Suite 507 - 475 Howe Street jetgoldcorp@shaw.ca |
Thank you for your letter dated June 17, 2008. We believe the reconciliations provided are correct and, accordingly, provide the following explanation for the reconciling amounts as requested.
As disclosed in Notes 2(b) and 13 (a) of the financial statements for the years ended August 31, 2007 and 2006, in accordance with Canadian GAAP, acquisition costs and exploration expenditures are capitalized. In accordance with EITF 04-02, exploration costs incurred in locating areas of potential mineralization are expensed as incurred, as described in Note 13 (a).
With respect to Note 13 (d), the amounts captioned “Exploration and development costs, net”, reconciles exploration expenditures incurred during the year less mineral expenditure tax credits as detailed in Note 4 from Canadian GAAP to US GAAP. The amounts detailed in Note 13 (d) which should be expensed pursuant to US GAAP are derived from Note 4 and comprised of the following amounts:
2007 | 2006 | 2005 | |
Statement of Operations | |||
Net Loss per Canadian GAAP | $(1,008,122) | $(359,187) | $(317,155) |
Total additions during the year | 481,368 | 270,677 | 130,482 |
Less: Acquisition costs | (151,000) | (129,500) | (17,600) |
Exploration costs during year | 330,368 | 141,177 | 112,882 |
Mineral expenditure tax credits | (35,415) | 0 | 0 |
Exploration and development costs, Net | 294,953 | 141,177 | 112,882 |
Net Loss per US GAAP | $(1,303,075) | $(500,364) | $(430,037) |
With respect to Note 13 (c), the amounts captioned “Adjustments to US GAAP – deferred expenditures”, is the cumulated exploration expenditures that have been capitalized in the financial statements under Canadian GAAP, but are expensed in accordance with US GAAP as described above.
2007 | 2006 | |
Mineral Interest(per Note 4 under Canadian GAAP)
Cumulative acquisition costs, in accordance with both Canadian and US GAAP are as follows:
Opening | $156,511 | $27,011 |
Additions | 151,000 | 129,500 |
Written-off | (27,011) | 0 |
Closing | $280,500 | $156,511 |
Accordingly, the balance sheet adjustments included in Note 13(c) for exploration expenditures incurred is as follows:
Total assets for Canadian GAAP | $890,928 | $1,419,000 |
Less: | ||
Cumulative exploration costs | ||
Opening | 586,329 | 445,152 |
Expenditure for year, net (as above) | 294,853 | 141,177 |
Written-off | (570,914) | 0 |
Closing | 310,368 | 586,329 |
Total assets for US GAAP | $580,560 | $832,671 |
If there are any questions or if we can be of further assistance, please do not hesitate to contact us