| UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549
|
| FORM 20-F |
| ANNUAL REPORT |
| FISCAL 2007 |
| ENDED MARCH 31, 2007 |
| [ ] | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
| | OR |
| [x] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
| | OR |
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| | For the transition period from _____ to _____ |
SEC Filing Number:000-50737
LOGAN RESOURCES LTD.
(Exact name of Registrant as specified in its charter)
British Columbia, Canada
(Jurisdiction of incorporation or organization)
1066 West Hastings Street, #1640, Vancouver, British Columbia, Canada V6E 3X1
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, without par value
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of issued and outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.
35,110,363
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 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 ninety days.
Yes ___ Noxxx
Indicate by check mark which financial statement item the registrant has elected to follow:
Item 17xxxItem 18 ___
Page 1 of 104
Index to Exhibits on Page 103
| LOGAN RESOURCES LTD. |
| |
| FORM 20-F |
| ANNUAL REPORT |
| FISCAL 2007 |
| ENDED MARCH 31, 2007 |
TABLE OF CONTENTS
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INTRODUCTION
Logan Resources Ltd. is organized under the laws of British Columbia, Canada. In this Annual Report, the “Company”, “Logan”, “we”, ” and “us” refer to Logan Resources Ltd. (unless the context otherwise requires). We refer you to the actual corporate documents for more complete information than may be contained in this Annual Report. Our principal corporate offices are located at 1066 West Hastings Street, Suite 1640, Vancouver, British Columbia, Canada, V6E 3X1. Our telephone number is 604-689-0299 and our fax number 604-689-0288.
BUSINESS OF LOGAN RESOURCES LTD.
Logan Resources Ltd. (the “Company") is a mineral exploration company. Its main focus is on property acquisition and exploration. The Company has interests in ten mineral properties (gold/copper/silver/uranium) in British Columbia, Yukon Territory, and Saskatchewan, respectively: Albert Creek, Antler Creek, Redford, Shell Creek, Heidi, Englishman, Cheyenne, Turn River, May Creek, and Carswell properties.
FINANCIAL AND OTHER INFORMATION
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, property exploration, mineral prices, future performance or results of current or anticipated mineral production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings.
Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Annual Report under ITEM #3, “Key Information, Risk Factors” and factors described in documents that we may furnish from time to time to the Securities and Exchange Commission. We undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.
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GLOSSARY
Adit: A horizontal or nearly horizontal tunnel made for exploration or mining.
Alteration zones: portions of bedrock where the mineralogic composition of the rock has been changed by physical or chemical means, especially by the actions of hydrothermal solutions.
Andesite: A dark-colored, fine-grained volcanic rock.
Anomalies: deviations from uniformity or regularity in geophysical or geochemical quantities.
Anomalous values: results of geophysical or geochemical testing which deviate from the expected or calculated value.
Archean: rocks formed during the earliest part of Precambrian time, prior to 2,500 million years before present.
Arenaceous: Rocks with a high sand component in their make up.
Au: Gold
Base metal:any of the more common and more chemically active metals, e.g. lead, copper and zinc.
Bedrock conductors:portions of consolidated earth material which offers a low resistance to the passage of an electric current.
Breccia: Rock composed of sharp-angled fragments embedded in a fine-grained matrix.
Channel Sample: A sample taken continuously over a specified distance.
Chromium: A metal used for corrosion-resistant steels and whose compounds have many beautiful colors.
Cross-cut:a mining tunnel driven perpendicular to the dominant trend of a vein or ore bearing structure.
Cut-off grade:the lowest grade of mineralized material considered economic to mine and process; used in the calculation of reserves.
Deposit: A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit does not qualify as a commercially mineable ore body or as containing reserves of ore, unless final legal, technical, and economic factors are resolved.
Diabase: A dark-colored very fine grained and hard intrusive rock.
Diamond drill holes:a drilling method whereby rock is drilled with a diamond impregnated, hollow drilling bit which produces a continuous, in-situ record of the rock mass intersected in the form of solid cylinders of rock which are referred to as core.
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Differentiated: A natural process during cooling of rocks where by one type of rock can solidify first followed by another kind.
Drive:a mining tunnel driven parallel to the dominant trend of a vein or ore bearing structure.
Dyke: An igneous mass injected into a fissure in rock.
Electromagnetic:of, produced by or having to do with magnetic fields associated with currents artificially or naturally maintained in the sub-surface of the earth.
Epiclastic: Sediments consisting of weathered products of older rock.
Feasibility Study:a definitive engineering estimate of all costs, revenues, equipment requirements, and production levels likely to be achieved if a mine is developed. The study is used to define the economic viability of a project and to support the search for project financing.
Felsic:an igneous rock made up of light colored minerals; composed primarily of feldspar and silica.
Float: Rock this is not outcrop and has been transported some distance from its source
g/t; g Au/t: Grams per metric tonne; grams gold per metric tonne.
-genic:meaning suitable to or pertaining to, e.g. syngenic, meaning a ore deposit formed contemporaneously with the enclosing rocks
Geochemistry: The measurement of trace elements in naturally occurring rocks, soils and stream sediments as a means of detecting mineralization.
Geochemical sampling:a mineral exploration method whereby samples of soil, stream sediments, rocks, et. al. are collected in a systematic way and analyzed for a suite of elements.
Geological resources:Mineralized material which in total does not constitute ore, but which may contain one or more zones of ore. Geological resources are categorized as inferred, indicated and measured according to the degree of certainty with which their grade and tonnage are known. A geological resource is sometimes referred to as a "mineral resource".
Geophysical:relating to the physical properties, e.g. magnetic, seismic, et al of the earth and rock materials.
Gold or Au: A gold metallic element that is ductile and very malleable. This precious metal has industrial applications a well as being monetary value and used in jewelry.
Gossan: Brown to orange to red colored rocks and soil, where the color is due to weathering sulphides.
Grade:the amount of valuable mineral in each tonne of ore, expressed as ounces per ton or grams per tonne for precious metal and as a percentage by weight for other metals.
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Grab Sample: Sample of selected rock or saprolite collected at random from within a restricted area of interest.
Grid:a systematic array of points or lines; e.g. a rectangular pattern of pits, boreholes or data collection locations used in mineral exploration.
Ground magnetic survey:a mineral exploration method involving the use of hand held magnetometer instruments which measure the intensity of the earth’s magnetic field. The survey usually takes the form of a regular pattern of parallel lines designed to cover the survey area with the objective of identifying magnetic anomalies, which may be indicative of hidden mineralization.
Hanging wall:the overlying side of a fault, ore body, or mine working, in particular the wall rock above a fault or inclined vein.
Heap leach:a relatively inexpensive processing method based on hydrometallurgical technology, whereby crushed rock is placed on an impermeable liner and is sprayed with a cyanide solution. The resulting gold bearing liquid is collected and the gold is recovered employing conventional technologies culminating in smelting and doré production.
Hectare: A unit of area in the metric system equal to 100 acres, or 10,000 square meters, and the equivalent of 2.471 acres in British Imperial and U.S. Customary measure.
Heterolithic: Composed of fragments of several different rock types.
Host rock:a volume of rock within which the ore body occurs.
Hydrogeological studies:studies concerning the occurrence, movement and condition of ground water.
Hydrothermal solutions:heated water, with or without demonstrable association with igneous processes.
Indicated resource:That material for which tonnage and grade are computed partly from specific measurements, samples or production data and partly from projection for a reasonable distance on geological evidence and for which the sites available for inspection, measurement and sampling are too widely or otherwise inappropriately spaced to outline the material completely or to establish its grade throughout.
Inferred resource:That material for which quantitative estimates are based largely on broad knowledge of the geological character of the deposit and for which there are few, if any, samples or measurements and for which the estimates are based on an assumed continuity or repetition for which there are reasonable geological indications, which indications may include comparison with deposits of similar type and bodies that are completely concealed may be included if there is specific evidence of their presence.
In-situ-resource:a tonnage of mineralized rock of intrinsic economic interest, the grades and limits of which are known with a specified degree of knowledge, expressed in terms of the material as it exists in the ground prior to mining.
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IP (induced polarization):a geophysical technique for detecting buried disseminated sulphides through the application to the ground of electrical currents.
IP survey:systematic completion of IP on a grid over the area of interest.
Intrusive: Rock mass formed below the earth’s surface from magma, which has intruded into a pre-existing rock mass.
Komatiite: A volcanic rock with distinctive texture.
Lead or Pb: A soft, bluish metal that is ductile, heavy and acid resistant.
Limestone: A rock composed principally of calcium carbonate, used as an essential ingredient in making cement.
Lineament:a linear feature in the earth’s crust generally coincident with a geological fault.
Lithogeochemical:relating to the trace element and major oxide chemistry of rocks to define alteration systems associated with mineralization.
Lithological contact:a boundary between two different rock types.
Lode:a tabular or vein-like deposit of valuable minerals between well defined walls of rock.
Mafic:an igneous rock composed chiefly of one or more ferromagnesian (containing iron and magnesium), dark colored minerals.
Mafic-ultramafic: A dark colored intrusive rock.
Magnetic:having the property of attracting iron or steel, like a magnet.
Measured resource:That material for which tonnage and grade are computed from dimensions revealed in outcrops or trenches or underground workings or drill holes and for which the grade is computed from the results of adequate sampling, and for which the sites for inspection, sampling and measurement are so spaced and the geological character so well defined that the size, shape and mineral content are established and for which the computed tonnage and grade are judged to be accurate within stated limits.
Metamorphosed:a term used to describe a rock mass which has been subjected to metamorphism. Metamorphism is a geological process where the original mineral composition of a rock is changed or metamorphosed in response to local or regional scale changes in temperature, pressure and the action of chemically active fluids.
Metamorphism: A natural process of heat and compression that changes rocks.
Metagabbro: A gabbro that has been metamorphosed.
Metapyroxenite: A pyroxenite that has been metamorphosed.
Metasediments:sedimentary rocks, which are rocks formed out of the consolidation of sediment settled out of water, ice or air, which have been metamorphosed.
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Mineralization:the process by which a mineral or minerals, usually metals, are introduced into a rock, resulting in an economically valuable or potentially valuable deposit. Also refers to mineral-bearing rock that has been identified by widely spaced drilling.
Mineralized material:a mineralized volume of rock which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metals to warrant further exploration. Such a deposit does not qualify as a reserve, until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.
Net Smelter Return: A royalty payment made by a producer of metals based on gross mineral production from the property, less deductions of certain limited costs including smelter, refining, transportation and insurance costs.
Nickel or Ni: A white metallic metal, very malleable and ductile, largely used in alloys because of its corrosion resisting property.
NSR: Net smelter return.
Ore:rock that contains one or more minerals or metals, at least one of which has commercial value and which can be recovered at a profit.
Ore body:a continuous volume of mineralized material which may be economic and feasible to mine.
Outcrop: Bedrock that is exposed at surface, and is not covered by soil or other material.
Overburden:barren rock material, usually unconsolidated, overlying a mineral deposit and which must be removed prior to mining.
Palladium or Pd: A silver-white metallic chemical element. The metal and its alloys is used in electrical contacts, precision instruments and jewelry and as a catalyst in the chemical industry particularly for automobile exhaust systems to help control pollution.
Phanerozoic:that part of geologic time for which, in the corresponding rocks, the evidence of life is abundant; geologic time from 570 million years ago to the present.
Phanerozoic Basin:a general term for a depressed, Phanerozoic aged sediment filled area.
Placer mining:the extraction of gold from loosely consolidated material, often a riverbed.
Platinum or Pt: A silver-white metallic chemical element. It has a high melting point and is resistant to chemical attack. The pure metal and its alloys are used in jewelry, electrical contacts, in laboratories as an acid resistant material and as an important catalyst.
PGM: Platinum group metals, which includes platinum, palladium, ruthenium, osmium, rhodium and iridium.
Proterozoic: Rocks formed between 1 and 2.2 billion years ago. The second oldest geological period after Archaean.
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Pyrite: A gold colored rock composed of iron and sulphur.
Pyroclastic: Material ejected into the air from a volcanic vent.
Pyroxenite: A dark rock composed of the mineral pyroxene.
Quartz or qtz: A very common hard rock forming mineral, generally clear to white but can be a variety of colors.
ppb: Parts per billion.
ppm: Parts per million.
Probable reserves:reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are further apart or otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Proven reserves:reserves for which: (a) quantity is computed from dimensions revealed in outcrops, trenches, working or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling, and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth, and mineral content of reserves are well-established.
Plutonic rocks:a rock formed at considerable depth below the earth’s surface by crystallization of magma.
Raking:angle between a linear feature and the horizontal measured in the plane that contains the two.
Reserve:that part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination.
Reverse circulation drilling:a type of rotary drilling that uses a double-walled drill pipe. Compressed air, water or other drilling medium is forced down the space between the two pipes to the drill bit and the drilled chips are flushed back up to the surface through the center tube of the drill pipe.
Reverse circulation holes:a drilling method employing dual walled drill rods fitted with either a hammer or rotary drilling bit. The pressurized drilling fluid (air or water) travels down the outer annulus and the return fluid travels up the center of the drill rod carrying the sample of rock chips and dust-sized particles to the surface.
Saprolite: Rock that has weathered to clay; but, is in place and has not been moved by erosion or other forces.
Schist:a metamorphic rock characterized by a well-developed parallel orientation of more than 50% of the minerals present.
Scree: Boulders and related debris which has fallen or slid down a steep embankment, hill or cliff.
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Sediments: Rocks, which are composed of various proportions of clay, silt, sand, gravel and pebbles.
Sedimentary:formed by the deposition of solid fragmented material that originates from weathering of rocks and is transported from a source to a site of deposition.
Shearing:the resulting action from stresses that cause or tend to cause contiguous parts of a body to slide relatively to each other in a direction parallel to their plane of contact.
Shear zones:linear areas of weakness along which a failure occurred whereby the portion of mass on one side of the area slides past the portion on the opposite side and which often form conduits for mineralizing fluids.
Silver or Ag: A white metallic element that is ductile, malleable and capable of high polish. This precious metal has major industrial applications in photography, x-ray films, electronics and electrical contacts, batteries, brazing alloys, catalysts, mirrors, jewelry and sterling ware.
Stock: An intrusive body that is very approximately circular and generally less than 100m to 200m across.
Stockwork:a mineral deposit in the form of a branching or interlocking network of veinlets.
stockwork of quartz veins:a crosscutting network of fractures filled with quartz.
Strata: A section of a formation that consist throughout of essentially the same kind of rock.
Stratigraphy:the arrangement of rock strata, especially as to geographic position and chronological order of sequence.
Strike:geological measurement of the direction of a horizontal line on the surface of the bed.
Stripping ratio:ratio of waste to ore.
Sulphides: A rock whose dominant component is the element sulphur.
Supracrustal rocks:rocks that overlie the basement. Basement is defined as a complex of undifferentiated rocks that underlies the oldest identifiable rocks in the area.
Tectonic: pertaining to the forces involved in, or the resulting structures or features of the large scale architecture of the upper part of the Earth’s crust.
Tectonized:a rock mass that has been severally modified by folding and/or faulting.
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Tertiary:that portion of the geologic sedimentary section younger than the Cretaceous and older than the Quaternary ranging in age from approximately 55 million to 2 million years old.
ton: Short ton (2,000 pounds).
tonne: Metric tonne (1,000 kilograms).
Tuff: A rock formed by volcanic fragments generally less than 4 mm.
Vein:sheet-like body of minerals formed by fracture filling or replacement of the host rock.
VLF (very low frequency):a geophysical technique which utilizes the magnetic components of the electromagnetic field generated by long distance radio transmitters to delineate geological structures.
VMS (volcanogenic massive sulfide) deposits:deposits of base and precious metals were formed as layers at the bottom of bodies of water from sulfur-rich material erupted during volcanic activity
Volcanic:pertaining to the activities, structures or rock types of a volcano.
Winze:a vertical shaft in a mine sunk or excavated from top to bottom.
Zinc or Zn: A bluish-white metallic element resistant to atmospheric corrosion.
CONVERSION TABLE
The following table sets forth certain standard conversions from Standard Imperial units to the International System of Units (or metric units).
| To Convert From | To | Multiply By |
| Feet | Meters | 0.305 |
| Meters | Feet | 3.281 |
| Miles | Kilometers | 1.609 |
| Kilometers | Miles | 0.621 |
| Acres | Hectares | 0.405 |
| Hectares | Acres | 2.471 |
| Grams | Ounces (troy) | 0.032 |
| Ounces (troy) | Grams | 31.103 |
| Tonnes | Short tons | 1.102 |
| Short tons | Tonnes | 0.907 |
| Grams per tonne | Ounces (troy) | 0.029 |
| Ounces (troy) per tonne | Grams per tonne | 34.438 |
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
- --- No Disclosure Necessary ---
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.
- --- No Disclosure Necessary ---
ITEM 3. KEY INFORMATION.
3.A.1. Selected Financial Data
3.A.2. Selected Financial Data
The selected financial data of the Company for Fiscal 2007/2006/2005 ended March 31st were derived from the financial statements of the Company that have been audited by Manning Elliott LLP, independent registered public accounting firm, as indicated in their audit report which is included elsewhere in this Annual Report. The selected financial data of the Company for Fiscal 2004/2003 ended March 31st was derived from the audited financial statements of the Company; these financial statements are not included herein.
The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Annual Report.
The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.
Effective 1/30/2002, pursuant to a special resolution passed by shareholders 9/28/2001, the Company consolidated its capital on a five old common shares for one new common share basis. The Company also changed the name of the Company to Logan Resources Ltd. and increased its authorized share capital to 100,000,000 common shares without par value. References to numbers of shares and per-share data refer to post-consolidation figures unless otherwise indicated.
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Table No. 1 is derived from the financial statements of the Company, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and Canadian/USA Generally Accepted Auditing Standards (GAAS). All material numerical differences between Canadian GAAP and US GAAP, as applicable to the Company, are described in footnotes to the financial statements.
Table No. 1
Selected Financial Data
(CDN$ in 000, except per share data)
| | | | | | | | | | | | | | | | |
| Year Ended | | 3/31/2007 | | | 3/31/2006 | | | 3/31/2005 | | | 3/31/2004 | | | 3/31/03 | |
| CANADIAN GAAP | | | | | | | | | | | | | | | |
| Revenue | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| Net Income (Loss) | $ | 894 | | $ | (180 | ) | $ | (571 | ) | $ | (148 | ) | $ | (102 | ) |
| Basic Income (Loss)/Share | $ | 0.03 | | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) |
| Dividends Per Share | $ | 0.00 | | $ | 0.00 | | $ | 0.00 | | $ | 0.00 | | $ | 0.00 | |
| | | | | | | | | | | | | | | | |
| Wtd. Avg. Shares (000) | | 31,646 | | | 18,757 | | | 13,693 | | | 8,640 | | | 5,811 | |
| Period End Shares (000) | | 34,550 | | | 21,582 | | | 16,582 | | | 9,643 | | | 8,076 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Working Capital (3) | | 4,049 | | | 559 | | | 511 | | | (13 | ) | | (-) | |
| Mineral Properties | | 4,124 | | | 1,704 | | | 1,047 | | | 558 | | | 311 | |
| Capital Share | | 10,705 | | | 6,193 | | | 5,307 | | | 3,849 | | | 3,636 | |
| Shareholders’ Equity | | 8,217 | | | 2,299 | | | 1,556 | | | 551 | | | 344 | |
| Total Assets | | 8,374 | | | 2,480 | | | 1,611 | | | 713 | | | 372 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| US GAAP | | | | | | | | | | | | | | | |
| Net Loss | | (2,871 | ) | $ | (836 | ) | $ | (1,060 | ) | $ | (396 | ) | $ | (286 | ) |
| Loss per Share | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.05 | ) |
| Mineral Properties | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| Shareholders’ Equity | $ | 4,282 | | $ | 941 | | $ | 519 | | $ | (7 | ) | $ | 33 | |
| Total Assets | $ | 4,439 | | $ | 1,122 | | $ | 564 | | $ | 155 | | $ | 61 | |
| (1) | Cumulative Net Loss since incorporation through 3/31/2007 under US GAAP was ($8,765,332). |
| | | |
| (2) | a) | Under US GAAP, expenditures relating to exploration-stage properties are expensed in the period incurred. |
| | | |
| b) | Under US GAAP, during 2003, the Company recognized stock-based compensation based on the estimated fair value of stock options granted. This adjustment was not necessary in subsequent years. |
| | | |
| (3) | Cash committed for the mineral exploration was reclassified as current for 2004. Under the new classification working capital deficit is $13,000 |
| | |
| | |
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3.A.3. Exchange Rates
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).
Table No. 2 sets forth the exchange rates for the Canadian Dollar at the end of the five most recent fiscal years ended, the average rates for those periods, and the range of high and low rates for those periods. The data for each month during the most recent six months is provided.
For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. The table sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar. The average rate means the average of the exchange rates on the last day of each month during the period.
Table No. 2
U.S. Dollar/Canadian Dollar
| | | | | |
| | Average | High | Low | Close |
| | | | | |
| | | | | |
| August 2007 | 1.06 | 1.06 | 1.05 | 1.06 |
| July 2007 | 1.05 | 1.05 | 1.05 | 1.05 |
| June 2007 | 1.07 | 1.07 | 1.06 | 1.07 |
| May 2007 | 1.09 | 1.10 | 1.09 | 1.10 |
| April 2007 | 1.13 | 1.14 | 1.13 | 1.13 |
| March 2007 | 1.17 | 1.17 | 1.17 | 1.17 |
| | | | | |
| | | | | |
| Fiscal Year Ended 3/31/2007 | 1.14 | 1.14 | 1.14 | 1.14 |
| Fiscal Year Ended 3/31/2006 | 1.19 | 1.20 | 1.19 | 1.19 |
| Fiscal Year Ended 3/31/2005 | 1.28 | 1.40 | 1.18 | 1.21 |
| Fiscal Year Ended 3/31/2004 | 1.35 | 1.48 | 1.30 | 1.31 |
| | | | | |
| Fiscal Year Ended 3/31/2003 | 1.38 | 1.60 | 1.51 | 1.47 |
| | | | | |
3.B. Capitalization and Indebtedness
3.C. Reasons For The Offer And Use Of Proceeds
--- No Disclosure Necessary ---
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3.D. Risk Factors
Company is Incorporated in Canada, which has Different Laws
The articles of the Company and the laws of British Columbia are different from those typical in the United States. The typical rights of investors in Canadian companies differ modestly from those in the United States; refer to the relevant sections which are discussed in Section 9.A.5 and Section 10.B of this Annual Report. Such differences may cause investors legal difficulties.
Dependence Upon Key Management Employees
While engaged in the business of exploring mineral properties, the nature of the Company’s business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel. Competition for such personnel is intense and the Company may not be able to attract and retain such personnel. The Company’s growth will depend on the efforts of its Senior Management, including its President/CEO, Seamus Young and its Corporate Secretary/CFO, Judith T. Mazvihwa. Loss of these individuals could have a material adverse effect on the Company. The Company has no key-man life insurance and there are no written agreements with them.
Management and Directors Are Associated with Other Resource Companies
Certain of the Directors and Senior Management of the Company (specifically, F. Charles Vickers, Clifford H. Frame, Peter F. Cummings, Judith Mazvihwa, and Seamus Young) are also Directors and/or Senior Management and/or significant shareholders of other companies, including those also involved in natural resources; refer to ITEM 6.A. for resumes. As the Company is engaged in the business of exploiting mineral properties, such associations may give rise to conflicts of interest from time to time. Law requires the directors of the Company to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board of Directors, any Director in a conflict must disclose his interest and abstain from voting on such matter. In determining whether or not the Company will participate in any project or opportunity, the Directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time. If not properly resolved, the Company could be placed at a disadvantage when considering which properties to acquire/explore and if/how to explore existing properties.
Control by Principal Stockholders, Officers and Directors Could AdverselyAffect the Company’s Stockholders
The Company’s Senior Management, Directors and greater-than-five-percent stockholders (and their affiliates), acting together, have the ability to control substantially all matters submitted to the Company’s stockholders for approval (including the election and removal of directors and any merger, consolidation or sale of all or substantially all of the Company’s assets) and to control the Company’s management and affairs. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of the Company, impeding a merger, consolidation, takeover or other business combination involving the Company or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could materially adversely affect the market price of the Company’s stock.
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Dilution Through Employee/Director/Consultant Options
Because the success of the Company is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives. To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted causing possible loss of investment value.
Stock Market Price and Volume Volatility
The market for the common shares of the Company may be highly volatile for reasons both related to the performance of the Company or events pertaining to the industry (i.e., price fluctuation/high production costs/accidents) as well as factors unrelated to the Company or its industry. The market price of metals is highly speculative and volatile. Instability in metal prices may affect the interest in mining properties and the development of production from such properties and may adversely affect the Company’s ability to raise capital to explore existing or new mineral properties. The Company’s common shares can be expected to be subject to volatility in both price and volume arising from market expectations. Stockholders of the Company may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in the price of the common shares.
Need for Additional Financing to Finish Property Exploration/Development
The Company is engaged in the business of exploiting mineral properties. The Company believes it has sufficient funds to continue operations for the next 6 to 12 months depending on the level of exploration expenditures. However, additional financing will be required to carry out current exploration plans for calendar 2008. In the long term, further financing will be required to continue exploration and to develop the mineral properties identified and to place them into commercial production. The exploitation of the Company’s mineral properties is, therefore, dependent upon the Company’s ability to obtain financing through equity financing or other means. Failure to obtain such financing may result in delay or indefinite postponement of work on the Company’s mineral properties, as well as the possible loss of such properties. Such delays, and possible inability to proceed with planned operations could cause loss of investment value.
History of Losses
The Company has a history of losses: (179,610), (571,209), ($147,619), ($101,904) and ($89,165) in Fiscal Years 2006/2005/2004/2003/2002 (in 2007 the Company had a income of $893,590 and a loss before income tax recovery of $450,439). Despite recent capital infusions, the Company will require significant additional funding to meet its business objectives. Capital will need to be available to help maintain and to expand work on the Company’s principal exploration properties. The Company may not be able to obtain additional financing on reasonable terms, or at all. If equity financing is required, then such financings could result in significant dilution to existing shareholders. If the Company is unable to obtain sufficient financing, the Company might have to dramatically slow exploration efforts and/or lose control of its projects. The Company has historically obtained the preponderance of its financing through the issuance of equity. There is no limit to the number of authorized common shares but the current authorized share capital is 100,000,000 common shares, and the Company has no current plans to obtain financing through means other than equity financing and/or loans. Such losses and the resulting need for external financings could result in losses of investment value.
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Broker-Dealers May Be Discouraged From Effecting Transactions In Our CommonShares Because They Are Penny Stocks And Are Subject To The Penny Stock Rules.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on NASD broker-dealers who make a market in “a penny stock”. A penny stock generally includes any non-NASDAQ equity security that has a market price of less than US$5.00 per share. Our shares are quoted on the TSX Venture Exchange, and the price of our common shares ranged from CDN$0.19 (low) to CDN$0.75 (high) during the period from 04/01/2006 to 03/31/2007 trading at $0.375 on 10/03/2007. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000, or US$300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the US Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.
U.S. Investors May Not Be Able to Enforce Their Civil Liabilities Against Usor Our Directors, Controlling Persons and Officers
It may be difficult to bring and enforce suits against the Company. The Company is a corporation incorporated under the laws of British Columbia, Canada and governed by the Business Corporations Act(British Columbia).All or substantial portions of their assets are located outside of the United States, predominately in Canada. As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them. In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.
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However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided that they are in compliance with applicable Canadian legislation regarding the limitation of actions. Also, a Canadian court would generally recognize a judgment obtained in a U.S. Court except, for example, where:
| | a) | where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law; |
| | b) | the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state; |
| | c) | the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure; |
| | d) | a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court; |
| | e) | the outcome of the judgment of the U.S. court was inconsistent with Canadian public policy; |
| | f) | the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or |
| | g) | there has not been compliance with applicable Canadian law dealing with the limitation of actions. |
As a “foreign private issuer”, the Company is exempt from the Section 14 proxyrules and Section 16 of the 1934 Securities Act
The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data. The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.
Operating Hazards and Risks Associated with the Mining Industry Could Resultin a Significantly Negative Effect on the Company
Mining operations generally involve a high degree of risk. Hazards such as unusual or unexpected formations and other conditions are involved. Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of precious and base metals, any of which could result in work stoppages, damage to or destruction of mines and other producing facilities, damage to life and property, environmental damage and legal liability for any or all damage. The Company may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks. The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force the Company to cease operations.
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The Expense of Meeting Environmental Regulations Could Cause a SignificantlyNegative Effect on the Company
The current and anticipated future operations of the Company, including further exploration activities require permits from various Canadian Federal and provincial governmental authorities. Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters. The permits which the Company may require for construction of mining facilities and conduct of mining operations must be obtainable on reasonable terms to the Company. Unfavorable amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.
Large increases in capital expenditures resulting from any of the above factors could force the Company to cease operations.
The Company has No Proven Reserves on the Properties in Which It Has anInterest
The properties in which the Company has an interest or the concessions in which the Company has the right to earn an interest are in the exploratory stage only and are without a known body of ore. Properties on which mineral reserves are not found will have to be discarded causing the Company to write each respective property off thus sustaining a loss.
Mineral Prices May Not Support Corporate Profit
The mining industry is intensely competitive and even if commercial quantities of mineral resources are developed, a profitable market may not exist for the sale of same. If a profitable market does not exist the Company could have to cease operations.
Significant Negative Effect on the Company
The expenditures to be made by the Company in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities. Most exploration projects do not result in the discovery of commercially mineable ore deposits.
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ITEM 4. INFORMATION ON THE COMPANY
4.A. History and Development of the Company
Introduction
The Company is engaged in the acquisition and exploration of mineral resource properties. The Company has interests in ten mineral properties (gold/uranium/copper/silver) in British Columbia, Saskatchewan, and the Yukon Territory. Its mineral properties in British Columbia are Albert Creek, Antler Creek, Redford, in Saskatchewan the Company has the Carswell Dome property, and finally its properties in the Yukon Territory are the Shell Creek, Heidi, Englishman, Turn River, May Creek and Cheyenne properties. In the first three months of Fiscal 2008 from April 1, 2007 to June 30, 2007, the Company expended a total of $1,409,895 on property acquisition/exploration. $1,020,798 was spent on the Heidi property and $389,097 was spent on the Company’s other mineral interests.
The Company’s executive and registered office is located at:
1066 West Hastings Street
#1640, Vancouver,
British Columbia,
Canada,
V6E 3X1
Telephone number is 604-689-0299
Telephone number is 800-665-3772 (USA)
Telephone number is 877-689-6130 (Canada)
Facsimile: 604-690-0288
e-mail:info@loganresources.ca
website:www.loganresources.ca
The contact person is:
Seamus Young, President/CEO/Director.
The Company's fiscal year ends March 31st.
The Company's common shares trade on the TSX Venture Exchange in Toronto, Canada, under the symbol ”LGR”.
The Company has 100,000,000 common shares without par value authorized. At 3/31/2007, the end of the Company's most recent fiscal year, there were 34,550,363 issued and outstanding.
Incorporation and Name Changes
Logan Resources Ltd. (the “Company”) was incorporated as a specially limited company on 06/26/1978 in the Province of British Columbia, Canada, under the name “Logan Mines Ltd. (NPL)” by registration of its Articles and Memorandum pursuant to the Company Act (British Columbia). On 07/21/1992, the Company was converted to a limited company and the name of the Company was changed to “Consolidated Logan Mines Ltd.”. The Company was registered as an extraterritorial company in the Northwest Territories from 07/08/1979 to 08/07/1998. On 01/30/2002, the name of the Company was changed to “Logan Resources Ltd.”. The Company was extra-territorially registered in the Yukon Territory on 06/30/2003.
Stock Splits/Consolidations
On 07/21/1992, the Company consolidated its share capital on the basis of three old shares for one new share. On 01/30/2002, the Company consolidated its share capital on the basis of five old shares for one new share. All references to number of shares or to per share data refer to post-consolidation data unless otherwise indicated.
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Corporate History
In May 2000, the Company entered into an agreement to acquire the Antler Creek Property by issuing 20,000 post-consolidation common shares at a deemed fair market value of $10,000. This agreement was amended in June 2002. In September 2000, the Company entered into a Letter Agreement to acquire a 100% interest in the Albert Creek Property, by incurring $235,000 in related expenditures and issuing 220,000 post-consolidation common shares in three stages over four years.
In late 2001, the Company allowed the last four mineral claims representing 50 units (the Spanish Mountain Property) to lapse.
In January 2003, the Company entered into an option agreement to acquire a 100% interest in the Shell Creek Property, by paying $155,000, incurring $1,550,000 in exploration expenditures and issuing 1,000,000 common shares, all in stages over a five - year period.
In April 2003, the Company entered into an option agreement to acquire a 100% interest in the Heidi Mineral Claims, by paying $180,000, issuing 1,000,000 common shares, and incurring $600,000 of exploration expenditures, all in stages over a period of five years. The Company has met all the terms of the property agreement and now has 100% interest in the Heidi property. Subsequent to 03/31/2007, the Company staked an additional 166 claims, increasing the number of mineral claims from 54 to 220.
In April 2003, the Company entered into an option agreement to acquire a 100% interest in the Iron Horse Claims, by paying $75,000 and issuing up to 300,000 shares in stages over a period of three years. In April 2004, the Company allowed the option to lapse.
In 2005 the Company staked 2 claims covering an area of 7,552 hectares on the Carswell Dome Formation, Saskatchewan.
In March 2005, the Company entered into an option agreement, granting an option to a third party to earn a 50% interest in the Carswell Property by paying $25,000 cash, issuing 200,000 of its shares (all in stages over a period of three years) and incurring a total of $300,000 in exploration expenditures, all in stages over a period of five years.
In April 2005, pursuant to an option agreement dated April 15, 2004 and amended September 7, 2004, the Company granted an option to a third party to earn a 51% interest in the Albert Creek Property by issuing 150,000 of its shares and incurring a total of $300,000 in exploration expenditures, all in stages over a period of three years. The option agreement was cancelled by the optionee on March 16, 2006.
In December 2005, the Company entered into an option agreement to acquire a 100% interest in the Cheyenne Claims, by paying $300,000, issuing 1,000,000 of its shares, and incurring $500,000 of exploration expenditures, all in stages over a period of five years.
In August 2006, the Company entered into an option agreement to acquire a 100% interest in the May Creek property by issuing 750,000 shares, paying $225,000 and incurring $500,000 in exploration expenditures all in stages over a five year period.
In March 2007, the Company entered into an option agreement to acquire a 100% interest in the Englishman property by paying $50,000, issuing 250,000 shares and incurring $350,000 in exploration expenditures all in stages over a four year period.
In February 2007, The Company partnered with International KRL Resources Corp., a company related to Logan Resources Ltd. by common directors, and jointly acquired the Turn River project by staking 2,220 claims. Each company
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has a 50% interest in the mineral property. In August 2007 the Company and International KRL Resources Corp. staked an additional 1,311 claims prospective for nickel. The Turn River Project now consists of 3,531 claims over twelve independent blocks, covering approximately 74,287 hectares (183,567) acres.
In September 2007 Both Logan Resources Ltd. and International KRL Resources Corp. signed an agreement with Longview Capital Partners Incorporated granting Longview Capital Partners the option to earn a 50% interest in the Turn River project in the Yukon for $15 million in staged exploration expenditures.
Financings
The Company has financed its operations through funds raised in loans, public/private placements of common shares, shares issued for property, shares issued in debt settlements, and shares issued upon exercise of stock options and share purchase warrants.
| Fiscal Year | Nature of Share Issuance | Number of Shares | Capital Raised |
| | | | |
| | | | |
| 2000 | Exercise of Warrants | 100,000 shares | $100,000 |
| 2001 | Options Exercised | 10,000 shares | $7,500 |
| | Shares for Property (1) | 40,000 shares | $20,000 |
| 2002 | Private Placement | 1,000,000 Units | $50,000 |
| | Shares for debt (1) | 1,053,400 shares | $131,678 |
| 2003 | Private Placement | 2,050,000 Units | $246,000 |
| | Agent Commissions (1) | 164,000 shares | $19,680 |
| | Shares for Property (1) | 100,000 shares | $12,000 |
| | Shares for Debt (1) | 427,532 shares | $64,130 |
| | Exercise of Warrants | 900,000 shares | $90,000 |
| 2004 | Private Placement | 186,700 Units | $28,005 |
| | Shares for Property (1) | 940,000 shares | $103,000 |
| | Exercise of Warrants | 315,424 shares | $57,717 |
| | Options Exercised | 312,000 shares | $62,400 |
| 2005 | Private Placement | 6,326,036 Units | $1,364,841 |
| | Exercise of Stock Options | 100,000 shares | $20,000 |
| | Exercise of warrants | 188,000 shares | $37,600 |
| | Shares for Property (1) | 250,000 shares | $62,500 |
| | Agent Commissions (1) | 74,318 shares | $18,579 |
| 2006 | Private Placement | 2,486,333 Units | $638,250 |
| | Exercise of Stock Options | 350,000 shares | $140,000 |
| | Exercise of warrants | 1,596,500 shares | $349,525 |
| | Shares for Property (1) | 500,000 shares | $126,000 |
| | Agent Commissions (1) | 67,500 shares | $30,375 |
| 2007 | Private Placement | 9,770,000 Units | $5,070,500 |
| | Exercise of Stock Options | 225,000 shares | $90,000 |
| | Exercise of warrants | 1,706,000 shares | $640,850 |
| | Shares for Property (1) | 800,000 shares | $285,000 |
| | Agent Commissions (1) | 467,500 shares | $233,750 |
| | | | |
| | | | |
| (1) Deemed fair market value for shares issued. |
| |
| Capital Expenditures | | |
| Fiscal 2001: | $ 27,317, | predominately for property acquisition/exploration |
| Fiscal 2002: | $ 37,299, | predominately for property acquisition/exploration |
| Fiscal 2003: | $186,828, | predominately for property acquisition/exploration |
| Fiscal 2004: | $177,549, | predominately for property acquisition/exploration |
| Fiscal 2005: | $483,308, | predominately for property acquisition/exploration |
| Fiscal 2006: | $748,218, | predominately for property acquisition/exploration |
| Fiscal 2007: | $2,294,676, | predominately for property acquisition/exploration |
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Plan Of Operations
Source of Funds for Fiscal 2007
The Company’s primary source of funds since incorporation has been through the issuance of equity. Currently the Company does not have operating revenues, and the Company does not anticipate generating any during the next year. As of 3/31/2007, the Company had working capital of $4,049,000.
At 3/31/2007, the Company had 3,025,000 outstanding stock options with a weighted average exercise price of $0.47. At 3/31/2007, the Company had 5,665,000 outstanding share purchase warrants with a weighted average exercise price of $0.69. Since 3/31/2007 the Company granted 1,225,000 incentive stock options with exercise prices of $0.40 and $0.45. The Company is continuing to seek new equity investments.
Use of Funds for Fiscal 2008
During Fiscal 2008, the Company estimates that it might expend $780,000 on general/administrative expenses (expense excluding gains, losses and write/offs and non-cash stock based compensation). During Fiscal 2008, the Company estimates that it might expend $4,220,000 on property acquisition/exploration expenses.
Anticipated Changes to Facilities/Employees
The Company has no plans to add any additional personnel. Management anticipates that any property exploration efforts will be carried out by outside contractors.
4.B. BUSINESS OVERVIEW
The Company acquired three additional exploration properties in January 2003 and April 2003, the Shell Creek Property, the Heidi Mineral Claims, and the Iron Horse Claims (The Iron Horse property option agreement between Logan Resources Ltd. and Rich River Exploration Ltd. was terminated on April 24, 2004).In December 2005, the Company acquired the Cheyenne Property, a mineral exploration property located in the Yukon Territory. In August 2006, the Company acquired the May Creek property. In February 2007 and March 2007, the Company acquired the Turn River and Englishman properties. The May Creek, Turn River, and Englishman properties are all located in the Yukon Territory.
Redford Property, British Columbia, Canada
Location: 22km northeast of the town of Ucluelet, Vancouver Island.
The Company began Fiscal 2001 with only one property, the Redford Property, where it was conducting limited exploration, looking for gold. These modest efforts continued through most of Fiscal 2004. Diamond drilling was carried out on the Redford Property in March 2004. Six holes were drilled totaling 928.90 meters. Drill holes R-1-04 to R-4-04 and drill hole R-6-04 tested the strike and down-dip extensions of the Seamus Zone, the principal target on the property and drill hole R-5-04 tested the down-dip extension of the Walker Zone. The drill holes intersected intervals of albite-arsenic-gold mineralization with grades up to 1.18 g/t gold over 1.0 meter. Higher grades were obtained from previous surveys, up to 3.21g/t gold from feldspar-arsenopyrite alteration with quartz vein stockwork surrounding the drilled area. Additional drilling is recommended on the Seamus Zone to test the down dip extension of the arsenic–gold-quartz vein mineralization.
As a result of the drill results management decided to expand the property and stake 20 additional claims (345 claim units). The Company now owns a total of 25 claims (432 claim units) and carried out a rock chip sampling program. This program identified copper–cobalt–gold+/-magnetite skarn showings scattered throughout the northwestern part of the property including the magnetite skarn at the Brynnor Mine and the Tony showing. The massive sulphide Tony showing and surrounding skarn showings are at the center of an airborne magnetic high
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of similar size and intensity of that over the Brynnor Mine. The recent chip sampling of the Tony showing returned 5 meters grading 0.559% copper, 0.0464 % cobalt and 0.164 g/t gold.
Copper–platinum–palladium mineralization hosted by the Karmutsen volcanics occurs over an area of 3 kilometers by 1 kilometer in the northwestern part of the Redford property and grab samples returned up to 1599 ppm copper and up to 13 ppb Pt and up to 38 ppb Pd. Additional trenching, IP and magnetometer surveys are recommended at and in the vicinity of the Tony showing to test the potential for a major copper–cobalt–gold+/-magnetite deposit in the area followed by diamond drilling if warranted. Total budget for both programs is $400,000.00 (David J. Bridge, MASc, P.Geo).
Logan Resources Ltd. is also seeking a joint venture partnership for the Redford property.
Antler Creek Property,British Columbia, Canada
Location: In the heart of Barkersville-Wells placer/lode gold camp, along strike from International Wayside’s Bonanza Ledge Zone.
The Company decided to add additional exploration properties starting in May 2000 and again in September 2004, the Antler Creek Property and Albert Creek Property, respectively. The Antler Creek Property was staked and then optioned by the Company in response to the nearby discovery, not on the Company’s property, of significant bulk tonnage-fissure-type gold intersection in Bonanza Ledge Gold zone. The property had had historic placer gold production from three creeks and been covered by Government Regional Geochemical Stream Silt Survey (RGS); the Company was unaware of any records of mapping, prospecting or soil geo-chemical surveys. During FY2001-FY2004, the Company has conducted modest exploration, mainly consisting of mapping, prospecting and soil/silt sampling.
Logan Resources Ltd. is also seeking a joint venture partnership for the Antler Creek property.
Subsequent to year end, the Company completed a Max Min electromagnetic (EM) survey over the Antler Creek gold project. The survey identified a number of conductors which Logan intends to test with a diamond drill program. The survey completed by EarthWorks Geophysical Consultants, of White Rock, BC, also recorded several secondary responses on the transverses.
Albert Creek Property, British Columbia, Canada
Location: In northern British Columbia, 60km west/southwest of Watson Lake, Yukon Territory.
The Albert Creek Property was the subject of mapping, prospecting and silt/soil sampling during FY2001/FY2003 and a fixed-wing air-magnetic survey, which outlined a linear northwest trending magnetic anomaly. The anomaly was tested with a 1200-meter diamond drilling program during Fiscal 2003. The drill program results were not sufficiently encouraging to warrant further exploration of this property at this time.
In 2004, the Company granted Forsys Metals Corp. (previously known as Forsys Technology), the right to earn a 51% interest in the Albert Creek Property. To earn this interest, the optionee issued 150,000 of its shares and had to incur a total of $300,000 in exploration expenditures over a five year period. Upon completion of these expenditures, the optionee would have the right to earn a further 20% interest in the property by delivering it to a bankable feasibility study.
On March 16, 2006, Logan Resources Ltd. accepted written confirmation from Forsys Metals Corp. canceling their option to acquire a 51% interest in the property. Forsys Metals Corp. is focusing on its projects in Namibia, Africa.
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Last fiscal year, the Company carried out an exploration program consisting of line cutting, soil geochemistry and magnetic and horizontal loop electromagnetic geophysical surveys. No significant mineralization was found near surface. A report dated January 2006 by J.L. LeBel, P.Eng recommends a deep penetrating electromagnetic survey to explore for mineralization at depth greater than 100 m.
The Albert Creek claims are in good standing until 2010 and the property is available for option.
Shell Creek Property,Yukon Territory
Location:located 75 kilometres northwest of Dawson City, in west-central Yukon Territory.
In January 2003, the Company acquired the Shell Creek property. In 2005, the Shell Creek Property was subject to preliminary rock sampling program that was inconclusive. Follow-up bulk sampling of the quartz veins, soil sampling, mapping, trenching, and magnetometer/soil surveys revealed potential drill targets. An extensive exploration program was planned for the Shell Creek Property for summer 2005.
Logan Resources Ltd. increased the size of its Shell Creek property by 418 claims from the initial 70 claims acquired in accordance with an option agreement dated January 1, 2003. In 2005 the Shell Creek property consisted of 488 claims, covering an area of 98km2. Logan staked more claims around this property and it now comprises 628 mineral claims.
In 2005, an extensive silt sampling program was carried out on all the creeks on the property. Approximately 95 silt samples were collected over a 14km by 12km area. The samples were sent to Acme Labs for analysis which consisted of 30 multi-element ICP. The results from this analysis indicated a 12km long gold/copper anomaly.
A mapping and rock chip sampling program was carried out at the same time as the silt sampling program. The mapping and the assay results from the rock chip samples was successful in identifying the source and setting of the visible gold previously identified in quartz float on the property.
The recommended exploration program for 2005 included airborne magnetic survey, an induced polarization survey, a gravity survey and more geological mapping and sampling.
The year ending 31 March 2006 exploration program was directed to evaluate the potential for the existence of copper-uranium-gold mineralization in the Proterozoic-age rocks on the property. This program was encouraged by initial positive results of regional geology, geochemical (stream sediments) and geophysical (aeromagnetics) data. The 2006 program consisted of a detailed helicopter-borne magnetic survey, a soil geochemical survey over the Shell Creek ridge, an orientation induced polarization survey and a gravity survey.
The 2006 fieldwork program for the Shell Creek property began in the first week of June and the geophysical surveys were conducted by Aurora Geosciences Ltd. Three widely spaced reconnaissance lines of modified pole-dipole induced polarization/apparent resistivity (IP/Res) were surveyed totaling 16.7 kilometres with dipole separations of 25, 50 and 100 metres. There were 55 gravity readings at spacing of approximately 1 square kilometre were collected over the Shell Creek property.
The preliminary review of the Induced Polarization/Resistivity (IP/Res) geophysical surveys completed on the property detected a well-defined, near surface anomaly that was mapped over a distance of 300 metres and a deeper 100 to 150-metre long anomaly to the immediate west. Anomalous copper assays of up
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to 230 ppm and 80 ppb gold are coincident with the near surface IP/Res anomaly. Both anomalies lie on the north side of an oblong 2.5 (E-W) x 1.5 (NS) kilometre gravity high with amplitude of greater than one milligal. These encouraging results define a significantly anomalous area that warrants an extensive drill program.
In 2006, silt geochemistry surveys were completed by Ryanwood Exploration under the supervision of the Company’s senior geological staff, Mark Terry. Approximately 1,000 soil samples were collected at 50 meter intervals on lines 250 meters and 500 meters apart over an area of 8.5km by 1.5km and the samples were sent to Acme Labs in Vancouver for analysis. Preliminary interpretation of the assay results show a significant east west copper anomaly over the entire length of the grid with some scattered gold and uranium anomalous numbers.
The results of the 2006 program were successful in providing a preliminary assessment of the potential for Olympic Dam-type mineralization.
An independent, NI 43-101 compliant report, dated 5 December 2005, on its Shell Creek Property, was written by Ontario based consulting geologist Peter T. George, P. Geo., the report was filed on SEDAR (www.sedar.com).
In his report, Mr. George stated that the regional geological setting of the Shell Creek area suggests that there is potential for Olympic Dam-type copper-uranium-gold mineralization in the area. This suggestion is supported by gold showings on the property plus anomalous copper and uranium stream sediment geochemical samples.
As the results of the 2006 program were successful in providing a preliminary assessment of the potential for Olympic Dam-type mineralization, Mr. George concluded that a drill program is warranted for the property and recommended that such a program be commenced in the 2007 field season to explore for Olympic Dam-type mineralization on the property.
Mr. George recognized a 6 kilometre by 3 kilometre area (18 square kilometres) that is underlain by anomalous copper-gold values, oblique structural trends not reflected on the near surface structural trends, and correlates with a regional gravity high. From this data Mr. George concluded that the area warranted follow-up by drilling and recommended 10 drill holes totalling 4,000 meters to provide an initial test of the 18 square kilometre area. Additional prospecting, and mapping were also recommended for the 2007 field season.
In 2007, the Company further evaluated the copper geochemical anomaly with a ground magnetic survey and mobile metal ions geochemical survey over a narrower line spaced grid. A total of 2,260 samples were collected in the geochemical survey. The assay results from these samples were greater than 200ppm copper and confirmed and increased the area covered by the copper anomaly. The Company drilled three holes on these areas of anomalous copper targets. As expected, these holes did not return significant values because the holes did not reach the intended target depths of 400-600 meters. The deepest hole drilled reached 176.26 meters. A two-meter sample assaying 1 g/t gold was intersected in the overburden-bedrock in Hole SCK-06-01. The Company plans to continue drilling in the following field season. Subsequent to March 31, 2007, Logan was mobilizing a diamond drill machine to the property in preparation for the diamond drill program. The Company also completed an airborne survey over the Shell Creek property, subsequent to March 31, 2007. Results from these exploration programs are still standing
Heidi Property, Yukon Territory
Location: Approximately 95 km east-northeast of Dawson, Yukon and approximately 30 km east of the Dempster Highway.
The Heidi mineral property, since being optioned, has been the subject of a 33 rock-chip sampling program from five trenches, all of which returned anomalous
26
gold with a significant percent containing encouraging results. Soil sampling immediately west of trenched area located two large and several small, strong gold anomalies in 2000 meter by 500 meter area. The anomalies remain open in several directions.
Induced Polarization (IP) and Magnetic (mag) surveys were carried out in August/September 2003. The IP covered an area of 1.5 km2 (6 lines, each 1 km long and 100 m line spacing) and the mag survey covered an area of 3.25 km2(23 lines, each approximately 1.4km long and 100 meter line spacing). The IP survey identified 3 main parallel zones which are possibly connected forming a tight “S” fold. The correlation between the IP and mag anormalies shows that the IP anormalies are open to the west, east and north.
Logan Resources Ltd. carried out a two day field evaluation program, in August 2004. The program focused on examining and sampling trenches dug on the discovery zone and other selected mineralized zones. A total of 19 rock chip samples were collected and sent for assay. The results show the presence of anomalous arsenopyrite in samples containing elevated gold values (Gold values in the rock chip samples ranged from 1.62g/t Au to 19.87g/t Au).
The magnetic and IP geophysical anomalies were compiled with soil geochemistry anomalies to help the property evaluation. The IP and soil survey anomalies overlap.
Work carried out on the Heidi Property by Logan Resources Ltd. and previous operators identified potential drill targets. The property was drill ready in 2005, and an extensive diamond drill program was planned when funds are available.
In 2006, Logan filed an independent NI 43-101 compliant report, dated 8 December, 2005, on the property on SEDAR (www.sedar.com). The author of the report is Mr. Peter T. George, P. Geo., a consulting geologist based in Hamilton, Ontario.
The 43-101 compliant report by Mr. George reviewed the results of earlier work by Homestake (1995 – 1996) and work completed in 2003 by the Vendor, which consisted of further geochemical sampling, a magnetometer survey and several IP test lines across coincident gold–arsenic geochemical anomalies. The Company’s sampling program during the course of its 2004 due diligence examination confirmed gold values reported by Homestake and independent grab samples which assayed up to 19.9 g/t gold.
Based on the results of both historical work (Homestake, 1995-1996), work by the vendor (2003) and the Company (2004), Mr. George concluded that the geological setting of the Heidi Property is permissive for epithermal gold mineralization in association with Tombstone Intrusives. He recommended an initial program of drilling of 1,600 metres in 8 holes to evaluate the current target area. If successful, this would be followed by induced polarization and in-fill drilling.
In fiscal 2007, the Company planned to continue drilling the Heidi property. Subsequent to March 31, 2007, the Company started a drill program designed to continue evaluating the targets identified in earlier programs. The Company completed 19 diamond drill holes on the Heidi property and it is waiting for assay results from the analytical laboratory.
Cheyenne Property, Yukon Territory
Location:60 km northeast of Dawson City, 1.5 km east of the Dempster Highway, and 30 km west of Logan’s Heidi gold property in the Mayo Mining District, Yukon Territory.
In December 2005 the Company acquired the Cheyenne property. Mineralized quartz veins are reported on the Cheyenne property, by previous operators as cutting a sequence of Proterozoic to lower Cambrian Hyland Group sedimentary
27
rocks. The veins are up to 1 meter in width and are tens of meters long. Assays are reported as high as 10% copper, 3% lead, 2.5% zinc, 300g/t silver and 30g/t gold. In other areas chip samples returned values as high as 270g/t gold. A historical drill program reported assay results up to 21g/t gold across 3.1 m.
Logan staked an additional 152 claims around the initial claims acquired and the Cheyenne gold project now consists of 364 mineral claims.
During the fiscal year ending March 31, 2007, Logan filed a NI 43-101 compliant report on its Cheyenne gold property with the B.C. Securities Commission. The author of this report is Mr. Peter T. George, P.Geo., a consulting geologist based in Hamilton, Ontario. Mr. George reported, there are seven known zones of gold and gold/silver mineralization over the property and Logan is the first operator to own the claims covering all seven showings. All of the known mineralization on the property appears to be related to hydrothermal fluids from the Antimony Mountain intrusion (Tombstone Intrusive type) and most of the gold showings on the Cheyenne property are vein type. Of particular interest is the Golden Wall showing, which is more typical of the skarn replacement type mineralization. The Golden Wall appears to be comprised of stratabound replacement type massive to disseminated sulphides. The Golden Wall zone is a high priority target and the Company rock sampled the zone.
The Company’s geologists collected six rock samples over a 10 meter area over the Golden Wall Zone as follow up to the geochemical sampling program conducted by the property’s previous operator. The samples were sent to Acme Laboratories Ltd. in Vancouver for fire assay analysis and the gold assay results are listed below.
Golden Wall (Cheyenne) Rock Sampling July 2006
| Sample Number | Total Au gm/mt |
| MH-07-2006-01 | 5.04 |
| MH-07-2006-02 | 2.16 |
| MH-07-2006-03 | 0.88 |
| MH-07-2006-04 | 1.08 |
| MH-07-2006-05 | 2.17 |
| MH-07-2006-06 | 3.08 |
These assay results verify geochemical surveys conducted by previous operators and confirm mineralization in the area. Logan also compiled results from recent and historic exploration activities conducted on the property. This process generated additional potential diamond drill targets on the Cheyenne property. The Company plans to carry out an aggressive exploration program on the Cheyenne property.
May Creek Property Yukon Territory
Location:Located in the Mayo Mining District in the Yukon Territory, 45 km west-northwest of the community of Mayo.
On December 6, 2006 Logan acquired the May Creek silver project. This property was discovered in 1922 and originally explored as a silver project. Exploration over the years identified multiple targets prospective for gold, copper, lead, zinc and silver. The property has never been drilled and Logan intends to evaluate the property during the 2007 exploration season. Subsequent to March 31, 2007, Logan began a reverse circulation drill program on the May Creek property.
Turn River Property Yukon Territory
Location:approximately 95 km northeast of Whitehorse in the Yukon Territory
During the year, Logan and International KRL Resources Corp. jointly acquired the Turn River Project by staking. The property is located in the Cassiar
28
Plateau and has potential for uranium. As of March, 31, 2007, the Turn River property consisted of 2,220 claims, covering approximately 46,900 hectares.
The highest known uranium silt geochemical values in the Yukon are found in the Cassiar Plateau region and values from the Turn River property are as high as 291ppm. This is significantly higher than the 95th percentile (13.6ppm) for uranium silt geochemical samples in the region.
Subsequent to March 31, 2007, the Company and International KRL Resources staked an additional 1,311 claims prospective for nickel at the Turn River project. Samples collected from the newly staked claims by the GSC in a 2003 regional stream geochemical survey, returned values up to 545 ppm nickel. The massive uranium-nickel project now consists of 3,531 claims over twelve independent blocks, covering approximately 74,287 hectares (183,567) acres. Each company holds a 50% interest in the project.
During the 2007 field season both Logan and International KRL Resources Corp. plan an airborne radiometric survey over the property.
Englishman Property Yukon Territory
Location:located in the Watson Lake Mining District of the Yukon Territory, 160 km east of Whitehorse and 60 km northeast of Teslin During the year, the Company acquired the Englishman property which consists of 16 mineral claims covering 826 acres (334.5 hectares). The property was originally staked as the ABBA claims by Urangesellschaft and Eldorado Nuclear in 1978-1979 as follow up to its regional reconnaissance radiometric survey. In 1979 Urangesellschaft conducted detailed airborne and ground radiometric surveys, mapping and sampling. The sampling program identified widespread stream silt uranium anomalies with silt samples returning values up to 5280ppm (0.528%) uranium and bedrock samples up to 900ppm (0.09%) uranium with anomalous lead and molybdenum. In the same year, Eldorado Nuclear added a large block of claims to the south and conducted mapping, radiometric surveying and geochemical sampling. In 1985, the GSC conducted a regional stream silt sampling program of the Yukon. The highest uranium value 481ppm (0.0481%) recovered for the entire program was found on this property. Refer to Note 4 to financial statement for details on the property option agreement.
Carswell PropertySaskatchewan
Location:located on the Carswell Dome Formation, Athabasca Basin, Saskatchewan
In 2005, the Company staked 2 claims, covering an area of 7,552 hectares (18,661 acres). The Company optioned the property to ESO Uranium Corp. (formerly Essendon Solutions Inc.). As of year end, Logan was negotiating terms of a joint venture with ESO.
29
| | | | | | | |
| | | Antler | Albert | Shell | | (1)Iron |
| | Redford | Creek | Creek | Creek | Heidi | Horse |
| ACQUISITION COSTS | | | | | | |
| Balance 3/31/2000 | $3,167 | $0 | $0 | | | |
| Incurred during FY2001 | --- | $10,000 | $10,000 | | | |
| Balance 3/31/2001 | $3,167 | $10,000 | $10,000 | | | |
| Incurred during FY2002 | --- | 6,773 | --- | | | |
| Balance 3/31/2002 | $3,167 | $16,773 | $10,000 | | | |
| Incurred during FY2003 | --- | 12,000 | --- | | | |
| Balance 3/31/2003 | $3,167 | $28,773 | 10,000 | $0 | $0 | $0 |
| Incurred during FY2004 | $1,520 | $0 | $24,000 | $63,000 | $40,000 | $13,800 |
| Written off | $0 | $0 | $0 | $0 | $0 | $(13,800) |
| Balance 3/31/2004 | $4,687 | $28,773 | $34,000 | $63,000 | $40,000 | $0 |
| Incurred during FY2005 | $27,601 | $0 | $0 | $156,275 | $98,951 | $0 |
| Balance 3/31/2005 | $32,288 | $28,773 | $34,000 | $219,775 | $138,951 | $0 |
| Incurred during FY2006 | $0 | $0 | $6,757 | $85,756 | $90,500 | $0 |
| Balance 3/31/2006 | $32,288 | $28,773 | $40,757 | $305,031 | $229,451 | $0 |
| Incurred during FY2007 | $0 | $0 | $0 | $117,050 | $141,053 | $0 |
| Balance 3/31/2007 | $32,288 | $28,773 | $40,757 | $422,081 | $370,504 | $0 |
| | | | | |
| | | | | |
| | Cheyenne | Carswell | May Creek | Turn River |
| ACQUISITION COSTS | | | | |
| Balance 3/31/2000 | | | | |
| Incurred during FY2001 | | | | |
| | | | | |
| Balance 3/31/2001 | | | | |
| | | | | |
| Incurred during FY2002 | | | | |
| | | | | |
| Balance 3/31/2002 | | | | |
| | | | | |
| Incurred during FY2003 | | | | |
| | | | | |
| Balance 3/31/2003 | | | | |
| Incurred during FY2004 | | | | |
| Written off | | | | |
| Balance 3/31/2004 | | $0 | | |
| Incurred during FY2005 | $12,692 | | |
| Recovered through option | $(12,692) | | |
| Balance 3/31/2005 | | $0 | | |
| Incurred during FY2006 | $91,055 | $0 | | |
| Balance 3/31/2006 | $91,055 | $0 | | |
| Incurred during FY2007 | $157,800 | $0 | $78,000 | $237,485 |
| Balance 3/31/2007 | $248,855 | $0 | $78,000 | $237,485 |
30
| | | | | | | |
| | | Antler | Albert | Shell | | (1)Iron |
| | Redford | Creek | Creek | Creek | Heidi | Horse |
| EXPLORATION COSTS | | | | | | |
| Balance 3/31/2000 | $51,147 | $0 | $0 | | | |
| Incurred during FY2001 | 7,672 | 9,601 | 20,044 | | | |
| Balance 3/31/2001 | $58,819 | $9,601 | $20,044 | | | |
| Incurred during FY2002 | 8,544 | 6,097 | 18,003 | | | |
| Balance 3/31/2002 | $67,363 | $15,698 | $38,047 | $0 | | |
| Incurred during FY2003 | 6,757 | 6,628 | 117,826 | $16,268 | | |
| Balance 3/31/2003 | $74,120 | $22,326 | $155,873 | $16,268 | $0 | $0 |
Incurred during FY2004 | $50,935 | $5,580 | $5,682 | $7,724 | $49,456 | $7,083 |
| Written off | $0 | $0 | $0 | $0 | $0 | $(7,083) |
| Balance 3/31/2004 | $125,055 | $27,906 | $161,555 | $23,992 | $49,456 | $0 |
| Incurred during FY2005 | $122,640 | $500 | $937 | $83,589 | $11,207 | $1,285 |
| Adjustment to METC Claims | 12,348 | $493 | $21,566 | $0 | $(10,895) | $35 |
| Recovered through option | $0 | $0 | $(36,000) | $(213) | $0 | $0 |
| Written off - returned | $0 | $0 | $0 | $0 | $0 | $(1,320) |
| Balance 3/31/2005 | $260,043 | $28,899 | $148,058 | $107,368 | $49,768 | $0 |
| Incurred during FY2006 | $250 | $4,880 | $91,046 | $424,238 | $21,315 | $0 |
| Adjustment to METC Claims | $0 | $0 | $0 | $80,529 | ($1,030) | $0 |
| Recovered through option | $0 | $0$(100,000) $0 | $0 | $0 |
| Written off - returned | $0 | $0 | $0 | $0 | $0 | $0 |
| Balance 3/31/2006 | $260,293 | $33,779 | $139,104 | $451,077 | $70,053 | $0 |
| Incurred during FY2007 | $2,363 | $24,483 | $7,849 | $1,005,650 | $711,299 | $0 |
| Adjustment to METC Claims | $0 | $(1,441) | $(40) | $(115,234) | $(81,477) | $0 |
| Recovered through option | $0 | $0 | $0 | $0 | $0 | $0 |
| Written off - returned | $0 | $0 | $0 | $0 | $0 | $0 |
| | | | | | | |
| | | | | | | |
| Balance 3/31/2007 | $262,656 | $56,821 | $146,913 | $1,341,493 | $699,875 | $0 |
| | | | | |
| | | | | |
| | Cheyenne | Carswell | May Creek | Turn River |
| | | | | |
|
| EXPLORATION COSTS | | | | |
| Balance 3/31/2000 | | | | |
| Incurred during FY2001 | | | | |
| Balance 3/31/2001 | | | | |
| Incurred during FY2002 | | | | |
| Balance 3/31/2002 | | | | |
| Incurred during FY2003 | | | | |
| Balance 3/31/2003 | | | | |
| Incurred during FY2004 | | | | |
| Written off | | | | |
| Balance 3/31/2004 | | $0 | | |
| Incurred during FY2005 | | $2,991 | | |
| Adjustment to METC Claims | | $0 | | |
| Recovered through option | | $(2,991) | | |
| Written off - returned | | $0 | | |
| Balance 3/31/2005 | | $0 | | |
| Incurred during FY2006 | $22,080 | $3,500 | | |
| Adjustment to METC | $0 | $0 | | |
| Recovered through option | $0 | $(12,500) | | |
| Written off - returned | $0 | $9,000 | | |
| Balance 3/31/2006 | $22,080 | $0 | | |
| Incurred during FY2007 | $137,162 | $10,250 | $11,925 | $0 |
| Adjustment to METC Claims | $(12,175) | $0 | $(1,114) | $0 |
| Recovered through option | $0 | $(43,000) | $0 | $0 |
| Written off - returned | $0 | $32,750 | $0 | $0 |
| | | | | |
| Balance 3/31/2007 | $147,067 | $0 | $10,811 | $0 |
(1) Property written off.
31
United States vs. Foreign Sales/Assets
During fiscal years 2003- 2007, the Company generated no sales revenue and all assets were located in Canada.
4.C. Organization Structure
Logan Resources Ltd. (the “Company”) was incorporated on 6/26/1978 in the Province of British Columbia, Canada. The Company has no subsidiaries.
4.D. Property, Plant and Equipment
The Company’s executive offices are located in rented premises of approximately 2,608 sq. ft. at 1066 West Hastings Street, #1640, Vancouver, British Columbia, Canada V6E 3X1. The Company began occupying these facilities in July 2006. Monthly rent is $3,000.
Figure No.1
Mineral Properties Map
British Columbia
32
Mineral Map
Carswell Dome
Redford Property
British Columbia,
Canada Gold Exploration
Acquisition Details
The Company entered into an agreement dated 4/28/1995, as amended on 7/14/1995, to earn a 100 % interest in the “Lucky” and “Toq’ claim groups, located in the Alberni Mining Division of British Columbia. The agreement was terminated on 7/6/1998, and related acquisition costs and deferred exploration costs totaling $287,646 were written off. The Company returned the “Lucky” and “Toq” claims to the optionor, but retained four claims staked in the western portion of the property, which are known as the Redford Property. One of these claims was cancelled in July 2003 and re-staked. These claims were held in trust for the Company by its President except for the fifth claim that was staked in 2002. The claims have since been transferred and the Company now
33
owns a 100% interest in the claims. The Company staked an additional 20 claims. The property now consists of 25 claims comprising of 432 units.
Property Description/Location/Access
The property is located 22 kilometers northeast of Ucluelet on Vancouver Island, British Columbia, within the Alberni Mining Division. It is located on the west coast of Vancouver Island within the Mackenzie Range, an area of rugged, steep topography and dense old growth forest.
The property comprises 25 contiguous claims (432 units), or approximately 10,800 acres. The original 5 claims of this property were staked in 1995 and 1997, then re-staked in 2003. The claims are owned 100% by Logan Resources Ltd.
Access to the property is by a paved highway that connects Port Alberni to Ucluelet on Vancouver Island. The property is accessible from Ucluelet via 22 kilometers of paved road. Access to the claims is by active, all weather logging roads. The Draw Creek-Toquart Bay road joins Highway 4 near the middle of the east side of Kennedy Lake, and leads to the central part of the property at a distance of about 6 kilometers. Numerous logging roads throughout the property provide access to the various claims. Coulson Logging operates on the property with roads maintained, gated, and locked. The property is close to tidewater in Toquart Bay, which has a public campsite and boat ramp.
The Redford property encompasses an area of rugged topography on the southeast flank of the Mackenzie Range. Elevations range from sea level to 720 meters on Redford Mountain. Draw Creek, Little Toquart Creek and Redford Creek and their tributaries drain most of the property.
Recent logging and related roads have greatly improved access and exposures. Vegetation on the property is typical of the Coast Range. Steep Mountain slopes are heavily forested with old growth, including hemlock, cedar, and spruce interspersed with areas of abundant deadfall and heavy undergrowth. Slide areas are common in the steeper terrain and are thick with deadfall and heavy growth of devils club, alder and nettles. Locally in valley bottoms, usually proximal to creeks, swampy areas with buck brush are common. Clear cuts occur throughout the area and the maturity of replanted tree varies. Vegetation extends to the tops of mountains. The combination of steep topography and heavy vegetation makes surface traversing difficult and limits helicopter landing-sites. Glacial movement on the property is to the southwest. It has not apparently scoured the area very strongly and has left considerable depths of overburden in the valleys. The area receives considerable precipitation that can reach more than 3,300 millimeters annually. Summers are short and winter snowfall is variable, being heavy on the mountains and lighter in the valleys.
The town of Ucluelet, 22 kilometers to the southwest, is on the B.C. Hydro grid system and offers accommodation, restaurants and shops for purchase of supplies, hardware, camp-related utensils and materials, and access to a work force. The town of Port Alberni, 40 kilometers northeast of the property, provides extensive industrial infrastructure and deep-water port facilities. Port facilities developed in conjunction with mining operations at the Brynnor Mine also exist on Toquart Bay.
Albert Creek Property
British Columbia, Canada
Silver/Zinc/Lead/Cadnium Exploration
Acquisition Details
On 9/15/2000, the Company owns the right to earn a 100% interest (51% has been earned), subject to a 2% NSR Royalty, in eleven mineral claims from two individuals, one being the President of the Company. This option is exercisable in three stages. The first stage (51%) has been completed by 34
paying $10,000 of out-of-pocket staking costs (paid by issuing 100,000 common shares at $0.10 per share) and incurring $75,000 of exploration expenditures. The second stage (24%) has been completed by issuing 240,000 common shares and incurring a further $100,000 of exploration expenditures by 9/26/2003. The third stage (25%) was completed subsequent to March 31, 2007 by issuing 360,000 shares.
The Company now has 100% interest in the Albert Creek property which has 15 mineral claims subject to a 2% net smelter royalty. The Company has the right to acquire 50% of the NSR by paying $1,000,000.
Property Description/Location/Access
The area of Albert Creek property comprises 4,900 hectares, located in Northern British Columbia near the border with the Yukon Territory. The property consists of 15 mineral claims in un-patented, contiguous claims situated in the Liard Mining Division. The property has not been surveyed by a legal land surveyor.
The property is accessible by 4-wheel drive vehicle via the One Ace Mountain forestry road that was extended into the claim area in 1979. The One Ace Mountain road leaves the Stewart-Cassiar highway (Highway 37) at a point about 15 kilometers south of the Yukon - British Columbia border. Twenty minutes of helicopter flight provides optional access by air from Watson Lake situated 50 kilometers northeast. With respect to the bio-climate the property area is in the sub-boreal spruce zone with upland transition to spruce/willow/birch zone. It is defined by typical warm continental summers, up to 30° C contrasting with cold, sub-zero temperatures in the winters. Precipitation is moderate, ranging from 200 to 500 millimeters annually with half of it as snow. The climate offers no insurmountable impediment to year round operations on the property.
Watson Lake is the local commercial and population center and is situated 50 kilometers northeast from the property along Alaska Highway. It is serviced by regularly scheduled passenger air service from the south and east. Between Watson Lake and Whitehorse, the capital of the Yukon located about 300 kilometers to the northwest along Alaska Highway, all rudimentary equipment and supplies required for exploration on the property are available.
Antler Creek Property
British Columbia, Canada
Gold Exploration
Acquisition Details
Pursuant to an Option Agreement dated 5/23/2000 and amended 6/21/2002, the Company acquired the right to earn a 100% interest, subject to a 2% NSR Royalty, in 49 mineral claims representing 64 units from two individuals, one being the son of the President of the Company. During Fiscal 2003, the Company acquired the claims, subject to a 2% NSR Royalty, by issuing 100,000 shares at a fair market value of $12,000.
Property Description/Location/Access
The property is located 100 kilometers east of Quesnel, British Columbia and four kilometers south of the historic Wells-Barkerville placer-lode gold camp. Access is by road. The property is covered by the Government Regional Silt survey and three creeks on the property have historic placer gold recovery.
There is no visible mineralization in outcrop. In this region, gold occurs in Showshoe Group in quartz veins and stringer swarms with pyrite and in massive to semi-massive banded and stringer pyrite in small tubular and lenticular replacement bodies in limestone.
35
Heidi Property
Yukon Territory, Canada
Gold Exploration
Acquisition Details
On 4/8/2003, the Company entered into an agreement to acquire a 100% interest in 20 mineral claims in the Mayo Mining District, Yukon Territory from Shawn Ryan. In order to earn a 100% interest, subject to a 2% NSR retained by Ryan, the Company must make $180,000 in cash payments, issue 1,000,000 common shares and expend $600,000 on exploration of the Shell Creek Property over a period of five years. As of March 31, 2007, the Company had paid $155,000, issued 850,000 shares and expended $600,000 on exploration. The Company retained the right to acquire a 1 % NSR by paying $2,000,000 to Ryan, and has a right of first refusal on the balance of the NSR.
Subsequent to the year ending March 31, 2007, the Company paid $25,000 and issued 150,000 shares, completing the final property payment to earn a 100% interest in the property. It now has a 100% interest in the Heidi property subject to a 2% NSR. The Company also staked 166 claims around the 54 claims which originally comprised the Heidi project to secure additional ground around priority target areas. The Heidi property now consists of 220 mineral claims covering approximately 4,074 hectares (10,067 acres).
Property Description/Location/Access
The property is located 90 kilometers northeast of Dawson City, Yukon Territory. Access is by helicopter.
The property is covered by government airborne magnetic survey, and has been prospected, mapped, soil sampled and trenched.
Existing mineralization includes gold showings in five trenches in 300 meter by 150 meter area. Gold occurs in veins 1-10 centimeters, up to 1-2 meters thick with quartz and arsenopyrite, in disseminated to banded pyrite, and arsenopryite, and in massive pyrite/arsenopyrite/stibnite veins and bands. The target is Fort Knox style intrusive related bulk tonnage from an open pit.
Shell Creek Property
Yukon Territory, Canada
Gold/Copper Exploration
Acquisition Details
On 3/31/2003, the Company entered into an agreement (dated for reference 1/1/2003) to acquire a 100% interest in 70 mineral claims in the Dawson Mining District, Yukon Territory from Shawn Ryan. In order to earn a 100% interest, subject to a 2% NSR retained by Ryan, the Company must make $155,000 in cash payments, issue 1,000,000 common shares and expend $1,550,000 on exploration of the Shell Creek Property over a period of five years. As of March 31, 2007, the Company had paid $155,000, issued 800,000 shares and expended $1,050,000 on exploration. The Company retained the right to acquire a 1% NSR by paying $2,000,000 to Ryan, and has a right of first refusal on the balance of the NSR.
In fiscal 2005 and 2006, the Company staked an additional 558 claims. The Shell Creek property now consists of 628 mineral claims.
Property Description/Location/Access
The property is located 55 kilometers northwest of Dawson City, Yukon Territory. Access is by helicopter.
An iron formation has been traced for 16 kilometers along both limbs and nose of anticline; it consists of magnetite (lesser hematite) and thin-banded grey chert, locally pyrite and pyrrhotite facies. The Tintina Trench lies 2.5 kilometers south southwest.
36
The property was “discovered” in 1954 and explored for iron. It was staked in 2002 after gold was found in quartz veins. Placer gold has been recovered from Shell Creek.
The property is covered by government airborne magnetic and regional geochemical surveys (RGS), and been mapped, trenched, partially covered by soil/silt/ground magnetic surveys, and preliminarily rock sampled.
Carswell Dome Uranium Property
Saskatchewan, Canada
Gold/Copper Exploration
Acquisition Details
Logan Resources Ltd. staked 2 claims on the Carswell Dome Formation, Athabasca Basin, Saskatchewan, covering an area of 7,552 hectares. The Company optioned the property to ESO Uranium Corp. (formerly Essendon Solutions Inc.). Pursuant to the agreement dated March 15, 2005, ESO Uranium Corp. must do the following to earn a 50% interest in mineral claims:
- pay $25,000 (paid)
- issue 200,000 of its common shares (issued)
- fulfilling a work commitment of $300,000 on the property over 3 years.
The Company is currently negotiating a joint venture agreement with ESO Uranium Corp.
Property Description/Location/Access
The property is located on the Carswell Dome Formation on the Athabasca Basin of Saskatchewan, adjacent to Cluff Lake Mine boundary and less than 7km from the uranium deposits.
Cheyenne Property
Yukon Territory, Canada
Gold Exploration
Acquisition Details
On 12/23/2005, the Company entered into an agreement to acquire a 100% interest in 364 mineral claims in the Mayo Mining District, Yukon Territory from Shawn Ryan. In order to earn a 100% interest, subject to a 2% NSR retained by Ryan, the Company must make $300,000 in cash payments, issue 1,000,000 common shares and expend $500,000 on exploration of the Cheyenne Property over a period of four years. As of March 31, 2007, the Company had paid $100,000, issued 400,000 shares and expended $100,000 on exploration. The Company retained the right to acquire a 1 % NSR by paying $2,000,000 to Ryan, and has a right of first refusal on the balance of the NSR.
Property Description/Location/Access
The property is located 65 kilometers northeast of Dawson City, Yukon Territory, 1.5 kilometers east of the Dempster Highway, and 30 kilometers from the Heidi Property. Access is by helicopter.
The property is covered by government airborne magnetic survey, and has been prospected, mapped, soil sampled and trenched.
May Creek Property
Yukon Territory, Canada
Silver, Gold, Copper, Zinc Exploration
Acquisition Details
On 8/01/2006, the Company entered into an agreement to acquire a 100% interest in 84 mineral claims in the Mayo Mining District, Yukon Territory from Shawn Ryan. In order to earn a 100% interest, subject to a 2% NSR retained by Ryan, the Company must make $225,000 in cash payments, issue 750,000 common shares and expend $500,000 on exploration of the May Creek Property over a period of five years. As of March 31, 2007, the Company had paid $20,000, issued 150,000 37
shares and expended $11,925 on exploration. The Company retained the right to acquire a 1% NSR by paying $2,000,000 to Ryan, and has a right of first refusal on the balance of the NSR.
Property Description/Location/Access
The property is located 45 kilometers west-northwest of the community of Mayo. Access to the May Creek property is via bulldozer trail system which connects to property to the highway linking the community of Mayo to Whitehorse.
Englishman Property
Yukon Territory, Canada
Uranium Exploration
Acquisition Details
On 3/27/2007, the Company entered into an agreement to acquire a 100% interest in 16 mineral claims in the Watson Lake Mining District, Yukon Territory from 39777 Yukon Inc. In order to earn a 100% interest, subject to a 2% NSR retained by 39777 Yukon Inc., the Company must make $50,000 in cash payments, issue 250,000 common shares and expend $550,000 on exploration of the property over a period of three years. As of March 31, 2007, the Company had paid $5,000 and issued 50,000 shares. The Company retained the right to acquire a 1% NSR by paying the Optionor $2,000,000, and has a right of first refusal on the balance of the NSR.
Property Description/Location/Access
The property is located 160 kilometers east of Whitehorse and 60 kilometers northeast of Teslin.
Turn River Property
Yukon Territory, Canada
Uranium Exploration
Acquisition Details
During February 2007, the Company and International KRL Resources Corp., related by common directors, acquired 50% each, by staking in the Cassiar Plateau, Yukon Territory, 2,220 claims. Subsequent to 31 March 2007, the Company and International KRL Resources Corp. added an additional block with potential for nickel. The Turn River project now consists of 3,531 claims.
Property Description/Location/Access
The property is located approximately 95 kilometers northeast of Whitehorse. Access is via the Canol Road.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion for the fiscal years ended March 31, 2003 - 2007 should be read in conjunction with the financial statements of the Company and the notes thereto.
The Company’s principal business is the exploration and development of resource properties. The Company is continually investigating new exploration opportunities, and exploration is carried out on properties identified by management of the Company as having favorable exploration potential. The Company advances its projects to varying degrees by prospecting, mapping, geophysics, and drilling until it decides either that the property has limited exploration potential and should be abandoned or that work on the property has reached a stage where the expense and risk of further exploration and development dictate that the property should be optioned to a third party. The resource exploration business is high risk and most exploration projects do not reach a commercial stage of operations.
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Operating Results
Fiscal 2007 Ended 3/31/2007 versus Fiscal 2006
During the year, the Company raised $625,000 from a brokered private placement of 1,250,000 units at a price of $0.50 per unit. The Company also raised $500,000 from a non brokered private placement of 1,000,000 units at a price of $0.50 per unit. The Company issued 6,250,000 Flow-through shares at $0.55 per unit, raising $3,437,500 through a brokered private placement. The Company also issued 1,270,000 flow through shares at $0.40 per unit, raising $508,000 through a non brokered private placement.
Through the exercising of 1,706,000 warrants and 225,000 options $730,850 was netted. A total of $2,275,470 was spent on mineral interest acquisition and exploration expenditures. Administration expenses amounted to $999,370, which includes non-cash stock-based compensation totaling $217,568. There was a net increase in cash of $407,258 for the year.
SELECTED ANNUAL INFORMATION
| March 31, 2007 | March 31, 2006 | March 31, 2005 | March 31, 2004 |
Net Income (loss) | 893,590 | (179,610) | (571,209) | (147,619) |
| Net Income (loss) per share (basic and diluted) | 0.03 | (0.01) | (0.03) | (0.02) |
| Total assets | 8,373,806 | 2,479,672 | 1,611,132 | 713,204 |
As the Company has no revenues, increased activity causes increased losses. Other losses can be caused by write-downs or write-offs of assets which do not follow a trend. The future income tax recovery and gain on sale of marketable securities resulted in decreasing the overall loss for the Company.
Net income in the current year was $893,590 compared to a net loss of $179,610 for the prior year, reflecting a net overall improvement of $1,073,200. Significant line item changes were as follows:
- Provision for future income tax recoveries of $1,344,029 was made.
- Stock-based compensation increased by $106,726 mainly due to higher expected volatility or fluctuation in share price.
- Management fees increased by $70,000 due to competitive compensation adjustments.
- Office expense increased by $40,778 mainly due to increased costs of the new premises.
- Travel and promotion increased by $129,540 due to increased efforts to raise the profile of the company.
SUMMARY OF QUARTERLY RESULTS
| March 31, 2007 | December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 |
| Net income (loss) before tax | 71,512 | (91,279) | (231,111) | (199,561) | (106,085) | (73,320) | (204,999) | (73,131) |
| Net income (loss) per share (Basic and Diluted) | 0.002 | (0.003) | (0.007) | (0.007) | (0.005) | (0.004) | (0.01) | (0.004) |
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LIQUIDITY
As at March 31, 2007 the Company had working capital of $4,049,150 which management considers sufficient to continue operations for the coming year. However, there are insufficient funds to meet all property commitments listed below, as they now stand. The Company will be seeking further funds, from private placement financings, to meet these commitments or may seek extensions to the exploration schedule. Also, in the longer term, in order to continue operations, and in particular, to fund ongoing expenditure commitments listed below and in the notes to the financial statements, the Company will need to raise additional capital. The Company plans to do this through private placements and public offerings.
CAPITAL RESOURCES AND EXPLORATION EXPENDITURE COMMITMENTS
The Shell Creek, Cheyenne, May Creek, and Englishman properties are held under option agreements. Under these agreements the Company must make various cash and stock payments and incur exploration expenditures by various deadlines. Details of these requirements are listed in the notes to the audited annual financial statements.
At the date of this report, all cash payments on the above four property options were up to date and all share payments have been made. Extensions have been received for all exploration expenditure commitments that have not yet been met.
Under the Cheyenne, May Creek and Englishman options, cash expenditure requirements for the year ahead amount to approximately $100,000. The Heidi, Albert Creek, Antler Creek, Carswell and Redford properties have no further payment requirements, beyond the exploration required for standard assessment to keep the claims in good standing. The Shell Creek only has one more share consideration of 200,000 due to be issued on or before January 1, 2008.
EXPLORATION EXPENDITURES
The Company spent a total of $1,699,500 net of tax credits recoverable of $211,481, on exploration in the current period. The focus of the work in the current period was on the Company’s Heidi and Shell Creek properties in the Yukon where expenditures totaled $1,520,238 net of tax credits of $196,711 recoverable. A total of $179,262, net of tax credits of $14,770, recoverable, was spent on the Company’s remaining mineral interests. Full details on exploration expenditures are disclosed in Note 4 accompanying the audited annual financial statements. See the mineral property update below, for further details of activities.
Fiscal 2006 Ended 3/31/2006 versus Fiscal 2005
During the year, the Company raised $335,000 from private placements of 333,333 units at a price of $0.30 per unit and 940,000 units at a price of $0.25. Through the exercising of 1,596,500 warrants and 350,000 options $489,525 was netted. The Company issued 1,213,000 Flow-through shares at $0.25 per share, raising $303,250. A total of $715,377 was spent on mineral interest acquisition and exploration expenditures. Administration expenses amounted to $555,902, which includes non-cash stock-based compensation totaling $110,842. There was a net increase in cash of $131,096 for the year.
SELECTED ANNUAL INFORMATION
| | March 31, 2006 | March 31, 2005 | March 31, 2004 |
| Net loss | (179,610) | (571,209) | (147,619) |
| Net loss per share (basic and diluted) | (0.01) | (0.03) | (0.02) |
| Total assets | 2,479,672 | 1,611,132 | 713,204 |
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As the Company has no revenues, increased activity causes increased losses. Other losses can be caused by write-downs or write-offs of assets which do not follow a trend. The future income tax recovery and gain on sale of marketable securities resulted in decreasing the overall loss for the Company.
Net loss in the current year was $179,610 compared to $571,209 for the prior year, reflecting a net overall improvement of $391,599. Significant line item changes were as follows:
- Provision for future income tax recoveries of $277,925 was made.
- Mainly due to lower expected volatility or fluctuation in share price the non-cash Stock-based compensation decreased by $155,101. Management fees increased by $10,730 as an incentive to increase productivity.
- Office expense increased by $21,796 mainly due to increased costs of the new premises.
- Travel and promotion increased by $66,419 due to increased efforts to raise the profile of the company.
SUMMARY OF QUARTERLY RESULTS
| March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2004 | September 30, 2004 | June 30, 2004 |
| Net Income (Loss) before tax | (106,085) | (73,320) | (204,999) | (73,131) | (184,221) | (101,500) | (103,207) | (182,281) |
| Net Income (Loss)per share (Basic and Diluted) | (0.01) | (0.004) | (0.01) | (0.004) | (0.012) | (0.01) | (0.01) | (0.02) |
LIQUIDITY
As at March 31, 2006, the Company had working capital of $559,214 which management considers sufficient to continue operations for the coming year. However, there are insufficient funds to meet all property commitments listed below, as they now stand. The Company will be seeking further funds, from private placement financings, to meet these commitments or may seek extensions to the exploration schedule. Also, in the longer term, in order to continue operations, and in particular, to fund ongoing expenditure commitments listed below and in the notes to the financial statements, the Company will need to raise additional capital. The Company plans to do this through private placements and public offerings. Subsequent to the year end, the Company raised a total of $4,562,500 through brokered and non-brokered private placements (for more detail refer to ‘Subsequent Events’ below).
CAPITAL RESOURCES AND EXPLORATION EXPENDITURE COMMITMENTS
The Shell Creek, Heidi, Cheyenne and Albert Creek properties are held under option agreements. Under these agreements the Company must make various cash and stock payments and incur exploration expenditures by various deadlines. Details of these requirements are listed in the notes to the audited annual financial statements.
At the date of this report, all cash payments on the above four property options were up to date and all share payments have been made. Extensions have been received for all exploration expenditure commitments that have not yet been met.
Under the Cheyenne and Heidi options, cash expenditure requirements for the year ahead amount to approximately $110,000. The Albert Creek, Antler Creek, Carswell and Redford properties have no further payment requirements, beyond the exploration required for standard assessment to keep the claims in good 41
standing. The 75% interest now held in the Albert Creek property can be increased by a further issue of shares at the option of the Company (see notes to financial statements).
EXPLORATION EXPENDITURES
The Company spent a total of $485,750, net of tax credits recoverable of $81,559, on exploration in the current period. The focus of the work in the current period was on the Company’s Shell Creek, Yukon mineral interests where expenditures totaled $343,709 net of tax credits of $80,529, recoverable. A total of $142,041, net of tax credits of $1,030, recoverable, was spent on the Company’s remaining mineral interests. Full details on exploration expenditures are disclosed in Note 4 accompanying the audited annual financial statements. See the mineral property update below, for further details of activities.
Fiscal 2005 Ended 3/31/2005 versus Fiscal 2004
During the year, the Company raised a gross amount of $1.42 million from private placements, warrants exercised and options exercised. $295,000 was spent on property option payments and new property acquisitions. $223,000 was spent on mineral exploration. Administration expenses amounted to $341,000 (calculated as total expenses less option gains, write-offs and write-downs and stock based compensation).
Net loss in the current year was $571,209 compared to $147,619 in the prior year. Most expense categories increased due to increased activity by the Company following its successful financing efforts. Significant line item changes were as follows:
- Administration salaries were up from $nil to $88,225 due to the hiring on a shared basis of a receptionist, accountant and land/legal administrator.
- Legal fees were up from 14,707 to 33,900 due to general increased activity in the company including regulatory matters, property option contracts and acquisitions, registration with the SEC and general legal advice.
- Office rent increased from $16,023 to $37,491 due to expansion of premises.
- Stock-based compensation increased from $9,085 to $265,943 due to increased grants of stock options to employees and consultants. This expense is entirely non-cash.
- Travel and promotion and investor relations costs increased from $28,597 to $109,077 due to the increased use of consultants, increased efforts to raise capital and promote awareness of the company. This year the Company participated in the, the New York Gold Show, the New Orleans Investor Conference, the Yukon Geoscience forum, the San Francisco Investor Show, the Vancouver Investment Conference and the Prospectors and Developers Conference, whereas last year only 2 conventions were attended.
The gain on property option represents the excess of the value of shares and cash received during the year pursuant to the optioning of 50% of the Company’s interest in the Carswell property, over the Company’s cost of acquisition and exploration on the property.
Fiscal 2004 Ended 3/31/2004 versus Fiscal 2003
During this year, the Company acquired three new exploration properties: the Shell Creek Property, the Heidi Property, and the Iron Horse Property. Exploration efforts were conducted on all properties: $126,460.
Administration costs rose 24% to $126,736 in Fiscal 2004. The largest component of operating expenses was management fees of $30,000 for the
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Company’s President/CEO/Director, unchanged from last year. Investor relations costs were $22,389 versus $1,207 last year. The Company increased investor relations costs to take advantage of improved market conditions. These expenses include those incurred to attend mining conventions during the year. TSX Stock Exchange and filing fees was basically unchanged at $16,355. Office/Rent/Telephone fell 15% to $16,023. Legal fees fell to $14,707 from $24,609 because of share for debt filings in the previous year and reduced filing needs for property agreements.
The Net Loss was increased to ($147,619) from ($101,904). Net Loss Per Shares was ($0.02) versus ($0.02) .
Fiscal 2003 Ended 3/31/2003 versus Fiscal 2002 and Fiscal 2001
The Company continued to move forward on its three properties: Redford, Albert Creek, and Antler Creek. At March 2003, the Shell Property was acquired and in April 2003, subsequent to the end of Fiscal 2003, two additional properties were acquired, Heidi Property and Iron Horse. Exploration efforts rose meaningfully during Fiscal 2003 to $160,646 with 80% spent on the Albert Creek Property, versus $36,250 during Fiscal 2002 and $43,317 during Fiscal 2001.
Administration costs rose 14% to $101,904 in Fiscal 2003, versus $89,165 in Fiscal 2002 and $74,355 in Fiscal 2001. The largest component of operating expenses for all three periods was management fees of $30,000 for the Company’s President/CEO/Director. Legal fees rose 52% in Fiscal 2003 to $24,609 following a doubling in Fiscal 2002; the increases resulted from generally increased corporate activity, property acquisitions, and financings. Transfer Agent and regulatory expenses rose 28% during Fiscal 2003 to $16,203 as a result of numerous stock certificate issuances. Office/rent expenses were $12,000 for both Fiscal 2003 and Fiscal 2002 versus $nil in Fiscal 2001 (when the Company had very limited funds).
The Net Loss rose to ($101,904) in Fiscal 2003 from ($89,165) in Fiscal 2002 and ($74,355) in Fiscal 2001. Net Loss Per Shares was ($0.01) all three years, adjusted for the January 2002 1-for-5 stock consolidation.
Liquidity and Capital Resources
Fiscal 2005 Ended 3/31/2005
As at March 31, 2005, the Company had working capital of $510,848. This includes flow-through share funds which are committed to mineral exploration in Canada. Details of amounts raised through share issuances are found in note [6] to the financial statements. Since the year end, the Company has raised an additional $279,000 through the exercise of warrants and $100,000 pursuant to a private placement. In the longer term, in order to continue operations, and in particular, to fund the expenditure commitments listed below and in the notes to the financial statements, the Company will need to raise additional capital. The Company plans to do this through private placements and public offerings.
The Shell Creek, Heidi and Albert Creek properties are held under option agreements. Under these agreements the Company must make various cash and stock payments and incur exploration expenditures by various deadlines. Details of these requirements are listed in the notes to the financial statements.
At the date of this report, all payments on the above 3 options were up to date. Extensions have been received for all exploration expenditure commitments that have not yet been met.
The Albert Creek, Antler Creek, Carswell and Redford properties have no further payment requirements, beyond the standard assessment exploration, to stay in good standing. The 75% interest now held in the Albert Creek property can be increased by a further issue of shares at the option of the Company (see notes to financial statements).
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Pursuant to various flow-through share agreements, the Company was committed, as at March 31, 2005, to incur a further $235,056 of Canadian Exploration Expenditures during calendar 2005. These expenditures have been made as of the date of this report.
Management expects to fund the above commitments and keep the properties in good standing from current cash reserves and through future private placements and public offerings.
Fiscal 2004 Ended 3/31/2004
As at March 31, 2004, the Company had a working capital deficit of $12,688 This includes flow-through share funds which are committed to mineral exploration in Canada. During this year, the Company acquired three new exploration properties, expending $39,320 and issuing 700,000 common shares: the Shell Creek Property, the Heidi Property, and the Iron Horse Property. An additional 240,000 common shares were issued pursuant to a September 2000 agreement for acquisition of the Albert Creek Property. Exploration efforts were conducted on all properties, expending $126,460 during the year.
In May 2003, the Company completed a private placement of 186,700 units at $0.15 per unit, raising $28,005. Each unit will consist of one flow-through common share and one warrant to purchase one additional non-flow-through common shares exercisable at a price of $0.20 per share for a period of one year.
Cash Used by Fiscal 2004 Operating Activities totaled $16,924 including the ($147,619) Net Loss; significant adjustments included $20,883 write-off of mineral properties (Iron Horse Property) and $134,378 in net changes in non-cash working capital items. Cash Used in Investing Activities was ($123,405), primarily for acquisition of mineral properties. Cash Provided by Fiscal 2004 Financing Activities was $176,092, this included $103,000 related to the issuance of 940,000 common shares for mineral property acquisition, $62,400 related to the exercise of 312,000 stock options, $57,717 related to the exercise of warrants, and ($66,375) related to “cash committed for mineral exploration” (Shell Creek and Heidi Properties).
The Company has not generated any operating revenue from any of its properties. The Company receives cash for use in operations from issuing common shares and optioning/sale of selected assets.
Fiscal 2003 Ended 3/31/2003 and Fiscal 2002
The Company had working capital of $118 on 3/31/2003.
The Company had working capital of ($110,399) on 3/31/2002.
The Company had working capital of ($165,875) on 3/31/2001.
On 1/30/2002, the Company consolidated its share capital on the basis of five old shares for one new share. All references to number of shares or to per share data refer to post-consolidation data unless otherwise indicated.
In February 2002, the Company completed a private placement of 1,000,000 units at $0.05 per unit. Each unit consisted of one common share and one warrant; each warrant was exercisable for one year at $0.10. In March 2002, the Company completed a stock-for-debt arrangement, issuing 1,053,400 common shares for $131,678 of indebtedness.
In May 2000, the Company entered into an agreement to acquire the Antler Creek Property by issuing, during Fiscal 2002, 20,000 post-consolidation common shares at a deemed fair market value of $10,000. In September 2000, the Company entered into a Letter Agreement to acquire a 100% interest in the Albert Creek Property, by incurring $235,000 in related expenditures and issuing 220,000 post-consolidation common shares in three stages over four years. In late 2001, the Company allowed the last four mineral claims 44
representing 50 units (the Spanish Mountain Property) were allowed to lapse. In January 2003, the Company entered into an option agreement to acquire a 100% interest in the Shell Creek Property, by incurring $1,550,000 in related expenditures and issuing 1,000,000 common shares, all in stages over a five-year period.
Property acquisition costs during FY2003/FY2001/FY2001, respectively, totaled $12,000, $6,773 and $nil. Property exploration costs during FY2003/FY2001/FY2001, respectively, totaled $160,646, $36,250 and $47,317. Refer to table in ITEM #4B for additional information.
Cash Used by Fiscal 2003 Operating Activities totaled ($107,330) including the ($101,904) Net Loss; significant adjustments included ($5,820) in net changes in non-cash working capital items. Cash Used in Fiscal 2003 Investing Activities was ($56,885), predominately for acquisition/exploration of mineral properties. Cash Provided by Fiscal 2003 Financing Activities was $154,251, primarily from issuance of equity as detailed above as well as repayment of $24,349 in advances from related parties. In addition: 100,000 common shares with a fair market value of $12,000 was issued for acquisition of mineral properties; 427,532 common shares with a fair market value of $64,130 were issued to settle debt; and 164,000 common shares with a fair market value of $19,680 were issued for agents’ commissions.
Cash Used by Fiscal 2002 Operating Activities totaled ($74,452) including the ($89,165) Net Loss; significant adjustments included $14,451 in net changes in non-cash working capital items. Cash Used in Fiscal 2002 Investing Activities was ($37,299), predominately for acquisition/exploration of mineral properties. Cash Provided by Fiscal 2002 Financing Activities was $114,360 from issuances of equity as detailed above as well as $64,360 from advances from related parties. In addition, 1,053,400 common shares with a fair market value of $131,678 were issued to settle debt.
5.C. Research and development, patents and licenses, etc.
5.D. Trends
5.E. Off-Balance Sheet Arrangements.
5.F. Tabular disclosure of contractual obligations.
--- No Disclosure Necessary ---
5.G. Safe harbor.
This Form 20-F Annual Report contains forward-looking statements including but not limited to comments regarding the timing and content of upcoming operation and exploration plans and business development plans. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Forward looking statements are usually identified by our use of certain terminology, including “will”, “believes”, “may”, “expects”, “should”, “seeks”, “anticipates” or “intends” or by discussions of strategy or intentions.
Forward looking statements used in this discussion are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond the control of the Company. If risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES
6.A. Directors and Senior Management
Table No. 6
Directors and Senior Management
October 10, 2007
| | | | |
| | | | |
| | | | Date of First |
| | | | Election or |
| Name | Position | Age | Appointment |
|
| |
| F. Charles Vickers (1)(2) | Director | 58 | June 2005 |
| Peter F. Cummings (1)(3) | Director | 50 | March 2004 |
| Judith T. Mazvihwa (1)(3)(4) | Director/Chief Financial Officer/ | 33 | Sept |
| 2003 | | | |
| | | | |
| Corporate Secretary | | | |
| Clifford H. Frame (5) | Director | 74 | July |
| 2005 | | | |
| Seamus Young (3)(6) | Director/President/CEO | 67 | May 1991 |
| | | | |
| | | | |
|
| (1) Member of Audit Committee. | | | |
| (2) Resident/Citizen of Texas, US. | | | |
| (3) Resident/Citizen of British Columbia, Canada. | | | |
| (4) She spends about half of her time on the affairs of the Company. | |
| (5) Resident/Citizen of Ontario, Canada. | | | |
| (6) He spends about half of his time on the affairs of the Company. | | |
| | | | |
| | | |
Clifford H. Frameis a professional engineer with over 40 years of experience in all aspects of resource project development, acquisition, marketing, financing, operations and production. Widely recognized for his achievements in the resource industry, he has overseen several major mine developments in Canada, Australia and Indonesia. Mr. Frame has outstanding industry experience, leadership and communication skills, which have earned him extensive international mining contacts and well-established relationships with government, financial and investor groups. He has a strong background in all aspects of mine exploration, development and operation.
F. Charles Vickersis the president of Greyling Investments, Inc. which is a major shareholder in the Company as well as a number of other junior resource companies in Canada. Mr. Vickers was the Chairman and President of Troutline Investments Inc. until April of 2004 when Troutline successfully merged with three oil and gas companies to become Innova Energy Ltd. (“Innova”).
Mr. Vickers continues to serve as a director of Innova. Innova has grown from an initial market capitalization of’ $67 million to a current market valuation of almost $200 million. Mr. Vickers has 30 years of experience with resource based companies.
Peter F. Cummings is a Chartered Accountant with extensive financial and general management experience principally in the retail, distribution and greenhouse industries. Since 1999, he has been VP Finance and VP Information Technology of BC Hot House Foods Inc., a large private seller of greenhouse-grown vegetables. He had five years experience as a Chartered Accountant before entering corporate management in 1985. He obtained his CA while working with Collins Barrow Chartered Accountants.
Judith T. Mazvihwa is a mining geologist with 10 years geology and management experience. She recently earned a MBA and is working towards her CMA designation through Simon Fraser University School of Business. From December 1996 to April 1997, she was a geologist with Prospecting Ventures Ltd.; from
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June 1997 to September 1999, she was Mining Geologist Section Head with Casmyn Mining Zimbabwe (Pvt) Ltd.; from March 2002 to April 2002, she was a geologist with Cumberland Resources Ltd.; and from April 2002 to November 2002, she was a geologist with Northgate Exploration Ltd. Since December 2002, she was Officer Manager with International KRL Resources Corp. and since December 2003, she has been a CFO and Director of International KRL Resources Corp., a mineral exploration company publicly traded on the TSX Venture Exchange.
Seamus Younghas over 40 years experience in the mineral exploration business, running both public and private companies. He has a proven record of acquiring prospective projects and putting together highly skilled exploration teams to advance them. In 1966 he founded Donegal Developments Inc., one of Canada's longest running mineral exploration contracting companies. In 1983 Seamus acquired International KRL Resources Corp. and has been President and CEO since that time. Mr. Young became President and CEO of Logan Resources Ltd. in 1992. He has put together an impressive Canadian portfolio of prospective projects with discovery potential for Logan since that time.
(George Anderson resigned from the Board of Directors July 18, 2005.) (Charles D. Mooney did not stand for re-election at the Company’s Annual General Meeting held September 28, 2005).
The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.
The Senior Management serve at the pleasure of the Board of Directors.
Despite the Company’s Senior Management spending material portions of their time on businesses other than the Company, the Company believes that they devote sufficient time to the Company to properly carry out their duties.
No Director and/or Senior Management has been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.
There are no family relationships between any two or more Directors or Senior Management.
There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.
6.B. Compensation
Cash Compensation. Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during Fiscal 2007 ended 3/31/2007 was $202,100, consisting of: $112,500 as a management and administration fee paid (or accrued) to T-Bags Management Inc., a private company controlled by the President/Director, Seamus Young; $63,025 paid or accrued to the aforesaid T-Bags Management Inc. for property exploration supervision by the President/Director, Seamus Young; $26,575 paid to the CFO/Director, Judith Mazvihwa.
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Director Compensation. The Company has no formal plan for compensating its Directors for their service in their capacity as Directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director. Other than indicated below no Director received any compensation for his services as a Director, including committee participation and/or special assignments.
Stock Options. The Company may grant stock options to Directors, Senior Management, and employees/consultants. Refer to ITEM #6.E., "Share Ownership" and Table #7, #8, #10 for information about stock options granted, stock options exercised, and stock options outstanding. No SARs (stock appreciation rights) were granted or exercised during Fiscal 2007. During Fiscal 2007, 225,000 stock options were cancelled.
During the most recently completed fiscal year, the following incentive stock options were granted to Senior Management, Directors and employees. No SARs (stock appreciation rights) were granted during this period.
Table No. 7
Stock Option Grants in Fiscal 2007 Ended 3/31/2007
| | | |
| | | |
| | Percentage | Market Value of Securities |
| | Number | of | Exer. | | Underlying Options |
| | of | Total | Price | | | on Date |
| | Options | Options | Per | Grant | Exp’r | of Grant |
| Name | Granted | Granted | Share | Date | Date | Per Share |
| |
| |
| Judith Mazvihwa | 150,000 | 8.7% | $0.70 | 5/26/2007 | 5/26/2009 | $0.49 |
| | 100,000 | 5.8% | $0.37 | 3/23/2007 | 3/23/2009 | $0.32 |
| | | | | | | |
| Peter F. Cummings | 150,000 | 8.7% | $0.70 | 5/26/2007 | 5/26/2009 | $0.49 |
| | 100,000 | 5.8% | $0.37 | 3/23/2007 | 3/23/2009 | $0.32 |
| | | | | | | |
| Seamus Young | 200,000 | 11.6% | $0.70 | 5/26/2007 | 5/26/2009 | $0.49 |
| | 200,000 | 11.6% | $0.37 | 3/23/2007 | 3/23/2009 | $0.32 |
| | | | | | | |
| Clifford F. Frame | 100,000 | 5.8% | $0.37 | 3/23/2007 | 3/23/2009 | $0.32 |
| | | | | | | |
| Management Total | 1,000,000 | 58% | | | | |
| Consultants/Others (1) | 725,000 | 42% | | | | |
| Total | 1,725,000 | 100% | | | | |
| |
| |
| Options were vested upon granting. | | | | | | |
| | | | | | | |
| | | | | |
48
Table No. 8 gives certain information concerning stock option exercises during Fiscal 2007 Ended 3/31/2007 by our Senior Management and Directors. It also gives information concerning stock option values. During Fiscal 2007, 225,000 stock options in aggregate were exercised.
Table No. 8
Aggregated Stock Options Exercises in Fiscal 2007
Fiscal Yearend Unexercised Stock Options / Stock Option Values
Senior Management/Directors
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Number of Shares Acquired on Excercise | | Value Realized | Number of Unexcercised Options of Fiscal Year-end Excercisable/Unexcercisble | Value of Unexcercised In-the Money Options at Fiscal Year-end Excercisable/Unexcercisble |
| Name | | | | | | |
| | | | | | | |
| Seamus Young | 0 | | $0 | 200,000 @ | $0.50 | | $0 |
| | | | | 200,000 @ | $0.70 | | $0 |
| | | | | 200,000 @ | $0.37 | | $0 |
| Judith T. Mazvihwa | 0 | | $0 | 100,000 @ | $0.50 | | $0 |
| | 0 | | $0 | 150,000 @ | $0.70 | | $0 |
| | | | | 100,000 @ | $0.37 | | $0 |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Change of Control Remuneration. The Company has no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2008 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management.
Other Compensation. No Senior Management/Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.
Bonus/Profit Sharing/Non-Cash Compensation. Except for the stock option program discussed in ITEM #6.E., the Company has no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's Directors or Senior Management. However, members of Senior Management have written contracts that contain bonus arrangements.
Pension/Retirement Benefits. No funds were set aside or accrued by the Company during Fiscal 2007 to provide pension, retirement or similar benefits for Directors or Senior Management.
Written Management Agreements
Seamus Young has an “employment agreement” dated 2/1/2002 that stipules that he will be compensated, directly and indirectly, $5,000 per month. T-Bags Management Inc., a non-reporting company controlled by Seamus Young, entered into an agreement dated January 1, 2006 to provide management consulting services for a term of three years for the sum of $10,000 per month. In the event of termination without cause, the Company shall pay severance equal to the number of months remaining under the term of the agreement, multiplied by the compensation rate at the date of termination.
49
6.C. Board Practices
6.C.1. Terms of Office. Refer to ITEM 6.A.1.
6.C.2. Directors’ Service Contracts.
--- No Disclosure Necessary - ---
6.C.3. Board of Director Committees.
The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Company’s audits, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company. The current members of the Audit Committee are: F. Charles Vickers, Peter F. Cummings, and Judith T. Mazvihwa. The Audit Committee intends to meet at least four times during Fiscal 2008.
Due to the passing into law, of the new Business Corporations Act (British Columbia) in 2004, the Company revised its articles. All directors hold office until the next meeting of the shareholders of the Company unless they resign or are removed in accordance with the Company’s Articles. Officers are appointed to serve at the discretion of the Board of Directors. The Board of Directors and Committees of the Board schedule regular meetings over the course of the year.
The fundamental objective of the Board is to ensure that it operates in a fashion that maximizes shareholder value over the long term. The Board’s duties and responsibilities are all carried out in a manner consistent with that fundamental objective. The principal duty and responsibility of the Board is to oversee the management and operations of the Company, with the day-today management of the business and affairs of the Company delegated by the Board to the CEO and other Senior Management.
The Board’s responsibilities include overseeing the conduct of the Company’s business, providing leadership and direction to its management, and setting policies. Strategic direction for the Company is developed through the Board’s annual planning process. Through this process, the Board adopts the operating plan for the coming year, and monitors management’s progress relative to that plan through a regular reporting and review process.
The Board has delegated to the CEO and Senior Management responsibility for the day-to-day management of the business of the Company. Matters of policy and issues outside the normal course of business are brought before the Board for its review and approval, along with all matters dictated by statute and legislation requiring Board review and approval. The CEO and Senior Management review the Company’s progress in relation to the current operating plan at in-person Board meetings. The Board meets on a regular basis with and without management present. Financial, operational and strategic issues facing the Company are reviewed, monitored and approved at the Board meetings.
6.D. Employees
As of 10/10/2007, the Company had seven employees, including the Senior Management. As of 3/31/2006 there were seven employees on average and as of 3/31/2005, there were five employees on average (including the Senior Management). None of the Company's employees are covered by collective bargaining agreements.
50
6.E. Share Ownership
Table No. 9 lists, as of 10/10/2007, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common share, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group. Table No. 8 shows the only persons/companies where the Company is aware that a shareholder has 5% or greater beneficial interest in the Company’s securities.
Table No. 9
Shareholdings of Directors and Senior Management
Shareholdings of 5% Shareholders
| | | | |
| | | | |
| Title of Class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class #
|
| | | | |
| Common | Seamus Young (1) | 2,185,889 | 6.22% |
| Common | Judith Mazvihwa | 62,500 | 0.18% |
| Common | Peter Cummings | 88,500 | 0.25% |
| Common | F. Charles Vickers (2) | 2,541,667 | 7.24% |
| Common | Clifford H. Frame | | |
| 560,000 | 1.59% | | |
| Total Directors/Management/5% Holders | | 4,976,556 | 15.49% |
|
| (1) | 616,032 are held by Donegal Development Ltd, a private company controlled by Mr. Young. |
| | 14,000 are held by T-Bags, a private company controlled by Mr. Young. |
| | |
| (2) | 2,541,667 are held by Greyling Investment, Inc., a non-reporting corporation controlled by Mr. Vickers. |
|
| |
Stock Options. The terms of incentive options grantable by the Company are done in accordance with the rules and policies of the TSX Venture Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto. The Company adopted a formal written stock option plan (the Stock Option Plan") on 9/10/2003.
The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.
The Stock Option Plan provides that stock options may be granted to directors, senior officers, employees and consultants of the Company and management company employees. For the purposes of the Stock Option Plan, the terms “employees”, “consultants” and “management company employees” have the meanings set out in TSX Venture Exchange Policy 4.4. In addition, the term “director” is defined in TSX Venture Exchange Policy 4.4 to include directors, senior officers and management company employees.
51
Under the Stock Option Plan, the Company’s board of directors (the “Board”) may, from time to time, designate a director or other senior officer or employee of the Company as administrator (the “Administrator”) for the purposes of administering the Plan. Currently, the Administrator is the Corporate Secretary of the Company.
The Plan provides for the issuance of stock options to acquire at any time up to a maximum of 10% of the issued and outstanding common shares of the Company (subject to standard anti-dilution adjustments). If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Plan. Any stock option outstanding when the Plan is terminated will remain in effect until it is exercised or it expires. The Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:
| (a) | options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death; |
| (b) | options may be exercisable for a maximum of five years from grant date; |
| (c) | options to acquire no more than 5% of the issued shares of the Company may be granted to any one individual in any 12 month period; |
| (d) | options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any 12 month period; |
| (e) | options to acquire no more than an aggregate of 2% of the issued shares of the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any 12 month period; |
| (f) | options held by an option holder who is a director, employee, consultant or management company employee must expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee; |
| (g) | options held by an option holder who is engaged in investor relations activities must expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and |
| (h) | in the event of an option holder’s death, the option holder’s personal representative may exercise any portion of the option holder’s vested outstanding options for a period of one year following the option holder’s death. |
The Stock Option Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate. Stock options granted to directors, senior officers, employees or consultants will vest when granted unless otherwise determined by the Board on a case by case basis, other than stock options granted to consultants performing investor relations activities, which will vest in stages over 12 months with no more than one-fourth of the options vesting in any three month period.
In addition, under the Stock Option Plan a stock option will expire immediately in the event a director or senior officer ceases to be a director or senior officer of the Company as a result of (i) ceasing to meet the qualifications under the Business Corporation Act (British Columbia), (ii) the passing of a special resolution by the shareholders or (iii) an order made by a regulatory authority. A stock option will also expire immediately in the event an employee ceases to be an employee as a result of termination for cause or an employee or consultant ceases to be an employee or consultant as a result of an order made by a regulatory authority.
52
The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in any event will not be less than the discounted market price of the Company’s common shares as of the date of the grant of the stock option (the “Award Date”). The market price of the Company’s common shares for a particular Award Date will typically be the closing trading price of the Company’s common shares on the day immediately preceding the Award Date, or otherwise in accordance with the terms of the Stock Option Plan. Discounted market price means the market price less a discount of up to 25% if the market price is $0.50 or less; up to 20% if the market price is between $2.00 and $0.51; and up to 15% if the market price is greater than $2.00.
In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.
The Stock Option Plan also provides that (a) disinterested shareholder approval will be obtained for any reduction in the exercise price of an option held by an insider of the Company and (b) options cannot be granted to employees, consultants or management company employees that are not bona fide employees, consultants or management company employees, as the case may be.
Common shares will not be issued pursuant to stock options granted under the Stock Option Plan until they have been fully paid for by the option holder. The Company will not provide financial assistance to option holders to assist them in exercising their stock options.
The names and titles of the Directors/Executive Officers of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in Table No. 10 as of 10/10/2007, as well as the number of options granted to Directors and all employees as a group.
Table No. 10
Stock Options Outstanding
| | | | |
| | | | |
| Number of Shares of Common Stock | CDN$ Exer. Price | Grant Date | Expir'n Date |
| Name | | | | |
| Seamus Young | 200,000 | $0.50 | 2/1/2006 | 2/1/2008 |
| | 200,000 | $0.70 | 5/26/2006 | 5/26/2008 |
| | 200,000 | $0.37 | 3/23/2007 | 3/23/2009 |
| | 100,000 | $0.45 | 28/9/2007 | 28/9/2009 |
| | | | | |
| Judith Mazvihwa | 100,000 | $0.50 | 2/1/2006 | 2/1/2008 |
| | 150,000 | $0.70 | 5/26/2006 | 5/26/2008 |
| | 100,000 | $0.37 | 3/23/2007 | 3/23/2009 |
| | 75,000 | $0.45 | 28/9/2007 | 28/9/2009 |
| | | | | |
| Peter Cummings | 100,000 | $0.50 | 2/1/2006 | 2/1/2008 |
| | 150,000 | $0.70 | 5/26/2006 | 5/26/2008 |
| | 100,000 | $0.37 | 3/23/2007 | 3/23/2009 |
| | 150,000 | $0.45 | 28/9/2007 | 28/9/2009 |
| Total Officers/Directors | 1,625,000 | | | |
| Total Employees/Consultants | 2,125,000 | | | |
| Total Officers/Directors/Etc. | 3,750,000 | | | |
| | | | | |
| | | | |
53
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders.
7.A.1.a. Holdings By Major Shareholders.
Refer to ITEM #6.E and Table No. 9.
7.A.1.b. Significant Changes in Major Shareholders’ Holdings.
The participation in private placements of equity by the Company, the exercise of stock options/share purchase warrants, and sales by the individuals has lead over the last several years to some significant changes in the holdings of major shareholders (5%); the table reflects direct/indirect holdings of common shares, refer to Tables #7, #8, #9, #10 for additional information.
| | | | | |
| | Shares Owned | Shares Owned | Shares Owned | Shares Owned |
| | 3/31/2007 | 3/31/2006 | 3/31/2005 | 3/31/2004 |
| Seamus Young | 2,185,889 | 2,132,389 | 2,031,889 | 1,597,889 |
7.A.1.c. Different Voting Rights. The Company’s major shareholders do not have different voting rights.
7.A.2. Canadian Share Ownership. On 10/10/2007, the Company’s shareholders’ list showed 35,110,363 common shares outstanding, with 218 registered shareholders. 50 of these shareholders were U.S. residents, holding 1,705,254 common shares (representing about 4.9% of the issued/outstanding shares)CEDE & Co in the US holds 1,427,360) and 168 registered shareholders were resident in Canada, holding 2,512,560 common shares (representing about 7.2% of the issued/outstanding shares)(CDS in Canada holds 29,465,189 shares).
The Company has researched the indirect holding by depository institutions and other financial institutions; based on this research and other research into the indirect holdings of other institutions, the Company believes that it has approximately 600 beneficial owners of its common shares.
7.A.3. Control of Company. The Company is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents. The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., “History and Growth of the Company”, and ITEM #6.E., “Share Ownership”.
7.A.4. Change of Control of Company Arrangements.
No Disclosure Necessary
54
7.B. Related Party Transactions
Stock-for-Debt Settlement
During Fiscal 2003, the Company issued 427,532 common shares to settle $64,130 of debts including: 160,000 shares to Seamus Young; and 267,532 shares to Donegal Developments Inc. (controlled by Seamus Young).
Funds Owing to/from Seamus Young, President/Director
At 3/31/2007, 3/31/2006, 3/31/2005 and 3/31/2004, respectively, $52,500, $16,111, $14,732 and $54,498 was owing to Mr. Young or companies controlled by him and was included in accounts payable. These amounts are unsecured, non-interest bearing and due on demand.
At 3/31/2007, $150,033 was owed from a company controlled by Mr. Young. The Company extended the funds as a loan to purchase geophysical survey equipment which was used to conduct geophysical surveys over the Company’s mineral properties. The loan is non-interest bearing, unsecured, and due upon demand.
The Company advanced funds to a company controlled by the President to pay for exploration and general administration expenses on behalf of the Company. As of 3/31/2007 total amounts paid by the company controlled by the President and reimbursed by Logan is $233,784 for exploration expenses and $64,377 for general administration expenses; $153,306 was owed by the company controlled by the President for advance payments not yet used on behalf of the Company.
Indirect Payments to Seamus Young, President/Director
During Fiscal 2007/2006/2005, respectively, $175,525, $78,142, $63,600, was paid to private company controlled by Mr. Young as management fees and for supervision of properties.
Properties Acquired From Seamus Young and Family
The Company’s acquisition of the Antler Creek Property was from two individuals, one being the son of the President of the Company. The Company’s acquisition of the Albert Creek Property was from two individuals, one being the President of the Company. Refer to ITEM #4.B.
Other than as disclosed above, there have been no transactions since 3/31/2001, or proposed transactions, which have materially affected or will materially affect the Company in which any director, executive officer, or beneficial holder of more than 10% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest. Management believes the transactions referenced above were on terms at least as favorable to the Company as the Company could have obtained from unaffiliated parties.
7.C. Interests of Experts and Counsel
--- No Disclosure Necessary ---
ITEM 8. FINANCIAL INFORMATION
8.A. Statements and Other Financial Information
The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian GAAP, the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.
The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The audit report of Manning Elliott LLP, independent registered public accounting firm, are included herein immediately preceding the financial statements.
55
Audited Financial Statements:
Fiscal 2007/2006/2005 Ended March 31st
8.A.7. Legal/Arbitration Proceedings
The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.
The Directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.
8.B. Significant Changes
No undisclosed significant change has occurred since the date of the annual financial statements and/or since the date of the most recent interim financial statements.
56
ITEM 9. THE OFFER AND LISTING
9.A. Common Share Trading Information
The Company's common shares trade on the TSX Venture Exchange in Toronto, Ontario, Canada, under the symbol "LGR". The initial public offering was effective on the Vancouver Stock Exchange under the auspices of the British Columbia Securities Commission in 7/26/1992 under a former name, "Consolidated Logan Mines Ltd.”.
Table No. 9 lists the volume of trading and high, low and closing sales prices on the TSX Venture Exchange (Canadian Venture Exchange prior to 8/2/2001 and the Vancouver Stock Exchange prior to November 1999) for actual trades of common shares of the Company for the last six months, last nine fiscal quarters, and last five fiscal years.
Table No. 9
TSX Venture Exchange Common Shares Trading Activity
| | | | | | |
| | | | | | |
| | | | | | |
| Period | | | | Canadian Dollars | - Sales - |
| Ended | Volume | | High | Low | Closing |
| | | | | |
| Monthly | | | | | |
| 9/30/2007 | 2,388,140 | | $0.48 | $0.205 | $0.465 |
| 8/31/2007 | 839,154 | | $0.34 | 0.20 | 0.25 |
| 7/31/2007 | 662,360 | | 0.34 | 0.25 | 0.315 |
| 6/30/2007 | 696,600 | | 0.325 | 0.28 | 0.28 |
| 5/31/2007 | 862,106 | | 0.35 | 0.30 | 0.305 |
| 4/30/2007 | 1,295,340 | | 0.38 | 0.30 | 0.34 |
| 3/31/2007 | 1,399,527 | | 0.36 | 0.265 | 0.31 |
| | | | | |
| Quarterly | | | | | |
| 09/30/2007 | 3,889,654 | | $0.48 | $0.20 | $0.456 |
| 6/30/2007 | 2,854,046 | | $0.38 | $0.28 | $0.28 |
| 3/31/2007 | 5,318,609 | | $0.51 | $0.265 | $0.31 |
| 12/31/2006 | 3,503,756 | | $0.47 | $0.19 | $0.43 |
| 09/30/2006 | 1,118,573 | | $0.45 | $0.24 | $0.24 |
| 6/30/2006 | 2,531,545 | | $0.76 | $0.33 | $0.35 |
| 3/31/2006 | 2,272,746 | | $0.70 | $0.235 | $0.60 |
| 12/31/2005 | 959,828 | | $0.29 | $0.18 | $0.25 |
| 9/30/2005 | 642,730 | | $0.32 | $0.19 | $0.29 |
| 6/30/2005 | 861,687 | | $0.28 | $0.18 | $0.235 |
| 3/31/2005 | 1,017,798 | | $0.30 | $0.20 | $0.225 |
| 12/31/2004 | 2,397,487 | | $0.38 | $0.165 | $0.22 |
| 9/30/2004 | 1,091,406 | | $0.55 | $0.20 | $0.23 |
| 6/30/2004 | 2,877,200 | | $0.63 | $0.29 | $0.42 |
| 3/31/2004 | 3,713,600 | | $0.51 | $0.10 | $0.50 |
| 12/31/2003 | 748,800 | | $0.15 | $0.07 | $0.09 |
| 9/30/2003 | 117,300 | | $0.13 | $0.07 | $0.07 |
| 6/30/2003 | 63,000 | | $0.14 | $0.11 | $0.11 |
| 3/31/2003 | 14,100 | | $0.10 | $0.07 | $0.09 |
| 12/31/2002 | 126,300 | | $0.16 | $0.05 | $0.12 |
| 9/30/2002 | 7,800 | | $0.07 | $0.06 | $0.06 |
| 6/30/2002 | 101,860 | | $0.15 | $0.10 | $0.10 |
| | | | | |
| Yearly | | | | | |
| 3/31/2007 | 12,472,483 | | $0.76 | $0.19 | $0.31 |
| 3/31/2006 | 3,650,118 | | $0.76 | $0.24 | $0.426 |
| 3/31/2005 | 4,736,991 | | $0.65 | $0.18 | $0.291 |
| 3/31/2004 | 330,167 | | $0.51 | $0.14 | $0.50 |
| 3/31/2003 | 48,000 | | $0.12 | $0.10 | $0.10 |
| | | | | | |
| | | | | | |
| 3/31/2002 | 14,200 | | $0.13 | $0.12 | $0.12 |
| | | | | | |
57
The TSX Venture Exchange
The TSX Venture Exchange is a result of the acquisition by the Toronto Stock Exchange of the Canadian Venture Exchange (“CDNX”) from its member firms on 8/1/2001. The CDNX resulted from the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange that took place on 11/29/1999, to form the CDNX. The TSX Venture Exchange currently operates as a complementary but independent exchange from its parent, the Toronto Stock Exchange.
The initial roster of the CDNX was made up of venture companies previously listed on the Vancouver Stock Exchange or the Alberta Stock Exchange and later incorporated junior listings from the Montreal Stock Exchange, the Winnipeg Stock Exchange, and the CDN Over-The-Counter Market. The TSX Venture Exchange is a venture market as compared to the Toronto Stock Exchange that is Canada’s senior market and the Montreal Exchange that is Canada’s market for derivatives products.
The TSX Venture Exchange currently has five service centers: Calgary, Toronto, Vancouver, Winnipeg and Montreal. These service centers provide corporate finance, surveillance and marketing expertise. The corporate office for the TSX Venture Exchange is located in Calgary and the operations office is located in Vancouver.
The TSX Venture Exchange is a self-regulating organization owned and operated by the Toronto Stock Exchange, which in turn is owned by its member brokerage firms. It is governed by representatives of member firms and the public.
Organizationally, the TSX Venture Exchange is comprised of seven business areas: Corporate Finance Services, Trading Services and Market Information Services, Compliance, Marketing, Technology, Corporate Affairs and Human Resources.
The TSX Venture Exchange acts as a business link between TSX members, listed companies and investors. TSX Venture Exchange policies and procedures are designed to accommodate companies still in their formative stages and recognize those that are more established. Listings are predominately small and medium sized companies.
Investors in Canada are protected by the Canadian Investor Protection Fund (“CIPF”). The CIPF is a private trust fund established to protect customers in the event of the insolvency of a member of any of the following self-regulatory organizations: the TSX Venture Exchange; the Montreal Exchange; the Toronto Stock Exchange; the Toronto Futures Exchange; and the Investment Dealers Association of Canada.
Post-trade monitoring of market activity occurs in the market surveillance department. Sophisticated software analyses trade data from TRADETSX to detect possible market improprieties. A variety of surveillance and investigative tools allow the TSX Venture Exchange to perform electronic market monitoring and trade reviews.
The surveillance department is also responsible for monitoring and reviewing listed company activities and detecting breaches of the listing policies or the listing agreement. Market surveillance and listed company surveillance activities are closely coordinated.
58
9.A.5. Common Share Description
Registrar/Common Shares Outstanding/Shareholders
The Company's common shares are issued in registered form and the following information is taken from the records of Computershare Investor Services Inc. (located in Vancouver, British Columbia, Canada), the registrar and transfer agent for the common shares.
Common Share Description
All of the authorized common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets. Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders. Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.
Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities. No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.
Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the Business Corporation Act (British Columbia)(“the BCA”). Unless theBCA or the Company's Articles otherwise provide, any action to be taken by a resolution of the members may be taken by an ordinary resolution or by a vote of a majority or more of the shares represented at the shareholders' meeting.
The Company's Articles and theBCA contain provisions, which require a "special resolution" for effecting certain corporate actions. Such a "special resolution" requires a two-thirds vote of shareholders rather than a simple majority for passage. The principle corporate actions that require a "special resolution" include:
| | a. | Transferring the Company's jurisdiction from British Columbia to another jurisdiction; |
| | b. | Giving financial assistance under certain circumstances; |
| | c. | Disposing of all/substantially all of Company's undertakings; |
| | d. | Removing Director before expiration of his term of office; |
| | e. | Certain alterations of share capital; |
| | f. | Altering any restrictions on the Company's business; and |
| | g. | Certain reorganizations of the Company. |
There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.
59
Flow-Through Common Shares
"Flow-through" shares differ from other shares of common shares in only one aspect being the contractual right of the shareholder to receive certain tax deductions when renounced by the Company under the subscription agreement. In all other respects rights of the shareholder remain unchanged. Companies must specifically identify the expenditures associated with the funds raised through the sale of flow-through shares. Companies raising capital through flow-through shares expend the funds on natural resource/exploration development. The tax benefits (depreciation, amortization, etc.) connected with the expenditures flow through to the shareholder rather than the corporation. These tax benefits are available only to shareholders residing in Canada. Shareholders residing in the United States and other non-Canadian shareholders, receive no tax benefits through the purchase of flow-through shares.
Stock Options
Refer to ITEM 6.E. and Table No. #7 for additional information.
Warrants
Table No. 10 lists, as of 10/09/2007, warrants outstanding, the date the warrants were issued, the exercise price, and the expiration date of the warrants. As of 10/09/2007, the Company was aware of approximately 50 holders of its 4,915,000 warrants. These warrants are non-transferable.
Table No. 10
Warrants Outstanding
| | | | | |
| | | | | |
| Effective Date of Issuance | Number of Share Purchase Warrants
Originally Issued | Number of Share Purchase Warrants
Still Outstanding | Excercise Price
Year #1 Year #2 | Expiration Date of
Share Purchase Warrants |
| 4/25/2006 | 3,125,000 | 3,125,000 | $0.70 | 10/26/2007 |
| 4/25/2006 | 625,000 | 625,000 | $0.70 | 10/26/2007 |
| 5/01/2006 | 500,000 | 500,000 | $0.70 | 10/26/2007 |
| 4/25/2006 | 222,500 | 222,500 | $0.70 | 11/01/2007 |
| 12/22/2006 | 317,500 | 317,500 | $0.60 | 12/21/2007 |
| 12/22/2006 | 125,000 | 125,000 | $0.60 | 12/21/2007 |
| | | | | |
9.A.6. Differing Rights
9.A.7.a. Subscription Warrants/Right
9.A.7.b. Convertible Securities/Warrants
--- No Disclosure Necessary ---
9.C. Markets
The common shares trade on the TSX Venture Exchange in Toronto, Ontario. Refer to ITEM #9.A.4.
60
ITEM 10. ADDITIONAL INFORMATION
10.A. Share Capital
10.A.1. Authorized/Issued Capital.
10.A.2. Shares Not Representing Capital. 10.A.3. Shares Held By Company.
10.A.4. Stock Options/Share Purchase Warrants 10.A.5. Stock Options/Share Purchase Warrants 10.A.6. History of Share Capital10.A.7. Resolutions/Authorizations/Approvals
--- No Disclosure Necessary ---
10.B. Notice of Articles and Articles
The Company is incorporated under the laws of British Columbia and is governed under the Business Corporations Act (British Columbia)(“the BCA”). The Company was originally incorporated as a specially limited company, but under a special resolution passed May 20, 1992, the Company was changed to a limited company under the former Company Act.
The Articles of the Company do not address the Company’s objects and purposes and there are no restrictions on the business the Company may carry on in the Articles.
A Director shall disclose his interest in and not vote in respect of the approval of any contract or transaction with the Company in which he is interested, but he shall be counted in the quorum present at the meeting at which the vote is taken.
Part 8 of the Articles details the Directors’ borrowing powers. The Directors may from time to time in behalf of the Company:
| | (a) | Borrow money in a manner and amount, on any security, from any source and upon any terms and conditions; |
| | (b) | Issue bonds, debentures, and other debt obligations either outright or as security for any liability or obligation of the Company or any other person; |
| | (c) | Guarantee the repayment of money by any other person or the performance of any obligation by any other person; and |
| | (d) | Mortgage or charge, whether by way of specific or floating charge, or give other security on the undertaking, or on the whole or any part of the property and assets, of the Company (both present and future). |
There are no age considerations pertaining to the retirement or non-retirement of directors. The Directors may remove from office a Director who is convicted of an indictable offense.
A Director shall not be required to hold a share in the capital of the Company as qualification for his office but shall be qualified as required by the BCA, to become or act as a Director.
A Director may hold any office or place of profit with the Company in conjunction with his office of Director for such period and on such terms as the Directors may determine and no Director or intended Director shall be disqualified by his office from contracting with the Company. A Director or his firm may act in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.
Subject to provisions of the BCA, the Company shall indemnify a Director, or former Director, of the Company and the Company may indemnify a Director or former Director of a corporation of which the Company is or was a shareholder and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid to settle an action or
61
satisfy a judgment, actually and reasonably incurred by him or them, by reason of his being or having been a Director of the Company or a director of such corporation, including any action brought by the Company or any such corporation. The Directors may cause the Company to indemnify any officer, employee or agent of the Company, or of a corporation of which the Company is or was a shareholder and his heirs and personal representatives, against all costs, charges and expenses whatsoever incurred by him or them and resulting from his acting as an officer, employee or agent of the Company or such corporation. The Company shall indemnify the Secretary and Assistant Secretary of the Company and his heirs and legal representatives against all charges, costs and expenses whatsoever incurred by them and arising out of the functions assigned to the Secretary by the BCA or the Company’s Articles. The failure of a Director or officer of the Company to comply with the provisions of the BCA or of the Articles shall not invalidate any indemnity to which he is entitled under the Articles.
All of the authorized common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets. Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders. Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.
Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities. No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.
Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the BCA. Unless the BCA or the Company's Articles otherwise provide, any action to be taken by a resolution of the members may be taken by an ordinary resolution or by a vote of a majority or more of the shares represented at the shareholders' meeting.
There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.
There is no liability to further capital calls by the Company.
There are no provisions discriminating against any existing or prospective holder of securities as a result of such shareholder owning a substantial number of shares.
The rights of holders of the Company’s stock can only be altered by a Special Shareholders’ meeting.
Under the BCA, the first annual general meeting shall be held within 18 months from the date the BCA came into force (29 March, 2004) and the following annual general meetings shall be held once in every calendar year at a time, not being more than 13 months after the holding of the last preceding annual general meeting, and at a place as the Directors shall appoint. In default of the meeting being held, the meeting shall be called by any two members in the same manner as nearly as possible as that in which meetings are to be called by the Directors.
The Directors may, whenever they think fit, convene a general meeting. A general meeting, if requisitioned in accordance with the BCA, shall be convened by the Directors or, if not convened by the Directors, may be convened by a group as provided in the BCA.
62
Not less than 21 days’ notice of any general meeting specifying the time and place of meeting and in case of special business, the general nature of that business shall be given in the manner mentioned in Article 10.4, or in such other manner, if any, as may be prescribed by ordinary resolution whether previous notice has been given or not, to any person as may by law or under the Articles or other regulations of the Company entitled to receive the notice from the Company. But the accidental omission to give notice of any meeting to, or the non-receipt of any notice, by any person shall not invalidate any proceedings at that meeting.
Persons entitled to notice of a general meeting may waive or reduce the period of notice convening the meeting, by unanimous consent in writing, and may give such waiver before, during or after the meeting.
There are no limitations on the rights to own securities.
There is no provision of the Company’s articles of association, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).
Shareholder ownership must be disclosed to the British Columbia Securities Commission and the TSX Venture Exchange by any shareholder who owns more than 10% of the Company’s common stock.
10.C. Material Contracts
A Management Agreement with Seamus Young, dated 2/1/2002 and updated January 2006.
10.D. Exchange Controls
Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10, “Taxation” below.
Restrictions on Share Ownership by Non-Canadians
There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.
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10.E Taxation
The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of theIncome Tax Act (Canada) (the "Act") and theCanada – United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.
U.S. Holders are urged to consult their own tax advisors with respect to their particular circumstances.
Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares. The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.
In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada. For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.
The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended 3/31/2007 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.
64
10.F. Dividends and Paying Agents
The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.
Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for nonresident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders. The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.
| 10.G. Statement by Experts | --- No Disclosure Necessary --- |
| 10.H. Documents on Display | --- No Disclosure Necessary --- |
| ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
--- No Disclosure Necessary --- |
| ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
| 12.A. Debt Securities | --- No Disclosure Necessary --- |
| 12.B. Warrants and Rights | --- No Disclosure Necessary --- |
| 12.C. Other Securities | --- No Disclosure Necessary --- |
| 12.D. American Depository Shares | --- No Disclosure Necessary --- |
65
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
--- No Disclosure Necessary ---
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS --- No Disclosure Necessary ---
ITEM 15. CONTROLS AND PROCEDURES
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” [as defined in the Exchange Act Rule 13a-15(e)] as of the end of the period covered by this report. Based upon that evaluation, the President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings, and that information is recorded, processed, summarized and reported as and when required.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
There was no significant change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal year ended 3/31/2007 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Nor were there any significant deficiencies or material weaknesses in the Company's internal controls requiring corrective actions.
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Company has determined that Peter Cummings, CA qualifies as an “audit committee financial expert” serving on its audit committee and that Mr. Cummings is independent, under applicable definitions. The Company’s Audit Committee consists of two independent directors and the Corporate Secretary of the Company, all of whom are both financially literate and very knowledgeable about the Company’s affairs.
ITEM 16B. CODE OF ETHICS
The Company has not adopted a written ”code of ethics” that meets the new United States' Sarbanes-Oxley standards; the Board of Directors believes that existing Canadian standards and procedures is adequate for its purposes. The Company has not seen any need to adopt a written code of ethics on the basis that its corporate culture effectively deters wrongdoing and promotes honest and ethical conduct, full, fair and accurate, timely, and understandable disclosure in reports and documents, the compliance with applicable governmental laws, rules and regulations; prompt internal reporting.
66
Item 16C. PRINCIPAL ACCOUNTIING FEES AND SERVICES
The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.
The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy/procedure. The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.
In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by Manning Elliott, including audit services, audit related services, tax services and other services. The procedure requires that all proposed engagements of Manning Elliott for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.
Fees, including reimbursements for expenses, for professional services rendered by Manning Elliott LLP to the Company were:
| | | | |
| Fiscal Year ended March 31, 2007 and 2006 | Fiscal Year 2007 | | Fiscal Year 2006 |
| Principal Accountant Fees and Services | | | |
|
| Audit Fees | $20,078 | | $15,675 |
| Audit Related Fees | $2,485 | | $0 |
| Tax Fees | $2,422 | | $3,000 |
| All Other Fees | $0 | | $0 |
| | | | |
| Total | $25,350 | | $18,675 |
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
--- No Disclosure Necessary ---
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
--- No Disclosure Necessary ---
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PART III
ITEM 17. FINANCIAL STATEMENTS
The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.
The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The audit report of Manning Elliott LLP, independent Chartered Accountants, is included herein immediately preceding the audited financial statements.
Audited Financial Statements
Auditor's Report, dated 06/21/2007
Balance Sheets at 03/31/2007 and 03/31/2006
Statements of Operations and Deficit for the fiscal years ended 03/31/2007, 03/31/2006 and 03/31/2005
Statements of Cash Flows
for the fiscal years ended 03/31/2007, 03/31/2006 and 03/31/2005
Notes to Financial Statements
ITEM 18. FINANCIAL STATEMENTS
The Company has elected to provide financial statements pursuant to ITEM # 17.
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| |
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| |
| Financial Statements |
| |
| For the Years Ended |
| |
| March 31, 2007, 2006 and 2005 |
| |
| (Expressed in Canadian Dollars) |
| |
69
Auditors’ Report
To the Shareholders of
Logan Resources Ltd.
(An Exploration Stage Company)
We have audited the balance sheets of Logan Resources Ltd. (An Exploration Stage Company) as at March 31, 2007 and 2006 and the statements of operations and deficit and cash flows for the years ended March 31, 2007, 2006 and 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial positions of the Company as at March 31, 2007 and 2006 and the results of its operations and its cash flows for the years ended March 31, 2007, 2006 and 2005 in accordance with Canadian generally accepted accounting principles.
/s/ “Manning Elliott LLP”
CHARTERED ACCOUNTANTS
Vancouver, Canada
June 21, 2007
Comments by Auditors on Canada – United States Reporting Differences
The standards of the Public Company Accounting Oversight Board (United States) require the addition of an explanatory paragraph when the financial statements are affected by conditions and events that cast substantial doubt on the Company’ ability to continue as a going concern, such as those described in Note 1 to the financial statements. Although we conducted audits in accordance with both Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States), our report to the shareholders dated June 21, 2007 is expressed in accordance with Canadian reporting standards which do not permit a reference to such conditions and events in the auditor’s report when these are adequately disclosed in the financial statements.
/s/ “Manning Elliott LLP”
CHARTERED ACCOUNTANTS
Vancouver, British Columbia
June 21, 2007
70
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Balance Sheets |
| As at March 31, 2007 and 2006 |
| (Expressed in Canadian Dollars) |
| | 2007 | 2006 |
| | $ | $ |
| Assets | | |
| Current Assets | | |
| Cash | 923,763 | 265,565 |
| Cash committed for mineral exploration | – | 250,940 |
| Short-term investments | 160,259 | 50,000 |
| Short-term investments committed for mineral exploration | 1,839,741 | – |
| Marketable securities [Note 2[e]] | 87,080 | 75,000 |
| Amounts receivable | 399,278 | 96,309 |
| Prepaid expenses | 492,683 | 1,667 |
| Due from related parties [Note 9[b]] | 303,339 | – |
| | 4,206,143 | 739,481 |
| Property Bonds | 5,000 | 5,000 |
| Property and Equipment [Note 3] | 38,284 | 31,450 |
| Mineral Properties [Note 4] | 4,124,379 | 1,703,741 |
| | 8,373,806 | 2,479,672 |
| | | |
| Liabilities | | |
| Current Liabilities | | |
| Accounts payable and accrued liabilities | 103,739 | 46,247 |
| Due to related parties [Note 9[c]] | 53,254 | 134,020 |
| | 156,993 | 180,267 |
| | | |
| Shareholders' Equity | | |
| Share Capital [Note 5] | 10,705,182 | 6,370,101 |
| Share Subscriptions Receivable [Note 9[d]] | – | (177,000) |
| Contributed Surplus [Note 8] | 808,555 | 296,818 |
| Deficit | (3,296,924) | (4,190,514) |
| | 8,216,813 | 2,299,405 |
| | 8,373,806 | 2,479,672 |
Nature of Operations and Continuance of Business [Note 1]
Commitments [Note 12]
Subsequent Events [Note 13]
Approved on behalf of the Board:
| /s/ “Seamus Young” | /s/ “Judith Mazvihwa” |
| Seamus Young, Director | Judith Mazvihwa, Director |
The Accompanying Notes are an Integral Part of the Financial Statements
71
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Statements of Operations and Deficit |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| | 2007 | 2006 | 2005 |
| | $ | $ | $ |
| | | | |
| Revenue | – | – | – |
| Expenses | | | |
| Administration salaries | 128,715 | 85,560 | 88,225 |
| Amortization | 12,372 | 4,380 | 624 |
| Management fees [Note 9[a]] | 112,500 | 42,500 | 31,770 |
| Office, rent and telephone [Note 9[a]] | 100,619 | 59,841 | 38,045 |
| Professional fees | 95,519 | 48,634 | 44,673 |
| Stock-based compensation | 217,568 | 110,842 | 265,943 |
| Transfer agent and regulatory fees | 27,041 | 28,649 | 28,902 |
| Travel and promotion | 305,036 | 175,496 | 109,077 |
| | | | |
| | 999,370 | 555,902 | 607,259 |
| Loss Before Other Income (Expense) | (999,370) | (555,902) | (607,259) |
| Other Income (Expense) | | | |
| Gain on option of mineral property | 32,750 | 9,000 | 40,316 |
| Gain on sale of marketable securities | 377,884 | 82,931 | – |
| Interest income | 138,297 | 6,436 | 554 |
| Impairment loss on mineral properties | – | – | (1,320) |
| Impairment loss on marketable securities | – | – | (3,500) |
| | 548,931 | 98,367 | 36,050 |
| Net Loss Before Income Taxes | (450,439) | (457,535) | (571,209) |
| Income Taxes | | | |
| Income tax recovery [Note 10] | 1,344,029 | 277,925 | – |
| Net Income (Loss) for the Year | 893,590 | (179,610) | (571,209) |
| Deficit, Beginning of Year | (4,190,514) | (4,010,904) | (3,439,695) |
| | | | |
| Deficit, End of Year | (3,296,924) | (4,190,514) | (4,010,904) |
| | | | |
| Net Income (Loss) per share - Basic and Diluted | 0.03 | (0.01) | (0.03) |
| | | | |
| Weighted Average Shares Outstanding | 31,646,000 | 18,757,000 | 13,692,600 |
The Accompanying Notes are an Integral Part of the Financial Statements
72
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Statements of Cash Flows |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| | 2007 | 2006 | 2005 |
| | | | |
| Operating Activities | | | |
| Net income (loss) for the year | 893,590 | (179,610) | (571,209) |
| Items not involving cash: | | | |
| Amortization | 12,372 | 4,380 | 624 |
| Future income tax recovery | (1,344,029) | (277,925) | |
| Gain on sale of marketable securities | (377,884) | (82,931) | |
| Gain on option of mineral property | (32,750) | (9,000) | (40,316) |
| Impairment loss on marketable securities | | | 3,500 |
| Impairment loss on mineral properties | | | 1,320 |
| Stock-based compensation | 217,568 | 110,842 | 265,943 |
| Changes in non-cash working capital items | | | |
| Amounts receivable | (91,488) | 3,158 | (10,102) |
| Prepaid expenses | (491,016) | 155 | (1,822) |
| Accounts payable and accrued liabilities | 57,492 | 16,107 | (77,197) |
| Due to (from) related parties | (384,105) | 182,645 | (115,125) |
| Net Cash Used In Operations | (1,540,250) | (232,179) | (544,384) |
| | | | |
| Investing Activities | | | |
| Purchase of short-term investments | (1,950,000) | (50,000) | |
| Proceeds on sale of marketable securities | 418,804 | 101,131 | |
| Purchase of marketable securities | (10,000) | (17,200) | |
| Acquisition of property and equipment | (19,206) | (32,841) | (3,416) |
| Acquisition of and expenditures on mineral properties | (2,275,470) | (715,377) | (479,892) |
| Mineral exploration tax credits received | | 23,724 | |
| Mineral property option proceeds | | 100,000 | 25,000 |
| | | | |
| Net Cash Used In Investing Activities | (3,835,872) | (590,563) | (458,308) |
| | | | |
| Financing Activities | | | |
| Proceeds from issuance of shares | 5,801,350 | 970,775 | 1,266,182 |
| Share issuance costs | (194,970) | (16,937) | (7,280) |
| Subscriptions received | 177,000 | | |
| | | | |
| Net Cash Provided by Financing Activities | 5,783,380 | 953,838 | 1,258,092 |
| Increase in Cash and Cash Equivalents | 407,258 | 131,096 | 255,400 |
| | | | |
| Cash and Cash Equivalents - Beginning of Year | 516,505 | 385,409 | 130,009 |
| | | | |
| Cash and Cash Equivalents - End of Year | 923,763 | 516,505 | 385,409 |
| | | | |
| Cash and Cash Equivalents consists of: | | | |
| Cash | 923,763 | 265,565 | 150,353 |
| Cash committed for mineral exploration | | 250,940 | 235,056 |
| | | | |
| | 923,763 | 516,505 | 385,409 |
| Non-cash Investing and Financing Activities | | | |
| Marketable securities received pursuant to a mineral property option | | | |
| agreement | 43,000 | 12,500 | 67,000 |
| Issuance of shares for finders’ fees | 233,750 | 30,750 | 18,580 |
| Issuance of agent warrants for finders’ fees | 266,685 | | |
| Issuance of shares pursuant to mineral property option agreements | 285,000 | 126,000 | 62,500 |
| Supplemental Disclosures | | | |
| Interest paid | | | |
| Income tax paid | | | |
The Accompanying Notes are an Integral Part of the Financial Statements
73
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 1. | Nature of Operations and Continuance of Business |
The Company is in the business of acquiring and exploring mineral properties. There has been no determination whether properties held contain ore reserves, which are economically recoverable. In the ordinary course of business, the Company sells or options its mineral property interests to third parties, accepting as consideration cash and/or securities of the acquiring party.
The recoverability of valuations assigned to mineral properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the properties, the ability to obtain necessary financing to complete development, and future profitable production or proceeds from disposition.
The company incurred a net loss before income taxes of $450,439 during the year ended March 31, 2007 (2006 - $457,535) and had a deficit of $3,296,924 at March 31, 2007 (2006 - $4,190,514) which has been funded primarily by the issuance of equity. The Company’s ability to continue its operations and to realize assets at their carrying values is dependent upon the continued support of its shareholders, obtaining additional financing, and generating revenues sufficient to cover its operating costs.
These financial statements have been prepared on the going concern basis, which assumes that the Company will be able to continue as a going concern and realize its assets and discharge its liabilities in the normal course of business, and do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. Management is of the opinion that sufficient working capital will be obtained from operations or external financing to meet the Company’s liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company.
| 2. | Significant Accounting Policies |
| | [a] | Basis of presentation |
| | | |
| | | The financial statements of the Company are prepared in accordance with Canadian generally accepted accounting principles. |
| | | |
| | [b] | Use of estimates |
| | | |
| | | The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses for the period reported. Actual results could differ from those estimates. Significant areas requiring the use of management estimates relate to impairment of mineral properties, valuation allowance for future income tax assets and stock-based compensation. |
| | | |
| | [c] | Cash and cash equivalents |
| | | |
| | | The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. |
| | | |
| | [d] | Short-term investments |
| | | |
| | | Short-term investments consist of highly liquid short-term interest bearing securities with a term to maturity of greater than three months on the date of purchase. Short-term investments are recorded at the lower of cost plus accrued interest or fair market value. |
74
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 2. | Significant Accounting Policies(continued) |
Marketable securities are recorded at the lower of cost or fair market value. The carrying amount is reduced to market value when the decline in value is other than temporary. As at March 31, 2007, the fair market value of the securities held was $277,010 (March 31, 2006 - $440,600).
| | [f] | Property and equipment |
Property and equipment is recorded at cost, less accumulated amortization. Amortization is calculated on a straight-line basis over their estimated useful lives at the following annual rates:
| | Automotive | 33% |
| | Computer equipment | 25% |
| | Field equipment | 25% |
| | Office furniture and equipment | 20% |
All costs related to the acquisition, exploration and development of mineral properties are capitalized. Upon commencement of commercial production, the related accumulated costs are amortized against future income of the project using the unit of production method over estimated recoverable ore reserves. Management periodically assesses carrying values of non-producing properties and if management determines that the carrying values cannot be recovered or the carrying values are related to properties that are allowed to lapse, the unrecoverable amounts are expensed.
The recoverability of the carried amounts of mineral properties is dependent on the existence of economically recoverable ore reserves and the ability to obtain the necessary financing to complete the development of such ore reserves and the success of future operations. The Company has not yet determined whether any of its mineral properties contains economically recoverable reserves. Amounts capitalized as mineral properties represent costs incurred to date, less write-downs and recoveries, and does not necessarily reflect present or future values.
When options are granted on mineral properties or properties are sold, proceeds are credited to the cost of the property. If no future capital expenditure is required and proceeds exceed costs, the excess proceeds are reported as a gain.
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Financial instruments are comprised of cash and cash equivalents, short-term investments, marketable securities, amounts receivable, accounts payable and accrued liabilities, and due from and to related parties. The fair values of these balance sheet items approximate their carrying values due to the short-term maturity of those instruments except for marketable securities. The fair value of marketable securities is based on the quoted market values. The Company is not exposed to significant interest rate, currency exchange rate or credit risk arising from these financial instruments. The Company is not party to any derivative instruments.
75
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 2. | Significant Accounting Policies(continued) |
| | [j] | Asset retirement obligations |
| | | |
| | | The Company follows the recommendations of the CICA Handbook Section 3110, with respect to asset retirement obligations. This standard requires liability recognition for retirement obligations associated with the Company’s resource properties. The standard requires the Company to recognize the fair value of the liability for an asset retirement obligation in the period in which it is incurred and record a corresponding increase in the carrying value of the related long-lived asset. Fair value is estimated using the present value of the estimated future cash outflows. The liability is subsequently adjusted for the passage of time, and is recognised as an accretion expense in the statements of operations. The increase in the carrying value of the asset is amortized on the same basis as the resource properties. At March 31, 2007 and 2006 the Company did not have any asset retirement obligations. |
| | | |
| | [k] | Income taxes |
| | | |
| | | The Company follows the asset and liability method of accounting for income taxes. Future income tax assets and liabilities are determined based on temporary differences between the accounting and tax bases of existing assets and liabilities, and are measured using the tax rates expected to apply when these differences reverse. The effect on future taxes for a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against any future tax asset if it is more likely than not that the asset will not be realized. |
| | | |
| | [l] | Flow-through shares |
| | | |
| | | The Company follows the recommendations of EIC 146 with respect to flow-through shares. Canadian tax legislation permits a company to issue securities referred to as flow-through shares whereby the Company assigns the tax deductions arising from the related resource expenditures to the shareholders. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, a future income tax liability is recognized and the share capital is reduced. |
| | | |
| | | If the Company has sufficient unrecognized tax loss carryforwards or other future income tax assets to offset all or part of this future income tax liability and no future income tax assets have been previously recognized for these future income tax assets, a portion of such unrecognized losses is recorded as tax recovery up to the amount of the future income tax liability that would otherwise have been recognized on the renounced expenditures. |
| | | |
| | [m] | Stock-based compensation |
| | | |
| | | The Company applies the fair value method to stock-based payments to all awards that are direct awards of stock, that call for settlement in cash or other assets or are stock appreciation rights that call for settlement by the issuance of equity instruments. Compensation expense for stock options granted is recognized over the applicable vesting period with a corresponding increase in contributed surplus. Agents’ warrants issued in connection with common share placements are recorded as share issuance costs with a corresponding increase in contributed surplus. When the options and warrants are exercised, the exercise price proceeds together with the amount initially recorded in contributed surplus are credited to share capital. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based compensation. |
| | | |
| | [n] | Income (loss) per share |
| | | |
| | | Basic income (loss) per share is computed using the weighted average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted income (loss) per share. The existence of warrants and options affects the calculation of income (loss) per share on a fully diluted basis. As the effect of this dilution is to increase the reported income per share and reduce the reported loss per share, basic and diluted loss are the same. |
76
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 2. | Significant Accounting Policies(continued) |
| | [o] | Comparative figures |
| | | |
| | | Certain of the prior year’s figures have been reclassified to conform to the current year’s presentation. Such reclassification is for presentation purpose only and has no effect on previously reported results. |
| | | | | 2007 | 2006 |
| | | | Accumulated | Net Carrying | Net Carrying |
| | | Cost | Amortization | Value | Value |
| | | $ | $ | $ | $ |
| | | | | | |
| | Automotive | 15,836 | 5,734 | 10,102 | 15,328 |
| | Computer equipment | 3,254 | 2,541 | 713 | 1,526 |
| | Field equipment | 22,216 | 4,282 | 17,934 | 1,881 |
| | Office furniture and equipment | 12,438 | 4,287 | 8,151 | 10,639 |
| | Software | 2,769 | 1,385 | 1,384 | 2,076 |
| | | | | | |
| | | 56,513 | 18,229 | 38,284 | 31,450 |
Acquisition costs and exploration expenditures incurred during the year on the properties are as follows:
| | | Acquisition | Exploration | Total | Total |
| | | Costs | Expenditures | 2007 | 2006 |
| | | $ | $ | $ | $ |
| | | | | | |
| | Albert Creek Property [[a] below] | | | | |
| | Beginning of year | 40,757 | 139,104 | 179,861 | 182,058 |
| | Incurred during the year | – | 7,849 | 7,849 | 97,803 |
| | Option payments received | – | – | – | (100,000) |
| | METC claim | – | (40) | (40) | – |
| | | | | | |
| | End of year | 40,757 | 146,913 | 187,670 | 179,861 |
| | | | | | |
| | Antler Creek Property [[b] below] | | | | |
| | Beginning of year | 28,773 | 33,779 | 62,552 | 57,672 |
| | Incurred during the year | – | 24,483 | 24,483 | 4,880 |
| | METC claim | – | (1,441) | (1,441) | – |
| | | | | | |
| | End of year | 28,773 | 56,821 | 85,594 | 62,552 |
| | | | | | |
| | Carswell Property [[c] below] | | | | |
| | Beginning of year | – | – | – | – |
| | Incurred during the year | – | 10,250 | 10,250 | 3,500 |
| | Option payments received | – | (43,000) | (43,000) | (12,500) |
| | Gain on option payments received | – | 32,750 | 32,750 | 9,000 |
| | | | | | |
| | End of year | – | – | – | – |
77
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | | Acquisition | Exploration | Total | Total |
| | | Costs Expenditures | 2007 | 2006 |
| | | $ | $ | $ | $ |
| | Cheyenne Property [[d] below] | | | | |
| | Beginning of year | 91,055 | 22,080 | 113,135 | – |
| | Incurred during the year | 157,800 | 137,162 | 294,962 | 113,135 |
| | METC claim | – | (12,175) | (12,175) | – |
| | End of year | 248,855 | 147,067 | 395,922 | 113,135 |
| | | | | | |
| | Heidi Property [[e] below] | | | | |
| | Beginning of year | 229,451 | 70,053 | 299,504 | 188,719 |
| | Incurred during the year | 141,053 | 711,299 | 852,352 | 111,815 |
| | METC claim | – | (81,477) | (81,477) | (1,030) |
| | End of year | 370,504 | 699,875 | 1,070,379 | 299,504 |
| | Redford Property [[f] below] | | | | |
| | Beginning of year | 32,288 | 260,293 | 292,581 | 292,331 |
| | Incurred during the year | – | 2,363 | 2,363 | 250 |
| | End of year | 32,288 | 262,656 | 294,944 | 292,581 |
| | Shell Creek Property [[g] below] | | | | |
| | Beginning of year | 305,031 | 451,077 | 756,108 | 326,643 |
| | Incurred during the year | 117,050 | 1,005,650 | 1,122,700 | 509,994 |
| | METC claim | – | (115,234) | (115,234) | (80,529) |
| | End of year | 422,081 | 1,341,493 | 1,763,574 | 756,108 |
| | | | | | |
| | May Creek Property [[h] below] | | | | |
| | Beginning of year | – | – | – | – |
| | Incurred during the year | 78,000 | 11,925 | 89,925 | – |
| | METC claim | – | (1,114) | (1,114) | – |
| | End of year | 78,000 | 10,811 | 88,811 | – |
| | Turn River Property [[i] below] | | | | |
| | Beginning of year | – | – | – | – |
| | Incurred during the year | 237,485 | – | 237,485 | – |
| | End of year | 237,485 | – | 237,485 | – |
| | Total | 1,458,743 | 2,665,636 | 4,124,379 | 1,703,741 |
| | [a] | Albert Creek Property (Liard Mining Division, B.C.) |
Pursuant to an option agreement with two individuals, including the President of the Company, the Company owns the right to earn a 100% interest, subject to a 2% net smelter royalty (“NSR”), in eleven mineral claims (159 units). This option (as amended on April 15, 2004) is exercisable in three stages. The first stage (51%) has been completed by paying $10,000 of out-of-pocket staking costs (paid by issuing 100,000 shares at $0.10 per share) and incurring $75,000 of exploration expenditures. The second stage (24%) has been completed by issuing 240,000 shares at a fair value of $0.10 per share, and incurring a further $100,000 of exploration expenditures. The third stage (25%), was completed subsequent to year-end [Note 13[b]] by issuing 360,000 shares.
78
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | [a] | Albert Creek Property (Liard Mining Division, B.C.) (continued) |
The Company has the right to acquire 50% of the NSR by paying $1,000,000 to the Optionors by September 30, 2008.
| | [b] | Antler Creek Property (Cariboo Mining Division, B.C.) |
The Antler Creek property consists of 49 claims representing 64 units. The Company holds a 100% interest in the property, subject to a 2% NSR, held by two individuals, including the son of the President of the Company.
| | [c] | Carswell Property (Saskatchewan) |
In fiscal 2005, the Company staked 2 claims covering a total area of 7,552 hectares on the Carswell Dome Formation, Saskatchewan.
Pursuant to an option agreement dated March 2, 2005, the Company granted an option to a third party to earn a 50% interest in the Carswell Property.
To earn this interest the optionee paid $25,000 cash and must issue 200,000 of its shares and incur a total of $300,000 in exploration expenditures as follows:
Share considerations to be received from optionee:
| | [i] | 100,000 shares to be issued upon acceptance of the Option Agreement by the TSX Venture Exchange (issued); |
| | [ii] | a further 50,000 shares to be issued on or before March 14, 2006 (issued) and |
| | [iii] | a further 50,000 shares to be issued on or before March 14, 2007 (issued). |
Exploration expenditures to be incurred:
| | [i] | $25,000 on or before March 14, 2006 (incurred); |
| | [ii] | a further $50,000 on or before March 14, 2007 |
| | [iii] | a further $75,000 on or before March 14, 2008 and |
| | [iv] | a further $150,000 on or before March 14, 2009. |
Upon completion of the above expenditures a joint venture will be entered into between the parties.
| | [d] | Cheyenne Property (Mayo Mining District, Yukon Territory) |
The Cheyenne property consists of 364 mineral claims in the Mayo Mining District, Yukon Territory. The Company holds a 100% interest in the property, subject to a 2% NSR. In order to exercise the option the Company must pay $300,000, issue 1,000,000 common shares and incur $500,000 of exploration expenditures, all in stages over a period of four years as follows:
Cash considerations to be made:
| | [i] | $10,000 upon acceptance of the Option Agreement by the TSX Venture Exchange (paid); |
| | [ii] | a further $40,000 paid on or before June 21, 2006 (paid); |
| | [iii] | a further $50,000 paid on or before December 23, 2006 (paid); |
| | [iv] | a further $60,000 to be paid on or before December 23, 2007; |
| | [v] | a further $70,000 to be paid on or before December 23, 2008; and |
| | [vi] | a further $70,000 to be paid on or before December 23, 2009. |
79
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | [d] | Cheyenne Property (Mayo Mining District, Yukon Territory) (continued) |
Share considerations to be made:
| | [i] | 200,000 shares within 5 days of TSX Venture Exchange approval (issued); |
| | [ii] | 200,000 shares issued on or before December 23, 2006 (issued); |
| | [iii] | 200,000 shares on or before December 23, 2007; |
| | [iv] | 200,000 shares on or before December 23, 2008; and |
| | [v] | 200,000 shares on or before December 23, 2009. |
Exploration expenditures to be incurred:
| | [i] | $100,000 in 2007 (incurred); |
| | [ii] | $100,000 in 2008; |
| | [iii] | $150,000 in 2009; and |
| | [iv] | $150,000 in 2010. |
The Company will have the right to purchase 50% of the NSR retained by the optionor prior to the Commercial Production Date, for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.
If the property is not in production by March 1, 2015, advance royalty payments will be made as follows:
| | [i] | $25,000 on March 1, 2015; |
| | [ii] | $25,000 on March 1, 2016; |
| | [iii] | $25,000 on March 1, 2017; and |
| | [iv] | $25,000 on March 1, 2018. |
| | [e] | Heidi Property (Mayo Mining District, Yukon Territory) |
The Heidi property consists of 54 mineral claims in the Mayo Mining District, Yukon Territory. A total of 34 claims were acquired through staking and the remaining 20 are held pursuant to an option agreement dated April 8, 2003 that gives the Company the right to acquire a 100% interest, subject to a 2% NSR. In order to exercise the option, the Company must pay a total of $180,000 cash consideration, issue a total of 1,000,000 shares and incur exploration expenditures aggregating $600,000 as follows:
Cash considerations to be made:
| | [i] | $15,000 paid upon acceptance of the Option Agreement by the TSX Venture Exchange (paid); |
| | [ii] | a further $10,000 paid on or before July 15, 2003 (paid); |
| | [iii] | a further $15,000 paid on or before January 15, 2004 (paid); |
| | [iv] | a further $15,000 paid on or before July 15, 2004 (paid); |
| | [v] | a further $17,500 paid on or before January 15, 2005 (paid); |
| | [vi] | a further $17,500 paid on or before July 15, 2005 (paid); |
| | [vii] | a further $20,000 paid on or before January 15, 2006 (paid); |
| | [viii] | a further $20,000 paid on or before July 15, 2006 (paid); |
| | [ix] | a further $25,000 paid on or before January 15, 2007 (paid); and |
| | [x] | a further $25,000 to be paid on or before July 15, 2007. |
80
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | [e] | Heidi Property (Mayo Mining District, Yukon Territory) (continued) |
Share considerations to be made:
| | [i] | 100,000 shares issued upon acceptance of the Option Agreement by the TSX Venture Exchange (issued); |
| | [ii] | 100,000 shares issued on or before July 15, 2003 (issued); |
| | [iii] | 50,000 shares issued on or before January 15, 2004 (issued); |
| | [iv] | 50,000 shares issued on or before July 15, 2004 (issued); |
| | [v] | 100,000 shares issued on or before January 15, 2005 (issued); |
| | [vi] | 100,000 shares issued on or before July 15, 2005 (issued); |
| | [vii] | 100,000 shares issued on or before January 15, 2006 (issued); |
| | [viii] | 100,000 shares issued on or before July 15, 2006 (issued); |
| | [ix] | 150,000 shares issued on or before January 15, 2007 (issued); and |
| | [x] | 150,000 shares to be issued on or before July 15, 2007. |
Exploration expenditures to be incurred:
| | [i] | $75,000 by April 8, 2004 (date extended by the Optionor); |
| | [ii] | $175,000 in aggregate by April 8, 2005 (date extended by the Optionor); |
| | [iii] | $300,000 in aggregate by April 8, 2006 (incurred); |
| | [iv] | $450,000 in aggregate by April 8, 2007 (incurred); and |
| | [v] | $600,000 in aggregate by April 8, 2008 (incurred). |
The Company will have the right to purchase 50% of the NSR royalty retained by the Optionor for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.
| | [f] | Redford Property (Alberni Mining Division, B.C.) |
The Company owns a 100% interest in 25 claims (432 units) in the Alberni Mining Division, B.C..
| | [g] | Shell Creek Property (Dawson Mining District, Yukon Territory) |
The Shell Creek property consists of 628 mineral claims in the Dawson Mining District, Yukon Territory. A total of 558 claims were acquired through staking during the current year and the remaining 70 claims are held pursuant to an option agreement dated January 1, 2003, that gives the Company the right to earn a 100% interest, subject to a 2% NSR. In order to exercise the option, the Company must pay a total of $155,000 cash consideration (paid), issue a total of 1,000,000 shares and incur exploration expenditures aggregating $1,550,000 as follows:
Cash considerations to be made:
| | [i] | $10,000 paid to cover certain expenditures (paid); |
| | [ii] | a further $15,000 paid upon acceptance of the option agreement by the TSX Venture Exchange (paid); |
| | [iii] | a further $25,000 paid on or before January 1, 2004 (paid); |
| | [iv] | a further $30,000 paid on or before January 1, 2005 (paid); |
| | [v] | a further $35,000 paid on or before January 1, 2006 (paid); and |
| | [vi] | a further $40,000 paid on or before January 1, 2007 (paid). |
81
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | [g] | Shell Creek Property (Dawson Mining District, Yukon Territory) (continued) |
Share considerations to be made:
| | [i] | 100,000 shares issued upon acceptance of the Option Agreement by the TSX Venture Exchange (issued); |
| | [ii] | a further 100,000 shares issued on or before July 1, 2003 (issued); |
| | [iii] | a further 200,000 shares issued on or before January 1, 2004 (issued); |
| | [iv] | a further 100,000 shares issued on or before January 1, 2005 (issued); |
| | [v] | a further 100,000 shares issued on or before January 1, 2006 (issued); |
| | [vi] | a further 200,000 shares issued on or before January 1, 2007 (issued); and |
| | [vii] | a further 200,000 shares to be issued on or before January 1, 2008. |
Exploration expenditures to be incurred:
| | [i] | $150,000 before January 1, 2004 (incurred); |
| | [ii] | $350,000 in aggregate before January 1, 2005 (incurred); |
| | [iii] | $650,000 in aggregate before January 1, 2006 (date extended by the Optionor); |
| | [iv] | $1,050,000 in aggregate before January 1, 2007 (incurred); and |
| | [v] | $1,550,000 in aggregate before January 1, 2008. |
The Company will have the right to purchase 50% of the NSR retained by the Optionor for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.
| | [h] | May Creek Property (Mayo Mining District, Yukon Territory) |
The May Creek property consists of 84 mineral claims in the Mayo Mining District, Yukon Territory and are held pursuant to an option agreement dated August 1, 2006, that gives the Company the right to earn a 100% interest, subject to a 2% NSR royalty. In order to exercise the option, the Company must pay a total of $225,000 cash consideration, issue a total of 750,000 shares and incur exploration expenditures aggregating $500,000 as follows:
Cash considerations to be made:
| | [i] | $20,000 within five business days upon acceptance of the Option Agreement by the TSX Venture Exchange (paid); |
| | [ii] | a further $30,000 to be paid on or before December 12, 2007; |
| | [iii] | a further $40,000 to be paid on or before December 12, 2008; |
| | [iv] | a further $40,000 to be paid on or before December 12, 2009; |
| | [v] | a further $45,000 to be paid on or before December 12, 2010; and |
| | [vi] | a further $50,000 to be paid on or before December 12, 2011; |
Share considerations to be made:
| | [i] | 150,000 shares issued upon acceptance of the Option Agreement by the TSX Venture Exchange (issued); |
| | [ii] | a further 150,000 shares to be issued on or before December 12, 2007; |
| | [iii] | a further 100,000 shares to be issued on or before December 12, 2008; |
| | [iv] | a further 100,000 shares to be issued on or before December 12, 2009; |
| | [v] | a further 100,000 shares to be issued on or before December 12, 2010; and |
| | [vi] | a further 150,000 shares to be issued on or before December 12, 2011. |
82
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
| | [h] | May Creek Property (Mayo Mining District, Yukon Territory) (continued) |
Exploration expenditures to be incurred: $500,000 during the term of this agreement.
The Company will have the right to purchase 50% of the NSR royalty retained by the Optionor for a purchase price of $1,000,000 and the right of first refusal on the remaining 50%.
| | [i] | Turn River Property, (Cassiar Plateau, Yukon Territory) |
During February 2007 the Company and International KRL Resources Corp., related by common directors, acquired 50% each, by staking in the Cassiar Plateau, Yukon Territory, 2,220 claims, covering 46,941 hectares, which includes twelve distinct project areas.
| | [j] | Englishman Property, (Watson Lake, Yukon Territory) |
The Englishman property consists of 16 mineral claims in the Watson Lake Mining District, Yukon Territory and are held pursuant to an option agreement executed March 27, 2007, that gives the Company the right to earn a 100% interest, subject to a 2% NSR royalty upon Exchange review and acceptance. In order to exercise the option, the Company must pay a total of $50,000 cash consideration, issue a total of 250,000 shares and incur exploration expenditures aggregating $350,000 as follows:
Cash considerations to be made:
| | [i] | $5,000 upon signing the letter of intent (paid) [Note 13[a]]; |
| | [ii] | a further $10,000 to be paid on or before February 1, 2008; |
| | [iii] | a further $15,000 to be paid on or before February 1, 2009; and |
| | [iv] | a further $20,000 to be paid on or before February 1, 2010. |
Share considerations to be made:
| | [i] | 50,000 shares to be issued upon acceptance of the Option Agreement by the TSX Venture Exchange (issued) [Note 13[a]]; |
| | [ii] | a further 50,000 shares to be issued on or before February 1, 2008; |
| | [iii] | a further 50,000 shares to be issued on or before February 1, 2009; and |
| | [iv] | a further 100,000 shares to be issued on or before February 1, 2010. |
Exploration expenditures to be incurred:
| | [i] | $50,000 before February 1, 2008; |
| | [ii] | $150,000 in aggregate before February 1, 2009; and |
| | [iii] | $350,000 in aggregate before February 1, 2010. |
The Company will have the right to purchase 50% of the NSR royalty retained by the Optionor for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.
83
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 4. | Mineral Properties(continued) |
The following table represents exploration expenditures incurred during 2007:
| | | Albert | Antler | | Cheyenne | | | Shell | May | Turn | |
| | | Creek | Creek | Carswell | Gold | Heidi | Redford | Creek | Creek | River | Total |
| | | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
| Accommodation and | | | | | | | | | | |
| meals | 409 | – | – | 3,629 | 86,844 | – | 100,974 | – | – | 191,856 |
| Assays | – | – | – | 913 | 5,657 | 363 | 45,875 | – | – | 52,808 |
| Camp supplies | – | – | – | 2,580 | 14,557 | – | 28,386 | – | – | 45,523 |
| Diamond drilling | – | – | – | – | 59,410 | – | 159,511 | – | – | 218,921 |
| Equipment rental | – | – | – | 3,000 | – | – | 4,919 | – | – | 7,919 |
| Filing and recording | – | 13,440 | – | – | – | – | 11,286 | – | – | 24,726 |
| Fuel | 700 | – | – | 22,931 | 67,357 | – | 67,533 | 564 | – | 159,085 |
| Geologist fees and costs | – | – | – | 49,015 | 97,140 | – | 147,373 | 2,746 | – | 296,274 |
| Geophysical | – | 10,293 | – | 9,338 | – | – | 13,610 | 475 | – | 33,716 |
| Helicopter | 990 | – | – | 28,332 | 320,888 | – | 322,274 | 4,875 | – | 677,359 |
| Licenses and permits | – | – | – | 500 | – | – | 500 | – | – | 1,000 |
| Mapping | – | – | 1,250 | 754 | 298 | – | 2,036 | 515 | – | 4,853 |
| Miscellaneous | – | – | – | 1,429 | 5,884 | – | 13,654 | – | – | 20,967 |
| Supervision [Note 9[a]] | 5,750 | 750 | 9,000 | 9,562 | 12,750 | 2,000 | 17,713 | 2,750 | – | 60,275 |
| Surveys | – | – | – | – | 110 | – | 26,511 | – | – | 26,621 |
| Travel | – | – | – | 5,149 | 10,727 | – | 11,122 | – | – | 26,998 |
| Support wages | – | – | – | 30 | 29,677 | – | 32,373 | – | – | 62,080 |
| | 7,849 | 24,483 | 10,250 | 137,162 | 711,299 | 2,363 | 1,005,650 | 11,925 | – | 1,910,981 |
The following table represents exploration expenditures incurred during 2006:
| | Albert | Antler | | Cheyenne | | | Shell | |
| | Creek | Creek | Carswell | Gold | Heidi | Redford | Creek | Total |
| | $ | $ | $ | $ | $ | $ | $ | $ |
| Assays | 7,807 | 121 | – | 5,261 | 250 | – | 21,464 | 34,903 |
| Camp supplies | – | – | – | – | – | – | 5,794 | 5,794 |
| Equipment rental | 4,600 | – | – | – | – | – | 9,562 | 14,162 |
| Filing and recording | – | 604 | – | – | – | – | 10,152 | 10,756 |
| Geochem surveys | – | – | – | – | – | – | 15,516 | 15,516 |
| Geologist fees and costs | 120 | – | – | – | 838 | – | 4,837 | 5,795 |
| Helicopter | 12,375 | – | – | – | – | – | 152,807 | 165,182 |
| Licenses and permits | 312 | – | – | – | 2,500 | – | 2,900 | 5,712 |
| Line cutting | 47,811 | – | – | – | – | – | 13,400 | 61,211 |
| Mapping | – | – | – | 7,353 | 425 | – | 2,031 | 9,809 |
| Miscellaneous | 4,030 | – | – | 31 | 71 | – | 999 | 5,131 |
| Mobilization | – | – | – | – | – | – | 3,468 | 3,468 |
| Supervision [Note 9[a]] | 3,500 | 1,500 | 3,500 | 3,750 | 4,096 | 250 | 24,046 | 40,642 |
| Surveys | 8,585 | 2,655 | – | 3,185 | 1,435 | – | 116,695 | 132,555 |
| Travel | 1,906 | – | – | – | – | – | 40,567 | 42,473 |
| Support wages | – | – | – | 2,500 | 11,700 | – | – | 14,200 |
| | 91,046 | 4,880 | 3,500 | 22,080 | 21,315 | 250 | 424,238 | 567,309 |
84
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
Authorized: 100,000,000 common shares without par value.
| | | Number of | Value |
| | | shares | $ |
| | Issued as at March 31, 2005 | 16,581,530 | 5,326,546 |
| | Issued during fiscal 2006 for: | | |
| | Cash | | |
| | Flow-through private placement | 1,213,000 | 303,250 |
| | Non-flow-through private placement | 1,273,333 | 335,000 |
| | Stock options exercised | 350,000 | 140,000 |
| | Warrants exercised | 1,596,500 | 349,525 |
| | Mineral property option payments | 500,000 | 126,000 |
| | Finders’ fees | 67,500 | 30,375 |
| | Share issuance costs | – | (47,312) |
| | Fair value of stock options exercised transferred from contributed surplus | – | 84,642 |
| | Flow-through shares renunciation | – | (277,925) |
| | | | |
| | Issued as at March 31, 2006 | 21,581,863 | 6,370,101 |
| | Issued during fiscal 2007 for: | | |
| | Cash | | |
| | Flow-through brokered private placement | 6,250,000 | 3,437,500 |
| | Non-flow-through brokered private placement | 1,250,000 | 625,000 |
| | Non-flow-through private placement | 1,000,000 | 500,000 |
| | Flow-through private placement | 1,270,000 | 508,000 |
| | Stock options exercised | 225,000 | 90,000 |
| | Warrants exercised | 1,706,000 | 640,850 |
| | Mineral property option payments | 800,000 | 285,000 |
| | Finders’ fees | 467,500 | 233,750 |
| | Agent warrants | – | (266,685) |
| | Share issuance costs | – | (428,721) |
| | Fair value of stock options exercised transferred from contributed surplus | – | 54,416 |
| | Flow-through shares renunciation | – | (1,344,029) |
| | | | |
| | Issued as at March 31, 2007 | 34,550,363 | 10,705,182 |
For the year ended March 31, 2007:
| | [a] | On April 25, 2006 the Company issued 6,250,000 flow-through units through a brokered private placement at a price of $0.55 per unit. Each flow-through unit consists of one flow-through common share and one half non-flow-through share purchase warrant with one whole share purchase warrant exercisable at a price of $0.70 per share for a period of eighteen months. |
| | | |
| | | On April 25, 2006, the Company also issued 1,250,000 non-flow-through-units through a brokered private placement at a price of $0.50 per unit. Each non-flow-through-unit consists of one non-flow- through common share and one half non-flow-through share purchase warrant with one whole share purchase warrant exercisable at a price of $0.70 per share for a period of eighteen months. |
85
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 5. | Share Capital(continued) |
In connection with the private placement, the Company paid $102,500 in finders’ fees, issued 445,000 non-flow through finder’s units with the same terms and conditions as the financing and 750,000 finder’s warrants. Each finder’s warrant entitles the holder to purchase one non-flow-through common share for $0.70 per share for up to eighteen months. The fair value of the share portion of the finder’s units are $222,500 recorded as finders’ fees and $60,942 for the warrant portion calculated under the Black-Scholes model, recorded as a share issuance cost. The fair value of the finder’s warrants under the Black-Scholes model was $195,423, recorded as a share issuance cost.
| | [b] | On May 1, 2006 the Company issued 1,000,000 non-flow-through-units through a non-brokered private placement at a price of $0.50 per unit. Each non-flow-through-unit consists of one non-flow- through common share and one half non-flow-through share purchase warrant with one whole share purchase warrant exercisable at a price of $0.70 per share for a period of eighteen months. In connection with the private placement, the Company paid $6,000 and issued 22,500 non-flow- through common shares at a fair value of $0.50 per share as finders’ fees. |
| | | |
| | [c] | On December 22, 2006 the Company issued 1,270,000 flow-through units through a private placement at a price of $0.40 per unit. Each flow-through unit consists of one share and one quarter non-flow-through share purchase warrant with one whole share purchase warrant exercisable at a price of $0.60 per share for a period of twelve months. In connection with the private placement, the Company paid $30,480 in finders’ fees and issued 125,000 finder’s warrants with the same terms and conditions as the financing. The fair value of the finder’s warrants under the Black-Scholes model was $10,320, recorded as a share issuance cost. |
| | | |
| | [d] | In the current year 225,000 options were exercised at $0.40 per share for proceeds of $90,000. The fair value when granted of $54,416 was transferred to share capital from contributed surplus to reflect the exercise of these options. |
| | | |
| | [e] | In the current year 1,706,000 warrants were exercised at prices ranging from $0.35 to $0.40 per share for proceeds of $640,850. |
| | | |
| | [f] | Pursuant to the mineral property option agreements, the Company issued 800,000 shares at fair value ranging from $0.30 to $0.38 per share for a total fair value of $285,000. |
| | | |
| | [g] | Of the shares issued during 2006, 7,520,000 were issued on a flow-through basis whereby the Company is committed to spend $3,939,123 of Canadian exploration expenditures (“CEE”) over two years and has renounced this amount to the shareholders. |
| | | |
| | For the year ended March 31, 2006: |
| | | |
| | [a] | On January 31, 2006, the Company issued 940,000 non-flow-through units at a price of $0.25 per unit for total proceeds of $235,000. Each non-flow-through unit consists of one non-flow-through common share and one non-flow-through share purchase warrant, with each share purchase warrant exercisable into one common share at a price of $0.35 expiring on January 31, 2007. In connection with this private placement, the Company paid $16,937 and issued 67,500 common shares at a fair value of $0.45 per share as finders’ fees. |
86
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 5. | Share Capital(continued) |
| | [b] | On December 29, 2005, the Company issued 1,213,000 flow-through units at a price of $0.25 per unit for total proceeds of $303,250. Each flow-through unit consist of one flow-through common share and one half of one non-flow-through share purchase warrant, with one whole share purchase warrant exercisable into one common share at a price of $0.35 expiring on December 29, 2006. Pursuant to the flow-through shares issued, the Company was committed to spend $303,250 on Canadian Exploration Expenditures (“CEE”) which was spent prior to December 31, 2006. Exploration expenditures of $303,250 were renounced in favour of subscribers effective December 31, 2005. |
| | | |
| | [c] | On August 15, 2005, the Company issued 333,333 non-flow-through units at a price of $0.30 per unit for total proceeds of $100,000. Each unit consists of one common share and one non-flow through share purchase warrant exercisable at a price of $0.40 per share expiring on August 15, 2006. |
| | | |
| | [d] | Pursuant to the mineral property option agreements, the Company issued 500,000 shares at fair values ranging from $0.12 to $0.30 per share for a total fair value of $126,000. |
| | | |
| | [e] | In fiscal 2006, 350,000 options were exercised at $0.40 per share for proceeds of $140,000. The fair value when granted of $84,642 was transferred to share capital from contributed surplus to reflect the exercise of these options. |
| | | |
| | [f] | In fiscal 2006, 1,596,500 warrants were exercised at fair values ranging from $0.20 to $0.35 per share for proceeds of $349,525. |
The Company grants stock options to directors, officers, employees and consultants as compensation for services, pursuant to its Incentive Share Option Plan (the “Plan”). Options issued pursuant to the Plan must have an exercise price greater than or equal to the “Discounted Market Price” of the Company's stock on the grant date. The maximum discount allowed varies with share price, with a maximum of 25% and a minimum price of $0.10. Options have a maximum expiry period of five years from the grant date. The number of options, that may be issued under the plan, is limited to no more than 10% of the Company's issued and outstanding shares on the grant date.
Pursuant to the stock option plan, options granted in respect of investor relations activities are subject to vesting restrictions, such that one-quarter of the options vest three months from the grant date and in each subsequent three-month period thereafter such that the entire option will have vested twelve months after the award date. Vesting restrictions may also be applied to certain other options grants, at the discretion of the directors.
87
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 6. | Stock Options(continued) |
The following table summarizes the continuity of the Company’s stock options:
| | | | | | | Weighted average | |
| | | | Number of | | | exercise price | |
| | | | shares | | | $ | |
| | Outstanding, March 31, 2004 | | 204,000 | | | 0.20 | |
| | Granted | | 1,350,000 | | | 0.37 | |
| | Exercised | | (100,000 | ) | | 0.20 | |
| | Cancelled/forfeited | | (279,000 | ) | | 0.27 | |
| | Outstanding, March 31, 2005 | | 1,175,000 | | | 0.38 | |
| | Granted | | 1,425,000 | | | 0.44 | |
| | Exercised | | (350,000 | ) | | 0.40 | |
| | Cancelled/forfeited | | (500,000 | ) | | 0.39 | |
| | Outstanding, March 31, 2006 | | 1,750,000 | | | 0.42 | |
| | Granted | | 1,725,000 | | | 0.49 | |
| | Exercised | | (225,000 | ) | | 0.40 | |
| | Cancelled/forfeited | | (225,000 | ) | | 0.32 | |
| | Outstanding, March 31, 2007 | | 3,025,000 | | | 0.47 | |
At March 31, 2007, the following share purchase options were outstanding:
| | | Exercise Price | |
| | | Number of Options | $ | Expiry Date |
| | | | |
| | 500,000 | 0.35 | July 19, 2007 |
| | 650,000 | 0.50 | February 1, 2008 |
| | 150,000 | 0.50 | March 3, 2008 |
| | 100,000 | 0.50 | May 26, 2008 |
| | 525,000 | 0.70 | May 26, 2008 |
| | 250,000 | 0.45 | July 5, 2008 |
| | 100,000 | 0.35 | September 18, 2008 |
| | 750,000 | 0.37 | March 23, 2009 |
| | | | |
| | 3,025,000 | | |
Additional information regarding options outstanding as at March 31, 2007 is as follows:
| | | | Weighted average | | Weighted average |
| | Exercise price | Outstanding | remaining contractual | Exercisable | exercise price |
| | $ | # | life (years) | # | $ |
| | 0.35-0.70 | 3,025,000 | 1.16 | 2,950,000 | 0.47 |
The weighted average grant date fair value of options granted during the year was $0.17 (2006 - $0.23; 2005 - $0.09) per option.
The fair value for stock options granted was estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:
| | | 2007 | 2006 | 2005 |
| | | | | |
| | Risk free interest rate | 4.07% | 3.53% | 3.02% |
| | Expected life (in years) | 2 | 2 | 2 |
| | Expected volatility | 93% | 92% | 134% |
88
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 6. | Stock Options(continued) |
Total compensation expense recognized for stock options granted during the year was $299,467 (2006 - $215,077; 2005 - $297,469). Stock-based compensation of $81,899 (2006 - $Nil; 2005 - $Nil) was capitalized to mineral properties for options granted and $217,568 was expensed to operations for options granted to directors, officers and consultants of the Company.
| 7. | Share Purchase Warrants |
The following table summarizes the continuity of the Company’s warrants:
| | | | Weighted |
| | | | average |
| | | Number of | exercise price |
| | | shares | $ |
| | Balance, March 31, 2005 | 5,682,032 | 0.29 |
| | Issued with private placements | 1,879,833 | 0.36 |
| | Exercised | (1,596,500) | 0.22 |
| | Expired | (1,467,000) | 0.21 |
| | Balance March 31, 2006 | 4,498,365 | 0.37 |
| | Issued with private placements | 4,567,500 | 0.69 |
| | Agent’s warrants | 1,097,500 | 0.69 |
| | Exercised | (1,706,000) | 0.37 |
| | Expired | (2,792,365) | 0.37 |
| | Balance March 31, 2007 | 5,665,000 | 0.69 |
At March 31, 2007, the following share purchase warrants were outstanding:
| | | Exercise Price | |
| | Number of Warrants | $ | Expiry Date |
| | 4,722,500 | 0.70 | October 24, 2007 |
| | 500,000 | 0.70 | October 31, 2007 |
| | 442,500 | 0.60 | December 21, 2007 |
| | | | |
| | 5,665,000 | | |
The Company recognized a share issuance cost for the fair value of agents’ warrants issued as finder’s fees in connection with private placements. The amount calculated is recorded as a share issuance cost with a corresponding credit to contributed surplus. The Company uses the Black-Scholes option pricing model to estimate fair values of warrants issued assuming no expected dividends and the following weighted average assumptions:
| | | 2007 | 2006 |
| | | | |
| | Risk-free interest rate | 4.11% | – |
| | Expected life of warrants (in years) | 1.4 | – |
| | Expected volatility | 94.98% | – |
The weighted average fair value of the agent warrants issued during the year was $0.24 (2006 - $Nil).
89
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
The following table summarizes the continuity of the Company’s contributed surplus:
| | | Amount |
| | | $ |
| | Balance, March 31, 2005 | 270,618 |
| | Fair value of stock options granted | 215,077 |
| | Fair value of stock options cancelled/forfeited | (104,235) |
| | Fair value of stock options exercised transferred to share capital | (84,642) |
| | Balance, March 31, 2006 | 296,818 |
| | Fair value of stock options granted | 299,467 |
| | Fair value of agents warrants | 266,686 |
| | Fair value of stock options exercised transferred to share capital | (54,416) |
| | Balance, March 31, 2007 | 808,555 |
| 9. | Related Party Transactions |
| | [a] | The Company paid the following amounts to related parties at their exchange amounts: |
| | | | Year Ended | |
| | | | March 31, | |
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | | | | |
| | Management fees paid to a director and a company controlled by the | | | |
| | director | 112,500 | 37,500 | 30,300 |
| | Property supervision fees paid to a company controlled by a director | 63,025 | 40,642 | 33,300 |
| | Rent paid to a company with common officers and directors | 29,909 | 20,250 | 11,577 |
| | | | | |
| | | 205,434 | 98,392 | 75,177 |
| | [b] | The Company incurred certain charges from a company controlled by the President. These charges have been recorded as exploration expenses and general and administration expenses as follows: |
| | | | Year Ended | |
| | | | March 31, | |
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | | | | |
| | Amounts charged to mineral interests | 233,784 | – | – |
| | Amounts charged to general and administration expenses | 64,377 | – | – |
| | | | | |
| | | 298,161 | – | – |
90
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 9. | Related Party Transactions |
Under the same arrangement the following amounts are due from the same company controlled by the President of the Company:
| | | | Year Ended | |
| | | | March 31, | |
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | Due, non-interest bearing, unsecured and due on demand. | 153,306 | – | – |
| | Due, for the purchase of equipment, non-interest bearing, | | | |
| | unsecured and due on demand. | 150,033 | – | – |
| | Due from related parties | 303,339 | – | – |
| | [c] | Due to related parties: |
| | | | Year Ended | |
| | | | March 31, | |
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | Due to the President of the Company and is non-interest | | | |
| | bearing, unsecured and due on demand | 52,500 | – | 315 |
| | | | | |
| | Due to a company controlled by the President of the Company | | | |
| | and is non-interest bearing, unsecured and due on demand. | – | 16,111 | 14,417 |
| | | | | |
| | Due to (from) a company with common officers and directors | | | |
| | which represents accumulated costs for shared office expenses, | | | |
| | administration wages and rent. This amount is non-interest | | | |
| | bearing, unsecured and due on demand. | 754 | 117,909 | (63,357) |
| | | | | |
| | Due to related parties | 53,254 | 134,020 | 48,625 |
| | [d] | Share subscriptions receivable of $Nil (2006 - $177,000; 2005 - $20,000) was due from officers/directors for shares issued pursuant to the exercise of options and warrants. The amount was non-interest bearing, unsecured and due on demand. |
| | | |
| | [e] | See Note 4[a] for mineral property option agreements with related parties. |
91
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
The following table reconciles the amount of income tax recoverable on application of the statutory Canadian federal and provincial income tax rates:
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | Canadian statutory income tax rate | 34.12% | 35.62% | 35.62% |
| | | $ | $ | $ |
| | Income tax recovery at statutory rate | 153,690 | 162,974 | 203,465 |
| | Effect of income taxes of: | | | |
| | Accounting gains | 140,108 | 32,746 | 14,361 |
| | Share issuance costs | 36,595 | 8,987 | 2,969 |
| | Prescribed resource loss | (16,950) | (21,863) | (21,477) |
| | Taxable capital gains | (64,467) | (14,770) | – |
| | Stock-based compensation | (74,234) | (39,482) | (94,729) |
| | Flow-through shares renounced | 1,344,029 | 277,925 | – |
| | Valuation allowance | (174,742) | (128,592) | (104,589) |
| | Income tax recoverable | 1,344,029 | 277,925 | – |
The tax effects of temporary differences that give rise to significant portions of the future tax assets and liabilities are as follows:
| | | 2007 | 2006 |
| | | $ | $ |
| | | | |
| | | | |
| | Non-capital loss carry-forwards | 473,000 | 335,000 |
| | Mineral properties | (377,000) | 112,000 |
| | Property and equipment | 6,000 | 2,000 |
| | Investment tax credit | 56,000 | 5,000 |
| | Share issuance costs | 134,000 | 24,000 |
| | | | |
| | Total gross future income tax assets | 292,000 | 478,000 |
| | Valuation allowance | (292,000) | (478,000) |
| | | | |
| | Net future income tax asset | – | – |
The Company has approximately $1,387,000 of losses for tax purposes which may be used to reduce income taxes of future years and will expire as follows:
| | $ |
| | |
| 2008 | 44,000 |
| 2009 | 67,000 |
| 2010 | 81,000 |
| 2014 | 92,000 |
| 2015 | 278,000 |
| 2026 | 341,000 |
| 2027 | 484,000 |
| | |
| | 1,387,000 |
92
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 10. | Income Taxes(continued) |
At March 31, 2007, the Company had cumulative Canadian Exploration Expenses of $740,000 which are deductible at a rate of 100% each year against future years’ taxable income and have no expiry date.
At March 31, 2007, the Company had cumulative Canadian Development Expenses of $1,998,000 which are deductible at a rate of 30% each year against future years’ taxable income and have no expiry date.
At March 31, 2007, the Company had Foreign Exploration and Development Expenses of $282,000 which are deductible at a rate of 10% each year against future years’ taxable income and have no expiry date.
In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion of all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The amount of future tax asset considered realizable could change materially in the near term based on future taxable income during the carry forward period.
The Company’s operations are limited to a single industry segment being the acquisition, exploration and development of mineral properties. The mineral properties are located in Canada: British Columbia; Saskatchewan and the Yukon Territory.
| | [a] | The Company is committed to a consulting contract as of April 15, 2007. The contract requires payments of $8,000 per month for six months. |
| | | |
| | [b] | The Company is committed to aggregate premises lease payments of $158,973, consisting of $36,686 for the years 2008 through 2011 and $12,229 for 2012. |
| | [a] | Subsequent to year end, the Company paid $5,000 and issued 50,000 shares at a price of $0.34 per share pursuant to a new property option agreement to which the Company has been granted an option to earn a 100% interest in the Englishman project located in the Watson Lake Mining District of the Yukon Territory. Total consideration is 250,000 common shares of the Company, a $50,000 cash payment and $350,000 in work commitments to be completed over a period of three years. In addition, there is a 2% net smelter return relating to the acquisition subject to further TSX Venture Exchange review and acceptance. The Company may purchase 1% of the net smelter return for $2,000,000. |
| | | |
| | [b] | On April 26, 2007, the Company issued 360,000 shares at a fair value of $0.32 per share in consideration for acquiring the final 25% interest in the Albert Creek property. See Note 4[a] for mineral property option agreements with related parties. |
| | | |
| | [c] | On April 30, 2007, the Company granted 400,000 stock options, vesting quarterly, exercisable at $0.40 per share for a period of two years. |
93
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 14. | Differences Between Canadian and United States Generally Accepted Accounting Principles |
These financial statements have been prepared in accordance with Canadian GAAP, which differs in certain respects from US GAAP. The material differences between Canadian and US GAAP and the rules and regulations of the Securities and Exchange Commission affecting the Company’s financial statements are summarized as follows:
| | | | As at March 31, |
| | Balance Sheets | | 2007 | 2006 |
| | | | $ | $ |
| | Total assets under Canadian GAAP | | 8,373,806 | 2,479,672 |
| | Marketable securities (a) | | 189,930 | 345,600 |
| | Decrease in mineral properties due to expensing of mineral | | |
| | property costs (b) | | (4,124,379) | (1,703,741) |
| | Total assets under US GAAP | | 4,439,357 | 1,121,531 |
| | | | | |
| | Shareholders’ equity under Canadian GAAP | | 8,216,813 | 2,299,405 |
| | Marketable securities (a) | | 189,930 | 345,600 |
| | Cumulative mineral properties adjustment (b) | | (4,124,379) | (1,703,741) |
| | Reduction in share capital related to flow-through shares (c) | 1,344,029 | – |
| | Increase in deficit related to future income tax on flow through | | |
| | shares (c) | | (1,344,029) | – |
| | Shareholders’ equity under US GAAP | | 4,282,364 | 941,264 |
| | | | | |
| | | | | |
| | | Years Ended March 31, |
| | Statements of Operations | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | | | | |
| | Net Income (Loss) under Canadian GAAP | 893,590 | (179,610) | (571,209) |
| | Mineral property costs expensed and written-off (b) | (2,420,638) | (656,318) | (490,319) |
| | Mineral properties written off | – | – | 1,320 |
| | Future income tax benefit related to flow through | | | |
| | shares (c) | (1,344,029) | – | – |
| | | | | |
| | Net loss in accordance with US GAAP | (2,871,077) | (835,928) | (1,060,208) |
| | Net loss per share under US GAAP | (0.09) | (0.06) | (0.08) |
94
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 14. | Differences Between Canadian and United States Generally Accepted Accounting Principles |
(continued)
| | | Years Ended March 31, |
| | Statements of Cash Flows | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | | | | |
| | Operating Activities | | | |
| | Operating activities under Canadian GAAP | (1,540,250) | (232,179) | (544,384) |
| | Impairment of mineral property acquisition costs | 446,388 | 148,068 | – |
| | Deferred exploration and acquisition costs (b) | (2,275,470) | (591,653) | (479,892) |
| | Operating activities under US GAAP | (3,369,332) | (675,774) | (1,024,276) |
| | Investing activities | | | |
| | Investing activities under Canadian GAAP | (3,835,872) | (590,563) | (458,308) |
| | Deferred exploration (b) | 1,829,082 | 443,585 | 479,892 |
| | Investing activities under US GAAP | (2,006,790) | (146,978) | 21,584 |
| | | | | |
| | Financing activities | | | |
| | Financing activities under Canadian and US GAAP | 5,783,380 | 953,838 | 1,258,092 |
In June 1997, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 130, Reporting Comprehensive Income, which requires that an enterprise report, by major components and as a single total, the change in its net assets during the period from non-owner sources. Pursuant to Statement of Financial Accounting Standards No. 115, investments in securities are classified as either trading, held to maturity, or available-for-sale. The Company has classified securities as available-for-sale which results in unrealized gains or losses to be accounted for as a component of comprehensive income. The impact of SFAS No. 130 on the Company’s financial statements is as follows:
| | | Years Ended March 31, |
| | | 2007 | 2006 | 2005 |
| | | $ | $ | $ |
| | Net loss under US GAAP | (2,871,077) | (835,928) | (1,060,208) |
| | Other comprehensive income: | | | |
| | Unrealized gain on marketable securities | 189,930 | 345,600 | – |
| | Comprehensive loss under US GAAP | (2,681,147) | (490,328) | (1,060,208) |
| | [b] | Mineral property expenditures |
Canadian GAAP allows mineral exploration costs to be capitalized during the search for a commercially mineable deposit. Under US GAAP, mineral exploration costs are expensed as incurred and mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights are Tangible or Intangible Assets”. The Company assesses the carrying costs for impairment under SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” at each fiscal quarter end. As the Company has not established proven and probable reserves on any of its mineral properties, an impairment loss is recognized for capitalized mineral property acquisition costs.
95
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 14. | Differences Between Canadian and United States Generally Accepted Accounting Principles |
(continued)
Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur Canadian exploration expenditures (as defined in the Income Tax Act, Canada) and renounce the related income tax deductions to the investors. Under Canadian GAAP, the full amount of funds received from flow-through share issuances are initially recorded as share capital. Upon renouncing the expenditures, the amount of deferred tax on the expenditures is removed from share capital. Under U.S. GAAP, the premium paid for the flow-through shares in excess of market value is credited to liabilities and included in income when the Company renounces the related tax benefits.
| | [d] | Recent accounting pronouncements |
US GAAP
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. This Statement permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its financial position and results of operations.
In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. This statement requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The provisions of SFAS No. 158 are effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is effective for periods ending after November 15, 2006. The implementation of SFAS No. 158 did not have any material impact on its financial position and results of operations.
96
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 14. | Differences Between Canadian and United States Generally Accepted Accounting Principles |
(continued)
| | [d] | Recent accounting pronouncements (continued) |
In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year beginning after September 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140", to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", to permit fair value re-measurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, with earlier application allowed. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
97
| |
| Logan Resources Ltd. |
| (An Exploration Stage Company) |
| Notes to the Financial Statements |
| For the Years Ended March 31, 2007, 2006 and 2005 |
| (Expressed in Canadian Dollars) |
| 14. | Differences Between Canadian and United States Generally Accepted Accounting Principles |
(continued)
| | [d] | Recent accounting pronouncements (continued) |
Canadian GAAP
On January 27, 2005, the CICA issued Section 3855 of the Handbook entitled Financial Instruments - Recognition and Measurement. It expands Handbook Section 3860, Financial Instruments - Disclosure and Presentation by prescribing when a financial instrument to be recognized on the balance sheet and at what amount. It also specifies how financial instrument gains and losses are to be presented. All financial instruments will be required to be classified into various categories. Held to maturity investments and loans and receivables are measured at amortized cost with amortization of premium or discounts and losses and impairment included in current period interest income or expense. Held for trading financial assets and liabilities are measured at fair market value with all gains and losses included in net income in the period in which they arise. All available for sale financial assets are measured at fair market value with revaluation gains and losses included in oth er comprehensive income until the asset is removed from the balance sheet and losses due to impairment included in net income. All other financial liabilities are to be carried at amortized cost. This new Handbook Section will bring Canadian GAAP more in line with U.S. GAAP. The mandatory effective date is for fiscal years beginning on or after October 1, 2006.
New Handbook Section 3865, Hedges, provides alternative treatments to Handbook Section 3855 for entities which choose to designate qualifying transactions as hedges for accounting purposes. The effective date for this section is for fiscal years beginning on or after October 1, 2006. The Company does not currently have any hedging relationships.
New Handbook Section 1530, Comprehensive Income, introduces a requirement to temporarily present certain gains and losses outside of income. Section 1530 defines comprehensive income as a change in value of net assets that is not due to owner activities. Assets that are classified as available for sale will have revaluation gains and losses included in other comprehensive income until the asset is removed from the balance sheet. In 2007, the Company had investments in shares of arm’s-length corporations that may be classified as available for sale investments. The Company would be required to recognize unrealized gains and losses on these securities and include these amounts in comprehensive income. The effective date for this section is for fiscal years beginning on or after October 1, 2006. Implementation of this section will more closely align Canadian GAAP with U.S. GAAP.
98
Exhibit 12.1
I,Seamus Young, certify that:
| 1. | I have reviewed this Annual Report on Form 20-F of:Logan Resources Ltd.; |
| | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; |
| | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| | |
| 4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: |
| | (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | | |
| | (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | | |
| | (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | | |
| | (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| | (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| | (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date:October 31, 2007
Seamus Young
Chief Executive Officer
99
Exhibit 12.2
I,Judith T. Mazvihwa, certify that:
| 1. | I have reviewed this Annual Report on Form 20-F of:Logan Resources Ltd.; |
| | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; |
| | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| | |
| 4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: |
| | (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | | |
| | (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | | |
| | (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | | |
| | (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| | (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| | | |
| | (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date:October 31, 2007
Judith T. Mazvihwa
Chief Financial Officer
100
EXHIBIT 13.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report ofLogan Resources Ltd., a company organized under theBusiness Corporation Act (British Columbia)(the “Company”) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Seamus Young, President/CEO/Director of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:
| | (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | | |
| | (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Seamus Young
Seamus Young, President/CEO/Director
Date: October 31, 2007
101
EXHIBIT 13.2
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report ofLogan Resources Ltd., a company organized under theBusiness Corporation Act (British Columbia)(the “Company”) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Judith T. Mazvihwa, CFO/Director of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:
| | (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | | |
| | (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Judith T. Mazvihwa
Judith T. Mazvihwa, CFO/Director
Date: October 31, 2007
102
ITEM 19. EXHIBITS
| | | Page |
| 1. | Articles of Incorporation/Bylaws as currently in effect: | | |
| | Incorporated by reference to the Registration Statement and Form 6-K’s | | |
| | | | |
| 2. | Instruments defining the rights of holders of equity or debt securities | | |
| | being registered. | | |
| | --- Refer to Exhibit No. 1 --- | | |
| | | | |
| 3. | Voting Trust Agreements: | No Disclosure Necessary | |
| | | | |
| 4. | Material Contracts: | | |
| | Incorporated by reference to the Registration Statement and Form 6-K’s | | |
| | | | |
| 5. | Foreign Patents: | No Disclosure Necessary | |
| 6. | Earnings Per Share Calculation: | No Disclosure Necessary | |
| 7. | Ratio of Earnings To Fixed Charges: | No Disclosure Necessary | |
| 8. | List of Subsidiaries: | No Disclosure Necessary | |
| 9. | Statement Regarding Date of Financial Statements: | No Disclosure Necessary | |
| 10. | Notice Required by Rul3e 104 of Regulation BTR: | No Disclosure Necessary | |
| 11. | Code of Ethics as required by ITEM No. 16: | No Disclosure Necessary | |
| | | | |
| 12: | The certifications required by Rule 13a-14(a) or Rule 15d-14(a) | | 99 |
| | | | |
| 13. | The certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code | | 101 |
| | | | |
| 14. | Additional Exhibits: | | |
| | Incorporated by reference to the Registration Statement and Form 6-K’s | | |
103
SIGNATURE PAGE
Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Logan Resources Ltd.
Registrant
| Dated: October 31, 2007 | By | /s/ Seamus Young |
| | | Seamus Young, President/Director |
| | | |
| | | |
| Dated: October 31, 2007 | By | /s/ Judith T. Mazvihwa |
| | | Judith T. Mazvihwa, Director |
104
