UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2016

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-52391

ROYAL MINES AND MINERALS CORP.
(Exact name of registrant as specified in its charter)

NEVADA 20-4178322
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
2580 Anthem Village Dr.  
Henderson, NV 89052
(Address of principal executive offices) (Zip code)

(702) 588-5973
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]        No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]        No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ] Accelerated filer                      [   ]
Non-accelerated filer   [   ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ]         No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
As of December 21, 2016, the Registrant had 245,199,204 shares of common stock outstanding .

EXPLANATORY NOTE

Our Board of Directors, in consultation with management, determined that our Balance Sheet as of April 30, 2015, contained in our annual report on Form 10-K for the year ended April 30, 2015, should be restated due to default of payment on equipment leased in our Scottsdale Facility.

This restatement had an impact on our Condensed Statements of Operations and Comprehensive Loss, and Condensed Statements of Cash Flows for the three and six months ended October 31, 2015. For additional background on the restatement, please see Note 15 to our Financial Statements.

Effects of the Restatement Due to Default of Payment of Leased Equipment

The following table provides a summary of selected line items from our condensed statements of operations and comprehensive loss, and condensed statements of cash flows for the three and six months ended October 31, 2015 affected by this restatement.

      As     Restatement        
      Previously     Adjustments     As Restated  
      Reported              
Statement of Operations and Comprehensive Loss –                    
For the Three Months Ended October 31, 2015                    
Mineral exploration and evaluation expenses   $  77,614   $  (12,551 ) $  65,063  
Total operating expenses   $  169,306   $  (12,551 ) $  156,755  
Loss from operations   $  169,306   $  (12,551 ) $  156,755  
Net loss   $  190,473   $  (12,551 ) $  177,922  
Comprehensive loss   $  190,473   $  (12,551 ) $  177,922  
                     
Statement of Operations and Comprehensive Loss –                    
For the Six Months Ended October 31, 2015                    
Mineral exploration and evaluation expenses   $  156,645   $  (25,102 ) $  131,543  
Total operating expenses   $  377,108   $  (25,102 ) $  352,006  
Loss from operations   $  377,108   $  (25,102 ) $  352,006  
Net loss   $  416,677   $  (25,102 ) $  391,575  
Comprehensive loss   $  416,677   $  (25,102 ) $  391,575  
                     
Statement of Cash Flows – For the Six Months Ended                    
October 31, 2015                    
Net loss   $  416,677   $  (25,102 ) $  391,575  
Accounts payable   $  27,067   $  (33,000 ) $  (5,933 )
Deferred rent   $  (7,898 ) $  7,898   $  -  

Except for certain updated information in the items listed above, there have been no changes to the condensed financial statements filed in our quarterly report on Form 10-Q for the three and six months ended October 31, 2015.

2

PART I - FINANCIAL INFORMATION

ITEM 1.               FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and six months ended October 31, 2016 are not necessarily indicative of the results that can be expected for the year ending April 30, 2017.

As used in this Quarterly Report, the terms “we,” “us,” “our,” “Royal Mines,” and the “Company” mean Royal Mines And Minerals Corp. unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

3

ROYAL MINES AND MINERALS CORP.
CONDENSED BALANCE SHEETS

    October 31, 2016     April 30, 2016  
    (Unaudited)        
 ASSETS   
             
Current assets            
   Cash and cash equivalents $  20,735   $  60  
   Other current assets   2,500     -  
       Total current assets   23,235     60  
             
Non-current assets            
   Investment in marketable securities   -     216,648  
   Property and equipment, net   62,176     97,059  
   Other assets   7,655     7,655  
       Total non-current assets   69,831     321,362  
             
       Total assets $  93,066   $  321,422  
             
             
LIABILITIES AND STOCKHOLDERS' DEFICIT   
             
Current liabilities            
   Accounts payable $  332,645   $  356,561  
   Accounts payable - related parties   398,617     375,465  
   Accrued interest   104,351     92,204  
   Accrued interest - related parties   257,856     206,581  
   Loans payable   98,030     98,030  
   Loans payable - related parties   1,078,000     878,000  
   Convertible note   150,000     150,000  
   Notes payable   50,000     50,000  
       Total current liabilities   2,469,499     2,206,841  
             
       Total liabilities   2,469,499     2,206,841  
             
Commitments and contingencies            
             
Stockholders' deficit            
   Preferred stock, $0.001 par value; 100,000,000 shares
      authorized, zero shares issued and outstanding 		  -     -  
   Common stock, $0.001 par value; 900,000,000 shares authorized, 245,199,204
      and 228,793,634 shares issued and outstanding, respectively 		  245,199     228,794  
   Additional paid-in capital   16,588,093     16,430,134  
   Subscriptions payable   -     10,000  
   Accumulated deficit   (19,209,725 )   (18,554,347 )
       Total stockholders' deficit   (2,376,433 )   (1,885,419 )
             
Total liabilities and stockholders' deficit $  93,066   $  321,422  

See accompanying notes to these condensed unaudited financial statements.
F-1

ROYAL MINES AND MINERALS CORP.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

    For the Three Months Ended October 31,     For the Six Months Ended October 31,  
    2016     2015     2016     2015  
          (Restated)           (Restated)  
                         
Revenue $  -   $  -   $  -   $  -  
                         
Operating expenses:                        
 Mineral exploration and evaluation expenses   55,045     65,063     112,901     131,543  
 Mineral exploration and evaluation expenses - related parties   15,000     15,000     30,000     30,000  
 General and administrative   30,623     20,358     61,164     55,156  
 General and administrative - related parties   34,000     36,000     68,000     71,000  
 Depreciation and amortization   17,441     17,441     34,883     34,883  
 Loss in marketable securities on joint venture settlement   189,567     -     189,567     -  
 Loss on joint venture settlement   106,966     -     106,966     -  
 Other than temporary loss on marketable security   -     2,893     -     28,387  
 Bad debt expense   -     -     -     1,037  
 Gain on sale of marketable securities   (13,199 )   -     (13,199 )   -  
     Total operating expenses   435,443     156,755     590,282     352,006  
                         
Loss from operations   (435,443 )   (156,755 )   (590,282 )   (352,006 )
                         
Other expense:                        
 Interest expense   (33,941 )   (21,167 )   (65,096 )   (39,569 )
     Total other expense   (33,941 )   (21,167 )   (65,096 )   (39,569 )
                         
Net loss $  (469,384 ) $  (177,922 ) $  (655,378 ) $  (391,575 )
                         
Other comprehensive loss:                        
 Unrealized loss on marketable securities $  (4,248 )   -     -     -  
                         
Comprehensive (loss) $  (473,632 ) $  (177,922 ) $  (655,378 ) $  (391,575 )
                         
Net loss per common share - basic and diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )
                         
Weighted average common shares outstanding - basic and diluted   235,016,369     228,793,634     231,905,002     228,793,634  

See accompanying notes to these condensed unaudited financial statements.
F-2

ROYAL MINES AND MINERALS CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

    For the Six Months Ended October 31,  
    2016     2015  
          (Restated)  
CASH FLOWS FROM OPERATING ACTIVITIES            
   Net loss $  (655,378 ) $  (391,575 )
   Adjustments to reconcile net loss to net cash used in operating activities:            
           Depreciation and amortization   34,883     34,883  
           Stock-based expenses   399     -  
           Allowance for bad debt   -     1,037  
           Other than temporary loss on marketable securities   -     28,387  
           Gain on sale of marketable securities   (13,199 )   -  
           Loss in marketable securities on joint venture settlement   189,567     -  
           Loss on joint venture settlement   106,966     -  
   Changes in operating assets and liabilities:            
           Other current assets   (2,500 )   -  
           Accounts payable   (23,917 )   (5,933 )
           Accounts payable - related parties   23,152     41,465  
           Accrued interest   12,147     9,429  
           Accrued interest - related parties   51,275     26,533  
             
 Net cash used in operating activities   (276,605 )   (255,774 )
             
CASH FLOW FROM INVESTING ACTIVITIES            
   Proceeds from sale of marketable securities   40,280     -  
             
   Net cash provided by investing activities   40,280     -  
             
CASH FLOW FROM FINANCING ACTIVITIES            
   Proceeds from stock issuance   57,000     -  
   Proceeds from borrowings - related parties   200,000     255,000  
             
   Net cash provided by financing activities   257,000     255,000  
             
NET CHANGE IN CASH   20,675     (774 )
             
CASH AT BEGINNING OF PERIOD   60     10,860  
             
CASH AT END OF PERIOD $  20,735   $  10,086  
             
             
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION            
             
Interest paid $  -   $  326  
Income taxes paid $  -   $  -  

See accompanying notes to these condensed unaudited financial statements.
F-3

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

1.

DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

   

Basis of Presentation – The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Royal Mines and Minerals Corp’s (the “Company”) fiscal year-end is April 30.

   

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' deficit in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the six months ended October 31, 2016 are not necessarily indicative of the results that can be expected for the year ending April 30, 2017.

   

Description of Business – The Company's primary objectives are to 1) commercially and viably extract and refine precious metals from specific coal ash (fly and bottom), ores and other leachable assets, 2) use its proprietary processes to convert specific ore bodies and coal ash landfills into valuable assets, and 3) joint venture, acquire and develop mining projects in North America. The Company has not yet realized significant revenues from its primary objectives.

   

History – The Company was incorporated on December 14, 2005 under the laws of the State of Nevada. On June 13, 2007, the Company incorporated a wholly-owned subsidiary, Royal Mines Acquisition Corp., in the state of Nevada.

   

On October 5, 2007, Centrus Ventures Inc. (Centrus) completed the acquisition of Royal Mines Inc. (“Royal Mines”). The acquisition of Royal Mines was completed by way of a “triangular merger” pursuant to the provisions of the Agreement and Plan of Merger dated September 24, 2007 (the “First Merger Agreement”) among Centrus, Royal Mines Acquisition Corp. (“Centrus Sub”), a wholly owned subsidiary of Centrus, Royal Mines and Kevin B. Epp, the former sole executive officer and director of Centrus. On October 5, 2007, under the terms of the First Merger Agreement, Royal Mines was merged with and into Centrus Sub, with Centrus Sub continuing as the surviving corporation (the “First Merger”).

   

On October 6, 2007, a second merger was completed pursuant to an Agreement and Plan of Merger dated October 6, 2007 (the “Second Merger Agreement”) between Centrus and its wholly owned subsidiary, Centrus Sub, whereby Centrus Sub was merged with and into Centrus, with Centrus continuing as the surviving corporation (the “Second Merger”). As part of the Second Merger, Centrus changed its name from “Centrus Ventures Inc.” to “Royal Mines And Minerals Corp.”(“the Company”). Other than the name change, no amendments were made to the Articles of Incorporation.

   

Under the terms and conditions of the First Merger Agreement, each share of Royal Mines’ common stock issued and outstanding immediately prior to the completion of the First Merger was converted into one share of Centrus’ common stock. As a result, a total of 32,183,326 shares of Centrus common stock were issued to former stockholders of Royal Mines. In addition, Mr. Epp surrendered 23,500,000 shares of Centrus common stock for cancellation in consideration of payment by Centrus of $0.001 per share for an aggregate consideration of $23,500. As a result, upon completion of the First Merger, the former stockholders of Royal Mines owned approximately 69.7% of the issued and outstanding common stock.

   

As such, Royal Mines is deemed to be the acquiring enterprise for financial reporting purposes. All acquired assets and liabilities of Centrus were recorded at fair value on the date of the acquisition, as required by the purchase method of accounting, and the tangible net liabilities were debited against equity of the Company. There are no continuing operations of Centrus from the date of acquisition.

F-6

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

Going Concern – The accompanying financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management.

If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty.

As of October 31, 2016, the Company had cumulative net losses of $19,209,725 from operations since inception and had negative working capital of $2,446,264. For the six months ended October 31, 2016, the Company incurred a net loss of $655,378 and had net cash used in operating activities of $276,605. For the six months ended October 31, 2015 the Company incurred a net loss of $391,575 and had net cash used in operating activities of $255,774. The Company has not fully started its minerals processing operations, raising substantial doubt about its ability to continue as a going concern.

To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses, elected to defer payment of certain obligations, deferred payment of our CEO’s salary and reduced staffing levels to conserve cash. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock, or by issuing debt convertible into shares of capital stock, the ownership interest of the Company’s existing common stock holders will be diluted.

Use of Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation, impairment analysis of long-lived assets, and the realizability of deferred tax assets. Actual results could differ from those estimates.

Cash and Cash Equivalents - The Company considers all investments with an original maturity of three months or less to be a cash equivalent.

Other Current Assets - Other current assets are comprised of other receivables, which do not bear interest and are recorded at cost. The Company extends credit to its consultants, which receivables can be offset against commissions payable to the respective consultants.

F-7

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in the Company’s existing other receivables. The Company determines the allowance based on specific customer information, historical write-off experience and current industry and economic data. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. Management believes that there are no concentrations of credit risk for which an allowance has not been established. Although management believes that the allowance is adequate, it is possible that the estimated amount of cash collections with respect to accounts receivable could change. As of October 31, 2016 and April 30, 2016, the Company has recorded an allowance for doubtful account of $15,798.

Fair Value - ASC 825, Financial Instruments requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data of the fair value of the assets or liabilities.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Pursuant to ASC 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company's financial instruments consist of cash, prepaid expenses, other assets, accounts payable, accrued liabilities, and loans payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of October 31, 2016 and April 30, 2016 as follows:

Fair Value Measurements at October 31, 2016 Using:

  Assets:   Total Carrying     Quoted Marked     Significant Other     Significant  
      Value as of     Prices in Active     Observable Inputs     Unobservable  
      10/31/2016     Markets (Level 1)     (Level 2)     Inputs (Level 3)  
  Investments in marketable securities $  -   $  -   $  -   $  -  
   Total $  -   $  -   $  -   $  -  

F-8

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

Fair Value Measurements at April 30, 2016 Using:

  Assets:   Total Carrying     Quoted Marked     Significant Other     Significant  
      Value as of     Prices in Active     Observable Inputs     Unobservable  
      4/30/2016     Markets (Level 1)     (Level 2)     Inputs (Level 3)  
  Investments in marketable securities $  216,648   $  -   $  216,648   $  -  
   Total $  216,648   $  -   $  216,648   $  -  

Property and Equipment - Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operating expenses.

Mineral Exploration and Development Costs – Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense.

Impairment of Long-Lived Assets – The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17, Measurement of an Impairment Loss , if events or circumstances indicate that their carrying amount might not be recoverable.

Various factors could impact our ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions the Company may use in cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.

The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value. No impairment expense was recognized for the six months ended October 31, 2016 and 2015.

Research and Development - All research and development expenditures are expensed as incurred.

Per Share Amounts - Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. As of October 31, 2016, and 2015, stock options and warrants outstanding were 163,825,129 and 159,785,129 respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive.

Income Taxes – For interim reporting periods, the Company uses the annualized effective tax rate (“AETR”) method to calculate its income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax losses to determine the income tax benefit or expense for the year-to-date period. The income tax benefit or expense for a quarter represents the difference between the year-to-date income tax benefit or expense for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual operating results and AETR.

F-9

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all the deferred income tax asset will not be realized.

Stock-Based Compensation – The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation , which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date , the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

Recent Accounting Standards – From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.

In February 2016, the FASB issued Accounting Standard (“ASU”) 2016-02, “Leases,” which requires lessees to put most leases on their balance sheets, but recognize the expenses on their income statements in a manner like current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The new standard is effective for annual periods beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The standard will be effective for the Company beginning May 1, 2019. The Company is currently evaluating the impact to its condensed financial statements.

In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”, which simplifies income tax accounting. The update requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. The adoption of this standard had no impact on the condensed financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”, which simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption was permitted. The adoption of this standard had no impact on the condensed financial position, results of operations or cash flows.

F-10

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about Entity’s Ability to Continue as a Going Concern”. This standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management is also required to evaluate and disclose whether its plans alleviate that doubt. The standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the condensed financial position, results of operations or cash flows.

   
2.

SCOTTSDALE FACILITY AGREEMENT

   

On April 16, 2014, the Company entered into a loan and joint venture agreement (the “Agreement”) with GJS Capital Corp. (the "Creditor"). Under the terms of the Agreement, the Creditor loaned the Company $150,000 convertible note (the “Principal”) and agreed to form a joint venture with the Company for constructing and operating a processing plant at the Scottsdale facility, an existing facility, utilizing the Company’s licensed Technology. In addition, the Creditor was to advance $250,000 plus up to 15% for contingencies, a total of $287,500, to fund the initial construction and operation costs of the joint venture. The advances were not expected to be paid back to the Creditor. The Company received a total of $329,000 towards the joint venture and treated the funds as contributed capital, since in substance the Creditor secured future revenue of the Scottsdale facility operations with such funds.

   

On September 23, 2016, the Company entered into an amended and restated loan and joint venture agreement (the “Amendment Agreement”) with the Creditor and Gregg Sedun (the “Consultant”). The Amendment Agreement replaces in its entirety the Agreement, between the Company and the Creditor.

   

Under the terms of the Amendment Agreement, the Creditor has agreed to extend the Principal. The loan bears interest at a rate of 6% per annum, compounded annually and now has a maturity date of December 31, 2016 (the “Maturity Date"). The Company settled the $329,000 joint venture advance in exchange for 15,065,570 shares of common stock of the Company. Also, the Company agreed to transfer 1,400,000 of its 1,600,000 common shares of Gainey Capital Corp. to the Creditor.

   

At any time prior to the Maturity Date, the Creditor may elect to receive units (each a “Unit") of the Company in exchange for any portion of the Principal outstanding on the basis of one Unit for each $0.05 of indebtedness converted (the “Unit Conversion Option"). Each Unit consists of one share of the Company’s common stock and one warrant to purchase an additional share of the Company's common stock at a price of $0.10 per share for two years from the date of issuance. If the Creditor exercises the Unit Conversion Option, the Creditor will forgive the interest that accrued on the converted portion of the Principal.

   

If the Creditor exercises the Unit Conversion Option, the Creditor will receive a net profits interest (the “Net Profits Interest”) on any future profits received by the Company that are derived from the Company’s Technology on the basis of 1% of the Company’s net profits for every $10,000 of converted Principal. The Net Profits Interest will terminate when the Creditor receives eight times the amount of converted Principal.

   

The Company also agreed that in circumstances where the Consultant introduces sub-licensees or joint venture partners (“Partnership Interest”) to the Company for the purpose of using the Company’s Technology, the Company shall pay 20% of the net cash proceeds received by the Company from the Partnership Interest to the Consultant. The Company is under no obligation to enter into an agreement or terminate any future agreement with any Partnership Interest

F-11

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

3.

INVESTMENT IN MARKETABLE SECURITIES

   

On September 27, 2013, the Company entered into a settlement and security release agreement with Golden Anvil. Under the terms of the Release Agreement, the Company agreed to release Golden Anvil from loan agreements pursuant to which, Golden Anvil owed the Company $983,055 in secured indebtedness. In exchange for the release, Golden Anvil had 2,000,000 common shares of Gainey issued to the Company as part of an asset purchase agreement between Golden Anvil and Gainey.

   

The Asset Purchase was completed on September 30, 2013. The Gainey shares are held in escrow and will be released pursuant to the terms of a surplus escrow agreement as follows. The company cannot enter into any sales transaction of the Gainey shares prior to their release.


% of Shares to be Released Date of Release
5% October 2, 2013
5% April 2, 2014
10% October 2, 2014
10% April 2, 2015
15% October 2, 2015
15% April 2, 2016
40% October 2, 2016

On March 30, 2015, the Company sold 400,000 Gainey shares to the Creditor (see Note 2) for $49,747 cash, net of currency exchange and other banking fees. The cost of the 400,000 Gainey shares was $200,000. The Company recorded a loss on sale of marketable securities of $150,253.

On September 23, 2016, the Company agreed to transfer 1,400,000 Gainey shares to the Creditor in accordance with the Amendment Agreement. The cost of the 1,400,000 Gainey shares was $700,000. The Company had previously recorded a other than temporary loss on marketable securities of $510,433 related to these 1,400,000 Gainey shares. The Company recorded a loss on marketable securities in joint venture settlement of $189,567 and removed an unrealized gain on marketable securities of $3,717.

On October 14, 2016, the Company sold its last 200,000 Gainey shares to the Creditor for $40,280 cash. The cost of the 200,000 Gainey shares was $100,000. The Company had previously recorded a other than temporary loss on marketable securities of $72,919 related to these 200,000 Gainey shares. The Company recorded a gain on sale of marketable securities of $13,199 and removed an unrealized gain on marketable securities of $531.

As of October 31, 2016 and April 30, 2016, investment in marketable securities consisted of zero and $216,648, respectively. The Company held 1,600,000 Gainey Capital Corp. (“Gainey”) common shares, and the market value was $0.135 per share April 30, 2016. Gainey shares are traded on the Vancouver exchange under the stock symbol GNC.V and on the OTC Pink marketplace under the stock symbol GNYPF. Marketable securities are held for an indefinite period of time and thus are classified as available-for-sale securities. Realized investment gains and losses are included in the statement of operations, as are provisions for other than temporary declines in the market value of available-for-sale securities. Unrealized gains and unrealized losses deemed to be temporary are excluded from earnings (losses), net of applicable taxes, as a component of other comprehensive income. Factors considered in judging whether an impairment is other than temporary include the financial condition, business prospects and creditworthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of decline, and the Company’s ability and intent to hold the investment until the fair value recovers.

Based on management’s evaluation of the circumstances, management believed that the decline in fair value below the cost of certain of the Company’s marketable securities was other-than-temporary.

The following is a summary of available-for-sale marketable securities as of April 30, 2016:

F-12

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

    Cost     Unrealized Gain     Realized (Losses)     Market or Fair Value  
Equity securities $  800,000   $  --   $  (583,352 ) $  216,648  
                   Total $  800,000   $  --   $  (583,352 ) $  216,648  

4.

PROPERTY AND EQUIPMENT

   

Property and equipment consists of the following:


    As of     As of  
    October 31, 2016     April 30, 2016  
Process, lab and office equipment $  406,316   $  406,316  
Less: accumulated depreciation   (344,140 )   (309,257 )
  $  62,176   $  97,059  

Depreciation expense was $17,441 for the three months ended October 31, 2016 and 2015. Depreciation expense was $34,883 for the six months ended October 31, 2016 and 2015.

   
5.

ACCOUNTS PAYABLE - RELATED PARTIES

   

As of October 31, 2016 and April 30, 2016, accounts payable – related parties of $398,617 and $375,465, respectively, mainly consisted of consulting fees due to one director and officer of the Company.

   
6.

LOANS PAYABLE

   

As of October 31, 2016 and April 30, 2016, loans payable of $98,030, consists of borrowings payable to an unrelated third party. The loan bears 12% interest, is unsecured and is due on demand.

   

As of October 31, 2016 and April 30, 2016, accrued interest was $104,351 and $92,204, respectively.

   
7.

LOANS PAYABLE AND ACCRUED INTEREST – RELATED PARTIES

   

As of October 31, 2016 and April 30, 2016, loans payable – related parties of $1,078,000 and $878,000, respectively, mainly consists of borrowings, directly and indirectly, from one director of the Company. The balance bears 10% interest, is unsecured and is due on demand.

   

As of October 31, 2016 and April 30, 2016, accrued interest – related party was $257,856 and $206,581, respectively. Related parties – interest expense was $26,925 and $14,457 for the three months ended October 31, 2016 and 2015, respectively. Related parties – interest expense was $52,008 and $26,783 for the six months ended October 31, 2016 and 2015, respectively.

   
8.

CONVERTIBLE NOTE

   

On April 16, 2014, the Company entered into a loan and joint venture agreement (the “Agreement”) with GJS Capital Corp. (the "Creditor"). Under the terms of the Agreement, the Creditor loaned the Company $150,000 convertible note (the “Principal”).

   

On September 23, 2016, the Company entered into an amended and restated loan and joint venture agreement (the “Amendment Agreement”) with the Creditor and Gregg Sedun (the “Consultant”). The Amendment Agreement replaces in its entirety the Agreement, between the Company and the Creditor.

F-13

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

Under the terms of the Amendment Agreement, the Creditor has agreed to extend the Principal. The loan bears interest at a rate of 6% per annum, compounded annually and now has a maturity date of December 31, 2016 (the “Maturity Date").

   

At any time prior to the Maturity Date, the Creditor may elect to receive units (each a “Unit") of the Company in exchange for any portion of the Principal outstanding on the basis of one Unit for each $0.05 of indebtedness converted (the “Unit Conversion Option"). Each Unit consists of one share of the Company’s common stock and one warrant to purchase an additional share of the Company's common stock at a price of $0.10 per share for two years from the date of issuance. If the Creditor exercises the Unit Conversion Option, the Creditor will forgive the interest that accrued on the converted portion of the Principal.

   

If the Creditor exercises the Unit Conversion Option, the Creditor will receive a net profits interest (the “Net Profits Interest”) on any future profits received by the Company that are derived from the Company’s Technology on the basis of 1% of the Company’s net profits for every $10,000 of converted Principal. The Net Profits Interest will terminate when the Creditor receives eight times the amount of converted Principal.

   
9.

NOTES PAYABLE

   

As of October 31, 2016 and April 30, 2016, notes payable consists of an unsecured $50,000 payable to New Verde River Mining and Robert H. Gunnison. The note payable bears 6% interest annually, is unsecured and is due on demand.

   
10.

COMMITMENTS AND CONTINGENCIES

   

Lease obligations – The Company has operating leases for its corporate office, corporate housing and plant facilities. Future minimum lease payments under the operating leases as of October 31, 2016 are as follows:


Fiscal year ending April 30, 2017 $  6,961  
Fiscal year ending April 30, 2018 $  -  
Fiscal year ending April 30, 2019 $  -  
Fiscal year ending April 30, 2020 $  -  
Fiscal year ending April 30, 2021 $  -  

Lease expense was $20,883 for the three months ended October 31, 2016 and 2015. Lease expense was $41,766 and $42,816 for the six months ended October 31, 2016 and 2015, respectively.

Legal proceedings – The Company received a verified complaint (the “Complaint”), dated September 12, 2013, that was filed in Arizona Superior Court, Maricopa County, by McKendry Enterprises, Inc. Profit Sharing Plan and Retirement Trust (the “Landlord”), alleging breach of contract and breach of covenant of good faith and fair dealing in relation to the lease agreement dated June 6, 2007, between the Landlord and the Company, as amended (the “Lease Agreement”). The Complaint sought to recover damages of at least $108,581, including, but not limited to: 1) $56,358 rent; 2) $52,223 for maintenance, clean-up costs and construction; and 3) undetermined damages for additional repair, clean up and legal fees.

On October 22, 2014, the Company reached a settlement with the Landlord to pay $70,000 as follows: $5,000 on or before November 24, 2014; $5,000 payable 90 days thereafter; six payments of $7,000 due every 90 days thereafter; and two $9,000 payments due every 90 days thereafter. Each payment has a 3-day cure/grace period. Any later payment will trigger a default and immediate recordation/enforcement of a judgment. Payment is secured by a judgment for $78,969 plus attorney fees incurred by Landlord to date, plus any further attorney fees incurred in relation to the judgment. The judgment will not be executed unless the Company defaults on its payment obligations noted above. As of October 31, 2016, the Company has a liability in the amount of $9,000 recorded in accounts payable related to this matter.

F-14

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

On May 1, 2015, the Company received an amended notice of civil claim (the “Claim”), dated April 1, 2015 (original filed on December 31, 2014), that was filed in the Supreme Court of British Columbia, by 1254859 Ontario Inc. (the “Plaintiff”), alleging breach of specific performance and breach of contract in relation to the Golden Anvil Asset Purchase by Gainey (see Note 3). The Plaintiff seeks to recover damages of including, but not limited to: 1) 1,000,000 shares of Gainey stock; 2) damages in lieu of specific performance; and 3) damages for breach of contract.

   

On June 1, 2015, the Company filed a response to the Claim, denying: 1) entering into any oral agreement; 2) that the Plaintiff presented a potential transaction with Gainey; 3) that there was any fee payable to Plaintiff upon completion of a transaction with Gainey; 4) any existence of an agreement with Plaintiff and as such, the Gainey transaction was not related to any agreement with Plaintiff; and 5) any obligation to pay a fee to Plaintiff, contractually or otherwise. While the Company intends to vigorously defend the lawsuit, there is no assurance that the Company will be able to successfully defend the lawsuit.

   

On January 29, 2016, the Plaintiff filed a Notice of Application (the “Application”) in the Supreme Court of British Columbia, seeking an injunction to prohibit the distribution of shares of Gainey Capital Corp. held by the Company. A hearing took place on March 17, 2016. On June 16, 2016, the Application was dismissed against the Company.

   

No other legal proceedings are pending, threatened or contemplated.

   
11.

STOCKHOLDERS’ EQUITY

   

Common and Preferred Stock:

   

As of October 31, 2016 and April 30, 2016, there were 245,199,204 and 228,793,634, respectively, shares of common stock outstanding and zero shares of preferred stock outstanding.

   

On September 23, 2016, the Company entered into the Amendment Agreement (see Note 2) where the Company issued 15,065,570 shares of common stock of the Company, with a market value of $106,966, to the Creditor as part of the joint venture settlement.

   

On October 31, 2016, the Company issued an aggregate of 200,000 units at a price of $0.05 per unit in a private placement offering for subscriptions payable for which $10,000 was received in the prior fiscal year. Each unit was comprised of one share of the Company’s common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.10 for a two-year period from the date of issuance.

   

On October 31, 2016, the Company issued an aggregate of 1,140,000 units at a price of $0.05 per unit in a separate concurrent private placement offering for subscription aggregate cash proceeds of $57,000. Each unit was comprised of one share of the Company’s common stock and one share purchase warrant, which each warrant entitling the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.10 for a two-year period from the date of issuance.

   
12.

STOCK OPTIONS AND WARRANTS

   

On July 7, 2016, the Company extended the expiration dates of 23,020,000 warrants previously issued on July 13, 2011, from an expiration date of July 12, 2016 to July 12, 2018. Each warrant entitles the holder to purchase an additional share of the Company’s common stock at a price of $0.10 per share.

   

On July 30, 2016, 3,500,000 non-qualified stock options expired.

F-15

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

On October 11, 2016, the Company granted non-qualified stock options under the 2013 Plan for the purchase of 200,000 shares of common stock at $0.01 per share. The nonqualified stock options were granted to one consultant, are fully vested and expire October 11, 2018. The Company calculated the value of the options using the Black-Scholes option pricing model using the following assumptions: a bond equivalent yield of 1.25%, volatility of 185%, estimated life of 2 years and closing stock price of $0.006 per share on the date of grant. The value for the 200,000 stock options is $399.

   

On October 31, 2016, the Company issued an aggregate of 1,340,000 warrants in separate concurrent private placement offerings (see Note 10). Each warrant entitles the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.10 for a two-year period from the date of issuance.

   

As of October 31, 2016 and April 30, 2016, there were 28,800,000 and 32,100,000 stock options, respectively, and 135,025,129 and 133,685,129 stock warrants, respectively, outstanding and exercisable.

   
13.

RELATED PARTY TRANSACTIONS

   

For the three months ended October 31, 2016 and 2015, the Company incurred $49,000 and $51,000, respectively, in consulting fees expense from companies with a common director or officer.

   

For the six months ended October 31, 2016 and 2015, the Company incurred $98,000 and $101,000, respectively, in consulting fees expense from companies with a common director or officer.

   
14.

SUBSEQUENT EVENTS

   

None.

   
15.

RESTATEMENT

   

The Company determined that the balance sheet as of April 30, 2015, contained in the Company’s annual report on Form 10-K for the year ended April 30, 2015, should be restated due to default of payment on equipment leased in its Scottsdale Facility.

   

This restatement had the following impact on the Company’s condensed statement of operations and comprehensive loss for the three months ended October 31, 2015:


  • Decrease in mineral exploration and evaluation expenses of $12,551;

This restatement had the following impact on the Company’s condensed statement of operations and comprehensive loss, and condensed statement of cash flows for the six months ended October 31, 2015:

  • Decrease in mineral exploration and evaluation expenses of $25,102;
  • Reduction of accounts payable by $33,000; and
  • Increase of deferred rent by $7,898.

The decrease in mineral exploration and evaluation expenses and accounts payable, and the elimination of the deferred rent, as previously reported, is due to the full recognition of the expense of the leased equipment at April 30, 2015.

F-16

ROYAL MINES AND MINERALS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2016
(UNAUDITED)

A summary of the effect of the restatement is as follows:

      As Previously     Restatement        
      Reported     Adjustments     As Restated  
  Statement of Operations and Comprehensive Loss –                  
  For the Three Months Ended October 31, 2015                  
  Mineral exploration and evaluation expenses $  77,614   $  (12,551 ) $  65,063  
  Total operating expenses $  169,306   $  (12,551 ) $  156,755  
  Loss from operations $  169,306   $  (12,551 ) $  156,755  
  Net loss $  190,473   $  (12,551 ) $  177,922  
  Comprehensive loss $  190,473   $  (12,551 ) $  177,922  
                     
  Statement of Operations and Comprehensive Loss –                  
  For the Six Months Ended October 31, 2015                  
  Mineral exploration and evaluation expenses $  156,645   $  (25,102 ) $  131,543  
  Total operating expenses $  377,108   $  (25,102 ) $  352,006  
  Loss from operations $  377,108   $  (25,102 ) $  352,006  
  Net loss $  416,677   $  (25,102 ) $  391,575  
  Comprehensive loss $  416,677   $  (25,102 ) $  391,575  
                     
  Statement of Cash Flows – For the Six Months Ended                  
  October 31, 2015                  
  Net loss $  416,677   $  (25,102 ) $  391,575  
  Accounts payable $  27,067   $  (33,000 ) $  (5,933 )
  Deferred rent $  (7,898 ) $  7,898   $  -  

F-17

ITEM 2.               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II – Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and Current Reports, that we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

OVERVIEW

We were incorporated on December 14, 2005 under the laws of the State of Nevada. Our primary objectives are to: (i) commercially and viably extract and refine precious metals from specific coal (fly and bottom) ash and other leachable assets; (ii) use our proprietary processes to convert specific ore bodies and coal ash landfills into valuable assets; and (iii) joint venture, acquire and develop mining projects in North America.

We are focusing our business on commercially processing specific coal ash through a process of mechanical attrition, chemical treatments and thermal sintering that exposes extractable gold (the “Cholla Process”) at our processing and refining plant located in Scottsdale, Arizona (the “Scottsdale Facility”). This process agglomerates metal atoms into larger nanoparticles, before forming bulk gold metal. Once in bulk gold metal, all traditional assay methods can effectively measure value. In November 2012, we shut down our Phoenix Facility and we have no plans to continue that operation.

We are actively seeking to enter into joint ventures with third parties who have legal rights to fly ash resources, including landfills. There is no assurance that we will be able to commercially extract precious metals from fly ash or other mineable ores using our Cholla process or that we will be able to enter into joint ventures for the exploration and development of additional mining projects.

RESULTS OF OPERATIONS

Three Months and Six Months Summary

    Three Months Ended     Percentage     Six Months Ended     Percentage  
    October 31,     October 31,     Increase /     October 31,     October 31,     Increase /  
    2016     2015     (Decrease)     2016     2015     (Decrease)  
Revenue $  -   $  -     n/a   $  -   $  -     n/a  
Expenses   (435,443 )   (156,755 )   177.8%     (590,282 )   (352,006 )   67.7%  
Other Items   (33,941 )   (21,167 )   60.3%     (65,096 )   (39,569 )   64.5%  
Net Loss $  (469,384 ) $  (177,922 )   163.8%   $  (655,378 ) $  (391,575 )   67.4%  

Revenues

We earned no revenues during the six months ended October 31, 2016 and 2015. We can provide no assurances that we will be able to develop a commercially viable process or earn significant revenue from the processing of fly ash or other materials.

4

Expenses

The major components of our operating expenses for the three and six months ended October 31, 2016 and 2015 are outlined in the table below:

    Three Months Ended     Percentage     Six Months Ended     Percentage  
    October 31,     October     Increase /     October     October 31,     Increase /  
    2016     31, 2015     (Decrease)     31, 2016     2015     (Decrease)  
Mineral exploration and evaluation expenses $  70,045   $  80,063     (12.5)%   $  142,901   $  161,543     (11.5)%  
General and administrative   64,623     56,358     14.7%     129,164     126,156     2.4%  
Depreciation   17,441     17,411     0.2%     34,883     34,883     0.0%  
Loss in marketable securities on joint venture settlement   189,567     -     100.0%     189,567     -     100.0%  
Loss on joint venture settlement   106,966     -     100.0%     106,966     -     100.0%  
Other than temporary loss on marketable securities   -     2,893     (100.0)%     -     28,387     (100.0)%  
Bad debt expense   -     -     0.0%     -     1,037     (100.0)%  
Gain on sale of marketable securities   (13,199 )   -     100.0%     (13,199 )   -     100.0%  
Total operating expenses $  435,443   $  156,755     177.8%   $  590,282   $  352,006     67.7%  

Our operating expenses for the three and six months ended October 31, 2016 increased as compared to the three and six months ended October 31, 2015. The increase in our operating expenses primarily relates to the recording of losses in connection with our entry into a joint venture settlement agreement and the sale of securities in connection with that settlement. The increase was partially offset by decreases in mineral exploration and evaluation expenses and a gain on sale of marketable securities.

Mineral exploration and evaluation expenses primarily consist of rent, consulting fees and labor expenses in connection with our Scottsdale Facility.

Loss in marketable securities on joint venture settlement and loss on joint venture settlement relates to our entry into an amended and restated loan and joint venture agreement (the “Amendment Agreement”) with GJS Capital Corp. (the "Creditor") and Gregg Sedun (the “Consultant”). The Amendment Agreement replaces in its entirety the original loan and joint venture agreement (the “Original Agreement”) dated April 16, 2014, between the Creditor and us. Under the terms of the Amendment Agreement, the Creditor has agreed to extend the previously advanced $150,000 Convertible Loan (the “Principal”). The loan bears interest at a rate of 6% per annum, compounded annually and now has a maturity date of December 31, 2016 (the “Maturity Date"). We settled $329,000 in joint venture contributed capital in exchange for 15,065,570 shares of our common stock. Also, we transferred, 1,400,000 of our 1,600,000 common shares of Gainey Capital Corp. to the Creditor. The Creditor represented that it was not a "US Person" as that term is defined by Regulation S of the Securities Act of 1933, as amended.

Other than temporary loss on sale of marketable securities relates to the impairment loss recognized for the continued decline in stock price of our Gainey Capital Corp. shares.

Our general and administrative expenses primarily consist of: (i) monthly consulting fees to our Chief Financial Officer, Mr. Mitchell; (ii) legal and audit fees in connection with meeting our reporting requirements under the Exchange Act; and (iii) travel expense for our executives and directors.

5

We anticipate that our operating expenses will increase significantly as we implement our plan of operation for our Scottsdale Facility.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital                  
                Percentage  
    At October 31, 2016     At April 30, 2016     Increase / (Decrease)  
Current Assets $  23,235   $  60     38,625%  
Current Liabilities   (2,469,499 )   (2,206,841 )   11.9%  
Working Capital Deficit $  (2,446,264 ) $  (2,206,781 )   10.9%  

Cash Flows            
    Six Months Ended  
    October 31, 2016     October 31, 2015  
Net Cash Used in Operating Activities $  (276,605 ) $  (255,774 )
Net Cash Used In Investing Activities   40,280     -  
Net Cash Provided By Financing Activities   257,000     255,000  
Net Decrease in Cash During Period $  (20,675 ) $  (774 )

As of October 31, 2016, we had a working capital deficit of $2,446,264 as compared to a working capital deficit of $2,206,781 at our year ended April 30, 2016. The increase in our working capital deficit is primarily due to an increase in accrued interest-related parties and loans payable-related parties.

FINANCING REQUIREMENTS

Currently, we do not have sufficient financial resources to complete our plan of operation for the next twelve months. As such, our ability to complete our plan of operation is dependent upon our ability to obtain additional financing in the near term.

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned mining, development and exploration activities.

OFF-BALANCE SHEET ARRANGEMENTS

We have 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 is material to stockholders.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 1 to our interim financial statements included in this Quarterly Report.

6

ITEM 4.               CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2016 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended October 31, 2016 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

7

PART II - OTHER INFORMATION

ITEM 1.               LEGAL PROCEEDINGS.

The Company received a verified complaint (the “Complaint”), dated September 12, 2013, that was filed in Arizona Superior Court, Maricopa County, by McKendry Enterprises, Inc. Profit Sharing Plan and Retirement Trust (the “Landlord”), alleging breach of contract and breach of covenant of good faith and fair dealing in relation to the lease agreement dated June 6, 2007, between the Landlord and the Company, as amended (the “Lease Agreement”). The Complaint sought to recover damages of at least $108,581, including, but not limited to: 1) $56,358 rent; 2) $52,223 for maintenance, clean-up costs and construction; and 3) undetermined damages for additional repair, clean up and legal fees.

On October 22, 2014, the Company reached a settlement with the Landlord to pay $70,000 as follows: $5,000 on or before November 24, 2014 (amount has been paid); $5,000 payable 90 days thereafter (amount has been paid); six payments of $7,000 due every 90 days thereafter (five payments of $7,000 have been paid); and two $9,000 payments due every 90 days thereafter. Each payment has a 3-day cure/grace period. Any later payment will trigger a default and immediate recordation/enforcement of a judgment. Payment is secured by a judgment for $78,969 plus attorney fees incurred by Landlord to date, plus any further attorney fees incurred in relation to the judgment. The judgment will not be executed unless the Company defaults on its payment obligations noted above. As of July 31, 2016, the Company has a liability in the amount of $25,000 recorded in accounts payable related to this matter.

On May 1, 2015, the Company received an amended Notice of Civil Claim (the “Claim”), dated April 1, 2015 (original filed on December 31, 2014), that was filed in the Supreme Court of British Columbia, by 1254859 Ontario Inc. (the “Plaintiff”), alleging breach of specific performance and breach of contract in relation to the Golden Anvil Asset Purchase by Gainey (see Note 3). The Plaintiff seeks to recover damages of including, but not limited to: 1) 1,000,000 shares of Gainey stock; 2) damages in lieu of specific performance; and 3) damages for breach of contract.

On June 1, 2015, the Company filed a Response to Civil Claim, denying: 1) entering into any oral agreement; 2) that the Plaintiff presented a potential transaction with Gainey; 3) that there was any fee payable to Plaintiff upon completion of a transaction with Gainey; 4) any existence of an agreement with Plaintiff and as such, the Gainey transaction was not related to any agreement with Plaintiff; and 5) any obligation to pay a fee to Plaintiff, contractually or otherwise. While the Company intends to vigorously defend the lawsuit, there is no assurance that the Company will be able to successfully defend the lawsuit.

On January 29, 2016, the Plaintiff filed a Notice of Application (the “Injunction Application”) in the Supreme Court of British Columbia, seeking an injunction to prohibit the distribution of shares of Gainey Capital Corp. held by the Company. A hearing took place on March 17, 2016. The Company successfully opposed the Injunction Application and on June 16, 2016 the Injunction Application was dismissed against the Company.

ITEM 1A.             RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

If we do not obtain additional financing, we may not be able to continue our operations at our Scottsdale Facility or enter into any potential joint venture or licensing agreements.

As of October 31, 2016, we had cash on hand of $20,735 and accumulated net loss of $19,209,725 since inception. Our plan of operation calls for significant expenses in connection with the operation of our Scottsdale Facility and the entry of any potential joint ventures. If we are unable to raise sufficient financing, there is a substantial risk that we will be unable to meet payments of principal and interest to our creditors and pay our consultants and employees. In addition, we will require substantial financing in order to implement our plan of operation over the next twelve months. There is no assurance that this will satisfy all of our working capital requirements for the next twelve months or that these funds will be sufficient to complete our planned development program.

8

Because we are a development stage company, we face a high risk of business failure.

We have earned minimal revenues from the processing of ore at our Phoenix and Scottsdale Facilities. Our primary business activities have involved the exploration and development on the Piute Valley Property and the commencement of operations at our Phoenix Facility and Scottsdale Facility. In August 2012, we did not pay the renewal fee on the Piute Valley Property and the BLM Claims, allowing those claims to lapse. In November 2012, we shut down our Phoenix Facility and we have no plans to continue that operation. Potential investors should be aware of the difficulties normally encountered by exploration and development stage companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of mineral properties. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

Because we anticipate our operating expenses will increase prior to our earning significant revenues, we may never achieve profitability.

We anticipate that we will incur increased operating expenses prior to realizing any significant revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the operation of our Scottsdale Facility, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we may not be able to ever generate any operating revenues or achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

Certain work to be performed at our facility may require us to apply for permits from federal, state or local regulatory bodies.

If our applications for permits from the relevant regulatory bodies are denied, we may not be able to proceed with our development programs as disclosed above, which could have a negative effect on our business.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.

Our success will largely depend on our ability to hire highly qualified personnel with experience in the geological field. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Our failure to hire key personnel when needed could have a significant negative effect on our business.

If we complete additional financings through the sale of shares of our common stock, our existing stockholders will experience dilution.

The most likely source of future financing presently available to us is through the issuance of our common stock. Issuing shares of our common stock, for financing purposes or otherwise, will dilute the interests of our existing stockholders.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

Our common stock is considered to be a “penny stock” since it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act. Our common stock is a “penny stock” because it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

9

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

ITEM 2.               UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.               DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.               MINE SAFETY DISCLOSURES.

None.

ITEM 5.               OTHER INFORMATION.

None.

ITEM 6.               EXHIBITS.

Exhibit  
Number Description of Exhibits
2.1

Agreement and Plan of Merger dated September 24, 2007 among the Company, Royal Mines Acquisition Corp., Royal Mines Inc. and Kevin B. Epp. (4)

2.2

Agreement and Plan of Merger dated October 6, 2007 between the Company and Royal Mines Acquisition Corp. (5)

3.1

Articles of Incorporation. (1)

3.2

Certificate of Change Pursuant to NRS 78.209 increasing the authorized capital of common stock to 300,000,000 shares, par value $0.001 per share. (2)

3.3

Certificate of Amendment Pursuant increasing the authorized capital of common stock to 900,000,000 shares, par value $0.001 per share. (11)

10


Exhibit  
Number Description of Exhibits
3.4 Bylaws. (1)
3.5

Articles of Merger between the Company and Royal Mines Acquisition Corp. (5)

4.1

Form of Share Certificate. (1)

10.1

Technology and Asset Purchase Agreement dated April 2, 2007 among New Verde River Mining Co., Inc., Robert H. Gunnison and Royal Mines Inc. (5)

10.2

Lease Agreement dated June 6, 2007 among McKendry Enterprises Inc., Profit Sharing Plan and Retirement Trust and Royal Mines Inc. (5)

10.3

Management Consulting Agreement dated February 24, 2009 between the Company and Jason S. Mitchell. (6)

10.4

First Amendment of Lease Agreement dated November 20, 2009 among McKendry Enterprises Inc., Profit Sharing Plan and Retirement Trust and Royal Mines Inc. (5)

10.5

2011 Stock Incentive Plan. (7)

10.6

Consulting Services Agreement dated February 1, 2012 between the Company and Alvin A. Snaper. (8)

10.7

Agreement dated June 14, 2012 between the Company and Phoenix PMX LLC. (9)

10.8

2013 Stock Incentive Plan. (10)

10.9

Settlement and Security Release Agreement dated September 27, 2013 between the Company and Golden Anvil S.A. de C.V. (12)

10.10

Form of Non-Qualified Option Agreement. (13)

10.11

Convertible Loan Agreement dated April 16, 2014, between the Company and Bruce Matheson. (14)

10.12

Loan and Joint Venture Agreement dated April 16, 2014, between the Company and GJS Capital Corp. (15)

10.13

Letter of Intent dated for reference July 7, 2014, between the Company and Lafarge North America Inc. (16)

10.14

Amended and Restated License Agreement dated August 20, 2014 between the Company and Alvin C. Johnson Jr. (17)

10.15

Settlement Agreement dated October 22, 2014, between the Company and McKendry Enterprises, Inc. Profit Sharing Plan and Retirement Trust. (18)

10.16

Amended and Restated Loan and Joint Venture Agreement dated September 23, 2016, between Royal Mines and Minerals Corp. and GJS Capital Corp. (19)

14.1

Code of Ethics. (3)

31.1

Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

31.2

Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

32.1

Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

32.2

Certification of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

XBRL Taxonomy Extension Definition Linkbase.

101.LAB

XBRL Taxonomy Extension Label Linkbase.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

11

Notes:

(1)

Filed with the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on August 17, 2006, as amended.

(2)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed June 12, 2007.

(3)

Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed July 30, 2007.

(4)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 28, 2007

(5)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed October 12, 2007.

(6)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 26, 2009.

(7)

Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed September 15, 2010.

(8)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 1, 2012.

(9)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed June 20, 2012.

(10)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed June 24, 2013.

(11)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed August 28, 2013.

(12)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed October 2, 2013.

(13)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed November 1, 2013.

(14)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed April 21, 2014.

(15)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed April 21, 2014.

(16)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed July 16, 2014.

(17)

Filed with the SEC as an exhibit to our Quarterly Report on from 10-Q filed on September 22, 2014.

(18)

Filed with the SEC as an exhibit to our Quarterly Report on from 10-Q filed on December 16, 2014.

(19)

Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 28, 2016.

12

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

        ROYAL MINES AND MINERALS CORP.
         
         
         
Date: December 21, 2016   By: /s/ K. Ian Matheson
        K. IAN MATHESON
        Chief Executive Officer
        (Principal Executive Officer)
         
         
         
         
Date: December 21, 2016   By: /s/ Jason S. Mitchell
        JASON S. MITCHELL
        Chief Financial Officer
        (Principal Accounting Officer)

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