NIOGOLD MINING CORP.
INTERIM FINANCIAL STATEMENTS
FEBRUARY 29, 2008
(Unaudited)
Notice Pursuant to National Instrument 51-102
These unaudited interim financial statements have been prepared by management and approved by the Audit Committee
and Board of Directors of the Company. They have not been reviewed by an audit
NIOGOLD MINING CORP.
Balance Sheets
(Unaudited -- Prepared by Management)
February 29, | August 31, | |
ASSETS | ||
CURRENT | ||
Cash and cash equivalents | $ 6,496,811 | $ 8,663,870 |
Investments | 138,025 | 123,500 |
Accounts receivable (Note 3) | 270,754 | 190,370 |
Prepaid expenses and deposits (Note 10) | 11,588 | 17,898 |
6,917,178 | 8,995,638 | |
EQUIPMENT (Note 4) | 109,247 | 92,462 |
MINERAL PROPERTIES (Notes 5, 6 and 11) | 8,063,221 | 6,379,369 |
$ 15,089,646 | $ 15,467,469 | |
LIABILITIES | ||
CURRENT | ||
Accounts payable and accrued liabilities | $ 52,128 | $ 281,066 |
52,128 | 281,066 | |
COMMITMENTS (Note 5) | ||
SHAREHOLDERS' EQUITY | ||
SHARE CAPITAL (Notes 6 and 12) | 23,960,983 | 23,822,483 |
SHARE PURCHASE WARRANTS (Note 8) | 787,394 | 836,608 |
CONTRIBUTED SURPLUS (Note 9) | 1,351,461 | 1,278,683 |
DEFICIT | (11,062,321) | (10,751,371) |
15, 037, 517 | 15,186, 403 | |
$ 15,089,645 | $ 15,467,469 |
APPROVED BY THE BOARD:
"Michael Iverson"
"Rock Lefrangois"
Michael Iverson, Director
Rock Lefrançois, Director
NIOGOLD MINING CORP.
Statements of Operations and Deficit
(Unaudited -- Prepared by Management)
Three Months Ended | Six Months Ended | |||||
February 29, 2008 | February 28, 2007 | February 29, 2008 | February 28, 2007 | |||
EXPENSES | ||||||
Amortization | $ 7,893 | $ 762 | $ 15,111 | $ 17,474 | ||
Consulting (Note 10) | - | 15,000 | - | 33,000 | ||
Investor relations | 23,500 | 24,012 | 54,000 | 24,012 | ||
Legal and audit | 39,498 | 34,005 | 68,700 | 61,301 | ||
Management fees (Note 10) | 36,000 | 25,500 | 72,000 | 51,000 | ||
Share-based compensation (Note 7) | 23,564 | 223,448 | 23,564 | 223,448 | ||
Office and administrative | 19,778 | 8,852 | 32,811 | 15,991 | ||
Rent (Note 10) | 24,397 | 5,840 | 40,250 | 11,540 | ||
Shareholder information | 60,850 | 43,957 | 146,827 | 57,596 | ||
Telephone | 6,345 | 2,957 | 12,597 | 6,405 | ||
Transfer agent and filing fees | 17,529 | 16,773 | 20,022 | 19,039 | ||
Travel and automotive | 9,879 | (202) | 33,090 | 11,631 | ||
Interest income | (97,377) | (9,187) | (200,960) | (22,148) | ||
Unrealized loss (gain) on investments | 20,937 | - | (7,063) | - | ||
LOSS | $ 192,793 | $ 391,717 | $ 310,949 | $ 510,289 | ||
DEFICIT, OPENING | 10,869,528 | 9,643,112 | 10,751,372 | 9,524,540 | ||
DEFICIT, CLOSING | $ 11,062,321 | $ 10,034,829 | $ 11,062,321 | $ 10,034,829 | ||
LOSS PER SHARE - basic and diluted | $ 0.00 | $ 0.01 | $ 0.01 | $ 0.02 | ||
Weighted average number of common shares | 61,154,000 | 33,755,000 | 61,123,000 | 33,320,000 | ||
NIOGOLD MINING CORP.
Statements of Cash Flows
(Unaudited -- Prepared by Management)
Three Months Ended | Six Months Ended | |||
February 29, 2008 | February 28, 2007 | February 29, 2008 | February 28, 2007 | |
CASH PROVIDED BY (USED FOR) | ||||
OPERATIONS | ||||
Loss | $ (192,793) | $ (391,717) | $ (310,949) | $ (510,289) |
Items not involving cash: | ||||
Amortization | 7,893 | 762 | 15,111 | 17,474 |
Share-based compensation | 23,564 | 223,448 | 23,564 | 223,448 |
Unrealized loss (gain) on investments | 20,937 | - | (7,063) | - |
Changes in non-cash working capital: | ||||
Accounts receivable | (93,230) | 107,515 | (80,384) | 24,662 |
Prepaid expenses and deposits | 3,655 | 4,711 | 6,310 | 8,204 |
Accounts payable and accrued liabilities | (169,530) | (76,290) | (228,938) | (107,198) |
Cash provided by (used for) operations | (406,966) | (131,571) | (589,811) | (343,699) |
FINANCING | ||||
Common shares subscribed for cash | - | 548,655 | - | 548,655 |
- | 548,655 | - | 548,655 | |
INVESTING | ||||
Mineral property expenditures | (745,597) | (439,250) | (1,545,352) | (1,032,244) |
Equipment acquired | (6,078) | (7,625) | (31,897) | (12,502) |
(751,675) | (446,875) | (1,577,249) | (1,044,746) | |
CHANGE IN CASH AND CASH EQUIVALENTS | (1,158,641) | (29,791) | (2,167,060) | (839,790) |
CASH AND CASH EQUIVALENTS, OPENING | 7,655,452 | 1,322,190 | 8,663,870 | 2,132,189 |
CASH AND CASH EQUIVALENTS, CLOSING | $ 6,496,810 | $ 1,292,399 | $ 6,496,810 | $ 1,292,399 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||||
Cash paid for Interest | $ 166 | $ 182 | $ 166 | $ 198 |
Cash paid for Income taxes | - | - | - | - |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
1.
NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated in the Province of British Columbia on March 30, 1988, as Penn-Gold Resources Inc.The Company’s name was changed to Moreno Ventures Inc. on April 7, 1998, and to Niogold Mining Corp. onSeptember 25, 2003. The Company is engaged in the exploration and development of resource properties in Quebec,Canada.
During the years ended August 31, 2007 and 2006, the Company incurred significant losses. The Company receivesno revenue from its mineral properties and is dependent primarily upon share offerings to support it as a going concern.
These financial statements have been prepared on a going concern basis and do not include any adjustments thatmight be necessary should the Company be unable to continue to realize its assets and discharge its liabilities in thenormal course of business.
2.
SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Presentation
These financial statements have been prepared in accordance with Canadian generally accepted accountingprinciples and are presented in Canadian dollars.
(b)
Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated at the rate in effect at the balancesheet date. Non-monetary assets and liabilities are translated at historic rates. Revenues and expenses aretranslated at the average exchange rate for the period.
(c)
Risk Management
The Company generates nominal revenues and is not exposed to significant credit concentration risk. TheCompany is not exposed to significant interest rate risk. Because the Company's functional currency is theCanadian dollar and all current operations occur within Canada, the Company is not exposed to significant foreignexchange risk.
(d)
Financial Instruments
Effective September 1, 2006, the Company adopted, on a prospective basis, the recommendations of CICAHandbook Section 3855 “Financial Instruments” and Section 3861 “Financial Instruments -- Disclosure andPresentation”. Section 3855 recommends that financial assets and liabilities classified as held for trading bemeasured at fair value with gains and losses recognized in net income in the periods in which they arise. TheCompany classifies its investments in marketable securities as held for trading.
The Company's financial instruments consist of cash and cash equivalents, investments, accounts receivable,prepaid expenses and deposits, and accounts payable and accrued liabilities. Unless otherwise noted, the fairvalues of these financial instruments approximate their carrying values. The Company does not have any hedginginstruments.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
2.
SIGNIFICANT ACCOUNTING POLICIES, continued
(e)
Use of Estimates
The preparation of financial statements in conformity with Canadian generally accepted accounting principlesrequires management to make estimates that affect the amounts of assets and liabilities reported in the financialstatements. Those estimates also affect the disclosure of contingencies at the date of the financial statements andthe reported amounts of revenues and expenses during the year. Significant estimates include the carrying valueof mineral properties, the value of incentive share purchase options, and certain accrued liabilities. Actual resultscould differ from those estimates.
(f)
Cash and Cash Equivalents
The Company considers all highly liquid financial instruments with a maturity date of three months or less at thetime of purchase to be cash equivalents. Cash and cash equivalents consist primarily of cash, term deposits andmoney market funds held at banks and other financial institutions.
(g)
Investments
Investments, consisting of shares in public companies, are carried at fair market value (Note 3).
(h)
Equipment and Amortization
Equipment is carried at cost less accumulated amortization. Amortization is calculated using the declining balancemethod at the annual rates set out below. In the year of acquisition, amortization is provided at one-half the annualrate.
Computer equipment | 30 to 50% | Mining equipment | 20% | |
Office furniture and equipment | 20% | Vehicles | 30% |
(i) Mineral Properties
The Company has not yet determined whether its mineral properties contain ore reserves that are economicallyrecoverable. In accordance with industry practice, the recoverability of amounts shown for mineral properties andrelated deferred costs is dependent upon the discovery of economically recoverable reserves, confirmation of theCompany's interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing tocomplete the development of the resource, favourable future ore prices and interest rates, and upon futureprofitable production.
All costs directly relating to the acquisition, exploration and development of mineral properties are deferred untilsuch time as the properties are brought into commercial production, sold or abandoned, at which time they will beamortized on a unit of production basis over the estimated useful life of the property or written off. Revenueincidental to exploration and development activities, including the proceeds on sales of partial properties, is creditedagainst the cost of related properties. Properties that include abandoned claims are carried at the total cost of allrelated claims. Inactive properties are carried at cost unless there is an abandonment of the Company's interest, atwhich time the cost is written off.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
2. SIGNIFICANT ACCOUNTING POLICIES, continued
(i)
Mineral Properties, continued
Where the Company enters into an option agreement for the acquisition of an interest in mineral properties thatprovides for periodic payments, such amounts unpaid are not recorded as a liability since they are payable at theCompany's discretion.
(j)
Government Grants
The Company is entitled to apply for government grants in the form of refundable tax credits and mining duties inrespect of qualifying mining exploration expenses incurred in the Province of Quebec. These recoveries areaccounted for using the cost reduction approach whereby amounts received or receivable are applied against thecost of related assets or expenditures.
(k)
Asset Retirement Obligations
The Company follows the recommendations of CICA Handbook Section 3110 "Asset Retirement Obligations" whichrequires entities to record a liability at fair value in the period in which it incurs a legal obligation associated with theretirement of an asset, including environmental and site reclamation costs. As at the date of these financialstatements, the Company does not have any asset retirement obligations.
(l)
Share-Based Compensation
Effective September 1, 2004, the Company adopted, on a prospective basis, the recommendations of CICAHandbook Section 3870 “Stock-Based Compensation and Other Stock-Based Payments”. Section 3870recommends fair value-based methodology for measuring all compensation costs. Under this method the fair valueof share options awarded is recognized as an expense with a corresponding charge to contributed surplus.
The Company uses the Black-Scholes option pricing model to determine share-based compensation costs. Thismodel was developed for use in estimating the value of traded options that have no vesting restrictions and are fullytransferable. Because the Company's share-based compensation options have characteristics significantlydifferent from those of traded options, and because changes in the subjective input assumptions can materiallyaffect value estimates, amounts estimated using the Black-Scholes option pricing model may differ materially fromthe actual fair value of the Company's share-based compensation options.
(m)
Income Taxes
The Company follows the asset and liability method of accounting for income taxes. Under this method, futureincome tax assets and liabilities are determined based on temporary differences between the financial reportingand tax basis of assets and liabilities, and are measured using the tax rates expected to apply when thesedifferences reverse. A valuation allowance is recorded against any potential future income tax asset if it is morelikely than not that the asset will not be realized. As at the date of these financial statements, the Company doesnot meet the criteria for recognition of future income tax assets and, consequently, a full valuation allowance hasbeen recorded.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
2. SIGNIFICANT ACCOUNTING POLICIES, continued
(n)
Flow-Through Shares
The Company finances a portion of its exploration activities through the issuance of flow-through shares, whichtransfer the tax deductibility of qualifying exploration expenditures to the investor in accordance with income taxlegislation.
Effective September 1, 2004, the Company adopted the recommendations of CICA EIC-146 "Flow-through Shares".Under EIC-146 future income tax liabilities resulting from the renunciation of exploration expenditures are recordedas a reduction in share capital in the period of renunciation, and any corresponding realization of future income taxassets resulting from the utilization of prior year losses is reflected in income as a recovery of future income taxes.
The renunciation of exploration expenditures represents a reduction in deductible temporary differences betweenthe financial reporting and tax basis of the Company's mineral properties. The Company's deductible temporarydifferences are not expected to reverse in the foreseeable future and, therefore, the renunciation of explorationexpenditures is not expected to result in a future income tax liability. Accordingly, the Company has not recorded areduction in share capital nor the realization of a future tax asset as contemplated by EIC-146.
(o)
Income (Loss) Per Share
Basic income (loss) per share is calculated using the weighted average number of common shares outstandingduring the period. The calculation of diluted income (loss) per share uses a weighted average number of sharesthat includes additional shares from the assumed exercise of warrants and options, if dilutive.
(p)
Comparative Figures
Certain comparative figures have been reclassified to conform with the current year’s presentation.
3.
ACCOUNTS RECEIVABLE
February 29, 2008 | August 31, 2007 | |
Goods and services taxes | $ 223,029 | $ 171,941 |
Accrued interest | 47,725 | 18,429 |
$ 270,754 | $ 190,370 |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
4.
EQUIPMENT
Cost | Accumulated Amortization | Net Book Value | ||
Computer equipment | $ 78,000 | $ 47,906 | $ 30,102 | |
Mining equipment | 22,585 | 6,716 | 15,869 | |
Office furniture and equipment | 64,115 | 27,973 | 36,142 | |
Vehicles | 59,575 | 32,441 | 27,134 | |
February 29, 2008 | $ 224,283 | $ 115,036 | $ 109,247 |
Cost | Accumulated Amortization | Net Book Value | ||
Computer equipment | $ 71,931 | $ 41,900 | $ 30,031 | |
Mining equipment | 22,585 | 4,958 | 17,627 | |
Office furniture and equipment | 38,297 | 25,399 | 12,898 | |
Vehicles | 59,297 | 27,669 | 31,906 | |
August 31, 2007 | $ 192,388 | $ 99,926 | $ 92,462 |
5.
MINERAL PROPERTIES
(a)
Malartic, Fournière and Cadillac Townships, Quebec
Marban Block
On February 3, 2006, the Company entered into an option agreement to acquire a 100% interest in threecontiguous mineral properties known as the Marban, First Canadian, and Norlartic properties, located near Val-d'Or, Quebec. The Company paid $200,000 and issued 500,000 common shares upon signing of the agreement. Underthe terms of the option agreement, the Company can earn a 100% interest in the properties by paying an additional$200,000, issuing a further 500,000 common shares and incurring at least $2,500,000 of exploration anddevelopment expenses within three years. The Marban claims are subject to net smelter royalties totaling 2 to 2.5percent depending on the price of gold. The First Canadian claims are subject to a 10% net profits interest. Thevendor retains a 0.5% net smelter royalty on th e Marban claims, a 1% net smelter royalty on the First Canadianclaims, and a 2% net smelter royalty on the Norlartic claims.
Gold Hawk Claims
On February 16, 2006, the Company entered into an option agreement to acquire a 100% interest in certain mineralproperties, located near Malartic, Quebec, known as the Gold Hawk claims. The Company paid $20,000 cash andissued 200,000 common shares upon signing of the agreement and can earn a 100% interest in the claims bypaying an additional $30,000 (paid) and issuing a further 200,000 shares (issued) within two years, and incurring atleast $250,000 of exploration and development expenses within three years. The vendor retains a 2% net smelter
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(a)
Malartic, Fournière and Cadillac Townships, Quebec, continued
Camflo West Block
On October 27, 2004, the Company acquired a 100% interest in the 2M/5M property in the Malartic Gold Camp,consisting of 57 mineral claims covering 2,137 hectares in Malartic Township, Quebec for $7,000 cash. The claimsare subject to net smelter return royalties in favour of various third parties, ranging from 2% to 3% on 49 of the 57claims.
On March 24, 2005, the Company entered into an agreement to acquire a further six mining claims covering 160hectares in Malartic Township, Quebec, for 400,000 common shares (issued). The claims are subject to a 1.5% netsmelter return royalty.
On June 20, 2005, the Company entered into an agreement to acquire a 100% interest in nine mining claimslocated in Malartic Township, Quebec, for consideration of 200,000 common shares (issued), subject to a 1.5% netsmelter return royalty.
On July 15, 2005, the Company entered into an agreement to acquire a 100% interest in a further 13 mining claimscovering 230.2 hectares in Malartic and Fournière Townships, Quebec, for consideration of $15,000 cash (paid),subject to a 3% net smelter return royalty.
On October 25, 2005, the Company entered into an agreement to acquire a 100% interest in 16 contiguous miningclaims covering 682.37 hectares in Malartic Township, Quebec, for 150,000 common shares (issued). The claimsare subject to a 1 % net smelter return royalty.
Malartic Hygrade
On January 26, 2007, the Company entered into an option agreement to acquire a 50% interest in three claimscovering 106 hectares in Malartic Township. The claims are contiguous with the Camflo West and Marban claimblocks. Under the terms of the option agreement, the Company can earn a 50% interest in the claims by paying$10,000 (paid) and issuing 200,000 common shares to the vendor (issued) and incurring $100,000 of explorationand development expenses on the claims within two years. The claims are subject to a 2% net smelter royalty.
Heva Property
The Heva Property consists of two separate claim blocks located in Malartic and Cadillac Townships, AbitibiCounty, Quebec, for a total 32 mining claims covering 1,300 hectares. The property was initially put together by themap designation of 22 mining claims covering 961 hectares.
On January 31, 2008, the Company entered into an agreement to acquire ten additional mineral properties covering339 hectares located in Malartic Township, Quebec. The Company paid $10,000 and issuing 100,000 commonshares upon signing of the agreement and can acquire a 100% interest in the claims by paying a further $10,000and issuing a further 100,000 common shares on or before the first anniversary of the agreement. The vendorretains a 1.5% net smelter royalty.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(b)
Pump Lake Project, Le Sueur Controlled Zone, Quebec
On February 16, 2007, the Company announced that it had entered into an option agreement to acquire a 100%interest in 146 mining claims covering 8,500 hectares located 200 kilometres southeast of Val-d'Or, Quebec. Theproject has been named Pump Lake. On March 2, 2007, the Company paid registration fees to designate anadditional 38 claims under the vendor's ownership thus increasing the size of property to 184 claims covering10,700 hectares. Under the terms of the option agreement, the Company can earn a 100% interest in the claimsover a three-year period by paying a total of $100,000 ($25,000 paid to February 29, 2008) and issuing a total of500,000 common shares to the vendor (250,000 issued to February 29, 2008), and incurring $500,000 ofexploration expenses. The vendor retains a 2% net smelter royalty.
The Company map designated an additional 125 mining claims during the months of November and December,2008. The Pump Lake property presently consists of 309 claims covering 17,046 hectares.
(c)
Blondeau and Guillet Townships, Quebec
The Company owns a 100% interest in 155 mineral claims located in Blondeau Township, Quebec. Thirty-eight ofthese claims are subject to a 2% net smelter return royalty, while the other 117 claims are subject to a 1% netsmelter return royalty.
On June 20, 2006, the Company entered into an option agreement with SearchGold Resources Inc. Under theterms of the agreement, SearchGold may acquire a 70% interest in the Blondeau Property by paying $50,000(received) and issuing 750,000 shares to the Company (received), and by incurring $620,000 of explorationexpenditures on the property over three years.
(d)
Le Tac Township, Quebec
On January 27, 2003, the Company announced that it had staked and received confirmation for a single block of 9contiguous mineral claims referred to as the Lichen-Le Tac Property, located in the Le Tac Township of Quebec.During the year ended August 31, 2004, the Company staked an additional 7 claims adjacent to the original block.The claims are 100% owned by the Company.
(e)
Montviel Township and Goeland-Waswanipi Region, Quebec
On December 13, 2002, the Company entered into an option agreement to acquire a 100% undivided interest incertain mineral claims located in Quebec and known as the Montviel Carbonatite and the Goeland-WaswanipiProject and on July 9, 2003, the Company issued 700,000 common shares to acquire a 40% interest in theproperties. Under the terms of the option agreement, the Company conducted a total of $250,000 in explorationand maintenance on the properties and issued an aggregate of 900,000 common shares to the vendor over a two- year period thereby increasing its interest in the properties to 100%. During the year ended August 31, 2006, theCompany decided not to renew the cells making up the Goeland-Waswanipi claim blocks and the cost of theseproperties was written off.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(f)
Vassan Township, Quebec
During the year ended August 31, 2005, the Company purchased a block of 19 contiguous mineral claims covering301 hectares in Vassan Township, Quebec for $1,000 cash and acquired 6 additional claims by designation.During the year ended August 31, 2006, the Company acquired a further 5 claims by designation.
On September 29, 2006, the Company entered into an option agreement with Alexandria Minerals Corporation.Under the terms of the agreement, Alexandria may acquire a 70% interest in the Vassan Property by issuing100,000 shares to the Company (received) and incurring $65,000 of exploration expenditures on the property overone year.
(g)
Mineral Property Acquisition and Deferred Exploration Costs
Period Ended | Year Ended | ||
Marban, First Canadian, Norlartic and Gold Hawk Properties, Malartic Township, Quebec | |||
Acquisition costs, opening | $ 477,193 | $ 463,370 | |
Option payments – cash | 30,000 | - | |
Option payments – 200,000 shares at $0.28 | 56,000 | - | |
Filing fees and staking | 2,911 | 13,823 | |
Acquisition costs, closing | 566,104 | 477,193 | |
Exploration costs, opening | 2,719,100 | 616,028 | |
Trenching, sampling and linecutting | 2,355 | 37,377 | |
Engineering and geological reports | 12,580 | 24,695 | |
Geological | 390,803 | 938,673 | |
Drilling | 767,539 | 1,079,877 | |
Geophysical | - | 22,450 | |
Exploration costs, closing | 3,892,377 | 2,719,100 | |
4,458,481 | 3,196,293 | ||
Camflo West and Malartic Hygrade Properties, Malartic and Fournière Townships, Quebec | |||
Acquisition costs, opening | 293,331 | 203,139 | |
Option payments – cash | - | 10,000 | |
Option payments – 200,000 shares at $0.37 | - | 74,000 | |
Filing fees and staking | 3,301 | 6,192 | |
Acquisition costs, closing | 296,632 | 293,331 | |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(g)
Mineral Property Acquisition and Deferred Exploration Costs, continued
Period Ended February 29, 2008 | Year Ended August 31, 2007 | ||
Camflo West and Malartic Hygrade Properties, continued | |||
Exploration costs, opening | $ 853,417 | $ 818,018 | |
Engineering and geological reports | 590 | 12,000 | |
Geological | 59,387 | 16,649 | |
Drilling | 44,257 | - | |
Geophysical | - | 6,750 | |
Exploration costs, closing | 957,651 | 853,417 | |
1,254,283 | 1,146,748 | ||
Heva Property, Malartic and Cadillac Townships, Quebec | |||
Acquisition costs, opening | - | - | |
Option payments – cash | 10,000 | - | |
Option payments – 100,000 shares at $0.225 | 22,500 | - | |
Acquisition costs, closing | 32,500 | - | |
32,500 | - | ||
Pump Lake Project, Quebec | |||
Acquisition costs, opening | 76,802 | - | |
Option payments – cash | 25,000 | - | |
Option payments – 150,000 shares at $0.40 | 60,000 | - | |
Option payments – 100,000 shares at $0.40 | - | 40,000 | |
Cash payment | - | 25,000 | |
Filing fees and staking | 4,018 | 11,802 | |
Acquisition costs, closing | 165,820 | 76,802 | |
Exploration costs, opening | 358,487 | - | |
Trenching, sampling and linecutting | 69,993 | 30,894 | |
Engineering and geological reports | 4,319 | 24,125 | |
Geological | 53,504 | 144,600 | |
Drilling | 58,119 | - | |
Geophysical | 4,895 | 158,868 | |
Exploration costs, closing | 549,317 | 358,487 | |
715,137 | 435,289 |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(g)
Mineral Property Acquisition and Deferred Exploration Costs, continued
Period Ended February 29, 2008 | Year Ended August 31, 2007 | ||
Blondeau and Guillet Townships, Quebec | |||
Acquisition costs, opening | $ 168,448 | $ 226,156 | |
Option payments received | - | (62,500) | |
Filing fees and staking | 225 | 4,792 | |
Acquisition costs, closing | 168,673 | 168,448 | |
Exploration costs, opening | 252,078 | 252,055 | |
Geological | - | 23 | |
Exploration costs, closing | 252,078 | 252,078 | |
420,751 | 420,526 | ||
Boyvinet Township, Quebec | |||
Acquisition costs, opening | 13,090 | 12,670 | |
Filing fees and staking | 67 | 420 | |
Acquisition costs, closing | 13,157 | 13,090 | |
Exploration costs, opening | 96,396 | 95,821 | |
Trenching, sampling and linecutting | - | - | |
Geological | - | 575 | |
Drilling | - | ||
Exploration costs, closing | 96,396 | 96,396 | |
109,553 | 109,486 | ||
Le Tac Township, Quebec | |||
Acquisition costs, opening | 10,157 | 9,481 | |
Filing fees and staking | 821 | 676 | |
Acquisition costs, closing | 10,978 | 10,157 | |
Exploration costs, opening | 511,249 | 510,476 | |
Geological | - | 773 | |
Exploration costs, closing | 511,249 | 511,249 | |
522,226 | 521,406 |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
5.
MINERAL PROPERTIES, continued
(g)
Mineral Property Acquisition and Deferred Exploration Costs, continued
Period Ended February 29, 2008 | Year Ended August 31, 2007 | ||
Montviel Township, Quebec | |||
Acquisition costs, opening | $ 464,017 | $ 459,681 | |
Filing fees and staking | 490 | 4,336 | |
Acquisition costs, closing | 464,507 | 464,017 | |
Exploration costs, opening | 329,098 | 329,098 | |
Exploration costs | - | - | |
Exploration costs, closing | 329,098 | 329,098 | |
793,605 | 793,115 | ||
Vassan Township, Quebec | |||
Acquisition costs, opening | (13,321) | 7,750 | |
Option payments received | - | (23,000) | |
Filing fees and staking | 178 | 1,929 | |
Acquisition costs, closing | (13,143) | (13,321) | |
Exploration costs, opening | 9,950 | 7,559 | |
Geological | - | 2,391 | |
Exploration costs, closing | 9,950 | 9,950 | |
(3,193) | (3,371) | ||
Government grants | (240,121) | (240,121) | |
$ 8,063,221 | $ 6,379,369 |
(g)
Government Grants
The Company applies for refundable tax credits and mining duties in respect of qualifying mining explorationexpenses incurred. No amount has been accrued for the year ended August 31, 2007, because the Companyrenounced all of its qualifying expenditures in favour of flow-through share subscribers.
(i)
Flow-Through Share Obligations
As at February 29, 2008, the Company had fulfilled its obligations to incur eligible Canadian Exploration Expensesprior to December 31, 2008, in order to satisfy the terms of flow-through share purchase agreements.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)February 29, 2008
6.
SHARE CAPITAL
(a)
Authorized Share Capital
Unlimited number of common shares, without par value
Unlimited number of preferred shares
(b)
Common Shares Issued and Fully Paid
Six Months Ended February 29, 2008 | Year Ended August 31, 2007 | ||||
Shares | Dollars | Shares | Dollar | ||
Balance, Opening | 61,092,089 | $ 23,822,483 | 32,885,123 | $ 13,922,778 | |
For cash at $0.25, net of finders fees | - | - | 1,000,000 | 229,900 | |
Warrants valuation | - | - | - | (43,554) | |
For cash at $0.35 | - | - | 2,285,714 | 800,000 | |
For cash at $0.45 and $0.35 | - | - | 17,523,000 | 6,799,750 | |
Warrants valuation | - | - | - | (775,736) | |
Commissions | - | - | 1,004,030 | (124,572) | |
Offering costs | - | - | - | (130,489) | |
For cash at $0.45 | - | - | 237,222 | 106,750 | |
Warrants valuation | - | - | - | (11,659) | |
For mineral properties at $0.37 | - | - | 200,000 | 74,000 | |
For mineral properties at $0.40 | - | - | 100,000 | 40,000 | |
For mineral properties at $0.225 | 100,000 | 22,500 | - | - | |
For mineral properties at $0.40 | 150,000 | 60,000 | - | - | |
For mineral properties at $0.28 | 200,000 | 56,000 | - | - | |
Options exercised @ $0.30 | - | - | 200,000 | 60,000 | |
Options exercised @ $0.31 | - | - | 20,000 | 6,200 | |
Options exercised @ $0.41 | - | - | 10,000 | 4,100 | |
Options valuation - exercised | - | - | - | 41,438 | |
Warrants exercised @ $0.30 | - | - | 840,000 | 252,000 | |
Warrants exercised @ $0.35 | - | - | 4,787,000 | 1,675,450 | |
Warrants valuation - exercised | - | - | - | 896,128 | |
Balance, Closing | 61,542,089 | $ 23,960,983 | 61,092,089 | $ 23,822,483 | |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
6.
SHARE CAPITAL, continued
(c)
Changes in Issued Common Shares
Flow-Through Private Placement at $0.25
On December 31, 2006, the Company closed a non-brokered private placement of 1,000,000 flow-through units ata price of $0.25 per unit for gross proceeds of $250,000. Each unit consisted of one flow-through common shareand one-half of one non-transferable common share purchase warrant. Each whole warrant entitles the holder toacquire one ordinary common share at a price of $0.35 for a period of twelve months after closing.
Non-Brokered Private Placement at $0.35
On April 17, 2007, the Company closed a non-brokered private placement consisting of 2,285,714 units at a price of$0.35 for gross proceeds on $800,000. Each unit was priced at $0.35 and consisted of one common share and one- half of one transferable common share purchase warrant. Each full warrant entitles the holder to purchase oneadditional common share of the Company at a price of $0.70 for a period of eighteen months from closing.
Brokered Private Placement at $0.45 and $0.35
On April 25, 2007, the Company closed a brokered private placement of 6,667,000 flow-through units and10,856,000 ordinary units. Each flow-through unit was priced at $0.45 and consisted of one flow-through commonshare and one-half of one transferable common share purchase warrant. Each ordinary unit was priced at $0.35and consisted of one ordinary common share and one-half of one transferable common share purchase warrant.Each full warrant attached to the flow-through and ordinary units entitles the holder to purchase one additionalordinary common share of the Company at a price of $0.70 for a period of eighteen months from closing.
The Agents received a commission equal to 7% of the gross proceeds of the brokered offering, paid in acombination of $124,572 cash and 1,004,030 ordinary units at a deemed price of $0.35 per unit. The agents werefurther granted 1,752,300 compensation options each entitling the holder to purchase a common share at $0.45 fora period of eighteen months from closing.
Non-Brokered Private Placement
On June 28, 2007, the Company closed a non-brokered private placement consisting of 237,222 flow-through unitsat a price of $0.45 for gross proceeds of $106,750. Each unit consisted of one flow-through common share andone-half of one ordinary common share purchase warrant. Each whole warrant entitles the holder to purchase oneadditional common share of the Company at a price of $0.70 for a period of eighteen months from closing.
Shares Issued for Mineral Properties
On February 12, 2007, the Company issued 200,000 common shares in connection with the acquisition of claimslocated in Malartic Township, Quebec (Note 5(b)).
On March 22, 2007, the Company issued 100,000 common shares in connection with the acquisition of the PumpLake claims, Quebec (Note 5(e)).
On February 13, 2008, the Company issued 100,000 common shares in connection with the acquisition of HevaProperty claims, Quebec (Note 5(b)).
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
6.
SHARE CAPITAL, continued
(c)
Changes in Issued Common Shares, continued
Shares Issued for Mineral Properties, continued
On February 15, 2008, the Company issued 150,000 common shares in connection with the acquisition of thePump Lake claims, Quebec (Note 5(e)).
On February 20, 2008, the Company issued 200,000 common shares in connection with the acquisition of the GoldHawk claims, Quebec (Note 5(b)).
(d)
Escrow Shares
Included in issued share capital are 17,307 common shares held in escrow subject to the consent of regulatoryauthorities for transfers within escrow. The release of these shares from escrow is governed by a formula set bythe TSX Venture Exchange.
(e)
Preferred Shares
As at February 29, 2008, no preferred shares had been issued by the Company.
7.
SHARE PURCHASE OPTIONS
(a)
Incentive Share Option Plan
The Company has an incentive share option plan whereby it may grant common share purchase options to itsdirectors, officers, employees and consultants. The exercise price of each option is equal to the market price on thedate of the grant. The share purchase options are for a maximum term of five years and, unless otherwise noted,vest when granted.
(b)
Changes in Outstanding Options
The following table summarizes changes in outstanding director and employee options:
Number of shares | Weighted average exercise price | |
Balance, August 31, 2006 | 1,830,000 | $ 0.30 |
Granted | 2,345,000 | 0.38 |
Exercised | (230,000) | 0.31 |
Balance, August 31, 2007 | 3,945,000 | 0.35 |
Cancelled | (540,000) | 0.41 |
Granted | 150,000 | 0.24 |
Balance, February 29, 2008 | 3,555,000 | $ 0.34 |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
7.
SHARE PURCHASE OPTIONS, continued
(c)
Options Outstanding at End of Period
The following director and employee options were outstanding at the end of the period:
Number | Number | Estimated | |
Exercisable at $0.30 until October 31, 2008 | 300,000 | 300,000 | $ - |
Exercisable at $0.30 until February 21, 2010 | 400,000 | 400,000 | 64,024 |
Exercisable at $0.30 until April 25, 2010 | 125,000 | 125,000 | 19,894 |
Exercisable at $0.30 until February 16, 2011 | 300,000 | 300,000 | 49,545 |
Exercisable at $0.30 until March 14, 2011 | 225,000 | 225,000 | 44,812 |
Exercisable at $0.31 until May 19, 2011 | 160,000 | 160,000 | 34,929 |
Exercisable at $0.28 until December 12, 2011 | 430,000 | 430,000 | 74,840 |
Exercisable at $0.35 until January 17, 2012 | 175,000 | 175,000 | 45,717 |
Exercisable at $0.47 until February 6, 2012 | 100,000 | 100,000 | 31,003 |
Exercisable at $0.38 until February 19, 2012 | 250,000 | 250,000 | 71,888 |
Exercisable at $0.41 until May 3, 2012 | 20,000 | 20,000 | 5,509 |
Exercisable at $0.364 until May 18, 2012 | 200,000 | 200,000 | 55,020 |
Exercisable at $0.435 until August 8, 2012 | 720,000 | 720,000 | 205,644 |
Exercisable at $0.22 until January 23, 2013 | 50,000 | 50,000 | 7,215 |
Exercisable at $0.25 until February 20, 2013 | 100,000 | 100,000 | 16,349 |
Balance, February 29, 2008 | 3,555,000 | 3,555,000 | $ 726,389 |
(d)
Share-Based Compensation
Share-based compensation charges associated with the granting of options to directors and employees have beendetermined using the Black-Scholes option pricing model with the following weighted-average assumptions:
2008 | 2007 | |
Expected share price volatility | 79.3% | 86.1% |
Expected risk-free interest rate | 3.3% | 4.4% |
Expected dividend yield | 0.0% | 0.0% |
Expected life of options, in years | 5.0 | 5.0 |
(e)
Agent's Compensation Options
As at February 29, 2008, there were 1,752,300 agent's compensation options outstanding, exercisable at a price of$0.45 per share until October 24, 2008.
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
8.
SHARE PURCHASE WARRANTS
(a)
Changes in Outstanding Warrants
The following table summarizes changes in outstanding common share purchase warrants:
Number of shares | Weighted average exercise price | |
Balance, August 31, 2006 | 7,480,850 | $ 0.34 |
Exercised | (5,627,000) | 0.35 |
Expired | (1,715,050) | 0.40 |
Issued with private placement | 500,000 | 0.35 |
Issued with private placements | 11,027,017 | 0.70 |
Balance, August 31, 2007 | 11,665,817 | 0.67 |
Expired | (638,800) | 0.31 |
Balance, February 29, 2008 | 11,027,017 | $ 0.69 |
(b)
Common Share Purchase Warrants Outstanding
The following common share purchase warrants were outstanding at the end of the period:
Number of shares | Estimated | |
Exercisable at $0.70 until October 17, 2008 | 1,644,871 | $ 115,212 |
Exercisable at $0.70 until October 24, 2008 | 9,263,535 | 660,523 |
Exercisable at $0.70 until December 27, 2008 | 118,611 | 11,659 |
Balance, February 29, 2008 | 11,027,017 | $ 787,394 |
(c)
Valuation of Common Share Purchase Warrants
The estimated value of common share purchase warrants has been determined using the Black-Scholes optionpricing model with the following weighted-average assumptions:
2008 | 2007 | |
Expected share price volatility - | - | 81.6% |
Expected risk-free interest rate - | - | 4.3% |
Expected dividend yield - | - | 0.0% |
Expected life of warrants, in years - | - | 1.5 |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
9.
CONTRIBUTED SURPLUS
Period Ended February 29, | Year Ended August 31, | |
Balance, Opening | $ 1,278,683 | $ 447,961 |
Share purchase options awarded | 23,564 | 619,990 |
Share purchase options exercised | - | (41,438) |
Expired share purchase warrants | 49,214 | 252,170 |
Balance, Closing | $ 1,351,461 | $ 1,278,683 |
10.
RELATED PARTY TRANSACTIONS
2008 | 2007 | |
(a) Transactions During the Period | ||
Deferred exploration costs -- salary paid or payable to a director and officer of the Company | $ 72,000 | $ 51,000 |
Management and consulting fees paid or payable to companies controlled by directors and officers of the Company | $ 72,000 | $ 87,000 |
Office rent paid to a company controlled by a director of the Company (b) Balances at Period-End | $ 3,000 | $ 3,000 |
Amount included in prepaid expenses and deposits owed to the Company by a director of the Company | $ - | $ 2,526 |
11.
INCOME TAXES
(a)
Income Tax Provision
The provision for income taxes differs from the amount imputed by applying combined federal and provincialcorporate income tax rates to the Company's before-tax loss. The components of these differences are as follows:
2008 | 2007 | |
Income (loss) before income taxes Corporate income tax rate | $ (310,949) 32.02% | $ (510,289) 32.02% |
Imputed income tax expense (recovery) | (99,566) | (163,395) |
Increase (decrease) resulting from: | ||
Non-deductible expenses | 10,122 | 77,143 |
Amortization of share issuance costs | (27,162) | (18,352) |
Valuation allowance | 116,606 | 104,603 |
Provision for (recovery of) future income taxes | $ - | $ - |
NIOGOLD MINING CORP.
Notes to the Financial Statements
(Unaudited -- Prepared by Management)
February 29, 2008
11.
INCOME TAXES, continued
(b)
Expiry of Non-Capital Losses
The Company has approximately $2,840,000 of non-capital losses which may be applied against taxable income offuture years expiring as follows:
2008 | $ 110,000 |
2009 | 180,000 |
2010 | 200,000 |
2014 | 360,000 |
2015 | 560,000 |
2026 | 600,000 |
2027 | 830,000 |
12.
SUPPLEMENTARY DISCLOSURE OF NON-CASH TRANSACTIONS
2008 | 2007 | |
During the period the following non-cash transactions took place: | ||
Shares issued for the acquisition of mineral properties | $ 138,500 | $ 74,000 |
Shares received pursuant to mineral property option agreements | $ - | $ 23,000 |
13.
SUBSEQUENT EVENT
On April 1, 2008, the Company granted 125,000 incentive stock options to a consultant, exercisable at a price of $0.20per share for a period of five years.
