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5) Depository Payment Towards Acquisition of Iron Ore Mine
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9 Months Ended | |||||||||||||||||||||||||||
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Sep. 30, 2013
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| 5) Depository Payment Towards Acquisition of Iron Ore Mine | 5) DEPOSITORY PAYMENT TOWARDS ACQUISITION OF IRON ORE MINE
On September 21, 2011, the Company entered into an agreement to acquire title to an iron ore mine in the Republic of Chile at an acquisition cost of $3,250,000 as of September 30, 2013 and paid an initial deposit of $250,000 to the seller. The agreement provides for the participation of the Republic of Chile in 15% of the mining profits.
On April 26, 2012, the Company amended the payment terms of the agreement and paid an additional deposit of $100,000 upon execution of the amended agreement. Under the terms of the amended agreement, the Company is required to remit the remaining balance of $2,900,000 over a three year period as follows:
As of September 30, 2013, the Company is not in compliance with the terms of this agreement due to non-payment of the amounts due on May 31, 2012, August 31, 2012 and February 28, 2013. However, the seller has not issued the Company a formal notice of default. |