{"url_path":"/sec/srgz/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 **","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-22","source_url":"https://www.sec.gov/Archives/edgar/data/1401835/0001437749-26-024054-index.html","accession_number":"0001437749-26-024054","cik":"0001401835","ticker":"SRGZ","issuer_name":"Star Gold Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1401835/0001437749-26-024054-index.html","primary_entity_key":"0001401835","primary_entity_name":"Star Gold Corp."},"word_count":1722,"has_tables":true,"body_markdown":"**ITEM 7.**\n\n**MANAGEMENT**’**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**\n\n \n\n**PLAN OF OPERATION**\n\n \n\nThe Company maintains a corporate office in Coeur d’Alene, Idaho. This is the primary administrative office for the Company and is utilized by Chief Executive Officer Lindsay Gorrill and Chief Financial Officer Gerry Pascale.\n\n \n\nThe drilling permit granted from the Bureau of Land Management (“BLM”) in September 2019 expired in December 2022. The permit allowed the Company to commence drilling mainly for the Hydrology Study but also enabling drilling of other holes on the Main knob for geochemical analysis. A bond has been obtained and there are no impediments to drilling other than capital constraints. The Company will apply for an extension of the permit.\n\n \n\nFor the fiscal year ending April 30, 2026, the Company plans to commence the following activities as it prepares to draft its Environmental Impact Statement (“EIS”) on the Longstreet Project:\n\n \n\nHydrology Drilling – 2 to 4 holes expected to be sufficient:\n\n \n\nGeochemical analysis – design of program for submission to State of Nevada involves some core drilling;\n\n \n\nPlan of Operations Development (Mine Plan, Civil Engineering Design)\n\n \n\nAssuming the results of the above-referenced activities are favorable, the Company intends to proceed to the preparation of an EIS and plan of operation for the Longstreet project (the “Longstreet Plan”). The eventual objective of the EIS and Longstreet Plan is the issuance, by each respective governing agency, of the necessary mine permits to authorize the construction of, and ongoing operations at, an open pit/heap leach mine at the Longstreet Property.\n\n \n\nApproval of the Longstreet Plan is subject to governmental agency review and may require additional remediation activities.\n\n \n\nManagement 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, sale of property, joint ventures and/or farm-out a portion of its exploration properties.\n\n \n\nFuture 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.\n\n \n\nThe Company believes it has secured the financing required to complete the necessary steps to apply for a final permit. Additional financing will be required in the future to continue from permitting into production. 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.\n\n \n\n**RESULTS OF OPERATIONS**\n\n \n\n \n \n\nFor the years ended April 30,\n\n \n \n \n \n \n \n \n \n \n\n \n \n\n2026\n\n \n \n\n2025\n\n \n \n\n$ Change\n\n \n \n\n% Change\n\n \n\nMineral exploration expense\n\n \n$\n30,866\n \n \n$\n30,866\n \n \n$\n-\n \n \n \n0.0\n%\n\nPre-development expense\n\n \n \n231,565\n \n \n \n8,794\n \n \n \n222,771\n \n \n \n2533.2\n%\n\nLegal and professional fees\n\n \n \n253,029\n \n \n \n85,316\n \n \n \n167,713\n \n \n \n196.6\n%\n\nManagement and administrative\n\n \n \n259,499\n \n \n \n78,052\n \n \n \n181,447\n \n \n \n232.5\n%\n\nInterest expense\n\n \n \n2,956\n \n \n \n805\n \n \n \n2,151\n \n \n \n267.0\n%\n\nInterest expense, related party\n\n \n \n50,100\n \n \n \n53,553\n \n \n \n(3,453\n)\n \n \n(6.4\n)%\n\nInterest (income)\n\n \n \n(3,165\n)\n \n \n \n \n \n \n(3,165\n)\n \n \nn/a\n \n\nNET LOSS\n\n \n$\n824,850\n \n \n$\n257,386\n \n \n$\n567,464\n \n \n \n220.5\n%\n\n \n\nPage 29\n\n[Table of Contents](#toc)\n\n \n\nThe Company earned no operating revenue in 2026 or 2025 and does not anticipate earning any operating revenues in the near future. Star Gold Corp. is a pre-development stage company and focused on permitting for its Longstreet property.\n\n \n\nThe Company will continue to focus its capital and resources toward permitting activities at its Longstreet Property.\n\n \n\nTotal net loss for the year ended April 30, 2026 of $824,850 increased by $567,464 from the 2025 total net loss of $257,386.\n\n \n\n**Mineral exploration expense**\n\n \n\n \n \n\nFor the years ended April\n\n30,\n\n \n \n \n \n \n \n \n \n \n\n \n \n\n2026\n\n \n \n\n2025\n\n \n \n\n$ Change\n\n \n \n\n% Change\n\n \n\nClaims\n\n \n \n30,866\n \n \n \n30,866\n \n \n \n-\n \n \n \n0.0\n%\n\nTotal mineral exploration expense\n\n \n \n30,866\n \n \n \n30,866\n \n \n$\n-\n \n \n \n0.0\n%\n\n \n\nMineral exploration expense for the year ended April 30, 2026 was $30,866  which was an increase of $nil above the 2025 mineral exploration expense of $30,866. Aside from annual claims payments, there was no additional mineral exploration expense for the year ended April 30, 2026 and 2025, respectively.\n\n \n\nThe Company’s emphasis has shifted from exploratory drilling to activities related to pre-development expense including environmental and anthropological studies associated with building a Plan of Operations and obtaining a permit to construct a mine at the Longstreet site.\n\n \n\n**Pre-development expense**\n\n \n\n \n \n\nFor the years ended April\n\n30,\n\n \n \n \n \n \n \n \n \n \n\n \n \n\n2026\n\n \n \n\n2025\n\n \n \n\n$ Change\n\n \n \n\n% Change\n\n \n\nField expense\n\n \n$\n20,896\n \n \n$\n5,169\n \n \n$\n15,727\n \n \n \n304.3\n%\n\nPermits and fees\n\n \n \n139,553\n \n \n \n-\n \n \n \n139,553\n \n \n \nn/a\n \n\nTechnical consultants\n\n \n \n69,535\n \n \n \n3,625\n \n \n \n65,910\n \n \n \n1,818.2\n%\n\nWater rights costs\n\n \n \n1,581\n \n \n \n-\n \n \n \n1,581\n \n \n \nn/a\n \n\nTotal pre-development expense\n\n \n$\n231,565\n \n \n$\n8,794\n \n \n$\n222,771\n \n \n \n2,533.2\n%\n\n \n\nPre-development expense for the year ended April 30, 2026 was $231,565, an increase of  $222,771 from 2025 pre-development expense of $8,794.\n\n \n\nThe Company is currently working with engineering firms for development of a full Plan of Operations and Mine Schedule for development and eventual submission of an application to permit construction of a heap leach mining operation on the Longstreet Property. The Company is also working with engineering firms in preparation for the drilling of monitor and water-course wells on the Longstreet property site to determine suitability for future mining and leach pad operations.\n\n \n\nPage 30\n\n[Table of Contents](#toc)\n\n \n\n**Legal and professional fees**\n\n \n\n \n \n\nFor the years ended April 30,\n\n \n \n \n \n \n \n \n \n \n\n \n \n\n2026\n\n \n \n\n2025\n\n \n \n\n$ Change\n\n \n \n\n% Change\n\n \n\nAudit and accounting\n\n \n$\n49,378\n \n \n$\n34,590\n \n \n$\n14,788\n \n \n \n42.8\n%\n\nLegal fees\n\n \n \n151,124\n \n \n \n12,261\n \n \n \n138,863\n \n \n \n1,132.6\n%\n\nPublic company expense\n\n \n \n48,047\n \n \n \n38,387\n \n \n \n9,660\n \n \n \n25.2\n%\n\nInvestor relations\n\n \n \n4,480\n \n \n \n78\n \n \n \n4,402\n \n \n \n5,643.6\n%\n\nTotal legal and professional fees\n\n \n$\n253,029\n \n \n$\n85,316\n \n \n$\n167,713\n \n \n \n196.6\n%\n\n \n\nAudit and accounting fees for the year ended April 30, 2026 increased by $14,788 compared to the year ended April 30, 2025.\n\n \n\nLegal fees increased $138,863 from $12,261 for the year ended April 30, 2025 to $151,124 for the year ended April 30, 2026. The increase in legal fees for the year ended April 30, 2026 was due to an increased need for legal services related to compliance, SEC filings, property transfer and corporate transaction matters. There are no pending legal issues or contingencies as of April 30, 2026.\n\n \n\nPublic company expense increased $9,660 due to increase in filing fees, SEC requirements and software requirements. \n\n \n\n**Management and administrative expense**\n\n \n\n \n \n\nFor the years ended April\n\n30,\n\n \n \n \n \n \n \n \n \n \n\n \n \n\n2026\n\n \n \n\n2025\n\n \n \n\n$ Change\n\n \n \n\n% Change\n\n \n\nGeneral administrative and insurance\n\n \n$\n140,837\n \n \n$\n41,279\n \n \n$\n99,558\n \n \n \n241.2\n%\n\nManagement fees and payroll\n\n \n \n89,373\n \n \n \n30,000\n \n \n \n59,373\n \n \n \n197.9\n%\n\nOffice and computer expense\n\n \n \n5,981\n \n \n \n2,435\n \n \n \n3,546\n \n \n \n145.6\n%\n\nAuto and travel\n\n \n \n22,670\n \n \n \n3,959\n \n \n \n18,711\n \n \n \n472.6\n%\n\nTelephone and utilities\n\n \n \n638\n \n \n \n379\n \n \n \n259\n \n \n \n68.3\n%\n\nTotal management and administrative\n\n \n$\n259,499\n \n \n$\n78,052\n \n \n$\n181,447\n \n \n \n232.5\n%\n\n \n\nTotal management and administrative expense increased $181,447 for the year ended April 30, 2026 to $259,499 compared to $78,052 for the year ended April 30, 2025. This increase was mainly due to General administrative and insurance and Management fees as the Company transitions into an active public company, meeting all SEC filings and requirements and supporting the pre-development efforts.\n\n \n\n**LIQUIDITY AND FINANCIAL CONDITION**\n\n \n\n \n \n\nApril 30, 2026\n\n \n \n\nApril 30, 2025\n\n \n\n**WORKING CAPITAL**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nCurrent assets\n\n \n$\n2,148,171\n \n \n$\n15,791\n \n\nCurrent liabilities\n\n \n \n124,352\n \n \n \n686,613\n \n\nWorking capital (deficit)\n\n \n$\n2,023,819\n \n \n$\n(670,822\n)\n\n \n\nPage 31\n\n[Table of Contents](#toc)\n\n \n\n \n \n\nFor the year ended\n\n \n\n \n \n\nApril 30, 2026\n\n \n \n\nApril 30, 2025\n\n \n\n**CASH FLOWS**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nCash flow used by operating activities\n\n \n$\n(929,165\n)\n \n$\n(157,294\n)\n\nCash flow used by investing activities\n\n \n \n(12,000\n)\n \n \n(12,000\n)\n\nCash flow provided by financing activities\n\n \n \n2,861,000\n \n \n \n175,500\n \n\nNet change in cash during period\n\n \n$\n1,919,835\n \n \n$\n6,206\n \n\n \n\nAs of April 30, 2026, the Company had cash on hand of $1,931,209. On February 27, 2026 the Company closed a private placement for the issuance of 74,600,000 units at a price of $0.04 per unit, generating proceeds of $2,984,000. Each unit consists of one share of common stock and one-half warrant to purchase one share of common stock. The warrants are exercisable at $0.08 per full share and expire twelve months from the date of issuance.\n\n \n\nIn addition, the Company converted $671,450 of existing debt and accrued interest to 16,786,265 units at a price of $0.04 per unit. Each unit consists of one share of common stock and one-half warrant to purchase one share of common stock. The warrants are exercisable at $0.08 per full share and expire twelve months from the date of issuance.\n\n \n\nThe Company also used the proceeds of the February 27, 2026 fund raise to pay off the $341,108 remaining debt and interest that was not converted. and issued 1,333,438 common shares for services during the year ended April 30, 2026.\n\n \n\n**OFF-BALANCE SHEET ARRANGEMENTS**\n\n \n\nThe 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.\n\n \n\n**CRITICAL ACCOUNTING POLICIES**\n\n \n\nThe 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.\n\n \n\n*Asset Impairments*\n\n \n\nThe Company periodically reviews its long-lived assets to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted net future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the assets will be written down to fair value.\n\n \n\n*Mineral Interests*\n\n \n\nExploration 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 based on 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."}