The following discussion should be read in conjunction with our financial
statements and the related notes that appear elsewhere in this quarterly report.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed below and elsewhere in
this quarterly report on Form 10-Q.
Overview
We were incorporated in the State of Nevada on July 21, 2005, under the name
"Nava Resources, Inc." for the purpose of conducting mineral exploration
activities. We were authorized to issue 400,000,000 shares of common stock,
having a par value of $0.001 per share. On January 4, 2007, we obtained written
consent from our shareholders to amend our Articles of Incorporation to change
the par value of our common stock from $0.001 to $0.00001 per share, which
change was effected on February 28, 2007. Effective July 30, 2013, we changed
our name from "Nava Resources, Inc." to "Blox, Inc.".
On July 9, 2020, the Company received notice from OTC Markets Group that the
closing bid price of our common shares has closed below $0.01 for more than 30
consecutive calendar days and no longer meets the Standards for Continued
Eligibility for the OTCQB quotation tier as per the OTCQB Standards Section
2.3(2), which states that the Company must "maintain proprietary priced
quotations published by a Market Maker in OTC Link with a minimum closing bid
price of $0.01 per share on at least one of the prior thirty consecutive
calendar days."
As per Section 4.1 of the OTCQB Standards, the company will be granted a cure
period of 90 calendar days during which the minimum closing bid price for the
Company's common stock must be $0.01 or greater for ten consecutive trading days
in order to continue trading on the OTCQB marketplace. If the requirement is not
met by October 7, 2020, the Company will be removed from the OTCQB marketplace
and demoted to the OTC Pink reporting tier. In addition, if the Company's
closing bid price falls below $0.001 at any time for five consecutive trading
days, the Company will be immediately removed from the OTCQB and demoted to the
OTC Pink reporting tier. On October 8, 2020, the Company's common shares started
trading at OTC Pink sheet.
Recent Developments
Recently Discontinued Projects
Mansounia Property, Guinea, West Africa
Our former Mansounia exploration permit was acquired in 2013 and was secured
based on our technical and financial capabilities to obtain a mining permit. The
2013 exploration permit was near expiration when acquired and was subsequently
renewed for the maximum of four times permitted by the Guinea Mining Code. In
December 2019, the Company submitted its final mining permit proposal to the
Ministry of Mines. The ministry requested, in its discretion, that we provide
evidence of funding to account for 15% of the capital required for project
financing. The Company was unable to secure the required financing during prior
to expiration of the final permit extension, and the permit was withdrawn by
decree from the Ministry of Mines. Although it is our understanding the Ministry
of Mines exercises considerable discretion regarding the extension and
revocation of permits and the grant of mining licenses, the decree to revoke our
exploration permit suggests that our application is no longer under
consideration. With respect to the fate of the project, we anticipate that we
will attempt to renegotiate a position for the Mansounia project once Guinea
reopens its border to international travel (the country has been inaccessible
due to COVID-19).
Current Business:
Pramkese, Osenase and Asamankese, Ghana, West Africa
On June 22, 2013, we entered into a share purchase agreement with Waratah
Investments Limited ("Waratah") whereby we agreed to purchase all of Waratah's
right, title, and interest in the Quivira Gold ("Quivira") shares, of which
Waratah holds 100% of the outstanding shares. As consideration for the Quivira
shares, we agreed to issue to Waratah 60,000,000 shares of common stock and
60,000,000 warrants. Each warrant entitles the holder to purchase one additional
common share at $0.05 for a period of five years from the closing date. Quivira,
a subsidiary of Waratah, owns and operates gold and diamond mining properties in
Ghana.
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The closing of the agreement was subject to the completion of a private
placement financing of up to US$1,500,000, which private placement was completed
in April 2018. We issued 30,000,000 units (the "Units") at a price of US$0.05
per unit for aggregate gross proceeds of US$1,500,000. US$1,100,000 of the
proceeds were advanced as non-interest bearing loans since 2014 and were
utilized to cover general and administrative expenses, as well as to carry out
exploration work on our mineral properties. The remaining balance of US$400,000
was received by April 2018. Each Unit consists of one common share and one share
purchase warrant entitling the holder thereof to purchase one additional common
share at a price of $0.05 per share for a term of five years from the date of
issuance.
Closing the Agreement is also conditional upon receiving legal opinions of Ghana
counsel confirming various matters relating to the laws of Ghana, including
corporate and title opinions; the Company receiving legal opinions of Australian
counsel confirming various matters relating to the laws of Australia, including
corporate and title opinions; completion of certain ongoing transactions by
Quivira relating to the transfer of title to certain assets and to an assignment
of debt; and preparation of U.S. GAAP consolidated financial statements for
Quivira.
Our directors conducted their first visit to Ghana in August 2015, when they
visited the Birim Region where the three Ghanaian concessions are located. The
objective was to carry out a geological reconnaissance over the areas to
identify potentially favourable lithologies. The directors inspected the
existing field programs in Ghana and oversaw the planning and implementation of
programs for the near future. Field work on the three concessions has since
ceased and associated exploration permits have expired. Neither the Company nor
Quivira holds any right title or claim to the concessions, but the Company
endeavors to renew permits subject to securing sufficient financing. There is no
guarantee that sufficient financing will be raise in a timely manner, if at all.
We intend to renew permits for three concessions in Ghana for their gold and
diamond potential, and to explore the market for other viable assets. All three
licences have expired and require an estimated $100,000 to renew. We are
currently in discussions with with prospective equity investors to finance the
renewal costs, however no agreement has been secured. Nevertheless, in order to
secure necessary financing, we will be required to increase our authorized
capital. The Asamankese, Osenase and Pramkese concessions are located near
Asamankese, Akim Oda and Kade towns respectively. The concession is dominated by
broad pene plain, dotted with moderate to high hills and remnant of rain forest.
The area is hilly and rugged, running from 180m to 300m in elevation. Around the
licences is the Atewa range about 1050m above sea level. There are little
published records of extensive widely scattered gold mineralization old pits,
shafts and adits, as well as artisanal gold workings in the concessions. In the
mid-sixties, the Geological Survey Department of Ghana undertook reconnaissance
mapping and soil geochemical survey in the area during which traces of gold were
recorded in panned concentrates of geochemical samples.
1. Osenase
Osenase is in the Birim Central Municipal District. The nearest town to the
project area is the District Capital Akim Oda. This project has seen limited
amount of gold exploration. The concession was previously held by Cornucopia
Resources in the 1990s and was engaged in potential for a diamond resource.
Paramount Mining Corporation held the concession for almost 6 years with limited
amount of work. The limited work done was focused on diamondiferous hard rock
potential at Atiankama Nkwanta. The presence of diamonds in what appears to be
an in-situ unit exposed by the Francis Pits at Atiakama Nkwanta provides an
opportunity to explain the source of some of the diamonds in the region. S Two
oriented grids were sampled in 2007 but were never analysed for gold. The
samples have been stored at the Manso camp to be analysed later. No subsequent
work has been carried out to establish gold or diamond potential, and there is
no guarantee that ore is present in economically significant quantity.
2. Asamankese
Asamankese is a 150Km2 Prospecting License (PL) in the West Akim District. The
nearest town to the project area is the District Capital Asamankese. Asamankese
was originally part of Osenase under a reconnaissance licence. In 2006, about 4
soil-oriented grids on 800m x 50m was established and sampled. The samples were
stored at the Manso camp to be analysed later. The samples are still in storage
at the Manso camp. A total of 436 samples representing two of the gridlines
L1600N and L2400N at 800m apart were later on analysed for gold. The samples
were sent to SGS Tarkwa for 2kg BLEG analysis. Results received were not
encouraging for gold, with only one modest spike of 170 ppb Au, associated with
alluvials. A limited stream sediment program began in November 2008 but could
not be completed due to financial constraints. About 108 stream sediment samples
were collected and panned for visible gold out of a total 183 planned. No
laboratory analysis was carried out. About 80 sample points are still yet to be
sampled.
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3. Pramkese
Pramkese is a 66 square kilometres Prospecting License (PL) in the Kwaebibirim
District located in the Birim Diamond Field. The nearest town to the project
area is the District Capital Kade. Limited reconnaissance work was carried out
in 2009 and the licence was converted to a Prospecting Licence. The exercise
concentrated on the south of the town of Pramkese. Ten (10) alluvial pits were
dug and sampled. The samples collected were panned and hand jigged for gold and
diamond respectively. In the early 90's, a fair amount of work was done on the
concession for both alluvial gold and diamond by Basogard. Basogard defined some
alluvial gold and diamond resources which were never investigated.
The company is now in discussions with various potential partners to explore and
define the potential of these concessions, however no definitive agreements have
been reached. There is no guarantee that any agreements will be reached or that
permits will be secured.
Going Concern
Our financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. We have not yet established an ongoing source of
revenues sufficient to cover our operating costs and to allow us to continue as
a going concern. We have incurred a net loss of $50,455 for the six months ended
September 30, 2020, and have incurred cumulative losses since inception of
$35,359,152. These factors raise substantial doubt about the ability of the
Company to continue as going concern. Our ability to continue as a going concern
is dependent on our ability to continue obtaining adequate capital to fund
operating losses until we become profitable. If we are unable to obtain adequate
capital, we could be forced to significantly curtail or cease operations.
We will need to raise additional funds to finance continuing operations.
However, there are no assurances that we will be successful in raising
additional funds. Without sufficient additional financing, it would be unlikely
for us to continue as a going concern. Our ability to continue as a going
concern is dependent upon our ability to successfully accomplish the plans
described in this quarterly report and eventually secure other sources of
financing and attain profitable operations.
Results of Operations
Three Months Ended September 30, 2020 and 2019
The net loss and comprehensive loss for the three months ended September 30,
2020 was $13,076 as compared to the net loss and comprehensive loss for three
months ended September 30, 2019 of $262,912. Operating expenses for the 2nd
quarter totaled $37,338 compared to $69,878, in 2019 a decrease of $32,540. Some
of the more items contributing to the net loss and comprehensive loss for the
2nd quarter of 2020 and 2019 were as follows:
? Exploration expenses of $Nil (2019 - $10,408). The Company currently will not
involve the exploration activities due to the loss of Mansounia exploration
license.
? Consulting and professional fees of $21,033 (2019 - $42,997). The decrease is
result of cutting back the management fees in the current quarter.
? Loss on the investment in warrants of $Nil (2019 - $65,507). The fair value of
warrants of ASI is $Nil in the current quarter due to the warrants expired.
? Accretion of $9,130 (2019 - $16,788). The decrease in accretion is due to only
one convertible note is still outstanding in the current quarter when compared
to two convertible notes in 2019.
? Unrealized gain on the investment in common shares of $34,899 (2019 - $100,113
unrealized loss). The unrealized gain is due to holding the investment in
Ashanti Sankofa Inc's (TSX.V-ASI)' common shares. The market value of ASI's
common shares increased for the current quarter.
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Six Months Ended September 30, 2020 and 2019
The net loss and comprehensive loss for the six months ended September 30, 2020
was $50,455 as compared to the net loss for the six months ended September 30,
2019 of $217,381. Operating expenses for two quarters totaled $107,975 compared
to $137,276 in 2019 a decrease of $29,301. Some of the more items contributing
to the net loss and comprehensive loss for two quarters of 2020 and 2019 were as
follows:
? Exploration expenses of $Nil (2019 - $35,513). The Company currently will not
involve the exploration activities due to the loss of Mansounia exploration
license.
? Consulting and professional fees of $43,824 (2019 - $77,502). The decrease is
result of cutting back the management fees in the current quarter.
? Loss on the investment in warrants of $Nil (2019 - $20,854). The fair value of
warrants of ASI is Nil in the current quarter due to the warrants expired.
? Accretion of $18,391 (2019 - $16,788). The accretion of the convertible
debenture was recognized in both 2020 and 2019.
? Default penalties of $35,000 (2019 - $Nil). The Default penalties, a non-cash
expense incurred is due to the loss of Mansounia property.
? Unrealized gain on the investment in common shares of $85,101 (2019 - $31,837
unrealized loss). The unrealized gain is due to holding the investment in
Ashanti Sankofa Inc's (TSX.V-ASI)' common shares. The market value of ASI's
common shares decreased for the current quarter.
Management anticipates operating expenses will materially increase in future
periods as we focus on green mineral development and incur increased costs as a
result of being a public company with a class of securities registered under the
Securities Exchange Act of 1934.
Liquidity and Capital Resources
Working Capital
September 30, March 31,
Continuing Operations 2020 2020
Current Assets $ 29,203 $ 32,718
Current Liabilities 753,672 810,779
Working Capital Deficit $ (724,469 ) $ (778,061 )
Current Assets
The nominal decrease in current assets as of September 30, 2020 compared to
March 31, 2020 was primarily due to a decrease in cash from $27,551 to $18,036.
Current Liabilities
Current liabilities as at September 30, 2020 decreased by $57,107 since March
31, 2020, primarily due to the conversion of convertible debentures into common
shares during the current quarters.
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Cash Flow
Our cash flow was as follows:
Six Months Ended
September 30
2020 2019
$ $
Net cash used in operating activities (77,515 ) (76,340 )
Net cash used in investing activities - -
Net cash provided by financing activities 68,000 137,500
Decrease (increase) in cash and cash equivalents (9,515 ) 61,160
Operating activities
The increase in net cash used in operating activities for the six months ended
September 30, 2020, compared to the same period in 2019 was primarily as a
result of increased operating activities in the current quarter.
Investing activities
For the six months ended September 30, 2019 and 2020, there were no investing
activities incurred.
Financing activities
There were convertible promissory notes issued in the six months ended September
30, 2020 and September 30, 2019.
Critical Accounting Policies
There have been no significant changes to the critical accounting policies as
described in our Annual Form 10-K for the year ended March 31, 2020.
Cash Requirements
Our current cash position is not sufficient to meet our present and near-term
cash needs. We will require additional cash resources, including the sale of
equity or debt securities, to meet our planned capital expenditures and working
capital requirements. For the next 12 months we estimate that our capital needs
will be $500,000 to $750,000 and we currently have approximately $18,000 in
cash. We will seek to sell additional equity or debt securities or obtain
additional credit facilities. The sale of additional equity securities will
result in dilution to our stockholders. The incurrence of indebtedness will
result in increased debt service obligations and could require us to agree to
operating and financial covenants that could restrict our operations or modify
our plans to grow the business. Financing may not be available in amounts or on
terms acceptable to us, if at all. Any failure by us to raise additional funds
on terms favorable to us, or at all, will limit our ability to expand our
business operations and could harm our overall business prospects.
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 is material to our stockholders.
Contractual Obligations
Not applicable.
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