1. Nature of Business
On July 30, 2008, Antioquia Gold Inc. (formerly High American Gold Inc.) (the “Company”) completed a transaction with Am-Ves Resources Inc. (“Am-Ves”) a company which was
incorporated under the laws of Alberta on January 19, 2006. The company now owns 100% of the outstanding shares of Am-Ves. This transaction has been accounted for as a reverse takeover as the control of Antioquia Gold Inc. was acquired by the shareholders of Am-Ves. Prior period results and comparatives are those of Am-Ves and its subsidiaries. Am-Ves owns 100% of Antioquia Gold Ltd., a Barbados company, which in turn has a branch registered to do business in Colombia, South America. All the mineral exploration activities of the company are in Colombia.
The Company is engaged in the acquisition, exploration and development of mineral resource properties internationally, with a current focus in Columbia. The Company considers itself to be in the development stage as it is in the process of exploring its mineral properties and has not yet determined whether they contain reserves that are economically recoverable. The success of the Company’s exploration and development of its mineral properties will be influenced by significant financial risks, legal and political risks, fluctuations in commodity prices and currency exchange rates, varying levels of taxation and the ability of the Company to discover recoverable reserves and to bring such reserves into production on an economic basis. The Company will be required to obtain additional financing to develop its resource properties. While the Company seeks to
manage these risks, many of these factors are beyond its control.
These interim unaudited financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles. The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the interim financial statements and accompanying notes. Actual results could differ from those estimates. The interim financial statements have, in management’s opinion, been properly prepared using careful judgment with reasonable limits of materiality. These interim financial statements do not include all the note disclosures required for annual financial statements and therefore they should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2008. The interim financial statements have been prepared following the same significant accounting policies as the most recently reported audited financial statements of the Company except as
disclosed in Note 3.
2. Going Concern
These consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles applicable for a going concern, which presumes that the Company will continue realizing its assets and discharging its liabilities in the normal course of business. At December 31, 2008, the Company had a cumulative deficit of $765,599 (March 31, 2008 – $304,160) and working capital deficiency of $376,827. The Company’s ability to continue as a going concern is dependent upon its ability to attain profitable operations, generate sufficient funds and continue to obtain sufficient capital from investors to meet its current and future obligations
3 . Summary of Significant Accounting Policies
The Canadian Institute of Chartered Accountants (“CICA”) issued the following new Handbook Sections, which were effective for interim periods beginning on or after April 1, 2008 for Am-Ves.
(a) Section 3862, “Financial Instruments – Disclosures”, describes the required disclosure for the assessment of the significance of financial instruments for an entity’s financial position and performance and of the nature and extent of risks arising from financial instruments to which the entity is exposed and how the entity manages those risks. This section and Section 3863, “Financial Instruments – Presentation” replaced Section 3861, “Financial Instruments – Disclosure and Presentation”. The adoption of this section did not have a material impact on the Company’s financial statements.
(b) Section 3863, “Financial Instruments – Presentation”, establishes standards for presentation of financial instruments and non-financial derivatives. The adoption of this section did not have a material impact on the Company’s financial statements.
(c) Section 1535, “Capital Disclosures”, establishes standards for disclosing information about an entity’s capital and how it is managed. It describes the disclosure requirements of the entity’s objectives, policies and processes for managing capital, the quantitative data relating to what the entity regards as capital, whether the entity has complied with capital requirements, and, if it has not complied, the consequences of such non-compliance. The adoption of this section did not have a material impact on the Company’s financial statements.
(d) The CICA has amended Section 1400, “General Standards of Financial Statement Presentation”, to include requirements to assess and disclose the Company’s ability to continue as a going concern. The adoption of this new section did not have a material impact on the financial statements.
(e) In addition, the Company has assessed new and revised accounting pronouncements that have been issued that are not yet effective and determined that the following may have a significant impact on the Company:
• As of April 1, 2009, Am-Ves will be required to adopt CICA Handbook Section 3064 Goodwill and Intangible Assets which replaces CICA Handbook Sections 3062 Goodwill
and Other Intangible Assets and Section 3450 Research and Development Costs. The adoption is not expected to have a material impact on its financial statements.
• The Canadian Accounting Standards Board (AcSB) has confirmed that the use of International Financial Reporting Standards (“IFRS”) will be required in 2011 for publicly
accountable profit-oriented enterprises. IFRS will replace Canada’s current GAAP for those enterprises. These include listed companies and other profit-oriented enterprises that
are responsible to large or diverse groups of stakeholders. The official changeover date is for interim and annual financial statements relating to fiscal years beginning on or after
January 1, 2011. Companies will be required to provide comparative IFRS information for the previous fiscal year. Am-Ves is currently evaluating the impact of adopting IFRS.