FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
Terra Nova Gold Corp.
(Translation of registrant’s name into English)
3rd Floor, 157 Alexander Street, Vancouver, BC Canada V6A 1B8
(Address of principal executive officer)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-Fü 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________ No::ü
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_________.
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.
Terra Nova Gold Corp.
Registrant
Dated:December 15, 2004 By: /s/David Patterson/s/
Title: Chairman
Terra Nova Gold Corp.
Quarterly Financial Statements
For The Three Months Ended October 31, 2004
(Unaudited)
Notice to Reader
The accompanying unaudited financial statements of Terra Nova Gold Corp. (“the Company”) have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of the Company’s unaudited interim financial statements as at and for the three months ended October 31, 2004.
TERRA NOVA GOLD CORP. | |||
(An exploration stage company) | |||
Balance Sheets | |||
(Canadian Dollars) | |||
(Unaudited) | |||
October, | July 31, | ||
2004 | 2004 | ||
ASSETS | |||
Current assets | |||
Cash and cash equivalents | $ 185,150 | $ 337,120 | |
Short term investments | 1,002,877 | 1,780,981 | |
Amounts receivable | 47,856 | 12,221 | |
Advances for exploration | 533,301 | 129,792 | |
Prepaid expenses | 21,215 | 8,631 | |
1,790,399 | 2,268,745 | ||
Property, plant and equipment | 17,756 | 18,961 | |
Mineral properties (note 3) | 281,035 | 270,082 | |
$ 2,089,190 | $ 2,557,788 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities | |||
Accounts payable and accrued liabilities | $ 142,887 | $ 38,247 | |
Shareholders' equity | |||
Share capital (note 4) | 14,874,442 | 14,874,442 | |
Stock options (note 5) | 308,395 | 273,278 | |
Deficit | (13,236,534) | (12,628,179) | |
1,946,303 | 2,519,541 | ||
$ 2,089,190 | $ 2,557,788 | ||
Approved on behalf of the Board: | |||
"Harvey Keats" | |||
"David Patterson" |
See accompanying notes to the financial statements.
TERRA NOVA GOLD CORP. | |||||||
(An exploration stage company) | |||||||
Statements of Operations | |||||||
(Canadian Dollars) | |||||||
(Unaudited) | |||||||
Three months ended October 31, | |||||||
2004 | 2003 | ||||||
Expenses | |||||||
Administration fees | $ 24,000 | $ 21,000 | |||||
Amortization | 1,205 | 1,428 | |||||
Directors fees | 6,000 | - | |||||
Exploration expenditures (schedule 1) | 429,562 | 164,070 | |||||
Filing and transfer agent fees | 2,583 | 12,303 | |||||
Legal fees | 4,169 | - | |||||
Management fees | 33,893 | 20,333 | |||||
Office and miscellaneous | 27,396 | 825 | |||||
Promotion | 26,756 | 112 | |||||
Rent | 7,500 | 3,000 | |||||
Stock-based compensation (note 5) | 35,117 | - | |||||
Telephone and communications | 2,685 | 1,611 | |||||
Travel | 12,727 | 10,566 | |||||
Less: interest income | (5,238) | (7,804) | |||||
Loss for the period | $ (608,355) | $ (227,444) | |||||
Basic and diluted loss per share | $ (0.03) | $ (0.02) | |||||
Weighted average number of shares outstanding | 23,508,050 | 14,498,111 | |||||
See accompanying notes to the financial statements.
TERRA NOVA GOLD CORP. | |||||||
(An exploration stage company) | |||||||
Statements of Deficit | |||||||
(Canadian Dollars) | |||||||
(Unaudited) | |||||||
Three months ended October 31, | |||||||
2004 | 2003 | ||||||
Deficit, beginning of period | $ (12,628,179) | $ (11,659,263) | |||||
Loss for the period | (608,355) | (227,444) | |||||
Deficit, end of period | $ (13,236,534) | $ (11,886,707) | |||||
See accompanying notes to the financial statements.
TERRA NOVA GOLD CORP. | |||||||
(An exploration stage company) | |||||||
Statements of Cash Flows | |||||||
(Canadian Dollars) | |||||||
(Unaudited) | |||||||
Three months ended October 31, | |||||||
Cash provided by (used for): | 2004 | 2003 | |||||
Operating activities | |||||||
Loss for the period | $ (608,355) | $ (227,444) | |||||
Items not involving cash: | |||||||
Amortization | 1,205 | 1,428 | |||||
Stock-based compensation | 35,117 | - | |||||
Accrued interest income | (2,122) | - | |||||
Changes in non-cash operating | |||||||
working capital items: | |||||||
Amounts receivable | (35,635) | (8,632) | |||||
Advances for exploration | (403,509) | 4,010 | |||||
Prepaid expenses | (12,584) | (2,174) | |||||
Accounts payable and accrued liabilities | 104,640 | 102,788 | |||||
(921,243) | (130,024) | ||||||
Financing activities | |||||||
Loans payable | - | (8,300) | |||||
Common shares issued for cash | - | 2,086,730 | |||||
- | 2,078,430 | ||||||
Investing activities | |||||||
Purchase of short term investments | (750,000) | - | |||||
Redemption of short term investments | 1,530,226 | - | |||||
Expenditures on mineral properties | (10,953) | - | |||||
769,273 | - | ||||||
Increase (decrease) in cash | (151,970) | 1,948,406 | |||||
Cash and cash equivalents, beginning of period | 337,120 | 43,501 | |||||
Cash and cash equivalents, end of period | $ 185,150 | $ 1,991,907 | |||||
See accompanying notes to the financial statements.
TERRA NOVA GOLD CORP. (An exploration stage company) Notes to the Financial Statements October 31, 2004 (Canadian Dollars) (Unaudited) |
1. Nature of Operations and Basis of Presentation
The Company is a public company incorporated under the Company Act, British Columbia, Canada. Its shares are listed on the TSX Venture Exchange and the Frankfurt Stock Exchange. The principal business of the Company is exploration of mineral properties. As of the date of this report, the Company has not determined whether its mineral properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration of the property and future profitable production from the property or proceeds from disposition.
These interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and notes to the financial statements required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three month period ended October 31, 2004 are not necessarily indicative of the results that may be expected for the year ended July 31, 2005. The balance sheet at July 31, 2004 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for comp lete financial statements.
2. Significant Accounting Policies
These interim financial statements have been prepared by management in accordance with the accounting policies described in the Company’s annual financial statements for the year ended July 31, 2004.For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report to Shareholders for the year ended July 31, 2004.
3. Mineral Properties
Cape | South | San | ||
Cumulative Acquisition Costs | Ray | Quinn | Diego | Total |
Balance at July 31, 2004 | $ 245,100 | $ 17,440 | $ 7,542 | $ 270,082 |
Option payments | - | - | 10,953 | 10,953 |
Balance at October 31, 2004 | $ 245,100 | $ 17,440 | $ 18,495 | $ 281,035 |
Cumulative Exploration Costs | ||||
Balance at July 31, 2004 | $ 377,639 | $ 46,343 | $ 97,447 | $ 521,429 |
Exploration expenditures (net of | ||||
government grants) | 303,933 | - | 125,629 | 429,562 |
Balance at October 31, 2004 | $ 681,572 | $ 46,343 | $ 223,076 | $ 950,991 |
4. Share Capital
Number | Amount | |||
Balance at July 31, 2004 and October 31, 2004 | 23,508,050 | $ 14,874,442 | ||
5. Stock-based Compensation
The Company uses the fair value based method of accounting for all stock-based awards. During the three months ended October 31, 2004, the Company extended the expiry date of 425,000 stock options with a compensation cost of $35,117. The Company calculated the compensation cost by using the Black-Scholes option pricing model assuming a weighted average risk-free interest rate of 2.85%, a dividend yield of nil, a weighted average stock price volatility of 90.05% and expected lives of the stock options of two years. One third of the options vest immediately, one third vest 12 months after the grant date and one third vest 24 months after the grant date.
6. Related Party Transactions
Related parties are directors, officers and other companies with common directors and/or officers of the Company. Amounts due to/from related parties are non-interest bearing and without specific terms of repayment.
Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
The following is a summary of the related party transactions that occurred throughout the three months ended October 31:
2004 | 2003 | ||
Directors fees | $ 6,000 | $ - | |
Management fees | $ 33,893 | $ 20,333 | |
Rent | $ 7,500 | $ - | |
Exploration expenditures (technical services) | $ 13,115 | $ - |
Accounts payable and accrued liabilities include $nil (2004 - $9,564) owing to related parties.
7. Segmented Information
Industry Information
The Company currently operates in one reportable operating segment, being the acquisition and exploration of mineral properties.
Geographic Information
The Company operates in two reportable geographic segments, being Canada and Mexico. Revenue from operations was derived from interest income in Canada.
The Company’s assets in geographic locations are as follows:
October 31, | July 31, | ||
2004 | 2004 | ||
Canada | $ 1,537,394 | $ 2,430,454 | |
Mexico | 551,796 | 127,334 | |
$ 2,089,190 | $ 2,557,788 | ||
TERRA NOVA GOLD CORP. | |||||||
(An exploration stage company) | |||||||
Exploration Expenditures | Schedule 1 | ||||||
(Canadian Dollars) | |||||||
Three months ended October 31, | |||||||
2004 | 2003 | ||||||
Cape Ray Property, Canada | |||||||
Drilling | $ 281,695 | $ 171,664 | |||||
Geochemistry | 13,745 | 1,243 | |||||
Geophysics | - | 18,051 | |||||
Government grants | - | (26,888) | |||||
Technical services | 8,493 | - | |||||
303,933 | 164,070 | ||||||
San Diego Property, Mexico | |||||||
Geochemistry | 36,014 | - | |||||
Geology | 27,512 | - | |||||
Geophysics | 38,886 | - | |||||
Other | 12,389 | - | |||||
Property maintenance | 6,206 | - | |||||
Technical services | 4,622 | - | |||||
125,629 | - | ||||||
$ 429,562 | $ 164,070 | ||||||