PORTAL RESOURCES LTD.
Consolidated Financial Statements
For the three months ended
September 30, 2007
(An exploration stage company)
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.
Portal Resources Ltd. | Trading Symbol: PDO | |
Head Office: Suite 750 – 625 Howe Street | Telephone: 604-629-1929 | |
Vancouver, British Columbia, Canada V6C 2T6 | Facsimile: 604-629-1930 |
PORTAL RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(stated in Canadian dollars)
(Unaudited – prepared by management)
September 30, | June 30, | ||
2007 | 2007 | ||
$ | $ | ||
Current | |||
Cash and cash equivalents | 5,025,491 | 1,069,730 | |
Accounts receivable | 41,836 | 42,661 | |
Prepaid expenses | 131,611 | 117,118 | |
5,198,938 | 1,229,509 | ||
Equipment and software (Note 3) | 96,911 | 94,609 | |
Unproven mineral rights (Note 4) | 6,004,916 | 5,683,359 | |
11,300,765 | 7,007,477 | ||
Current | |||
Accounts payable and accrued liabilities | 214,617 | 500,273 | |
Due to related parties (Note 8) | 13,452 | 3,233 | |
228,069 | 503,506 | ||
Share capital (Note 5) | 14,760,161 | 9,823,918 | |
Shares suscribed | - | 59,800 | |
Contributed surplus (Note 5) | 721,896 | 636,998 | |
Deficit | (4,409,361) | (4,016,745) | |
11,072,696 | 6,503,971 | ||
| 11,300,765 | 7,007,477 |
Approved by the Board of Directors:
“Gary Nordin” | “David Hottman” | |
Gary Nordin, Director | David Hottman, Director |
See notes to consolidated financial statements
PORTAL RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
For the three months ended September 30,
(stated in Canadian dollars)
(Unaudited – prepared by management)
2007 | 2006 | |||
$ | $ | |||
Revenue | - | - | ||
Expenses | ||||
Accounting and audit | 14,231 | 9,307 | ||
Amortization | 6,585 | 4,164 | ||
Bank charges and interest | 7,669 | 10,164 | ||
Consulting and management fees | 8,697 | - | ||
Foreign asset tax | 5,949 | - | ||
Foreign exchange | 19,338 | 14,353 | ||
Interest income | (39,384) | (38,448) | ||
Investor relations | 86,585 | 80,424 | ||
Legal | 17,536 | 8,153 | ||
Office and miscellaneous | 28,125 | 20,554 | ||
Rent | 8,271 | 4,936 | ||
Project investigation | 15,133 | 24,080 | ||
Salaries and benefits | 95,792 | 42,324 | ||
Stock-based compensation (Note 5) | 86,300 | 17,456 | ||
Travel | 12,976 | 5,666 | ||
Transfer agent and filing fees | 743 | 1,381 | ||
Write-off of amounts receivable | - | 15,291 | ||
Valuation allowance for foreign value added tax credit (IVA) | 18,070 | 95,891 | ||
392,616 | 315,696 | |||
Net loss for the period | (392,616) | (315,696) | ||
Deficit – beginning of period | (4,016,745) | (2,139,521) | ||
Deficit – end of period | (4,409,361) | (2,455,217) | ||
Loss per share (Note 2) | $(0.01) | $ (0.02) | ||
Weighted average number of common shares outstanding | 28,336,206 | 20,888,039 | ||
See notes to consolidated financial statements
PORTAL RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30,
(stated in Canadian dollars)
(Unaudited – prepared by management)
2007 | 2006 | |||
$ | $ | |||
Cash provided by (used for): | ||||
Operating Activities | ||||
Net loss for the period | (392,616) | (315,696) | ||
Items not involving cash: | ||||
Stock-based compensation | 86,300 | 17,456 | ||
Write-off of amounts receivable | - | 15,291 | ||
Amortization | 6,585 | 4,164 | ||
(299,731) | (278,785) | |||
Changes in non-cash working capital: | ||||
Amounts receivable | 825 | (6,786) | ||
Prepaid expenses | (14,493) | (10,155) | ||
Accounts payable and accrued liabilities | (170,181) | (144,125) | ||
Due to related parties | 10,219 | 25,595 | ||
(473,361) | (414,256) | |||
Investing Activities | ||||
Purchase of equipment and software | (8,887) | (23,034) | ||
Expenditures on unproven mineral rights | (437,032) | (649,372) | ||
(445,919) | (672,406) | |||
Financing Activities | ||||
Shares issued for cash | 5,126,550 | - | ||
On option exercise | 2,600 | - | ||
Shares subscribed | (59,800) | - | ||
Share issue costs | (194,309) | 500 | ||
4,875,041 | 500 | |||
Net increase (decrease) in cash and cash equivalents | 3,955,761 | (1,086,162) | ||
Cash and cash equivalents – beginning of period | 1,069,730 | 4,965,228 | ||
Cash and cash equivalents– end of period | 5,025,491 | 3,879,066 | ||
Supplementary disclosure of non-cash Investing and Financing Activities: | ||||
Deferred expenditures on unproven mineral rights included in accounts payable | $ 154,076 | $ - |
See notes to consolidated financial statements
PORTAL RESOURCES LTD.
CONSOLIDATED STATEMENTS OF DEFERRED EXPENDITURES ON UNPROVEN MINERAL RIGHTS
For the three months ended September 30,
(stated in Canadian dollars)
(Unaudited – prepared by management)
Arroyo Verde | San Rafael | La Pampa Uranium | Tiger Uranium | Slick Rock Uranium | Project Investigation | Total | |
$ | $ | $ | $ | $ | $ | $ | |
Total as at June 30, 2005 | 1,198,827 | 281,731 | - | - | - | 63,625 | 1,544,183 |
Land acquisition & holding costs | 53,953 | 80,450 | - | - | - | 1,200 | 135,603 |
Environment | - | 1,979 | - | - | - | - | 1,979 |
Geology | 229,646 | 94,558 | - | - | - | 15,305 | 339,509 |
Geophysics | - | 97,612 | - | - | - | - | 97,612 |
Surface geochemistry | 59,423 | 23,687 | - | - | - | - | 83,110 |
Drilling | 480,976 | - | - | - | - | - | 480,976 |
Total expenditures | 823,998 | 298,286 | - | - | - | 16,505 | 1,138,789 |
Property write-offs | - | - | - | - | - | (80,130) | (80,130) |
Total as at June 30, 2006 | 2,022,825 | 580,017 | - | - | - | - | 2,602,842 |
Land acquisition & holding costs | 72,695 | 221,715 | 17,143 | 1,131 | 132,448 | - | 445,132 |
Environment | 1,203 | 2,116 | - | 2,027 | - | - | 5,346 |
Geology | 413,219 | 262,537 | 152,632 | 56,292 | 1,070 | - | 885,750 |
Geophysics | 27,607 | 64,260 | - | - | - | - | 91,867 |
Surface geochemistry | 40,404 | 23,768 | 1,861 | 1,789 | - | - | 67,822 |
Drilling | 1,261,256 | 323,344 | - | - | - | - | 1,584,600 |
Total expenditures | 1,816,384 | 897,740 | 171,636 | 61,239 | 133,518 | - | 3,080,517 |
Total as at June 30, 2007 | 3,839,209 | 1,477,757 | 171,636 | 61,239 | 133,518 | - | 5,683,359 |
Land acquisition & holding costs | 29,385 | 11,144 | 10,798 | - | 7,763 | - | 59,090 |
Environment | 1,044 | 206 | 21 | 1,894 | - | - | 3,165 |
Geology | 62,464 | 38,649 | 125,477 | 5,409 | 12,542 | - | 244,541 |
Geophysics | - | 2,062 | - | - | - | - | 2,062 |
Surface geochemistry | 4,432 | - | 4,132 | - | - | - | 8,564 |
Drilling | 3,636 | 499 | - | - | - | - | 4,135 |
Total expenditures | 100,961 | 52,560 | 140,428 | 7,303 | 20,305 | - | 321,557 |
Total as at September 30, 2007 | 3,940,170 | 1,530,317 | 312,064 | 68,542 | 153,823 | - | 6,004,916 |
See notes to consolidated financial statements
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007(Unaudited – prepared by management)
(stated in Canadian dollars)
1.
NATURE OF OPERATIONS
Portal Resources Ltd. was incorporated on August 14, 2000 under the Company Act of the Province of British Columbia.
The Company is an exploration stage company whose business activity is the exploration of mineral rights located in Argentina and the United States. The Company has not yet determined if any of these rights contain economic mineral reserves and, accordingly, the amounts shown for deferred exploration costs represent costs incurred to date, less write-downs, and do not necessarily reflect present or future values. The recovery of these amounts is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration of the rights, and upon the commencement of future profitable production or, alternatively, upon the Company’s ability to dispose of its interests on an advantageous basis.
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). These interim consolidated financial statements have been prepared in accordance with the accounting policies describe in the Company’s annual consolidated financial statements, do not include in all respects the annual disclosure requirements of generally accepted accounting principles, and should be read in conjunction with the most recent annual consolidated financial statements. The differences between those principles and the ones that would be applied under U.S. generally accepted accounting principles (U.S. GAAP) are disclosed in note 8.
References to the Company are inclusive of the Canadian parent company and its wholly-owned Argentinean subsidiary. All significant inter-company transactions and balances have been eliminated.
The accounting policies followed by the Company are set out in Note 2 to the audited consolidated financial statements for the year ended June 30, 2007 and have been consistently followed in preparation of these interim consolidated financial statements, except with respect to the following new and revised accounting standards which the Company is required to adopt under Canadian GAAP for interim and annual financial statements relating to its fiscal year commencing July 1, 2007.
New accounting policies
Effective July 1, 2007, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1530, Comprehensive Income; Section 3251 Equity, Section 3855, Financial Instruments – Recognition and Measurement; and Section 3865, Hedges, retroactively without restatement. These new CICA Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide requirements for the recognition of financial instruments and on the use of hedge accounting.
(a)
Section 1530 – Comprehensive Income: Section 1530 establishes standards for reporting and presenting comprehensive income, with is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with generally accepted accounting principles. Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated. The adoption of this Handbook Sections has no impact on opening deficit.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES, (Continued)
(b)
Section 3855 – Financial Instruments – Recognition and Measurement: Section 3855 prescribes when a financial asset, financial liability or non-financial derivative is to be recognized on the balance sheet, and whether fair value or cost-based measures are used to measure the recorded amounts. Financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities, which are measured at amortized cost. Subsequent measurement and changes in fair value depend on their initial classification, as follows: held-for-trading financial instruments are measured a t fair value and changes in fair value are recognized in net income; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net income.
The Company has designated it cash and cash equivalents as held-for-trading, which are measured at fair value and accounts receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable, accrued liabilities and due to/from related parties are classified as other financial liabilities. The Company had neither available-for-sale not held-to-maturity instruments during the three months ended September 30, 2007.
(c)
Section 3865 – Hedges: Section 3865 is applicable when an entity chooses to designate a hedging relationship for accounting purposes. It specifies how hedge accounting is applied and what disclosures are necessary when it is applied. The adoption of this standard has no present impact as the Company is not currently engaged in any hedging activity.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
3.
EQUIPMENT AND SOFTWARE
September 30, 2007 | June 30, 2007 | ||||||||||
Cost | Accumulated amortization | Net book value | Cost | Accumulated amortization | Net book value | ||||||
$ | $ | $ | $ | $ | $ | ||||||
Computer equipment | 16,605 | 10,930 | 5,675 | 11,992 | 10,531 | 1,461 | |||||
Computer software | 20,453 | 18,792 | 1,661 | 20,453 | 18,460 | 1,993 | |||||
Furniture & fixtures | 8,773 | 1,461 | 7,312 | 4,499 | 1,130 | 3,369 | |||||
Vehicles | 44,558 | 15,982 | 28,576 | 44,558 | 13,754 | 30,804 | |||||
Field equipment | 65,893 | 12,206 | 53,687 | 65,893 | 8,911 | 56,982 | |||||
156,282 | 59,371 | 96,911 | 147,395 | 52,786 | 94,609 |
4.
UNPROVEN MINERAL RIGHTS
The Company’s mineral properties are all located in Argentina and the United States.
Arroyo Verde
On November 27, 2003, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Chubut province of Argentina. Under the terms of the agreement the Company’s payment requirements are as follows:
US$
Within 60 days of reviewing technical data
$ 1,000 (paid)
On signing of the agreement
$ 4,000 (paid)
On or before June 1, 2004
$ 5,000 (paid)
On or before December 1, 2004
$ 20,000 (paid)
On or before December 1, 2005
$ 40,000 (paid)
On or before December 1, 2006
$ 60,000 (paid)
On or before December 1, 2007
$ 80,000
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
4.
UNPROVEN MINERAL RIGHTS (Continued)
On or before December 1, 2008 or upon receipt of a feasibility study, the Company must pay an advance royalty payment of US$1 for each ounce of gold equivalent in the measured and indicated resources with a minimum of US$100,000 and a maximum of US$250,000. This advance royalty can be applied against subsequent royalty obligations. The vendor retains a 2% net smelter royalty that the Company can purchase 1% of, at any time, for US$1,000,000.
San Rafael
The properties in the San Rafael project have been acquired through two separate option agreements.
San Pedro
On June 18, 2004, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Mendoza province of Argentina. Under the terms of the agreement the Company’s payment requirements to exercise the option are as follows:
US$
On signing of the agreement
$ 30,000 (paid)
On or before June 18, 2005
$ 20,000 (paid)
On or before June 18, 2006
$ 30,000 (paid)
On or before June 18, 2007
$ 40,000 (paid)
On or before June 18, 2008
$ 50,000
On or before June 18, 2009
$ 60,000
On or before June 18, 2010
$200,000
On or before June 18, 2011
$200,000
On or before June 18, 2012
$200,000
Rio de la Plata
On June 18, 2004, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Mendoza province of Argentina. Under the terms of the agreement the Company’s payment requirements to exercise the option are as follows:
US$
On signing of the agreement
$ 15,000 (paid)
On or before April 9, 2005
$ 15,000 (paid)
On or before April 9, 2006
$ 15,000 (paid)
On or before April 9, 2007
$ 50,000 (paid)
On or before April 9, 2008
$ 70,000
On or before April 9, 2009
$100,000
The Company is obligated to make the initial three annual payments of $15,000. Should the Company wish to develop any of the four areas defined in the agreement, during the term of the option, it must pay the sum of US$50,000 for each area so designated. The Company would then form a new 100% owned subsidiary to which the mining rights in that designated area would be transferred. The new subsidiary would be subject to a 15% to 20% net profit interest to the owner. The Company has the right to purchase 10% of the net profits interest at any time for the sum of US$1,000,000.
Tiger Uranium
The Tiger uranium project consists of six mining concessions. The claims are held under the two existing option agreements for the San Rafael block of concessions.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
4.
UNPROVEN MINERAL RIGHTS, (Continued)
La Pampa Uranium
On April 20,2007 Portal signed a letter agreement whereby Portal has an option to earn a 60% interest in a series of mining rights in Chubut province of Argentina. Under the terms of the agreement the Company’s payment requirements are as follows:
US$
On signing of the agreement
$ 15,000 (paid)
On or before April 20, 2008
$ 30,000
On or before April 20, 2009
$ 50,000
On or before April 20, 2010
$ 50,000
In order to maintain the option in good standing, Portal must expend an aggregate of US$1,200,000 by April 20, 2011. The required cumulative required expenditures are as follows:
On or before April 20, 2008
$ 150,000
On or before April 20, 2009
$ 400,000
On or before April 20, 2010
$ 800,000
On or before April 20, 2011
$ 1,200,000
Slick Rock Uranium
On June 22, 2007, Portal signed a letter agreement whereby Portal has an option to earn a 60% interest in a approximately 419 hectares of private fee land and BLM claims in San Miguel County, Colorado, USA. Under the terms of the agreement, in addition to the issuance of 100,000 commons shares of the company, the Company’s payment requirements are as follows:
US$
On signing of the agreement
$ 51,000 (paid)
On or before June 22, 2008
$ 25,000
On or before June 22, 2009
$ 25,000
In order to maintain the option in good standing, Portal must expend an aggregate of US$445,000 by June 22, 2010, with a minimum of US$100,000 in each year. A further 15% interest can be earned through the expenditure of an additional US$250,000 over the following two years. If either party dilutes to less than a 10% working interest, it will be converted to a 2% net proceeds royalty of which 1% can be purchased for US$1,000,000 by the majority partner.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
5.
SHARE CAPITAL
Authorized
100,000,000 Common Shares without par value
100,000,000 Preferred shares issuable in series
Issued
Number |
Amount | Contributed surplus | |||
Balance – June 30, 2005 | 10,798,943 | $2,969,461 | $180,493 | ||
Private placements | 9,390,000 | 6,144,250 | - | ||
On exercise of warrants | 384,471 | 346,024 | - | ||
On exercise of options | 166,400 | 55,954 | - | ||
Fair market value of stock options exercised | - | 18,625 | (18,625) | ||
Stock based compensation | - | - | 138,605 | ||
Finders fees | 148,225 | 74,113 | - | ||
Share issue costs | - | (431,302) | - | ||
Balance – June 30, 2006 | 20,888,039 | 9,177,125 | 300,473 | ||
Issued for resource property | 100,000 | 78,000 | - | ||
On exercise of warrants | 759,000 | 569,250 | - | ||
On exercise of options | 12,500 | 8,300 | - | ||
Fair market value of stock options exercised | - | 3,681 | (3,681) | ||
Stock based compensation | - | - | 340,206 | ||
Share issue costs | - | (12,438) | - | ||
Balance – June 30, 2007 | 21,759,539 | 9,823,918 | 636,998 | ||
Private placement(i) | 7,887,000 | 5,126,550 | - | ||
On exercise of options | 5,000 | 2,600 | - | ||
Fair market value of stock options exercised | - | 1,402 | (1,402) | ||
Stock based compensation | - | - | 86,300 | ||
Finders fees | - | (151,997) | - | ||
Share issue costs | - | (42,312) | - | ||
Balance – September 30, 2007 | 29,651,539 | $14,760,161 | $721,896 |
i)
On July 20, 2007, the Company completed a private placement for 7,887,000 units at $0.65 for gross proceeds of $5,126,550, with each unit consisting of one common share and one-half share purchase warrant. Each whole share purchase warrant is exercisable at $0.85 until July 20, 2008 and all securities have a four-month hold period. Finder’s fees of $151,997 were paid on this placement.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
5.
SHARE CAPITAL, (Continued)
Stock-based Compensation
The Company has a stock option plan as described in the most recent annual financial statements of the Company. On December 5, 2006, the maximum aggregate number of common shares reserved and authorized to be issued pursuant to options granted under the Stock Option Plan was amended from 1,619,841 to 3,133,205 common shares.
The Company accounts for its grants in accordance with the fair value method of accounting for stock-based compensation. For the three months ended September 30, 2007, the Company recognized $ 86,300 (2006 - $17,456) in stock-based compensation for employees, directors and consultants.
A summary of changes to stock options outstanding is as follows:
September 30 | June 30 | |||
2007 | 2007 | |||
Weighted- Average | Weighted- Average | |||
Number of shares | Exercise Price | Number of shares | Exercise Price | |
Outstanding at beginning of period | 2,766,100 | $ 0.54 | 1,219,700 | $ 0.51 |
Granted under plan | - | $ - | 1,576,400 | $ 0.57 |
Exercised | (5,000) | $ 0.52 | (12,500) | $ 0.66 |
Forfeited or cancelled | (20,000) | $ 0.78 | (17,500) | $ 0.71 |
Outstanding at end of period | 2,741,100 | $ 0.54 | 2,766,100 | $ 0.54 |
At September 30, 2007, the weighted average remaining life of the outstanding options is 3.21 years (June 30, 2007 - 3.47 years).
Stock options outstanding as at September 30, 2007 are as follows:
Number | Exercise Price | Expiry Date |
632,200 | $ 0.25 | March 15, 2009 |
50,000 | $ 0.75 | June 18, 2009 |
60,000 | $ 0.77 | December 23, 2009 |
200,000 | $ 0.86 | April 14, 2010 |
137,500 | $ 0.70 | January 20, 2011 |
100,000 | $ 0.85 | March 21, 2008 |
105,000 | $ 0.75 | October 18, 2011 |
1,181,400 | $ 0.52 | December 5, 2011 |
200,000 | $ 0.70 | June 6, 2012 |
75,000 | $ 0.79 | June 19, 2012 |
2,741,100 |
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
5.
SHARE CAPITAL, (Continued)
Warrants
Warrants outstanding as at Sept 30, 2007 are as follows:
Number | Exercise Price | Expiry Date |
1,317,500 | $ 1.25 | November 18, 2007 (i) |
3,943,500 | $ 0.85 | July 20, 2008 |
5,261,000 |
(i)
On November 18, 2007 these warrants expired unexercised
6.
COMMITTMENTS
The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2008. The remaining future minimum lease payments for the non-cancellable lease for the fiscal year ended June 30, 2008 are $44,115.
7.
RELATED PARTY TRANSACTIONS
Payments to related parties were made in the normal course of operations and were valued at fair value as determined by management. Amounts due to or from related parties are unsecured, non-interest bearing and due on demand.
For the three months ended September 30, 2007, and 2006
During the three months ended September 30, 2007, $5,388 was charged to a private company with certain directors in common with the Company for administrative fees and rent. As at September 30, 2007, $Nil (June 30, 2007 - $Nil) was receivable from this private company.
During the three months ended September 30, 2007, $5,388 was charged to another private company with certain directors in common with the Company for administrative fees and rent. As at September 30, 2007, $Nil (June 30, 2007 - $Nil) was receivable from this private company.
During the three months ended September 30, 2007, $8,168 was charged to a public company with a director in common for rent. As at September 30, 2007, $Nil (June 30, 2007 - $Nil) was receivable from this public company.
As at September 30, 2007 the Company owes certain directors and officers an aggregate of $ 13,452 (June 30, 2007 - $3,233) for expense reimbursements.
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
8.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
Under Canadian GAAP for junior mining exploration companies, mineral exploration expenditures are deferred on prospective mineral rights until such time as it is determined that further exploration work is not warranted, at which time the mineral right costs are written-off. Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the mineral rights are capable of economic commercial production. The following items (a) to (g) provide a summary of the impact of these financial statements that would result from the application of U.S. accounting principles to deferred mineral rights.
For three months ended | Year ended | |||||
September 30, | June 30, | |||||
2007 | 2006 | 2007 | ||||
$ | $ | $ | ||||
a) Assets | ||||||
Unproven Mineral Rights Costs | ||||||
Unproven mineral rights costs under Canadian GAAP: | 6,004,916 | 3,252,214 | 5,683,359 | |||
Less unproven mineral rights costs | (6,004,916) | (3,252,214) | (5,683,359) | |||
Unproven mineral rights costs under U.S. GAAP | - | - | - |
b) Operations | ||||||
Net loss under Canadian GAAP | (392,616) | (315,696) | (1,877,224) | |||
Unproven mineral rights costs expensed under U.S. GAAP | (321,557) | (649,372) | (3,080,517) | |||
Net loss under U.S. GAAP | (714,173) | (965,068) | (4,957,741) | |||
c) Deficit | ||||||
Closing deficit under Canadian GAAP | (4,409,361) | (2,455,217) | (4,016,745) | |||
Adjustment to deficit for accumulated unproven mineral rights | ||||||
expensed under U.S. GAAP, net of income items | (6,004,916) | (3,252,214) | (5,683,359) | |||
Closing deficit under U.S. GAAP | (10,414,277) | (5,707,431) | (9,700,104) | |||
|
d) Cash Flows – Operating Activities | ||||||
Cash applied to operations under Canadian GAAP | (473,361) | (414,256) | (1,704,195) | |||
Add net loss following Canadian GAAP | 392,616 | 315,696 | 1,877,224 | |||
Add non cash unproven mineral rights expensed under U.S. GAAP | (115,475) | - | 347,551 | |||
Less net loss under U.S. GAAP | (714,173) | (965,068) | (4,957,741) | |||
Less unproven mineral rights costs expensed under Canadian GAAP | - | - | - | |||
Cash applied to operations under U.S. GAAP | (910,393) | (1,063,628) | (4,437,161) | |||
e) Cash Flows – Investing Activities | ||||||
Cash applied under Canadian GAAP | (445,919) | (672,406) | (2,816,215) | |||
Less non cash unproven mineral rights expensed under US GAAP | 115,475 | (347,551) | ||||
Add unproven mineral right costs expensed under U.S. GAAP | 321,557 | 649,372 | 3,080,517 | |||
Cash applied under U.S. GAAP | (8,887) | (23,034) | (83,249) | |||
PORTAL RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the three months ended September 30, 2007 (Unaudited – prepared by management)
(stated in Canadian dollars)
8.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Continued)
OTHER DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
f) Stockholders’ Equity
Common Stock
There are no differences between Canadian and U.S. GAAP for the years ended June 30, 2007, 2006 and 2005 regarding the disclosure of stock-based compensation.
g) Loss per Share
The following is a reconciliation of the numerators and denominators of the basic and diluted loss per share calculations. Diluted loss per share is not presented as it is anti-dilutive.
For the three months ended | Year ended | |||||
September 30, | June 30, | |||||
2007 | 2006 | 2007 | ||||
$ | $ | $ | ||||
Numerator: Net loss for the year under U.S. GAAP | (714,173) | (965,068) | (4,957,741) | |||
Denominator: Weighted-average number of shares under | ||||||
Canadian and U.S. GAAP | 28,336,206 | 20,888,039 | 21,183,935 | |||
Basic and fully diluted loss per share under U. S. GAAP | $ (0.03) | $ (0.05) | $ (0.23) | |||