NOTE 5 - INCOME TAXES
The Company has established a valuation allowance against its federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through October 31, 2017. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit.
A reconciliation of income taxes at statutory rates is as follows:
|
| Year ended October 31, | |||
|
| 2017 | 2016 | ||
| Loss before income taxes | $ | (289,867) | $ | (322,241) |
| Statutory tax rate |
| 26% |
| 26% |
| Expected recovery of income taxes |
| (75,000) |
| (84,000) |
| Non-deductible expenses |
| 3,000 |
| -- |
| Share issue costs |
| (4,000) |
| -- |
| Effect of foreign exchange |
| 346,000 |
| -- |
| Adjustment to prior year provision to statutory tax returns |
| 942,000 |
| -- |
| Change in valuation allowance |
| (1,212,000) |
| 84,000 |
|
| $ | -- | $ | -- |
The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:
|
| Year ended October 31, | |||
|
| 2017 |
| 2016 | |
| Share issuance costs | $ | 13,000 | $ | -- |
| Non-capital losses carried forward |
| 228,000 |
| 1,453,000 |
| Mineral properties |
| 4,000 |
| 4,000 |
| Less: Valuation allowance |
| (245,000) |
| (1,457,000) |
|
| $ | -- | $ | -- |
The Company has non-capital losses carried forward of approximately $875,000 which will expire from 2031 to 2037.