UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





x
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended July 31, 2012











o
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _____ to _____








Commission File Number:000-52550













ZORO MINING CORP.


(Exact name of registrant as specified in its charter)





Nevada

N/A(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)3040 North Campbell Avenue #110

Tucson, Arizona

85719(Address of principal executive offices)

(Zip Code)(520) 299-0390(Registrant’s telephone number, including area code)








Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.   Yes x    No  o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o   No  x





Indicate by check mark whether 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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o
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 Exchange Act).Yes o    No x





State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.  59,589,325 shares of common stock as of September 17, 2012.


1











ZORO MINING CORP.





Quarterly Report On Form 10-Q


For The Quarterly Period Ended


July 31, 2012











INDEX











PART I – FINANCIAL INFORMATION
3Item 1.
Financial Statements
3Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22Item 3.
Quantitative and Qualitative Disclosures About Market Risk
34Item 4.
Controls and Procedures
34PART II – OTHER INFORMATION
35Item 1.
Legal Proceedings
35Item 1A.
Risk Factors
35Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
35Item 3.
Defaults Upon Senior Securities
35Item 4.
Mine Safety Disclosure
35Item 5.
Other Information
35Item 6.
Exhibits
35








This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties.  Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations.  Such forward-looking statements involve risks and uncertainties regarding the market price of copper, availability of funds, government regulations, permitting, common share prices, operating costs, capital costs, outcomes of ore reserve development, recoveries and other factors.  Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition.  Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology.  Actual events or results may differ materially.  In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended April 30, 2012, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the “SEC”).  These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.











2








Part I





Item 1.         Financial Statements





The following unaudited interim financial statements of Zoro Mining Corp. are included in this quarterly report on Form 10-Q:





PageInterim Consolidated Balance Sheets as at July 31, 2012 (unaudited) and April 30, 2012 (audited)
4Interim Consolidated Statements of Operations and Comprehensive Loss for the three month period ended July 31, 2012 and July 31, 2011 and for the period from inception (April 20, 2004) to July 31, 2012
5Interim Consolidated Statements of Cash Flows for the three months ended July 31, 2012 and July 31, 2011 and for the period from inception (April 20, 2004) to July 31, 2012
6Interim Consolidated Statement of Stockholders’ Equity (Deficiency) for the period from inception (April 20, 2004) to July 31, 2012
7 - 8Condensed Notes to the Interim Consolidated Financial Statements
9
































3





Zoro Mining Corp.


(An Exploration Stage Company)


Interim Consolidated Balance Sheets as at July 31, 2012 (unaudited) and April 30, 2012 (audited)


(Expressed in US Dollars)


(Unaudited – Prepared By Management)





July 31,

2012

$


April 30,

2012

$CURRENT ASSETSCash


3,661



9,181Other receivables


6,507



6,476Total Current Assets


10,168



15,657Mineral Properties


5



5TOTAL ASSETS


10,173



15,662LIABILITIES AND STOCKHOLDERS’ DEFICIENCYCurrent LiabilitiesAccounts payable and accrued liabilities


881,427



717,280Promissory notes payable (Note 6)


225,150



224,649Liabilities payable in capital stock (Note  8)


1,600,000



1,600,000Due to related parties (Note 5)


494,253



184,886Total Current Liabilities


3,200,830



2,726,815Total Liabilities


3,200,830



2,726,815Stockholders’ DeficiencyCapital stock (Note 7)

180,000,000 common shares authorized, $0.00001 par value59,589,325 shares issued and outstanding (April 30, 2012 – 57,645,991)


1,421



1,402Additional paid-in capital


22,112,372



21,820,891Subscriptions received


42,000



333,500Donated capital


34,500



34,500Deficit accumulated during the exploration stage


(25,380,950
)


(24,901,446
)Total Stockholders’ Deficiency


(3,190,657
)


(2,711,153
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY


10,173



15,662


GOING CONCERN  (Note 2)


COMMITMENTS AND CONTINGENCIES (Note 8)


RELATED PARTY TRANSACTIONS (Note 5)








The accompanying notes are an integral part of the consolidated financial statements





4





Zoro Mining Corp.


(An Exploration Stage Company)


Interim Consolidated Statements of Operations and Comprehensive Loss for the three months ended July 31, 2012 and July 31, 2011 and for the period from inception (April 20, 2004) to July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)











For the Three Months Ended July 31, 2012


For the Three Months Ended

July 31, 2011


From April 20, 2004 (Date of Inception) to

July 31, 2012$


$


$ExpensesBad Debt
-



-



136,250Depreciation
-



14,238



371,800Donated services
-



-



25,500Filing and transfer agent fees
1,925



1,419



77,479Impairment of mineral property costs
-



-



10,756,203Interest Expense
13,153



19,149



374,501Investor Relations
-



13,244



414,691Management and administration fees
109,154



98,250



3,173,869Mineral exploration costs (Note 4)
320,912



74,194



8,209,643Office and general
16,387



20,984



823,044Professional fees
17,973



35,868



854,832Salaries and consulting fees
-



-



450,000(479,504
)


(277,346
)


(25,667,812
)Other incomeFederal income tax recovery
-



-



216,208Gain on sale of equipment
-



-



23,891Derivative Gain (Loss)
-



2,032



103Extinguishment Loss on Debt Modification
-



-



(126,875
)Gain on settlement of debt
-



-



130,093Impairment of  equipment
-



-



(24,604
)Interest income
-



-



68,046Net loss and comprehensive loss
(479,504
)


(275,314
)


(25,380,950
)Basic and diluted  loss per common share
(0.01
)


(0.01
)Weighted average number of common shares outstanding - basic and diluted
58,976,752



36,971,108








The accompanying notes are an integral part of the consolidated financial statements








5


Zoro Mining Corp.


(An Exploration Stage Company)


Interim Consolidated Statements of Cash Flows for the three months ended July 31, 2012 and July 31, 2011 and for the period from inception (April 20, 2004) to July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)





For the Three Months

Ended July 31,

2012

$


For the Three Months

Ended July 31, 2011

$


From

April 20, 2004

(Date of Inception)

to July 31, 2012

$Cash Flows Used In Operating ActivitiesNet loss


(479,504
)


(275,314
)


(25,380,950
)Adjustments to reconcile net loss to cash used in operating activities:Impairment of equipment


-



-



24,604Federal income tax recovery


-



-



(216,208
)Extinguishment loss on debt modification


-



-



126,875Adjustment to fair value of derivative instruments


-



(2,032)



(103
)Amortization of debt discount


-



5,045



13,837Depreciation


-



14,238



371,800Non-cash management fees and investor relations expenses


-



-



429,293Accrued interest expense


-



-



(11,250
)Shares issued for services


-



-



488,667Gain on sale of equipment


-



-



(23,891
)Accretion of interest on convertible note


-



-



32,121Bad debt


-



-



136,250Impairment of mineral properties


-



-



10,756,203Gain on  settlement of debt


-



-



(130,093
)Donated rent


-



-



9,000Donated services


-



-



25,500Change in operating assets and liabilities:Decrease (increase) in other receivables


(31
)


(3,376)



(6,507
)Increase in due to related parties


309,367



215,428



3,763,919Increase  in accounts payable and accrued liabilities


164,648



(33,528)



3,173,425Net Cash Used in Operating Activities


(5,520
)


(79,539
)


(6,417,508
)Cash Flows Used In Investing ActivitiesPurchase of equipment


-



-



(518,513
)Proceeds from Sale of Equipment


-



-



146,000Loan receivable


-



-



(125,000
)Net Cash Used In Investing Activities


-



-



(497,513
)Cash Flows From Financing ActivitiesPromissory note payable


-



-



927,611Convertible note


-



-



242,500Proceeds from common stock issuances and subscriptions


-



-



5,748,571Net Cash From Financing Activities


-



-



6,918,682Increase (Decrease) in Cash


(5,520
)


(79,539)



3,661Cash – Beginning


9,181



81,161



-Cash – Ending


3,661



1,622



3,661Supplemental DisclosuresInterest paid


-



-



-Income taxes paid


-



-



-Shares issued for services


-



-



-





The accompanying notes are an integral part of the consolidated financial statements


6





Zoro Mining Corp.


(An Exploration Stage Company)


Interim Consolidated Statement of Stockholders’ Equity (Deficiency)


From April 20, 2004 (Date of Inception) to July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)








Additional

Paid-in

Common Stock Subscrip-

Deficit Accumulated During the Exploration

Don-

atedCommon Stock

Capital

tions

Stage

Capital

Total#

$

$

$

$

$

$Balance – April 20, 2004 (Date of Inception)
-

-

-

-

-

-

-Issuance of common shares for cash  at $.0002/share
7,200,000

1,440

(1,400
)
(40
)
-

-

-Net loss for the period
-

-

-

-

(1,858
)
-

(1,858
)Balance – April 30, 2004
7,200,000

1,440

(1,400
)
(40
)
(1,858
)
-

(1,858
)Issuance of common shares for cash  at $.0002/share
1,800,000

360

(350
)
(10
)
-

-

-Share subscriptions received
-

-

-

40

-

-

40Donated rent and services
-

-

-

-

-

10,500

10,500Net loss for the year
-

-

-

-

(32,480
)
-

(32,480
)Balance – April 30, 2005
9,000,000

1,800

(1,750
)
(10
)
(34,338
)
10,500

(23,798
)Share subscriptions received
-

-

-

10

-

-

10Donated rent and services
-

-

-

-

-

12,000

12,000Net loss for the year
-

-

-

-

(12,690
)
-

(12,690
)Balance – April 30, 2006
9,000,000

1,800

(1,750
)
-

(47,028
)
22,500

(24,478
)Issuance of common shares for cash at $0.0544/share
1,822,500

364

100,886

-

-

-

101,250Share subscriptions received
-

-

-

2,600,000

-

-

2,600,000Donated rent and services
-

-

-

-

-

12,000

12,000Net loss for the year
-

-

-

-

(220,450
)
-

(220,450
)Balance – April 30, 2007
10,822,500

2,164

99,136

2,600,000

(267,478
)
34,500

2,468,322Shares and warrants issued for private placement at $25 per unit
157,514

32

3,765,908

(2,600,000
)
-

-

1,165,940Share cancellation
(6,642,500
)
(1,328
)
1,328

-

-

-

-Fair value of warrants issued for mineral properties
-

-

840,000

-

-

-

840,000Fair value of warrants issued for services
-

-

209,293

-

-

-

209,293Net loss
-

-

-

-

(3,539,499
)
-

( 3,539,499
)Balance – April 30, 2008
4,337,514

868

4,915,665

-

(3,806,977
)
34,500

1,144,056Issuance of common shares for services
7,500

1

119,999

-

-

-

120,000Net loss
-

-

-

-

(3,391,459
)
-

(3,391,459
)Balance – April 30, 2009
4,345,014

869

5,035,664

-

(7,198,436
)
34,500

(2,127,403
)













7


Interim Consolidated Statement of Stockholders’ Equity and Deficiency – continued








Shares issued in exchange for retirement of notes and other debt
4,366,522

45

1,746,563

-

-

-

1,746,608Shares issued for private placement at $0.50 per unit
290,000

3

134,847

-

-

-

134,850Shares issued for mineral properties at $.50
19,400,000

193

9,699,807

-

-

-

9,700,000Net loss
-

-

-

-

(11,617,028
)
-

(11,617,028
)Balance – April 30, 2010
28,401,536

1,110

16,616,881

-

(18,815,464
)
34,500

(2,162,973
)Issuance of common shares for services
250,000

2

99,998

-

-

-

100,000Shares issued in exchange for retirement of notes and other debt
7,094,572

71

1,915,463

-

-

-

1,915,534Loss on settlement of related party debt




(1,125
)


-

-

(1,125
)Modification of convertible note
-

-

126,875

-

-

-

126,875Shares issued for private placement at $0.20 per unit
1,225,000

12

244,988

-

-

-

245,000Net loss
-

-

-

-

(1,993,389
)
-

(1,993,389
)Balance – April 30, 2011
36,971,108

1,195

19,003,080



(20,808,853
)
34,500

(1,770,078
)Convertible note converted to shares
1,067,312

11

70,623

-

-

-

70,634Shares issued to officers as compensation
5,000,000

50

449,950

-

-

-

450,000Gain on stock issued on related party debt

settlements (Note 8)




436,425

-

-

-

436,425Shares issued in exchange for retirement of notes and other debt
6,543,114

66

654,245



-

-

654,311Issuance of common shares for services
198,041

2

38,665

-

-

-

38,667Shares issued for private placement at $0.15 per unit
7,866,666

78

1,167,903

-

-

-

1,167,981Share subscriptions received






333,500





333,500Shares cancelled
(250
)
-

-

-

-

-

-Net loss
-

-

-

-

(4,092,593
)
-

(4,092,593
)Balance – April  30, 2012
57,645,991

1,402

21,820,891

333,500

(24,901,446
)
34,500

(2,711,153
)Shares issued in a private placement at $0.15 per share
1,943,334

19

291,481

(291,500
)
-

-

-Net loss
-

-

-

-

(479,504
)
-

(479,504
)Balance – July  31, 2012
59,589,325

1,421

22,112,372

42,000

(25,380,950
)
34,500

(3,190,657
)











All share amounts have been restated to reflect the 36:1 forward share split on February 9, 2007 and a 20:1 reverse share split on April 22, 2009 (refer to Note 1).





The accompanying notes are an integral part of the consolidated financial statements











8





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








1.
Nature of Operations and Basis of Consolidation





Consolidated Financial Statements





Zoro Mining Corp. (the “Company” or “Zoro”) was incorporated in the State of Nevada on April 20, 2004 as Rochdale Mining Corporation. Effective on March 19, 2007, solely for the purposes of effecting a name change, the Company (as Rochdale Mining Corporation), merged with a new wholly-owned subsidiary, Zoro Mining Corp., pursuant to Articles of Merger that the Company filed with the Nevada Secretary of State. The merger was in the form of a parent/ subsidiary merger, with the Company as the surviving corporation. Upon completion of the merger, the Company’s name was changed to “Zoro Mining Corp.” and the Company’s Articles of Incorporation have been amended to reflect this name change.





The Company’s common shares trade on the United States OTC Bulletin Board and on the Frankfurt Stock Exchange.





Share Splits





On February 9, 2007 the Company increased the number of shares of the Company’s authorized share capital and correspondingly increased the number of its issued and outstanding common shares on a thirty-six (36) new shares for one (1) old share basis.  As a result, the Company’s authorized share capital was increased from 100,000,000 common shares to 3,600,000,000 common shares, and the Company’s issued and outstanding common stock was increased from 6,012,500 common shares to 216,450,000 common shares.





On April 22, 2009, the Company filed a Certificate of Change with the Secretary of State of the state of Nevada to effectuate a reverse stock split of the Company’s authorized share capital on the basis of one new common share for twenty old common shares. As a result, as of April 22, 2009, the Company’s authorized share capital decreased from 3,600,000,000 shares of common stock to 180,000,000 shares of common stock and its issued and outstanding share capital decreased from 86,900,400 shares of common stock to 4,345,020 shares of common stock.





All references to the number of common shares issued and outstanding have been restated to give retroactive effect to the stock splits, unless otherwise noted.





Principles of Consolidation





The Company has incorporated two wholly-owned subsidiaries in each of Peru (Zoro Mining SAC, dba “Zoro Peru”) and Chile (Sociedad Zoro Chile Limitada, dba “Zoro Chile”) to beneficially hold property titles in each country.  These financial statements include the accounts of Zoro Mining Corp., and its wholly-owned subsidiaries Zoro Peru and Zoro Chile, (collectively the “Company”).  All intercompany transactions and balances have been eliminated upon consolidation.








9





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








2.
Going Concern





These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent on the ability of the Company to obtain necessary equity financing to continue operations, the continued support of related party creditors, to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and ultimately the attainment of profitable operations. As at July 31, 2012, the Company has accumulated losses of $25,380,950 since inception and has a working capital deficiency of $3,190,662. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





3.
Summary of Significant Accounting Policies








a)     Basis of Presentation and Fiscal Year





These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.  The Company's fiscal year-end is April 30.








b)     Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The most significant estimates with regard to these financial statements relate to carrying values of mineral properties, estimated useful lives of equipment, fair value of stock-based transactions, and the determination of the valuation allowance for income taxes.








c)     Equipment





Equipment is recorded at cost.  Depreciation is provided using the straight-line method over 5 years for exploration equipment, earth moving equipment, automotive equipment and furniture and fixtures; depreciation is provided using the straight-line method over 3 years for computer equipment. Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized.








d)     Basic and Diluted Net Loss Per Share





Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. There were no common equivalent shares outstanding at July 31, 2012 and 2011 that have been included in dilutive loss per share calculation as the effects would have been anti-dilutive.





10





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)







3.
Summary of Significant Accounting Policies (cont'd)





e)     Comprehensive Loss





The Company reports comprehensive income or loss in a single continuous statement in its consolidated statement of operations and comprehensive loss.








f)     Mineral Property Costs





The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property payments are initially capitalized in accordance with the ASC 805-20-55-37, previously referenced as EITF 04-2 when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive Activities - Mining (AS 930) at each fiscal quarter end. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations. The Company has previously determined that its mineral properties have been impaired and has recorded an impairment charge of $10,756,203.








g)     Financial Instruments





The fair market value of the Company's financial instruments comprising cash, accounts payable and accrued liabilities, liabilities payable in capital stock,  promissory notes payable, due to related parties and convertible notes,  were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. The Company maintains cash balances at financial institutions. The Company has not experienced any material losses in such accounts.








h)     Income Taxes





Deferred income tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized.








i)     Foreign Currency Translation





The Company's functional and reporting currency is the United States dollar. The financial statements of the subsidiaries are translated to United States dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues and expenses. Foreign currency transaction gains and losses are included in current operations. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

















11





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)







3.
Summary of Significant Accounting Policies (cont'd)








j)     Stock-Based Compensation





The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the goods and services received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. The Company has  a stock option plan, but no stock options have been granted to date and no  related stock-based compensation has been recorded.








k)     Long-Lived Assets





The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are recognized in the statement of operations  as the excess of the carrying amount of the asset over its estimated fair value.








l)     Recent Accounting Pronouncements





In June 2011 the FASB issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income, which eliminates the option of presenting the components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The ASU instead permits an entity to present the total of comprehensive income, the components of net income and the components of OCI either in a single continuous statement of comprehensive income or in two separate but consecutive statements. With either format, the entity is required to present each component of net income along with total net income, each component of OCI along with the total for OCI, and a total amount for comprehensive income. Also, the ASU requires entities to present, for either format, reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. This ASU is to be applied retrospectively. For public entities, the ASU is effective for interim and annual periods beginning after December 15, 2011. We implemented the requirements and present net income and comprehensive income in a single continuous statement.





In May 2011, the FASB issued Accounting Standards Update (ASU) 2011-04, "Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS."There are few differences between the ASU and IFRS 13. While the ASU is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands ASC 820's existing disclosure requirements for fair value measurements and makes other amendments. The amendments in the update became effective for fiscal years and interim periods beginning after December 15, 2011. The Company has adopted this standard, and it did not materially impact the consolidated financial statements.





In September 2011, the FASB issued Accounting Standards Update (ASU) 2011-08 to simplify how tests for potential goodwill impairment are performed. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit in which goodwill resides is less than its carrying value. For reporting units in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform further goodwill impairment testing as required under the previous standards. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 31, 2011. Early adoption was permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011 if an entity’s financial statements had not yet been issued. We have adopted this standard and it did not materially impact our consolidated financial statements.







12





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


(Expressed in US Dollars)


(Unaudited – Prepared By Management)








4.        Mineral Properties





Expensed mineral exploration costs by area of exploration for the three months ended July 31, 2012 and 2011 were as follows





Three Months ended July 31, 2012


Three Months ended July 31, 2011ChileField supplies


759



-Geological, mapping and survey


27,723



-Property maintenance


1,312



-Site administration


31,434



74,194Travel


9,095



-70,323



74,194PeruEnvironmental  Study


6,049



-Field supplies


3,031



-Geological, mapping and survey


46,907



-Property maintenance


-



-Site administration


168,790



-Travel


25,812



-250,589



-Total

$
320,912


$
74,194





The Company shares operating offices in Chile, Peru, and Tucson, AZ with Pacific Copper Corp. (“Pacific Copper”), a Delaware public company, in Chile and Arizona also with Pan American Lithium Corp. (“Pan American”), and in Arizona with Titan Iron Ore Corp. (“Titan”).  Certain directors and management of the Company also act as officers, directors, and management of the other companies (refer to Note 5)








13





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








5.        Related Party Transactions





During the three months ended on July 31, 2012, the Company incurred the following amounts to officers, directors, and other related parties to the Company in addition to transactions disclosed elsewhere in these financial statements. All unpaid balances due to related parties are non-interest bearing, and unsecured.  Cash advances will bear interest at stated rates of 8-10% per annum simple interest if formalized into promissory notes.





a)           incurred $22,500 (July 31, 2011: $22,500) to a director and officer of the Company for geological services rendered.  An aggregate of $22,500 (April 30, 2012: $0) was owed this director at July 31, 2012 for unpaid services and reimbursement of expenses,





b)           incurred to a director and officer of the Company $22,500 (July 31, 2011: $22,500) for management of South American exploration with such costs recorded as administrative costs.  An aggregate of $280,119 (April 30, 2012: $115,420) was owed to this director for unpaid fees and reimbursement of expenses;





c)           incurred to a former director and officer of the Company $24,283 (July 31, 2011: $37,630) for management services with respect to the administration of the Company.  An aggregate of $60,337 (April 30, 2012: $37,837) was owed to this officer at July 31, 2012 for unpaid services and reimbursement of expenses;





d)           paid an officer of the Company $984 (July 31, 2011: $11,062) for administrative services;





e)           the Company incurred a total of $57,057 (July 31, 2011: $77,382) to a private Chilean company with a director in common that provides exploration services to the Company in Chile, with such costs recorded as exploration costs in Chile, South America.  An aggregate of $75,762 (April 30, 2012: $18,704) was owing at July 31, 2012.





f)           paid an officer of the Company $11,132 (2011: $11,826) for accounting services;





g)           incurred to a company managed by an officer and director $7,500 (2011: $7,500) for administrative services. An aggregate of $55,535 (April 30, 2012: $12,925) was owed to this company at July 31, 2012 for unpaid services and unreimbursed expenses;








During the year ended April 30, 2010 the Company acquired the right to receive $2,000 per month in lease payments from Pan American Lithium Corp. (“Pan American”) in connection with the Piedra Parada concessions. Pan American has one director and two officers in common with the Company. During the three months ended July 31, 2012 the Company received payments totaling $2,000(July 31, 2011: $4,000) from Pan American.





All related party transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.









































14





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








6.
Convertible and Promissory Notes





Convertible Notes





The carrying values of the Company’s convertible notes consist of the following as of July 31, 2012 and April 30, 2012:





Convertible Notes

July 31, 2012


April 30, 2012$200,000 face value convertible note due October  31, 2010

$
200,000


$
200,000





$200,000 Convertible Note





On October 31, 2008, the Company issued a $200,000 6% convertible note with a term to October 31, 2010 (the “Maturity Date”). The principal amount of the note and interest is payable on the maturity date. While the note is outstanding, the holder has the option to convert the principal balance and interest, into conversion units at a conversion price of $3.20 per unit for a period of two years.  Each unit is comprised of one common share and one share purchase warrant exercisable at $5 per share for a two year term from the date of conversion. Further, the terms of the convertible note provide for certain redemption features. If, in the event of certain defaults on the terms of the note, certain of which are indexed to equity risks, the holder can accelerate the payment of outstanding principal and interest.





The Company has evaluated the terms and conditions of the convertible note under the guidance of ASC 480 and ASC 815. The common stock component of the unit conversion feature does meet all of the eight conditions for equity classification provided in ASC 815. However, the warrant component of the unit conversion feature falls within the scope of ASC 480 because it contains a fundamental transaction which provides that the warrants are contingently redeemable for assets. Since the embedded warrant falls under the scope of ASC 480, it requires liability classification. The redemption features (the “default put”) are indexed to risks that are not associated with credit or interest risk and, therefore, require bifurcation. Accordingly, a compound embedded derivative, which comprises of (i) the warrant component of the unit conversion feature and (i) the default put was bifurcated from the contract and has been recorded as a derivative liability.





October 31, 2010 Modification  of $200,000 Convertible Note





On October 31, 2010, the Company and the holder of the $200,000 convertible note changed the conversion rights of accrued interest and principal to enable conversion by the holder at the rate of $0.40 per post consolidation share without the requirement for issuance of warrants on conversion. The modification gave rise to an extinguishment. As a result of the modification, the Company recorded a loss on extinguishment in the amount of $126,875. Following maturity the note is in default and no longer considered to be convertible.  The company continues to accrue interest at 6% per annum.





Promissory Note





During the year ended April 30, 2010, the Company borrowed $20,000 at 8% interest, unsecured and due on demand, from an unrelated party. At July 31, 2012, the balance owing including interest was $25,150 (April 30, 2012: $24,649).








15





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)







7.
Capital Stock





a)
Common Stock





On May 29, 2012, the Company issued 1,943,334 shares of the Company’s common stock under a private placement at a price of $0.15 per share for gross proceeds of $291,500 which were previously received as subscriptions. Each unit consists of one share of common stock and one half common stock share purchase warrant.








b)      Warrants:





On May 29, 2012 and in connection with a private placement, the Company issued 971,668 warrants to purchase common shares at a price of $0.25 until 24 months following the issue date.





The fair value of these warrants at the date of grant of $72,975 was estimated using the Black-Scholes option pricing model with an expected life of 2 years, a risk free interest rate of 3.25%, a dividend yield of 0%, and an expected volatility of 128.09%.





Warrant transactions are summarized as follows:


Number of Warrants


Weighted Average Exercise Price per Share ($)

Weighted Average Contractual Life Remaining (in Years)Balance, April 30, 2007


-



-

-Granted during the year


436,060



21.37

2.00Balance, April 30, 2008


436,060



21.37

1.22Granted during the year


-



-

-Balance, April 30, 2009


436,060



21.37

0.22Granted during the year


306,800



.75

1.58Expired during the year


(436,060
)


14.00

-Balance, April 30, 2010


306,800



.75

0.50Granted during the year


1,225,000



.30

2.00Balance, April 30, 2011


1,531,800



.39

1.25Granted during the period


4,013,333



.25

1.9Expired during the period


(306,800
)


.75

-Balance, April 30, 2012


5,238,333



.26

1.5Granted during the period


971,668



.25

1.9Balance, July 31, 2012


6,210,001



.26

1.3








c)            Share options:





On February 7, 2008, the Company adopted a stock option plan (the “2008 Stock Incentive Plan”) including both qualified and non-qualified share options not to exceed 15% of the issued and outstanding shares at any date.  No share options have been granted at the date of these financial statements.











16





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








8.        Commitments and Contingencies





The Company is a guarantor of a lease agreement effective September, 1, 2007 that obligates the Company under conditions of default by a related party lessee (a company which at the time had one director in common with the Company), to pay for the entire lease relating to the Company’s Tucson, Arizona office until the end of the lease term through January 31, 2011 or as amended or renewed.  As at April 30, 2010, the gross value of the guarantee was $212,774.  The lessee has defaulted on the lease and subsequently moved offices. The potential liability, if any, as a result of the lessee’s default due to joint and severable provisions relating to the lease guarantee is presently not determinable, and the Company has not been advised of the results, if any of negotiations by the lessee to settle this potential liability with the landlord.





Effective December 2, 2009, the Company exercised an Option for the acquisition from Sociedad Gareste Limitada (“Gareste”) of a 100% legal and beneficial interest in and to the Sierra Fritis Project.  Harold Gardner, an officer and Director of the Company, is co-managing partner of Gareste. Under the Option (which also included the Piedra Parada project), the Company (i) issued an aggregate of 19,400,000 restricted shares of its common stock to the vending parties; (ii) agreed to pay or cause to be paid all underlying regulatory and governmental payments and assessment work required to keep the mineral property interests in good standing; and (iii) granted to Gareste a 2% net smelter return (“NSR”) royalty on the proceeds of any production from the Fritis property, capped at $6,000,000, one-half of which can be repurchased by the Company at any time before commencement of any production for the sum of $2,000,000. The Fritis titles remain in Gareste currently pending completion of title transfers and notifications at the mining registry.





The Fritis property consists of 8 mineral exploration concessions covering approximately 2,300 hectares (5,683 acres), located roughly 40 kilometers to the south of Copiapo, Chile, via paved highway and improved roads, and at an elevation of 500 meters. These concessions appear to contain epithermal precious metals targets. The property was previously controlled by Teck-Cominco until mid-2009 when the concessions lapsed and were acquired by Gareste, who conducted a surface sampling program in late 2009.  Zoro has identified several areas at the concessions which could be the targets of future exploration efforts. However, the Company has no current exploration plans for the remainder of 2012 for the Sierra Fritis property.





Effective December 2, 2009, the Company exercised an Option for the acquisition from Gareste of interests in and to the Piedra Parada salar Project. Harold Gardner, an officer and Director of the Company, is co-managing partner of Gareste. Under the Option (which also included the Sierra Fritis project), the Company (i) issued an aggregate of 19,400,000 restricted shares of its common stock to the vending parties; (ii) agreed to pay or cause to be paid all underlying regulatory and governmental payments and assessment work required to keep the mineral property interests in good standing; and (iii) granted to Gareste a 2% net smelter return (“NSR”) royalty on the proceeds of any production from the Piedra Parada property, capped at $6,000,000, one-half of which can be repurchased by the Company at any time before commencement of any production for the sum of $2,000,000. The Piedra Parada titles remain in Gareste currently pending completion of title transfers and notifications at the mining registry.





The project lies roughly 310 kilometers to the northeast of Copiapo, the capital of Region III, via paved highway and improved roads, and is at an elevation of over 4,000 meters. The 12 Piedra Parada property mineral exploration concessions cover a total of 3,600 hectares (8,895 acres) in a prototypical salar — a dry lake bed with inflow waters and subsurface brines. However, Gareste, the vendor at Piedra Parada, owned and conveyed to Zoro senior concession rights on only 2,100 hectares (5,189 acres), and also conveyed overstaked concessions on 1,500 additional hectares (3,706 acres) which are subject to the senior rights of a third party.





The rights to lithium, light metals and commercial salts (collectively, the “Lithium Materials”) in these concessions have been previously conveyed to a third-party, with Gareste retaining a 2% NSR royalty on Lithium Materials. In addition, this third party is obligated to remit a payment of US$2,000 per month as a lease and rental remittance fee to maintain the Piedra Parada concessions through the exploration stage, which payments will increase to US$5,000 per month at such time as these concessions are converted to exploitation status.  In connection with the acquisition by Zoro, Gareste has conveyed the NSR and the rights to receive payments at Piedra Parada, and other attendant rights to the Company.





17





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








8.        Commitments and Contingencies (cont'd)




The Company has entered into an agreement dated October 11, 2010 with a consultant who will provide strategic planning, fund raising, and capital structuring advisory services for a term of nine months. In consideration for the services the company will issue 200,000 shares of its common stock to the consultant, 100,000 of which will be delivered at the end of four months, and 100,000 of which will be delivered at the end of nine months. In addition the Company will issue 200,000 options to the consultant to purchase Company shares at such time as the company has closed on at least $2 million in net proceeds attributable to the efforts of the consultant. In addition and subject to certain conditions, the Company will issue to the consultant 100,000 options to purchase Company shares for every $1 million in additional net proceeds attributable to the efforts of the consultant.  The shares were not issued as at July 31, 2012 due to a delay in starting the program.





On March 31, 2011, Zoro Mining Corp., through its subsidiary Sociedad Zoro Chile, Limitada (collectively, the “Company”) entered into a binding letter of intent (the “LOI”) with Llanos de Caldera, S.A. Cerrada (“LDC”), a privately-held Chilean corporation, whereby LDC can earn an undivided 70% interest in the Company’s Escondida precious metals project located near Copiapo, Chile, and following which the Company and LDS will form a joint venture to govern operations at Escondida, as follows:





1.
Earn-In Requirement. To earn the 70% interest, LDC must commence, pay for and complete qualifying Earn-In Expenditures totaling at least five hundred thousand dollars (US$500,000) within one (1) year of the date of the LOI (“Earn-In Term”). Earn-In Expenditures are defined as all the costs and expenses to complete an initial exploration, drilling, sampling and metallurgical testing program as set forth in the LOI (the “Initial Exploration Program”), and include, in addition, all tax payments and related costs of maintaining the mineral titles to Escondida during the Earn-In Term (“Holding Costs”) and payments for overhead expenses. Harold Gardner, a director of the Company and a principal within LDC, shall have oversight responsibility for the Initial Exploration Program, and LDC shall be the operator under the LOI.


2.
Declaration of Earn-In. At any time prior to or at the end of the Earn-In Term, LDC can elect to give notice in writing to the Company that it has completed the Initial Exploration Program and has successfully incurred the Earn-in Expenditures for Escondida (the “Earn-In”). At such time, to the extent not previously done, LDC shall furnish the Company with copies of all reports, information and data developed during the Initial Exploration Program, and satisfactory evidence of the incurrence and payment of the Earn-In Expenditures, which the Company shall reasonably accept, and LDC shall be deemed to have earned an undivided 70% interest in Escondida. Upon reasonable request from LDC, the Company shall cause the transfer of this 70% interest to LDC, or, alternatively, 100% of the property to the Joint Venture described below.


3.
Joint Venture and Joint Operating Agreement. At the time that Earn-In is achieved, the parties will form a Joint Venture and finalize and execute a Joint Operating Agreement (“JOA”) to govern their interests in Escondida, whereby LDC will be the Operator, and the parties shall fund their respective shares of expenses going forward.





On June 7, 2011 the Company entered into an agreement with a consultant to perform certain geological and project management services in Arequipa, Peru for a term of one year commencing when and if the Company secures targeted funding. Fees are approximately $12,810 per month based on a daily rate of $610 per day. In addition, the consultant can earn a $10,000 loyalty bonus after one year, or a prorated amount if the contract is terminated sooner. In the event the consultant fulfills the obligation for a full year, the Company will issue to the consultant 500,000 options to purchase Company shares at a price of $0.50 for a period of two years from the date of issue.








18





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








8.        Commitments and Contingencies (cont'd)





On October 4, 2011 the Company announced that it had entered into a binding Letter of Intent with various parties (the “Yura Agreement”), to earn up to a 75% indirect interest in the consolidated Yura Mining District (roughly 7,200 hectares), located approximately 30 km west of Arequipa, Peru. Zoro has also entered into an agreement with Minex Ventures II, LLC (“Minex”), a privately-held US based limited liability company, to compensate Minex for consideration furnished to Zoro in the Yura District (“Minex Agreement”).





Zoro’s holdings (the “Zoro Properties”) in the Yura District consisted of over 2,100 hectares of exploration concessions acquired in 2007 by Zoro Peru S.A.C. (“Zoro Peru”), the Company’s 99%-owned subsidiary, in exchange for Zoro shares. In addition, Zoro in 2010 signed an agreement to acquire roughly 1,500  additional hectares comprising the Fortuna exploration claims, which required Zoro to issue 6 million shares of its restricted common stock and make staged payments totaling $325,000 to the Fortuna Vendors, who also reserved a 2.5% net smelter return royalty. The Fortuna purchase agreement was never closed.





The Yura Agreement in principal part provides for the following:





·           All of the rights, titles and interests to the Zoro Properties, Fortuna claims, and related assets, and the balance of the properties in the Yura District, are being conveyed to Formacion Yura Exploracion S.A.C. (“Yura Exploracion”)





·           To earn an undivided 50% indirect interest in the Yura District, Zoro has the responsibility under the Yura Agreement to complete a minimum $5.0 million exploration program within 30 months





·           Provided that the exploration program produces a minimum 600,000 ounce gold measured and indicated resource estimate at Yura, Zoro has the option to purchase an additional undivided 25% indirect interest in the Yura District for a minimum of $30 million





The Minex Agreement recognizes the contributions of Minex and consideration furnished on behalf of the Company, and provides the following key terms:





·           Minex has contributed or has caused to be contributed US$1.6 million for exploration, and concession and permitting maintenance expenses, and related overhead at the Zoro Properties





·           Minex has absolved the Company from the shares and monies otherwise payable to the Fortuna Vendors with respect to the acquisition of the Fortuna Properties totalling approximately 1,500 hectares of exploration concessions, which have now been contributed to the Yura Project





·           Minex has agreed to use its best efforts to raise an additional $1.2 million for Zoro, to fund the first phase exploration programs on the consolidated Yura Project





·           The Company and Minex agreed that the value of the Minex contributions is US$3 million and the Company has agreed to issue 18 million shares of its common stock to Minex or to those designated by Minex, subject to satisfying applicable securities law





·           Minex shall have the right to appoint two members to the Company’s Board of Directors





With respect to the Minex Agreement, as at April 30, 2012, the Company had amended the Minex Agreement with the following key change:





·           the agreed value of the Minex contributions under the original Minex Agreement is US$1.6 million instead of US$3 million and that the Company agrees to issue 10 million shares of common stock instead of 18 million shares of common stock to Minex or to those designated by Minex, subject to satisfying applicable securities laws.





19





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 2012


Amounts Expressed in U.S. Dollars


(Unaudited – Prepared By Management)








8.        Commitments and Contingencies (cont'd)




On December 22, 2011, but having an effective date of September 26, 2011, the Company entered into a consulting agreement with Minex (the “Consulting Agreement”) whereby Minex agreed to provide certain services related to the Yura Project and operations in Peru in general in exchange for $200,000 of which $175,000 has been paid as at July 31, 2012.





On November 1, 2011, the Company entered into an agreement with a third party to provide administrative and investor relations services to the Company for a period of twelve (12) months. The Company agreed to pay the party CAD$17,000 per month. The agreement is cancellable by the Company with sixty (60) days written notice and by the party with ninety (90) days written notice.  As at July 31, 2012, the Company is in the process of cancelling this contract.








9.        Financial Instruments





The Company's financial instruments consist of cash, accounts payable and accrued liabilities, liabilities payable in capital stock, promissory notes payable, convertible notes and due to related parties. The carrying amounts of these financial instruments are a reasonable estimate of their fair values because of their current nature.





The following table summarizes information regarding the carrying values of the Company's financial instruments:





July 31, 2012


April 30,2012Held for trading (i)

$
3,661


$
9,181Other financial liabilities (ii)


3,200,830



2,726,815





(i)   Cash





(ii)  Accounts payable and accrued liabilities, liabilities payable in capital stock, promissory notes payable, and due to related parties





Fair values





The Company classifies its fair value measurements in accordance with an established hierarchy that prioritizes the inputs in valuation techniques used to measure fair value as follows:





Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;





Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and





Level 3 - Inputs that are not based on observable market date.


20





Zoro Mining Corp.


(An Exploration Stage Company)


Notes to the Interim Consolidated Financial Statements


July 31, 20112


(Expressed in US Dollars)


(Unaudited – Prepared By Management)








9.      Financial Instruments (cont'd)





The following table sets forth the Company's financial instruments as of July 31, 2012, measured at fair value by level within the fair value hierarchy:





Level 1


Level 2


Level 3


TotalCash

$
3,661



-



-



3,661Total assets

$
3,661



-



-



3,661


Accounts payable and accrued liabilities

$
-



-



881,427



881,427Promissory notes payable


-



-



25,150



25,150Convertible Notes


-



-



200,000



200,000Derivative Financial Instruments


-



-



1,600,000



1,600,000Due to related parties


-



-



494,253



494,253Total other financial liabilities

$
-



-



3,200,830



3,200,830








The following table sets forth the Company's financial instruments as of April 30, 2012, measured at fair value by level within the fair value hierarchy:





Level 1


Level 2


Level 3


TotalCash

$
9,181



-



-



9,181Total assets

$
9,181



-



-



9,181





Accounts payable and accrued liabilities

$
-



-



717,280



717,280Promissory notes payable


-



-



24,649



24,649Convertible Notes


-



-



200,000



200,000Derivative Financial Instruments


-



-



1,600,000



1,600,000Due to related parties


-



-



184,886



184,886Total other financial liabilities

$
-



-



2,726,815



2,726,815





The features embedded in the $200,000 face value convertible note were combined into one compound embedded derivative that the Company fair valued using the income valuation technique using the Monte Carlo valuation model. The Monte Carlo model was believed by management to be the best available technique for this compound derivative because, in addition to providing for inputs such as trading market values, volatilities and risk free rates, the Monte Carlo model also embodies assumptions that provide for credit risk, interest risk and redemption behaviors (i.e. assumptions market participants exchanging debt-type instruments would also consider). The Monte Carlo model simulates multiple outcomes over the period to maturity using multiple assumption inputs also over the period to maturity. The following table sets forth (i) the range of inputs for each significant assumption and (ii) the equivalent, or averages, of each significant assumption as of April 30, 2010:





The financings giving rise to derivative

financial instruments

$200,000 Face

ValueConversion price

$
5.24Equivalent volatility


118.42
%Equivalent term (years)


0.504Equivalent credit-risk adjusted yield


15.54
%Equivalent interest risk adjusted rate


5.84
%











21


Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations





The following discussion of our financial condition, changes in financial condition and results of operations for the three months ended July 31, 2012 and 2011 should be read in conjunction with our unaudited interim financial statements and related notes for the three months ended July 31, 2012 and 2011.  The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results may differ materially from those anticipated in these forward-looking statements.





Overview of our Business





Zoro Mining Corp. was incorporated under the laws of the State of Nevada on April 20, 2004 under the name “Rochdale Mining Corp”. Effective March 19, 2007, we merged with a wholly-owned subsidiary, Zoro Mining Corp., pursuant to Articles of Merger filed with the Nevada Secretary of State.  The merger was in the form of a parent/subsidiary merger with Rochdale Mining Corp. as the surviving corporation.  Upon completion of the merger, our corporate name was changed to “Zoro Mining Corp.” and our Articles of Incorporation were amended to reflect this name change. As of the date of this Quarterly Report, we are engaged in the acquisition and exploration of mineral properties located in South America.  We currently have interests in an aggregate of approximately 47,444 gross acres located in Chile and Peru, targeting gold, copper and platinum. After the effective date of our registration statement filed with the SEC (November 1, 2007), our shares were listed on the Over-the-Counter Bulletin Board, and our shares currently trade on the OTCQB Exchange. Our current symbol is “ZORM.QB”.





We have not established any proven or probable reserves on our mineral property interests.  To date, we have been engaged primarily in organizational activities and have engaged in minimal initial exploration at several of our projects, including exploratory drilling at one of our properties located in Chile. We plan to conduct exploration programs on our properties with the objective of ascertaining whether any of our properties contain economic concentrations of minerals that are prospective for mining. As such, we are considered an exploration or exploratory stage company. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic feasibility of our properties is determined. We have no known reserves of gold, copper, platinum or any other type of mineral on our properties.





Please note that throughout this quarterly report, and unless otherwise noted, the words “we,” “our,” “us,” the “Company,” or “Zoro Mining,” refers to Zoro Mining Corp.





Subsidiaries





During May 2007 through October 2007 and in accordance with applicable local laws and regulations in Chile, Peru and Mexico, we incorporated three wholly-owned subsidiaries in Chile, Peru and Mexico as follows: Sociedad Zoro Chile Limitada, in Chile, Zoro Mining SAC, in Peru; and Aravena Mexicana, SA in Mexico. We have completed property transfers in Chile, and the title to our property interests in Peru will now be held by our subsidiary indirectly through the Yura Agreement described in note 8 of the interim consolidated financial statements above.  The Mexican properties have lapsed due to non-payment of the concession maintenance fees.





Current Business Operations





We are a natural resource exploration company currently engaged in the exploration and acquisition of property located in South America. We plan to conduct exploration programs on our properties with the objective of ascertaining whether any of our properties contain economic concentrations of minerals that are prospective for mining. We currently have interests in an aggregate of approximately 29,652 acres located in Chile and approximately 17,792 acres in Peru, targeting gold, copper and platinum.





Our current acreage and location of our property is summarized as follows:


Location

Project

Exploration Target

Concession Hectares/AcresChile, South America

The Escondida Project

Gold, Platinum

2,600/6,425Chile, South America

Don Beno Project

Gold, Copper

3,400/8,402Chile, South America

Sierra Fritis Project

Gold, Copper

2,400/5,931Chile, South America

Piedra Parada Project

Gold, platinum group metals

3,600/8,895(1)(2)Peru, South America

The Yura Project

Gold

7,200/17,792(3)Total Net Hectares/Acres:

19,200/47,444


(1)
Gareste Limitada, the vendor at Piedra Parada, owned and conveyed to Zoro senior concession rights on over 2,100 hectares (5,189 acres), and also conveyed overstaked concessions on 1,500 additional hectares (3,706 acres) which are subject to the senior rights of a third party.


(2)
All concessions at Piedra Parada owned by Zoro are subject to pre-existing contractual rights granted from Gareste to a third-party to extract and exploit lithium, light metals and commercial salts.


(3)
Zoro’s initial Yura Project interests are now subsumed within the Yura Agreement described below under “Mineral Property Acquisition Agreements,” whereby Zoro can earn up to a 75% indirect interest in the 7,200 hectare Yura District.










22


Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  By resolutions dated July 16, 2010, the Board of Directors authorized the release and dropping of the Costa Rica and Rio Sur concessions in Chile. These properties, which were and are not material to the Company, in the aggregate covered 3,100 hectares (7,637 acres).





Recommended Exploration Programs and Budgets





Don Beno Project





First and foremost, Mr. Hiner sees no reason to continue exploration at Don Beno for a porphyry copper target.  Second, to accurately evaluate any targets developed during geologic, geochemical, or geophysical programs, core drilling is recommended and the utilization of RC drilling is specifically not advised. To compile sufficient information to evaluate the property’s potential to host an IOCG deposit and to adequately guide a drilling program, a detailed mapping and sampling program is recommended.  Additional IP/Resistivity studies should be supplanted with the following geophysical and geologic tools:





1.           An aeromagnetic compilation of the entire property


2.           Concurrent with the aeromagnetic survey, conduct a radiometrics survey


3.           A ground magnetic survey of the entire property


4.           Geologic mapping of the entire property at a scale of 1:5,000 or 1:10,000


5.           Sufficient geochemical sampling to establish a property-wide trace element distribution





Commercial aeromagnetic data are available for purchase.  The quality of this information should be examined, and if suitable could be purchased to save time and repetition.





Structural analysis coupled with thematic imagery analysis is also recommended to complement the surface and geophysical work. Manipulation and analysis of Landsat thematic imagery will help delineate both structural zones that may control mineralization and the associated alteration that would help define drill targets.  Although the Chilean IOCG deposits are not noted for high U+ or REE presence, a radiometric survey may help define lithologies or structural components, and is easily included if an airborne aeromagnetic survey is conducted.





If the integrated approach successfully indicates suitable and defensible drill targets, a second phase program of drilling is recommended.





Budget Estimate





The recommended exploration program at the Don Beno property is estimated at $241,587 for Phase 1 and $482,900 for Phase 2. The table below provides a breakdown of projected expenditures for the proposed geochemical and geophysical surveys, along with follow-up drilling.





Proposed Budget Phase 1


Activity
Description

TotalGeologyGeologic Mapping
60days @ $700/day

$
42,500Structural Analysis
10days @ $700/day

$
7,000Landsat Imagery & thematic analysis
Est. $25,000

$
25,000GeochemistryRock chip sampling
45 days @ $500/day

$
22,500Rock chip analyses
15 smpls/day x 45 x $35

$
23,625Geophysical SurveysAeromagnetic Survey
15 days est. $35,000


35,000Radiometrics Survey
Est. $50,000

$
50,000Ground magnetometry+report
20 days @ $ 700/day

$
14,000SubTotal


$
219,625Contingency @ 10%



21,962Phase 1 Total


$
241,587











23





Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)


Proposed Budget Phase 2


Activity

Description


TotalDrill ProgramDrill Mobilization Costs




$
25,000Core Drilling

3000 m’s x 100/m


$
300,000Geological & supervision

35 days @ $700


$
24,500Analyses – rock

1500 samples at $35/sample


$
52,500SupportMisc. supplies & materials

Estimate


$
5,000Food & Lodging, 2 personnel

Estimate 60 days @ $300/day


$
18,000Vehicles

Estimate 70 days @ $200/day


$
14,000Subtotal


$
439,000Contingency @ 10%




$
43,900Total




$
482,900





Escondida Project





Before any additional time and money are spent regarding the development of a pilot plant or flow sheet, work should be done to determine whether or not adequate mineralization exists.  A detailed mapping and sampling program is recommended prior to implementation of a drill program.  Structural analysis coupled with thematic imagery analysis is recommended to complement the surface work.  Detailed sampling to determine the habit of precious metals is recommended as part of a mapping program, as well as to determine the viability of utilizing any trace element geochemistry that may complement target development.





If a copper-gold-pyrite and/or a copper-silver-gold-pyrite relationship can be demonstrated, it may be possible to utilize some form of geophysics, such as IP to provide additional confidence in the design of a drill program.  In order to determine whether or not gold is associated with any mineralization, large samples should be taken and analyzed by both ICP methods and by fire assay methods, preferably utilizing a large sample charge of at least 30 grams.





Because of the degree of uncertainty regarding the development of a viable target, a two phase exploration budget is proposed.  The initial program entails geologic mapping, geochemical sampling, thin section or micro-probe analysis, followed by trenching and sampling if warranted.  If results merit continuing exploration, a modest drill program to test any targets developed is recommended.  Geologic and geohydrologic conditions, combined with the low levels of mineralization encountered to date, absolutely preclude the use of reverse circulation drilling methods.  Core drilling is highly recommended.





Budget Estimate





The recommended two-phase exploration program at the Escondida property is estimated at $92,950 for Phase 1, and $437,250 for Phase 2 if justified.  The program total is $530,200. The tables below provide a breakdown of projected expenditures for the proposed mapping and geochemical surveys, with follow-up drilling if merited.





Description
Explanation

Mth 1


Mth 2


Mth 3


Mth 4

Mth5
Mth 6

SbTotPersonnelSr.Geol-2mos, $750/day


7500



7500






7500




$
22,500Jr. Geol-4mos,$350/day






7000



7000



7000




$
21,000LogisticsFood & Lodging est$25/day


250



1000



500



750




$
2,500Travel-Sr. Geol expat


2000
















$
2,000Travel-Jr. Geol






500



500








$
1,000Vehicle-est $1500/mo


1500



1500



1500



1500




$
6,000Field ActivitiesMapping- purch imagery est $2500


2500
















$
2,500Thin sections/Microprobe










2500








$
2,500Trenching- excavator






10000



10000








$
20,000Geochemistry-est 100smpls, $25ea










1250



1250




$
2,500   24
 
 Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
 Office & AnalysisComputer entry & analysis














1,000




$
1,000Report & Recommend-Sr Geol














1,000




$
1,000Sbtot


$
84,50010%cont


$
8,450Ph 1 Tot


$
92,950








Proposed Budget Phase 1





Phase 2 Drill Program


Description
Explanation
Mth 1
Mth 2
Mth 3
Mth 4

Mth5


Mth 6


SbTotPersonnelSr.Geol-1/2mos, $750/day






3750



3750


$
7,500Jr. Geol-1mos,$350/day






7000






$
7,000LogisticsFood & Lodging est$25/day






500






$
500Travel-Sr. Geol expat






2000






$
2,000Travel-Jr. Geol






500






$
500Vehicle-est $1500/mo






1500



1500


$
3000Field ActivitiesDrilling – 2500m H core@ $125/m






312500






$
312,500Drill Geochem-2500smpls, $25ea










62,500


$
62,500Office & Analysis











1000


$
1,000Computer entry & analysis










1000


$
1,000Report & Recommend-Sr GeolSbtot






$
397,50010% cont






$
39,750Ph 2 Tot






$
437,250Tot Prgm






$
530,200





Effective March 31, 2011, through its subsidiary Sociedad Zoro Chile, Limitada, we entered into a binding letter of intent (the "LOI") with Llanos de Caldera, S.A. Cerrada ("LDC"), a privately-held Chilean corporation, whereby LDC can earn an undivided 70% interest in our Escondida precious metals project located near Copiapo, Chile, and following which our Company and LDS will form a joint venture to govern operations at Escondida, as follows:





1.
Earn-In Requirement.To earn the 70% interest, LDC must commence, pay for and complete qualifying Earn-In Expenditures totaling at least five hundred thousand dollars (US$500,000) within one (1) year of the date of the LOI ("Earn-In Term"). Earn-In Expenditures are defined as all the costs and expenses to complete an initial exploration, drilling, sampling and metallurgical testing program as set forth in the LOI (the "Initial Exploration Program"), and include, in addition, all tax payments and related costs of maintaining the mineral titles to Escondida during the Earn-In Term ("Holding Costs") and payments for overhead expenses. Harold Gardner, a director of our Company and a principal within LDC, shall have oversight responsibility for the Initial Exploration Program, and LDC shall be the operator under the LOI.





2.
Declaration of Earn-In.At any time prior to or at the end of the Earn-In Term, LDC can elect to give notice in writing to the Company that it has completed the Initial Exploration Program and has successfully incurred the Earn-in Expenditures for Escondida (the "Earn-In"). At such time, to the extent not previously done, LDC shall furnish our Company with copies of all reports, information and data developed during the Initial Exploration Program, and satisfactory evidence of the incurrence and payment of the Earn-In Expenditures, which our Company shall reasonably accept, and LDC shall be deemed to have earned an undivided 70% interest in Escondida. Upon reasonable request from LDC, our Company shall cause the transfer of this 70% interest to LDC, or, alternatively, 100% of the property to the Joint Venture described below.


25





Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)





3.
Joint Venture and Joint Operating Agreement.At the time that Earn-In is achieved, the parties will form a Joint Venture and finalize and execute a Joint Operating Agreement ("JOA") to govern their interests in Escondida, whereby LDC will be the Operator, and the parties shall fund their respective shares of expenses going forward. With Zoro’s consent, Llanos subsequently assigned its rights in the earn-in agreement to the Escondida Chile Joint Venture, a partnership between Llanos and the HEI Escondida Joint Venture. As at July 31, 2012, Escondida Chilewas still in the process of conducting the exploration and drilling program with the results to be determined in the latter half of 2012. As at July 31, 2012, the parties have agreed to extend the agreement an additional 12 months.





Yura Project





To develop existing targets and identify new zones, significantly more geologic and geochemical information is necessary.  The acquisition of sufficient information requires a multi-disciplinary approach involving the following actions:


1.      Geologic mapping and sampling of existing exposures, principally roadcuts and prospect pits


2.      Property-wide geochemical sampling to characterize the size and disposition of gold anomalies


3.      Structural and alteration analysis utilizing landsat and thematic imagery


4.      Trenching and new road construction in concert with additional geochemical sampling


5.      Structural analysis and geologic mapping in secondary detail using aerial photography


6.      Thin and polished section analysis of mineralized samples to determine mode of gold occurrence


7.      Collection of a sizeable sample (approximately 500kg) of mineralized material to determine a suitable analysis methodology for exploration samples





A budget for this phase 1 program is set out below.





If the integrated approach successfully indicates suitable and defensible drill targets, a second phase program of drilling is recommended.





Budget Estimate





The recommended exploration program at the Yura property is estimated at $384,450 for Phase 1 and $760,650 for Phase 2. The table below provides a breakdown of projected expenditures for the proposed geochemical and geophysical surveys, along with follow-up drilling.





Phase 1 Proposed Budget


Activity
Description

TotalGeologyGeologic Mapping
60days @ $700/day

$
42,000Aerial photography detailed mapping
15days@$700/day

$
10,500Landsite & thematic imagery analysis
Acq., analysis

$
32,500Geochemistrycollection
2geos-120days@ $500

$
60,000analysis
1500smpls@$50ea

$
75,000Trenching & RoadsTrenching
30days@$125/hr

$
30,000Roads
30days@$125/hr

$
30,000Bulk SampleCollection
500kg est

$
2,500Analysis
Mult testwork est

$
15,000LogisticsVehicles
Assume 3, 1500/mo*3

$
13,500Food & Lodging
90days, 2geos, $125/day

$
22,500Field Supplies
Estimate

$
5,500Office- report & target defin.
15days@$700/day

$
10,500Subtotal


$
349,50010%contingency


$
34,950Phase 1 total


$
384,450





26




Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  Phase 2 Proposed Budget


Activity

Description


TotalDrill ProgramDrill Mobilization Costs




$
25,000Core Drilling

5000 m’s x 100/m


$
500,000Geological & supervision

60 days @ $700


$
42,000Analyses – rock

2,500 samples at $35/sample


$
87,500SupportMisc. supplies & materials

Estimate


$
5,000Food & Lodging, 2 personnel

Estimate 60 days @ $300/day


$
18,000Vehicles

Estimate 70 days @ $200/day


$
14,000Subtotal


$
691,500Contingency @ 10%




$
69,150Total




$
760,650





Results of Operations





We are an exploration stage company and have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.





The summarized financial data set forth in the table below is derived from and should be read in conjunction with our unaudited financial statements for the three month period ended July 31, 2012 and July 31, 2011, including the notes to those financial statements which are included in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements.





The following table sets forth selected financial information for the periods indicated.





For the Three Months Ended July 31, 2012


For the Three Months Ended

July 31, 2011


From April 20, 2004 (Date of Inception) to

July 31, 2012$


$


$ExpensesBad Debt


-



-



136,250Depreciation


-



14,238



371,800Donated services


-



-



25,500Filing and transfer agent fees


1,925



1,419



77,479Impairment of mineral property costs


-



-



10,756,203Interest Expense


13,153



19,149



374,501Investor Relations


-



13,244



414,691Management and administration fees


109,154



98,250



3,173,869Mineral exploration costs (Note 4)


320,912



74,194



8,209,643Office and general


16,387



20,984



823,044Professional fees


17,973



35,868



854,832Salaries and consulting fees


-



-



450,000Net loss


(479,504
)


(277,346
)


(25,667,812
)





Three month period ended July 31, 2012 Compared to Three month period ended July 31, 2011.





During the three month periods ended July 31, 2012 and 2011, we did not generate any revenue.





During the three month period ended July 31, 2012, we incurred expenses of $479,504 compared to $277,346 incurred during the three month period ended July 31, 2011 (an increase of $202,158). These expenses incurred during the three month period ended July 31, 2012 and July 31, 2011 consisted of: (i) depreciation of $nil (2011: $14,238); (ii) filing and transfer agent fees of $1,925 (2011: $1,419); (iii) management and administration fees of $109,154 (2011: $98,250); (iv) mineral exploration costs of $320,912 (2011: $74,194); (v) office and general of $16,837 (2011: $20,984); (vi) professional fees of $17,973 (2011: $35,868); (vii) interest expense of $13,153 (2011: $19,149); (viii) investor relations of $nil (2011: $13,244) and (ix) salaries and consulting fees of $nil (2011: $nil).  Total expenses incurred during the three month period ended July 31, 2012 increased compared to the three month period ended July 31, 2011 primarily due to higher mineral explorations costs and management and administration fees and lower professional fees.






27
  Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  Our net loss for the three month period ended July 31, 2012 was $479,504 compared to a net loss of $277,346 during the three month period ended July 31, 2011 (an increase of $202,158).  The increase in our net loss is primarily due to the increase in mineral exploration costs.  Our net loss during the three month period ended July 31, 2012 was $0.01 per share compared to a net loss $0.01 per share during the three month period ended July 31, 2011. The weighted average number of shares outstanding was 58,976,752 for the three month period ended July 31, 2012 compared to 36,971,108 for the three month period ended July 31, 2011.





Liquidity and Capital Resources





As at the three month period ended July 31, 2012, our current assets were $10,168 and our current liabilities were $3,200,830, which resulted in a working capital deficiency of $3,190,662. As at the three month period ended July 31, 2012, current assets were comprised of $3,661 in cash and $6,507 in other receivables. As at the three month period ended July 31, 2012, current liabilities were comprised of: (i) $881,427 in accounts payable and accrued liabilities; (ii) $1,600,000 in capital stock payable; (iii) $494,253 due to related parties; and (iv) $225,150 in promissory notes payable.





As at the three month period ended July 31, 2012, our total assets were $10,173 comprised of: (i) $10,168 in current assets and (ii) $5 in mineral properties, compared to total assets of $15,662 as at our year ended April 30, 2012. The decrease in total assets during the three month period ended July 31, 2012 was primarily due to a decrease in cash.





As at the three month period ended July 31, 2012, our current and total liabilities were $3,200,830 compared to current and total liabilities of $2,726,815 as of our fiscal year ended April 30, 2012.  The increase in liabilities during the three month period ended July 31, 2012 resulted from an increase in accounts payable and accrued liabilities and due to related parties.





Stockholders’ deficit increased to $3,190,657 as at July 31, 2012 from $2,711,153 as at our year ended April 30, 2012.





Cash Flows Used in Operating Activities





We have not generated positive cash flows from operating activities. For the three month period ended July 31, 2012, net cash flows used in operating activities was $5,520, consisting of a net loss of $479,504.  Net cash flows used in operating activities was changed by an increase in other receivables of $31, an increase in amounts due to related parties of $309,367, and an increase in accounts payable and accrued liabilities of $164,648.





For the three month period ended July 31, 2011, net cash flows used in operating activities was $79,539 consisting of a net loss of $275,314, adjusted by $14,238 in depreciation and $5,045 in amortization of debt discount, plus a decrease of $2,032 in adjustment to fair value of derivative instruments.  Net cash flows used in operating activities was further changed by an increase in other receivables of $3,376, an increase in amounts due to related parties of $215,428 and a decrease in accounts payable and accrued liabilities of $33,528.





Cash Flows from Investing Activities





We did not have any cash flows from investing activities for the three month period ended July 31, 2012 or for the three month period ended July 31, 2011.





Cash Flows from Financing Activities





We have financed our operations primarily from either advances or the issuance of equity and debt instruments. For the three month period ended July 31, 2012, net cash flows provided from financing activities was $nil compared to $nil for the three month period ended July 31, 2011.





We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities, debt instruments, and related party loans or advances. Our working capital requirements are expected to increase in line with the growth of our business.





Plan of Operations





Our plan of operations for the next twelve months is to focus on the exploration of our Don Beno, Escondida and Yura properties.  In particular, in terms of priority, we intend to pursue the recommended Phase I exploration program at the Yura property, and, pending sufficient funding, the programs at the other two projects. We anticipate that we will require a total of approximately $1,720,000 for our plan of operations over the next twelve months, as follows:






28
  Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)


(a)
approximately $720,000 in the aggregate for the Phase I exploration programs at each of the Don Beno, Escondida and Yura properties; and





(b)
approximately $1,000,000 for management and administration fees, professional fees, and other general expenses over the next twelve months.





At July 31, 2012, we had cash of $3,661 and a working capital deficit of $3,190,662.  During the twelve month period following the date of this report, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations for and beyond the next twelve months.  Management anticipates that further advances and debt instruments, and equity private placements will be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity to third parties, and debt instruments from related and non-related parties.





We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock, issuance of debt, advances or otherwise to fund our exploration programs going forward. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.





Material Commitments





As of the date of this Quarterly Report, the agreements discussed below summarize our material commitments.





Related Party Arrangements





We participated in a cost sharing arrangement with several other public companies.  Pacific Copper Corp. (with two directors in common with us) and Pan American Lithium Corp. (one director and two officers in common) who indirectly share South American operating offices, and in Arizona also with Titan Iron Ore Corp. The expenditures relate to shared exploration staging and administration in similar operating areas of Chile and Peru including shared site offices in each country, and in the United States.





During the three months ended July 31, 2012, we incurred $22,500 (July 31, 2011: $22,500) to a director and officer of Zoro for geological services rendered.  An aggregate of $22,500 (April 30, 2012: $0) was owed this director at July 31, 2012 for unpaid services and reimbursement of expenses,





During the three months ended July 31, 2012, we incurred $22,500 (July 31, 2011: $22,500) to a director and officer of Zoro for management of South American exploration with such costs recorded as administrative costs.  An aggregate of $280,119 (April 30, 2012: $115,420) was owed to this director for unpaid fees and reimbursement of expenses;





During the three months ended July 31, 2012, we incurred $24,283 (July 31, 2011: $37,630) to a former director and officer of Zoro for management services with respect to the administration of the Company.  An aggregate of $60,337 (April 30, 2012: $37,837) was owed to this officer at July 31, 2012 for unpaid services and reimbursement of expenses;





During the three months ended July 31, 2012, we paid an officer of Zoro $984 (July 31, 2011: $11,062) for administrative services;





During the three months ended July 31, 2012, we incurred a total of $57,057 (July 31, 2011: $77,382) to a private Chilean company with a director in common that provides exploration services to Zoro in Chile, with such costs recorded as exploration costs in Chile, South America.  An aggregate of $75,762 (April 30, 2012: $18,704) was owing at July 31, 2012 for unpaid services and unreimbursed expenses.





During the three months ended July 31, 2012, we paid an officer of Zoro $11,132 (2011: $11,826) for accounting services;





During the three months ended July 31, 2012, we incurred to a company managed by an officer and director $7,500 (2011: $7,500) for administrative services. An aggregate of $55,535 (April 30, 2012: $12,925) was owed to this company at July 31, 2012 for unpaid services and unreimbursed expenses;







29
 
 Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)


$200,000 Convertible Note





On October 31, 2008, the Company issued a $200,000 6% convertible note with a term to October 31, 2010 (the “Maturity Date”). The principal amount of the note and interest is payable on the maturity date. While the note is outstanding, the holder has the option to convert the principal balance and interest, into conversion units at a conversion price of $3.20 per unit for a period of two years.  Each unit is comprised of one common share and one share purchase warrant exercisable at $5 per share for a two year term from the date of conversion. Further, the terms of the convertible note provide for certain redemption features. If, in the event of certain defaults on the terms of the note, certain of which are indexed to equity risks, the holder can accelerate the payment of outstanding principal and interest.





The Company has evaluated the terms and conditions of the convertible note under the guidance of ASC 480 and ASC 815. The common stock component of the unit conversion feature does meet all of the eight conditions for equity classification provided in ASC 815. However, the warrant component of the unit conversion feature falls within the scope of ASC 480 because it contains a fundamental transaction which provides that the warrants are contingently redeemable for assets. Since the embedded warrant falls under the scope of ASC 480, it requires liability classification. The redemption features (the “default put”) are indexed to risks that are not associated with credit or interest risk and, therefore, require bifurcation. Accordingly, a compound embedded derivative, which comprises of (i) the warrant component of the unit conversion feature and (i) the default put was bifurcated from the contract and has been recorded as a derivative liability.


October 31, 2010 Modification  of $200,000 Convertible Note
 
 On October 31, 2010, the Company and the holder of the $200,000 convertible note changed the conversion rights of accrued interest and principal to enable conversion by the holder at the rate of $0.40 per post consolidation share without the requirement for issuance of warrants on conversion. The modification gave rise to an extinguishment. As a result of the modification, the Company recorded a loss on extinguishment in the amount of $126,875. Following maturity the note is in default and no longer considered to be convertible.  The company continues to accrue interest at 6% per annum.


Promissory Notes





During the fiscal year ended April 30, 2010, the Company borrowed $20,000 at 8% interest unsecured and due on demand note from an unrelated party.  At July 31, 2012 the balance owing including the interest was $25,150 (April 30, 2012: $24,649).





Lease Agreement Guarantor





We have guaranteed the remaining lease term at previous premises previously occupied in Tucson.  The Company is a guarantor of a lease agreement effective September, 1, 2007 that obligates the Company under conditions of default by a previously related party lessee (a company which had two directors in common with the Company), to pay for the entire lease relating to the Company’s Tucson office until the end of the lease term through October 31, 2011 or as amended or renewed.  As at July 31, 2012, the gross value of the guarantee was $212,774.  The lessee has defaulted on the lease and the lessee subsequently moved offices. The potential liability, if any, as a result of the lessee’s default due to joint and severable provisions relating to the lease guarantee is presently not determinable, and the Company has not been advised of the results, if any of negotiations by the lessee to settle this potential liability with the landlord.





Advisory and Capital Raise Services Agreements





The Company has entered into an agreement dated October 11, 2010 with a consultant who will provide strategic planning, fund raising, and capital structuring advisory services for a term of nine months. In consideration for the services the company will issue 200,000 shares of its commons stock to the consultant, 100,000 of which will be delivered at the end of four months, and 100,000 of which will be delivered at the end of nine months. In addition the Company will issue 200,000 options to the consultant to purchase Company shares at such time as the company has closed on at least $2 million in net proceeds attributable to the efforts of the consultant. In addition and subject to certain conditions, the Company will issue to the consultant 100,000 options to purchase Company shares for every $1 million in additional net proceeds attributable to the efforts of the consultant.  The shares were not issued as at July 31, 2012 due to a delay in starting the program.







30
  Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  Property Acquisition Agreements





On September 23, 2009, the Company entered into a Mineral Assets Option Agreement (the “Option”) with Sociedad Gareste Limitada (“Gareste”) and other vendors, for the proposed acquisition by Zoro of the Piedra Parada and Fritis precious metals projects located in Chile’s Atacama Region III.  Harold Gardner, an officer and Director of the Company, is co-managing partner of Gareste.  Effective December 2, 2009, the Company exercised the Option and completed the acquisition of a 100% legal and beneficial interest in and to the Piedra Parada Project and the Fritis Project.  Under the Option, the Company (i) issued 19,400,000 restricted shares of its common stock to the vending parties; (ii) agreed to pay or cause to be paid all underlying regulatory and governmental payments and assessment work required to keep the mineral property interests in good standing; and (iii) granted to Gareste a 2% net smelter return (“NSR”) royalty on the proceeds of any production from each of the Piedra Parada and Fritis properties, capped at $6,000,000 at each property, one-half of which at each property can be repurchased by the Company at any time before commencement of any production at that property for the sum of $2,000,000.





The Company entered into an Asset Purchase Agreement (the “Fortuna Agreement”) dated February 22, 2010, with two vending parties to acquire a 100% interest in three property mineral exploration concessions covering approximately 1,500 hectares as an extension to the Company’s existing Yura gold prospect located 30 kilometers west of Arequipa, Peru (the “Fortuna Properties”).





The Fortuna Properties target precious metals and are comprised of three concessions that are accessible year round via paved highway and improved roads. Harold Gardner, an officer and director of the Company, is an indirect minority shareholder of one of the vending parties.  Subject to final due diligence, the lifting of the Cease Trade Order (which occurred on October 21, 2010), and other customary closing conditions, the Company planned to (i) issue 6,000,000 restricted shares of its common stock to the Vending Parties; (ii) pay to the Vending Parties $100,000 prior to the closing of the acquisition, $125,000 at the closing date, and $100,000 six months from the closing date; and (iii) grant to the Vending Parties, a 2.5% net smelter return (“NSR”) royalty on the proceeds of any production from the Fortuna Properties capped at $20,000,000, 1.5% of which can be repurchased by the Company at any time before commencement of any production for the sum of $8,000,000. The NSR also called for an advance minimum yearly payment of $100,000 to the Vending Parties, which amounts are credited against any royalties ultimately payable.  This Fortuna Agreement was never closed and the Fortuna Properties were folded into the Yura Agreement described below.





On March 31, 2011 the Company entered into an Earn-In agreement with Llanos de Caldera, S.A. Cerrada, (“Llanos”), a privately-held Chilean corporation, for participation by Llanos in the Escondida project.  The agreement granted Llanos a one-year period during which to act as operator and expend US$500,000 in qualifying expenditures at the project, constituting an initial exploration program and including drilling, sampling analytical and metallurgical test work.  At the end of the period, if it has properly incurred the qualifying expenditures, Llanos can elect to Earn-In and acquire an undivided 70% of the Escondida project.  On Earn-In the parties will form a joint venture and execute a Joint Operating Agreement whereby Llanos will be the Operator, and the parties shall fund their respective shares of expenses going forward. With Zoro’s consent, Llanos subsequently assigned its rights in the earn-in agreement to the Escondida Chile Joint Venture, a partnership between Llanos and the HEI Escondida Joint Venture.As at April 30, 2012, Escondida Chile was still in the process of conducting the exploration and drilling program with the results to be determined in the latter half of 2012. Although the agreement has lapsed, the parties have not formally cancelled it as at July 31, 2012.





We entered into an Asset Purchase Agreement (the “Fortuna Agreement”) dated February 22, 2010, with two vending parties to acquire a 100% interest in three property mineral exploration concessions covering approximately 1,500 hectares as an extension to our existing Yura gold prospect located 30 kilometers west of Arequipa, Peru (the “Fortuna Properties”).





The Fortuna Properties target precious metals and are comprised of three concessions that are accessible year round via paved highway and improved roads. Harold Gardner, an officer and director of Zoro, is an indirect minority shareholder of one of the vending parties. Subject to final due diligence, the lifting of a cease trade order issued by the British Columbia Securiites Commission (which occurred on October 21, 2010), and other customary closing conditions, we planned to (i) issue 6,000,000 restricted shares of its common stock to the vending parties; (ii) pay to the vending parties $100,000 prior to the closing of the acquisition, $125,000 at the closing date, and $100,000 six months from the closing date; and (iii) grant to the vending parties, a 2.5% net smelter return (“NSR”) royalty on the proceeds of any production from the Fortuna Properties capped at $20,000,000, 1.5% of which can be repurchased by us at any time before commencement of any production for the sum of $8,000,000. The NSR also called for an advance minimum yearly payment of $100,000 to the vending parties, which amounts are credited against any royalties ultimately payable. This Fortuna Agreement was never closed and the Fortuna Properties were folded into the Yura Agreement described below.





On October 4, 2011, we announced that we had entered into a binding Letter of Intent with various parties (the “Yura Agreement”), to earn up to a 75% indirect interest in the consolidated Yura Mining District (roughly 7,200 hectares), located approximately 30 km west of Arequipa, Peru. We had also entered into an agreement with Minex Ventures II, LLC (“Minex”), to compensate Minex for consideration furnished to or on behalf of us for both pre-existing and future obligations owed by us in the Yura District (the “Minex Agreement”).




31
  Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  Our holdings (the “Zoro Properties”) in the Yura District consisted of over 2,100 hectares of exploration concessions acquired in 2007 by Zoro Peru S.A.C. (“Zoro Peru”), our 99%-owned subsidiary, in exchange for shares of our common stock.





The Yura Agreement in principal part provides for the following:





·
All of the rights, titles and interests to the Zoro Properties, Fortuna Properties, and related assets, and the balance of the properties in the Yura District, are being conveyed to Formacion Yura Exploracion S.A.C. (“Yura Exploracion”)





·
To earn an undivided 50% indirect interest in the Yura District, Zoro has the responsibility under the Yura Agreement to complete a minimum $5.0 million exploration program within 30 months





·
Provided that the exploration program produces a minimum 600,000 ounce gold measured and indicated resource estimate at Yura, Zoro has the option to purchase an additional undivided 25% indirect interest in the Yura District for a minimum of $30 million





The Minex Agreement recognizes the contributions of Minex and consideration furnished on behalf of Zoro, and provides the following key terms:





·
Minex has contributed or has caused to be contributed US$1.6 million for exploration, and concession and permitting maintenance expenses, and related overhead at the Zoro Properties





·
Minex has absolved Zoro from the shares and monies otherwise payable to the Fortuna Vendors with respect to the acquisition of the Fortuna Properties totalling approximately 1,500 hectares of exploration concessions, which have now been contributed to the Yura Project





·
Minex has agreed to use its best efforts to raise an additional $1.2 million for Zoro, to fund the first phase exploration programs on the consolidated Yura Project





·
Zoro and Minex agreed that the value of the Minex contributions is US$3 million and Zoro has agreed to issue 18 million shares of its common stock to Minex or to those designated by Minex, subject to satisfying applicable securities law





·
Minex shall have the right to appoint two members to Zoro’s Board of Directors





On March 15, 2012 but having an effective date of September 27, 2011, we entered into an Amendment Agreement with Minex (the “Amendment Agreement”) whereby the parties agreed to amend the Minex Agreement so that the agreed value of the Minex contributions under the original Minex Agreement is US$1.6 million instead of US$3 million and that we agree to issue 10 million shares of common stock instead of 18 million shares of common stock to Minex or to those designated by Minex, subject to satisfying applicable securities laws.





Investor Relations Consulting Agreement





Effective on August 23, 2010, our Board of Directors authorized August 17, 2010 as the Commencement Date and effectiveness of activities under an Investor Relations Consulting Agreement with Bravo International Services (“Bravo”.)





Bravo’s services were to include, building our Company’s investment audience through the dissemination of corporate data packages, broker presentations, broker communications, mining analyst communications, attending trade shows and handling shareholder enquiries regarding the Company.  Under the Investor Relations Consulting Agreement, our Company is obligated to compensate Bravo $7,500 per month for nine (9) months from the Commencement Date and deliver Bravo Two Hundred Thousand (200,000) shares of the Company’s common stock.  On February 11, 2011, the Company terminated the Bravo contract for cause and has since commenced an arbitration under the rules of the American Arbitration Association against Bravo for breach of contract and fiduciary duties.  On March 29, 2012 the arbitrator awarded the Company $80,000 in damages.





Consulting Agreement





On December 22, 2011, but having an effective date of September 26, 2011, we entered into a consulting agreement with Minex Ventures II, LLC (“Minex”), a Colorado limited liability company, whereby Minex will provide and perform for our benefit the following services: (i) assisting in the negotiation and facilitating the arrangements necessary to assemble the Yura Yebecahas Mining Project located in Arequipa, Peru (the “Yura Project”); (ii) assisting in the negotiation and facilitating a letter of intent with Formacion Yura Exploracion S.A.C., Donald Stiles and South American Immobiliara S.A.C. for a joint venture on the Yura Project; (iii) assisting in the negotiation with the owners of the approximately 1,500 hectares of exploration concessions (specifically known as the “Fortuna Properties”) to have the Fortuna Properties placed into the Yura Project; (iv) assisting us with engaging qualified and experienced geologists and other experienced exploration personnel required for any exploration programs on the Yura Project; (v) assisting us with raising equity capital on terms acceptable to us and Minex; (vi) assisting in the identification of gold exploration projects in Peru which may enhance shareholder value for us; (vii) assisting in the negotiation of all proposed or potential joint venture and/or financing arrangements in connection with the ongoing development of our business; and (viii) assisting in and facilitating in the setting up of corporate alliances in Peru for us, or for any of our subsidiaries, as the case may be and as may be determined by us in our sole and absolute discretion, with potential and strategic business and financial partners for the purposes of our ongoing development and financing. In consideration for the services we will pay a consulting fee of $200,000 of which an initial $100,000 of the fee has already been paid to Minex prior to execution of the consulting agreement and a further $100,000 is to be paid to Minex on or before March 31, 2012. As at July 31, 2012 $25,000 of this amount was owing to the consultant.. The services to be provided under the consulting agreement have been substantially completed by December 31, 2011. A copy of the consulting agreement was attached as an Exhibit to our Form 10-Q filed with the SEC on March 21, 2012.




32
  Item 2.                 Management’s Discussion and Analysis of Financial Condition and Results of Operations (cont'd)
  Purchase of Significant Equipment





We do not intend to purchase any significant equipment during the next twelve months.





Off-Balance Sheet Arrangements





As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.





Going Concern





The independent auditors’ report accompanying our April 30, 2012 and 2011 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.





Recent Accounting Pronouncements





In June 2011 the FASB issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income, which eliminates the option of presenting the components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The ASU instead permits an entity to present the total of comprehensive income, the components of net income and the components of OCI either in a single continuous statement of comprehensive income or in two separate but consecutive statements. With either format, the entity is required to present each component of net income along with total net income, each component of OCI along with the total for OCI, and a total amount for comprehensive income. Also, the ASU requires entities to present, for either format, reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. This ASU is to be applied retrospectively. For public entities, the ASU is effective for interim and annual periods beginning after December 15, 2011. We early implemented the requirements and present net income and comprehensive income in a single continuous statement.





In May 2011, the FASB issued Accounting Standards Update (ASU) 2011-04, "Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS."There are few differences between the ASU and IFRS 13. While the ASU is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands ASC 820's existing disclosure requirements for fair value measurements and makes other amendments. The amendments in the update became effective for fiscal years and interim periods beginning after December 15, 2011. The Company has adopted this standard, and it did not materially impact the consolidated financial statements.





In September 2011, the FASB issued Accounting Standards Update (ASU) 2011-08 to simplify how tests for potential goodwill impairment are performed. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit in which goodwill resides is less than its carrying value. For reporting units in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform further goodwill impairment testing as required under the previous standards. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 31, 2011. Early adoption was permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011 if an entity’s financial statements had not yet been issued. We have early adopted this standard on September 30, 2011 and it did not materially impact our consolidated financial statements.











33


Item 3.                 Quantitative and Qualitative Disclosures About Market Risk





We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.





Item 4.                 Controls and Procedures





Evaluation of Disclosure Controls and Procedures





We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.





As of July 31, 2012, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer), and our chief financial officer (also our principal financial and accounting officer) of the effectiveness of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this report due to certain deficiencies that existed in the design or operation of our internal controls over financial reporting as at our year ended April 30, 2012, as disclosed in our Annual Report on Form 10-K for our fiscal year ended April 30, 2012, which may be considered to be material weaknesses and which had not been resolved as of July 31, 2012.





Changes in Internal Control over Financial Reporting





There have been no changes in our internal controls over financial reporting that occurred during our fiscal quarter ended July 31, 2012 that have materially affected, or are likely to materially affect, our internal control over financial reporting.


























34





Part II





Item 1.                 Legal Proceedings





Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.





Item 1A.                 Risk Factors





We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.





Item 2.                 Unregistered Sales of Equity Securities and Use of Proceeds





On May 29, 2012, we issued an aggregate of 1,943,334 units of the Company to seven investors at a price of $0.15 per unit for gross proceeds of $291,500. Each unit is comprised of one share of common stock and one half of one share purchase warrant. Each whole share purchase warrant is exercisable into one share of common stock at an exercise price of $0.25 per share until May 29, 2014.  We relied on exemptions from registration under the United States Securities Act of 1933, as amended, provided by Regulation S (with respect to one investor) and Rule 506 of Regulation D and/or Section 4(2) (with respect to the remaining six investors), based upon representations and warranties provided by the investors of the units in their respective subscription agreements entered into between each investor and the Company.


Item 3.                 Defaults Upon Senior Securities





None.





Item 4.                 Mine Safety Disclosures





Not applicable.





Item 5.                 Other Information





None.





Item 6.                 Exhibits




Exhibit No.
Document3.1
Articles of Incorporation (1)3.1.2
Certificate of Change effective February 9, 2007 (2)3.1.3
Articles of Merger effective March 19, 2007 (2)3.1.4
Certificate of Change effective April 22, 2009 (3)3.2
Bylaws (1)10.1
Mineral Assets Option Agreement dated September 23, 2009 among each of Gareste Limitada, Twaine Assets SA, Agosto Corporation Limited, Yu Cui, Zhao Heng, Ye Bin, Sun Suzhuan, Chen Zou and Zoro Mining Corp. (4)10.2
Asset Purchase Agreement dated February 22, 2010 between Zoro Mining Corp. and South American Inmobilaria S.A.C. and Donald Le Roy Stiles (5)10.3
Binding Letter of Intent for Participation in the Escondida Project dated March 31, 2011(6)10.4
Settlement Agreement between the Company and Andrew Brodkey, dated August 15, 2009(8)10.5
Settlement Agreement between the Company and Harold Gardner, dated August 15, 2009(8)10.6
Settlement Agreement between the Company and Harold Gardner, dated August 15, 2009(8)10.7
Settlement Agreement between the Company and Sage Associates Inc., dated August 15, 2009(8)10.8
Settlement Agreement between the Company and Pro Business Trust, dated August 15, 2009(8)10.9
Debt Assignment Agreement among the Company, Gareste Limitada, and Harold Gardner, dated August 17, 2009(8)10.10
Mineral Property Acquisition Agreement, dated for reference as fully executed on April 12, 2007, as entered into as entered between Zoro Mining Corp. and each of Eduardo Esteffan M., Fresia Sepulveda H., Eduardo Esteffan S., Gretchen Esteffan S., Claudio Esteffan S. and Integrity Capital Group, LLC (7)10.11
Corporate Support Agreement between the Company and Sweetwater Capital Corp., dated May 1, 2007(8)10.12
Convertible Note in the principal amount of $200,000, dated November 7, 2008(8)10.13
Promissory Note between the Company and Sweetwater Capital, dated September 12, 2008(8)10.14
Promissory Note between the Company and Woodburn Holdings Ltd., dated October 2, 2009(8)    35
  Item 6.                 Exhibits (Cont'd)
 10.15
Promissory Note from the Company to 1218716 Alberta Ltd., dated September 16, 2009(8)10.16
Promissory Note between the Company and WestPeak Ventures of Canada Ltd., dated September 17, 2008(8)10.17
Promissory Note between the Company and Timothy Brock., dated November 28, 2008(8)10.18
Advisory Services Agreement between the Company and Viewpoint Securities, LLC, dated January 8, 2010(8)10.19
Form of Restricted Stock Agreement, dated August 29, 2011(9)10.20
Form of Settlement Agreement, dated October 11, 2011(9)10.21
Binding Letter of Intent for Participation in Yebecahas Mineral Concessions, dated September 27, 2011(10)10.22
Agreement between the Company and Minex Ventures II, LLC, dated September 27, 2011(10)10.23
Consulting Agreement between the Company and Minex Ventures II, LLC, dated December 22, 2011, but having an effective date of September 26, 2011(10)10.24
Amendment Agreement between the Company and Minex Ventures II, LLC, dated March 15, 2012(10)31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.*31.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.*32.1
Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant to Section 906 of the Securities Exchange Act.*


*           Filed herewith.


(1)           Incorporated by reference from Form SB-2 filed with the SEC on August 10, 2005.


(2)           Incorporated by reference from Form 8-A Registration Statement filed with the SEC on April 5, 2007.


(3)           Incorporated by reference from Form 8-K filed with the SEC on April 22, 2009.


(4)           Incorporated by reference from Form 8-K/A filed with the SEC on October 19, 2009.


(5)           Incorporated by reference from Form 8-K filed with the SEC on February 26, 2010.


(6)           Incorporated by reference from Form 8-K filed with the SEC on April 6, 2011.


(7)           Incorporated by reference from Form 8-K filed with the SEC on April 16, 2007.


(8)           Incorporated by reference from Form 10-K filed with the SEC on August 17, 2011.


(9)           Incorporated by reference from Form 10-Q filed with the SEC on December 20, 2011.


(10)         Incorporated by reference from Form 10-Q filed with the SEC on March 21, 2012



















36








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 thereunto duly authorized.








ZORO MINING CORP.By:
/s/ Harold GardnerHarold GardnerInterim Chief Executive Officer, President and a director(Principal Executive Officer)Date: September 19, 2012








By:
/s/ Frank GarciaFrank GarciaChief Financial Officer(Principal Financial Officer and

Principal Accounting Officer)Date: September 19, 2012


































37