Gold American Mining Corp

Annual report

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

Except for historical information, the following Management's Discussion and Analysis contains forward-looking statements based upon current expectations that involve certain risks and uncertainties. Such forward-looking statements include statements regarding, among other things, (a) discussions about mineral resources and mineralized material, (b) our projected sales and profitability,
(c) our growth strategies, (d) anticipated trends in our industry, (e) our future financing plans, (f) our anticipated needs for working capital, (g) our lack of operational experience and (h) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Business," as well as in this Report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Report will in fact occur as projected.

Overview

We are a precious metal mineral acquisition, exploration and development company, formed in Nevada on July 2, 2007. At the time of our incorporation, we were incorporated under the name "The Golf Alliance Corporation," and our original business plan was to act as a service-based firm that would provide opportunities for golfers to play on private courses normally closed to them because of membership requirements. On February 12, 2010, Johannes Petersen acquired the majority of the shares of our issued and outstanding common stock in accordance with a stock purchase agreement by and between Mr. Petersen and John Fahlberg. Further, on March 5, 2010, we effected a name change to "Silver America, Inc." and at the same time effected a 50-for-1 forward stock split and increased our authorized capital from 100,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.00001 per share, to 500,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.00001. In addition to the name change, we changed our intended business purpose to that of precious metal mineral exploration, development and production. Unless specifically stated otherwise, all share amounts referenced herein, will refer to post-forward stock split share amounts. On June 23, 2010, we effected a name change from Silver America, Inc., to "Gold American Mining Corp." in order to better reflect the nature of our operations as a precious metal mining and exploration company, with a more specific emphasis on gold exploration.

Our primary business focus is to option, acquire, explore and develop precious metals properties in North America. On April 26, 2010, we entered into a definitive option agreement ("Guadalupe Option Agreement") with Yale Resources Ltd. ("Yale") with respect to our acquisition of an exclusive option (the "Option") to purchase an undivided 90% interest in those two certain mining concessions in Zacatecas State, Mexico, covering approximately 282.83 hectares (the "Guadalupe Property"). The Guadalupe Option Agreement was entered into pursuant to a binding letter of intent between the parties (the "LOI") dated March 5, 2010.

To exercise the option, we must pay cash to Yale, issue restricted shares of Company common stock to Yale, and fund exploration and development expenditures on the Guadalupe Property. The cash payments contemplated under the agreement total $900,000.00 and are to be distributed in installments from the date of the LOI through December 30, 2013. The number of Company shares to be issued to Yale total 1,000,000 and are to be distributed in installments from the date of the definitive agreement through December 30, 2013. We are also obligated to fund a total of $2,000,000.00 worth of exploration and development on the Guadalupe Property by December 30, 2013. Upon the execution and exercise of the Option, Yale will transfer a 90% undivided interest in the Guadalupe Property to the Company. Yale will act as the operator for the project, and should the earn-in be completed, Yale will retain a 10% participating interest in the Guadalupe Property as well as a 2% NSR, which can be bought out in its entirety for $2,000,000.

On April 28, 2010, we entered into a definitive option agreement (the "Keeno Strike Option Agreement") with four individuals (collectively, the "Optionor") with respect to our acquisition of an exclusive option (the "Keeno Option") to purchase an undivided 72% interest in those certain 12 mining claims and a mill site claim containing approximately 245 acres, located in Clark County, Nevada ("Keeno Property"). To exercise the Keeno Option, we must pay cash to the Optionor, issue restricted shares of Company common stock to Optionor, and fund exploration and development expenditures on the Keeno Property. The cash payments contemplated under the agreement total $272,000 to be paid in installments on or before June 30, 2010, such payments having been completed as of the date of the filing of this Annual Report on Form 10-K. The number of Company shares to be issued to Optionor total 2,000,000 and are to be distributed in installments from the date of the definitive agreement through October 31, 2011. The Company needs to fund a minimum of $750,000 worth of exploration and development on the Keeno Property, with at least $400,000 to be incurred or funded on or before April 30, 2011 and $350,000 to be incurred or funded on or before April 30, 2012. Upon our fulfillment of each of the above-referenced conditions and exercise of the Keeno Option, the Optionor will transfer an undivided 72% interest in the Keeno Property to us.

Further, pursuant to the Keeno Strike Option Agreement, if, prior to the Option Deadline, the work program provides evidence that there are at least 10,000,000 ounces of indicated silver resources and/or 500,000 ounces of indicated gold resources on the Keeno Property, such estimates to be evidenced by an independent third party report, we must issue the Optionor an additional 3,000,000 shares of our common stock. Should the earn-in be completed, the Optionor will retain a 28% interest in the Keeno Property as well as a 4% NSR. After our completion of the initial work commitment and exercise of the Keeno Option, the Optionor may elect to remain as a 28% carried joint venture partner or to offer the Company the right to purchase the Optionor's remaining 28% interest at a fair market valuation, as determined by a valuation report prepared by an independent third party mining engineer or qualified geologist. Further, we will have the right to purchase 2% of the 4% NSR retained by the Optionor for a purchase price of $20,000,000, or such pro rata portion thereof.

Results of Operations

Year ended July 31, 2010 compared to the year ended July 31, 2009

We had a net loss of $1,351,087 for the year ended July 31, 2010, which was $1,319,566 greater than the net loss of $31,521 for the year ended July 31, 2009. This change in our results over the two periods is primarily the result of an increase in professional fees, exploration costs and general and administrative expenses. The following table summarizes key items of comparison and their related increase (decrease) for the years ended July 31, 2010 and 2009:

Liquidity And Capital Resources

Our balance sheet as of July 31, 2010, reflects assets of $48,799. As we had cash in the amount of $8,202 and a working capital deficit in the amount of $92,928 as of July 31, 2010, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.

We anticipate generating losses and, therefore, may be unable to continue operations in the future. If we require additional capital, we would have to issue debt or equity or enter into a strategic arrangement with a third party.

Going Concern Consideration

As reflected in the accompanying financial statements, the Company is in the exploration stage with no revenue generating operations and has a net loss since inception of $1,458,042 and used cash in operations of $633,160 from inception. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

From March 5, 2010, the Company changed its intended business purpose to that of precious metals mineral exploration, development and production. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Operating Activities

Net cash flow used in operating activities during the year ended July 31, 2010 was $540,321 - an increase of $519,842 from the $20,479 net cash outflow during the year ended July 31, 2009. This increase in the cash used in operating activities was primarily due to the acquisition and operations on the Keeno Property and the Guadalupe Property.

Investing Activities

Cash used in investing activities during the year ended July 31, 2010 was $26,462 - an increase of $26,462 when compared to the figures as of July 31, 2009. This increase in the cash used in investing activities was primarily due to the development of our corporate website and purchase of computer equipment.

Financing Activities

Financing activities during the year ended July 31, 2010, provided $570,374 to us, an increase of $552,974 from the $17,400 provided by financing activities during the year ended July 31, 2009. During the year ended July 31, 2010, the company received $500,000 in proceeds from the issuance of common stock, $9,503 from net loans payable to related parties and $60,871 from expenses paid by a shareholder on behalf of the company.

The Company's financial commitments under the Guadalupe Option Agreement total $900,000 in cash payments to Yale and the funding of a total of $2,000,000 worth of exploration and development on the Property before December 30, 2013. The Company's financial commitments under the Keeno Strike Option Agreement total $272,000 in cash payments to the Optionor on or before June 30, 2010 (paid), and the funding of a minimum of $750,000 worth of exploration and development on the Property, with at least $400,000 to be incurred or funded on or before April 30, 2011 and $350,000 to be incurred or funded on or before April 30, 2012.

On May 7, 2010, we entered into an Equity Issuance Agreement with ZUG Financing Group S.A. ("ZUG") wherein ZUG has agreed to advance up to $7,500,000 to our Company until December 31, 2011. While we have arranged for advances of up to $7,500,000 from ZUG, there can be no assurances that we will receive these funds from ZUG. As of July 31, 2010, we had received an aggregate of $300,000 in net proceeds from ZUG under the Equity Issuance Agreement.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

Costs of acquiring mining properties and any exploration and development costs are expensed as incurred unless proven and probable reserves exist and the property is a commercially mineable property. Mine development costs incurred either to develop new gold and silver deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.

The Company capitalizes costs for mining properties by individual property and defers such costs for later amortization only if the prospects for economic productions are reasonably certain. Capitalized costs are expensed in the period when the determination has been made that economic production does not appear reasonably certain. As of July 31, 2010, none of our properties have proven reserves.

Recent Accounting Pronouncements

For recent accounting pronouncements, please refer to the notes to the financial statements section of this annual report.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.