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DYNAMIC GOLD CORP. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

February 7, 2014

The terms "Dynamic Gold", "Company", "we", "our", and "us" refer to Dynamic Gold Corp. and its subsidiary, as a consolidated entity, unless the context suggests otherwise.

FORWARD-LOOKING STATEMENTS



This Quarterly Report on Form 10-Q includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation the Risk Factors set forth in our Annual Report on Form 10-K for the year ended June 30, 2013 including the following:

our failure to obtain additional financing; our inability to continue as a going concern; the unique difficulties and uncertainties inherent in the mineral exploration business; the inherent dangers involved in mineral exploration; our President's and Secretary/Treasurer's inability to devote a significant amount of time to our business operations; environmental, health and safety laws in British Columbia; local and multi-national economic and political conditions; natural hazards on the Coast of British Columbia, Canada; and our common stock.



General

On January 8, 2008, we acquired, through our wholly owned subsidiary, a 100% interest in two gravel claims called the Northern Gravel Claims and Super Mammoth Gravel Claims (the "Super Mammoth Gravel Project") situated on tidewater for $25,000. The Super Mammoth Gravel Project consists of two mineral claim tenures that are approximately 124.1 each hectares ("ha") in size (total 248.2 ha). A detailed report used in obtaining aggregate samples has been filed and accepted by the British Columbia's Gold commissioner's office in September 2007. The claims are currently in good standing until their respective anniversary dates of November 6, 2014 (Northern Gravel Claim) and January 19, 2015 (Super Mammoth Claim).

On June 5, 2008, a comprehensive National Instrument 43-101 compliant report (the "report") on the Super Mammoth Gravel Project was completed. The report was prepared in accordance with the guidelines of National Instrument 43-101 "Standards of Disclosure for Mineral Projects" and is based on data and geological information gathered from public sources, assessment files, historical information, British Columbia provincial government maps and reports. The source information of data presented in the report discusses the geology and mineral potential of the Super Mammoth Gravel Project and is believed to be reliable and accurate.

The Super Mammoth Gravel Project is located at Lloyd Point on the east arm of Toba Inlet situated 50 kilometers east of Campbell River, British Columbia, Canada and 28 kilometers north of Powell River on the British Columbia mainland. The existence of the Super Mammoth gravel deposit has been identified by Lands and Water British Columbia Inc. and has been the subject of numerous preliminary investigations over the years, with the potential to host a year round future sand and gravel aggregate operation with tidewater access that could supply growing demand for a range of raw materials to both British Columbia, Washington State, California and other United States and Pacific Rim coastal construction markets.

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The Super Mammoth Gravel Project is situated between sea level to about 300 meters in elevation that comprises a sorted accumulation of sand and gravel.

Plan of Operations

Our intention for the next twelve months is to determine the Super Mammoth Gravel Project drill targets for future mineral exploration and development. Our 43-101 Report, which was finalized June 5, 2008, recommended a two-phase program. Phase One of the two-phase program outlines a three-stage program which covers a period of one month and will cost approximately $100,000. The three-stage program includes detailed mapping and sampling, clearing of the old road and north-south line cutting, which will facilitate further geological work and provide the requirements of a proposed seismic survey. The seismic survey would be carried out as stage three of the first phase of the exploration program recommended in the report. The stage three seismic survey of up to 5km total length will assist in order to establishing a three dimensional modeling and shape of the deposit. Once complete, and subject to the results of the report obtained in Phase 1, the Company will continue to Phase 2. Phase 2 is expected to take one month to complete and cost up to $200,000. Phase 2 will consist of 1,200 meters of drilling to determine shape (volume) of the deposit and the quality of the aggregate material.

The recoverability of amounts from the property will be dependent upon discovering economically recoverable reserves with specifications which are suitable for commercial products as defined by ASTM and CSA. Considerable further investigation will be required to establish the size of the deposit towards understanding its economic viability, the environmental concerns of the area and the social impact on various stakeholders.

In the next twelve months, we also anticipate spending an additional $120,000 on administrative fees, including professional fees payable in connection with the filing of this registration statement and complying with reporting obligations. Total expenditures over the next twelve months are therefore expected to be approximately $420,000.

Our cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding. However, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. As well, our management is prepared to provide us with short-term loans. During the six month period ended December 31, 2013, the Company borrowed an additional $Nil (December 31, 2012 - $10,000) from an officer, director and shareholder of the Company. This promissory note payable bore interest at 10% per annum. During the six month period ended December 31, 2013, $Nil (December 31, 2012 - $9,557) interest has been accrued and is secured by a general agreement over all the assets of the Company and is due and repayable January 8, 2014. On 26 April 2013, the Company paid $90,000 and issued 185,000 common shares at a price of $1.00 per share for a total consideration of $275,000 to an officer, director and shareholder of the Company as full settlement of the outstanding balance due to related party.

We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing.

If we do not secure additional funding for exploration expenditures, we may consider seeking an arrangement with a joint venture partner that would provide the required funding in exchange for receiving a part interest in the Super Mammoth Gravel Project. We have not undertaken any efforts to locate a joint venture partner. There is no guarantee that we will be able to locate a joint venture partner who will assist us in funding exploration expenditures upon acceptable terms.

If we are unable to arrange additional financing or find a joint venture partner for the Super Mammoth Gravel Project, our business plan will fail and operations will cease.

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Results of Operations for the Six Month Period Ending December 31, 2013

We have not earned any revenues from our incorporation on January 21, 2004 to December 31, 2013. We have not commenced the exploration stage of our business and can provide no assurance that we will discover economic mineralization on the property.

The Company's net loss for the six month period ended December 31, 2013 was $44,733 compared to a net loss of $60,306 for the six month period ended December 31, 2012. The decrease in net loss for the six month period ended December 31, 2013 is mainly attributed to decrease in filing and financing fees, bank charges and interest, legal and accounting fees, and recovery of expenses.

There were no mineral property expenditures related to the Super Mammoth Gravel Project for the six month periods ended December 31, 2013 and December 31, 2012. The Company did not conduct exploration activities during these periods.

Filing and financing fees decreased by $1,829 to $10,869 for the six month period ended December 31, 2013 from $12,698 for the six month period ended December 31, 2012. The filing and financing fees period over period decreased due to the decrease in charges to file our regulatory quarterly and annual filings with the British Columbia Securities Commission and the United States Securities and Exchange Commission.

Bank charges and interest have decreased by $9,757 to $152 for the six month period ended December 31, 2013 from $9,909 for the six month period ended December 31, 2012. The decrease in bank charges and interest period over period is due mainly to the interest accrued on the loan of $195,000 from our President, Mr. Tim Coupland in the previous year.

Legal and accounting fees decreased by $692 to $4,199 for the six month period ended December 31, 2013 from $4,891 for the six month period ended December 31, 2012. The decrease in legal and accounting fees period over period is due mainly to decreased professional fees incurred to prepare and file our regulatory quarterly and annual filings with the British Columbia Securities Commission and the United States Securities and Exchange Commission.

During the six month period ended December 31, 2013, an officer and director of the Company made contributions to capital for management fees in the amount of $30,000 (December 31, 2012 - $30,000) and for rent in the amount of $1,800 (December 31, 2012 - $1,800).

We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Liquidity and Capital Resources

At December 31, 2013, we had cash on hand of $818 and liabilities of $13,844 consisting of accounts payable and accrued liabilities.

Our cash reserves are not sufficient to meet our obligations for the next twelve-month period. We will require additional funding in order to cover all anticipated administration costs and to proceed with the recommendations of the National Instruments 43-101 report on the Super Mammoth Gravel Project, estimated to cost a minimum of $300,000. We do not have any arrangements in place for any future equity financing and there is no guarantee we will be able to obtain the funding necessary to continue as a going concern.

Capital Expenditures

The Company expended no amounts on capital expenditures for the period from inception to December 31, 2013. At present there are no transactions being contemplated by management or the board that would affect the financial condition, results of operations and cash flows of any asset of the Company.

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Employees

At present, we have no employees, other than our current officers and directors, who devote their time as required to our business operations.

Research and Development Expenditures

We have incurred a total of $1,000 in connection with a geological report concerning the Sobeski Lake Gold property. We have not incurred any other research and development expenditures since our incorporation.

An additional $Nil (December 31, 2012 - $Nil) has been incurred in connection with the preparation and completion of the Comprehensive National Instrument 43-101 compliant report on the Super Mammoth Gravel Project.

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements that would require disclosure.

Subsequent Events

There were no subsequent events.

Critical Accounting Policies

Our interim consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies.

Mineral property costs

The Company is primarily engaged in the acquisition, exploration and development of mineral properties.

Mineral property acquisition costs are initially capitalized as tangible assets when purchased. At the end of each fiscal quarter end, the Company assesses the carrying costs for impairment. If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

Mineral property exploration costs are expensed as incurred.

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

As of the date of these interim consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

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Source: Edgar Glimpses


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