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STAR GOLD CORP. - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

July 29, 2014

PLAN OF OPERATION

The Company maintains a corporate office in Coeur d'Alene, Idaho. This is the primary administrative office for the company and is utilized by Board Chairman Lindsay Gorrill and Chief Financial Officer Kelly Stopher and one administrative employee.

The financial condition of the Company was positive during 2013 and the metals commodity markets were unfavorable for most of the year but with little impact as Star Gold is an exploration stage company.

In the past year the Company completed the following:



Drilling program of approximately 20 holes (6,000 feet) to better define the existence of bulk mineable gold deposit.



Detailed mineralogical studies and metallurgical testing to assess the recovery of cyanide acid leachable gold and silver in the altered rhyolitic rocks.



Issued a detailed report outlining an updated information as to mineralogy at Main Zone and potential economics of such a zone.

The Company's plan of operations for the next twelve months, subject to funding, and the availability of contractors, is as follows:



Continue the advanced exploration and pre-development program for the Longstreet Project with a systematic exploration program to assess the exploration potential for the existence of bulk mineable gold-silver deposits. This work may include the following:

o



A program of in-fill reverse circulation drilling to extend and probe the eastern parts and the southern footwall of the Main Zone . This program will entail approximately 5000 feet of drilling.

o



Update the Mineral Resources of the Longstreet property



Begin a collection of data for preparation of a Baseline Study as required by the USFS and BLM.



Further study water rights issues and water sufficiency at Main Zone on Longstreet.

The preliminary budget for 2014:

STAR GOLD CORP. - LONGSTREET Au-Ag PROJECT, NEVADA

Reverse circulation drilling - 5000 feet $ 280,000 Collection for baseline studies 250,000 Studies into water issues 400,000 Update mineral resource model 40,000 Total $ 970,000



Both the collection for baseline studies and studies relating to water issues are contingent on securing additional financing.

Management believes it can source additional capital in the investment markets in the coming months and years. The Company may also consider other sources of funding, including potential mergers or farm-out a portion of its exploration properties.

Future liquidity and capital requirements depend on many factors including timing, cost and progress of the Company's exploration efforts. The Company will consider additional public offerings, private placement, mergers or debt instruments.

Additional financing will be required in the future to complete planned exploration projects and expand operations to the production stage. Although the Company believes it will be able to source additional financing there are no guarantees any needed financing will be available at the time needed or on acceptable terms, if at all. If the Company is unable to raise additional financing when necessary, it may have to delay exploration efforts or property acquisitions, or be forced to cease operations. Collaborative arrangements may require the Company to relinquish rights to certain of its mining claims.

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RESULTS OF OPERATIONS For the year ended April 30, 2014 April 30, 2013 Mineral exploration expense 701,976 799,862 Legal and professional fees 150,060 192,948 Management and administrative 683,798 1,009,480 Depreciation 5,915 5,915 Directors fees 750 3,000 Other expense (income) (821) 120,880 NET LOSS $ 1,541,678$ 2,132,085



The Company has earned no operating revenue in 2014 or 2013 and does not anticipate earning any revenues in the near future. Star Gold Corp. is an exploration stage company and presently is seeking other business opportunities.

Total net loss for 2014 of $1,541,678 decreased by $590,407 from 20132 total net loss of $2,132,085.

Mineral exploration and consultants' expense

SUMMARY OF MINERAL For the year ended EXPLORATION EXPENSE April 30, 2014 April 30, 2013 Drilling and field work $ 250,214$ 407,177 Geochemical analysis and metallurgy 91,405 71,962 Field consultants and payroll 139,860 176,812 Technical consultants 193,382 108,563 Claims 27,115 35,348



Total mineral exploration expense $ 701,976$ 799,862

Exploration and consultants expense for the year end April 30, 2014 was $701,976, a decrease of $97,886 over 2013 exploration and consultants expense of $799,862 resulting from drilling programs completed at the Longstreet property. Included in the April 30, 2014 exploration and consultant expense were costs associated with metallurgy and revised technical reports on the Longstreet property. Management expects to continue the Company's exploration and drilling programs at Longstreet during the fiscal year ending April 30, 2014 in accordance with minimum spend requirements outlined in Note 4 of the Company's financial statements. Consulting and exploration expenses are expected to increase as the Company anticipates ongoing drilling program(s) on its Longstreet project during the summer and fall of 2014, coupled with additional environmental and geological engineering work designed to taking the property to production. Through amendments to its Property Agreements, the Company will defer additional exploration on both Jet and Excalibur until the second half of calendar year 2014. Management believes concentration of drilling and exploration activities at the Longstreet property provides the best use of capital resources.

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General and administrative expense

SUMMARY OF MANAGEMENT For the year ended AND ADMINISTRATIVE EXPENSE April 30, 2014 April 30, 2013 Auto and travel $ 31,041$ 55,600 General administrative and insurance 31,843 34,497 Management fees and payroll 285,859 142,591 Office and computer expense 20,059 30,198 Rent and lease expense 30,000 34,355 Stock option expense 282,434 708,521 Telephone and utilities 2,562 3,718 Total $ 683,798$ 1,009,480



General and administrative expense decreased $325,682 to $683,798 compared to 2012 expense of $1,009,480. The difference was primarily attributable to a decrease of non-cash stock option expense of $426,087.

During the year ended April 30, 2014, the Company began compensating its President a market rate salary of $11,500 per month and paid a performance-related bonus of $64,981. The Company also engaged an administrative employee during the fiscal year ended April 30, 2014. This accounts for substantially all of the increase in management fees and payrolls for the year ended April 30, 2014.

Management expects travel expense to increase slightly for the fiscal year ending April 30, 2015. Travel is generally related to meetings associated with capital raises and visits to the exploration site by Company management and financiers.

Legal and professional fees SUMMARY OF LEGAL AND PROFESSIONAL FEES For the year ended PROFESSIONAL FEES April 30, 2014 April 30, 2013 Audit and accounting $ 46,941$ 44,178 Legal fees 24,173 73,198 Public company expense 6,951 10,405 Investor relations 71,995 65,167



Total legal and professional fees $ 150,060$ 192,948

Total legal and professional fees decreased $42,888 to $150,060 in 2014 from $192,948 in 2013. Legal fees decreased to $24,173 in 2014 from $73,198 in 2013 as there were no significant corporate governance, financing or legal matters during the fiscal year. Management expects legal fees to increase significantly in fiscal year 2015 relating to private placement documentation and other corporate governance matters.

Audit and accounting fees increased $2,763 from $44,178 for the year end April 30, 2013 compared to $46,941 for the year ended April 30, 2014. Management expects audit and accounting fees to increase slightly in fiscal year 2015 in conjunction with services provided for other corporate governance matters.

Investor relation expense of $71,995 for the year ended April 30, 2014 was an increase of $6,828 compared to $65,167 for the year ended April 30, 2013.

Management expects investor relation expense to remain relatively constant in fiscal year 2015.

Directors fees



Directors fees of $750 were expensed in fiscal year 2014. The Board added one additional members during the year ended April 30, 2014. Certain Board members may be compensated on a per diem consulting rate to verify and assess technical information provided by outside consultants. Those per diem consulting rates are charged to exploration expense as incurred.

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LIQUIDITY AND FINANCIAL CONDITION

WORKING CAPITAL April 30, 2014 April 30, 2013 Current assets $ 574,306$ 756,053 Current liabilities (47,130) (20,597) Working capital $ 527,176$ 735,456 CASH FLOWS Year ended April 30, 2014 2013



Cash flow used by operating activities $ (1,181,614)$ (1,242,215) Cash flow used by investing activities

(44,000) (42,986) Cash flow from financing activities 1,414,800 1,412,832 Net increase in cash during period $ 189,186$ 127,631



Working capital will be utilized for the Company's ongoing exploration at its Longstreet project scheduled for the summer of 2014 and general corporate purposes.

The Company utilized $44,000 in cash from Investing Activities to exercise its option on claims agreements and utilized for certain capitalized mineral assets at its Longstreet and Jet projects. The Company intends to continue exploration activities at Longstreet, Excalibur and Jet, with the primary emphasis on the Longstreet property. Through written agreement with the Optioner, the Company will defer exploration of Excalibur and Jet until the second half of calendar year 2014.

As of April 30, 2014, the Company had cash on hand of $542,757. Since inception, the sole source of financing has been sales of the Company's debt and equity securities. Star Gold Corp. has not attained profitable operations and its ability to pursue any future plan of operation is dependent upon our ability to obtain financing.

Star Gold Corp. anticipates continuing to rely on sales of its debt and/or equity securities in order to continue to fund ongoing operations. Issuances of additional shares of common stock may result in dilution to the Company's existing stockholders. There is no assurance that the Company will be able to complete any additional sales of equity securities or that it will be able arrange for other financing to fund its planned business activities.

The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, or ultimately to attain profitability. Potential sources of cash, or relief of demand for cash, include additional external debt, the sale of shares of the Company's stock or alternative methods such as mergers or sale of the Company's assets. No assurances can be given, however, that the Company will be able to obtain any of these potential sources of cash. The Company currently requires additional cash funding from outside sources to sustain existing operations and to meet current obligations and ongoing capital requirements.

The Company plans for the long term continuation as a going concern include financing future operations through sales of our equity and/or debt securities and the anticipated profitable exploitation of the Company's mining properties.

These plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property.

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OFF-BALANCE SHEET ARRANGEMENTS

The Company has no significant 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 its stockholders.

CRITICAL ACCOUNTING POLICIES

The Company has identified certain accounting policies, described below, that are most important to the portrayal of its current financial condition and results of operations. The Company's significant accounting policies are disclosed in the notes to the audited financial statements included in this Annual Report.

Asset Impairments

Significant property acquisition payments for active exploration properties are capitalized. The evaluation of the Company's mineral properties for impairment is based on market conditions for minerals, underlying mineralized material associated with the properties, and future costs that may be required for ultimate realization through mining operations or by sale. If no mineable ore body is discovered, or market conditions for minerals deteriorate, there is the potential for a material adjustment to the value assigned to mineral properties.

Mineral Interests

Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mineral properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.


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Source: Edgar Glimpses


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