UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month ended: May 31, 2004
Commission File Number: 000-31168
CONDOR GOLD CORP.
-----------------------------------------------
(Translation of registrant's name into English)
50 Richmond Street East, Suite 300, Toronto, Ontario M5C 1N7
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b) 82.
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CONDOR GOLD CORP.
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD
ENDED MAY 31, 2004
CONTENTS
Balance Sheet
Statement of Shareholders' Deficit
Statement of Earnings
Statement of Cash Flows
Notes to Financial Statements
2
CONDOR GOLD CORP.
Consolidated Balance Sheet
(Stated in Canadian Dollars)
May 31, 2004
(prepared by Management)
Period Ended Year ended
May 31, 2004 November 30, 2003
(unaudited) (audited)
----------- -----------------
ASSETS
Current
Cash $ -- $ --
Deferred Expenses 87,500 162,500
Property and Equipment 5,779,753 5,779,753
----------- -----------
$ 5,867,253 $ 5,942,253
=========== ===========
LIABILITIES
Current Liabilities
Bank indebtness $ 3,192 $ --
Accounts payable and accrued liabilities 399,657 634,341
Deposits 100,000 100,000
Advances from related parties 489,698 490,322
Notes payable - current portion 2,464,000 554,000
Reserve for loss contingencies 462,000 462,000
----------- -----------
3,918,547 2,240,663
Notes payable - long term portion -- 1,775,000
----------- -----------
3,918,547 4,015,663
----------- -----------
SHAREHOLDERS' EQUITY
Share Capital 9,129,952 8,473,426
Contributed Surplus 127,493 127,493
Deficit (7,308,739) (6,674,329)
----------- -----------
1,948,706 1,926,590
$ 5,867,253 $ 5,942,253
=========== ===========
See notes to these financial statements.
3
CONDOR GOLD CORP.
Consolidated Statement of Shareholders' Deficit
(Stated in Canadian Dollars)
For the Period Ended May 31,2004
(prepared by Management)
Three Month Period Ended Six Month Period Ended
--------------------------- ---------------------------
May 31, 2004 May 31, 2003 May 31, 2004 May 31, 2003
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Deficit - beginning of period $(7,030,112) $(3,922,624) $(6,674,329) $(3,126,882)
Net loss for the period (278,627) (482,343) (634,410) (1,278,085)
----------- ----------- ----------- -----------
Deficit - end of period $(7,308,739) $(4,404,967) $(7,308,739) $(4,404,967)
=========== =========== =========== ===========
See notes to these financial statements.
4
CONDOR GOLD CORP.
Consolidated Statement of Earnings & Expenses
(Stated in Canadian Dollars)
For the Three & Six Month Periods Ended
May 31, 2004
(prepared by Management)
Three Month Period Ended Six Month Period Ended
--------------------------- ---------------------------
May 31, 2004 May 31, 2003 May 31, 2004 May 31, 2003
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Expenses
General and administrative $ 146,986 $ 196,953 $ 310,949 $ 336,591
Consulting fees 19,017 23,836 45,437 93,563
Exploration -- 147,137 -- 610,602
Management fees 93,840 30,000 222,240 60,000
Professional fees 18,109 82,470 55,109 165,984
Miscellaneous 675 1,947 675 11,345
----------- ----------- ----------- -----------
278,627 482,343 634,410 1,278,085
Net Loss $ (278,627) $ (482,343) $ (634,410) $(1,278,085)
=========== =========== =========== ===========
See notes to these financial statements.
5
CONDOR GOLD CORP.
Consolidated Statement of Cash Flows
(Stated in Canadian Dollars)
For the Three & Six Month Periods Ended
May 31, 2004
(prepared by Management)
Three Month Period Ended Six Month Period Ended
--------------------------- ---------------------------
May 31, 2004 May 31, 2003 May 31, 2004 May 31, 2003
(unaudited) (unaudited) (unaudited) (unaudi
----------- ----------- ----------- -----------
Cash Flows from Operating Activities
Net loss $ (278,627) $ (482,343) $ (634,410) $(1,278,085)
Adjustments to reconcile net loss to net
cash used in operating activities:
Issuance of shares from subsidary company -- --
for debt settlement 600,426 600,426
Non cash interest expense 75,410 -- 150,000 --
Non cash financing charge 37,500 -- 75,000 --
Accounts Payable (281,076) 97,904 (234,684) 48,747
----------- ----------- ----------- -----------
153,633 (384,439) (43,668) (1,229,338)
----------- ----------- ----------- -----------
Cash Flows from Investing Activities
Investment in mining properities -- (85,000) -- (210,000)
Purchase of equipment -- (8,468) -- (15,109)
----------- ----------- ----------- -----------
-- (93,468) -- (225,109)
Cash Flows from Financing Activities
Proceeds from issuance of common shares -- 118,000 56,100 298,333
Proceeds from notes payable -- -- (15,000) 1,200,000
Advances from related parties (156,825) (52,978) (624) (127,978)
Proceeds from advanaces 100,000 100,000
----------- ----------- ----------- -----------
(156,825) 165,022 40,476 1,470,355
----------- ----------- ----------- -----------
Net (Drecease) Increase in Cash (3,192) (312,885) (3,192) 15,908
Cash beginning of year -- 353,597 -- 24,804
----------- ----------- ----------- -----------
Cash - end of period $ (3,192) $ 40,712 $ (3,192) $ 40,712
=========== =========== =========== ===========
See notes to these financial statements.
6
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Six Month Period Ended May 31, 2004
(Unaudited - prepared by management)
Readers are cautioned that these statements may not be appropriate for their
purposes.
1. Operations
The Corporation was originally incorporated on June 19, 1997 under the
Business Corporations Act (Ontario) under the name Findore Gold
Resources Ltd. and was in the business of investing in resource related
activities.
On October 17th, 2001 the shareholders approved the name change to
Ripped Canada Artists Inc. ("RCA") and a change of business to the
entertainment industry and TV, Film and Video production and
distribution.
On September 20, 2002, Ripped Canada Artists Inc. ("RCA") and the
shareholders of Northville Gold Corp. ("Northville") entered into a
Securities Exchange Agreement ("Agreement") whereby RCA acquired all of
the issued and outstanding securities of Northville in exchange for
equivalent securities on a one for one basis. Upon consummation, the
shareholders of Northville exchanged each of their common shares for
one post-consolidation common share of RCA. Northville shareholders
acquired control of RCA, a US publicly quoted company with 94.88%
interest in the post consolidated securities. Accordingly, this
transaction has been accounted for as a reverse takeover whereby
Northville was deemed to have acquired RCA. The ongoing business will
continue as that of Northville. Subsequently, RCA has changed its name
to Condor Gold Corp. (the "Company").
The company is engaged in the exploration and development of gold and
diamond properties in Canada. Since inception, the efforts of the
Company have been devoted to assessing whether properties have
sufficient mineral reserves for production. To date, the Company has
earned no revenues. Condor owns or controls interests in gold
properties in the townships of Chester, Benneweis, and Yeo in Northern
Ontario with a total strike length of eighteen miles (collectively, the
"Northville Properties"). In addition, in the search for diamond
properties, the Company has staked over 530 claim units in the James
Bay Lowlands of Northern Ontario. To date, the Company has earned no
revenues and is considered to be in the development stage.
2. Summary of Significant Accounting Policies
Management in accordance with generally accepted accounting principles
in Canada has prepared the financial statements of the Corporation. The
preparation of financial statements in conformity with Canadian
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates. The financial statements, in management's
opinion, have been properly prepared using careful judgment with
reasonable limits of materiality. These interim financial statements do
not contain all disclosures required under generally accepted
accounting principles for annual financial statements and should
therefore be read in conjunction with the most recent annual financial
statements. The auditor of Condor Gold Corp. has not performed a review
of the unaudited financial statements for the six months ended May 31,
2004 and May 31, 2003. The significant accounting policies follow that
of the most recently reported annual financial statements
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a) Going Concern
The Company's financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has
experienced recurring losses since inception and has negative working
capital and cash flows from operations that raise substantial doubt as
to its ability to continue as a going concern. For the six months ended
May 31, 2003 and the year ended November 30, 2003, the Company
experienced net losses of $634,410 and $2,881,095, respectively.
The Company's ability to continue as a going concern is also contingent
upon its ability to secure additional financing, initiating sale of its
product and attaining profitable operations.
Management is pursuing various sources of equity financing. Although
the Company plans to pursue additional financing, there can be no
assurance that the Company will be able to secure financing when needed
or obtain such on terms satisfactory to the Company, if at all.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result
from the possible inability of the Company to continue as a going
concern.
b) Unit of Measurement
The Canadian dollar has been used as the unit of measurement in these
financial statements. The functional currency of the operations are
denominated in Canadian currency.
c) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned and controlled subsidiaries, Northville
Gold Corp., Condor Diamond Corp., Dialex Minerals Inc., 1478837 Ontario
Inc., and 1485210 Ontario Inc. Intercompany accounts and transactions
have been eliminated on consolidation. These consolidated financial
statements reflect all adjustments, which are, in the opinion of
management, necessary for a fair presentation of the results for the
interim periods reported.
d) Mineral Exploration Properties
Property acquisition costs are capitalized until the property to which
they relate is placed into production, sold, abandoned or management
determines that there has been an impairment in value. On the
commencement of commercial production, these costs will be charged to
operations on the units-of-production method based upon estimated
recoverable proven and probable reserves. As at May 31, 2004, there has
not been any production at any of the properties.
The amount shown for mineral property interests represents costs
incurred and deferred to date and does not necessarily reflect present
and future values.
Exploration expenditures are expensed as incurred.
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e) Use of Estimates
The preparation of the Company's financial statements in conformity
with Canadian generally accepted accounting principles requires
management to make estimates and assumptions. These assumptions affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial
statements, and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those
estimates.
3. Deferred Expenses
On January 6th, 2003 the Company arranged for senior secured debt
financing from Treelawn Investment Corp. in the gross aggregate amount
of $1,500,000. the net proceeds from the loan were $1,200,000. The
$300,000 financing charge was set up as deferred expenses with the
amount expensed equally over the 24 month life of the loan, amounting
to $ 12,500 expense per month.
4. Property
May 31, 2004 November 31, 2003
------------ -----------------
Accumulated Accumulated
Cost Amortization Cost Amortization
---------- ------------ ---------- ------------
Exploration Properties $5,779,753 -0- $5,779,753 -0-
Net Carrying Amount -- $5,779,753 -- $5,779,753
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5. Notes Payable
May 31 Nov.30
2004 2003
--------- ---------
Notes payable, non-interest bearing and maturing on April 15, 2004, and
repayable from proceeds of production from one of the Company's
properties. $ 235,000 $ 250,000
Notes payable bearing interest at 12% and has no specified
terms of repayment 255,000 255,000
Notes payable non-interest bearing and has no specified
terms of repayment 49,000 49,000
Note payable from Treelawn, bearing interest at 20%,
repayable from proceeds of production from one of the
Company's properties and matures on January 6, 2005 1,925,000 1,775,000
----------- -----------
$ 2,464,000 $ 2,329,000
----------- -----------
As at May 31, 2004, the senior secured debt financing from Treelawn
Investment Corp. ("Treelawn"), amounted to $1,500,000 principal and
accrued interest of $425,000.
6. Reserve for Loss Contingencies
The Company has recorded a $462,000 liability for loss contingencies.
This reserve was established as a result of a potential liability of
Dialex Minerals Inc. ("Dialex"), a controlled subsidiary, to the
Internal Revenue Service (IRS) as a result of actions by the former
principal of Video Home Shopping Inc., which has led to an
investigation by the IRS. The Company has contacted the IRS for
information and has no indication that the investigation concerns the
Company directly. Management, nevertheless, believes that said IRS
investigation may relate, in part, to unpaid Federal Withholding taxes,
Social Security and Medicare taxes, employer's taxes, and other payroll
taxes and out of prudence, the Company has elected to provide a reserve
of $462,000.
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7. Share Capital
Authorized
Unlimited number of common shares, no par value
Issued Number of Shares $ Value
------ ---------------- -------
Balance beginning of period 75,564,183 $8,473,426
Issued during period 1,114,500 $ 656,526
Balance at end of period 76,678,683 $9,129,952
During the period, common shares were issued as follows:
a) 462,000 shares were issued for a total cash consideration of
$30,000.
b) 652,500 shares were issued for retirement of $15,000 of notes
payable and accrued interest of $11,100 on notes payable.
c) 6,004,260 shares were issued from subsidiary company Dialex
Minerals Inc. for debt settlement of $600,426.00 in that company.
8. Related Party Transactions
Advances due to related parties are payable either to shareholders or
to private companies which are owned by shareholders who may be
officers and/or directors of the Company. The amounts payable are
non-interest bearing and have no specified terms of repayment
The following table summarizes the Company's related party transactions
that occurred in the normal course of operations for the period.
Amounts Paid to Shareholders and Directors
May 31 May 31
2004 2003
-------- --------
General and administrative expenses $ 32,100 $ 45,046
Management fees 222,240 60,000
Consulting 25,437 93,563
General and administrative expenses $ 32,100 $ 45,046
Management fees 222,240 60,000
Consulting 25,437 93,563
9. Commitments and Contingencies
a) On January 6, 2003 the Company issued an option to enter into a
Royalty Agreement with Treelawn. Upon the payment of the exercise
price of $100,000 to the Company, the royalty agreement will
entitle Treelawn to royalties from the Company of:
(i) $100 per ounce of gold produced from the surface stockpile to
a maximum of 70,000 ounces of gold less any repayments made
towards the Note referred to in Note 6; and
(ii) $50 per ounce of gold produced from the ramp of the Murgold
Property located in Chester Township to a maximum of 68,000
ounces of gold.
b) Condor Gold Corp. is the plaintiff in an action initiated on
August 19, 2003 against former shareholders and directors of
Condor. The purpose of Condor's action was to claim damages for
negligence, defamation and breach of contract by the defendants.
In a statement of defence and counterclaim filed on or about
November 20, 2003, the defendants joined the subsidiary companies
of Condor as defendants by counterclaim. The counter claim has not
been formally served on the subsidiary companies. It is
management's opinion and that of its legal counsel that the
counterclaim action is frivolous, vexatious and without merit and
as such, management has made no provision for it in these
financial statement
10. Comparative Information
Certain figures for the period and the year ended May 31, 2003 and
November 30, 2003 respectively, have been reclassified to conform with
the current period's financial statement presentation.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
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The following is a discussion of the consolidated financial position,
results of operations and cash flows of Condor Gold Corp. for the three
and six month periods ended May 31, 2004 and 2003, and should be read
in conjunction with the company's most recent annual consolidated
financial statements as at and for the year ended November 30, 2003.
The financial statements are reported in accordance with Canadian GAAP.
References herein to "Condor", "the company", "we" and "our" mean
Condor Gold Corp. and its subsidiaries, unless otherwise noted.
This Management's discussion and Analysis of Financial Condition and
Results of Operations contains Condor Gold Corp forward-looking
statements that involve risks and uncertainties, which may cause actual
results to differ materially from the statements made. When used in
this document, the words "may", "would", "could", "will", "intend",
"plan", "anticipate", "believe", "estimate", "expect" and similar
expressions are intended to identify forward-looking statements. We
believe that the assumptions and expectations reflected in such
forward-looking statements are reasonable, based on information
available to us on the date hereof, but we cannot assure you that these
assumptions and expectations will prove to have been correct or that we
will take any action that we may presently be planning. . Many factors
could cause our actual results to differ materially from the statements
made, including those factors discussed in other filings made by us
with Canadian securities regulatory authorities. Should one or more of
these risks and uncertainties materialize, or should assumptions
underlying the forward looking financial statements prove incorrect,
actual results may vary materially for those described herein as
intended, planned, anticipated or expected. You should understand that
forward-looking statements made in this report are necessarily
qualified by these factors. We do not intent and do not assume any
obligation to update these forward-looking statements.
Results of Operations
Revenues
--------
The company is engaged in the exploration and development of gold and
diamond properties in Canada. . To date, the Company has earned no
revenues.
12
Expenses
--------
Three Month Period Ended May 31, 2004 Compared To The Three Month
Period Ended May 31, 2003 For the three-month period ended May 31, 2004
expenses totaled $278,627 compared to $482,343 for the same period
2003. The major variation was in exploration expense as the company
spent $147,137 in drilling and sampling programs during the three-month
period ended May 31, 2003. General and administrative expenses
decreased from $196,953 in 2003 to $146,986 in 2004 reflecting
reductions in salaries and office overheads. Management and Consulting
fees in total increased by $59,021 and Professional fees decreased in
the period ended May 31, 2004 from $18,109 in the previous period of
2003 to $18,109 mainly in the area of legal fees as a result of the
acquisition of Dialex Minerals Inc
Six Month Period Ended May 31, 2004 Compared To The Six Month Period
Ended May 31, 2003 For the period ended May 31, 2004 expenses totaled
$482,343 compared to $1,278,085 for the same period 2003. The major
variation was in exploration expense as the company spent $610,602 in
drilling and sampling programs during the six-month period ended May
31, 2003. Consulting fees were reduced by 74% from the previous year
reflecting the move of this expense into management fees as the
consultant was named an officer of the Company. Overall Management and
Consulting fees in total increased by $114,114 as a result of the
acquisition of Dialex Minerals Inc and the costs associated with its
acquisition. Professional fees decreased from $165,984 in the period
May 31, 2003 to $82,470 mainly in the area of legal fees associated
with the acquisition.
Liquidity and Capital Resources
-------------------------------
The Company's ability to continue as a going concern is also contingent
upon its ability to secure additional financing, initiating sale of its
product and attaining profitable operations.
Management is pursuing various sources of equity financing. Although
the Company plans to pursue additional financing, there can be no
assurance that the Company will be able to secure financing when needed
or obtain such on terms satisfactory to the Company, if at all.
During the current period ended May 31, 2004, the Company received
$30,000 through the sale of common shares, and issued shares in the
amount of $26,100 to note holders to retire $15,000 of notes payable
and pay $11,100 of accrued interest. For the period ended May 31, 2003
the Company received $180,333 in proceeds from sale of shares,
$1,200,000 loan in the way of a secured note payable and repaid
advances from related parties in the amount of $127,978.
13
SIGNATURES
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In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONDOR GOLD CORP.
Date July 30, 2004 (Signature)* /s/ Alexander G. Stewart
-------------------------------------
(Signature)* Alexander G. Stewart
Chief Executive Officer
Date July30, 2004 (Signature)* /s/ L. Kirk Boyd
-----------------------------
(Signature)* L. Kirk Boyd
Chief Financial Officer
*Print the name and title of each signing officer under his signature.
14