| 7. |
Income Taxes |
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The Company has net operating losses carried forward of $3,605,200 available to offset taxable income in future years which expires beginning in fiscal 2027. Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. The Company is subject to examination by the IRS for tax years 2014 to 2016. The Company is also subject to income tax in Canada which remain subject to examination for tax years 2014 to 2016. |
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The Company is subject to United States federal and state income taxes at an approximate rate of 34%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: |
| 2017 | 2016 | ||||||
| $ | $ | ||||||
| Income tax recovery at statutory rate | (100,783 | ) | (128,101 | ) | |||
| Valuation allowance change | 100,783 | 128,101 | |||||
| Provision for income taxes | – | – |
The significant components of deferred income tax assets and liabilities at May 31, 2017 and 2016, are as follows:
| 2017 | 2016 | ||||||
| $ | $ | ||||||
| Mineral property costs | 485,667 | 485,667 | |||||
| Net operating losses carried forward | 1,225,771 | 1,124,988 | |||||
| Gross deferred income tax assets | 1,711,438 | 1,610,655 | |||||
| Valuation allowance | (1,711,438 | ) | (1,610,655 | ) | |||
| Net deferred income tax asset | – | – |