PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
Overall performance (Going concern and future operations)
Peninsula Resources Ltd. (“Peninsula” or the “Company”) was incorporated on February 22, 1994, in the province of Alberta. The Company is listed on the NEX exchange. Management intends that the Company shall be engaged in the acquisition and exploration of resource properties.
On May 20, 2008 the TSX exchange approved a non-brokered private placement of 1,955,000 units at $0.17 per unit, comprised of one share and one purchase warrant exercisable at $0.225 for one year. The private placement was completed in July 2008 for proceeds of $332,350.
On March 13, 2009 the Company acquired from Tearlach Resources Limited (“Tearlach”), a company with directors in common, all of the issued and outstanding share capital of Tearlach Resources Limited (Barbados) (TB) for cash consideration of $15,000. TB was acquired in order to act as a holding company for acquisitions. Given the costs of setting up a new entity, management decided it was preferential to acquire an existing one.
The Company has accounted for the acquisition of TB using the guidance provided under related party transactions. Under this method the company does not record goodwill, and any gains or losses resulting due to the difference between the assets and liabilities acquired, and the consideration provided, is included in income for the period. Assets and liabilities of TB have been recorded at their fair values at the date of acquisition.
Reported income of the Company includes the results of operations of TB from the date of acquisition on March 13, 2009.
The allocation of the purchase cost to the assets and liabilities acquired is as follows:
| | |
Consideration provided | |
| Cash consideration | $ 15,000 |
| Current liabilities assumed | 7,097 |
| |
Total consideration provided | 22,097 |
| | |
| Current assets acquired | (4,401) |
| |
Loss on acquisition of Tearlach Barbados | $ 17,696 |
On April 16, 2009 Tearlach Resources Limited (Barbados) changed its name to Peninsula Resources (Barbados) Limited (PB).
2009 December MD&A | Peninsula Resources Ltd. | Page 1 |
PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
The Company currently has no source of operating cash flow, no financial resources, and has no assurance that additional funding will be available to it. The ability of the Company to continue as a going concern is dependent on the identification of new opportunities, in the mineral exploration area or elsewhere, and on obtaining additional financing from its existing or new shareholders. Failure to obtain such additional financing could result in the dissolution of the Company.
Selected Annual Information
| | | | | |
Year ended | Revenues | Profit or (Loss) | Profit or (Loss) per share | General and Administrative | Total Assets |
June 30, 2009 | - | (137,446) | (0.05) | 119,750 | 41,828 |
June 30, 2008 | - | (124,234) | (0.12) | 124,234 | 10,893 |
June 30, 2007 | - | (56,431) | (0.06) | 56,431 | 3,395 |
Results of Operations
The following discussion should be read in conjunction with the accompanying Financial Statements and related notes. During the three and six months ended December 31, 2009 and 2008 the Company was not involved in any exploration activities.
The Company’s total assets were $3,259 on December 31, 2009 (June 30, 2009 - $41,828). The Company did not incur any mineral property acquisition or exploration costs in this period. The Company did not have any mineral properties in production and, therefore, did not generate any revenue from operations. In order to obtain financing sufficient to continue operations, the Company will continue to seek private placement funding, and joint venture partners and/or exploration funding for properties it may acquire.
The Company realized net losses of $32,890 and $63,004 or $0.01 and $0.02 per share in the three and six months ended December 31, 2009 (2008 - $30,811 and $47,467 or $0.01 and $0.02 per share).
The Company incurred professional fees of $6,287 and $20,787 (2008 - $16,118 and $17,938). The second-quarter decrease is due to lower accounting fees. The Company incurred management fees of $7,500 and $15,000 (2008 - $7,500 and $15,000); transfer agent and listing fees of $5,287 and $6,621 (2008 - $4,891 and $7,918); and consulting fees of $4,875 and $6,175 (2008 - $1,495 and $5,525).
A summary of the Company’s financial information on a quarter by quarter basis for the preceding eight quarters appears below.
2009 December MD&A | Peninsula Resources Ltd. | Page 2 |
PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
Summary Quarterly Results for the Eight Fiscal Quarters Ended December 31, 2009
| | | | |
Quarter | Revenues | Profit or (Loss) | Profit or (Loss) per share | General and Administrative |
2nd Quarter 2010 | - | (32,890) | (0.01) | 32,890 |
1st Quarter 2010 | - | (33,204) | (0.01) | 30,165 |
4th Quarter 2009 | - | (72,376) | (0.02) | 54,680 |
3rd Quarter 2009 | - | (17,603) | (0.01) | 17,603 |
2nd Quarter 2009 | - | (30,811) | (0.01) | 30,811 |
1st Quarter 2009 | - | (16,656) | (0.01) | 16,656 |
4th Quarter 2008 | - | (42,347) | (0.04) | 42,347 |
3rd Quarter 2008 | - | (35,217) | (0.04) | 35,217 |
Liquidity
The Company had $281 cash on hand on December 31, 2009 (June 30, 2008 - $34,452). The Company had a working capital deficit of $1,245 on December 31, 2009 and working capital of $19,817 on June 30, 2009. The primary source of cash in the three and six months ended December 31, 2009 was the issuance of shares - $45,000. The primary use of cash was the funding of operations - $42,943 and $78,501. The Company currently has no source of operating cash flow, no financial resources, and has no assurance that additional funding will be available to it in order to remain a going concern. Failure to obtain such additional financing could result in the dissolution of the Company.
Share Capital
In July 2008 the Company completed a non-brokered private placement of 1,955,000 units at $0.17 per unit for proceeds of $332,350 less financing costs of $12,917. Each unit was comprised of one share and one purchase warrant exercisable at $0.225 for a period of one year. The shares were subject to a four-month hold ending November 4, 2008.
In February 2009 the Company issued 500,644 common shares at $0.225 per share upon the exercise of warrants for total proceeds of $112,645.
In July 2009 the Company issued 199,999 common shares at $0.225 per share upon the exercise of warrants for total proceeds of $45,000.
On July 3, 2009 1,254,357 warrants expired unexercised.
2009 December MD&A | Peninsula Resources Ltd. | Page 3 |
PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
Related party
In the three and six months ended December 31, 2009 the Company entered into the following transactions with related parties:
i) The Company paid $7,500 and $15,000 (2008 - $7,500 and $15,000) in management fees to a company controlled by a director. The Company repaid net $125 and incurred net $36 (2008 – repaid $nil and $2,833) to the director for expenses paid on behalf of the Company.
At December 31, 2009 $2,661 (June 30, 2009 - $500) was owed to the director and to companies controlled by the director.
ii) The Company paid $4,875 and $6,175 for consulting fees and incurred $169 and $852 for expenses to a director of the Company (2008 – incurred $1,495 and $5,525 for consulting fees and repaid net $92 and $15,862 for consulting fees and expenses). At December 31, 2009 $852 was owed to the director (June 30, 2009 - $nil).
iii) The Company incurred $686 and repaid net $968 (2008 – repaid net $16 and $13,452) to Goldex Resources Corporation (“Goldex” TSX.V: GDX) - a company with a director in common - for regulatory filing costs Goldex paid on the Company’s behalf.
The Company paid $1,500 and $3,000 (2008 - $nil) rent to Goldex. At December 31, 2009 $686 was owed to Goldex (June 30, 2009 - $1,654).
Related party transactions are in the normal course of operations and are measured at their exchange amount, which is the amount of consideration established and agreed to by the related parties. All amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment.
Related party payables were as follows:
| | |
| December 31, 2009 | June 30, 2009 |
i) Director and companies controlled by the director - for management fees, advances and expenses | $ 2,661 | $ 500 |
ii) Director - for consulting fees and expenses | 852 | - |
iii) Company with a director in common for expenses | 686 | 1,654 |
| $ 4,199 | $ 2,154 |
Commitments:
On July 1, 2006, as extended to July 1, 2010, the Company entered into an agreement with a company controlled by a director, for consulting services for $2,500 per month.
2009 December MD&A | Peninsula Resources Ltd. | Page 4 |
PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
International Financial Reporting Standards (IFRS):
In 2006, the AcSB ratified a strategic plan that will result in the convergence of Canadian GAAP, as used by public companies, with International Financial Reporting Standards (“IFRS”) over a transitional period. The AcSB has developed and published a detailed implementation plan, with a changeover date for fiscal years beginning on or after January 1, 2011. The impact of the transition to IFRS on the Company's financial statements has yet to be determined.
During 2010, the Company will assess its requirements and first time adoption methodologies, including its internal training and resource needs. The Company expects that by the third calendar quarter of 2010 management will have assessed conversion and first time adoption implications. During 2010 additional disclosures and analysis of impacts will be provided leading up to adoption in the first quarter of 2011.
This report includes certain “forward-looking statements” with respect to its anticipated future results and activities. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward-looking statements that involve various risks. Actual results could differ materially from those projected as a result of the following factors, among others: risks inherent in mineral exploration; risks associated with development, construction and mining operations; the uncertainty of future profitability and uncertainty of access to additional capital. The information provided herein with respect to the Company’s properties and activities should be read in reference to the technical reports and other relevant disclosure documents prepared by or on behalf of the Company, which may be viewed by interested parties at www.sedar.com.
2009 December MD&A | Peninsula Resources Ltd. | Page 5 |
PENINSULA RESOURCES LTD.
(FORMERLY NUGGET RESOURCES INC.)
MANAGEMENT’S DISCUSSION and ANALYSIS – March 01, 2010
The three and six months ended December 31, 2009 and 2008
Corporate Information
| | |
Directors and Officers
Graham C. Reveleigh, M.Sc. President and Director
Charles Ross CFO, and Director
Dieter Schindelhauer Director
Len Guenther Director
Australian Representative
Graham C. Reveleigh
Registered Office
2110 – 1177 West Hastings St. Vancouver, BC V6E 2K3
Head Office
2110 – 1177 West Hastings St. Vancouver, BC V6E 2K3
Tel: (604) 688-5007 Fax: (604) 909-4682 |
Solicitors
Leschert & Company Law Corporation
2760 – 200 Granville St. Vancouver, BC V6C 1S4
Transfer Agent
Computershare Limited
2nd Floor 510 Burrard Street Vancouver, BC V6c 3B9
Tel: (604) 689-9853 Fax: (604) 689-8144
Auditors
STS Partners LLP
Sixth Floor, 543 Granville St. Vancouver, BC
Tel: (604) 688-7800 |
Capitalization
Shares Issued 3,661,644
Shares Listed
NEX
Trading Symbol
PNU.H (effective May 9, 2008)
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2009 December MD&A | Peninsula Resources Ltd. | Page 6 |
