UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D. C. 20549





FORM 10-K/A2





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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015





Commission File Number:
000-53676





LODE-STAR MINING INC.


(formerly International Gold Corp.)





(Exact name
of registrant as specified in its charter)





NEVADA
47-4347638(State or other jurisdiction of incorporation or
organization)
(IRS Employer Identification No.)





13529 Skinner Road, Suite N


Cypress, TX 77429-1775





(Address of principal
executive offices, including zip code.)





(832) 371-6531





(Registrant’s telephone
number, including area code)





Securities registered pursuant to Section 12(b) of the
Act:
Securities registered pursuant to section 12(g) of the
Act:NONE
Common Stock, $0.001 par value





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


YES ☐
NO
☑





Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act:


YES ☐
NO
☑





Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.YES☑
NO
☐





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☑
NO
☐





Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
☑





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” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.





Large Accelerated Filer
☐
Accelerated Filer
☐Non-accelerated Filer
☐
Smaller Reporting Company
☑








1





Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). YES ☐NO
☑





The aggregate market value of the registrant’s common stock
held by non-affiliates of the registrant as of December 31, 2015
was $339,392. The stock price used in this calculation was the
closing price of the registrant’s stock reported on the OTCQB
marketplace on December 28, 2015, the date closest to the last
business day of the registrant’s 2015 fiscal
year.For purposes of calculating this amount only, all
executive officers and directors and beneficial owners of 5% or
more of the outstanding shares of common stock have been treated as
affiliates.





At March 29, 2016 there were 49,127,825 shares of the
registrant’s common stock outstanding.








EXPLANATORY NOTE





The
Registrant is filing this Amendment No. 2 on Form 10-K/A2
to its Annual Report on Form 10-K for the fiscal year ended
December 31, 2015 which was originally filed on March 29,
2016, to include additional information in Items 2 and 7 concerning
the following:





●
 Conditions to be met in order to retain title to the mineral
property and whether we have mineral and/or surface
rights


●
 Description of the rock formations and mineralization of existing
or potential economic significance on the
property


●
 Work completed on the property and its present
condition


●
 Modernization and physical condition of the plant and equipment,
including subsurface improvements and equipment


●
 Description of equipment, infrastructure and other
facilities


●
 Current state of exploration on the property


●
 A clear statement that the property is without known reserves and
the proposed program is exploratory in nature





This Form 10-K/A2 does
not attempt to modify or update any other disclosures set forth in
the Annual Report on Form
10-K/A1 which was filed on August 11,
2016.






























































2








TABLE OF CONTENTS


PART IItem 1.
Business.
4Item 1A.
Risk Factors.
5Item 1B.
Unresolved Staff Comments.
9Item 2.
Properties.
9Item 3.
Legal Proceedings.
13Item 4
Mine Safety Disclosure
13PART IIItem 5
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.
14Item 6.
Selected Financial Data.
16Item 7.
Management’s Discussion and Analysis of Financial Condition
and Results of Operation.
16Item 7A.
Quantitative and Qualitative Disclosures About Market
Risk.
33Item 8.
Financial Statements and Supplementary Data.
34Item 9.
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
35Item 9A.
Controls and Procedures.
36Item 9B.
Other Information.
36PART IIIItem 10.
Directors, Executive Officers and Corporate
Governance.
36Item 11.
Executive Compensation.
40Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
41Item 13.
Certain Relationships and Related Transactions, and Director
Independence.
42Item 14.
Principal Accounting Fees and Services.
43PART IVItem 15.
Exhibits and Financial Statement Schedules.
44








Cautionary Note Regarding Forward-Looking Statements.





This current report on Form 10-K (this “Report”)
contains forward-looking statements. In some cases, forward-looking
statements can be identified by terminology such as
“may”, “should”, “expects”,
“plans”, “anticipates”,
“believes”, “estimates”,
“predicts”, “potential” or
“continue” or the negative of these terms or other
comparable terminology.  These statements are only
predictions and involve known and unknown risks and the risks set
out below, any of which may cause our actual results, levels of
activity, performance or achievements to be materially different
from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.  These risks include, by way of example and
not in limitation:





●
 the uncertainty of
future revenue and profitability based upon our current financial
condition and history of losses;


●
 our lack of
operating history;


●
 we
have no proven and/or probable reserves at the present
time;


●
 risks relating to
our liquidity;


●
 risks related to
the market for our common stock and our ability to dilute our
current shareholders’ interest;


●
 risks related to
our ability to locate and proceed with a new project or business
for which we can obtain funding;


●
 risks related to
our ability to obtain adequate financing on a timely basis and on
acceptable terms; and


●
 other risks and
uncertainties related to our business strategy.





This list is not an exhaustive list of the factors that may affect
any of our forward-looking statements. These and other factors
should be considered carefully and readers should not place undue
reliance on our forward-looking statements.





Forward looking statements are made based on management’s
beliefs, estimates and opinions on the date the statements are made
and we undertake no obligation to update forward-looking statements
if these beliefs, estimates and opinions or other circumstances
should change. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or
achievements.  Except as required by applicable law,
including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform
these statements to actual results.





Unless the context otherwise requires, references in this Report to
“LSM,” the “Company”, “we”,
“us”, “our”, or
“ours” refer to Lode-Star Mining Inc.











3


PART I.





ITEM 1.
BUSINESS





Lode-Star Mining Inc. (formerly International Gold Corp.) was
incorporated in the State of Nevada on December 9, 2004 for the
purpose of acquiring and exploring mineral properties..  Our
principal executive offices are located at 13529 Skinner Road,
Suite N, Cypress, Texas 77429-1775. We also maintain a Canadian
business office at 666 Burrard Street, Suite 600, Vancouver,
British Columbia, Canada V6E 4M8.





On May 12, 2015, International Gold Corp. completed a merger with
its wholly owned subsidiary, Lode-Star Mining Inc., and formally
assumed the subsidiary’s name by filing Articles of Merger
with the Nevada Secretary of State (the “Name
Change”).  The subsidiary was incorporated entirely for
the purpose of effecting the Name Change and the merger did not
affect our corporate structure in any other way.





Mineral Property Interest





Further to a Mineral Option Agreement dated October 4, 2014,
on December 5, 2014, we entered into a subscription
agreement (the “Subscription Agreement”) with Lode Star
Gold Inc. (“LSG”), a private Nevada
corporation, pursuant to which we agreed to issue 35,000,000
shares of our common stock, valued at $230,180, to LSG in exchange
for a 20% undivided beneficial interest in and to the mineral
claims owned by LSG (the “Acquisition”). The mineral
claims, known as the “Goldfield Bonanza Project” (the
“Property”), are located in the State of
Nevada.





The Mineral Option Agreement can be found in our report filed
on Form 8-K on October 9, 2014 and is incorporated by reference,
shown as Exhibit 10.5 to this report. The Subscription Agreement is
filed with this report as Exhibit 10.7.





The execution of the Subscription Agreement was one of the closing
conditions of the Mineral Option Agreement dated
October 4, 2014, (the “Effective Date”) pursuant to
which we acquired the sole and exclusive option to earn up to an
80% undivided interest in and to the Property.  In order
to earn the additional 60% interest in the Property, we are
required to fund all expenditures on the Property and pay LSG an
aggregate of $5 million in cash from the Property’s mineral
production proceeds in the form of a net smelter royalty
(“NSR”). Until such time as we have earned the
additional 60% interest, the NSR will be split 79.2% to LSG, 19.8%
to us and 1% to the former Property owner.





If we fail to make any cash payments to LSG within one year of the
Effective Date, we are required to pay LSG an additional $100,000,
and in any subsequent years in which we fail to complete the
payment of the entire $5 million described above, we must make
quarterly cash payments to LSG of $25,000 until such time as we
have earned the additional 60% interest in the
Property.





The Option Agreement provides that we will act as the operator on
the Property and that a management committee will be formed,
comprised of representatives from us and LSG, with voting based on
each party’s proportionate interest, to
supervise exploration of the Property and approve work
programs and budgets. To the date of this report, no work programs
have been approved and LSG has borne all costs in connection with
operations on the Property. We expect the first work program,
entailing Property-related costs for which we will be responsible,
to be approved in the latter half of 2016.





Given that permitting for operations on the Property is still to be
completed, at the request of our management, LSG granted, by a
letter of agreement dated November 10, 2015, a six month deferment
to June 11, 2016 of the $100,000 payment otherwise due within one
year of the Effective Date (i.e. on October 4, 2015) if we fail to
make any cash payments to LSG.





Change in Officers





As a result of the Acquisition and on the Closing Date, our former
President and Chief Executive officer submitted his resignation and
Mark Walmesley, our Chief Financial Officer, Treasurer and a
director, as well as a director of LSG, was appointed to fill the
resulting vacancies.  Mr. Walmesley is now our President,
Chief Executive Officer, Chief Financial Officer, Treasurer and a
director.





Change in Shell Company Status





Prior to our acquisition of the mineral property interest, we were
a “shell company”
(as such term is defined in
Rule 12b-2 under the Exchange Act)since we were not
generating revenues, did not own an operating business, did not
have any assets other than cash and cash equivalents, and had no
specific plan other than to engage in a merger or acquisition
transaction with an operating company or
business. We have no revenues,
have losses since inception, have no direct operations, and have
been issued a going concern opinion by our auditor. We are relying
upon the sale of securities and loans to fund our operations. We
have no employees and expect to use outside consultants, advisors,
attorneys and accountants as necessary.





4





ITEM 1.
BUSINESS (continued)





Change in Control of Registrant





As a result of the Acquisition, LSG acquired 35,000,000 shares of
our common stock, or approximately 71.2% (currently) of the total
voting power of all of our outstanding voting
securities.  LSG assumed control from the holders of our
issued and outstanding common stock, and in particular our former
president, who owned approximately 24.3% of our common stock prior
to the Closing Date.





Lode-Star Gold Inc. (“LSG”)





LSG was incorporated in the State of Nevada on March 13, 1998 for
the purpose of acquiring exploration stage mineral
properties.  It currently has one shareholder, Lonnie
Humphries, who is the spouse of Mark Walmesley, our President and
Chief Financial Officer.  Mr. Walmesley is also the
Director of Operations and a director of LSG.





LSG acquired the leases to the Property in 1997 and became the
registered and beneficial owner of the Property on September 19,
2009.  Since the earlier of those dates, it has conducted
contract exploration work on the Property but has not determined
whether it contains mineral reserves that are economically
recoverable.





LSG is an exploration stage company and has not generated any
revenues since its inception.  The Property represents
its only material asset.





ITEM 1A.
RISK FACTORS.





You should carefully consider the risks described below before
purchasing our common stock. The following risk factors could have
a material adverse effect on our business, financial condition and
results of operations.





We have a history of operating losses and there can be no assurance
that we can achieve or maintain profitability.





We have a history of operating losses and may not achieve or
sustain profitability.  We cannot guarantee that we will
become profitable.  Even if we achieve profitability,
given the competitive and evolving nature of the industry in which
we operate, we may be unable to sustain or increase profitability
and our failure to do so would adversely affect our business,
including our ability to raise additional funds.





Because our auditors have issued a going concern opinion, there is
substantial uncertainty that we will be able to continue our
operations.





Our auditors have issued a going concern opinion.  This
means that there is substantial doubt that we can continue to
operate over the next 12 months.  Our financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the
amounts of and classification of liabilities that might be
necessary in the event we cannot continue in existence. As
such, if we are unable to obtain new financing to execute our
business plan we may be required to cease our
operations.





The Property may not contain mineral reserves that are economically
recoverable and we cannot accurately predict the effect of certain
factors affecting such a determination.





LSG has not determined if the Property contains mineral reserves
that are economically recoverable.  Exploration for
mineral reserves involves a high degree of risk, which even a
combination of careful evaluation, experience and knowledge, may
not eliminate.  Few properties which are explored are
ultimately developed into producing
properties.  Regardless, LSG is currently in the process
of re-opening its underground working and plans to complete
the first and second phases of its feasibility program, which,
pursuant to the Option Agreement, we are required to fund.
Estimates of mineral reserves and any potential determination as to
whether a mineral deposit will be commercially viable can be
affected by such factors as deposit size; grade; unusual or
unexpected geological formations and metallurgy; proximity to
infrastructure; metal prices which are highly cyclical;
environmental factors; unforeseen technical difficulties; work
interruptions; and government regulations, including regulations
relating to permitting, prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental
protection.  The exact effect of these factors cannot be
accurately predicted. The long term profitability of our operations
will be, in part, directly related to the cost and success of our
exploration and development program.  Substantial
expenditures are required to establish reserves through drilling,
to develop processes to extract the ore and, in the case of new
properties, to develop the extraction and processing facilities and
infrastructure at any site chosen for
extraction.  Although substantial benefits may be derived
from the discovery of a major deposit, we cannot provide any
assurance that any such deposit will be commercially viable or that
we will be able to obtain the funds required for development on a
timely basis.





5





ITEM 1A.
RISK FACTORS (continued)





If the Property is ultimately placed into production, we will
encounter hazards and risks that could result in significant legal
liability.





In the event that we are ultimately able to commence commercial
production on the Property, our operations will be subject to all
of the hazards and risks normally encountered in the exploration,
development and production of gold, including unusual and
unexpected geologic formations, seismic activity, rock bursts,
cave-ins, flooding and other conditions involved in the drilling
and removal of material, any of which could result in damage to, or
destruction of, the mine and other producing facilities, damage to
life or property, environmental damage and possible legal
liability.  Although we plan to take appropriate
precautions to mitigate these hazards and risks by, among other
things, obtaining liability insurance in an amount considered to be
adequate by management, their nature is such that the liabilities
might exceed policy limits, they might not be insurable, or we may
not elect to insure against them due to high premium costs or other
reasons, which could have a material adverse effect upon our
financial condition and results of operations.





We face significant competition in the mineral resource industry
that presents an ongoing threat to the success of our
business.





The mining industry is intensely competitive in all of its phases,
and we will be forced to compete with many companies that possess
greater financial resources and technical facilities than we
do.  Significant competition exists for the limited
number of mineral acquisition opportunities available in our sphere
of operations.  As a result of this competition, our
ability to acquire additional attractive mining properties on terms
we consider acceptable may be adversely affected.





Fluctuating mineral prices may negatively affect our ability to
secure financing or our results of operations.





Our future revenues, if any, will likely be derived from the
extraction and sale of base and precious metals.  The
price of those commodities has fluctuated widely, particularly in
recent years, and is affected by numerous factors beyond our
control including economic and political trends, expectations of
inflation, currency exchange fluctuations, interest rates, global
and regional consumptive patterns, speculative activities and
increased production due to new extraction developments and
improved extraction and production methods.  The effect
of these factors on the price of base and precious metals, and
therefore the economic viability of our business, could negatively
affect our ability to secure financing or our results of
operations.





We are subject to government laws and regulations particular to our
operations with which we may be unable to comply.





We may not be able to comply with all current and future government
environmental laws and regulations which are applicable to our
business.  Our operations are subject to all government
regulations normally incident to conducting business: occupational
safety and health acts, workmen’s compensation statutes,
unemployment insurance legislation, income tax and social security
laws and regulations, and most importantly, environmental laws and
regulations.  In addition, we are subject to laws and
regulations regarding the development of mineral properties in the
State of Nevada.  We are also subject to governmental
laws and regulations applicable to small public companies and their
capital formation efforts.





We are engaged in mineral exploration and are accordingly exposed
to environmental risks associated with mineral exploration and
mining activity.  LSG is currently in the exploration stage
and has not determined whether significant site reclamation costs
will be required on the Property in the future, which we will
likely be responsible for as well.  Although we will make
every effort to comply with all applicable laws and regulations, we
cannot provide any assurance that we will be able to deal with
evolving environmental attitudes and regulations, nor can we
predict the effect of any future changes to environmental
regulations on our proposed business activities.  We only
plan to record liabilities for site reclamation when reasonably
determinable and when such costs can be reliably
quantified.  Other costs of compliance with environmental
regulations may also be burdensome. Our failure to comply with
material regulatory requirements could have an adverse effect on
our ability to conduct our business.  The expenditure of
substantial sums on environmental matters would have a materially
negative effect on our ability to implement our business plan and
could require us to cease operations.





Our business depends substantially on the continuing efforts of our
officers, and our business may be severely disrupted if we lose
their services.





Our future success heavily depends on the continued service of our
officers.  Although we plan to increase the size of our
Board of Directors, appoint additional officers and engage various
consultants as our business grows, if they are unable or unwilling
to continue to work for us in their present capacities, we may have
to spend a considerable amount of time and resources searching,
recruiting and integrating one or more replacements into our
operations, which would severely disrupt our
business.  This may also adversely affect our ability to
execute our business strategy.





6





ITEM 1A.
RISK FACTORS (continued)








Our President’s limited experience managing a
publicly traded company may divert his attention from operations
and harm our business.





Mark Walmesley, our President, Chief Executive Officer, Chief
Financial Officer, Treasurer and director, has no previous
experience managing a publicly traded company and complying with
federal securities laws, including compliance with recently adopted
disclosure requirements on a timely basis.  He will be
required to design and implement appropriate programs and policies
in responding to increased legal, regulatory compliance and
reporting requirements, and any failure to do so could lead to the
imposition of fines and penalties and harm our
business.





We may be unable to attract and retain qualified, experienced,
highly skilled personnel, which could adversely affect the
implementation of our business plan.





Our success depends to a significant degree upon our ability to
attract, retain and motivate skilled and qualified
personnel.  As we become a more mature company in the
future, we may find recruiting and retention efforts more
challenging.  If we do not succeed in attracting, hiring
and integrating such personnel, or retaining and motivating
existing personnel, we may be unable to grow
effectively.  The loss of any key employee,
including members of our management team, and our inability to
attract highly skilled personnel with sufficient experience in our
industry could harm our business.





We may indemnify our officers and directors against liability to us
and our security holders, and such indemnification could increase
our operating costs.





Our Amended and Restated Articles of Incorporation allow us to
indemnify our officers and directors against claims associated with
carrying out the duties of their offices.  Our Bylaws
also allow us to reimburse them for the costs of certain legal
defenses.  Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to our officers,
directors or control persons, we have been advised by the SEC that
such indemnification is against public policy and is therefore
unenforceable.





Since our officers and directors are aware that they may be
indemnified for carrying out the duties of their offices, they may
be less motivated to meet the standards required by law to properly
carry out such duties, which could increase our operating
costs.  Further, if any of our officers and directors
files a claim against us for indemnification, the associated
expenses could also increase our operating costs.





Failure to comply
with theForeign Corrupt
Practices Actcould subject us to
penalties and other adverse consequences.





As a Nevada corporation, we are subject to
theForeign Corrupt Practices
Act, which generally prohibits
United States companies from engaging in bribery or other
prohibited payments to foreign officials for the purpose of
obtaining or retaining business.  Some foreign companies,
including some that may compete with us, may not be subject to
these prohibitions.  Corruption, extortion, bribery,
pay-offs, theft and other fraudulent practices may occur from
time-to-time in the countries in which we conduct our
business.  However, our employees or other agents may
engage in conduct for which we might be held
responsible.  If our employees or other agents are found
to have engaged in such practices, we could suffer severe penalties
and other consequences that may have a material adverse effect on
our business, financial condition and results of
operations.





Current global financial and economic conditions could adversely
impact our operations and financial condition.





Current global financial and economic conditions, while improving,
remain volatile.  Many industries, including the mineral
resource industry, are impacted by these market
conditions.  Some of the key impacts of the current
financial market turmoil include contraction in credit markets
resulting in a widening of credit risk; devaluations and high
volatility in global equity, commodity, foreign exchange and
precious metal markets; and a lack of market
liquidity.  Such factors may impact our ability to obtain
financing on favorable terms or at
all.  Additionally, global economic conditions may cause
a long term decrease in asset values.  If such global
volatility and market turmoil continue, our operations and
financial condition could be adversely impacted.





Risks Related to Ownership of Our Common Stock





Because there is a limited public trading market for our common
stock, investors may not be able to resell their
shares.





There is currently a limited public trading market for our common
stock.  Therefore, there is no central place, such as
stock exchange or electronic trading system, to resell any shares
of our common stock.  If investors wish to resell their
shares, they will have to locate a buyer and negotiate their own
sale.  As a result, they may be unable to sell their
shares or may be forced to sell them at a loss.





7


ITEM 1A.
RISK FACTORS (continued)





We cannot assure investors that
there will be a market in the future for our common
stock.  The trading of securities on the OTCQB is often
sporadic and investors may have difficulty buying and selling our
shares or obtaining market quotations for them, which may have a
negative effect on the market price of our common
stock.  Investors may not be able to sell shares at their
purchase price or at any price at all.





LSG has voting control over matters submitted to a vote of the
stockholders, and it may take actions that conflict with the
interests of our other stockholders and holders of our debt
securities.





We issued 35,000,000 shares of our common stock to LSG on the
Closing Date, and LSG therefore controls approximately 71.2% of the
votes eligible to be cast by stockholders in the election of
directors and generally.  As a result, LSG has the power
to control all matters requiring the approval of our stockholders,
including the election of directors and the approval of mergers and
other significant corporate transactions.





The sale of securities by us in any equity or debt financing could
result in dilution to our existing stockholders and have a material
adverse effect on our earnings.





Any sale of common stock by us in a future private placement
offering could result in dilution to the existing stockholders as a
direct result of our issuance of additional shares of our capital
stock.  In addition, our business strategy may include
expansion through the acquisition of additional property interests
or through business combinations with entities operating in our
industry.  In order to do so, or to finance the cost of
our operations, we may issue additional equity securities that
could dilute our stockholders’ stock ownership.  We
may also pursue debt financing, if and when available, and this
could negatively impact our earnings and results of
operations. If the board of directors issues an additional
class of voting for less than fair value, the value of your
interest in the company will be diluted. We have no present
intention to issue any additional class of voting
securities.





We are subject to penny stock regulations and restrictions and
investors may have difficulty selling shares of our common
stock.





Our common stock is subject to the provisions of Section 15(g) and
Rule 15g-9 of the Exchange Act, commonly referred to as the
“penny stock rules”.  Section 15(g) sets
forth certain requirements for transactions in penny stock, and
Rule 15g-9(d) incorporates the definition of “penny
stock” that is found in Rule 3a51-1 of the Exchange
Act.  The SEC generally defines a penny stock to be any
equity security that has a market price less than $5.00 per share,
subject to certain exceptions.  We are subject to the
SEC’s penny stock rules.





Since our common stock is deemed to be penny stock, trading in the
shares of our common stock is subject to additional sales practice
requirements on broker-dealers who sell penny stock to persons
other than established customers and accredited
investors.  “Accredited investors” are
generally persons with assets in excess of $1,000,000 (excluding
the value of such person’s primary residence) or annual
income exceeding $200,000 or $300,000 together with their
spouse.  For transactions covered by these rules,
broker-dealers must make a special suitability determination for
the purchase of such security and must have the purchaser’s
written consent to the transaction prior to the
purchase.  Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior
to the first transaction, of a risk disclosure document relating to
the penny stock market.  A broker-dealer also must
disclose the commissions payable to both the broker-dealer and the
registered representative and current quotations for the
securities.  Finally, monthly statements must be sent
disclosing recent price information for the penny stocks held in an
account and information to the limited market in penny
stocks.





Consequently, these rules may restrict the ability of broker-dealer
to trade and/or maintain a market in our common stock and may
affect the ability of our stockholders to sell their shares of
common stock.





There can be no assurance that our common stock will qualify for
exemption from the penny stock rules.  In any event, even
if our common stock was exempt from the penny stock rules, we would
remain subject to Section 15(b)(6) of the Exchange Act, which gives
the SEC the authority to restrict any person from participating in
a distribution of penny stock if the SEC finds that such a
restriction would be in the public interest.





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





We do not intend to declare dividends for the foreseeable future,
as we anticipate that we will reinvest any future earnings in the
development and growth of our business.  Therefore, our
stockholders will not receive any funds unless they sell their
common stock, and stockholders may be unable to sell their shares
on favorable terms or at all.








8





ITEM 1A.
RISK FACTORS (continued)





Investors
may face significant restrictions on the resale of their shares due
to state “blue sky” laws.





Each state has its own securities laws, commonly known as
“blue sky” laws, which (1) limit sales of securities to
a state’s residents unless the securities are registered in
that state or qualify for an exemption from registration, and (2)
govern the reporting requirements for broker-dealers doing business
directly or indirectly in the state.  Before a security
is sold in a state, there must be a registration in place to cover
the transaction, or it must be exempt from
registration.  The applicable broker-dealer must also be
registered in that state.





We do not know whether our securities will be registered or exempt
from registration under the laws of any state.  A
determination regarding registration will be made by those
broker-dealers, if any, who agree to serve as market makers for our
common stock.  There may be significant state blue sky
law restrictions on the ability of investors to sell, and on
purchasers to buy, our securities.  Investors should
therefore consider the resale market for our common stock to be
limited, as they may be unable to resell their shares without the
significant expense of state registration or
qualification.





ITEM 1B.
UNRESOLVED STAFF COMMENTS.





None.





ITEM 2.
PROPERTIES.





The Property is located in west-central Nevada (Figure 1), in the
Goldfield Mining District at Latitude 37° 42’, and
Longitude 117° 14’.  The claims comprising the
Property are located in surveyed sections 35 and 36, Township 2
South, Range 42 East, and in sections 1, 2, 11, and 12, Township 3
South, Range 42 East, in Esmeralda County, Nevada.  The
Property is accessible by traveling approximately one-half mile
northeast of the community of Goldfield, along a county-maintained
road that originates at U.S. Highway 95, which runs through
“downtown” Goldfield.  The town of Goldfield,
which is the Esmeralda county seat (population 300), is
approximately 200 air miles south of Reno and 180 air miles north
of Las Vegas. Surface access on the Property is excellent and the
relief is low, at an elevation of approximately 6000
feet.  Vegetation is sparse, consisting largely of
sagebrush, rabbitbrush, Joshua trees and grasses.





























9





ITEM 2.
PROPERTIES. (continued)





Figure 1: Property Location Map











The Property is wholly owned by the company's largest
shareholder and is clear titled. The property consists of 31
patented claims and 1 unpatented millsite claim (Figure 2),
covering a total of approximately 460 acres, or 186
hectares.  Only the single unpatented claim is
administered by the United States Bureau of Land Management, and
annual assessment filings and payments are due on
it.  The patented claims are owned as private land by
LSG, and only annual property taxes must be paid. We have
mineral rights to all the following claims. We have surface rights
on all claims except for a portion of five claims that exist within
the town boundary of Goldfield. See Figure 2, Claim
Map.





10





ITEM 2.
PROPERTIES. (continued)





The
31 patented claims and one unpatented millsite claim are as
follows:





Patented Claims





Claim Name
U.S. Survey No.Combination No. 3
2375August
2916Great Western
2525Gold Coin
2525February
2941Mohawk No. 1
2283Side Line Fraction
2567January
2941Silver Pick
2203Silver Pick Fraction
2203Deserted (1)
2203Pipe Dream
2203North End (2)
2203Hazel Queen
2375Fraction
2844White Horse
2844White Rock
2844Yellow Jacket
2844Firelight
2749Emma Fraction
2360S.E. 2/3 Red King (more or less)
2361S.E. 1/2 (Cornishman)
2750Kewana #3
2565Blue Jay
2375Combination No. 1 Claim (3)
2375Combination No 2 Claim (4)
2844 (19/24th interest)Omega
2844 (19/24th interest)Apazaca
2844 (19/24th interest)Alpha
2844 (19/24th interest)Jim Fraction
4096 (19/24th interest)O.K. Fraction
2560 (3⁄4 of 1⁄2 interest)





Notes:





(1)
 Excluding the upper 200 feet from surface of the north 1⁄2 of
such claim (the “Deserted Excluded Zone”). We may, in
our sole and unfettered discretion, by written notice to LSG at any
time during the term of the Option Agreement, opt to include the
Deserted Excluded Zone in the Property.





(2)
 Excluding the upper 200 feet from surface of the east 1⁄2 of
such claim (the “North End Excluded Zone”). We may, in
our sole and unfettered discretion, by written notice to LSG at any
time during the term of the Agreement, opt to include the North End
Excluded Zone in the Property.





(3)
 Includes all depths of the north 1⁄2 of such claim along with
depths beneath 380 feet on the south 1⁄2 of such
claim.





(4)
 Includes all depths of the south 1⁄2 of such claim along with
depths beneath 380 feet on the south 1⁄2 of such
claim.





Unpatented Claims





Claim Name
Nevada Mining Claim (NMC) No.Troublemaker
1034313





The
claims include any and all contracts, easements, leases and
rights-of-way affecting or appurtenant thereto.





The fees and maintenance of the claims are currently being paid by
the property's owner Lode-Star Gold, INC. The annual fee for
maintaining all the claims is under $1,500. A map of the claims is
included in Figure 2.





11





ITEM 2.
PROPERTIES. (continued)





Figure 2: Claim Map














12





ITEM 2.
PROPERTIES. (continued)





Current
Infrastructure:





All
properties, claims, buildings, equipment, and supplies are owned by
the Company's largest share holder Lode-Star Gold, INC.. The
Company has free access to utilize and manage all the above noted
items.





The
property is immediately adjacent to the historic gold producing
town of Goldfield, NV which is the county seat for Esmeralda
County. Water, electricity and other sundry needs such as
restaurants, lodging, minor medical needs, fire station, police,
are within 1 mile of the property.





The
Company manages operations from a 6,000 sq. ft. office and
warehouse facility complete with showers and laundry amenities. Two
residential trailer sites are immediately adjacent to this building
for crew needs.





The
property has one working shaft, the February Premier, that has
access to the 300 ft level which has approximately 1/2 mile of
ventilated drift. Underground work has identified 2 high-grade
gold-bearing zones which the company plans to further explore.
Given that the most prudent exploration must take place
underground, the company, through its largest shareholder is
applying for a "Surface Separation Facility through the Nevada
Department of Environmental Protection." The program that we
envision undertaking in the first half of 2017 includes the mining
of approximately 10,000 tons of non NI 43-101 compliant gold
mineralization at an approximate grade of .9 ounces per ton. The
estimated grade is based on historic drilling work done by LSG, for
which the 1.5 inch core samples were consumed by assay
requirements. In order to provide adequate sample weights to the
assaying lab, the entire core was processed for individual samples.
While we have encountered several additional high-grade drill
anomalies throughout the property, it is important to note that we
have no proven and/or probable reserves at the present time and
therefore the program is exploratory in nature.





The
property has two operating water monitoring wells (completed April
15, 2016) that are mandatory for the Company to receive a water
pollution control permit. Part of the permitting application is for
the allowance of the company to store its waste rock underground.
As for the mineralized material, the property has no milling on
site and must rely on at third party to receive it and tombstone
its tailings. The Company is in the final stages of negotiations
and the necessary preliminary modeling, assay and permitting work
required by its lead candidate to complete this processing circuit.
Once we have completed this circuit the company is scheduled to
file for its permit.





100%
of the permitting cost, approximately $200,000 to date, has been
borne by LSM's largest shareholder Lode-Star Gold INC. The budget
for this exercise is $250,000. Once permitting is completed further
estimated costs are detailed in Item 7.





ITEM 3.
LEGAL PROCEEDINGS.





We are not a party to any pending legal proceeding which management
believes is likely to result in a material liability and no such
action has been threatened against us, or, to the best of our
knowledge, is contemplated.





ITEM 4.
MINE SAFETY DISCLOSURES.





Not applicable.






































13





PART II





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





Our stock is quoted under the symbol “LSMG” on the
OTCQB marketplace of the OTC Markets Group. OTCQB companies
must verify via an annual OTCQB Certification, signed by the
company CEO or CFO, that their company information is current,
including information about a company’s reporting status,
company profile, information on management and boards, major
shareholders,law
firms,transfer agents, and IR / PR firms.





The high and low bid quotations of our common stock for the periods
indicated below are as follows:





2015Quarter Ended
High
LowDecember
31
$0.04
$0.01September
30
$0.0275
$0.015June
30
$0.05
$0.02March
31
$0.11
$0.03





2014Quarter Ended
High
LowDecember
31
$0.10
$0.01September
30
$0.15
$0.03June
30
$0.55
$0.03March
31
$0.20
$0.03





These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not represent actual
transactions.





The market for our common stock has been sporadic and there have
been significant periods during which there were few, if any,
transactions in the common stock and no reported quotations.
Accordingly, reliance should not be placed on the quotes listed
above, as the trades and depth of the market may be limited, and
therefore, such quotes may not be a true indication of the current
market value of the Company’s common stock.





On December 31, 2015, we had 86 shareholders of record of our
common stock.





Capitalization





On November 11, 2015, our board of directors and stockholders
holding a majority of our voting shares authorized the following
actions:


●
 Adoption
of an omnibus equity incentive plan for directors, officers, and
consultants;


●
 Adoption
of Amended and Restated Articles of Incorporation filed with the
Secretary of State of Nevada to effect the following:


■
 authorize our board
of directors to change our corporate name to a name selected by our
directors;


■
 establish corporate
codes and committees of the board of directors;


■
 increase the number
of shares of capital stock we are authorized to issue;
and


■
 authorize the
issuance of preferred stock with preferences, limitations, and
relative rights designated by our board of directors.


■
 authorize
indemnification agreements with directors and senior officers.
and


■
 adopt a serial
board of directors and other measures that are intended to be
anti-takeover provisions.





14





ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(continued)





On November 24, 2015, the board of directors authorized the
following changes to our capitalization:


Our authorized capital was increased from 100,000,000 shares of
common stock with a par value of $0.00001 per share to 500,000,000
shares of capital stock, divided into 480,000,000 shares of common
stock with a par value of $0.001 per share, and 20,000,000 shares
of preferred stock with a par value of $0.001 par value per share.
No shares of preferred stock have been issued to date.





There are no present plans, understandings or agreements, and we
are not engaged in any negotiations that will involve the issuance
of capital stock. However, the board of directors believes it
prudent to have shares of common and preferred stock available for
such corporate purposes as the board of directors may from time to
time deem necessary and advisable including, without limitation,
acquisitions, the raising of additional capital and assurance of
flexibility of action in the future.





We
believe that the Amended and Restated Articles of Incorporation
will provide a greater measure of flexibility and simplicity in
corporate governance and will increase the marketability of our
securities. Nevada has adopted a modern code governing the
formation and operation of corporations. In addition, the Nevada
law provides for greater flexibility in raising capital and other
corporate transactions. Nevada imposes no franchise taxes or
corporate income taxes on corporations that are incorporated in
Nevada.





Securities Authorized for Issuance under Equity Compensation
Plans





As part of the November 24, 2015 changes to our capitalization, we
reserved 10,000,000 shares of common stock for issuance under a new
2016 Omnibus Equity Incentive Plan. The purpose of the Plan is to
maintain our ability to attract and retain highly qualified and
experienced directors, officers and consultants and to give such
directors, officers and consultants a continued proprietary
interest in our success. The Plan is posted on our website at
www.lodestarmining.com and is
available to any stockholder by request to us. To date, 1,469,825 shares of common stock and
warrants to purchase 3,336,060 shares of common stock have been
issued under the Equity Incentive Plan. None of those warrants have
been exercised.





Immediately upon the grant of any award, the number of shares that
may be issued or optioned under the plan will be increased such
that the total number of shares issuable under the plan and
reserved for issuance upon exercise of outstanding options,
warrants or conversion of shares of preferred stock will equal 10%
of the total number of issued and outstanding shares. Such increase
in the number of shares subject to the plan shall occur without the
necessity of any further corporate action of any kind or
character.





Dividends





We have not declared any cash dividends, nor do we have any plans
to do so. Management anticipates that, for the foreseeable future,
all available cash will be needed to fund our
operations.





Penny Stock





Our common stock is subject to the provisions of Section 15(g) of
the Exchange Act and Rule 15g-9 thereunder, commonly referred to as
the “penny stock rule”.  Section 15(g) sets
forth certain requirements for transactions in penny stock, and
Rule 15g-9(d) incorporates the definition of “penny
stock” that is found in Rule 3a51-1 of the Exchange
Act.  The SEC generally defines a penny stock to be any
equity security that has a market price less than $5.00 per share,
subject to certain exceptions.  We are subject to the
SEC’s penny stock rules.





Since our common stock is deemed to be penny stock, trading in the
shares of our common stock is subject to additional sales practice
requirements on broker-dealers who sell penny stock to persons
other than established customers and accredited
investors.  “Accredited investors” are
generally persons with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their
spouse.  For transactions covered by these rules,
broker-dealers must make a special suitability determination for
the purchase of securities and must have the purchaser’s
written consent to the transaction prior to the
purchase.  Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior
to the first transaction, of a risk disclosure document prepared by
the SEC relating to the penny stock market.  A
broker-dealer also must disclose the commissions payable to both
the broker-dealer and the registered representative and current
quotations for the securities.  Finally, monthly
statements must be sent disclosing recent price information for
penny stocks held in an account and information to the limited
market in penny stocks.  Consequently, these rules may
restrict the ability of broker-dealer to trade and/or maintain a
market in our common stock and may affect the ability of our
stockholders to sell their shares.








15





ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(continued)





Recent Sales of Unregistered Securities





During the year ended December 31, 2015, we had no cash
subscriptions for shares of its common stock.





On November 11, 2015, we entered into a one year agreement to
obtain assistance in conducting business strategy and
communications planning, public financial disclosure reporting, and
various matters in connection with directors and other
professionals as needed by us. In consideration for the services to
be provided, we granted the consultant 1,469,825 shares of common
stock. Those shares were issued on December 11, 2015 and were
valued at $29,397, based on market price at the date of the
agreement. In addition, the consultant was granted warrants with a
five year term, commencing the date of the agreement, to purchase
3,336,060 shares of common stock at a price of $0.02 per share,
including a cashless exercise option. The warrants were valued at
$66,721 using the Black-Scholes option pricing model.





The shares and warrants issued to the consultant were offered and
sold in a private transaction in reliance upon the exemption from
registration pursuant to Section 4(2) of the Securities
Act.  Our reliance on Section 4(2) of the Securities Act
was based upon the following factors: (a) the issuance of the
securities was an isolated private transaction by us which did not
involve a public offering; (b) there was only one offeree; (c) we
did not engage in any subsequent or contemporaneous public
offerings of securities; (d) the securities were not broken down
into smaller denominations; and (e) the negotiations for the sale
of the stock took place directly between the consultant and
us.





On January 9, 2015, we reached agreements in connection with the
loans to us of $24,696 (CAD $28,650) and $1,767 (CAD $2,050)
whereby the loan amounts were to be converted to our common shares
at a price of CAD $0.05, to result in the issuance of 573,000 and
41,000 common shares respectively. Those shares were issued on
April 6, 2015.





On January 9, 2015, an agreement was reached to modify the terms of
a loan to us such that $26,750 of accrued interest together with a
premium was to be converted to our common shares at a price of
$0.05 per share, to result in the issuance of 535,000 common
shares. Those shares were issued on April 6, 2015.





Other than as described above, or as disclosed in previous reports
filed on Forms 10-Q, 10-K or 8-K, we have not issued any equity
securities that were not registered under the Securities Act within
the past three years.





ITEM 6.
SELECTED FINANCIAL DATA.





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





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





The following discussion and analysis of our financial condition
and results of operations should be read in conjunction with our
audited financial statements and related notes appearing elsewhere
in this report. In addition to historical financial information,
the following discussion includes a number of forward-looking
statements that reflect our plans, estimates and our current views
with respect to future events and financial performance. See
“Cautionary Note Regarding
Forward Looking Statements” above for a discussion of forward-looking
statements and the significance of such statements in the context
of this Report. It is important to note, while we have
encountered several high-grade drill anomalies throughout the
property we have no proven and/or probable reserves at the present
time.





Plan of Operations





We anticipate that we will require approximately $2 million to
pursue our plan of operations over the next 12 months, as detailed
below:





Previous
Exploration Work, Mineralization, State of
Exploration.





The
LSG property is wholly owned by LSMs largest shareholder and clear
titled. The property consists of 31 patented claims on
approximately 460 acres. LSG, over the past 15 years and
continuing, has spent over $5 million on underground rehab of
approximately 1/4 mile of drift at the 300ft sub surface level. LSG
also executed 22 surface core drill holes for a total of 10,400ft
and 152 underground core drill holes for a total of 23,000ft. A 1%
NSR in the favor of the original property owner
exists.





16





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





It
is important to note the following sample preparation and quality
controls used by LSG and ICN:





Lode-Star
Gold drill hole core sampling and analytical
protocol:


All
drill core samples were prepared and delivered to ALS Minerals in
Reno by Tom Temkin. Individual sampled intervals varied from
one-to-five foot lengths, based on geologic parameters, and
included 100% of core intervals. No core splitting was conducted.
No duplicate samples or standards were introduced other than those
inserted and utilized by ALS for their internal quality control.
Lab preparation of Individual samples included crushing and
grinding to minus 200 mesh, followed by a 1-ton assay for gold. All
samples that initially assayed over 1.0 opt Au were systematically
re-assayed.





ICN
drill hole core and Rotary RC sampling and analytical
protocol:





All
drill core samples were prepared by ICN personnel and either
delivered to the assay lab or were picked up on-site by lab
personnel. Rotary RC chip drilling samples were collected on-site
and transported to Reno by the respective labs The labs used
included ALS Minerals and American Assay Lab. Core was sawn by ALS
Minerals and/or ICN personnel. Individual core sampled intervals
varied from one-to-five foot lengths, based on geologic parameters,
and included one-half of the original core material. Rotary RC
samples were taken at 5-foot intervals entirely. Quality control
for all samples included a protocol of inserting duplicate samples,
blanks, and known standards, at repeating intervals so as to
maintain 08% check sampling. Lab preparation of Individual samples
included crushing and grinding to minus 200 mesh, followed by a
1-ton assay for gold. All samples that initially assayed over 1.0
opt Au were systematically re-assayed.





Underground
work has identified 2 high-grade gold-bearing zones (see the small
yellow stars in Fig. 1. and see Fig. 2.) that can support mine
development utilizing the Company's current infrastructure. The
property is being permitted for production and should be mine ready
by early 2017. It is LSM's intention to then start mining the
property. Much of the property remains under explored and it is our
belief that the district's high-grade, million ounce ore zones
repeat themselves. Further surface and underground exploration work
needs to executed. LSM plans to explore through production and
chase its known high-grade vein zones.







































































17





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





The
white stars below
show the historic zones where roughly 1 million ounces per star
were produced during the period 1904-1918 (See Figure 1a. below):
Last year of production by Goldfield Consolidated, (Source: Albers
and Stewart, 1972). The large yellow stars indicate
areas we need to explore to possibly repeat the past high-grade
production intercepts. The yellow lines are known
geophysical interpreted structures. The small yellow stars are the
immediate production zones targeted by us for development at an
estimated cost of $2 million.





Fig. 1. - The red vein zones
contained in the aerial photo below depict the historic mined
veins





18





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





HISTORIC
PRODUCTION





Figure
1a. - Production from Goldfield Mining District





Year
Ore (tons)
Gold (ounces)
● Silver
(ounces)1903

3,419
● 2871904
8,000
113,293
● 19,9541905
11,700
91,088
● 8,5891906
59,628
339,890
● 156481907
101,136
406,756
● 71,7101908
88,152
236,082
●
30,8231909
297,199
453,915
●
33,1641910
339,219
538,760
●
117,5981911
390,431
497,637
●
126,4061912
362,777
301,848
● 125,7361913
364,785
242,815
● 153,9841914
367,166
227,612
● 129,8301915
418,935
212,337
● 165,3051916
383,456
128,250
● 129,7811917
339,488
91,917
● 78,1841918*
264,237
58,685
● 90,5601919
16,435
35,810
● 39,9121920
6,571
7,536
● 6,0811921
1,903
7,101
● 1,7611922
5,619
12,773
● 5,7551923
3,137
4,471
● 3,6131924
7,352
4,336
● 3,9821925
2,773
5,053
● 2,3691925-1960
129,705
168,616
● 88,967Total
3,958,104
4,190,000
●
1,450,000





*
Last year of production by Goldfield
Consolidated


SOURCE: Albers and
Stewart, 1972














19


ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Geologic
Structure


The
geologic model that made Goldfield successful still exists today.
Fig. 1b. below shows the Goldfield high-grade gold zones pool which
leads to our conclusion that more multi-million ounce intercepts
are possible.





Fig.
1b. Geologic Structural Model








20





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Fig.
2. - Church and Red Hills Vein Zones are the two high-grade
gold-bearing zones that we expect to yield high-grade gold
concentrations.








Red
Hills Vein System - Priority 1.





Two
major vein zones exist in the Red Hills area, including the Stope
veins and the Decline vein (see Fig. 4 on the following page). The
respective names refer to the nature of brief mining conducted
previously in these areas. As further defined through LSG's
drilling to date, the area referred to as the Stope Veins is
comprised of two intersecting vein-filled faults, including the
West vein zone and the East vein zone (Fig. 3 below). The average
width of each of these vein zones is approximately three feet.
Drilling to date suggests the West vein zone to be essentially
vertical and near parallel to the East vein zone. The Decline vein
zone is also shown on Fig. 3, as a north-northwest trending zone.
Drilling on the Decline vein zone indicates a generally westerly
dipping feature with an average width of several feet. To date,
drilling has yielded very encouraging gold values within each of
the vein zones described above. As shown on Figures 4 and 5 on the
following page, several high-grade intercepts have been encountered
with values up to 75.0 oz/ton gold (East vein zone). Drilling
indicates each of these vein zones to be open along strike and at
depth.





A
3-D depiction, (Fig. 3 below), of the three identified vein zones
within the Red Hills shows the complex nature of their intersecting
relationship. This complex intersection of the three vein
components provides several locations where high-grade gold
concentrations are identified. Two readily obvious targets where
high-grade gold in excess of 1.0 ounce of gold per ton has been
intersected is shown on Figure 3 with dashed outlines. The drill
holes and actual values have been omitted for sake of clarity.
Additionally, each of these vein zones appear to be open either to
the north or to the south.





21





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Fig.
3. - 3D Section of the Red Hills Vein Zones



































22





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Fig. 4. - Plan View of Red Hills Vein
Zones
































23





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Fig. 5 - Red Hills Vein Zones Cross Section
3370N





Red
Hills Stope Zone Summary





The
drilling of this resource area was performed by LSG from 2000 -
2006 and assaying was performed by ALS Chemex. All activity was
performed prior to the company's need to have the drilling be
resource NI 43-101 compliant. We assume the zone could produce
10,000 ounces of AU. Historic underground mining was executed by
chasing veins that yielded pockets of high grade gold production.
It is LSM's intention to follow the same method and chase its known
high-grade gold-bearing veins. LSM'S initial mining stage in the
Red Hills area will extract mineralized material from the currently
exposed Stope Vein Zone, and the Decline Vein Zone on the 300-ft
mine level. Mining dimensions in the Stope Zone are expected to be
an average of 4 to 10 feet wide, approximately 80 feet upwards and
100 feet along strike. The mining in the Decline will achieve
mineralized material extraction while developing access to lower
levels. Eventually the gold mineralization below the 300 level in
both the Stope and Decline Vein Zones will be removed through the
development of a downward spiral ramping approach, ultimately
accessing mining depths to approximately the 450-ft mine
level.





Church
Vein Zone - Priority 2.





Based
on the success and encouragement realized through drilling
conducted by Trafalgar in 1982 and Westley in 1985, and further
success through follow-up drilling by LSG and ICN to date, a vein
zone measuring up to 40 feet in width and trending at least 600
feet north-northeasterly, exists immediately west of the Church
shaft (fig. 6 below).





As
shown on fig. 6, our interpretation of drilling to date indicates
this vein zone, which is comprised of numerous individual veins up
to several inches in width each, to be a steeply westerly-dipping
feature, with several intercepts of high-grade gold exceeding 1.0
ounce of gold per ton. Areas highlighted in red on figures 6 and 7
display interpreted orientation of repeated vein sets based on
drill intercepts. Figure 6 also shows the high priority drill
targets that we expect to yield additional high-grade gold
concentrations in the Church Vein zone. The nearly 200-foot
vertical interval between the 100-level gold mineralization and the
300-level gold mineralization is a high priority target, as are the
extensions to the north and south, and down-dip from the 300-level
workings.





24





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Fig. 6 - Church Vein Zones and Decline Vein
Zone





Figure 7 - Cross Section of Church Vein Zone at Section
3555





25





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





During 2011, ICN (a previous operator of the
property) drilled 26 core holes for a total of 1,767 metres and 63
RC holes for a total of 8,375 metres.(See press release dated
August 2011). The core holes were drilled in the Church Zone. Per
ICN's press release highlights of the better holes
included:





ICN's
2011 Church Zone Core Hole Drilling Highlights:


●
 Hole ICN-003 intersects 45.6 metres of 96.3 g/t
Au, including2.90
metres of 1,454.3 g/t AU.


●
 Hole ICN-013 intersects 14.9 metres of 164.5 g/t
Au, including
5.5 M @ 445.2 g/t
Au.


●
 Hole ICN-014 intersects 12.0 metres of 222.6 g/t
Au, including
2.9 m @ 918.0 g/t
Au.





Hole
ID
Azimuth
Angle
TD
From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Au
(oz/t)ICN-001
vertical
-
197.9
51.5
74.7
23.2
10.50including


59.8
61.6
1.83
119.380.5
123.2
42.7
1.40ICN-002
vertical
-
107.9
36.3
45.4
9.1
4.08ICN-003
vertical
-
121.6
16.9
62.5
45.6
96.3
3.09including


16.9
19.8
2.90
1454.3
46.75and


19.8
62.5
42.7
4.18ICN-004
270
-60
79.0
22.1
63.0
40.9
1.43ICN-008
90
-65
137.2
93.1
98.5
5.3
27.5including


94.5
95.3
0.8
183.6ICN-010
----
-90
46.6
9.3
18.9
9.6
2.89ICN-013
280
-45
40.2
24.1
39.0
14.9
164.5
5.29including


26.8
32.3
5.5
445.2
14.31ICN-014
90
-45
38.4
25.2
37.20
12.0
222.6
70.15including


25.2
28.0
2.9
918.0
29.52and


28.0
37.2
9.1
2.32ICN-015
105
-70
119.8
52.7
115.7
63.0
1.75ICN-018
97
-70
137.2
46.6
72.0
25.3
4.10including


56.4
59.5
3.0
17.1ICN-023
----
-90
91.9
46.8
78.2
31.4
2.73including


63.7
65.5
1.8
37.7ICN-024
90
-73
69.5
17.5
36.0
18.4
4.47





Permitting,
Toll milling and Site preparation





Our
primary objective remains the completion of our mine permitting
process. This entails having a toll milling agreement with an
existing milling operation to handle processing of our mineralized
material but also the tomb-stoning of the tailings from that
mineralized material. The Company is in the advanced stages of
discussions with its leading candidate and expects to reach an
agreement during the 1st quarter of 2017.





In
late October of 2016 the Company's largest shareholder Lode-Star
Gold, INC hired four personnel to initiate site preparation of its
surface facilities in anticipation of filing a Notification of
Commencement with both the State of Nevada and MSHA agencies in
order to reoccupy its mine workings.








26





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Permitting





Unique to our permitting is the proposed underground area of work
named the Red Hills Stope Zone. It is 150 feet above the 450 foot
deep water table, making the mine essentially a dry
mine.





The mine’s 300 foot level workings has pockets of unused
volume where our potentially acid generating waste rock can be
stored. This means no waste rock will come to the surface and LSM
will avoid, for the short-term, the expense of having to build and
maintain a surface storage facility.





We are hopeful that the two aforementioned mitigating circumstances
will make our permitting process more rapid and therefore, the
costs of execution and infrastructure improvements will be kept at
a minimum.





Permitting
costs to date are approximately $200,000 and are anticipated to
total $250,000.





In
addition to the permitting costs the Company expects its 1 year
development costs to come in as follows:





Site
and Surface Preparation
$100,000Equipment
and Mining Materials
$500,000Underground
Rehab & Preliminary Mine Development
$110,000Ore
Grade Control
$50,000Red
Hills Vein Zone Work
$270,000General
Corporate and Administration Fees
$720,000





Funding





We do not currently have sufficient funds to carry out our entire
plan of operations, so we intend to meet the balance of our cash
requirements for the next 12 months through a combination of debt
financing and equity financing through private
placements.  Currently we are active in contacting
broker/dealers regarding possible financing arrangements; however,
we do not currently have any arrangements in place to complete any
private placement financings and there is no assurance that we
will be successful in completing any such
financings.





If we are unsuccessful in obtaining sufficient funds through our
capital raising efforts, we may review other financing options,
although we cannot provide any assurance that any such options will
be available to us or on terms reasonably acceptable to
us. Further, if we are unable to secure any additional
financing then we plan to reduce the amount that we spend on our
operations, including our management-related consulting fees and
other general expenses, so as not to exceed the capital resources
available to us. Regardless, our current cash reserves and
working capital will not be sufficient for us to sustain our
business for the next 12 months, even if we decide to scale back
our operations.





Going Concern





Our auditors have issued a going concern opinion. This means that
there is substantial doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional
capital to pay our expenses. This is because we have not generated
any revenues to date and we cannot currently estimate the timing of
any possible future revenues. Our only source for cash at this time
is investments by others in our common stock, or
loans.





Intellectual Property





We do not own any intellectual property and we have not filed for
any protection of our trademark.





Personnel





We have no employees. Our president and CEO, Mark Walmesley,
receives no compensation for his services. We expect to continue to
use outside consultants, advisors, attorneys and accountants as
necessary.





Robert Baker, our former Corporate Secretary and Director, resigned
from his positions with us effective April 17, 2015. Mr. Baker was
previously our President and CEO.





27





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





On January 19, 2015, Thomas Temkin was appointed as Chief Operating
Officer and to the Board of Directors. Mr. Temkin is a Certified
Professional Geologist and a Qualified Person under National
Instrument (NI) 43101, with more than 38 years of experience in the
mining industry, primarily in exploration in the Western United
States. He is currently a consulting geologist working with LSG.
Mr. Temkin has been associated with LSG and the Property for over
15 years and has been instrumental through its entire exploration
program to date.





On April 22, 2015, Pam Walters was appointed as our Corporate
Secretary to replace Robert Baker. Ms. Walters has been associated
with the mining industry for over 25 years and has managed the
corporate finance and business operations of LSG and its
owners.





Other than our three officers, who currently receive no
compensation from us, we have no employees. We plan to rely on the
efforts of our officers and directors, as well as a number of
independent consultants, to manage our
operations.  However, we may hire workers on a contract
basis from time to time as the need arises.





Government Regulations





We plan to engage in mineral exploration and are accordingly
exposed to environmental risks associated with mineral exploration
activity.  LSG is currently in the exploration stage on
the Property and, pursuant to the Option Agreement, once formal
work plans are mutually agreed between us and LSG, we will be the
operator.





In general, in Nevada, no government permits are required on mining
claims for exploration activities which do not involve the use of
powered equipment.  Any disturbance of existing land and
vegetation by powered means will generally require a permit which
will specify that after work is completed land be re-contoured to
the original surface and be seeded with native plant
species.  On unpatented claims with federally-owned
surface, a “Notice of Intent” must be filed with the
BLM for all activities involving the disturbance of five acres (two
hectares) or less of the surface.  A Notice of Intent
will include details on the company submitting the notice, maps of
the proposed disturbance, equipment to be utilized, the general
schedule of operations, a calculation of the total disturbance
anticipated, and a detailed reclamation plan and
budget.  A bond will be required to ensure reclamation
and the amount will be determined by the calculated acreage being
disturbed.  The notice does not have an approval process
associated with it but the bond calculation does have to be
approved with a letter from the BLM before work can
proceed.  It is not necessary to file a Notice of Intent
prior to work on land with privately owned surface.





Measurement of land disturbance is cumulative, and once five acres
total has been disturbed on one project, a “Plan of
Operations” must be filed and approved by the BLM before
additional work can take place.  This too requires a cash
bond along with a reclamation plan.





LSG is not required to file a Notice of Intent for the Property
with the BLM; instead, it is required to file one with the
Department of Environmental Protection of the State of Nevada
(NDEP), since the only portion of the Property that has
publicly-owned surface rights is that which overlaps the Goldfield
town limits. This form of notice includes the same information as
the BLM Notice of Intent except that a detailed reclamation plan,
budget and bond are not required.  The notice also has a
very informal approval process associated with it.





LSG is currently operating under a Notice of Intent filed with the
NDEP and dated January, 2011.  This is an open-ended
permit that does not require bonding for reclamation and allows for
a total of five acres of disturbance.  We do not have any
pending Notices of Intent.





To the best of our knowledge, there are no existing environmental
liabilities on the Property.  A detailed environmental
investigation has not been conducted.


28





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Results of Operations





The following summary of our results of operations should be read
in conjunction with our restated audited financial statements for
the year ended December 31, 2015 which are included with this
Report. See “Cautionary Note Regarding Forward Looking
Statements” above for a discussion of forward-looking
statements and the significance of such statements in the context
of this Report.





Revenues





Year
Ended December 31
Increase/(Decrease)2015 -
Restated
2014
Amount
PercentageRevenue
$-
$-
$-
-Operating
Expenses
390,796
169,665
221,131
130%Operating
Loss Before Other Income (Expense)
(390,796)
(169,665)
(221,131)
130%Other
Income (Expense)
(20,525)
51,248
(71,773)
(140%)Net
Loss
$(411,321)
$(118,417)
$(292,904)
247%





We recorded a net loss of $411,321 for the year ended December 31,
2015, have an accumulated deficit of $1,412,024 and have had no
operating revenues since our inception on December 9, 2004. The
possibility and timing of revenue being generated from our mineral
property interest is uncertain.





Expenses





Our expenses for the years ended December 31, 2015 and 2014 are
outlined below:





Year
Ended December 31
Increase/(Decrease)2015 -
Restated
2014
Amount
PercentageConsulting
services
$121,409
$60,653
$60,756
100%Corporate
support services
12,759
2,594
10,165
392%Interest,
bank and finance charges
20,525
10,015
10,510
105%Mineral
option fees
123,913
-
123,913
-Office,
foreign exchange and sundry
10,136
(913)
11,049
1,210%Professional
fees
94,783
92,861
1,922
2%Transfer
and filing fees
27,796
14,470
13,326
92%Total
Operating and Other Expenses
$411,321
$179,680
$231,641
129%





Consulting services





Approximately
$25,000 was incurred in 2015 for consulting services to maintain a
solid corporate and marketing presence in Vancouver, Canada. This
was required as Vancouver is a major Canadian centre for the mining
industry, the majority of our shareholders (other than LSG) are
located in Canada, and our CEO is now located in Houston, Texas. In
addition, a consulting agreement was entered into in 2015 for a
range of business development services, accounting for
approximately a further $96,000 in consulting services costs. The
2014 consulting expense was comprised of amounts paid to our former
President and CEO under the terms of a consulting agreement which
was terminated after July, 2014.





Corporate support services





Approximately
$5,000 was incurred with our provider of corporate support services
in Vancouver, compared to approximately $3,000 in 2014, with the
increase being due to a higher level of activity related to
regulatory filings and share issuances in 2015. In addition, $8,000
was incurred for services from the Depository Trust Company in
2015, with no equivalent in the prior year.





Interest, bank and finance charges





The
increase in interest expense in 2015 was due to a net increase of
approximately $206,000 in interest-bearing loans during the
year.





29





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Mineral option fees





Approximately
$124,000 of mineral option fees were payable at December 31, 2015
under the terms of our Mineral Option Agreement with LSG. No such
fees were due under the terms of that agreement at December 31,
2014.





Office, foreign exchange and sundry





Key
items that resulted in the year over year increase in this expense
category were approximately $2,000 for licenses and permits to the
State of Nevada ($Nil in 2014) in connection with our activities
related to our mineral property interest located there, and
approximately $8,000 related to tradeshows, including accommodation
and travel ($Nil in 2014).





Transfer and filing fees





Transfer
agent fees increased approximately $3,000 in 2015 compared to the
prior year, due mainly to there being four separate share issuances
in 2015 versus one issuance in 2014. In addition, a $10,000 fee was
required to be paid to OTC Markets Group in order to have our stock
continue to be designated as trading on the OTCQB marketplace and
to subscribe to certain OTC Markets Groups’ services. This is
now an annual requirement, but there was no equivalent in
2014.





Assets and Liabilities





Balance Sheet items with notable year over year differences are as
follows:





December
31
Change2015 -
Restated
2014
Amount
PercentageCash
$12,456
$5,372
$7,084
132%Prepaid
fees
$3,217
$-
$3,217
-Accounts
payable and accrued liabilities
$14,302
$38,397
$(24,095)
(63%)Due
to related parties
$495,384
$139,353
$356,031
255%Loans
payable
$76,180
$135,825
$(59,645)
(44%)Additional
Paid-In Capital
$1,070,064
$922,215
$147,849
16%





·
 Cash
increased due to the amount of cash
provided by loans being approximately $7,000 higher than the amount
of cash used by operating activities.





·
 Prepaid fees
increased due to a $20,000 retainer
for legal services being paid in 2015, of which approximately
$17,000 was expensed and included in accrued liabilities for
services incurred during the year.





·
 Accounts payable and
accrued liabilities decreased
mainly due to the following items:


°
 Legal
fees payable increased approximately $3,000, primarily due to
advice required in 2015 with respect to filing of US tax
returns


°
 Accounting
and audit fees payable decreased approximately $6,000, primarily as
a result of 2014 balances of approximately $12,000 due to our
previous auditors being paid off, offset by 2015 accruals of $4,000
for our new auditors and approximately $2,000 for an accounting
consultant


°
 Fees
due to our former president and CEO of approximately $15,000 were
paid off in 2015


°
 A
total of approximately $6,000 in 2014 payables, comprised of IT
consulting services, Corporate support services, and miscellaneous
expenses due to our current CEO were paid off in 2015.





·
 Due to related
parties increased due to the
following:


°
 the
accrual of mineral option fees due to LSG totaling approximately
$124,000;


°
 net
cash loan advances from related parties of approximately
$167,000;


°
 accrued
loan interest of approximately $12,000, and


°
 expenses
(net of foreign exchange) paid by a related party on our behalf of
approximately $52,000








30





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





·
 Loans payable
decreased due to the
following:


°
 accrued
interest of approximately $7,000, offset by


°
 shares
issued for debt totaling approximately $26,000;


°
 shares
issued for accrued loan interest totaling approximately $27,000;
and


°
 repayment
of loan principal totaling approximately $14,000,





·
 Additional Paid-In
Capital increased
by:


°
 approximately
$53,000, which was the accounting value of shares issued in three
debt settlements, less their par value of $12, and


°
 approximately
$95,000, which was the total accounting value of shares issued and
warrants granted as compensation for consulting services, less
their par value of $1,470





Liquidity and Capital Resources





Our financial condition for the years ended December 31, 2015 and
2014 and the changes between those periods for the respective items
are summarized below:





As of December 31, 2015, our total assets were $245,853 (2014 -
$235,552) and our total liabilities were $585,866 (2014 -
$313,575). At December 31, 2015, we had cash of $12,456 (2014 -
$5,372) and negative working capital of $570,193 (2014 -
$308,203).





Working Capital





Year
Ended December 31
Increase/(Decrease)2015 -
Restated
2014
Amount
PercentageCurrent
Assets
$15,673
$5,372
$10,301
192%Current
Liabilities
585,866
313,575
272,291
87%Working
Capital (Deficiency)
$(570,193)
$(308,203)
$(261,990)
85%





The decrease in our working capital from December 31, 2014 to
December 31, 2015 was due to increases in cash of approximately
$7,000 and prepaid fees of approximately $3,000, together with a
decrease in accounts payable and accrued liabilities of
approximately $24,000 and in loans payable of approximately
$60,000, all offset by accrued mineral option fees of approximately
$124,000 and a net increase in loans, accrued interest, and
expenses paid on our behalf by related parties totaling
approximately $231,000.





Cash Flows





Year
Ended December 31
Increase/(Decrease)2015 -
Restated
2014
Amount
PercentageCash
Flows Provided By (Used In):Operating
Activities
$(146,316)
$(148,962)
$2,646
2%Financing
Activities
153,400
154,313
(913)
1%Net
increase in cash
$7,084
$5,351
$1,733
32%





Cash Used In Operating Activities:


Cash
used in operating activities remained static year over year. The
year over year change in net loss of approximately $293,000 was
largely offset by the net year over year differences in the changes
in: payables and accrued liabilities of approximately $12,000;
prepaid expenses of approximately ($3,000); accrued interest
payable of approximately $10,000; gain on debt forgiveness of
approximately $61,000; accrued mineral option fees of approximately
$124,000, stock and warrants issued for consulting services of
approximately $96,000; and foreign exchange gain of approximately
($5,000).





31





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. (continued)





Cash Provided By Financing Activities:


Cash
provided by financing activities also remained essentially flat
year over year, with related parties providing approximately a net
$167,000 to fund operating cash requirements of approximately
$146,000 and repayment of non-related party loans of $14,000,
leaving an increase of approximately $7,000 for the
year.





As of the date of this report, we have yet to generate any revenues
from our business operations. Our ability to generate adequate
amounts of cash to meet our needs is entirely dependent on the
issuance of shares or receipt of loans.





Our principal sources of working capital have been loans and funds
received as subscriptions for our common stock. For the foreseeable
future, we will have to continue to rely on those sources for
funding. We have no assurance that we can successfully engage in
any further private sales of our securities or that we can obtain
any additional loans.





Off-Balance Sheet Arrangements





We have no 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.





Commitments





We do not have any commitments as of December 31, 2015 which are
required to be disclosed in tabular form.





Critical Accounting Policies





Our critical accounting policies are mainly those subject to
significant judgments and uncertainties which could potentially
result in materially different results under different conditions
and assumptions. We believe the following critical accounting
policies reflect our most significant estimates, judgments and
assumptions used in the preparation of our financial
statements:





Use of Estimates and Assumptions





The preparation of financial statements, in conformity with US
GAAP, requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying disclosures.  By their nature, these
estimates are subject to measurement uncertainty and the effect on
the financial statements of changes in such estimates in future
periods could be significant.  Management bases its
estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying value of assets and liabilities that are not readily
apparent from other sources. Significant areas requiring
management’s estimates and assumptions are determining the
fairvalue of transactions involving related parties
and common stock.  Actual results may differ from the
estimates.





Foreign Currency Accounting





Our functional currency is the U.S. dollar. Branch office
activities are generally in Canadian dollars. Transactions in
Canadian currency are translated into U.S. dollars as
follows:


· monetary
items at the exchange rate prevailing at the balance sheet
date;


· non-monetary
items at the historical exchange rate; and


· revenue
and expense items at the rate in effect of the date of
transactions.


Gains and losses arising on the settlement of foreign currency
denominated transactions or balances are recorded in the statements
of operations.





Income Taxes





We use the asset and liability method of accounting for income
taxes in accordance with ASC Topic 740, Income
Taxes.  This standard requires the use of an asset and
liability approach for financial accounting and reporting on income
taxes.  If it is more likely than not that some portion
or all of a deferred tax asset will not be realized, a valuation
allowance is recognized.





In addition and as a result of completing the Acquisition, we
anticipate that the following critical accounting policies of LSG
will also become our critical accounting policies:





32





ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)





Mineral Property





Mineral property interests are capitalized and recorded at fair
value. The property interests are periodically assessed for
impairment of value when facts and circumstances suggest that the
carrying amount of the property interest may exceed its recoverable
amount. Costs of exploration, evaluation and retaining mineral
property interests are expensed as incurred. Once we have
identified proven and probable reserves in our investigation of our
property interests and upon development of a plan for operating a
mine, we would enter the development stage and capitalize future
costs until production is established. When a property reaches the
production stage, the related capital costs will be amortized,
using the units-of-production method over proven and probable
reserves.





Reclamation Liabilities and Asset Retirement
Obligations





Minimum standards for site reclamation and closure have been
established by various government agencies that affect our
operations. We calculate estimates of reclamation liabilities based
on current laws and regulations. US GAAP requires that the fair
value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred. It further
requires the recording of a liability for the present value of
estimated environmental remediation costs and the related asset
when a recoverable asset (long-lived asset) can be realized. To
date, no asset retirement obligation exists due to the early stage
of exploration. Accordingly, no liability has been
recorded.





Recent Accounting Pronouncements





From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board, (“FASB”) or other
standard setting bodies that are adopted by us as of the specified
effective date.  Unless otherwise discussed, we believe
that the impact of recently issued standards that are not yet
effective will not have a material impact on our financial
statements upon adoption.





ITEM 7A.
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.









































33


ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


























LODE-STAR MINING INC.


(formerly International Gold Corp.)





FINANCIAL STATEMENTS (RESTATED)








FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


(Stated in U.S.
Dollars)











Report of Independent Registered Public Accounting
Firm
F-1Report of Independent Registered Public Accounting
Firm
F-2Restated Balance Sheets
F-3Restated Statements of Operations
F-4Restated Statements of Cash Flows
F-5Restated Statements of Stockholders’ Deficiency
F-6Restated Notes to Financial Statements
F-7































































































34








Report of Independent Registered Public Accounting
Firm





To the Board of Directors of


Lode-Star
Mining, Inc.


Cypress, TX





We
have audited the accompanying balance sheet of Lode-Star Mining,
Inc. (the “Company”) as of December 31, 2015, and the
related statement of operations, shareholders’ deficit, and
cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.


We
conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.


In
our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Lode-Star Mining, Inc. as of December 31, 2015, and the results its
operations and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the
United States of America.


The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has had no revenue and
has incurred accumulated losses since inception. These conditions
raise significant doubt about the Company’s ability to
continue as a going concern. Management’s plans in this
regard are described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.


As
discussed in Note 2, the financial statements for the year ended
December 31, 2015 have been restated to include the accrual of
mineral option fees.





/s/
MaloneBailey, LLP


www.malonebailey.com


Houston,
Texas


March
29, 2016, except for the effects of the restatement discussed in
Note 2 as to which the date is August 10, 2016








F-1











REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM











To the Directors and Stockholders of


Lode-Star Mining Inc. (formerly International Gold
Corp.)





We have audited the accompanying balance sheet of Lode-Star Mining
Inc. (formerly International Gold Corp.) (the
“Company”) as of December 31, 2014, and the related
statements of operations, cash flows and stockholders’
deficiency for year then ended.  These financial
statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion
on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United
States).  Those standards require that we plan and
perform the audit to obtain reasonable assurance whether the
financial statements are free of material
misstatement.  The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial
reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a
reasonable basis for our opinion.





In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the
Company as of December 31, 2014, and the results of its operations
and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United
States.





The accompanying financial statements have been prepared assuming
the Company will continue as a going concern.  As
discussed in Note 1 to the financial statements, the Company has
suffered recurring losses from operations, has negative operating
cash flows, has a stockholders’ deficiency and is dependent
upon obtaining adequate financing to fulfill its business
activities.  These factors raise substantial doubt about
its ability to continue as a going
concern.  Management’s plans in regard to these
matters are also discussed in Note 1.  The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.











Vancouver, Canada  March 28,
2016
 “Morgan & Company LLP”





Chartered Professional Accountants


























F-2


LODE-STAR MINING INC.


(formerly International Gold Corp.)





BALANCE SHEETS (RESTATED)


(Stated in U.S. Dollars)





DECEMBER 312015
(Restated - Note 2)
2014ASSETSCurrentCash
$12,456
$5,372Prepaid
fees
3,217
-15,673
5,372Mineral Property Interest
230,180
230,180$245,853
$235,552LIABILITIESCurrentAccounts
payable and accrued liabilities
$14,302
$38,397Due
to related parties
495,384
139,353Loans
payable
76,180
135,825585,866
313,575Contractual Obligations, Commitments And Subsequent Events (Notes
4, 8 and 10)STOCKHOLDERS’ DEFICIENCYCapital StockAuthorized:480,000,000
voting common shares with a par value of $0.001 per
share20,000,0000
preferred shares with a par value of $0.001 per shareIssued:49,127,825
common shares at December 31, 2015 (46,509,000 common
shares
at December 31, 2014)
1,947
465Additional Paid-In Capital
1,070,064
922,215Accumulated Deficit
(1,412,024)
(1,000,703)(340,013)
(78,023)$245,853
$235,552








The accompanying notes are an integral part of these financial
statements.








F-3


LODE-STAR MINING INC.


(formerly International Gold Corp.)





STATEMENTS OF OPERATIONS (RESTATED)


(Stated in U.S. Dollars)








YEARS ENDEDDECEMBER 312015
(Restated – Note 2)
2014Revenue
$-
$-Operating ExpensesConsulting
services
121,409
60,653Corporate
support services
12,759
2,594Mineral
option fees
123,913
-Office,
foreign exchange and sundry
10,136
(913)Professional
fees
94,783
92,861Transfer
and filing fees
27,796
14,470390,796
169,665Operating Loss Before Other Income (Expense)
(390,796)
(169,665)Other Income (Expense)Gain
on debt forgiveness
-
61,263Interest,
bank and finance charges
(20,525)
(10,015)(20,525)
51,248Net Loss For The Year
$(411,321)
$(118,417)Basic And Diluted Loss Per Common Share
$(0.01)
$(0.01)Weighted Average Number Of Common Shares Outstanding
47,436,336
13,426,808








The accompanying notes are an integral part of these financial
statements.









































F-4


LODE-STAR MINING INC.


(formerly International Gold Corp.)





STATEMENTS OF CASH FLOWS (RESTATED)


(Stated in U.S. Dollars)








YEARS ENDED DECEMBER 312015
(Restated – Note 2)
2014Cash Provided By (Used In)Operating ActivitiesNet
loss for the year
$(411,321)
$(118,417)Adjustments
to reconcile net loss to net cash used in operating
activities:Foreign
exchange (gain)
(4,791)
-Stock
issued for services
29,397
-Warrants
issued for services
66,721
-Gain
on debt forgiveness
-
(61,263)Changes
in operating assets and liabilities:Prepaid
expenses
(3,217)
-Accounts
payable and accrued liabilities
33,194
21,584Due
to related party
123,913
-Accrued
interest payable
19,788
9,134(146,316)
(148,962)Financing ActivitiesRepayment
of loans payable
(14,000)
-Repayment
of loans payable – related party
(5,000)
-Proceeds
from loans payable
-
17,484Proceeds
from loans payable – related party
172,400
136,829153,400
154,313Net Increase In Cash
7,084
5,351Cash, Beginning Of Year
5,372
21Cash, End Of Year
$12,456
$5,372Supplemental Disclosure Of Cash Flow InformationCash
paid during the year for:Interest
$-
$-Income
taxes
$-
$-Non-cash Financing ActivityExpenses
paid by related party on behalf of the Company
$57,289
-Common
shares issued for debt settlements
$53,213
$-Common
shares issued for mineral property interest
$-
$230,180








The accompanying notes are an integral part of these financial
statements.


























F-5


LODE-STAR MINING INC.


(formerly International Gold Corp.)





STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
(RESTATED)





FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


(Stated in U.S. Dollars)








NUMBER OF COMMON SHARES
PAR VALUE
ADDITIONAL PAID-IN CAPITAL
ACCUMULATED DEFICIT
TOTALBalance, December
31, 2013
11,509,000
$115
$692,385
$(882,286)
$(189,786)Shares
issued for mineral property interest
35,000,000
350
229,830
-
230,180Net
loss for the year
-
-
-
(118,417)
(118,417)Balance,
December 31, 2014
46,509,000
465
922,215
(1,000,703)
(78,023)Shares
issued for debt
1,149,000
12
53,201
-
53,213Shares
issued for consulting services
1,469,825
1,470
27,927
-
29,397Warrants
issued for consulting services
-
-
66,721
-
66,721Net
loss for the year
-
-
-
(411,321)
(411,321)Balance, December 31, 2015
49,127,825
$1,947
$1,070,064
$(1,412,024)
$(340,013)








The accompanying notes are an integral part of these financial
statements.









































F-6
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)





1.
BASIS OF PRESENTATION AND NATURE OF OPERATIONS -
Restated





Organization





Lode-Star
Mining Inc. (formerly International Gold Corp.) (“the
Company”) was incorporated in the State of Nevada, U.S.A., on
December 9, 2004.  The Company’s principal
executive offices are located in Cypress, Texas.  The
Company was originally formed for the purpose of acquiring
exploration stage natural resource properties. The Company acquired
a mineral property interest from Lode Star Gold Inc., a private
Nevada corporation (“LSG”) on December 11, 2014 (See
Note 4) in consideration for the issuance of 35,000,000 common
shares of the Company. As a result of this transaction,
control of the Company was acquired by
LSG.





On
May 12, 2015, International Gold Corp. completed a merger with its
wholly owned subsidiary, Lode-Star Mining Inc., and formally
assumed the subsidiary’s name by filing Articles of Merger
with the Nevada Secretary of State (the “Name
Change”).  The subsidiary was incorporated entirely for
the purpose of effecting the Name Change and the merger did not
affect the Company’s corporate structure in any other
way.





Going Concern





The
accompanying financial statements have been prepared assuming the
Company will continue as a going concern.





The
future of the Company is dependent upon its ability to establish a
business and to obtain new financing to execute its business plan.
As shown in the accompanying financial statements, the Company has
had no revenue and has incurred restated accumulated losses of
$1,412,024 for the period from December 9, 2004 (inception) to
December 31 2015.  There is no assurance that
management’s plans to seek additional capital through private
placements of its common stock will be realized, and these factors
cast substantial doubt upon the use of the going concern
assumption. These financial statements do not include any
adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot
continue in existence.





2.
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS





Subsequent
to the original issuance of the Company’s annual financial
statements, the Company determined that mineral option fees
totaling $123,913 owing under the terms of its Mineral Option
Agreement with LSG dated October 4, 2014 had not, but should have
been accrued at December 31, 2015. While a deferral of the actual
payment to June 18, 2016 had been granted by LSG in November, 2015,
the fees still needed to be accrued as long as they remained
unpaid. A second deferral was later granted by LSG on June 15,
2016, extending the repayment date to January 18, 2017. On review,
the Company determined that the amount was material and a
restatement was required.





No
fees were required to be accrued at December 31, 2014 in accordance
with the terms of the agreement.





The
following financial statement items were affected by the
restatement:





Balance Sheet


As At December 31, 2015As
previously reported
Adjustment
RestatedDue
to related parties
$371,471
$123,913
$495,384Current
liabilities
$461,953
$123,913
$585,866Accumulated
Deficit
$(1,288,111)
$(123,913)
$(1,412,024)Stockholders’
Deficiency
$(216,100)
$(123,913)
$(340,013)





Statement of Operations


Year Ended December 31, 2015As
previously reported
Adjustment
RestatedMineral
option fees
$-
$123,913
$123,913Operating
Loss Before Other Income (Expense)
$(266,883)
$(123,913)
$(390,796)Net
Loss For The Year
$(287,408)
$(123,913)
$(411,321)





F-7
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)








2.
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
(Continued)





Statement of Cash Flows


Year Ended December 31, 2015As
previously reported
Adjustment
RestatedNet
loss for the year
$(287,408)
$(123,913)
$(411,321)Due
to related party
$-
$123,913
$123,913





Statement of Stockholders’ Deficiency


Year Ended December 31, 2015As
previously reported
Adjustment
RestatedNet
loss for the year
$(287,408)
$(123,913)
$(411,321)Balance,
December 31, 2015
$(216,100)
$(123,913)
$(340,013)





3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The
financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States (“GAAP”).  Because a precise
determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period
necessarily involves the use of estimates which have been made
using careful judgment.  All dollar amounts are in U.S.
dollars unless otherwise noted.





The
financial statements have, in management’s opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:





a)
Basis of Accounting





The
Company’s financial statements have been prepared using the
accrual method of accounting. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of financial position and the results of
operations for the periods presented have been reflected
herein.





b)
Cash and Cash Equivalents





Cash
consists of cash on deposit with high quality major financial
institutions.  For purposes of the balance sheets and
statements of cash flows, the Company considers all highly liquid
debt instruments purchased with maturity of 90 days or less to be
cash equivalents. At December 31, 2015 and 2014, the Company had no
cash equivalents.





c)
Foreign Currency Accounting





The
Company’s functional currency is the U.S.
dollar.  Branch office activities are generally in
Canadian dollars. Transactions in Canadian currency are translated
into U.S. dollars as follows:





i)
 monetary
items at the exchange rate prevailing at the balance sheet
date;


ii)
 non-monetary
items at the historical exchange rate; and


iii)
 revenue
and expense items at the rate in effect of the date of
transactions.





Gains
and losses arising on the settlement of foreign currency
denominated transactions or balances are recorded in the statements
of operations.





F-8
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)








3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





d)
Fair Value of Financial Instruments





ASC
Topic 820-10 establishes a three-tier value hierarchy, which
prioritizes the inputs used in measuring fair value.  The
hierarchy prioritizes the inputs into three levels based on the
extent to which inputs used in measuring fair value are observable
in the market. These tiers include:


●
 Level
1 – defined as observable inputs such as quoted prices in
active markets;


●
 Level
2 – defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable;
and


●
 Level
3 – defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its
own assumptions.





The Company’s financial instruments consist
of cash, accounts payable and accrued liabilities, and loans
payable. The Company is not exposed to significant interest,
currency or credit risks arising from these financial
instruments. Pursuant to ASC 820 and 825, the fair value of
cash is determined based on “Level 1” inputs, which
consist of quoted prices in active markets for identical assets.
Accounts payable and accrued liabilities and loans payable are
measured using “Level 2” inputs as there are no quoted
prices in active markets for identical instruments. The carrying values of cash, accounts payable and
accrued liabilities, and loans payable approximate their fair
values due to the immediate or short term maturity of these
financial instruments.





e)
Asset Retirement Obligations





The
Company has no asset retirement obligations, including
environmental rehabilitation expenditures, which relate to an
existing condition caused by past operations.





f)
Use of Estimates and Assumptions





The
preparation of financial statements, in conformity with GAAP,
requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying
disclosures.  By their nature, these estimates are
subject to measurement uncertainty and the effect on the financial
statements of changes in such estimates in future periods could be
significant.  Significant areas requiring
management’s estimates and assumptions are determining the
fair value of transactions involving related parties and common
stock.  Actual results may differ from the
estimates.





g)
Basic and Diluted Earnings Per Share





The
Company reports basic earnings or loss per share in accordance with
ASC Topic 260, “Earnings Per Share”. Basic
earnings per share is computed by dividing net earnings available
to common stockholders by the weighted average number of common
shares outstanding during the period. Diluted earnings per
share is computed similarly, except that the common stock number is
increased to include the any potential additional common shares,
for example from the exercise of options or warrants. As the
Company generated net losses in the periods presented, the
additional impact of including potential shares from outstanding
warrants would be anti-dilutive and is therefore not part of the
earnings per share calculation.





h)
Income Taxes





The
Company uses the asset and liability method of accounting for
income taxes in accordance with ASC Topic 740, Income
Taxes.  This standard requires the use of an asset and
liability approach for financial accounting and reporting on income
taxes.  If it is more likely than not that some portion
or all of a deferred tax asset will not be realized, a valuation
allowance is recognized.








F-9
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)








3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





i)
Stock-Based Compensation





Stock-based
compensation is accounted for in accordance with ASC 718 whereby a
compensation charge based on the fair value of the award is
recorded against earnings over the period during which the employee
is required to perform the services in exchange for the award
(generally the vesting period). For transactions with non-employees
in which services are performed in exchange for the Company’s
common stock or other equity instruments, the transactions are
recorded on the basis of the fair value of the service received or
the fair value of the equity instruments issued, whichever is more
readily measurable at the date of issuance. The expense is
recognized over the vesting period of the award.





j)
Mineral Property Interest and Impairment





Mineral
property interests are capitalized and recorded at fair value. The
property interests are periodically assessed for impairment of
value when facts and circumstances suggest that the carrying amount
of the property interest may exceed its recoverable amount. Costs
of exploration, evaluation and retaining mineral property interests
are expensed as incurred. Once the Company has identified proven
and probable reserves in its investigation of its property
interests and upon development of a plan for operating a mine, it
would enter the development stage and capitalize future costs until
production is established. When a property reaches the production
stage, the related capital costs will be amortized, using the
units-of-production method over proven and probable
reserves.





k)
Recent Accounting Pronouncements





The
Company has implemented all applicable new accounting
pronouncements that are in effect. Those pronouncements did not
have any material impact on the financial statements unless
otherwise disclosed, and the Company does not believe that there
are any other new accounting pronouncements that have been issued
that might have a material impact on its financial position or
results of operations.





4.
MINERAL PROPERTY INTEREST - Restated





On
December 5, 2014, the Company entered into a subscription agreement
(the “Subscription Agreements”) with Lode Star Gold
Inc. (“LSG”), a private Nevada corporation controlled
by the spouse of the Company’s current
President, pursuant to which the Company agreed to issue
35,000,000 shares of its common stock, valued at $230,180, to LSG
in exchange for a 20% undivided interest in and to the mineral
claims owned by LSG. The mineral claims, known as the
“Goldfield Bonanza Project” (the
“Property”), are located in the State of
Nevada.





The
execution of the Subscription Agreement was one of the closing
conditions of an Option Agreement dated October 4, 2014, pursuant
to which the Company acquired the sole and exclusive option to earn
up to an 80% undivided interest in and to the
Property.  In order to earn the additional 60% interest
in the Property, the Company is required to fund all expenditures
on the Property and pay LSG an aggregate of $5 million in cash in
the form of a net smelter royalty, each beginning on the Closing
Date, which was December 11, 2014. Until such time as the Company
has earned the additional 60% interest, the net smelter royalty
will be split 79.2% to LSG, 19.8% to the Company and 1% to the
former Property owner.





If
the Company fails to make any cash payments to LSG within one year
of the Effective Date of the Mineral Option Agreement with LSG
dated October 4, 2014, it is required to pay LSG an additional
$100,000, and in any subsequent years in which the Company fails to
complete the payment of the entire $5 million described above, it
must make quarterly cash payments to LSG of $25,000 until such time
as the Company has earned the additional 60% interest in the
Property. At December 31, 2015 $123,913 in fees payable to LSG has
been accrued.





Given
that permitting for operations on the Property is still to be
completed, at the request of the Company’s management, LSG
granted, by a letter of agreement dated November 10, 2015, a
deferment of the payment to June 18, 2016. A further deferment, to
January 18, 2017, was granted by LSG on June 15, 2016.








F-10
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)





4.
MINERAL PROPERTY INTEREST – Restated (Continued)





In
addition, the Option Agreement provides that the Company will act
as the operator on the Property and that a management
committee will be formed, comprised of representatives from the
Company and LSG, with voting based on each party’s
proportionate interest, to supervise exploration of the
Property and approve work programs and budgets. To December 31,
2015, no work programs had been approved.





The
Company assessed its mineral property interest at December 31, 2015
and to the date of these financial statements and concluded that
facts and circumstances do not suggest that the mineral property
interest’s carrying value exceeds its recoverable amount and
therefore no impairment is required.





5.
CAPITAL STOCK





During
the year ended December 31, 2015, the Company had no cash
subscriptions for shares of its common stock.





On
November 11, 2015, the Company entered into a one year agreement to
obtain assistance in conducting business strategy and
communications planning, public financial disclosure reporting, and
various matters in connection with directors and other
professionals as needed by the Company. In consideration for the
services to be provided, the Company granted the consultant
1,469,825 shares of common stock. Those shares were issued on
December 11, 2015 and were valued at $29,397, based on market price
at the date of the agreement. In addition, the consultant was
granted warrants with a five year term, commencing the date of the
agreement, to purchase 3,336,060 shares of common stock at a price
of $0.02 per
share, including a cashless exercise option. The warrants were
valued at $66,721 using the Black-Scholes option pricing model with
an average risk-free rate of 1.68%, estimated life of 5 years,
volatility of 208.7% and dividend yield of 0%.





On
January 9, 2015, agreements were reached in connection with the
loans of $24,696 (CAD $28,650) and $1,767 (CAD $2,050) whereby the
loan amounts were to be converted to Company shares at a price of
CAD $0.05, to result in the issuance of 573,000 and 41,000 common
shares respectively. Those shares were issued on April 6,
2015.





On
January 9, 2015, an agreement was reached to modify the terms of a
loan such that $26,750 of accrued interest together with a premium
was to be converted to Company shares at a price of $0.05 per
share, to result in the issuance of 535,000 common shares. Those
shares were issued on April 6, 2015.





During
the year ended December 31, 2014, the Company received no cash
subscriptions for shares of its common stock, however, on December
11, 2014, the Company issued 35,000,000 shares, valued at $230,180,
in exchange for the mineral property interest described in Note
4.





Capitalization





On
November 24, 2015, the board of directors authorized the following
changes to the capitalization of the Company:


The
authorized capital was increased from 100,000,000 shares of common
stock with a par value of $0.00001 per share to 500,000,000 shares
of capital stock, divided into 480,000,000 shares of common stock
with a par value of $0.001 per share, and 20,000,000 shares of
preferred stock with a par value of $0.001 per share. The Company
reserved 10,000,000 shares of common stock for issuance under its
new 2016 Omnibus Equity Incentive Plan. To date, warrants to
purchase 3,336,060 shares of common stock have been issued under
the Equity Incentive Plan and none of those warrants have been
exercised.





No
preferred shares have been issued to the date of issue of these
financial statements.





F-11
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)





5.
CAPITAL STOCK (Continued)





Warrants





Summary
of warrant activity and warrants outstanding at December 31,
2015:





Number of Warrants
Exercise Price
Weighted Average Exercise Price
Weighted Average Life Remaining
(Years)
Expiry DateBalance, December 31, 2014
-
-
-
-
-Granted
3,336,060
$0.02
$0.02Balance, December 31, 2015
3,336,060
$0.02
$0.02
4.86
November 10, 2020





6.
LOANS PAYABLE





At
December 31, 2015, the Company had the following loans
payable:





i.
 $1,000
(December 31, 2014 - $5,000): unsecured; interest at 15% per annum;
originally due on April 20, 2012.


●
 On
March 19, 2015, $4,000 was paid by the Company in partial
settlement of the December 31, 2014 principal balance.


ii.
 $65,000
(December 31, 2014 - $75,000): unsecured; interest at 10% per annum
from January 10, 2015.


●
 $27,500,
and any accrued interest was due and payable on written demand in
full (not received to date) on the earlier of June 9, 2015 or the
date on which the Company completes one or more debt or equity
financings that generate aggregate gross proceeds of at least
$250,000;


●
 The
balance of the outstanding principal, or $37,500, and any accrued
interest was due and payable on written demand in full (not
received to date) on January 9, 2016; and


●
 The
Company shall have the right to repay all or any part of the
Principal and any accrued interest to the Lender at any time and
from time to time, without any premium.


iii.
 $40,789
(December 31, 2014 - $34,160): unsecured; interest at 5% per annum;
with no specific terms of repayment, due to a related party, the
president of the Company.


iv.
 $290,000
(December 31, 2014 - $100,000): unsecured; interest at 5% per annum
from January 1, 2015; with no specific terms of repayment, due to a
related party, LSG, the Company’s majority
shareholder.


v.
 $23,966
(December 31, 2014 - $Nil): unsecured; interest at 5% per annum;
with no specific terms of repayment, due to a related party, LSG,
the Company’s majority shareholder.


vi.
 $3,613
(December 31, 2014 - $4,310): unsecured; non-interest bearing; with
no specific terms of repayment, due to a related party, the
controlling shareholder of LSG.


vii.
 $Nil
(December 31, 2014 - $24,696): unsecured; non-interest bearing;
with no specific terms of repayment (converted on January 9, 2015
to 573,000 common shares that were issued on April 6,
2015).


viii.
 $Nil
(December 31, 2014 - $1,767): unsecured; non-interest bearing; with
no specific terms of repayment (converted on January 9, 2015 to
41,000 common shares that were issued on April 6,
2015).





As
of December 31, 2015, interest totaling $23,283 (December 31, 2014
- $30,244) was accrued on the above loan amounts.





7.
RELATED PARTY TRANSACTIONS AND AMOUNTS DUE –
Restated





Transactions
with related parties were in the normal course of operations and
have been valued in these financial statements at the exchange
amount, which is the amount of consideration agreed to and
established by the related parties.





At
December 31, 2015, $Nil (December 31, 2014 - $15,300) included in
accounts payable was due to a company controlled by a former
director and president of the Company.





F-12
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)





7.
RELATED PARTY TRANSACTIONS AND AMOUNTS DUE – Restated
(Continued)





At
December 31, 2015, accrued interest was due to related parties in
connection with loans detailed above in Note 6, as
follows:





iii.
 $2,609
(December 31, 2014 - $883) to the president of the
Company.


iv.
 $10,157
(December 31, 2014 - $Nil) to the majority shareholder of the
Company.


v.
 $336
(December 31, 2014 - $Nil) to the majority shareholder of the
Company.





During
the year ended December 31, 2015, the Company incurred $123,913
(2014 - $Nil) in mineral option fees payable to LSG, which have
been accrued as of that date.





During
the year ended December 31, 2015, the Company incurred $Nil (2014 -
$60,653) in consulting fees and expenses to a former director and
president of the Company. See Note 8.





8.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS





See
Note 4 for details about the Company’s obligations and
commitments regarding its Mineral Property Interest.





Effective
July 1, 2012, the Company entered into a consulting agreement
whereby the former sole director and officer of the Company was to
provide services as the Company’s CEO, COO, CFO and Corporate
Secretary. The consulting agreement, which would otherwise have
extended to June 2016, was terminated with immediate effect in
accordance with a settlement agreement dated December 5,
2014.


●
 Under
the terms of that settlement agreement, the Company agreed to pay
an aggregate of $34,000 CAD.


●
 Of
that amount, $Nil was outstanding and included in accounts payable
at December 31, 2015 (December 31, 2014: $15,300 ($17,500
CAD).





9.
INCOME TAXES - Restated





In
December, 2014, the Company underwent a change in control which
subjected it to limitations under Internal Revenue Code Section
382. That section restricts post-change annual net operating loss
utilization, based on applying an IRS- prescribed rate to the
purchase price of the stock acquired in the change in control. The
Company accordingly revised its estimates of net operating loss
carry forwards, resulting in a reduction in the estimate of losses
available for utilization in the amount of approximately
$872,000.





A
reconciliation of income tax benefit to the amount computed at the
statutory rate of 34% (2014 – 34%) is as
follows:





2015
2014Expected
income tax recovery
$(139,800)
$(40,000)Adjustment
for non-deductible stock compensation
32,700
-Estimated
decrease in expected tax recovery resulting from Section 382 net
operating loss limitations after change in control
296,400
-Increase
(decrease) in valuation allowance
(189,300)
40,000$-
$-





Significant
components of deferred income tax assets are as
follows:





2015
2014Deferred
income tax assetsNet
operating losses carried forward
$151,000
$340,000Valuation
allowance
(151,000)
(340,000)$-
$-





F-13
  LODE-STAR MINING INC.
 (formerly International Gold Corp.)
 
 NOTES TO FINANCIAL STATEMENTS (RESTATED)
 
 FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
 (Stated in U.S. Dollars)








9.
INCOME TAXES – Restated (Continued)





The
Company has approximately $444,000 (2014 - $1,000,700) in net
operating losses carried forward which will expire by 2035 if not
utilized.  Future tax benefits, which may arise as a
result of these losses, have not been recognized in these financial
statements, and have been offset by a valuation
allowance.





The
Company’s net operating losses carried forward for United
States income tax purposes will expire, if not utilized, as
follows:





2024
$
10,0002025

7,6002026

6,0002027

10,9002028

53,2002029

8,9752030

6,4452031

6,4452032

6,4452033

6,4452034

6,4452035

315,200$
444,100





Realization of the above losses carried forward is
dependent on the Company filing the applicable tax returns with the
tax authorities, generating sufficient taxable income prior to
expiration of the losses carried forward and continuing use of the
acquired historic business or a significant portion of the acquired
assets for two years after the change of control transaction. If
this continuity of business
enterprise requirement is not
met, the annual net operating loss limitation on pre-change losses
is zero.





10.
SUBSEQUENT EVENTS





Management
has evaluated subsequent events and the impact on the reported
results and disclosures and has concluded that no other significant
events require disclosure as of the date these financial statements
were issued.














F-14


ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTINGAND FINANCIAL
DISCLOSURE





There have been no disagreements on accounting and financial
disclosures from the inception of our company through the date of
this report on Form 10-K/A. Our financial statements for the years
ended December 31, 2015 and 2014, included in this report, have
been audited by MaloneBailey LLP, 9801 Westheimer Road, Suite 1100,
Houston, Texas 77042 (2015) and Morgan LLP, 700 West Georgia Street, Suite
1488, Vancouver, British Columbia, Canada V7Y 1A1
(2014).





On December 14, 2015, we informed Morgan & Company LLP
(“Morgan”) that we had decided to change our
independent registered public accounting firm because we are now
headquartered in the United States. Morgan’s report on the
financial statements for the years ended December 31, 2014 and 2013
contained no adverse opinion or disclaimer of opinion and was not
qualified or modified as to audit scope or accounting, except that
the report contained an explanatory paragraph stating that there
was substantial doubt about the Company’s ability to continue
as a going concern.





Through the two year period covered by the financial statement
audits for the years ended December 31, 2013 and December 31, 2014
and the subsequent interim period from January 1, 2015 through
December 11, 2015, there were no disagreements with Morgan on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if
not resolved to the satisfaction of Morgan would have caused them
to make reference thereto in their report on the financial
statements and (ii) no “reportable events” as defined
in Item 304(a)(1)(v) of Regulation S-K. We authorized Morgan to
respond fully to the inquiries of the successor
accountant.





On December 11, 2015, we engaged MaloneBailey, LLP of Houston,
Texas (“MaloneBailey”) as our independent registered
public accounting firm. During the years ended December 31, 2013
and 2014 and the subsequent interim period from January 1, 2015
through December 11, 2015 (the date MaloneBailey was engaged), we
did not consult with MaloneBailey regarding (i) the application of
accounting principles to a specified transaction, (ii) the type of
audit opinion that might be rendered on the Company’s
financial statements by Malone Bailey, in either case where written
or oral advice provided by MaloneBailey would be an important
factor considered by us in reaching a decision as to any
accounting, auditing or financial reporting issues or (iii) any
other matter that was the subject of a disagreement between us and
our former auditor or was a reportable event (as described in Items
304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K,
respectively).





ITEM 9A.
CONTROLS AND PROCEDURES





Disclosure Controls and Procedures





As required by paragraph (b) of Rules 13a-15 or 15d-15 under the
Securities Exchange Act of 1934, we evaluated our disclosure
controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) as of the end of the period covered
by this Annual Report on Form 10-K/A.  Based on this
evaluation, when our report on Form 10-K was first filed on March
29, 2016, our Chief Executive Officer and Chief Financial Officer
had concluded that as of the end of the period covered by this
Annual Report on Form 10-K/A, these disclosure controls and
procedures were adequate to ensure that the information required to
be disclosed by us in reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and
Exchange Commission and include controls and procedures designed to
ensure that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required
disclosure.





Subsequent to that date, we determined that certain fees due for
the year ended December 31, 2015 under the terms of an agreement
with our majority shareholder had not been accrued. On review, we
concluded that the error was material, that a restatement of the
financial statements for that year was required, and therefore our
disclosure controls and procedures over financial reporting were
not adequate as of December 31, 2015.





Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all
control issues, if any, within our company have been detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because
of simple error or mistake.





Management’s Report on Internal Control over Financial
Reporting





Management is responsible for establishing and maintaining adequate
internal control over our financial reporting. In order to evaluate
the effectiveness of internal control over financial reporting, as
required by Section 404 of the Sarbanes-Oxley Act, management
conducted an assessment, based upon criteria established in
“Internal Control-Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). Based on the evaluation, when our report on
Form 10-K was first filed on March 29, 2016, our Chief Executive
Officer and Chief Financial Officer had concluded that our internal
controls over financial reporting were effective as of December 31,
2015.


35





ITEM 9A.
CONTROLS AND PROCEDURES (continued)





Subsequent to that date, we determined that certain fees due for
the year ended December 31, 2015 under the terms of an agreement
with our majority shareholder had not been accrued. On review, we
concluded that the error was material, that a restatement of the
financial statements for that year was required, and that our
internal controls over financial reporting were not effective as of
December 31, 2015.





In order to address the weakness in Disclosure Controls and
Procedures and in Internal Control over Financial Reporting, the
Company has adopted, with immediate effect, a procedure to list and
review all contract obligations at the end of each reporting
period, specifically with regard to possible liabilities to be
accrued, with a formal sign-off on the conclusions of the review
being required by our Chief Executive Officer and Chief Financial
Officer, and the Company’s primary accounting
personnel.





Our system of internal control over financial reporting is designed
to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements.
In addition, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become
inadequate because of changes in conditions and that the degree of
compliance with the policies or procedures may deteriorate. This
Annual Report does not include an attestation report of the
Company’s registered public accounting firm regarding
internal control over financial reporting.





Changes in Internal Control Over Financial Reporting:





There were no changes in our internal control over financial
reporting during the quarter ended December 31, 2015 that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.





The procedure described above that has been implemented by the
Company starting in August, 2016 in order to address the weakness
in disclosure controls and internal control existing at the time of
filing the initial report on Form 10-K for the year ended December
31, 2015 will impact on all financial reports to be filed going
forward.





ITEM 9B.
OTHER INFORMATION.





None.


PART III





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.





Officers and Directors





As of the date of this report, the names, ages and positions of our
executive officers and directors were as follows:





Name

Age

PositionMark Walmesley

58

President, Chief Executive Officer, Chief Financial Officer,
Treasurer, DirectorThomas Temkin

62

Chief Operating Officer, DirectorPam Walters

66

Secretary





Mark Walmesley was appointed as
our Chief Financial Officer, Treasurer and director on September
22, 2014, and our President and Chief Executive Officer on the
Closing Date.  He has been LSG’s Director of
Operations since 2005 and a director of the company since March
2009.





From 2005 to 2010, Mr. Walmesley directed operations on the
Property, during which time LSG had a crew of up to eight people
performing surface and underground exploratory drilling and mine
rehabilitation work.  In 2010 and 2011, he negotiated the
terms of the ICN Option Agreement on behalf of LSG, and he is
currently directing all of LSG’s advancement
activities.





Since 1985, Mr. Walmesley has been the owner and operator of Mark
Walmesley, Inc., a private Texas corporation, and MWI Utah, Inc., a
private Utah corporation, both of which specialize in the sale of
window etching theft deterrent products that are distributed
throughout the United States in the automotive aftermarket
industry.  Through an established network of agents and
car dealerships, he has achieved product fulfillment on millions of
vehicles over his 30 year career.


36





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)





Since 2008, Mr. Walmesley has been developing an emergency medical
communications platform for FAST Alert Support Team,
Inc.,a company dedicated to
facilitating worldwide communication between emergency medical
technicians (EMTs), incapacitated individuals and people assigned
by those individuals to accommodate pre-determined essential
support.Although
the project is currently on hold, Mr. Walmesley originally
developed this online software solution for the medical industry in
the United States and plans to build the business using his
existing network of automotive industry contacts.  He
remains the company’s Founder and Chief Software
Architect.





Mr. Walmesley has also been involved in financing and mentoring a
variety of other private companies throughout his professional
career.





Thomas Temkin was appointed as
Chief Operating Officer and to the Board of Directors on January
19, 2015. Mr. Temkin is a Certified Professional Geologist and a
Qualified Person under National Instrument (NI) 43101, with more
than 38 years of experience in the mining industry, primarily in
exploration in the Western United States. As senior project manager
for several major mining companies, Mr. Temkin has been associated
with several advanced gold exploration projects, some of which
developed into significant mines. After receiving his Bachelor of
Science degree in Economic Geology in 1976 from the Mackay School
of Mines, Mr. Temkin began his career as an exploration Geologist.
He is currently a consulting geologist working with LodeStar Gold,
Inc. Mr. Temkin has been associated with LSG and the project for
over 15 years and has been instrumental through its entire
exploration program to date.





Pam Walters was appointed as our Secretary on April 22,
2015. Since 1985 Ms. Walters has been working as the Corporate
Administration person responsible for employee relations as well as
managing the day-to-day corporate finance and business operations
of Lode Star Gold, Inc. Ms. Walters has been associated with the
mining industry for over 25 years. She attended the University of
New Orleans in the early 1970s and since 1998 she has been
acquiring and practicing the skills required to manage and maintain
our busy and growing corporate needs.





Term of Office





Our officers are appointed to serve until the meeting of our Board
of Directors following the next annual meeting of our stockholders
and until their successors have been elected and
qualified.





Committees of the Board of Directors





Our
board of directors has authorized an audit committee charter,
compensation committee charter, nominating and governance committee
charter, executive committee charter and nominating committee
charter. Our board may also establish from time to time any other
committees that it deems necessary or desirable. The composition of
each committee will comply, when required, with NYSE MKT listing
standards and other rules of the SEC and NYSE MKT.





Audit Committee





We have
not appointed members of our audit committee. However the chairman
will be independent within the meaning of applicable SEC rules and
NYSE MKT listing standards as an “audit committee financial
expert” as defined in the rules and regulations of the SEC,
and that is financially literate under the current listing
standards of the NYSE MKT. The audit committee has oversight
responsibilities regarding matters including:





●
the integrity of our financial statements and our financial
reporting and disclosure practices.


●
the soundness of our system of internal controls regarding finance
and accounting compliance.


●
the independent registered public accounting firm’s
qualifications and independence.


●
the engagement of the independent registered public accounting
firm.


●
the performance of our internal audit function and independent
registered public accounting firm.


●
our compliance with legal and regulatory requirements in connection
with the foregoing.


●
review of related party transactions in accordance with our written
policy as to such transactions. and


●
compliance with our Code of Conduct and Ethics.





We will
rely on the phase-in rules of the SEC and NYSE MKT with respect to
the independence of our audit committee. These rules permit us to
have an audit committee that has at least one member who is
independent by the NYSE MKT listing date, at least two members (a
majority of whom are independent) within 90 days after the listing
date, and at least three members (all of whom are independent)
within one year thereafter.








37





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)





Our
written charter for our audit committee will be available on our
website, www.lodestarmining.com. The information on our website is
not and will not be deemed to be part of this Report and our web
address is included herein as an inactive textual reference
only.





Compensation Committee





We have
not appointed members of our compensation committee. However, the
chairman of the committee will be independent within the meaning of
the listing standards of the NYSE MKT. The compensation committee
is authorized to assist the board in discharging the board’s
responsibilities relating to matters including:





●
review and administration of compensation and benefit policies and
programs designed to attract, motivate and retain personnel with
the requisite skills and abilities to us to achieve superior
operating results.


●
review and approval, annually of goals and objectives relevant to
compensation of our Chief Executive Officer, including evaluating
the performance of the Chief Executive Officer in light of those
goals and objectives and setting of our Chief Executive
Officer’s compensation based on such evaluation (and our
compensation committee will have sole authority to determine such
compensation).


●
establishment of the compensation of our other executives and the
Chairman of our board, and recommendation of the compensation of
our non-employee directors for approval by majority vote of
independent directors, and


●
issuance of an annual report on executive compensation for
inclusion in our annual proxy statement, once
required.





We will
rely on the phase-in rules of the SEC and NYSE MKT with respect to
the independence of our compensation committee. These rules permit
us to have a compensation committee that has at least one member
who is independent by five business days from the NYSE MKT listing
date, at least a majority of members who are independent within 90
days of the NYSE MKT listing date and all independent members
within one year of the NYSE MKT listing date.





Our
board has adopted a written charter for our compensation committee,
which will be available on our website, www.lodestarmining.com. The
information on our website is not and will not be deemed to be part
of this prospectus and our web address is included herein as an
inactive textual reference only. To assist the compensation
committee in discharging its responsibilities, the compensation
committee may engage a compensation consulting firm or other
advisors.





Nominating and Governance Committee





We have
not appointed members of our nominating and governance committee.
However, the chairman of the committee will be independent within
the meaning of the listing standards of NYSE MKT. The nominating
and governance committee is authorized to:





●
recommend to the board nominees for election as directors and
committee members.


●
develop and recommend to the board a set of corporate governance
guidelines.


●
review candidates for nomination for election as directors
submitted by directors, officers, employees and stockholders and
establish procedures to be followed by stockholders in submitting
nominees.


●
recommend to the board non-renomination or removal from the board
or a board committee as appropriate.


●
review with the board the requisite skills and characteristics for
continuation as board members, the selection


of new
board members and board composition. and


●
select, retain and evaluate any search firm with respect to the
identification of candidates for nomination for election as
directors (and our nominating and governance committee shall have
the sole authority to approve any such firm’s fees and other
retention terms).





We will
rely on the phase-in rules of the SEC and NYSE MKT with respect to
the independence of our nominating and governance committee. These
rules permit us to have a nominating and governance committee that
has at least one member who is independent by five business days
from the NYSE MKT listing date, at least a majority of members who
are independent within 90 days of the NYSE listing date and all
independent members within one year of the NYSE listing
date.





The
committee will assist the board in the selection of nominees for
election as directors at each annual meeting of our stockholders
and will establish policies and procedures regarding the
consideration of director nominations from stockholders. Our board
has adopted a written charter for our nominating and governance
committee, which will be available on our website,
www.lodestarmining.com. The information on our website is not and
will not be deemed to be part of this prospectus and our web
address is included herein as an inactive textual reference
only.





38





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(continued)





Code of Ethics





We have adopted a corporate code of ethics.  We believe
our code of ethics is reasonably designed to deter wrongdoing and
promote honest and ethical conduct; provide full, fair, accurate,
timely and understandable disclosure in public reports; comply with
applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the
code.  A copy of the code of ethics was included as
Exhibit 14.1 to our annual report on Form 10-K filed with the SEC
on April 7, 2009.





Significant Employees





Other than our officers and directors, we do not expect any other
individuals to make a significant contribution to our
business.





Family Relationships





There are no family relationships among our directors, executive
officers or persons nominated or chosen by us to become directors
or executive officers.





Involvement in Certain Legal Proceedings





None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the
past 10 years:





· any
bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that
time;





· any
conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);





· being
subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities;





· being
found by a court of competent jurisdiction (in a civil action), the
SEC or the Commodity Futures Trading Commission to have violated
any federal or state securities or commodities law, and the
judgment has not been reversed, suspended or
vacated;





· being
the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of
any law or regulation prohibiting mail or wire fraud or fraud in
connection with any business activity;





· being
the subject of, or a party to, any judicial or administrative
order, judgment, decree or finding, not subsequently reversed,
suspended or vacated relating to an alleged violation of any
federal or state securities or commodities law or regulation or any
law or regulation respecting financial institutions or insurance
companies; or





· being
the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any stock,
commodities or derivatives exchange or other self-regulatory
organization.





Except as set forth in our discussion below in “Certain
Relationships and Related Transactions,” none of our
directors or executive officers has been involved in any
transactions with us or any of our directors, executive officers,
affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the SEC.





Management Agreements





We do not yet have a formal management or consulting agreement in
place with Mark Walmesley, our President, Chief Executive Officer,
Chief Financial Officer, Treasurer and
director.  Regardless, we expect Mr. Walmesley to
allocate the majority of his working time to our
business.  We also do not yet have a formal management or
consulting agreement in place with Thomas Temkin, our Chief
Operating Officer and director. Until a formal work program for the
Property is in place, Mr. Temkin is being compensated by Lode Star
Gold Inc.





39





ITEM 11.
EXECUTIVE COMPENSATION.





Summary Compensation Table





The following sets forth information with respect to the
compensation awarded or paid to Mark Walmesley, our President,
Chief Executive Officer, Chief Financial, Treasurer and director,
Robert Baker, our former President, Chief Executive Officer, Chief
Financial Officer and Treasurer, Thomas Temkin, our Chief
Operating Officer and director, and Pam Walters, our Secretary, for
all services rendered in all capacities to us during our fiscal
years ended December 31, 2015 and 2014. We do not have any
other executive officers and no other individual received total
compensation from us in excess of $100,000 during those
years.





Pursuant to Item 402(a)(5) of Regulation S-K we have omitted
certain columns from the table since there was no compensation
awarded to, earned by or paid to these individuals required to be
reported in such columns in either year.





Name and Principal Position
Year Ended
December 31
Salary
($)
Total
($)Mark
Walmesley, CEO (1)
2015
-
-2014
-
-Robert
Baker, former CEO (2)
2015
-
-2014
60,653
60,653Thomas
Temkin, Director and COO (3)
2015
-
-2014
-
-Pam
Walters, Secretary (4)
2015
-
-2014
-
-





(1)
Mark Walmesley was appointed as our Chief Financial Officer,
Treasurer and director on September 22, 2014, and our President and
Chief Executive Officer on the December 11, 2014.  Mr.
Walmesley has been LSG’s Director of Operations since 2005
and a director of the company since March 2009.





(2)
Robert Baker was appointed as our Secretary and director on
December 9, 2004, acted as our Chief Financial Officer and
Treasurer from May 31, 2007 until September 22, 2014, and acted as
our President and Chief Executive Officer from May 31, 2007 until
December 11, 2014. The consulting agreement for those
services, originally effective January 1, 2012, was cancelled in
accordance with a settlement agreement dated December 5,
2014.





(3)
Thomas Temkin was appointed as
our Chief Operating Officer and
director on January 19, 2015.





(4)
Pam Walters was appointed as our Secretary on April 22,
2015.





Section 16(a) Beneficial Ownership Compliance





Section
16(a) of the Exchange Act, as amended, requires our executive
officers, directors and persons who beneficially own more than 10%
of our common stock to file reports of their beneficial ownership
and changes in ownership (Forms 3, 4 and 5, and any amendment
thereto) with the SEC. Executive officers, directors, and greater
than ten percent holders are required to furnish us with copies of
all Section 16(a) forms they file. Based solely on a review of the
Forms 3 and 4 and amendments thereto furnished pursuant to Rule
16a3(c) during its most recent fiscal year and Form 5 and
amendments thereto furnished with respect to our most recent fiscal
year, and any written representations to the effect that no Form 5
is required.





To the
best of our knowledge, no person who, at any time during such
fiscal year, was a director, officer, or beneficial owner of more
than 10% of our common stock, or any other reporting person (as
defined in Item 405 of Regulation SK) (“reporting
person”), other than Lode Star Gold, Inc., failed to file on
a timely basis, as disclosed in the above forms, reports required
by Section 16(a) of the Exchange Act during the most recent fiscal
year or prior fiscal year: 2014.





Outstanding Equity Awards at Fiscal Year-End





As of December 31, 2015, we did not have any outstanding equity
awards.





Benefit Plans





We do not have any pensions plan, profit sharing plan or similar
plan for the benefit of our officers, directors or
employees.  However, we may establish such plans in the
future.





40





ITEM 11.
EXECUTIVE COMPENSATION. (continued)





Director Compensation





We have not compensated any of our directors for their service on
the Board of Directors.  Management directors are not
compensated for their service as directors; however they may
receive compensation for their services as our employees. The
compensation received by our former CEO and director is shown in
the “Summary Compensation Table” above.





ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS





The following table lists the beneficial ownership of shares of our
common stock by (i) all persons and groups known by
the


company to own beneficially more than 5% of the outstanding shares
of our common stock, (ii) each director, (iii) each person who held
the office of chief executive officer at any time during the year
ended December 31, 2015, (iv) up to two executive officers other
than the Chief Executive Officer who were serving as executive
officers on December 31, 2015 and to whom the company paid more
than $100,000 in compensation during the last fiscal year, (v) up
to two additional persons to whom the company paid more than
$100,000 during the last fiscal year but who were not serving as an
executive officer on December 31,2015 and (vi) all directors and
officers as a group. None of the directors, nominees, or officers
of the company owned any equity security issued by the
company’s subsidiaries. Information with respect to officers,
directors and their families is as of December 31, 2015, updated to
March 7, 2016, and is based on the books and records of the company
and information obtained from each individual. Information with
respect to other stockholders is based upon the Schedule 13D or
Schedule 13G filed by such stockholders with the Securities and
Exchange Commission. Unless otherwise stated, the business address
of each individual or group is the same as the address of the
company’s principal executive office.





Number of
Percentage ofName and Address of Beneficial Owner (1)
Common Shares
Ownership (2)Mark Walmesley (3)
1,225,000
2.49%Thomas Temkin (4)
20,000
0.04%All executive officers and directors as a group (2
persons)
1,245,000
2.53%Lode Star Gold Inc. (5)
35,000,000
71.24%Lonnie S. Humphries Non-Exempt Trust (5)
200,000
0.41%Lonnie S. Humphries
1,369,756
2.79%





1)
 Unless otherwise indicated, the address of all
named persons is 13529 Skinner Road, Suite N,
Cypress, Texas 77429-1775





2)
 Based
on 49,127,825 shares of our common stock issued and outstanding as
of December 31, 2015.





3)
 Mark
Walmesley was appointed as our Chief Financial Officer, Treasurer
and director on September 22, 2014, and our President and Chief
Executive Officer on December 11, 2014.  Mr. Walmesley
has been LSG’s Director of Operations since 2005 and a
director of the company since March 2009.





4)
 Thomas
Temkin was appointed as Chief Operating Officer and to the Board of
Directors on January 19, 2015.





5)
 The
person with investment and dispositive authority is Lonnie
Humphries





Changes in Control





As of the date of this report, we are not aware of any
arrangements, including any pledge by any person of our securities,
the operation of which may at a subsequent date result in a change
in our control.








41


ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.





On December 11, 2014, pursuant to the Subscription Agreement, we
issued 35,000,000 shares of our common stock to
LSG.  Upon the closing of the Acquisition, LSG became our
principal stockholder and Mark Walmesley, the Director of
Operations and a director of LSG, was appointed as our President
and Chief Executive Officer.





As of December 31, 2015, the following amounts were due to related
parties:





· To
Mark Walmesley, our President, Chief Executive Officer, Chief
Financial Officer, Treasurer and director: an unsecured loan with
interest at 5% per annum; with no specific terms of repayment, in
the amount of $40,789 plus accrued interest of
$2,609





· To
Lode Star Gold Inc., our controlling shareholder
(“LSG”): two unsecured loans with interest at 5% per
annum, with no specific terms of repayment, totaling $313,966 plus
accrued interest totaling $10,493, and $123,913 in accrued mineral
option fees payable under the terms of our Mineral Option Agreement
with LSG dated October 4, 2014





· To
Lonnie Humphries, the sole shareholder of Lode Star Gold Inc., our
controlling shareholder: an unsecured, non-interest bearing loan of
$3,612, with no specific terms of repayment





Other than as described above, we have not entered into any
transactions with our officers, directors, persons nominated for
these positions, beneficial owners of 5% or more of our common
stock, or family members of those persons wherein the amount
involved in the transaction or a series of similar transactions
exceeded the lesser of $120,000 or 1% of the average of our total
assets for the last two fiscal years.





Director Independence





Because our common stock is not currently listed on a national
securities exchange, we currently use the definition in NASDAQ
Listing Rule 5605(a)(2) for determining director independence,
which provides that an “independent director” is a
person other than an executive officer or employee of the company
or any other individual having a relationship which, in the opinion
of the company’s Board of Directors, would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director.  The NASDAQ listing rules
provide that a director cannot be considered independent
if:





· the
director is, or at any time during the past three years was, an
employee of the company;





· the
director or a family member of the director accepted any
compensation from the company in excess of $120,000 during any
period of 12 consecutive months within the three years preceding
the independence determination (subject to certain exclusions,
including, among other things, compensation for board or board
committee service);





· a
family member of the director is, or at any time during the past
three years was, an executive officer of the
company;





· the
director or a family member of the director is a partner in,
controlling stockholder of, or an executive officer of an entity to
which the company made, or from which the company received,
payments in the current or any of the past three fiscal years that
exceed 5% of the recipient’s consolidated gross revenue for
that year or $200,000, whichever is greater (subject to certain
exclusions);





· the
director or a family member of the director is employed as an
executive officer of an entity where, at any time during the past
three years, any of the executive officers of the company served on
the compensation committee of such other entity;
or





· the
director or a family member of the director is a current partner of
the company’s outside auditor, or at any time during the past
three years was a partner or employee of the company’s
outside auditor, and who worked on the company’s
audit.





We have determined that none of our directors meet this definition
of independence due to the fact that they are also our executive
officers.








42





ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.





See Item 9 regarding the 2015 change in our independent registered
public accounting firm.





(1) Audit Fees





The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for our
audit of annual financial statements and review of financial
statements included in our Form 10-Qs or services that are normally
provided by the accountant in connection with statutory and
regulatory filings or engagements for those fiscal years
was:





2015
$4,000
MaloneBailey
LLP2015
$23,793
Morgan
& Company  LLP2014
$18,750
Morgan
& Company  LLP





(2) Audit-Related Fees





The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountants that
are reasonably related to the performance of the audit or review of
our financial statements and are not reported in the preceding
paragraph:





2015
$0
MaloneBailey
LLP2015
$0
Morgan
& Company  LLP2014
$0
Morgan
& Company  LLP





(3) Tax Fees





The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning was:





2015
$0
MaloneBailey
LLP2015
$0
Morgan
& Company  LLP2014
$0
Morgan
& Company  LLP





(4) All Other Fees





The aggregate fees billed in each of the last two fiscal years for
the products and services provided by the principal accountant,
other than the services reported in paragraphs (1), (2), and (3)
was:





2015
$0
MaloneBailey
LLP2015
$0
Morgan
& Company  LLP2014
$0
Morgan
& Company  LLP





(5) The percentage of hours expended on the principal
accountant’s engagement to audit our financial statements for
the most recent fiscal year that were attributed to work performed
by persons other than the principal accountant’s full time,
permanent employees was nil.














43








PART IV. OTHER INFORMATION





ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.





The following is a complete list of exhibits filed as part of this
annual report:





Incorporated by referenceExhibit
Document Description
Form
Date
Number
Filed herewith3.1
Articles of Incorporation.
SB-2
3/04/05
3.13.2
Bylaws.
SB-2
3/04/05
3.23.3
Amended and Restated Articles of Incorporation
14-C
11/24/14
3.33.4
Omnibus Equity Incentive Plan
14-C
11/24/15
3.44.1
Specimen Stock Certificate.
SB-2
3/04/05
4.110.1
Mining Claim.
S-1/A-5
2/08/08
10.110.2
Bill of Sale.
SB-2
3/04/05
10.210.3
Trust Agreement.
SB-2
12/19/07
10.310.4
Consulting Agreement with Woodburn Holdings Ltd.
8-K
2/21/12
10.110.5
Mineral Option Agreement with Lode Star Gold Inc.
8-K
10/09/14
10.110.6
Settlement
Agreement
8-K
12/16/14
10.210.7
Acquisition
of Mineral Property Interest



X14.1
Code of Ethics.
10-K
4/15/11
14.131.1
Certification of
Principal Executive and Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002



X32.1
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Chief Executive and Chief Financial Officer.



X99.1
Subscription Agreement.
SB-2
3/04/05
99.199.2
Charter Audit Committee
10-K
4/15/11
99.299.3
Disclosure Committee
10-K
4/15/11
99.3101.INS
XBRL Instance Document
10-K
4/14/14
101.INS101.SCH
XBRL Taxonomy Extension Schema
10-K
4/14/14
101.SCH101.CAL
XBRL Taxonomy Extension Calculation Linkbase
10-K
4/14/14
101.CAL101.DEF
XBRL Taxonomy Extension Definition Linkbase
10-K
4/14/14
101.DEF101.LAB
XBRL Taxonomy Extension Label Linkbase
10-K
4/14/14
101.LAB101.PRE
XBRL Taxonomy Extension Presentation Linkbase
10-K
4/14/14
101.PRE

















44





SIGNATURES





In accordance with Section 13 or 15(d) of the Securities and
Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on
this 10th
day of January,
2017





LODE-STAR MINING INC.By:
/s/Mark
WalmesleyMark WalmesleyPresident, Principal Executive Officer, Treasurer, Principal
Financial Officer, and Principal Accounting Officer




















In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated:





Signature
Title
Date/s/Mark
Walmesley
Director, President, Chief Executive Officer and Chief Financial
Officer
January 10, 2017Mark Walmesley



































45