UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Period January 2004 File No. 0-31195
Alpha Gold Corporation
(Name of Registrant)
410 Donald Street, Coquitlam, British Columbia, Canada V3K 3Z8
(Address of principal executive offices)
1.
Interim Financial Statements (unaudited) for the nine months ended November 30, 2003
2.
News Release dated January 2, 2004
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
FORM 20-FXXX
FORM 40-F ____
Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _____
NoXXX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Alpha Gold Corporation
(Registrant)
Dated: March 4, 2004 | By: /s/ George Whatley George Whatley, President and Director |
ALPHA GOLD CORP.
INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited - Prepared By Management)
BAILEY & ASSOCIATES J.C. (Jack) Bailey, C.A.
(an incorporated professional)
CHARTERED ACCOUNTANTS Bryant P. McAfee – F.C.A.– Associate
Suite 888 – 609 W. Hastings St.
Vancouver, BC, Canada V6B 4W4
Tel: (604) 647-2200
Fax: (604) 647-0095
NOTICE TO READER
We have compiled the balance sheet of Alpha Gold Corp. as at November 30, 2003 and the statements of operations, deficit and cash flows for the nine months then ended from information provided by management. We have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Readers are cautioned that these statements may not be appropriate for their purposes.
"Bailey & Associates”
CHARTERED ACCOUNTANTS
Vancouver, Canada
January 15, 2003
ALPHA GOLD CORP.
INTERIM BALANCE SHEETS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited - see Notice to Reader)
November 30, 2003 | February 28, 2003 | |
ASSETS | ||
CURRENT Cash and term deposits | $1,440,249 | $2,130,049 |
Accounts receivable | 55,342 | 8,499 |
Taxes receivable | 137,586 | 137,586 |
Prepaid expense | 7,000 | 11,340 |
1,640,177 | 2,287,474 | |
INVESTMENT IN EXPLORATION PROPERTIES (Schedule) | 550,114 | 376,114 |
EXPENDITURES ON EXPLORATION PROPERTIES (Schedule) | 3,919,657 | 3,020,656 |
PROPERTY, PLANT AND EQUIPMENT (Note 4) | 36,352 | 46,677 |
$6,146,300 | $5,730,92 | |
LIABILITIES CURRENT Accounts payable and accrued liabilities | $6,000 | $11,044 |
SHAREHOLDERS' EQUITY SHARE CAPITAL (Note 5) | 8,517,737 | 7,950,693 |
DEFICIT | (2,377,437) | (2,230,816) |
6,140,300 | 5,719,877 | |
$6,146,300 | $5,730,921 |
APPROVED BY THE DIRECTORS
“George Whatley”
“Richard Whatley”
ALPHA GOLD CORP.
INTERIM STATEMENTS OF OPERATIONS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – see Notice to Reader)
Cumulative, Inception to November 30, 2003 | 3 months ended November 30, 2003 | 9 months ended November 30, 2003 | 3 months ended November 30, 2002 | 9 months ended November 30, 2002 | |
REVENUE Sales | $ 97,403 | $ - | $ - | $ - | $ - |
EXPENSES Amortization | 164,695 | 3,44 | 10,325 | 2,205 | 6,613 |
Automotive | 69,597 | 1,260 | 4,574 | 5,278 | 12,160 |
Bad debts | 14,999 | - | - | - | - |
Consulting and management fees | 334,263 | 15,000 | 45,000 | 14,000 | 50,000 |
Financial relations | 59,000 | - | - | - | - |
Gain on disposal of capital assets | (24,414) | - | - | - | - |
Gain on disposal of exploration property | (7,400) | - | - | - | - |
Graphics | 53,632 | - | - | - | - |
Insurance | 23,880 | - | 2,185 | 18 | 1,805 |
Office, printing and miscellaneous | 231,447 | 8,526 | 16,238 | 6,789 | 15,811 |
Professional fees | 531,591 | 12,371 | 37,992 | 6,518 | 41,964 |
Property investigation | 25,052 | - | - | - | - |
Regulatory and transfer fees | 113,824 | 846 | 5,673 | 607 | 7,070 |
Rent | 71,430 | 1,500 | 4,500 | 1,500 | 4,500 |
Repairs and maintenance | 13,291 | - | - | - | - |
Shareholder relations | 100,655 | 31,612 | 52,371 | - | 3,884 |
Telephone | 6,895 | - | - | - | - |
Travel and promotion | 95,420 | 4,045 | 6,813 | 1,781 | 2,932 |
Wages | 12,864 | - | - | - | - |
Write-off of exploration properties | 809,960 | - | - | - | - |
Write-down of capital assets | 46,527 | - | - | - | - |
2,747,208 | 78,601 | 185,671 | 38,696 | 146,739 | |
NET LOSS BEFORE OTHER INCOME & EXPENSES | (2,649,805) | (78,601) | (185,671) | (38,696) | (146,739) |
OTHER INCOME Insurance proceeds | 12,898 | _- | - | - | - |
Interest | 250,851 | 10,906 | 40,186 | 8,404 | 20,982 |
Gain on disposal of marketable securities | 60,093 | - | - | - | - |
OTHER EXPENSES Interest, bank charges and foreign exchange | (16,988) | (84) | (1,136) | (719) | (2,095) |
Loss on realization of demand debenture | (14,487) | - | - | - | - |
Write-off of investment in & advances to subsidiary | - | - | - | - | - |
Write-down of marketable securities | (19,999) | - | - | - | - |
272,368 | 10,822 | 39,050 | 7,685 | 18,887 | |
NET LOSS FOR THE PERIOD | $(2,377,437) | $(67,779) | $(146,621) | $(31,011) | $(127,852) |
LOSS PER SHARE | $ ( 0.11) | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.01) |
ALPHA GOLD CORP.
INTERIM STATEMENTS OF DEFICIT
NINE MONTH PERIOD ENDED NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – see Notice to Reader)
Cumulative, Inception to November 30, 2003 | 3 months Ended November 30, 2003 | 9 months Ended November 30, 2003 | 3 months Ended November 30, 2002 | 9 months Ended November 30, 2002 |
DEFICIT – BEGINNING OF PERIOD | $(2,309,658) | $(2,230,816) | $(2,173,454) | $(2,076,613) | |
NET LOSS FOR THE PERIOD | $(2,377.437) | (67,779) | (146,621) | (31,011) | (127,852) |
DEFICIT – END OF THE PERIOD | $(2,377,437) | $(2,377,437) | $(2,377,437) | $(2,204,465) | $(2,204,465) |
ALPHA GOLD CORP.
INTERIM STATEMENTS OF CASH FLOWS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – see Notice to Reader)
Cumulative, Inception to November 30, 2003 | 3 months ended November 30, 2003 | 9 months ended November 30, 2003 | 3 months ended November 30, 2002 | 9 months ended November 30, 2002 | |
CASH PROVIDED BY (USED IN) | |||||
OPERATING ACTIVITIES | |||||
Net loss for the period | $(2,377,437) | $(67,779) | $(146,621) | $(31,011) | $(127,852) |
Items not affecting cash: | |||||
Amortization | 164,695 | 3,441 | 10,325 | 2,205 | 6,613 |
Gain on disposal of capital asset | (24,945) | - | - | - | - |
Gain on sale of exploration property | (7,400) | - | - | - | - |
Gain on sale of marketable securities | (60,093) | - | - | - | - |
Loss on realization of demand debenture | 14,487 | - | - | - | - |
Write-off of exploration properties | 809,960 | - | - | - | - |
Write-off of investment in and advances to subsidiary | 20,668 | - | - | - | - |
Write down of capital assets | 46,527 | - | - | - | - |
Write down of marketable securities | 19,999 | - | - | - | - |
(1,393,539) | (64,338) | (136,296) | (28,806) | (121,239) | |
Changes in non-cash working capital balances | (236,833) | 5,136 | (47,547) | 19,299 | (21,571) |
(1,630,372) | (59,202) | (183,843) | (9,507) | (142,810) | |
INVESTING ACTIVITIES | |||||
Investment in and expenditures on exploration Properties | (5,292,331) | (375,886) | (1,073,001) | (170,949) | (752,773) |
Proceeds on disposal of exploration property | 20,000 | - | - | - | - |
Proceeds on disposal of marketable securities | 60,094 | - | - | - | - |
Purchase of capital assets, net of disposal | (222,629) | - | - | (8,336) | (20,433) |
Demand debenture | (12,250) | - | - | - | - |
(5,447,116) | (375,886) | (1,073,001) | (179,285) | (773,206) | |
FINANCING ACTIVITIES | |||||
Proceeds on issuance of shares | 8,517,737 | - | 1,073,179 | 8,250 | 1,342,498 |
Proceeds on shares allotted but not issued | - | - | (506,135) | - | - |
8,517,737 | - | 567,044 | 8,250 | 1,342,498 | |
INCREASE (DECREASE) IN CASH FOR THE PERIOD | 1,440,249 | (435,088) | (689,800) | (180,542) | 426,482 |
CASH AND TERM DEPOSITS – BEGINNING OF THE PERIOD | - | 1,875,337 | 2,130,049 | 1,713,901 | 1,106,877 |
CASH AND TERM DEPOSITS – END OF THE PERIOD | $1,440,249 | $1,440,249 | $1,440,249 | $1,533,359 | $1,533,359 |
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30
, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
1.
NATURE OF OPERATIONS
The investment in and expenditures on exploration properties comprise a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent upon obtaining the necessary financing to continue exploration and development of the properties, the attainment of successful production from the properties or from the proceeds of their disposal.
The continuing operations of the company are dependent upon its ability to continue to raise capital to funds its exploration and development programs. The company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2.
SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Presentation
The financial statements of the Company are prepared in accordance with Canadian generally accepted accounting principles. As described in note 9, these principles differ in certain material respects from United States generally accepted accounting principles.
(b)
Translation of Foreign Currency
Amounts recorded in foreign currency have been translated into Canadian dollars as follows:
(i)
Accounts included in the statement of income and deficit are translated at average rates of exchange prevailing during the year; and,
(ii)
Accounts included in the balance sheet are translated at rates of exchange at year end; except that, capital assets and investment in and expenditures on exploration properties are translated at rates prevailing at last acquisition dates or at the rate prevailing at last write-down to fair market value.
All gains and losses arising from the translation of foreign currency are included in net income.
(a)
Deferred Expenditures
Acquisition costs of exploration properties, rights and options together with direct exploration and development expenditures thereon are deferred in the accounts to be written off when production is attained or disposition occurs. Acquisition costs will be reduced by any payments from the granting of options to purchase the exploration property.
Such expenditures are accumulated and amortized using the unit of production method based upon the estimated proven reserves in each cost centre as determined by independent engineers, or charged to income if any cost centre is determined to be unsuccessful.
All deferred expenditures are reviewed by management, on a property by property basis, to consider whether there are any conditions that may indicate an impairment in value. When the carrying value exceeds the net recoverable amount as estimated by management, or the Company’s ability to sell the property for an amount exceeding the deferred costs, provision is made for the impairment in value.
(b)
Environmental Protection And Rehabilitation Costs
Expense related to environmental protection and rehabilitation costs are accrued and charged to income when their likelihood of occurrence is established. This includes future removal and site restoration costs as required due to environmental law and contracts.
.
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) | ||
(e) | Property, Plant and Equipment Property, plant and equipment are recorded at cost and amortization is calculated on a declining balance basis at the following annual rates: | ||
Furniture and fixtures | - 20% | ||
(f) | Trucks Loss Per Share | - 30% |
Loss per share computations are based on the weighted average number of common shares outstanding during the year. Fully diluted loss per share has not been calculated since the exercise of outstanding options and warrants is anti-dilutive.
(g)
Flow-Through Shares
From time to time, the Company finances a portion of its Canadian exploration program with flow-through share issues. Under this type of financing arrangement, the proceeds are used to fund exploration work within a defined time period and shares are subsequently issued to the vendors as consideration.
The Company receives no income tax benefits related to the expenditures made. The benefits are “flowed-through” to the investors.
(a)
Financial Instruments
The carrying value of cash and term deposits, accounts receivable, prepaid expenses and accounts payable and accrued liabilities approximate their fair values due to the short period to maturity of these instruments.
(b)
Use of Estimates
The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those reported.
(c)
Income Taxes
The company follows the liability method of accounting for income taxes. Under this policy, future income tax assets and liabilities are determined based on the differences between the tax basis of assets and liabilities and those reported in the financial statements. The future tax assets or liabilities are calculated using the tax rates for the periods in which the temporary differences are expected to reverse. The effect on future income tax assets and liabilities of a change in tax rates is included in operations in the period in which the change is enacted or substantially assured. The amount of future tax assets recognized is limited to the amount of the benefit that is more likely than not to be realized.
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(k)
Stock Options
As of January 1, 2002, the Company adopted the standard in Section 3870 “Stock-based Compensation and Other stock-based Payments”, of the Canadian Institute of Chartered Accounts Handbook to be applied prospectively. This section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. The standard requires that all stock-based awards made to non-employees be measured and recognized using a fair value based method. The standard encourages the use of a fair value based method for all awards granted to employees, but only requires the use of a fair value based method for direct awards of stock, stock appreciation rights, and awards that call for settlement in cash or other assets. Awards that a company has the ability to settle in stock are recorded as equity, whereas awards that the entity is required to or has a practice of settling in cash are recorded as liabilities. For stock options granted to employees, the Company has adopted the disclosure-only provisions of the new standard whereby pro-forma net income and pro-forma earnings per share are disclosed in the notes to the financial statements, as if the fair value based method of accounting had been used.
3. | EXPLORATION PROPERTIES | ||
November 30, 2003 | February 28, 2003 | ||
Acquisition costs (Schedule) | $ 550,114 | $376,114 | |
Deferred expenditures (Schedule) | 3,919,657 | 3,020,656 | |
$4,469,771 | $3,396,770 |
(a)
Lust Dust Claims
(i)
On July 15, 1989, the Company acquired a 100% interest in certain mineral claims located in the Omineca Mining Division, British Columbia for cash of $170,000. The vendor retains a royalty of 3% of net smelter returns.
(ii)
On February 21, 1992, the Company acquired a 100% interest in certain mineral claims located in the Omineca Mining Division, British Columbia for $100,000 cash and 200,000 shares of the company at a deemed consideration of $0.60 each (previously subject to a 5% Net Profit Interest to a maximum of $100,000 and a royalty of 2% of net smelter returns) In July 2003, the Company acquired the retained “5% Net Profit Interest and the 2% net smelter return royalty” for $150,000 cash.
(b)
Goldbanks
On October 30, 1995, the Company entered into an Agreement to acquire a 100% interest in certain mineral claims situated in Pershing County, Nevada, U.S.A. The Company had previously entered into an option agreement to acquire the mineral claims in the 1995 fiscal year. The Company and the vendor agreed to terminate the Option Agreement dated April 30, 1994. Payment under the Option Agreement totalled $26,400.00 U.S. and apply to the purchase.
In addition to the above payments, the Agreement calls for the issuance to the vendor of 100,000 shares of Alpha Gold Corp. As at February 28, 2003, regulatory approval had been received but the shares had not yet been issued.
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
4.
PROPERTY, PLANT AND EQUIPMENT
Net Book Value | ||||
Cost | Accumulated Amortization | November 30, 2003 | February 28, 2003 | |
Furniture and fixtures | $16,361 | $14,353 | $ 2,008 | $ 2,362 |
Trucks | 52,560 | 18,216 | 34,344 | 44,315 |
$68,921 | $32,569 | $36,352 | $46,677 |
5.
SHARE CAPITAL
(a)
Authorized
100,000,000 common shares without par value
(b)
Issued
9 months ended November 30, 2003 | Year ended February 28, 2003 | |||||
Number of shares | Amount | Number of Shares | Amount | |||
Balance – at the Beginning of the period | 19,732,380 | $7,444,558 | 16,371,760 | $6,102,060 | ||
Issue during the period | ||||||
- for cash @ $0.35 (see i) below) | 1,500,000 | 525,000 | ||||
-for cash @ $0.33 (see ii) below) | 175,000 | 57,750 | ||||
- for cash @ $0.46 (see iii) below) | 685,714 | 315,429 | ||||
- for cash @ $0.50 (see iv) below) | 250,000 | 125,000 | ||||
- for cash @ $0.50 (see v) below) | 100,000 | 50,000 | ||||
Issued during the year | ||||||
- for cash @ $0.40 (see iii) below) | 3,135,620 | 1,254,248 | ||||
- for cash @ $0.40 (see iv) below) | 200,000 | 80,000 | ||||
- for cash @ $0.33 (see v) below) | 25,000 | 8,250 | ||||
Balance – at the end of the period | 22,443,094 | $ 8,517,737 | 19,732,380 | $ 7,444,558 | ||
(c ) Allotted during the year – not yet issued - for cash | - | - | 1,446,100 | 506,135 | ||
Totals – issued and allotted | 22,443,094 | $ 8,517,737 | 21,178,480 | $ 7,950,693 |
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
5. SHARE CAPITAL (continued)
During the period:
i)
1,500,000 common shares were issued at $0.35 per share (of which 663,900 were “flow-through common shares”) that provided purchasers with warrants to purchase one additional common share at a price of $0.43 expiring February 18, 2005.
ii)
175,000 common shares were issued at $0.33 per share due to the exercised of employee stock options.
iii)
685,714 common shares were issued at $0.46 per share due to the exercise of warrants from a prior year share issue (250,000 of these shares were flow-through common shares). The remainder of the warrants relating to this earlier issue have now expired.
iv)
250,000 common shares were issued at $0.50 per share due to the exercise of warrants from a prior year share issue. The remainder of the warrants relating to this earlier issue have now expired.
v)
100,000 common shares were issued at $0.50 per share due to the exercise of warrants from a prior year share issue. The remainder of the warrants relating to this earlier issue expire on August 12, 2004.
In the prior year:
vi)
3,135,620 common shares were issued for $0.40 per share (of which 900,000 were “flow-through shares”) with warrants to purchase additional common shares at a price of $0.50 per share expiring August 12, 2004.
vii)
200,000 common shares were issued for $0.40 per share due to the exercise of warrants from a prior year share issue. The remainder of the warrants relating to this earlier issue have now expired.
viii)
25,000 common shares were issued at $0.33 per share due to the exercise of management options. The remaining 175,000 options were exercised subsequent to the year-end.
As of November 30, 2003, the following share purchase warrants were outstanding:
Shares | $ per share | Expiration |
1,500,000 | $0.43 | February 18, 2005 |
3,135,620 | $0.50 | August 12, 2004 |
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
6.
SHARE PURCHASE OPTIONS
The Company has established a share purchase option plan whereby the board of directors may, from time to time, grant options to directors, officers, employees or consultants. The exercise price of an option is not less than the closing price on the Exchange on the last trading day preceding the grant. Options vest on the date granted.
A summary of the Company’s options at November 30, 2003 and the changes for the period are as follows:
Number Outstanding February 28, 2003 | Granted | Exercised | Forfeited | Expired | Number Outstanding November 30, 2003 | Exercise Price Per Share | Expiry Date |
175,000 | - | (175,000) | - | - | - | $0.33 | May 1, 2003 |
750,000 | - | - | - | - | 750,000 | $0.40 | April 25, 2004 |
300,000 | - | - | - | - | 300,000 | $0.50 | June 7, 2005 |
May 1, 2003 | |||||||
1,225,000 | - | (175,000) | - | - | 1,050,000 | $0.33-0.50 | June 7, 2005 |
As of January 1, 2002, the Company adopted the standard in Section 3870 “Stock-based Compensation and Other stock-based Payments”, of the Canadian Institute of Chartered Accounts Handbook to be applied prospectively (Note 2 [k]).
The Company elected not to adopt the fair value method for stock-based compensation granted to employees and directors. Had compensation cost for the Company’s stock-based awards granted to employees and directors been determined under the fair value based method of accounting for awards granted on or after January 1, 2002, pro forma loss would have amounted to $350,703 and pro forma loss per share would have been $0.01 for the year ended February 28, 2003. The fair value of the option grant is estimated on the date of grant using the Black-Scholes option pricing model, with the following assumptions for each grant:
April 25 Grant | June 7 Grant | |
Number of options | 750,000 | 300,000 |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 89.05% | 92.50% |
Risk-free interest rate | 3.80% | 3.70% |
Expected life (years) | 2 | 3 |
The weighted average grant-date fair value per option was $0.17 for April 25 and $0.23 for June 7.
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
7.
INCOME TAXES
The Company has available non-capital losses of $742,262, Cumulative Canadian Exploration Expenses of $284,832, Cumulative Canadian Development Expenses of $483,236 and Cumulative Foreign Exploration and Development Expenses of $928,904 which may be carried forward to reduce taxable income in future years. The potential future income tax benefit arising from the foregoing is not reflected in these financial statements. The non-capital losses expire as follows:
2004 | 17,541 |
2005 | 57,137 |
2006 | 89,273 |
2007 | 104,349 |
2008 | 109,248 |
2009 | 121,751 |
2010 | 150,073 |
$649,372 |
Year ended February 28, 2003 | Year ended February 28, 2002 | |
Future income tax asset | $259,709 | $237,915 |
Valuation allowance | (259,709) | (237,915) |
Net future income tax asset | $ - | $ - |
The Company has recorded a valuation allowance against its future income tax asset because it believes it is not more likely than not that sufficient taxable income will be realized during the carry-forward period to utilize the future tax asset.
8.
RELATED PARTY TRANSACTIONS
During the period, the Company paid fees of $112,500 (2002 - $116,500) for contract negotiation, property investigation, property acquisition, site investigation and management of field programs, $5,200 (2002 - $5,250) for secretarial and bookkeeping services, and $4,500 (2002 - $4,500) for office rental, and nil (2002 - $3,200) for car rental to a company controlled by a director.
9.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES
The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) which differ in certain respects from those principles that the Company would have followed had its financial statements been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP).
Differences which materially affect the measurement of items included in the financial statements are:
a)
U.S. GAAP requires that exploration and general and administrative costs (G&A) related to projects be charged to expense as incurred. As such, some of the costs accounted for as deferred exploration property and exploration expenditures under Canadian GAAP would have been charged to earnings under U.S. GAAP. Any other related costs in respect of the properties are charged to earnings under U.S. GAAP and capitalized under Canadian GAAP.
ALPHA GOLD CORP.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
9.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES (continued)
b) Had the Company followed U.S. GAAP, certain items on the statements of income and deficit would have been reported as follows:
9 months ended November 30, 2003 | 9 months ended November 30, 2002 | |
Loss per Canadian GAAP | $(146,621) | $(127,852) |
Effect of the write-off exploration costs for the period | (1,073,001) | (752,773) |
Loss per U.S. GAAP | $(1,219,622) | $(880,625) |
Basic loss per share under U.S. GAAP | $(0.06) | $(0.05) |
The statements of comprehensive loss provide a measure of all changes in equity of the Company that result from transactions other than those with the shareholders and other economic events that occur during the period. There are no other material differences between Canadian GAAP and United States GAAP other than those presented above with respect to the statements of comprehensive loss.
c)
The Company accounts for its share options under Canadian GAAP, which in the Company’s circumstances are not different from the amounts that would be determined under provisions of U.S. GAAP.
d)
The effects of the differences in accounting under Canadian GAAP and U.S. GAAP on the balance sheets and statements of cash flows are as follows:
Balance sheets | November 30, | 2003 | February 28, | 2003 |
Canadian GAAP | U.S. GAAP | Canadian GAAP | U.S. GAAP | |
Current assets | $1,640,177 | $1,640,177 | $2,287,474 | $2,287,474 |
Exploration properties and deferred costs | 4,469,771 | - | 3,396,770 | - |
Capital assets | 36,352 | 36,352 | 46,677 | 46,677 |
$6,146,300 | $1,676,529 | $5,730,921 | $2,334,15 | |
Current liabilities | $ 6,000 | $ 6,000 | $ 11,044 | $ 11,044 |
Share capital | 8,517,737 | 8,517,737 | 7,950,693 | 7,950,693 |
Deficit | (2,377,437) | (6,847,208) | (2,230,816) | (5,627,586) |
$6,146,300 | $1,676,529 | $5,730,921 | $2,334,151 |
9. | GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES (continued) | |||
e) Reconciliation of statements of cash flows | ||||
9 months ended November 30, 2003 | ||||
Operations Investing | Financing | |||
Cash generated (used) per Canadian GAAP Effect of the write-off of exploration and G&A project costs | $(183,843) (1,073,001) | $(1,073,001) 1,073,001 | $567,044 - | |
Cash generated (used) per U.S. GAAP | $(1,256,844) | $ - | $567,044 | |
9 months ended November 30, 2002 | ||||
Operations | Investing | Financing | ||
Cash generated (used) per Canadian GAAP | $(142,810) | $(773,206) | $1,342,498 | |
Effect of the write-off of exploration and G&A project costs | (752,773) | 752,773 | - | |
Cash generated (used) per U.S. GAAP | $(895,583) | $(20,433) | $1,342,498 |
ALPHA GOLD CORP.
SCHEDULE OF DEFERRED EXPENDITURES
NINE MONTHS ENDED NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
Total | ||||
Lust Dust Claims | Goldbanks Claims | 9 months ended November 30, 2003 | Year ended February 28, 2003 | |
EXPLORATION Assaying | $29,373 | $ - | $29,373 | $ 24,022 |
Camp expenses | 19,155 | - | 19,155 | 17,238 |
Drilling | 549,463 | - | 549,463 | 459,441 |
Filing fees & claim assessment | 7,372 | 2,625 | 9,997 | 2,000 |
Fuel | 2,852 | - | 2,852 | 1,012 |
Geological/geochemical work and reports | 207,975 | - | 207,975 | 161,122 |
On-site management | 20,500 | - | 20,500 | 23,500 |
Roadwork/Reclamation | 43,087 | - | 43,087 | 49,221 |
Travel | 16,599 | - | 16,599 | 22,771 |
896,376 | 2,625 | 899,001 | 634,241 | |
BC Mining Tax Credit | - | - | - | (126,086) |
EXPENSES FOR THE PERIOD | 896,376 | 2,625 | 899,001 | 634,241 |
BALANCE - BEGINNING OF THE PERIOD | 2,742,283 | 278,373 | 3,020,656 | 2,386,415 |
BALANCE - END OF THE PERIOD | $3,638,659 | $280,998 | $3,919,657 | $3,020,656 |
ALPHA GOLD CORP.
EXPLORATION PROPERTIES
NINE MONTHS ENDED NOVEMBER 30, 2003
(An Exploration Stage Company)
(Unaudited – Prepared By Management)
ACQUISITION COSTS BY CLAIM GROUP
Lustdust | Goldbanks | 9 months ended November 30, 2003 | Total Year ended February 28, 2003 | |
Balance, beginning of period | $339,682 | $ 36,432 | $376,114 | $376,114 |
Acquisition costs for the period | 174,000 | - | 174,000 | - |
Balance, end of period | $513,682 | $ 36,432 | $550,114 | $376,114 |
ALPHA GOLD CORP.
410 Donald Street
Coquitlam, B.C. V3K 3Z8
(604) 939-4083
(www.alphagold.bc.ca)
January 2, 2004
Alpha Closes $600,000 of Flow-Through Financings
George Whatley, Director of Alpha Gold Corp (TSX Venture:ALQ) (“Alpha”) announces that Alpha has closed the private placements announced November 27, 2003. A total of 909,090 flow-through units at a price of $0.66 per FT Unit were issued two limited partnerships, as to 454,545 FT Units to MineralFields BC 2003 Limited Partnership and 454,545 FT Units Mineral Fields 2003 Limited Partnership, for total gross proceeds of $600,000. The warrants comprised in the FT Units are exercisable to purchase an additional non-flow-through common share at a price of $1.15 until December 19, 2004. All shares issued, including any shares issued on exercise of the warrants, bear a legend restricting transfer until April 19, 2004. Alpha also issued 90,090 Agent’s Warrants to First Republic Securities Inc. which are exercisable on the same terms as the warrants comprised in the FT Units, and paid a 10% cash commission and due diligence fees to Limited Market Dealer Inc.
For further information, please contact: George Whatlely, President, Alpha Gold Corp., at Phone: (604) 939-4083 or Fax: (604) 939-4981. Alpha’s website iswww.alphagold.bc.ca.
ON BEHALF OF THE BOARD “George Whatley”
George Whatley, President and Director
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENTS OF THIS NEWS RELEASE.