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PRESTON CORP. - 10-Q - Management's Discussion and Analysis or Plan of Operation

July 24, 2014

This document includes statements that may constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution readers regarding certain forward-looking statements in this document, press releases, securities filings, and all other documents and communications. All statements, other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this Quarterly Report on Form 10-Q (" Report ") are forward looking. The words " believes ," " anticipates ," " estimates ," " expects ," and words of similar import, constitute " forward-looking statements ." While we believe in the veracity of all statements made herein, forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and contingencies and known and unknown risks. As a result of such risks, our actual results could differ materially from those expressed in any forward-looking statements made by, or on behalf of, our company. We will not necessarily update information if any forward-looking statement later turns out to be inaccurate. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including risks and uncertainties set forth in our S-1 Registration Statement, as well as in other documents we file with the Securities and Exchange Commission ("SEC ").

The following information has not been audited. You should read this information in conjunction with the unaudited financial statements and related notes to the financial statements included in this report.


We are an "exploration stage" company that has not realized any revenues to date. Our business is the acquisition and exploration of mining properties located in the state of Nevada, with the objective of identifying potential gold and silver ore deposits. We have commenced an exploration program on our mineral lease located in Esmeralda County, Nevada, at Oasis Divide, Nevada. On November 15, 2013, we acquired four federal lode mining claims in the Oasis Divide area of Esmeralda County in Nevada, known as the Silver Oasis #1- #4 (the "Silver Oasis claims").

Plan of Operation

We have completed the first phase of the recommended exploration program on our Silver Oasis claims. The program was finalized in December 2013 by our geologist, Charles P. Watson, President of Advanced Geologic Exploration, Inc.

The first phase cost $9,000 which included the staking of the property. The exploration program was recommended by our geologist Advanced Geologic Exploration, Inc., in its Phase 1 Reconnaissance Sampling Report dated December 31, 2013, based on his evaluation of the property, its history and the surrounding geological setting. Our primary focus is in the exploration of silver deposits. The geographical area in and around our claims have shown strong silver and base metal mineralization. Further exploration is required.

Whether or not we will discover commercially viable mineral deposits will depend on this further exploration.

Our plan of operation is to continue exploration work on the Silver Oasis Claims. There is no assurance that an economic mineral deposit exists on the Silver Oasis Claims. Even if we complete our proposed exploration program on the Silver Oasis Claims and we are successful in identifying a mineral deposit, we would have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit.

The Phase 1 reconnaissance exploration and sampling program results are very encouraging and suggest that high-grade silver mineralization could occur at depth. The "Paymaster Zone" of the Palmetto mining district is noted for high-grade silver veins and considering the Silver Oasis claims are located at the north end of that zone, it is likely that these results are indicative of a "sleeper" silver deposit. Moreover, the association of silver mineralization in both the massive quartz vein and iron oxide mineralization suites indicates that the complex ore genesis contained elevated silver throughout its processes. Coupled with the base metal counterparts and the large spatial distributions of the alteration haloes, the Silver Oasis claims have an excellent potential for economic silver deposit.


Other base metal mineralization, such as copper, lead, zinc and tungsten, is observed in nearly every sample and suggests that a complex poly-metallic ore geneses. This high-grade mineralization is consistent with other accounts from other mines found in the mining district.

Our plan of operation for the next twelve months is to carry out the second phase of the recommended exploration program. This program may consist of acquiring additional prospects contiguous to the Silver Oasis Claims and sampling, assaying those claims, as well as geological mapping, a detailed rock sampling program and map and sample underground workings for future drill targets. Phase 2 is estimated to cost between $30,000 and $40,000, which we plan to carry out when financing allows. The exploration program was recommended by Advanced Geologic Exploration, Inc., in its geological report dated December 31, 2013, based on their evaluation of the property, its history and the surrounding geological setting.

We will require additional funding in order to proceed with additional exploration on Silver Oasis Claims. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or from director loans. We do not have any arrangements in place for any future equity financing or loans.

In addition to exploration costs of approximately $40,000, we will incur salary expenses for Mr. Stephenson of $36,000 for a total of $76,000 for the year. If we cannot afford to pay this salary it will be accrued. In addition, we anticipate spending an additional $83,000 on administrative fees, new employees, legal and accounting fees and complying with future SEC reporting obligations.

Total expenditures over the next 12 months are therefore expected to be approximately $159,000. With these expenditures and Mr. Stephenson's education and experience the second phase of exploration will be completed and evaluated. Upon that evaluation a third phase of exploration could be recommended that could cost in the range of $50,000 - $100,000 and will delineate final drilling targets

If we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource or non-resource sector. Any business opportunity would require our management to perform diligence on possible acquisition of additional resource properties. Such due diligence would likely include purchase investigation costs, such as professional fees by consulting geologists, preparation of geological reports on the properties, conducting title searches and travel costs for site visits.

Based on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We base this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include the following:

our ability to raise additional funding;

our ability to locate and acquire a suitable interest in a mineral property;

the market price for minerals;

the results of our proposed exploration programs; and

our ability to find joint venture partners for the development of any property interests

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.

We have had no operating revenues since our inception on January 29, 2013 through June 30, 2014, and have incurred operating expenses in the amount of $73,251 for the same period. Our activities have been financed from the proceeds of share subscriptions and advances from related party.


Results of Operations for Periods Ending June 30, 2014 and June 30, 2013

We did not earn any revenues during the three month periods ending June 30, 2014 and 2013, for the nine and five month periods ended June 30, 2014 and June 30, 2013, respectively, nor for the period from inception through June 30, 2014. We incurred operating expenses in the amount of $28,698 for the three months ended June 30, 2014, compared to $939 for the three months ended June 30, 2013. We incurred operating expenses in the amount of $59,279 for the nine months ended June 30, 2014, compared to $939 for the five months ended June 30, 2013. The increase in general and administrative expenses during the three and nine months ended June 30, 2014 was the costs incurred in preparing and filing a registration statement with the Securities and Exchange Commission.

Liquidity and Capital Resources

As of June 30, 2014, we had total current assets of $16,295, consisting of cash of $8,795 and prepaid deposits of $7,500 for a working capital deficit of $31,105, compared to total currents assets of $6,974 and working capital of $5,574 as of the year ended September 30, 2013. Our liabilities consisted mostly of accounts payable and related party advances to us.

We expect to continue incurring losses in the next twelve months. We have no agreements for additional financing and cannot provide any assurance that additional funding will be available to finance our operations on acceptable terms in order to enable us to complete our plan of operations. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of our mineral claim and our venture will fail.

We plan to continue to finance our activities in the short term through shareholder advances similar to the ones that have occurred to date. In the longer term it is hoped there will be further equity financings but none are planned at the moment.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet transactions, arrangements, or obligations that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, or capital resources.

Item 3.

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Source: Edgar Glimpses

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