and mapping of the permit area that had potential for gold in Birimian sedimentary to metasedimentary volcanic rocks, similar to most major gold deposits in Guinea and West Africa.  The geological study, published in July 2007, concluded that the geomorphology and distribution of elluvial and alluvial placer gold indicated a lode source of gold within the permit area, warranting further exploration.





The source of lode gold in the permit area is obscured by an extensive lateritic cap of residual alumina and iron oxides.  This material was formed during a long period of intense tropical weathering and almost fully mantles the underlying bedrock or saprolite.  There are two hills within the permit area that have similar relief to the silicified mineralized zones at the SAG mine 35 kilometers to the northeast.  Abundant quartz float is present on the hillside surfaces, below the level of laterite cap on the hill.  In one case, quartz vein material outcrops near the top of the hill, with some samples positively assayed for gold greater than 0.10 grams per ton.





Adjacent to the hills are elluvial and alluvial gold concentrations that have been worked historically and are currently being worked by artisanal miners.  The elluvial deposits are at the base of the slope where gold float and a quartz vein sample assayed positively for gold.





A program of termite mound sampling was undertaken to screen the remainder of the permit area.  This sampling tested positive for gold in the area where artisanal mining of the alluvium was present as well as areas where it was not being conducted.





The report, prepared pursuant to the Canadian standard, NI 43-101, recommended a two stage program of further exploration. The first stage entails completion of the termite mound sampling, detailed geological mapping, and geochemical soil sampling. The second stage recommended entails reverse circulation drilling and sampling in areas showing positive assays from the first stage.





The author preparing the NI 43-101 report conducted due diligence sampling in December of 2006.  According to sampling guidelines, to ensure chain of custody, the samples were in his possession at all times. When the location of a potential sample was reached, the following protocol was followed:





1.     Plastic sample bags were labeled with indelible ink.2.     A field sample tag with the same number as written on the outside of the bag was put into the plastic sample bag with the sample.3.     The sample was collected and the sample bag closed and sealed with a single-use cable tie.4.     The author carried the sample to camp, and it remained in the author’s possession until submitted to SGS Guinee laboratory in Siguiri, Guinea.





All QA/QC protocols are defined by the Canadian Instrument 43-101 which the company has adopted and adheres to the same guidelines regarding its sample acquisition procedures.





Management recommends that continued exploration of the permit area should comprise completion of the termite mound sampling to identify areas of anomalous gold beneath the laterite cap. After completion of the termite mound sampling, a reverse circulation drilling program is recommended, with core drilling to be done in selected areas to provide detailed subsurface geologic information where possible. Should the termite mound sampling indicate more extensive areas of anomalous gold, a high-resolution airborne geophysical survey (magnetometer, electromagnetic and radiometric survey) should be undertaken over the entire permit area to identify underlying structures and delineate additional areas for future drilling.  For the proposed drilling program the target areas appears to be:




4





1)  Northwest to southeast drilling across both the assumed structural and stratigraphic fabrics in the permit area.


2)  Northwest to southeast drilling across the topographic highs with silicified rocks and surrounded by alluvial and elluvial artisanal workings possibly derived from the silicified areas.





The properties are without known reserves and the proposed program is exploratory in nature.





Evaluation and Acquisition -- Dinguiraye Property





On February 11, 2011, the Company entered into a Letter of Intent with Gold River of Africa Corporation (“Gold River”), related to the proposed acquisition of an option to acquire an undivided 100% interest in the eastern one-third of the Paramangui Exploration Permit (the “Dinguiraye property”) located in north-central Guinea, West Africa in the Prefecture of Dinguiraye.  Gold River holds a 100% interest in the Paramangui Exploration Permit issued by the Republic of Guinea #A2006/3480/MMG/SGG and dated July 24, 2006.  There are no annual fees for the permit. The size of the exploration permit is 166.6 square kilometers.





The Letter of Intent was binding and granted to the Company, after a due diligence period of up to April 30, 2011, approval of the board of directors of the Company and the board of directors of Gold River,  (the “Effective Date”), the right to acquire the Dinguiraye property upon the issuance of 15,000,000 shares of Company common stock.  The due diligence period entitled the Company to undertake a comprehensive program of due diligence with regard to the Dinguiraye property and all exploration that had been conducted thereon to date.  An extension of the allowable due diligence period was made by mutual consent of the Company and Gold River until 31 December 2011.  However, this option was cancelled by mutual consent of the Company and Gold River on December 23, 2011.







5


Vietnam Property











On October 22, 2009, the Company entered into a binding letter of intent (“Joint Venture” or “Joint Venture Agreement”) with Ba Dinh Mineral Company Limited (“Ba Dinh”), which was signed on behalf of Ba Dinh by former director and CEO Todd Sterck, before he was appointed as our CEO and director, whereby Ba Dinh agreed to sell us  51% of the assets associated with the mining claims known as the “Nat Son” Exploration Property.    The retention of mineral rights is conditioned upon the Company putting a best effort into exploring and developing the property. The Nat Son exploration property consists of approximately 102 hectares of land in northern Vietnam.  Exploration interest in the property is based on the presence of gold-silver bearing quartz-arsenopyrite veins which are exposed at the surface and within rudimentary underground mine workings.  The veins are known to extend well beyond the current property boundaries and have been examined and sampled over a strike length of 4.0 km. The Nat Son property is located 50 km southwest of Hanoi in Nat Son Commune, Kim Boi District, Hoa Binh Province and is accessible by road.




6





Mineral rights were issued by the Peoples Committee of Hoa Binh Province to Ba Dinh Construction and Consulting Joint Stock Company, a different legal entity than Ba Dinh Mineral Company Limited.  The Peoples Committee of Hoa Binh Province issued an Exploration Permit to Ba Dinh on June 9th, 2009 No.: 39/QÐ – UBND.  This permit is valid for five years from the issue date and in renewable for an additional five years. The permitted area of interest covers 40 hectares in Nat Son Commune, Hoa Binh Province Vietnam.  The Company is responsible for all Exploration and Exploitation Costs. There are no annual fees or dues associated with the Nat Son Property.  The total land area of the Nat Son Property is 103 hectares with 40 hectares approved for exploitation.





A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property in Vietnam between the Company and Ba Dinh as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company.  Management, in consultation with legal counsel, has determined that the arguments by those key partners have no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  To date, Ba Dinh has not completed a transfer of the title to the Nat Son property to the Company, per the agreement between the parties, and the Company has sought the assistance of Vietnamese counsel to enforce the binding letter of intent.





Counsel was retained for initial investigations in Vietnam to determine what the true state of the project was during the first quarter of 2012.  As a result of these investigations, it was determined that a valid exploration permit has been granted to Ba Dinh Construction and Consulting Joint Stock Company by the provincial authorities and is in effect until June 2014.  However, investigations are continuing regarding the status of ownership and/or leasing of the Nat Son property by Ba Dinh.  Also, Ba Dinh officers continue to be unresponsive, thereby putting the viability of the joint venture in question.





There is not enough information available on the legal status of the Joint Venture Agreement with Ba Dinh and the Nat Son property to determine whether or not Ba Dinh has performed according to the requirements of the Joint Venture Agreement.  Therefore, the project has been written off in the fourth quarter of 2011 to allow for possible permanent impairment of the project.  Management’s opinion on this matter is that the project still is potentially viable, but that all joint venture activities with Ba Dinh may need to cease if a mutually agreeable solution cannot be reached.  Should the joint venture agreement be formally dissolved, the Company may pursue legal options in Vietnam during 2012 to recover payments made to Ba Dinh for expenses that they have not documented adequately or for which official documentation has not been provided for the project.





To date the Company and Ba Dinh have built crew housing and a core shack.  The Company also had a new road completed from Luong Son village to the property site. A draft Technical Report compliant with Canadian standard N1 43-101 was prepared by “qualified person” M. Hassan Alief on the property in September 2009, and in December 2009 a final report was issued by Mr. Alief based on two weeks of detailed field work. As a result of the field work, the Company’s geological consultants recommended a detailed drill program to test the subsurface potential of the property.





A geochemical report was completed by consultant Bob Marvin.  To date there have been no subsurface improvements and no equipment is on site.  Water is available by artesian springs on the property and power will be by generator.





The NI 43-101 report concluded that the Nat Son property is centered on a 2 to 3 square kilometer area of strong to intense sericite-kaolinite-quartz-anhydrite alteration of Triassic age clastic and volcanic rocks.  Strongly gold mineralized, arsenopyrite rich, quartz veins occur within this envelope.  The veins, mineralization and alteration appear to be focused around a series of strongly altered, andesite porphyry intrusions.  Mineralized veins on the Nat Son property occur in two distinct sets: an apparently dominant east-northeast set and a secondary north-south set.




7





The author preparing the NI 43-101 report collected 14 samples. The samples were in his position at all times. Thirteen samples were taken to the office of DHL in Hanoi, directly, and shipped to ALS Chemex in Vancouver, BC, Canada. The samples were analyzed for a 33 element suite and gold. The chain of custody meets the requirements necessary for NI 43-101 technical report purposes. One sample collected from the old operations next to the adit Number Two consisted of pulverized material. DHL did not accept the sample because it could not ship the pulverized material out of Vietnam. That sample was taken by Todd Sterck to Arlington, Washington, and shipped to ALS Chemex from there. The result of chemical analysis for this sample is shown in the table listing all other analyses with a caveat that the chain of custody cannot be verified.   All QA/QC protocols are defined by NI 43-101 which the company has adopted and adheres to the same guidelines regarding its future sample acquisition procedures.





The drilling that is planned will be the first depth testing of the ore bearing veins at Nat Son.  The results of the planned drilling should provide critical data that will enable a rough resource calculation to be made and provide the basis for further, more detailed exploration of the property.





Pending legal review, management has recommended that the Company undertake an exploration program to pursue the gold, lead and zinc targets on and in the vicinity of the old workings. These targets include zones of higher grade mineralization encountered in old adits to date, new conceptual targets  premised on the recognition that the mineralization are related in time and space to faults in limestone. The following activities are deemed to be essential components of this program based on the NI 43-101 report:





1.  Clean up and make old adits, drifts and winzes safe for inspection, mapping and sampling.


2.  Map and sample the old workings.


3.  Send samples to ALS Chemex for analysis, making sure of sample integrity and chain of custody.


4.  Although surface outcrops are very few, making use of satellite imagery to put together a structural picture of the area along with lithology is recommended.


5.  Because of paucity of outcrops in the property, a geophysical exploration program was suggested to outline the underlying structures and possible mineralized areas.


6.  The geology of the property needs to be mapped using a GPS system with detailed notes describing lithologies, mineralization, alteration, and structural and stratigraphic details.





The property is without known reserves and the proposed program is exploratory in nature.





Employees





We currently employ two management level employees, working as part-time contractors.  The Company may require additional employees in the future. There is intense competition for capable, experienced personnel and there is no assurance the Company will be able to obtain new qualified employees when required.





The Company believes its relations with its employees are good.





Patents





The Company holds no patents for any products.





Government Regulation





Our activities will be subject to various federal, foreign and local laws and regulations governing prospecting, exploration, production, labor standards, occupational health and mine safety, control of toxic substances, and other matters involving environmental protection and taxation.  It is possible that future changes in these laws or regulations could have a significant impact on our business, causing those activities to be economically re-evaluated at that time.




8





Environmental Risks





Minerals exploration and mining are subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. Insurance against environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production, is not generally available to us (or to other companies in the minerals industry) at a reasonable price. To the extent that we may become subject to environmental liabilities, the remediation of any such liabilities would reduce funds otherwise available to us and could have a material adverse effect on our financial condition. Laws and regulations intended to ensure the protection of the environment are constantly changing, and are generally becoming more restrictive.





Competition





There is aggressive competition within the minerals industry to discover, acquire and mine mineral properties considered to have commercial potential.   In addition, we compete with others in efforts to obtain financing to acquire and explore mineral properties.





The Company competes in Guinea with other more established gold mining companies in the area, such as Cassidy Gold Corporation, and AngloGold Ashanti.





Item 1A.  RISK FACTORS





We are subject to various risks which may materially harm our business, financial condition and results of operations. You should carefully consider the risks and uncertainties described below and the other information in this filing before deciding to purchase our common stock. If any of these risks or uncertainties actually occurs, our business, financial condition or operating results could be materially harmed. In that case, the trading price of our common stock could decline and you could lose all or part of your investment.





Because Most of Our Operations Will Be Located Outside the U.S., U.S. Investors May Experience Difficulties In Attempting To Enforce Judgments Based Upon U.S. Federal Securities Laws.  U.S. Laws and/or Judgments Might Not Be Enforced Against Us In Foreign Jurisdictions.





Most of our operations and assets will be located outside of the United States.  As a result, it may be difficult or impossible for U.S. investors to enforce judgments of U.S. courts for civil liabilities against us or against any of our individual directors or officers.   In addition, U. S. investors should not assume that courts in the countries in which our operations or assets are located (i) would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions of applicable U.S. federal and state securities laws or (ii) would enforce, in original actions, liabilities against us based upon these laws.





Mining activities involve a high degree of risk.





Our operations on our properties will be subject to all the hazards and risks normally encountered in the mining deposits of gold. These hazards and risks include, without limitation, unusual and unexpected geologic formations, seismic activity, rock bursts, pit-wall failures, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and legal liability.  Milling operations, if any, are subject to various hazards, including, without limitation, equipment failure and failure of retaining dams around tailings disposal areas, which may result in environmental pollution and legal liability.





The parameters that would be used at our properties in estimating possible mining and processing efficiencies would be based on the testing and experience our management has acquired in operations elsewhere. Various unforeseen conditions can occur that may materially affect estimates based on those parameters. In particular, past mining operations indicate that care must be taken to ensure that proper mineral grade control is employed and that proper steps are taken to ensure that mining operations are executed as planned to avoid mine grade dilution, resulting in uneconomic material being fed to a mill. Other unforeseen and uncontrollable difficulties may occur in planned operations at our properties which could lead to failure of the operation.




9





If we make a decision to exploit either of our properties based on gold mineralization that may be discovered and proven, we plan to process the resource using technology that has been demonstrated to be commercially effective at other geologically similar gold deposits elsewhere in the world.  These techniques may not be as efficient or economical as we project, and we may never achieve profitability.





We may be adversely affected by fluctuations in gold and silver prices.





The value and price of our securities, our financial results, and our exploration activities may be significantly adversely affected by declines in the price of gold and other precious metals.  Gold prices fluctuate widely and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the relative value of the United States dollar against foreign currencies on the world market, global and regional supply and demand for gold, and the political and economic conditions of gold producing countries throughout the world. The price for gold fluctuates in response to many factors beyond anyone’s ability to predict. The prices that would be used in making any resource estimates at our properties would be disclosed and would probably differ from daily prices quoted in the news media. Percentage changes in the price of gold cannot be directly related to any estimated resource quantities at any of our properties, as they are affected by a number of additional factors. For example, a ten percent change in the price of gold may have little impact on any estimated resource quantities and would affect only the resultant cash flow.  Because any future mining would occur over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a variety of reasons, including a belief that a low price of gold is temporary and/or that a greater expense would be incurred in temporarily or permanently closing a mine there.





Mineralized material calculations and life-of-mine plans, if any, using significantly lower gold and precious metal prices could result in material write-downs of our investments in mining properties and increased reclamation and closure charges.





In addition to adversely affecting any of our mineralized material estimates and its financial aspects, declining metal prices may impact our operations by requiring a reassessment of the commercial feasibility of a particular project.  Such a reassessment may be the result of a management decision related to a particular event, such as a cave-in of a mine tunnel or open pit wall.  Even if any of our projects may ultimately be determined to be economically viable, the need to conduct such a reassessment may cause substantial delays in establishing operations or may interrupt on-going operations, if any, until the reassessment can be completed.





Estimates of mineralized material are subject to evaluation uncertainties that could result in project failure.





Our exploration and future mining operations, if any, are and would be faced with risks associated with being able to accurately predict the quantity and quality of mineralized material within the earth using statistical sampling techniques. Estimates of any mineralized material on any of our properties would be made using samples obtained from appropriately placed trenches, test pits and underground workings and intelligently designed drilling. There is an inherent variability of assays between check and duplicate samples taken adjacent to each other and between sampling points that cannot be reasonably eliminated.





Additionally, there also may be unknown geologic details that have not been identified or correctly appreciated at the current level of accumulated knowledge about our properties. This could result in uncertainties that cannot be reasonably eliminated from the process of estimating mineralized material. If these estimates were to prove to be unreliable, we could implement an exploitation plan that may not lead to commercially viable operations in the future.




10





Future legislation and administrative changes to the Vietnamese and Guinean mining laws could prevent us from exploring our properties.





Vietnamese and Guinean laws and regulations, amendments to existing laws and regulations, administrative interpretation of existing laws and regulations, or more stringent enforcement of existing laws and regulations, could have a material adverse impact on our ability to conduct exploration and mining activities.   Any change in the regulatory structure making it more expensive to engage in mining activities could cause us to cease operations.





We are a relatively young company with limited operating history





Because we are a young company, it is difficult to evaluate our business and prospects. At this stage of our business operations, even with our good faith efforts, potential investors have a high probability of losing their investment. Our future operating results will depend on many factors, including the ability to generate sustained and increased demand and acceptance of our products, the level of our competition, and our ability to attract and maintain key management and employees. Whereas management believes their estimates of projected occurrences and events are within the timetable of their business plan, there can be no guarantees or assurances that the results anticipated will occur.





We may require additional funds to operate in accordance with our business plan.





We may not be able to obtain additional funds that we may require. We do not presently have adequate cash from operations or financing activities to meet our long-term needs. If unanticipated expenses, problems, and unforeseen business difficulties occur, which result in material delays, we will not be able to operate within our budget. If we do not achieve our internally projected sales revenues and earnings, we will not be able to operate within our budget. If we do not operate within our budget, we will require additional funds to continue our business. If we are unsuccessful in obtaining those funds, we cannot assure our ability to generate positive returns to the Company. Further, we may not be able to obtain the additional funds that we require on terms acceptable to us, if at all. We do not currently have any established third-party bank credit arrangements. If the additional funds that we may require are not available to us, we may be required to curtail significantly or to eliminate some or all of our acquisition, exploration, development, or sales and marketing programs.





If we need additional funds, we may seek to obtain them primarily through equity or debt financings. Such additional financing, if available on terms and schedules acceptable to us, if available at all, could result in dilution to our current stockholders and to you. We may also attempt to obtain funds through arrangement with corporate partners or others. Those types of arrangements may require us to relinquish certain rights to our mineral or intellectual property or to resulting products.





Our Auditor has raised substantial doubt about our ability to continue as a going concern





The report of our independent auditor regarding our audited financial statements for the period ended December 31, 2011 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are that we have an accumulated deficit since inception and have no revenues. Our future is dependent upon our ability to obtain financing and upon successful exploration and future development and production stages on our mining claims and mineral concessions. This is a significant risk to investors who purchase shares of our common stock because there is an increased risk that we may not be able to generate and/or raise enough capital to remain operational for an indefinite period of time.





Potential investors should also be aware of the difficulties normally encountered in the exploration stage of mining companies and the high rate of failure of such enterprises. Our auditor's concern may inhibit our ability to raise financing because we may not remain operational for an indefinite period of time resulting in potential investors failing to receive any return on their investment. Persons who cannot afford to lose their entire investment should not invest in the Company’s securities.





We compete with larger, better capitalized competitors in the mining industry.





The mining industry is acutely competitive in all of its phases. We face strong competition from other mining companies in connection with the acquisition of exploration-stage properties, or properties capable of producing precious metals.  Many of these companies have greater financial resources, operational experience and technical capabilities than us. As a result of this competition, we may be unable to maintain or acquire attractive mining properties on terms we consider acceptable or at all. Consequently, our revenues, operations and financial condition and possible future revenues could be materially adversely affected by actions by our competitors.




11





Risks Relating to Our Common Stock





We do not expect to pay dividends for the foreseeable future.





For the foreseeable future, it is anticipated that earnings, if any, that may be generated from our operations will be used to finance our operations and that cash dividends will not be paid to holders of our common stock.





We expect to be subject to SEC regulations and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and other trading market rules, which are creating uncertainty for public companies.





We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest appropriate resources to comply with evolving standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.





Our common stock is traded on the over-the-counter bulletin board, is illiquid and subject to price volatility unrelated to our operations.





Our shares of common stock are currently traded on the over-the-counter bulletin board. Many institutional investors have investment policies which prohibit them from trading in stocks on the over-the-counter bulletin board. As a result, stock quoted on the bulletin board generally have limited trading volume and exhibit a wider spread between the bid/ask quotations than stock traded on national exchanges.





In addition, the stock market is subject to extreme price and volume fluctuations.  The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, our quarterly operating results, operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us.  Certain of these factors can have a significant effect on the market price for our stock for reasons that are unrelated to our operating performance.





Our common stock is subject to penny stock rules.





Our common stock is subject to Rule 15g-1 through 15g-9 under the Exchange Act, which imposes certain sales practice requirements on broker-dealers which sell our common stock to persons other than established customers and “accredited investors” (generally, individuals with net worth's in excess of $1,000,000 or annual incomes exceeding $200,000 (or $300,000 together with their spouses).  For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale.  This rule adversely affects the ability of broker-dealers to sell our common stock and the ability of our stockholders to sell their shares of common stock.





Additionally, our common stock is subject to the SEC regulations for “penny stock.”  Penny stock includes any equity security that is not listed on a national exchange and has a market price of less than $5.00 per share, subject to certain exceptions.  The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock.  This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock.  The regulations also require that monthly statements be sent to holders of penny stock that disclose recent price information for the penny stock and information of the limited market for penny stocks.  These requirements adversely affect the market liquidity of our common stock.




12





Issuance of additional securities.





Our Board of Directors has authority to issue additional shares of common stock or other securities without the consent or vote of our stockholders. The issuance of additional shares, whether in respect of a transaction involving a business opportunity or otherwise, may have the effect of further diluting the proportionate equity interest and voting power of our stockholders. In the event of such future acquisitions, we could issue equity securities which would dilute current stockholders' percentage ownership, incur substantial debt or assume contingent liabilities. Such actions by the Board of Directors could materially adversely affect our operating results and/or the value of our common stock.





Item 1B.  UNRESOLVED STAFF COMMENTS





None.





Item 2.    PROPERTIES





Guinea, West Africa





The Siguiri exploration permit comprises 103 square kilometers, approximately 492 kilometers northeast of the of Conakry, the capital of the country, near the city of Siguiri. The permit area is centered on 11 degrees 16 minutes 20 seconds north, 9 degrees, 36 minutes 20 seconds west in the Prefecture of Siguiri in north central Guinea. Siguiri is the second largest city in Guinea and is the supply center for the mining industry in northern Guinea.





Vietnam Property





The Nat Son exploration property is located in northern Vietnam in a position approximately 50 km southwest of Hanoi. Exploration interest in the property is based on the presence of gold-silver bearing quartz-arsenopyrite veins which are exposed at surface and within rudimentary underground mine workings.  The veins are now known to extend well beyond the current property boundaries and have been examined and sampled over a strike length of 4.0 km.





Item 3.    LEGAL PROCEEDINGS





A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property in Vietnam between the Company and Ba Dinh Mineral Company Limited as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company.  Management, in consultation with legal counsel, has determined that the arguments by those key partners have no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  To date, Ba Dinh has not completed a transfer of the title to the Nat Son property to the Company, per the agreement between the parties, and the Company has sought the assistance of Vietnamese counsel to enforce the binding letter of intent.





Ba Dinh has been notified of this finding and has not responded to further inquiries.  To the best of our knowledge, no other legal action by or against the Company has been threatened.





Item 4.    MINE SAFETY DISCLOSURES





Not applicable.




13





PART II





Item 5.    MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES





Our common stock trades publicly on the over the counter bulletin board under the symbol "SMNG." During the fiscal year ended December 31, 2011, our common stock traded part of that year publicly on the OTC Markets Pink Sheets.  The over the counter bulletin board and the pink sheets are regulated quotation services that display real-time quotes, last-sale prices and volume information in over-the-counter equity securities. The over the counter bulletin board and pink sheet securities are traded by a community of market makers that enter quotes and trade reports. This market is extremely limited and any prices quoted may not be a reliable indication of the value of our common stock.




The following table sets forth the high and low bid prices per share of our common stock for the periods indicated as reported on the over the counter (OTC) Markets Pink Sheets and OTC Bulletin Board:





High


LowFISCAL YEAR ENDED DECEMBER 31, 2011Fourth Quarter

$
0.04


$
0.01Third Quarter

$
0.04


$
0.01Second Quarter

$
0.06


$
0.04First Quarter

$
0.14


$
0.05FISCAL YEAR ENDED DECEMBER 31, 2010Fourth Quarter

$
0.17


$
0.03Third Quarter

$
0.09


$
0.02Second Quarter

$
0.23

$
0.03First Quarter

$
0.35


$
0.10





The quotes represent inter-dealer prices, without adjustment for retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The trading volume of our securities fluctuates and may be limited during certain periods. As a result of these volume fluctuations, the liquidity of an investment in our securities may be adversely affected.





Holders





As of March 31, 2012, there were 181,236,792 shares of common stock outstanding held by approximately 201 holders of record.





Dividends





Our board of directors has not declared a dividend on our common stock during the last three fiscal years or the subsequent interim period and we do not anticipate the payments of dividends in the near future as we intend to reinvest our profits to grow our business.





Penny Stock Status





The Company’s common stock is a "penny stock," as the term is defined by Rule 3a51-1 of the Securities Exchange Act of 1934. This makes it subject to reporting, disclosure and other rules imposed on broker-dealers by the Securities and Exchange Commission requiring brokers and dealers to do the following in connection with transactions in penny stocks:





1. Prior to the transaction, to approve the person's account for transactions in penny stocks by obtaining information from the person regarding his or her financial situation, investment experience and objectives, to reasonably determine based on that information that transactions in penny stocks are suitable for the person, and that the person has sufficient knowledge and experience in financial matters that the person or his or her independent advisor reasonably may be expected to be capable of evaluating the risks of transactions in penny stocks. In addition, the broker or dealer must deliver to the person a written statement setting forth the basis for the determination and advising in highlighted format that it is unlawful for the broker or dealer to effect a transaction in a penny stock unless the broker or dealer has received, prior to the transaction, a written agreement from the person. Further, the broker or dealer must receive a manually signed and dated written agreement from the person in order to effectuate any transactions is a penny stock.




14





2. Prior to the transaction, the broker or dealer must disclose to the customer the inside bid quotation for the penny stock and, if there is no inside bid quotation or inside offer quotation, he or she must disclose the offer price for the security transacted for a customer on a principal basis unless exempt from doing so under the rules.





3. Prior to the transaction, the broker or dealer must disclose the aggregate amount of compensation received or to be received by the broker or dealer in connection with the transaction, and the aggregate amount of cash compensation received or to be received by any associated person of the broker dealer, other than a person whose function in solely clerical or ministerial.





4. The broker or dealer who has effected sales of penny stock to a customer, unless exempted by the rules, is required to send to the customer a written statement containing the identity and number of shares or units of each such security and the estimated market value of the security. The imposition of these reporting and disclosure requirements on a broker or dealer makes it unlawful for the broker or dealer to effect transactions in penny stocks on behalf of customers. Brokers or dealers may be discouraged from dealing in penny stocks, due to the additional time, responsibility involved, and, as a result, this may have a deleterious effect on the market for the company's stock.





Unregistered Sales of Securities





The following securities were issued by Strategic Mining Corporation within the fiscal year and were not registered under the Securities Act:





In July 2011 the Company executed a six month agreement with a communication firm to provide investor relations and corporate communication services. The Company issued 2,000,000 shares of common stock at $0.04 per share, the value of the shares as of the date of issuance, for a total value of $80,000.





On 4 August 2011, the Company converted 4,000,000 restricted Class A Convertible Preferred Shares into 4,000,000 shares of the Company’s Common stock. The conversion price was $0.015 per share, in accordance with the Convertible Preferred Share original subscription.





On 5 October 2011, the Company executed an agreement with Rathbourne Mercantile Ltd. to provide investor relations and corporate communication services. The Company issued 500,000 shares of common stock at $0.0171 per share, the value of the shares as of the date of issuance, a total value of $8,550.





During the first quarter of 2012 the Company entered into a debt assumption agreement with Asher Enterprises Inc. for assumption of $66,000 of debt originally held by Magma Gold Corporation. This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company.  In March 2012 the Company issued 15,829,295 shares of common stock to Asher Enterprises Inc. in exchange for this debt assumption.




During the first quarter of 2012 the Company entered into a debt assumption agreement with Redwood Management LLC for assumption of $182,708 of debt originally held by Frank Brodzik.  This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. The Company issued 51,268,777 shares of common stock to Redwood Management LLC through May 14, 2012 in exchange for $121,000 of this debt assumption.





In March 2012, the Company cancelled 14,350,030 shares of common stock which were previously issued in the prior fiscal year in settlement of loans payable to related parties. The Company has assumed the original debt in the amount of $292,180 in exchange for the cancellation of the shares.





15





The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp., for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted common stock to AGS Capital Corp. in exchange for $20,000 in services to allow for preparation of the related documents and discussions.





Additional restricted shares of common stock of 30,978,934 were issued to AGS Capital Corp. in the second quarter 2012 as commitment required under the REF Agreement.  Advances on the total available financing have not been requested pending completion of the 10K filing and subsequent first quarter 10Q filing.





Proceeds from the above-referenced sales were used for administrative and corporate expenses, including legal, accounting, consulting and finance activities, as well as research, travel and acquisition and exploration expenses




Item 6.    SELECTED FINANCIAL DATA





The registrant is a smaller reporting company, pursuant to Rule 229.10(f)(1), and is not required to report this information. The financial statements of the issuer are attached.





Item 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





Certain statements contained in this annual filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.





Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.





Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following discussion and analysis should be read in conjunction with our Financial Statements and notes appearing elsewhere in this report.





Results of Operations





The Company is an exploration stage mining company with no revenues since entering the exploration stage.





Twelve Months Ended December 31, 2011 Compared To The Twelve Months Ended December 31, 2010





Revenues





There were no revenues in either twelve month period ended December 31, 2011 and December 31, 2010.





Operating Expenses





Interest expenses for the twelve months ended December 31, 2011 were $11,004 and $61,139 for the twelve months ended December 31, 2010.  The decrease during the twelve months ended December 31, 2011, was primarily attributed to decreases in interest bearing loans payable and related accrued interest costs and debt converted to shares.




16





Professional fees for the twelve months ended December 31, 2011 were $44,355 and $50,175 for the twelve months ended December 31, 2010.  The decrease during the twelve months ended December 31, 2011, were primarily attributed to additional professional fees in the prior period relating to filing of the Company’s Form 10A and quarterly financial statements preparation which were not required during the corresponding periods of 2011.





Exploration costs for the twelve months ended December 31, 2011 were $209,139 and $234,454 for the twelve months ended December 31, 2010.  The increase during the twelve months ended December 31, 2011 was primarily attributed to ongoing activity in Guinea and briefly increased exploration activity in Vietnam, including the commencement of drilling related program training in Nat Son, Vietnam.





Consulting expenses for the twelve months ended December 31, 2011 were $229,901 and $323,116 for the twelve months ended December 31, 2010.   The expenses during the twelve months ended December 31, 2011, were primarily due to (i) a new consulting contract granted to Ken Baird commencing on May 23, 2011 for $6,000 per month, and stock option expenses of $5,000 on the amortization of 5,000 stock options vested during the quarter in association with certain consulting contracts and (ii) additional investor relations costs during the year.





Net Loss





We recorded a net loss of $1,051,278 for the twelve months ended December 31, 2011, as compared to a net loss of $668,884 for the twelve months ended December 31, 2010.  The increase in net loss is primarily attributed to adjustments for impairments of exploration properties and equipment.





Liquidity and Capital Resources





At December 31, 2011, we had an accumulated deficit of $2,707,794 and a working capital deficit of $519,602.





For the year ended December 31, 2011, net cash used in operating activities amounted to $162,271, as compared to $676,952 for the year ended December 31, 2010. The decrease in the cash used in operating activities was primarily due to an increase in our accounts payable.





For the year ended December 31, 2011, net cash used in investing activities amounted to $25,000, as compared to $404,697 for the year ended December 31, 2010. The cash used in investing activities in 2011 related to the further acquisition of mining claims for the Nat Son property in Vietnam.





For the year ended December 31, 2011, net cash provided in financing activities amounted to $185,203, as compared to $1,083,567 for the year ended December 31, 2010. The decrease in cash provided from financing activities was due to a decrease in proceeds from issuance of common stock from $245,100 to $Nil and reductions in proceeds on assumption of debt and proceeds from related party loans from $834,467 to $185,203.





A total of $142,500 was raised through equity financing through April 30, 2012 for company operations.  Also during the first quarter of 2012, an additional $248,782 in Company debt was transferred from previous debt holders to debt assumption companies for subsequent conversion in 2012 to stock.  These debt assumptions will ultimately remove this debt from the Company accounts as those conversions to shares of common stock take place.




17





We will need to raise additional capital through equity or debt financing in the next twelve months in order to fund our planned operations and repay, restructure, or refinance our debt obligations. Our current operating plans for the next fiscal year are to meet our existing customer commitments, expand our exploration and engineering capabilities, and continue to develop innovative solutions for our customers. Although we will have to raise additional funds through the issuance of debt and/or equity during the next twelve months, there can be no assurance that financing will be available, or if available, that such financing will be upon terms acceptable to us.  The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp. (“AGS”), for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted shares of common stock to AGS in exchange for $20,000 in services to allow for preparation of the related documents and discussions. Additional restricted shares of common stock of 30,978,934 were issued to AGS in the second quarter 2012 as commitment shares required under the REF Agreement.  Advances on the total available financing have not been requested pending completion of the 10K filing and subsequent first quarter 2012 10Q filing.





The Company has focused since its inception on forming its corporate structure, developing its business plan and raising capital.  The Company is an exploration stage company with a plan of operations as set forth below.





Plan of Operations





Our current plan of operations is to complete further exploration, drilling and mapping on our various properties, as follows:





Guinea, West Africa





The geologist’s report on the Siguiri exploration permit recommended a two stage program of further exploration. The proposed plan for the first stage entails completion of a 3 month program of termite mound sampling, geological mapping, and geophysical and geochemical surveys budgeted at $630,000. The second stage entails a 12 month program of reverse circulation drilling sampling in areas showing positive assays, totaling $1.2M.  It is anticipated that the first stage will commence in the first half of 2012, and the second will continue for a 15 to 18 month duration tentatively to be completed in 2013. During the three month rainy season, no work will be performed.





In addition, upon arrangement of financing for such operations, it is anticipated that equipment and personnel necessary to begin placer mining operations within the Siguiri permit area will be identified and engaged as possible to bring available placer gold deposits in the property into production as soon as possible.  Exact timing of these operations is dependent on timing of financing, availability of equipment and personnel in a timely fashion, and permitting of such operations by the Guinea government.





The Company holds 100% interest in the joint venture’s two-year Siguiri Exploration Permit issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River . The Guinea government is entitled to a 15% royalty on all extracted minerals. Exploration permits are issued for two years and a one-time fee is paid for the permit.  Otherwise, there are no annual fees for the permit, but taxes are due annually to the government.





The Company applied for an extension of the Siguiri permit in May 2011 to allow further evaluation work and preparation for mining of placer gold deposits.  During the change in governments in Guinea and related turmoil in 2011, the extension was put on hold by the government and the Company’s permit and rights to the property through the joint venture remained in question until the matter could be resolved with the new government.  The permit extension was granted in April 2012 after government review of all outstanding exploration permits and activities in those permit areas.  Receipt of the permit document from Guinea is pending.




Nat Son, Vietnam





The geologist’s report on the Nat Son property recommended a detailed drill program to test the subsurface potential of the property.  The recommended work program will include geological mapping, geochemical and geophysical surveys and a drilling program spanning twelve months budgeted at $1.6 million. A small drilling program began in mid-2011, but was suspended due to equipment and personnel problems and extremely adverse weather conditions.  The program was planned to re-commence by Winter of 2011, however, operations were suspended due to a dispute that arose with Ba Dinh in October 2011.   This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  Assuming positive resolution of this dispute, a drilling program would be initiated that would require another twelve months. There will be a work stoppage during the two month rainy season.




18





The amount of work undertaken, and timing of the work, is dependent upon the successful raising of equity capital to fund the projects.  Should the capital be available, it is anticipated that the recommended work programs outlined will take between two to three years to accomplish.





During the next twelve months, the Company plans to satisfy its cash requirements by additional equity financing. The Company intends to undertake private placements of its common stock in order to raise future development and operating capital. The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its stock. There can be no assurance that the Company will be successful in raising the capital it requires through the sale of its common stock.





The Company does not contemplate any product research and development, but it does anticipate additional exploration and development costs on its properties. The Company anticipates an increase in labor force to explore and develop its properties which will be sought from outside contract labor.





The dispute which arose in October, 2011 concerning the status of joint work on the Nat Son property in Vietnam between the Company and Ba Dinh Mineral Company Limited as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company resulted in management, in consultation with legal counsel, to determine that the arguments by the key partners had no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  To date, Ba Dinh has not completed a transfer of the title to the Nat Son property to the Company, per the agreement between the parties.





Vietnamese counsel was retained for initial investigations in Vietnam to determine what the true state of the project was during the first quarter of 2012.  As a result of these investigations, it was determined that a valid exploration permit has been granted to Ba Dinh Construction Investment and Consulting Joint Stock Company by the provincial authorities and is in effect until 9 June 2014.  However, investigations are continuing regarding the status of ownership and/or leasing of the Nat Son property by Ba Dinh Mineral Company Limited.  Also, Ba Dinh officers continue to be unresponsive, thereby putting the viability of the Joint Venture in question.   Legal recourse in Vietnam continues to be investigated during the first half of 2012.





There is not enough information available on the legal status of the joint venture agreement with Ba Dinh and the Nat Son property to determine whether or not Ba Dinh has performed according to the requirements of the joint venture agreement.  Therefore, the project has been written down in the fourth quarter of 2011 to allow for possible permanent impairment of the project.  Management’s opinion on this matter is that the project still is potentially viable, but that all joint venture activities with Ba Dinh may need to cease if a mutually agreeable solution cannot be reached.  Should the joint venture be formally dissolved, the Company may pursue legal options in Vietnam during 2012 to recover payments made to Ba Dinh for expenses that they have not documented adequately or for which official documentation has not been provided for the project.





Dinguiraye Property





The option period for potential acquisition of the Dinguiraye property was extended in May 2011 by verbal agreement with Gold River until December 31, 2011. The Company decided on December 23, 2011 to not continue due diligence on the Dinguiraye property and cancelled the option agreement with Gold River by mutual consent.  The Company chose to do this to be able to focus efforts and exploration funds on the Siguiri Property instead.




19





Off-Balance Sheet Arrangements





The Company has no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.





Critical Accounting Estimates and Policies





Use of Estimates





The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the period, reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements.  On an ongoing basis, management reviews its estimates, including those related to personal injury and other claims, environmental claims, depreciation, and income taxes, based upon currently available information.  Actual results could differ from these estimates.





Stock-Based Compensation





FASB ASC 505-50 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.   FASB ASC 505-50 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  FASB ASC 505-50 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements.  That cost will be measured based on the fair value of the equity or liability instruments issued.





The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees.”  The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, which ever is more readily determinable in accordance with FASB ASC 505-50.





Income taxes





The Company accounts for its income taxes in accordance with FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.





Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The Company’s business activities contain elements of risk. The Company considers a principal type of market risk to be a valuation risk. All assets are valued at fair value as determined in good faith by or under the direction of the Board of Directors.




20




Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of Directors and
 Stockholders of Strategic Mining Corporation
 
 We have audited the accompanying balance sheet of Strategic Mining Corporation (the “Company”) as of December 31, 2011, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2011 and for the period from the date of inception (January 17, 2007) through December 31, 2011. Strategic Mining Corporation’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strategic Mining Corporation as of December 31, 2011, and the results of its operations and its cash flows for the year ended December 31, 2011 and for the period from inception (January 17, 2007) through December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has no revenue and has experienced losses from inception and has working capital deficiencies; therefore these conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
 
 /s/ DNTW Chartered Accountants, LLP
  Markham, Canada
 May 15, 2012
 
 F-1
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of Directors and
 Stockholders of Strategic Mining Corporation
 
 We have audited the accompanying balance sheet of Strategic Mining Corporation as of December 31, 2010 and the related statement of  operations, changes in stockholders' equity and cash flows for the year ended December 31, 2010 and for the period from the date of inception (January 17, 2007) through December 31, 2010. Strategic Mining Corporation’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strategic Mining Corporation as of December 31, 2010, and the results of its operations and its cash flows for the year ended December 31, 2010 and for the period from inception (January 17, 2007) through December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, these conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
  /s/ EFP Rotenberg, LLP
 
 EFP Rotenberg, LLP
 Rochester, New York
 April 14, 2011
 
 F-2
 
 
 
 STRATEGIC MINING CORP.
 (An Exploration Stage Company)
  FINANCIAL STATEMENTS
  31 DECEMBER 2011
     F-3
 
 STRATEGIC MINING CORP.
  (An Exploration Stage Company)
  BALANCE SHEETS
  AS OF 31 DECEMBER
  (Expressed in United States Dollars)
 
 2011


2010ASSETSCurrent AssetsCash

$
532


$
2,600Refundable permit fee


35,000



-Prepaid deposits


-



41,000Total Current Assets


35,532



43,600Long Term AssetsProperty and equipment, net


-



97,182Exploration properties


728,250



1,162,948Total Long Term Assets


728,250



1,260,130Total Assets

$
763,782


$
1,303,730
  LIABILITIES AND STOCKHOLDERS' EQUITY
 Current LiabilitiesAccounts payable

$
267,557


$
50,511Accrued interest


13,851



3,320Loans payable to related parties


273,726



88,523Total Liabilities


555,134



142,354
  Stockholders' Equity
 Preferred stock $0.0001 par value; Authorized 25,000,000; Issued and outstanding 20,634,741 (24,634,741 - December 31 2010)


2,063



2,463Common stock $.001 par value; Authorized 400,000,000; Issued and outstanding 164,843,294 (158,343,294 - December 31 2010)


164,844



158,344Additional paid-in capital


2,749,535



2,657,085Deficit accumulated during the exploration stage


(2,707,794
)


(1,656,516
)Total Stockholders' Equity


208,648



1,161,376Total Liabilities and Stockholders' Equity

$
763,782


$
1,303,730
 
 The accompanying notes are an integral part of these financial statements.
 
 F-4
  STRATEGIC MINING CORP.
  (An Exploration Stage Company)
  STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
  (Expressed in United States Dollars)
  For the Year Ended 31 December 2011


For the Year Ended 31 December 2010


For the Period from Inception (17 January 2007) to 31 December 2011EXPENSESConsulting

$
229,901


$
323,116


$
846,383Exploration costs


209,139



234,454



953,026Professional fees


44,355



50,175



139,814Interest and bank charges


11,004



61,139



200,495Incorporation tax


-



-



11,197Depreciation


18,374



-



18,374TOTAL OPERATING EXPENSES


512,773



668,884



2,169,289LOSS FROM OPERATIONS


(512,773
)


-



(2,169,289
)Impairment of equipment


(78,807
)






(78,807
)Impairment of exploration properties


(459,698
)


-



(459,698
)NET LOSS AND COMPREHENSIVE LOSS

$
(1,051,278
)

$
(668,884
)

$
(2,707,794
)LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

$
(0.01
)

$
(0.01
)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED


161,355,642



104,018,246
 
 The accompanying notes are an integral part of these financial statements.
 
 F-5
 
 STRATEGIC MINING CORP.
 (An Exploration Stage Company)
  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
  FOR THE PERIOD FROM THE DATE OF INCEPTION (17 JANUARY 2007) TO 31 DECEMBER 2011
  (Expressed in United States Dollars)
  Common Stock


Preferred StockShares


Common Stock


Preferred Shares


Preferred Shares


Additional Paid-In Capital


Deficit Accumulated During The Exploration Stage


Total Stockholders' Equity (Deficit)Common shares issued for exploration properties on 17 January 2007 (Inception date)


97,100,000


$
97,100



-



-


$
631,150



-


$
728,250Common shares issued to acquire shell


2,514,611



2,515



-



-



(2,515
)


-



-Issuance of stock options on 17 January 2007


-



-



-



-



2,249



-



2,249Net loss


-



-



-



-



-



(220,437
)


(220,437
)Balance 31 December 2007


99,614,611


$
99,615



-



-


$
630,884


$
(220,437
)

$
510,062Stock-based compensation


-



-



-



-



350



-



350Net loss


-



-



-



-



-



(277,558
)


(277,558
)Balance 31 December 2008


99,614,611


$
99,615



-


$
-


$
631,234


$
(497,995
)

$
232,854Net loss


-



-



-



-



-



(489,637
)


(489,637
)Balance 31 December 2009


99,614,611


$
99,615



-


$
-


$
631,234


$
(987,632
)

$
(256,783
)Common shares issued for exploration properties


30,000


$
30



-



-


$
9,970



-


$
10,000Common shares issued for cash


1,625,000



1,625



-



-



243,475



-



245,100Common shares issued for settlement of loans


56,073,683



56,074



-



-



1,308,956



-



1,365,030Preferred shares issued for loan


-



-



24,634,741



2,463



367,058



-



369,521Common shares issued for services


1,000,000



1,000



-



-



34,000



-



35,000Stock-based compensation


-



-



-



-



62,392



-



62,392Net loss


-



-



-



-



-



(668,884
)


(668,884
)Balance 31 December 2010


158,343,294


$
158,344



24,634,741


$
2,463


$
2,657,085


$
(1,656,516
)

$
1,161,376Common shares issued  for services


2,500,000



2,500



-



-



86,050



-



88,550Conversion of preferred shares to common shares


4,000,000



4,000



(4,000,000
)


(400
)


(3,600
)


-



-Stock-based compensation


-



-



-



-



10,000



-



10,000Net loss


-



-



-



-



-



(1,051,278
)


(1,051,278
)Balance 31 December 2011


164,843,294


$
164,844



20,634,741


$
2,063


$
2,749,535


$
(2,707,794
)

$
208,648
  The accompanying notes are an integral part of these financial statements.
 
 F-6
  STRATEGIC MINING CORP.
  (An Exploration Stage Company)
  STATEMENTS OF CASH FLOWS
  (Expressed in United States Dollars)
  For the Year Ended 31 December 2011


For the Year Ended 31 December 2010


For the Period From Inception (17 January 2007) to 31 December 2011CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(1,051,278
)

$
(668,884
)

$
(2,707,794
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation


18,374



-



18,374Impairment of exploration properties and equipment


538,505



-



538,505Stock-based compensation


10,000



62,392



72,742Shares issued for services


88,550



35,000



125,799Accrued interest


10,531



39,659



50,190Changes in operating assets and liabilities:Prepaid deposits and refundable permit fees


6,000



(41,000
)


(35,000
)Accounts payable and accrued liabilities


217,047



(104,119
)


713,276CASH USED IN OPERATING ACTIVITIES


(162,271
)


(676,952
)


(1,223,908
)CASH FLOWS FROMINVESTING ACTIVITIESAcquisition of exploration properties


(25,000
)


(404,697
)


(538,879
)CASH FLOWS USED IN INVESTING ACTIVITIES


(25,000
)


(404,697
)


(538,879
)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from related party loans


185,203



838,467



1,518,219Issuance of common stock


-



245,100



245,100CASH FLOWS PROVIDED BY FINANCING ACTIVITIES


185,203



1,083,567



1,763,319NET (DECREASE) INCREASE IN CASH


(2,068
)


1,918



532CASH, BEGINNING OF YEAR


2,600



682



-CASH, END OF YEAR

$
532


$
2,600


$
532
 Non-Cash Investing and Financing Activities:Shares issued for acquisition of exploration properties

$
-


$
10,000


$
10,000Shares issued on conversion of debts

$
-


$
1,663,064


$
1,663,064Shares issued in settlement of accounts payable

$
-


$
31,918


$
31,918
 
 The accompanying notes are an integral part of these financial statements.
  F-7
 
 STRATEGIC MINING CORP.
  (An Exploration Stage Company)
  Notes to the Financial Statements
 
 1.
ORGANIZATION AND NATURE OF BUSINESS
 
 Organization
 
 Strategic Mining Corp.(the “Company”) was originally incorporated in Delaware on 24 August 1995 as Infocenter Inc. On 28 February 2000, the Company changed its name to Green Dolphin Systems Corporation and new corporate officers were appointed.  On 10 January 2006, the Board of Directors adopted a resolution authorizing the assignment of all the assets of Green Dolphin Systems Corporation to PentaDeltex, Ltd., a Canadian corporation, in exchange for the forgiveness of $263,717 in debt owing to Nicholas Plessas and an additional $153,683 owing to PentaDeltex, and assumption by PentaDeltex of all obligations owed by Green Dolphin Systems Corporation to suppliers and on other accounts payable.  As the result of the above settlements of debts, Green Dolphin Systems Corporation effectively ceased operations on 10 January 2006 with the discontinued operations of its U.S. subsidiary.  On 1 December 2006, the Company changed its name to Gold Coast Mining Corporation and new corporate officers were appointed shortly after.  On 17 January 2007 the Company issued 97,100,000 shares of its common stock to unrelated parties in exchange for various mining rights.  The issuance of the 97,100,000 represented approximately 97.5% of the then outstanding shares.  The transaction resulted in a change in control of the entity.  The issuance of shares and change in control has been accounted for as a reverse acquisition followed by a recapitalization of the Company’s equity structure.  The stockholders obtaining control in the transaction is considered the accounting acquirer for financial reporting purposes.  Accordingly, the equity section of the financial statements have been presented displaying the recapitalization of shares held by the individuals obtaining control followed by the issuance of shares to the minority stockholders.
 
 On 13 November 2009, the Company was reincorporated in the State of Wyoming. On 23 November 2009, the Company changed its name to Strategic Mining Corp.
 
 Nature of Business
 
 Strategic Mining Corp. is engaged in the business of exploration and development of gold properties in Guinea, West Africa and Vietnam, Southeast Asia.  The Company has secured a renewable exploration and mining permit in the Republic of Guinea through a Joint Venture agreement (the “Guinea JV”) with Gold River of Africa Corp. (“Gold River”).  The permit issued pertains to a 103 square kilometer area of gold anomalies located in Siguiri District of northeastern Guinea.  The Company had an option on a second property located in Dinguiraye District of northeastern Guinea in the valley of the Bafing River.  However, this option was cancelled by mutual consent of the Company and Gold River on 23 December 2011.
 
 The Company entered into a binding joint venture agreement (the “Ba Dinh JV”) on 22 December 2009 with Ba Dinh Mineral Company Limited (“Ba Dinh”), a Vietnamese mineral exploration company based in Ho Chi Minh City, to purchase a 51% interest in the Nat Son property that covers 102 hectares. The Company also secured via the Ba Dinh JV an exploration and mining permit for the property located in northern Vietnam approximately 50 kilometers southwest of Hanoi. Exploration interest in the property is based on the presence of gold-silver bearing quartz-arsenopyrite veins which are exposed at surface and within rudimentary underground mine workings.  The veins are known to extend well beyond the current property boundaries and have been examined and sampled over a strike length of 4.0 km. As further discussed in note 13, due to the uncertainty of the Ba Dinh JV, management has determined the related capitalized exploration properties are impaired and therefore have been written off in the fourth quarter of 2011.  Management has not received a professional opinion on the outcome of the dispute, and it therefore cannot be determined if the property will remain a viable project for the Company.  Investigations are continuing on the legal status of the exploration permit, property ownership, and viability of further operations within the context of the Ba Dinh Joint Venture.
  On March 30, 2012, as amended April 3, 2012, the Company filed a current report on Form 8K. That filing disclosed that, as a result of the dispute which arose in October, 2011 concerning the status of joint work on the Nat Son property in Vietnam between the Company and Ba Dinh as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company, and the subsequent Company investigation of the transaction and uncertainty of the current status of the Company’s joint venture with Ba Dinh, management determined, as a result of consulting with the Company’s former PCAOB registered public accounting firm, that the Company’s financial statements, contained within its Registration Statement on Form 10/A, filed January 21, 2011, its annual reports on Form 10K for the period ended December 31, 2010, and its quarterly reports on Form 10Q for all periods through September 30, 2011 should no longer be relied upon. The Company, in consultation with its former and current PCAOB registered public accounting firms and related application of authoritative guidance prescribed in FASB ASC 250, Accounting for Changes and Error Corrections, has determined that there are no filing errors that need be corrected in previously issued reports and that the related adjustments to the financial statements and notes thereto were appropriately made in the Company’s fourth quarter of fiscal 2011. Therefore, the Company will not be filing any amendments to the said reports in so far as it relates to the dispute and ongoing investigation with the joint venture in Vietnam.
  The Company is in the exploration stage and thus presents its financial statements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 915 (“Development Stage Entities”).
 
 2.  GOING CONCERN
 
 The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company has experienced losses from operations since inception and has working capital deficiencies that raise substantial doubt as to its ability to continue as a going concern.
  F-8
  The Company's existence is dependent upon management's ability to raise capital and/or to successfully market and sell its products. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional equity investment in the Company.
 
 The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
 
 3.  SIGNIFICANT ACCOUNTING POLICIES
 
 Exploration Properties
 
 Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Exploration property acquisition costs are capitalized including licenses and lease payments. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount.
 
 Carrying Value of Exploration Properties
 
 The cost of acquiring mineral property interests is capitalized. Capitalized acquisition costs are expensed in the period in which it is determined that the mineral property has no future economic value. Capitalized amounts may be written down if future cash flows, including potential sales proceeds related to the property, are estimated to be less than the carrying value of the property. The Company reviews the carrying value of mineral property interests periodically and whenever events or changes in circumstances indicate that the carrying value may not be recoverable, reductions in the carrying value of each property would be recorded to the extent the carrying value of the investment exceeds the property’s estimated fair value.
 
 Use of Estimates
 
 The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the period, reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements.  On an ongoing basis, management reviews its estimates, including those related to personal injury and other claims, environmental claims, depreciation, and income taxes, based upon currently available information.  Actual results could differ from these estimates.
 
 Cash and Cash Equivalents
 
 Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less.  The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.
 
 Stock-Based Compensation
 
 FASB ASC 505-50 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.   FASB ASC 505-50 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  FASB ASC 505-50 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements.  That cost will be measured based on the fair value of the equity or liability instruments issued.
 
 The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable in accordance with FASB ASC 505-50.
  F-9
 Income taxes
 
 The Company accounts for its income taxes in accordance with FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.
 
 Valuation of Long-Lived Assets
 
 Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicated that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of the asset less costs to sell. During the year ended 31 December 2011, the Company recorded impairment of equipment and exploration properties of $78,807 and $459,698, respectively.
 
 Fair Value of Financial Instruments
 
 For certain of the Company’s financial instruments, including cash and cash equivalents, accounts payable and accrued interest, the carrying amounts approximate fair values due to their short maturities.
 
 The Company measures its financial assets and liabilities in accordance with the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
 
 Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
 
 Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
 
 Level 3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
 
 Earnings per Share
 
 Earnings per share of common stock are computed in accordance with ASC 260-10. Basic earnings per share are computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for each period.  Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding assuming conversion of all potentially dilutive stock options, warrants and convertible securities, if dilutive.  Common stock equivalents that are anti-dilutive are excluded from both diluted weighted average number of common shares outstanding and diluted earnings per share.
 
 Reclassifications
 
 Certain prior year amounts have been reclassified to conform to the current year.
 
 4.  RECENT ACCOUNTING PRONOUNCEMENTS
 
 There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.
 
 5.  PLANNED EXPLORATION
 
 Guinea, West Africa
 
 The Company entered into a joint venture agreement with Gold River of Africa Company (“Gold River”) for the Siguiri property on 15 January 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea to Gold River. The Company acquired the interest in exchange for shares of common stock. The Guinea government is entitled to a 15% royalty on all extracted minerals.
  F-10
 An extension of this permit was applied for in May 2011 by Gold River, but was in review at the end of 2011 due to the change in governments in Guinea during mid-2011 and subsequent reviews by the government of mining laws and all exploration permits.  The Company paid $35,000 to Gold River to pay the Guinea Ministry of Mines for the application of the permit extension, on behalf of the Company. The permit extension was granted by the Ministry of Mines subsequent to the year end.
 
 Nat Son, Vietnam
 
 Pursuant to a binding letter of intent, the Company purchased a 51% interest in a joint venture (“Joint Venture”) with Ba Dinh Mineral  Company Limited, a Vietnamese company engaged in mineral exploration in that country,  to explore for minerals per license # 39/QD-UBND (dated 9 June 2009) issued to Ba Dinh Construction and Investment Joint Stock Company by the Peoples Committee of Hoa Binh Province, Vietnam. This license is valid for five years from the issue date and is renewable for an additional four years according to current mining laws in Vietnam. The permitted area covers 40 square hectares in Nat Son Commune, Hoa Binh Province Vietnam. As further discussed in note 12, due to the uncertainty of the Ba Dinh Joint Venture, management has determined the related capitalized exploration properties are impaired and, therefore, have been written off in the fourth quarter of 2011.  Management has not received a professional opinion on the outcome of the dispute, and it therefore cannot be determined yet if the property will remain a viable project for the Company.  Investigations are continuing on the legal status of the exploration permit, property ownership, and viability of further operations within the context of the Ba Dinh Joint Venture.
  6.   PROPERTY AND EQUIPMENT
 
 As of 31 December 2011 and 2010, respectively, equipment is as follows:
 
 2011


2010Infrastructure development

$
5,931


$
5,932Telecom equipment


13,125



13,125Equipment


47,500



47,500Vehicle


30,625



30,625Total equipment


97,181



1,260,130Less: accumulated depreciation


(18,374
)


-Less; Impairment of equipment


(78,807
)Equipment, net

$
-


$
1,260,130Depreciation expense for the year ended 31 December 31, 2011 and 2010 was $18,374 and $Nil, respectively. During the year ended 31 December 2011, the Company recorded an impairment of property and equipment of $78,807. The impairment was based on an assessment by management which concluded that an impairment loss on obsolete and lost items was considered necessary.
 
 7.   LOANS PAYABLE TO RELATED PARTIES
 
 As of 31 December 2011 and 2010, respectively, the Company has loans payable to related parties as follows:
 
 2011


2010AGMC LTD.

$
16,000


$
16,000Frank Brodzik


191,726



42,523Magma Gold Corporation


66,000



-Peter Sadlocha


-



30,000Total loans payable

$
273,726


$
88,523
 
 The above loans are due to stockholders or companies controlled by stockholders of the Company.  Beginning 1 January 2011, all loans payable bear interest at 4% per annum and have no definite repayment terms. Prior to 1 January 2011, the loans payable bear interest at 15% per annum. All loans payable are unsecured.
 
 8.   CAPITAL STOCK
 
 During the year ended 31 December 2010, the Company issued 56,073,683 shares of common stock in settlement of certain loans and accounts payable in the amount of $1,365,030.  The value of the common stock issued was determined by the Board of Directors and no underwriters were used in the transaction.
  F-11
 During the year ended 31 December 2010, the Company issued 1,625,000 shares of common stock for cash proceeds of $245,100. The value of the common stock issued was determined by the Board of Directors and no underwriters were used in the transaction.
 
 During the year ended 31 December 2010, the Company issued 30,000 shares of common stock in exchange for mining rights. The value of the common stock issued was determined by the Board of Directors and no underwriters were used in the transaction.
 
 During the year ended 31 December 2010, the Company issued 1,000,000 shares of common stock in exchange for consulting services rendered in the amount of $35,000. The value of the common stock issued was determined by the Board of Directors and no underwriters were used in the transaction.
 
 The Class A series of Convertible Preferred Stock were created by Directors’ Resolution on 4 March 2010. These shares are designated as Series A Convertible Preferred Stock and the number of shares constituting such series are 25,000,000.   Each share of outstanding Class A Preferred Stock shall entitle the holder thereof to vote on each matter submitted to a vote of the stockholders of the Corporation and to have the number of votes equal to 10 times the number of shares of Common Stock.
 
 On 17 April 2010, 24,634,741 shares of Series A Preferred Stock was issued to five non-affiliate investors, in discharge of debt owed to the Company of $369,521. The value of the preferred stock issued was determined by the Board of Directors and no underwriters were used in the transaction.
 
 In July 2011 the Company executed a six month agreement with a communication firm to provide investor relations and corporate communication services. The Company issued 2,000,000 shares of common stock at $0.04 per share, the value of the shares as of the date of issuance, for a total value of $80,000.
 
 On 4 August 2011, the Company converted 4,000,000 restricted Class A Convertible Preferred Shares into 4,000,000 shares of the Company’s Common stock. The conversion price was $0.015 per share, in accordance with the Convertible Preferred Share original subscription.
 
 On 5 October 2011, the Company executed an agreement with Rathbourne Mercantile Ltd. to provide investor relations and corporate communication services. The Company issued 500,000 shares of common stock at $0.0171 per share, the value of the shares as of the date of issuance, a total value of $8,550.
 
 9.   RELATED PARTY TRANSACTIONS
  The following transactions with related parties were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.
 
 Related party transactions not disclosed elsewhere in these financial statements are as follows:
 
 On 22 October 2009, the Company entered into a binding letter of intent with Ba Dinh to acquire a 51% interest in the Nat Son property.  Subsequently, Todd Sterck, the former president of Ba Dinh, became our Chief Executive Officer. Prior to the letter of intent, Mr. Sterck had no interest or affiliation with the Company.   Mr. Sterck resigned from Ba Dinh on July 22, 2010.  In May 2011, Mr. Sterck resigned as Chief Executive Officer and in August 2011 resigned as director of the Company.
 
 The Company entered into a joint venture with Gold River of Africa Company (“Gold River”) for the Siguiri property on 15 January 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River.  Gold River is also a stockholder of the Company.
 
 Included in accounts payable as of 31 December 2011 is $227,037 (2010 - $29,000) due to various current and former directors, officers and stockholders of the Company for consulting fees rendered and/or expense reimbursements, subject to normal trade terms.
 
 During the year ended 31 December 2011, the Company recorded $110,103 (2010 - $108,000) of consulting fees to various current and former directors, officers and stockholders of the Company.
 
 During the year ended 31 December 2011, the Company recorded $58,500 (2010 - $180,470) of exploration costs to companies controlled by various current and former directors and stockholders of the Company.
 
 10.   STOCK OPTIONS
 
 The Company has established the “2007 Stock Option Plan” that permits the granting of share options and shares to employees, directors and consultants.  The Company believes that such awards better align the interests of the employees and consultants with those of the Company’s shareholders.  The 2007 Stock Option Plan provides for the issuance of up to 9,000,000 shares of common stock available for grant as incentive stock options. The exercise price for options awarded is $0.015.
  F-12
 Management has valued the options at their date of grant utilizing the Black-Scholes Option Pricing Model. Since there is not a public market for the Company shares, the fair value of the underlying shares was determined based on recent transactions by the Company to sell shares to third parties.  Further, the excepted volatility was calculated using the historical volatility of a similar public entity in the gold mining industry.  In making this determination and finding another similar company, the Company considered the industry, stage of life cycle, size and financial leverage of such other entities.  Based on the exploration stage of the Company, similar companies with enough historical data are not available.   The Company was able to find an entity that met the industry criterion and as a result has based its expected volatility off this Company’s historical stock prices for a period similar to the expected term of the option.  The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options.  The expected life of options used was based on the contractual life of the option granted.  The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future.
 
 The following weighted-average assumptions were utilized in the fair value calculations for options granted:
 
 2011


2010Expected dividend yield


N/A



0Expected stock price volatility


N/A
%


400
%Risk-free interest rate


N/A
%


2.48
%Expected life of options

N/A


5 years
 
 The following table summarizes the status of the Company’s aggregate stock options granted:
 
 Number of Shares Options Remaining


Weighted Average Exercise Price


Weighted Average Remaining Contractual Term


Aggregate Intrinsic ValueInception Date 17 January 2007


-



-Options granted


500,000



0.015



5



-Options exercised


-



-



-



-Options canceled


-



-



-



-Outstanding at 31 December 2007


500,000



0.015



5



-Options granted


500,000



0.015



-



-Options exercised


-



-



-



-Options canceled


-



-



-



-Outstanding at 31 December 2008


1,000,000



0.015



4.5



-Options granted


500,000



0.015



-



-Options exercised


-



-



-



-Options canceled


-



-



-



-Outstanding at 31 December 2009


1,500,000



0.015



4



-Options granted


2,000,000



0.03



5



-Options exercised


-



-



-



-Outstanding at 31 December 2010


3,500,000



0.02



4



-Options granted


-



-



-



-Options exercised


-



-



-



-Options cancelled


(1,000,000
)


0.03



3.5



-Exercisable at 31 December 2011


2,500,000



0.02



3



-
 
 The weighted average fair value of options granted during the years ended 31 December 2011 and 2010 was approximately $.002.
 
 The following table summarizes the status of the Company’s aggregate non-vested shares granted under the 2007 Stock Option Plan:
 
 Number of Non-Vested Shares Subject to Options


Weighted Average Grant-Date Fair ValueNon-vested as of December 31, 2010


1,000,000



30,000Vested- year ended 31 December 2011


(250,000
)


(10,000
)Forfeited/cancelled- year ended 31 December 2011


(750,000
)


(20,000
)Non-vested as of December 31, 2011


-



-
 
 F-13
 
 As of 31 December 2011the unrecognized compensation cost related to non-vested share based compensation arrangements granted under the plan was approximately $Nil.
 
 11.   GENERAL BUSINESS RISKS
 
 A significant portion of the Company's assets are located in the Republic of Guinea and Vietnam and changes in the political and economic policies of these governments could have a significant impact upon what business the Company may be able to conduct in these countries and accordingly on the results of its operations and financial condition. The business operations may be negatively affected by the current and future political environment in these countries. The governments of the Republic of Guinea and Vietnam exert substantial influence and control over the manner in which the Company must conduct their business activities. The Company’s ability to operate in these countries may be affected by changes in laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, exploration properties and other matters.
 
 12.   INCOME TAXES
 
 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax liabilities and assets as of 31 December 2011 are as follows:
 
 Deferred tax assets:
 
 Accumulated net operating loss

$
2,176,354Income tax rate


34
%739,960Less valuation allowance


(739,960
)Net

$
-
 
 Through 31 December 2011, a valuation allowance has been recorded to offset the deferred tax assets, including those related to the net operating losses. As of 31 December 2011, the Company had approximately $2,176,354 of federal and state net accumulated operating losses. The net operating loss carry forwards, if not utilized will begin to expire in 2026. The utilization of these losses for tax purposes will be limited due to the operation of Internal Revenue Code Section 382 which restricts the utilization of net operating loss carry forwards is circumstances where there is a more than 51% change of control in a company.
 
 Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended 31 December 2011 and 2010 are as follows:
 
 2011


2010Federal statutory income tax rate


34.0
%


34.0
%State tax net of federal benefit


0.00
%


0.00
%34.0
%


34.0
%Increase in valuation allowance


(34.0
%)


(34.0
%)Effective tax rate


0.0
%


0.0
%
 
 In accordance with FASB ASC-740-10,  Accounting for Uncertainty in Income Taxes, the Company has evaluated tax positions taken in the financial statements. Because of the significant net operating losses sustained, Management does not believe that the Company has any uncertain federal or state tax position uncertainties as of 31 December 2011.
 
 13.   SUBSEQUENT EVENTS
 
 A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property between the Company and Ba Dinh J.S.C. as a result of key partners in Ba Dinh J.S.C. disagreeing with the Company about the status of their stock holdings in the Company.  Management in consultation with legal counsel has determined that the arguments by those key partners have no legal merit and may expose those partners to securities litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh J.S.C. has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.
  F-14
 Legal counsel in Vietnam was retained during first quarter of 2012 to investigate the status of the exploration license and any property ownership for the Nat Son project and Joint Venture  with Ba Dinh Mineral Company Limited.  The exploration license was found to be valid and active until 8 June 2014 in the name of Ba Dinh Construction Investment and Consulting Joint Stock Company.  Results of the investigation from our Vietnam legal counsel are pending to confirm the status of the joint venture, the  and the ownership or lease of the underlying property.  There is not enough information available on the legal status of the Joint Venture and the Nat Son property to determine whether or not Ba Dinh has performed according to the requirements of the binding letter of intent.  Therefore, the project has been written down in the 4th quarter of 2011 to allow for possible permanent impairment of the project.  Management’s opinion on this matter is that the project still is potentially viable, but that all JV activities with Ba Dinh may need to cease if a mutually agreeable solution cannot be reached.  Should the Joint Venture be formally dissolved, the Company may pursue legal options in Vietnam during 2012 to recover payments made to Ba Dinh for expenses that they have not documented adequately or for which official government documentation has not been provided for the project.
 
 The permit extension for the Siguiri property in Guinea has been granted by the Ministry of Mines based upon the extension letter dated 12 April 2012.  The Company’s copy of the permit has not been received yet.
 
 A convertible debenture was issued to Redwood Management, LLC (“Redwood”) in exchange for $70,000 in cash during the first quarter of 2012.  The convertible debenture bears interest at 12% per annum, matures on 16 March 2012 can be converted to shares of common stock after a nine month restriction period and is unsecured. The Company has the option before maturity to prepay the convertible note at 125% of the principal amount including accrued interest.  Redwood has the option, at any time or from time to time, to convert the principal amount including accrued interest to shares of the Company’s common stock at a price of 55% of the lowest traded price, determined on the then current trading market for the Company’s common stock, for ten trading days prior to the conversion date.
 
 A convertible promissory note was issued to Asher Enterprises Inc. (“Asher”) during the first quarter of 2012 in exchange for $50,000 in cash.  The convertible promissory note bears interest at 8% per annum, matures on 6 November 2012, can be converted to shares of common stock after a six month restriction period and is unsecured.  The Company has the option within 120 days of the date of the agreement to prepay the convertible promissory note at 140% of the principal amount including accrued interest or within 121-180 days of the agreement to prepay the convertible promissory note at 150% of the principal amount including accrued interest.  If any amount of principal or interest remains unpaid at the maturity date, the remaining amount will bear interest at a rate of 22% per annum. Asher has the option, at any time or from time to time, to convert the principal amount of the convertible promissory note including accrued interest to shares of the Company’s common stock at a price of 55% of the average lowest three days trading price out of 17 days, determined on the then current trading market for the Company’s common stock, prior to the conversion date.
 
 A second convertible promissory note was issued to Asher during the first quarter of 2012 in exchange for $22,500 in cash.  The convertible promissory note bears interest at 8% per annum, matures on 12 December 2012, can be converted to shares of common stock after a six month restriction period and is unsecured.  The Company has the option within 120 days of the date of the agreement to prepay the convertible promissory note at 140% of the principal amount including accrued interest or within 121-180 days of the agreement to prepay the convertible promissory note at 150% of the principal amount including accrued interest.  If any amount of principal or interest remains unpaid at the maturity date, the remaining amount will bear interest at a rate of 22% per annum. Asher has the option, at any time or from time to time, to convert the principal amount of the convertible promissory note including accrued interest to shares of the Company’s common stock at a price of 55% of the average lowest three days trading price out of 17 days, determined on the then current trading market for the Company’s common stock, prior to the conversion date.
 
 The two convertible notes issued to Asher during the first quarter of 2012 for a total of $72,500 are in default and as a result the Company owes $108,750 (which includes interest and penalty on the notes).
 
 During the first quarter of 2012 the Company entered into a debt assumption agreement with Asher for assumption of $66,000 of debt originally held by Magma Gold Corporation. This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. In March 2012 the Company issued 15,829,295 shares of common stock to Asher in exchange for this debt assumption.
  During the first quarter of 2012 the Company entered into a debt assumption agreement with Redwood Management LLC for assumption of $182,708 of debt originally held by Frank Brodzik.  This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. The Company issued 51,268,777 shares of common stock to Redwood Management LLC through May 14, 2012 in exchange for $121,000 of this debt assumption.
  In March 2012, the Company cancelled 14,350,030 shares of common stock which were previously issued in the prior fiscal year in settlement of loans payable to related parties.  The Company has assumed the original debt in the amount of $292,180 in exchange for the cancellation of the shares.
  The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp. (“AGS”), for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted shares of common stock to AGS in exchange for $20,000 in services to allow for preparation of the related documents and discussions.
 
 Additional restricted shares of common stock of 30,978,934 were issued to AGS in the second quarter 2012 as commitment shares required under the REF Agreement.  Advances on the total available financing have not been requested pending completion of the 10K filing and subsequent first quarter 2012 10Q filing.
 
 F-15




Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
 The independent auditor for the Company was changed from EFP Rotenberg, LLP to DNTW Chartered Accountants, LLP starting with the second quarter of 2011.  There have been no changes of or disagreements with our independent accountants during the remainder of 2011.
 
 Item 9A.  CONTROLS AND PROCEDURES
 
 Evaluation of disclosure controls and procedures
 
 As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Chief Executive Officer/Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2011. In designing and evaluating the Company’s disclosure controls and procedures, the Company recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, the Company’s management was required to apply its reasonable judgment.
 
 Based upon that evaluation, the Certifying Officers concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective. We have identified material weaknesses discussed below in the Report of management on internal control over financial reporting.
 
 Report of Management on Internal Control over Financial Reporting
 
 Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
 
 (i)           Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
 
 (ii)          Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
 
 (iii)         Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.
  Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2011 and has identified material weaknesses.  A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement to the Company’s annual or interim financial statements will not be prevented or detected.
 In the course of management’s assessment, we have identified the following material weaknesses in internal control over financial reporting:
 
 ●           Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties. Namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures.
 
 ●           Maintenance of Current Accounting Records – This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions.
 
 We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company is still in its exploration stage and intends on hiring the necessary staff to address the weaknesses once full operations have commenced.
  21
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
 
 Changes in Internal Control over Financial Reporting
 
 There have been no changes in internal control over financial reporting during the last fiscal quarter of calendar year 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
  Item 9B.  OTHER INFORMATION
 
 None.
  22
  PART III
 
 Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
 The members of the Board of Directors of the Company serve until the next annual meeting of stockholders, or until their successors have been elected.  The officers serve at the pleasure of the Board of Directors.
 
 Name

Age

PositionDouglas C. Peters


56

Vice-President for Exploration, President, Chief Executive Officer, DirectorIan Lambert


67

Secretary, Chief Financial Officer, DirectorJames Spence Stewart


79

Director
 
 Douglas C. Peters.  Mr. Peters has been Vice-President for Exploration and Director of the Company since October 19, 2011. Upon resignation of former President and CEO Ken Baird on November 4, 2011, Mr. Peters was appointed as Interim President and CEO until such time as the position becomes permanent or a replacement is hired.   From 1996 to the present, he has been the owner of his own consulting firm, Peters Geosciences.  From 2007 to the present, he has served as a Director and President and COO of ARNEVUT Resources Inc., a junior private precious metals and uranium exploration company.  From 2001 to the present, he has served as a Principal and Treasurer of Afghan American Engineering, LLC, an engineering and development company focused on development and rehabilitation of Afghanistan. Mr. Peters spends approximately 60% of his professional time on Company business.
 
 James Spence Stewart.  Mr. Stewart has been Director of the Company since January 8, 2007.  For the past six years he has been self employed as an independent lawyer and consultant.  From 2006 to present he has been the Secretary and a Director  of Sierra Gold Corporation.  Since 2003  to present he has been the Director and President of Rocmar Farms Limited. He holds an LLB degree in law from Dalhousie University, Canada.  Mr. Stewart spends approximately 10% of his professional time on Company business.
 Ian D. Lambert.  Mr. Lambert has been Secretary and a Director of the Company since March 15, 2010.  He recently sold Trade Winds Ventures Inc., where he served as CEO & President/Director, from April 1990 to December 2011; Director, North Sea Energy Inc., an oil and gas production company, from Sept. 2007 to present; Director, Mobilebits Holding Corp., a company providing proprietary software to enable Social Marketing and Loyalty Solutions, from December 2010 to present; and Director, Sunorca Development Corp., a company engaged in energy, oil and gas exploration, from December, 2000 to present. He also serves as CEO & President/Director of Kings Road Resources Inc., Silver Rock Resources Inc., Swincan Development Limited and Wesroc Management Ltd.  He holds a Bachelor of Commerce degree in Quantitative Analysis and Computer Science from the University of Saskatchewan.  Mr. Lambert spends approximately 10% of his professional time on Company business.
 
 Item 11.  EXECUTIVE COMPENSATION
 
 The following table provides information as to cash compensation of all officers of the Company, for the years ended December 31, 2011 and 2010.
 
 SUMMARY COMPENSATION TABLE
 
 Name and principal position

Year

Salary


Stock Awards


Option Awards


Non-Equity Incentive Plan Compensation Earnings


Nonqualified

Deferred Compensation Earnings


All Other Compensation


TotalTodd Sterck

2010

$
0


$
0


$
19,991


$
0


$
0


$
45,000


$
64,991Past President(2)

2011

$
0


$
0


$
0


$
0


$
0


$
30,000


$
30,000Gary Cripps,

2010

$
0


$
0


$
0


$
0


$
0


$
0


$
0Past President (1)

2011

$
0


$
0


$
0


$
0


$
0


$
0


$
0Ian D. Lambert,

2010

$
0


$
0


$
0


$
0


$
0


$
17,500


$
17,500Secretary

2011

$
0


$
0


$
0


$
0


$
0


$
0


$
0
  Douglas Peters,

2010

$
0


$
0


$
0


$
0


$
0


$
0


$
0President (3)

2011

$
0


$
0


$
0


$
0


$
0


$
0


$
0Ken Baird,

2010

$
0


$
0


$
0


$
0


$
0


$
0


$
0Past President (4)

2011

$
0


$
0


$
0


$
0


$
0


$
34,602


$
34,602
 
 23
 
 (1) Gary Cripps served as an officer for 2009 and for two months in 2010. He resigned in February 5th, 2010.



(2) Todd Sterck was appointed in as an officer on February 20th, 2010. Effective May 23, 2011, the registrant’s President and Chief Executive Officer, Todd Sterck, resigned, and was replaced by Ken Baird.  Mr. Sterck remained on the board of directors. On August 4, 2011, the registrant’s director, Todd Sterck, resigned.



(3) Effective October 19, 2011, Douglas Peters was appointed as Vice-president and Director of the registrant. Effective November 2, 2011, Douglas Peters, present Director of Strategic Mining, was appointed Interim President and Chief Executive Officer to replace Ken Baird.

(4) Effective May 23, 2011, Ken Baird was appointed as Chief Executive Officer and Director of the registrant. Ken Baird resigned on November 2, 2011.
 
 The following table provides information concerning the compensation of the directors of the Company for the year ended December 31, 2011:
 
 DIRECTOR COMPENSATION
 
 Name

Fees Earned or Paid in Cash


Stock Awards


Option Awards


Non-Equity Incentive Plan Compensation


Non-Qualified Deferred Compensation Earnings


All Other Compensation


TotalJames Spencer Stewart

$
0


$
0


$
0


$
0


$
0


$
0


$
0Todd Sterck

$
0


$
0


$
0


$
0


$
0


$
30,000


$
30,000Ian D. Lambert

$
0


$
0


$
0


$
0


$
0


$
0


$
0Ken Baird

$
0


$
0


$
0


$
0


$
0


$
34,602


$
34,602
  EMPLOYMENT AGREEMENTS
 
 No formal employment agreements exist with any current officer of the company.  A verbal agreement exists with President and CEO Douglas Peters for spending at least 10 hours per week on company business and for time to be recompensed at a rate of $65/hour or $500/day (up to 8 hours/day), with the option to convert any portion of that time to company stock as agreed between the Board and Mr. Peters.  No invoice for time had been submitted by Mr. Peters as of December 31, 2011.  Such agreement or other agreements with officers may be modified and formalized in the future.
 
 Corporate Governance
 
 The Board of Directors is committed to maintaining strong corporate governance principles and practices. The Board periodically reviews evolving legal, regulatory, and best practice developments to determine those that will best serve the interests of our shareholders.
 
 Meetings and Attendance
 
 The Company’s Board of Directors is required by our bylaws to hold regularly scheduled annual meetings.  In addition to the annual meetings, it has the authority to call regularly scheduled meetings in person, via teleconference, and via other electronic means such as e-mail, and to call special meetings by resolution duly approved by at least 2/3 of the Board.   The Company’s Board met five times during the past fiscal year.
  24
 
 All incumbent directors attended 100% of the Board meetings during the last fiscal year.
 
 Nominations of Directors
 
 There are no material changes to the procedures by which security holders may recommend nominees to the registrant’s board of directors.
 
 Audit Committee
 
 Prior to the 3rd quarter of 2011, the Company had no formal audit committee.  The Company appointed an audit committee on November 2, 2011, prior to completion of the 3rd quarter 10Q completion and filing, composed of the existing three directors.
 
 Item 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS.
 
 The following table sets forth information furnished to us with respect to the beneficial ownership of our common stock by (i) each executive officer, director and nominee, and by all directors and executive officers as a group, and (ii) each beneficial owner of more than five percent of our outstanding common stock, in each case as of December 31, 2011. Unless otherwise indicated, each of the persons listed has sole voting and dispositive power with respect to the shares shown as beneficially owned.
 
 Name and Address

Number of Shares

Percentage Owned

Total Voting PowerTodd Sterck

18309 114th Pl NE

Granite Falls, Washington

98252

962,821 common stock

0%

0%James Spencer Stewart

R.R. #2

Baltimore, ONT, Canada

500,000 common stock

0%

0%Gold River of Africa Corp. (1)

BP 4506

Conakry, Republic de Guinea

10,800,000

6.5%

of common stock

3.5%Ian D. Lambert, 1170-36Toronto Street,

Toronto, ON, Canada

500,000 common stock

0%

0%Peter Sadlocha*

4 Village Gate

Williamsville, NY 14221

4,694,731  Series A

Preferred stock

1,623,220  common stock

22.7% of Series A Preferred 1% of common stock

15.3%AGMC Ltd.*(1)

BP 50458

Conakry, Guinea

5,881,459 Series A

Preferred stock

28.5% of Series A Preferred

19.2%Amadou Mara

BP 50458

Conakry, Guinea

10,800,000 common stock

5,881,459 Series A Preferred stock

6.5% of common and 28.5% of Series A Preferred

30%Debbie Dise*

219 Power Lane

Tahlequah,OK 74464

4,558,551 shares Series A Preferred stock

22% Series A Preferred

14.9%Joan Gamler*

13801 US Highway 1

Juno Beach, FL 33048

4,000,000 shares Series A Preferred stock

19.3% Series A Preferred

13.1%  25
  Tracy Hatheway*

23 Northern Lane

Quinte W, Ontario

Canada K8V 686

4,000,000 shares Series A Preferred stock

19.3% Series A Preferred

13.1%Atlantic Gold Mining (2)

356 Golfview Road

N.Palm Beach,FL 33408

1,500,000 shares Series A Preferred stock

5,530,030 common stock

7.2% Series A Preferred and 3% common stock

4.9%



3.6%Frank Brodzik (2)

2464 Elmwood Avenue

Buffalo, NY  14216

8,130,906 common stock

1,500,000 shares Series A

Preferred stock

7.2% Series A Preferred and 4.9% common stock

5.3%Officers and Directors as a Group

1,962,821 common stock

1%

5.05%Nil -  Series A

Preferred stock

0.00%

0.00%
 
 *These shareholders hold shares of Series A preferred stock.  Holders of Series A Preferred Stock have super voting rights equivalent to 10 shares of common stock for every share of Series A Preferred.  Each share of Series A Preferred Stock is convertible to one share of Company common stock.  As of December 31, 2011, there were 20,634,741 shares of Series A Preferred Stock outstanding, held by 6 shareholders of record.
 
 (1)
Amadou Mara controls the voting and dispositive rights over the shares owned by Gold River of Africa Corp. and  AGMC Ltd.(2)
Frank Brodzik owns 2,600,876 shares of common stock.  He is also an officer and director of Atlantic Mining Co., which owns 5,530,030 shares of common stock and 1,500,000 shares of Series A preferred stock.
 
 The issuer is not aware of any person who owns of record, or is known to own beneficially, five percent or more of the outstanding securities of any class of the issuer, other than as set forth above.
 
 Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 
 As of December 31, 2011 and 2010, respectively, the Company has loans payable to related parties as follows:
 
 2011


2010AGMC LTD.

$
16,000


$
16,000Frank Brodzik


191,726



42,523Magma Gold Corporation


66,000



-Peter Sadlocha


-



30,000Total loans payable

$
273,726


$
88,523
 
 The above loans are due to stockholders or companies controlled by stockholders of the Company.  Beginning January 1, 2011, all loans payable bear interest at 4% per annum and have no definite repayment terms. Prior to January 1, 2011, the loans payable bear interest at 15% per annum. All loans payable are unsecured.
 
 On October 22, 2009, the Company entered into a binding letter of intent with Ba Dinh Mineral Company Limited (“Ba Dinh”), to acquire a 51% interest in the Nat Son property.  Subsequently, Todd Sterck, the former president of Ba Dinh, became our Chief Executive Officer. Prior to the letter of intent, Mr. Sterck had no interest or affiliation with the Company.   Mr. Sterck resigned from Ba Dinh on July 22, 2010.  In May 2011, Mr. Sterck resigned as Chief Executive Officer and in August 2011 resigned as director of the Company.
 
 The Company entered into a joint venture with Gold River of Africa Company (“Gold River”) for the Siguiri property on January 15, 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River.  Gold River is also a stockholder of the Company.
 
 Included in accounts payable as of December 31, 2011 is $227,037 (2010 - $29,000) due to various current and former directors, officers and stockholders of the Company for consulting fees rendered and/or expense reimbursements, subject to normal trade terms.
 
 During the year ended December 31, 2011, the Company recorded $110,103 (2010 - $108,000) of consulting fees to various current and former directors, officers and stockholders of the Company.
  26
 
 During the year ended December 31, 2011, the Company recorded $58,500 (2010 - $180,470) of exploration costs to companies controlled by various current and former directors and stockholders of the Company.
 
 Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES
 
 Audit Fees
 
 For the Company's fiscal year ended December 31, 2011, we were billed $4,280 by EFP Rotenberg LLP and $12,000 by DNTW Chartered Accountants LLP for professional services rendered for the audit and reviews of our financial statements.
 
 For the Company's fiscal year ended December 31, 2010, we were billed $28,100 for professional services rendered by EFP Rotenberg LLP for the audit and reviews of our financial statements.
 
 Tax Fees
 
 No fees were paid for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.
 
 All Other Fees
 
 No other fees were paid for any other services.
  Item 15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES.
 
 (a)
The following financial statements are filed as part of this Report:
 
 Report of Independent Registered Certified Public Accountant
 Financial Statements
 Balance Sheets
 Statements of Operations
 Statements of Stockholders’ Equity
 Statements of Cash Flows
 Notes to Financial Statements
 
 (b)
The following exhibits are filed as part of this Report:
 
 Exhibit Description
Filed herewithCertification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
XCertification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
XCertification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
XCertification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
 
 
 (c)
The following exhibits are filed as part of this Annual Report:
 
 EXHIBIT NUMBER
DESCRIPTION
INCORPORATION BY REFERENCE
 
 27
 
 SIGNATURES
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  STRATEGIC MINING CORPORATIONDate: October 24, 2012
By:
/s/ Douglas C. PetersDouglas C. PetersPresident, Chief Executive Officer, DirectorDate: October 24, 2012
By:
/s/ Ian LambertIan LambertChief Financial Officer, Director
 
 28