UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 20-F
(Mark One)
[_] REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934 OR
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 2006
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
OR
[_] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring this shell company report: ____________________
Commission File Number: 000-50422
AMADOR GOLD CORP.
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(Exact Name of Registrant as specified in its charter)
BRITISH COLUMBIA, CANADA
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(Jurisdiction of Incorporation or Organization
711-675 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1N2
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(Address of Principal Executive Offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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None None
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Securities registered or to be registered pursuant to Section 12(g) of the Act:
COMMON SHARES WITHOUT PAR VALUE
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(Title of Class)
Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:
NOT APPLICABLE
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(Title of Class)
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.
As of March 31, 2007: 78,665,748 common shares without par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
[_] Yes [X] No
If this report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
[_] Yes [X] No
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [_] No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one).
Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X]
Indicate by check mark which financial statement item the registrant has elected
to follow. [X] Item 17 [_] Item 18
If this is an annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).
[_] Yes [X] No
T A B L E OF C O N T E N T S
SUMMARY OF AMENDMENTS..........................................................1
FORWARD LOOKING STATEMENTS.....................................................1
CONVERSION TABLE...............................................................1
GLOSSARY OF TERMS..............................................................1
PART I
ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.................3
ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE...............................3
ITEM 3 KEY INFORMATION.......................................................3
A. Selected Financial Data......................................3
B. Capitalization and Indebtedness..............................7
C. Reasons for the Offer and Use of Proceeds....................7
D. Risk Factors.................................................7
ITEM 4 INFORMATION ON THE COMPANY...........................................10
A. History and Development of the Company......................10
B. Business Overview...........................................17
C. Organizational Structure....................................18
D. Property, Plants and Equipment..............................18
ITEM 4A UNRESOLVED STAFF COMMENTS............................................37
ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS.........................41
A. Operating Results...........................................41
B. Liquidity and Capital Resources.............................42
C. Research and Development, Patents, Licenses, etc............45
D. Trend Information...........................................45
E. Off-Balance Sheet Information...............................45
F. Tabular Disclosure of Contractual Information...............45
ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES...........................47
A. Directors and Senior Management.............................47
B. Compensation................................................49
C. Board Practices.............................................50
D. Employees...................................................51
E. Share Ownership.............................................51
ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS....................53
A. Major Shareholders..........................................53
B. Related Party Transactions..................................54
C. Interests of Experts and Counsel............................55
ITEM 8 FINANCIAL INFORMATION................................................55
A. Financial Statements and Other Financial Information........55
B. Significant Changes.........................................56
i
ITEM 9 THE OFFER AND LISTING............................................57
A. Offer & Listing Details.................................57
B. Plan of Distributions...................................58
C. Markets.................................................58
D. Selling Shareholders....................................58
E. Dilution................................................58
D. Expenses of the Issue...................................58
ITEM 10 ADDITIONAL INFORMATION...........................................58
A. Share Capital...........................................58
B. Memorandum and Articles of Association..................58
C. Material Contracts......................................59
D. Exchange Controls.......................................62
E. Taxation................................................63
F. Dividends and Paying Agents.............................71
G. Statement by Experts....................................71
H. Documents on Display....................................71
I. Subsidiary Information..................................71
ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........72
ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES...............72
PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES......................73
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS.........................................73
ITEM 15 CONTROLS AND PROCEDURES..............................................73
ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT.....................................73
ITEM 16B CODE OF ETHICS.......................................................73
ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................74
ITEM 16D EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES............75
ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS...........................................................75
PART III
ITEM 17 FINANCIAL STATEMENTS.................................................76
ITEM 18 FINANCIAL STATEMENTS.................................................76
ITEM 19 EXHIBITS.............................................................76
SIGNATURES....................................................................77
FINANCIAL STATEMENTS
EXHIBIT INDEX
ii
The financial statements and exhibits listed and referred to herein, are filed
with this Annual Report on Form 20-F in the United States. This Annual Report is
also filed in Canada as an Annual Information Form and the Canadian filing does
not include the financial statements and exhibits listed herein. Canadian
investors should refer to the annual financial statements of Amador Gold Corp.
(the "Company" or "Amador") at October 31, 2006 as filed with the applicable
Canadian Securities Regulators.
FORWARD-LOOKING STATEMENTS
Except for statements of historical fact, certain information contained herein
constitutes "forward-looking statements," including without limitation,
statements containing the words "believes," "anticipates," "intends," "expects"
and words of similar import, as well as all projections of future results. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results or achievements of the Company
to be materially different from any future results or achievements of the
Company expressed or implied by such forward-looking statements. Such factors
include, among others, the following: the Company's uncertainty of future
profitability; uncertainty of access to additional capital; competition; risks
associated with development, construction and managing mining operations;
restrictions and regulatory requirements regarding the mining industry;
regulatory uncertainties regarding the mining industry; dependence on joint
venture partners for project financing; obtaining mining licenses and managing
mining operations; and changes in economic conditions and industry competition.
See "Item 3 - Key Information - Risk Factors."
If one or more of these risks or uncertainties materializes, or if underlying
assumptions prove incorrect, our actual results may vary materially from those
expected, estimated or projected. Forward-looking statements in this document
are not a prediction of future events or circumstances, and those future events
or circumstances may not occur. Given these uncertainties, users of the
information included herein, including investors and prospective investors are
cautioned not to place undue reliance on such forward-looking statements.
CONVERSION TABLE
In this Annual Report a combination of Imperial and metric measures are used
with respect to our mineral properties. Conversion rates from Imperial measure
to metric and from metric to Imperial are provided below:
- -------------------------------- --------------------- ------------------------- --------------------
IMPERIAL MEASURE = METRIC UNIT METRIC MEASURE = IMPERIAL UNIT
- -------------------------------- --------------------- ------------------------- --------------------
2.47 acres 1 hectare 0.4047 hectares 1 acre
3.28 feet 1 metre 0.3048 metres 1 foot
0.62 miles 1 kilometre 1.609 kilometres 1 mile
1.102 tons (short) 1 tonne 0.907 tonnes 1 ton
0.029 ounces (troy)/ton 1 gram/tonne 34.28 grams/tonne 1 ounce (troy/ton)
- -------------------------------- --------------------- ------------------------- --------------------
GLOSSARY OF TERMS
"batholiths," A body of magmatic rock of any composition
and shape emplaced and solidified beneath
the surface of the Earth, with a surface
area in excess of 100 square kilometres
Page 2
"conjugate," Acute angle intersection
"felsic intrusion," A body of magmatic rock rich in feldspar,
felspathoids or quartz (i.e., granite,
granatoid)
"grade," The quantity of a mineral resource and the
amount of gold and silver (or other
products) contained in such resource and
includes estimates for mining dilution but
not for other processing losses
"mafic," Rock or minerals with high concentrations
of magnesium and iron (i.e., basalts,
pyroxenes, biotite)
"mineralization," A natural aggregate of one or more valuable
minerals
"ounces," Troy ounces
"shear," A linear zone of faulting within which the
host rock is often broken and fragmented
"strike," The geographical alignment of any
horizontal line or a plane or surface
"tonne," 2,205 pounds or 1,000 kilograms
"ultramafic," Rock especially rich in magnesium and iron
with no feldspar or quartz (i.e., dunite,
peridotites)
Page 3
PART I
ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable
ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable
ITEM 3 KEY INFORMATION
A. SELECTED FINANCIAL DATA
The selected financial data of the Company for fiscal 2006 and 2005 ended
October 31st was derived from the financial statements of the Company which have
been audited by Morgan & Company, Chartered Accountants, as indicated in their
audit report which is included elsewhere in this Annual Report. The selected
financial data of the Company for fiscal 2004, fiscal 2003 and fiscal 2002 ended
October 31st was derived from the financial statements of the Company which have
been audited by Staley, Okada & Partners, Chartered Accountants. All amounts are
expressed in Canadian dollars.
The financial statements included in this Annual Report and the tables set forth
below have been prepared in accordance with Canadian Generally Accepted
Accounting Principles (GAAP). There are several material differences between
Canadian GAAP and United States GAAP as applied to the financial information
disclosed or summarized herein. Note 11 to the Company's audited financial
statements for Fiscal 2006 ended October 31st provides a description of the
principal differences between Canadian GAAP and United States GAAP, as they
relate to the Company, and a reconciliation to United States GAAP of the
Company's net income and stockholders' equity.
The information in the following table was extracted from the more detailed
audited financial statements and related notes included herein and should be
read in conjunction with such audited financial statements and with the
information appearing under Item 5, "Operating and Financial Review and
Prospects."
Page 4
TABLE 1: STATEMENTS OF OPERATIONS AND DEFICIT
YEARS ENDED OCTOBER 31 (AUDITED)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
2006 2005 2004 2003 2002
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Amortization 326 466 274 - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Bank charges and interest 761 1,608 832 620 351
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Consulting fees 290,461 107,551 46,519 29,232 -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Financing fees - - - 102,500 10,000
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Interest on debt - - 49,779 24,748 5,406
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Investor relations and
promotion 30,103 17,370 132,154 78,260 -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Legal and accounting 79,028 49,033 79,570 63,044 30,009
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Management fees 395,760 137,000 27,000 44,000 30,000
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Office and miscellaneous 12,790 11,799 15,108 5,247 2,115
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Part X11.6 penalty tax 9,056 - 3,800 - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Regulatory fees 36,000 28,982 34,808 15,866 15,311
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Stock based compensation 286,000 79,000 144,000 - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Transfer agent fees 19,029 8,587 10,116 6,811 4,966
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Recovery of prior year expenses - - - (1,690) -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Less: interest earned (43) (619) (4,960) (3,209) (434)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TOTAL EXPENSES 1,159.271 440,777 539,000 365,429 97,724
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
LOSS BEFORE OTHER ITEMS AND
OTHER TAXES (1,159,271) (440,777) (539,000) (365,429) (97,724)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
OTHER ITEMS AND INCOME TAXES
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Write off of distribution
rights and patents - - - - (1)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Write off of marketable
securities - - - - (100)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Write off (recovery) of
mineral property expenditures (3,261,819) - 11,788 (158,990) -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Future income tax benefit
recognized on issuance of flow
through shares 223,689 101,000 - - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TOTAL - OTHER ITEMS AND INCOME
TAXES (3,261,819) 101,000 11,788 (158,990) (101)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Loss for the period/year (4,197,401) (339,777) (527,212) (524,419) (97,825)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Deficit - beginning of
period/year (4,271,601) (3,931,824) (3,812,612) (3,416,958) (3,364,696)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Future income tax benefit
recognized on issuance of flow
through shares - - 408,000 128,765 45,563
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Deficit - end of period/year (8,469,002) (4,271,601) (3,931,824) (3,812,612) (3,416,958)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Loss per share ($0.08) ($0.01) ($0.04) ($0.07) ($0.04)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Page 5
US GAAP
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Loss for the year - US GAAP (2,753,817) (1,399,839) (1,983,032) (1,368,429) (264,874)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Loss per share - US GAAP (0.05) ($0.06) ($0.14) ($0.17) ($0.10)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TABLE 2: BALANCE SHEETS
YEARS ENDED OCTOBER 31 (AUDITED)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
2006 2005 2004 2003 2002
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Assets:
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Cash and cash equivalent 540,099 189,341 23,017 98,463 68,123
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Tax credits recoverable - - 12,909 - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Goods and services tax
recoverable 30,055 16,038 6,588 3,915 12,729
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Prepaid expenses 2,318 483 5,600 433 -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Mineral properties and
deferred exploration costs 2,083,357 3,526,941 2,466,879 1,011,059 167,049
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Exploration advances 3,385 - - - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Equipment 760 1,086 1,552 - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Other long term assets - - - - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TOTAL ASSETS 2,659,974 3,733,889 2,516,545 1,113,870 247,901
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Accounts payable and accrued
liabilities 62,204 48,981 63,353 67,447 36,055
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Due to related party 46,677 4,280 10,688 3,946 -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Promissory note payable - - - 350,000 -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Convertible debenture - - - 125,000 125,000
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TOTAL LIABILITIES 108,881 53,261 74,041 546,393 161,055
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Share capital 10,480,845 7,866,229 6,374,328 4,380,089 3,503,804
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Deficit (8,469,002) (4,271,601) (3,931,824) (3,812,612) (3,416,958)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Total Shareholders' equity
(deficit) 2,551,093 3,680,628 2,442,504 567,477 86,846
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 2,659,974 3,733,889 2,516,545 1,113,870 247,901
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Number of Shares, Issued &
Allotted 61,000,748 39,417,915 21,997,915 10,067,227 5,128,401
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
US GAAP
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Mineral properties and
deferred exploration costs -
US GAAP - - - - -
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Total Shareholders' equity -
US GAAP 467,736 153,687 (24,375) (443,582) (80,203)
- -------------------------------- ------------------ ------------------ ----------------- ------------------- -----------------
Page 6
CURRENCY AND EXCHANGE RATES
The following table sets out the exchange rates for one United States dollar
("US$") expressed in terms of one Canadian dollar ("Cdn$") in effect at the end
of the following periods, (based on the average of the exchange rates on the
last day of each month in such periods).
- ----------------------------------------------------------------
Year Ended October 31st
- ----------------------------------------------------------------
2006 2005 2004 2003 2002
- -------------- ----------- ------------ ------------ -----------
1.1328 1.2135 1.3145 1.4431 1.5735
- -------------- ----------- ------------ ------------ -----------
The high and low exchange rates for each month during the previous six months
are as follows (Canadian dollars per United States $1.00):
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MONTH HIGH LOW
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March 2007 1.1810 1.1530
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February 2007 1.1852 1.1586
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January 2007 1.1815 1.1699
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December 2006 1.1575 1.1415
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November 2006 1.1474 1.1275
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October 2006 1.1384 1.1185
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The high, low, average (calculated by using the average of the exchange rates on
the last day of each month during the period) and closing exchange rates for
each of the Company's five previous fiscal years are as follows:
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COMPANY'S FISCAL YEAR ENDED
OCTOBER 31
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2006 2005 2004 2003 2002 2001
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High 1.1670 1.1607 1.2194 1.3043 1.5108 1.4933
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Low 1.1027 1.2703 1.3970 1.5903 1.6128 1.5905
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Average 1.1328 1.2135 1.3147 1.4379 1.5718 1.5411
- -------------------------------------------------------------------------------------------------------
Period End 1.1227 1.1796 1.2209 1.3195 1.5610 1.5905
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Exchange rates are based upon the noon buying rate in New York City for Cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York.
Unless otherwise indicated, in this Annual Report all references herein are to
Canadian Dollars.
On March 30, 2007, the exchange rate of Canadian dollars into United States
dollars, based upon the noon buying rate in New York City for cable transfers
payable in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank of New York, was U.S. $1.00 equals CDN$1.1530.
Page 7
B. CAPITALIZATION AND INDEBTEDNESS
Not Applicable
C. REASONS FOR THE OFFER AND USE OF PROCEEDS
Not Applicable
D. RISK FACTORS
Any investment in the Company's shares involves a high degree of risk. An
investor should consider carefully the following information before deciding to
buy the Company's common shares. If any of the events discussed in the following
risk factors actually occurs, the Company's business, financial condition or
results of operations would likely suffer. In this case, the market price of the
Company's shares could decline, and the investor could lose all or part of its
investment in the Company's shares. In particular, a prospective investor should
consider carefully the following risk factors:
EXPLORATION EFFORTS MAY BE UNSUCCESSFUL:
Investors in the Company could lose their entire investment. Most exploration
projects do not result in the discovery of commercially minable ore deposits.
The Company might not identify any mineral deposit that qualifies as a
commercially minable (or viable) ore body that could be legally and economically
exploited.
NO ONGOING MINING OPERATIONS:
The Company is in an advanced exploration stage and has no mining operations of
any kind. At this stage of exploration, the Company has not made a decision if
actual mining operations will ever commence. Should the Company decide to enter
into the mining business there are a number of factors beyond the Company's
control including changes in economic conditions, intense industry competition,
variability and operating cost, changes in government resulting in changes in
rules and regulations of numerous regulatory authorities that the Company would
have to consider.
LACK OF EARNINGS AND CASH FLOW:
The Company has no history of earnings or cash flow from operations. The
continued lack of earnings or cash flow could force the Company to cease
operations and investors in the Company will lose their entire investment. As at
October 31, 2006, the Company's deficit was $(8,469,002).
UNCERTAINTY OF CONTINUING AS A GOING CONCERN:
The continuation of the Company depends upon its ability to attain profitable
operations and generate cash flow from operations and/or to raise equity capital
through the sale of its securities. Because of this uncertainty, there is doubt
about the Company's ability to continue as a going concern. The Company's
financial statements do not include the adjustments that would be necessary if
the Company were unable to continue as a going concern.
NO PROVEN OR PROBABLE RESERVES:
The Company currently has few tangible assets, and no proven or probable
reserves have been identified to date. If the Company does not discover proven
reserves on its properties the Company will have to cease operations and
investors will lose their entire investment. The properties in which the Company
has an interest or the concessions in which the Company has the right to earn an
interest are in the exploratory stage only and are without a known body of ore.
Page 8
NO GUARANTEE OF CLEAR TITLE TO MINERAL PROPERTIES:
If titles to the properties in which the Company has an interest are not valid,
the Company will be forced out of business and investors will lose their entire
investment.
MINERAL EXPLORATION IS SUBJECT TO SIGNIFICANT OPERATING HAZARDS AND RISKS:
Mineral exploration, development and production involves many risks that even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Environmental hazards, industrial accidents, unusual or unexpected
geological formations and bullion losses due to theft, fires, power outages,
labor disruptions, flooding, explosions, cave-ins, land slides and the inability
to obtain suitable or adequate machinery, equipment or labor are other risks
involved in the conduct of exploration programs. Operations in which the Company
has an interest will be subject to all the hazards and risks normally incidental
to exploration, development and production of copper, gold and other metals, any
of which could result in work stoppages, damage to property and possible
environmental damage.
FLUCTUATING METALS PRICES:
The prices of precious metals and base metals fluctuate widely and are affected
by numerous factors beyond the Company's control, including expectations about
the rate of inflation, the strength of the U.S. dollar and of other currencies,
interest rates, and global or regional political or economic crisis. The demand
for and supply of precious metals and base metals may affect precious metals and
base metals prices but not necessarily in the same manner as supply and demand
affect the prices of other commodities. These fluctuations and uncertainties can
undermine the Company's financial condition and increase the risk and
vulnerability of an investment in the Company's common shares.
THE COMPANY'S SUCCESS DEPENDS ON PERFORMANCE AND SERVICE OF INDEPENDENT
CONTRACTORS:
The Company's success depends to a significant extent on the performance and
continued service of independent contractors. The Company has contracted the
services of professional drillers and others for exploration, environmental,
construction and engineering services. Poor performance by such contractors or
the loss of such services could delay the exploration projects on the Company's
properties resulting in a reduction of share value.
UNCERTAINTY OF OBTAINING ADDITIONAL FUNDING REQUIREMENTS:
The Company has no earnings and will therefore require financing to complete its
intended exploration programs. To date, the Company has funded its exploration
programs through the issuance of its equity securities, and the Company will
continue to need to fund its exploration programs in this manner until such
time, if ever, that it generates revenues and profits. In addition, the current
corporate plan envisions expenditures of approximately $1,000,000 for property
payments and exploration expenses for this year. Failure to obtain additional
financing on a timely basis will cause the Company to forfeit its interest in
its properties, dilute its interests in the properties and/or reduce or
terminate its operations, thus causing investors to lose all or a portion of
their investment.
POSSIBLE DILUTION TO PRESENT AND PROSPECTIVE SHAREHOLDERS:
The Company's plan of operation, in part, contemplates the accomplishment of
business negotiations by the payment of cash, issuance of securities of the
Company, or a combination of the two, and possibly, incurring debt. Any
transaction involving the issuance of previously authorized but unissued shares
of common stock, or securities convertible into common stock, will result in
dilution to present and prospective holders of common stock.
RISKS ASSOCIATED WITH PENNY STOCK CLASSIFICATION:
The Company's stock is subject to "penny stock" rules as defined in Rule 3a51-1
under the United States Securities Exchange Act of 1934, as amended, and because
of the constraints on trading resulting from
Page 9
the "penny stock" definition investors will encounter difficulty in selling
their stock. The Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. The Company's common
shares are subject to these penny stock rules. Transaction costs associated with
purchases and sales of penny stocks are likely to be higher than those for other
securities. Penny stocks generally are equity securities with a price of less
than U.S. $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally
or in writing prior to effecting the transaction and must be given to the
customer in writing before or with the customer's confirmation.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from such rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for the Company's common shares in the
United States and shareholders may find it more difficult to sell their shares.
LIMITED AND VOLATILE TRADING VOLUME:
Although the Company's shares trade on the TSX Venture Exchange, the volume of
trading has been limited and volatile in the past and is likely to continue to
be so in the future, reducing the liquidity of an investment in the Company's
shares and making it difficult for investors to readily sell their shares in the
open market. Without a liquid market for the Company's shares, investors may be
unable to sell their shares at favorable times and prices and may be required to
hold their shares in declining markets or to sell them at unfavorable prices.
VOLATILITY OF SHARE PRICE:
In recent years, securities markets in Canada have experienced a high level of
price volatility. The market price of many resource companies, particularly
those, like the Company, that are considered speculative exploration companies,
have experienced wide fluctuations in price, resulting in substantial losses to
investors who have sold their shares at a low price point. These fluctuations
are based only in part on the level of progress of exploration, and can reflect
general economic and market trends, world events or investor sentiment, and may
sometimes bear no apparent relation to any objective factors or criteria. During
Fiscal 2006, the Company's share price fluctuated between a low of $0.09 and a
high of $0.295. Subsequent to Fiscal 2006, the Company's share price has
fluctuated between a low of $0.11 and a high of $0.17. Significant fluctuation
in the Company's share price is likely to continue, and could potentially
increase, in the future.
DIFFICULTY FOR U.S. INVESTORS TO EFFECT SERVICE OF PROCESS AGAINST THE COMPANY:
The Company is incorporated under the laws of the Province of British Columbia,
Canada. Consequently, it will be difficult for United States investors to effect
service of process in the United States upon the directors or officers of the
Company, or to realize in the United States upon judgments of
Page 10
United States courts predicated upon civil liabilities under the United States
Securities Exchange Act of 1934, as amended. All of the Company's directors and
officers are residents of Canada and substantially all of the Company's assets
are located outside of the United States. A judgment of a U.S. court predicated
solely upon such civil liabilities would probably be enforceable in Canada by a
Canadian court if the U.S. court in which the judgment was obtained had
jurisdiction, as determined by the Canadian court, in the matter. There is
substantial doubt whether an original action could be brought successfully in
Canada against any of such persons or the Company predicated solely upon such
civil liabilities.
POSSIBLE DIFFICULTIES IN OBTAINING REQUIRED PERMITS AND LICENSES:
The Company's future operations may require it to obtain licenses and permits
from various governmental and regulatory authorities. The Company's ability to
conduct exploration, development and mining operations in the future could be
impeded if it is unable to obtain required licenses and permits.
ITEM 4. INFORMATION ON THE COMPANY
Refer to the "Glossary of Terms" on page 1 of this Annual Report for details of
geological terms.
A. HISTORY AND DEVELOPMENT OF THE COMPANY
CORPORATE BACKGROUND
The Company was incorporated on October 24, 1980 under the laws of the Province
of British Columbia by registration of its Memorandum and Articles pursuant to
the COMPANY ACT (British Columbia) under the name "Golden Trend Energy Ltd.". It
changed its name to "World Power Bike Inc." on January 9, 1991. On March 13,
2000, the Company changed its name to "Parkside 2000 Resources Corp." and the
outstanding common shares were consolidated on a one for seven basis in order to
make the Company's share capital more attractive to potential investors. On May
16, 2003, the Company changed its name to "Amador Gold Corp." to be more
consistent with the Company's business objectives.
On March 29, 2004, the British Columbia legislature enacted the BUSINESS
CORPORATIONS ACT (British Columbia) and repealed the COMPANY ACT (British
Columbia). The Company's Notice of Alteration was effected on June 2, 2005.
The Company's common shares are listed on the TSX Venture Exchange ("TSXV"),
which classifies listed companies into two different tiers based on standards,
which include historical financial performance, stage of development, and
financial resources of the listed company. Tier 1 is the TSXV's premier tier and
is reserved for the TSXV's most advanced issuers with the most significant
financial resources. Tier 1 issuers benefit from decreased filing requirements
and improved service standards. The majority of the companies listed on the TSXV
are Tier 2 companies. The Company trades on the TSXV under the trading symbol of
"AGX" and is classified as a Tier 2 company.
The Company's head office is located at 711-675 West Hastings Street, Vancouver,
British Columbia, Canada, V6B 1N2 (Telephone: 604-685-2222; Facsimile:
604-685-3764). The Company's e-mail address is: info@amadorgoldcorp.com and its
website is: www.amadorgoldcorp.com. The Company's registered office is located
at 711-675 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1N2
(Telephone: 604-685-2222, Facsimile: 604-685-3764).
Page 11
The contact person in Vancouver, British Columbia, Canada is: Mr. Richard W.
Hughes, President and Chief Executive Officer.
BUSINESS DEVELOPMENTS DURING FISCAL 2006
GOULD COPPER MINE PROPERTY, ONTARIO
On September 19, 2005, the Company acquired an option from 733526 Ontario Inc.
and Jim Ralph to earn a 100% undivided interest in the Gould Copper Mine
Property located in Gould Township, Ontario.
SAVARD & SHARPE PROPERTY, ONTARIO
On December 8, 2005, the Company acquired an option from Pat Gryba to earn a
100% undivided interest in the Savard & Sharpe Property, located in Savard &
Sharpe Township, Ontario.
BOMPAS-STRATHY PROPERTIES, ONTARIO
On December 9, 2005, the Company acquired an option from Pat Gryba to earn a
100% interest in 2 mineral claims (comprising a total of 17 units) situated in
the Bompas and Strathy Townships, Ontario.
HORWOOD GROUP, ONTARIO
In January 2006, the Company assembled a large land package of over 10,920 acres
in the Horwood Lake area of Ontario, approximately 30 miles southwest of
Timmins, by optioning from various vendors four properties: Horwood Gold,
Horwood Gold 2, Labbe and Ross-Windsor.
A. HORWOOD GOLD PROPERTY
On January 4, 2006, the Company acquired an option from Frederick J. Ross,
Christina McManus, Jennah Durham, Denis Laforest and Garry Windsor to earn a
100% undivided interest in the Horwood Gold Property. The Property consists of
21 mineral claims (210 units).
B. HORWOOD GOLD 2
On January 4, 2006, the Company purchased one mineral claim from Jennah Durham,
Christina McManus, Tina Petroni and Denis Laforest. Under the terms of the
agreement, the Company paid $6,000. There is a 2% NSR payable, of which half may
be purchased for $500,000. The Property consists of 1 mineral claim (3 units).
C. LABBE PROPERTY
On January 4, 2006, the Company acquired an option from Frederick J. Ross,
Christina McManus, Denis Morin, Fernand Morin and Roger Dennomme to earn a 100%
undivided interest in the Labbe Property. The Property consists of 1 mineral
claim (9 units).
Page 12
D. ROSS WINDSOR PROPERTY
On January 4, 2006, the Company acquired an option from Frederick J. Ross and
Garry Frederick Windsor to earn a 100% undivided interest in the Ross Windsor
Property. The Property consists of 3 mineral claims (33 units).
EAST BRECCIA PROPERTY, ONTARIO
On March 1, 2006, the Company acquired an option from Ken Fenwick, George Lucuik
and Daniel Shelly to earn a 100% undivided interest in the East Breccia Property
located in the Nicolet Township, Ontario. The Property consists of 3 mineral
claims (20 units).
PATENT GOLD PROPERTY, ONTARIO
On May 2, 2006 the Company acquired an option to earn a 100% interest in the
Patent Gold Property located in the Sewell and Reeves Townships, Ontario.
KEITH-SEWELL AND MORIN PROPERTY GROUP, ONTARIO
On May 28, 2006, the Company acquired an option to earn a 100% interest in the
Morin Property located in the Keith Township, Ontario and on April 10, 2006 the
Company acquired an option to earn a 100% interest in the Keith-Sewell Property
located in the Keith and Sewell Townships, Ontario.
HOLLOWAY PROPERTY GROUP, ONTARIO
On May 18, 2006 the Company acquired an option to earn a 100% interest in the
Holloway 1 Property located in the Holloway and Frecheville Township, Ontario
and on May 18, 2006 the Company acquired an option to earn a 100% interest in
the Holloway 2 Property located in the Holloway Township, Ontario.
These agreements were terminated on December 21, 2006.
LOVELAND PROPERTY GROUP, ONTARIO
On May 18, 2006 the Company acquired an option to earn a 100% interest in the
Loveland 1 Property located in the Loveland and Byers Townships, Ontario and on
May18, 2006 the Company acquired an option to earn a 100% interest in the
Loveland 2 Property located in the Loveland, Byers and Thorburn Townships,
Ontario.
CHAPLEAU PROPERTY, ONTARIO
During fiscal 2005, the Company acquired 34,900 acres of prospective kimberlite
ground in the Chapleau area of Ontario from Golden Chalice Resources Inc., a
public company related by common directors. During fiscal 2006, the Company
increased the number of acres that fall under this arrangement to 47,278.
ANDERSON LAKE PROPERTY, ONTARIO
On June 23, 2006, the Company acquired an option to earn a 100% interest in the
Anderson Lake Property, located about 45 km east of Thunder Bay, Ontario. The
Property consists of 2 mineral claims (32 units).
Page 13
CHEWETT PROPERTY, ONTARIO
On June 28, 2006, the Company acquired an option from Frederick J. Ross (as to
50%) and Garry Windsor (as to 50%) to earn a 100% interest in 6 mineral claims
(comprising a total of 52 units) situated in the Chewett Township, Ontario.
BLACKSTOCK PROPERTY, ONTARIO AND OKE & FORD PROPERTY, ONTARIO
The Blackstock Property and the Oke & Ford Property were acquired by staking.
There were no underlying agreements. The staking was done based on management's
interpretation of geological structures found on the properties from government
files.
FORGE LAKE PROPERTY, ONTARIO AND OTTER POND PROPERTY, ONTARIO
The Company entered into joint venture agreements with Golden Chalice Resources
Inc. ("Golden Chalice") with regard to the Forge Lake Property, Ontario and the
Otter Pond Property, Ontario.
BUSINESS DEVELOPMENTS SUBSEQUENT TO FISCAL 2006
On November 3, 2006, 112,500 options were granted, exercisable at $0.15 per
share, expiring on November 3, 2011.
On December 27, 2006, the Company closed a private placement consisting of
13,965,000 flow-through units, at $0.12 per unit, for gross proceeds of
$1,675,800. On February 7, 2007, the Company closed a private placement
consisting of 2,350,000 units (of which 1,565,000 are flow-through units and
785,000 are non-flow-through units), at $0.12 per unit, for gross proceeds of
$282,000. Each of the units consists of either one flow-through or non
flow-through common share and one non flow-through non-transferable share
purchase warrant entitling the holder to purchase one additional common share
for a period of two years at a price of $0.15 per share.
On February 5, 2007, the Company entered into an option agreement with Ashley
Gold Mines Limited and David R. Healey to acquire a 100% interest in the Gogama
Moly Property, located approximately 58 kilometres southwest of Thunder Bay,
Ontario. Consideration for the property consists of $45,000, 200,000 shares and
a work commitment of $75,000 all over a period of 2 years. There is a 2% net
smelter return payable, of which half may be purchased for $1,000,000. The
agreement was approved by the TSX Venture Exchange on February 20, 2007. The
Gogama Property is located in Moher Township, consists of 1 claim totaling 16
units for 640 acres and is accessed by an all weather gravel road off of highway
144. The claim covers a government documented occurrence of molybdenite located
on the contact between a porphyritic granite and amphibolitized schist and
gneiss. The molybdenum occurred in a quartz vein that has been exposed for 6
metres. No work has been recorded since the initial discovery by the government
geologists in 1968. Amador plans to conduct prospecting and mapping in the
spring on the Property.
On February 5, 2007, the Company entered into an option agreement with Frederick
Ross, Garry Windsor, Bruce Durham and Charles Hartley (each as to 25%) to
acquire a 100% interest in the Dale Gold Property, located in the Porcupine
Mining Division, Ontario. Consideration for the property consists of $55,000 and
300,000 shares over a period of two years. There is a 2% net smelter return
payable, of which half may be purchased for $1,000,000. The agreement was
approved by the TSX Venture Exchange on March 26, 2007. The Dale Gold Property
is accessible by highway and secondary logging roads. Gold was first discovered
on the Property in the early 1930's. Trenching and drilling
Page 14
during the mid 1990's discovered two 20 metre to 30 metre wide parallel shear
zones containing anomalous gold. Gold is associated with pyrite in quartz
stockwork zones within the quartz-carbonate-chlorite-sericite altered shear
zones. The best value from drill core was 6.08 g/t gold over 2.4 metres. It is
reported that drilling and trenching tested only 5% of the estimated 4,000 metre
strike length of the shear zones. The Company plans ground geophysical and soil
geochemical surveys followed by trenching to evaluate the size, grade, and
strike extent of the mineralized shear zones.
On March 1, 2007, the Company entered into an option agreement with CJP
Exploration Inc. and Ashley Gold Mines Limited (each as to 50%) to acquire a 20%
interest in the Meteor Lake Property, located in the Larder Lake and Sudbury
Mining Division, Ontario. The Company's partners in this agreement include
Klondike Gold Corp. ("Klondike Gold") (20%), Golden Chalice Resources Inc.
("Golden Chalice") (20%) and Hastings Management Corp. (40%). Klondike Gold and
Golden Chalice are public companies related by common directors. Hastings
Management is a private company owned as to 100% by Richard W. Hughes, the
President and a director of the Company. Consideration for the property consists
of $20,000 (20% paid by the Company and the balance by its partners) and 200,000
shares of Klondike Gold. The Company will reimburse Klondike Gold for the value
of the shares up to 20%, based on the closing price of the shares as at the date
of issuance. The agreement is subject to acceptance by the TSX Venture Exchange.
PRINCIPAL CAPITAL EXPENDITURES AND DIVESTITURES
BX PROPERTY
Up until July 2002, the Company was essentially dormant and reactivated itself
by acquiring a joint venture interest in the BX Property from Goldrea. The
Company made expenditures of $143,990 in the summer and fall of 2002 exploring
(drilling etc.) this property, which resulted in the Company acquiring a 10%
interest. In May 2003, the Company terminated its option agreement with Goldrea.
KENORA PROPERTY GROUP, ONTARIO
A. In October 2002, the Company entered into a letter of intent for the
assignment of an option agreement, followed by formal option agreements in
January 2003, as amended on August 10, 2004, to acquire a 100% interest in 40
patented claims and 2 mineral claims 60 kilometres west of Kenora, Ontario (the
"KPM Property"). Consideration, as amended consisted of $35,000 to the assignor
(paid) and option payments made by the Company totaling $225,000 in February
2003, $250,000 in August 2003, $250,000 in August 2004 and $250,000 in August
2005. Finder's fees to a maximum of $300,000 was payable on the KPM Property, of
which $103,282 had been incurred as at October 31, 2006.
B. During fiscal 2004, the Company acquired an option to earn a 100% interest in
approximately 21 claim units covering 840 acres in the Glass Township, Shoal
Lake, Ontario. The Company made option payments totaling $33,000 (subsequent to
fiscal 2004).
During the year ended October 31, 2006, the Company abandoned and wrote off all
costs incurred with respect to the Kenora Property Group.
MAGNUM PROPERTY
During fiscal 2005, the Company entered into an Assignment Agreement to acquire
a 100% interest in the Magnum Property. The Company paid $50,000 and incurred
$25,000 in exploration expenditures. During the year ended October 31, 2006, the
Company abandoned and wrote off all costs incurred with respect to the Magnum
Property.
Page 15
HOLLOWAY PROPERTY GROUP, ONTARIO
On May 18, 2006 the Company acquired an option to earn a 100% interest in the
Holloway 1 Property located in the Holloway and Frecheville Township, Ontario
and on May 18, 2006 the Company acquired an option to earn a 100% interest in
the Holloway 2 Property located in the Holloway Township, Ontario.
Consideration for the Holloway 1 property, over a 4 1/2 period, is to pay
$250,000 (as at October 31, 2006, $25,000 has been paid) and issue, over a
4-year period, 500,000 common shares of the Company (as at October 31, 2006,
100,000 shares have been issued). On December 21, 2006, this agreement was
terminated.
Consideration for the Holloway 2 property, over a 1-year period, is to pay
$20,000 (paid) and issue 200,000 common shares of the Company (as at October 31,
2006, 100,000 shares were issued). On December 21, 2006, this agreement was
terminated.
From the proceeds of private placements completed during fiscal 2006, the
Company paid the cash option payments on the following properties:
Page 16
- ------------------------- -------------------------- ---------------------------
PROPERTY AMOUNT FIRST/SECOND/THIRD PAYMENT
- ------------------------- -------------------------- ---------------------------
Glass Township $15,000 Third Payment
- ------------------------- -------------------------- ---------------------------
Todd Township $12,000 Third Payment
- ------------------------- -------------------------- ---------------------------
Maskootch $15,000 Third Payment
- ------------------------- -------------------------- ---------------------------
Hunter Gold $10,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Silver Strike $10,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Silverclaim $15,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Capitol Silver $5,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Thompson $5,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Kell Mine $5,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Hudson Bay $5,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Banting Chambers $7,500 Second Payment
- ------------------------- -------------------------- ---------------------------
Tetagouche $10,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Mennin Lake $25,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Willet $5,000 Second Payment
- ------------------------- -------------------------- ---------------------------
Bompas-Strathy $10,000 First Payment
- ------------------------- -------------------------- ---------------------------
Anderson Lake $12,000 First Payment
- ------------------------- -------------------------- ---------------------------
Horwood Gold $15,000 First Payment
- ------------------------- -------------------------- ---------------------------
Horwood Gold 2 $6,000 First Payment
- ------------------------- -------------------------- ---------------------------
Labbe $5,000 First Payment
- ------------------------- -------------------------- ---------------------------
Ross Windsor $5,000 First Payment
- ------------------------- -------------------------- ---------------------------
East Breccia $12,000 First Payment
- ------------------------- -------------------------- ---------------------------
Gould Copper $12,000 First Payment
- ------------------------- -------------------------- ---------------------------
Patent Gold $15,000 First Payment
- ------------------------- -------------------------- ---------------------------
Keith-Sewell $21,000 First Payment
- ------------------------- -------------------------- ---------------------------
Morin $10,000 First Payment
- ------------------------- -------------------------- ---------------------------
Holloway 1 (1) $25,000 First Payment
- ------------------------- -------------------------- ---------------------------
Holloway 2 (1) $20,000 First Payment
- ------------------------- -------------------------- ---------------------------
Loveland 1 $25,000 First Payment
- ------------------------- -------------------------- ---------------------------
Loveland 2 $25,000 First Payment
- ------------------------- -------------------------- ---------------------------
Sharpe & Savard $10,000 First Payment
- ------------------------- -------------------------- ---------------------------
Otter Pond $27,495 First Payment
- ------------------------- -------------------------- ---------------------------
Forge Lake $34,000 First Payment
- ------------------------- -------------------------- ---------------------------
Chapleau $8,385 Only Payment
- ------------------------- -------------------------- ---------------------------
Chewett $15,000 Only Payment
- ------------------------- -------------------------- ---------------------------
Total $457,380
- ------------------------- -------------------------- ---------------------------
NOTE:
(1) During the year ended October 31, 2006, the Company abandoned
and wrote off all costs incurred with respect to the Holloway
Property Group.
In addition, the Company paid staking costs of $458,619 for several properties
during fiscal 2006, the largest amount being paid for the Chapleau Property,
Ontario ($159,406) and the Oke & Ford Properties, Ontario ($134,300).
Page 17
B. BUSINESS OVERVIEW
OPERATIONS AND PRINCIPAL ACTIVITIES
The Company is a natural resource company engaged in the acquisition and
exploration of mineral resource properties, principally for copper and gold, in
Canada and its properties do not contain a known commercially viable minable
deposit. Further exploration is required before a final evaluation of the
economic and legal feasibility is determined.
PRINCIPAL MARKETS AND COMPETITIVE CONDITIONS
While the Company has not received any revenue from its current operations, it
anticipates its markets if and when they develop will be based on Comex and/or
London Metal Exchange (LME) prices.
The Company competes with other natural resource and mining companies, some of
which have greater financial resources and technical facilities, for the
acquisition of mineral interests, as well as for the recruitment and retention
of qualified employees.
SEASONALITY
Mineral exploration in Canada is seasonal in nature due to the fact that weather
conditions may make properties inaccessible. In addition, during periods of good
weather conditions there is great demand for available crew and equipment such
as drilling rigs, geological crews and airplanes.
MARKETING CHANNELS
The Company is not currently marketing any mineral products.
ENVIRONMENTAL AND OTHER REGULATORY REQUIREMENTS
In connection with its properties, the Company is subject to extensive and
changing environmental legislation, regulation and actions. The Company cannot
predict what environmental legislation, regulation or policy will be enacted or
adopted in the future or how future laws and regulations will be administered or
interpreted. The recent trend in environmental legislation and regulation
generally is toward stricter standards and this trend is likely to continue in
the future. This recent trend includes, without limitation, laws and regulations
relating to air and water quality, mine reclamation, waste handling and
disposal, the protection of certain species and the preservation of certain
lands. These regulations may require the acquisition of permits or other
authorizations for certain activities. These laws and regulations may also limit
or prohibit activities on certain lands. Compliance with more stringent laws and
regulations, as well as potentially more vigorous enforcement policies or
stricter interpretation of existing laws, may necessitate significant capital
outlays, may materially affect the Company's results of operations and business,
or may cause material changes or delays in the Company's intended activities.
The Company can carry out exploration work including drilling, trenching, heavy
mineral studies, airborne geophysical surveys, extensive use of off road
vehicles, establishment of a camp or other activities capable of causing ground
disturbance, water quality impairments or disruption to wildlife or wildlife
habitat, provided that it complies with applicable provincial and federal acts
and regulations in so doing. The Company is not required to obtain work permits
for exploration activities on its properties but is required to notify the
government of the work being undertaken.
Page 18
To the best of the Company's knowledge, the Company is operating in compliance
with all applicable environmental regulations. The Company currently is not
insured against environmental liabilities.
COMPETITION
The Company's business is intensely competitive, and the Company competes with
other mining companies, many of which have greater resources and experience.
Competition in the mining industry is primarily for mineral rich properties
which can be developed and produce economically; the technical expertise to
find, develop, and produce from such properties; the labor to operate the
properties; the capital for the purpose of financing development of such
properties; and arrangements for marketing, particularly in the case of products
not traded on terminal markets. Many competitors not only explore for and mine
metals and minerals, but also conduct refining and marketing operations on a
world-wide basis and some of these companies have much greater financial and
technical resources than the Company. Such competition may result in the Company
being unable to acquire desired properties, to recruit or retain qualified
employees or to acquire the capital necessary to fund its operations and develop
its properties. The Company's inability to compete with other mining companies
for mineral deposits could have a material adverse effect on the Company's
results of operation and business.
C. ORGANIZATIONAL STRUCTURE
Not Applicable
D. PROPERTY, PLANTS AND EQUIPMENT
The Company does not own most of its equipment used to conduct its business. The
Company's infrastructure is largely provided under management agreements.
The Company's corporate offices are located in Vancouver, British Columbia,
Canada.
Hastings Management Corp. ("HMC"), a company wholly owned by Richard W. Hughes,
a director and the current President and Chief Executive Officer of the Company,
was paid $395,760 for the year ended October 31, 2006, pursuant to
administrative services provided to the Company including supervising and
administering the financial requirements of the Company's business,
communication with various regulatory authorities in order to ensure compliance
with all applicable laws; assisting in the preparation of news releases,
promotional materials and other documents required to be disseminated to the
public and responding to any requests for information or questions which may be
posed by the public; providing access to secretarial services and legal
consultation; providing office space, office furniture, boardroom facilities,
access to photocopier, fax and such other amenities normally associated with
executive offices. HMC entered into an Administrative Services Agreement on June
1, 2005 (as amended on January 1, 2006)) whereby HMC received $20,000 per month
until December 31, 2005. As amended, HMC receives a minimum monthly management
fee of $35,000, a maximum monthly fee of $45,000 in higher activity periods and
a reimbursement of actual out-of-pocket costs plus 5% for administrative
overhead.
The Company's material assets are the exploration properties located in Ontario,
New Brunswick and British Columbia, described below. During fiscal 2006, the
Company was granted options on certain mineral properties, described below.
Page 19
KENORA PROPERTY GROUP, ONTARIO
A. KPM PROPERTY
During fiscal 2003, the Company entered into a letter of intent for the
assignment of an option agreement to acquire a 100% interest in 40 patented
claims and 2 mineral claims 60 kilometres west of Kenora, Ontario. The agreement
was amended in August 2004. Consideration, as amended, consisted of $35,000 to
the assignor (paid), $225,000 before February 14, 2003 (paid), $250,000 on
August 27, 2003 (paid), $250,000 on each of August 27, 2004 (paid), and 2005
(paid), $500,000 on each of August 27, 2006, 2007, 2008, and 2009. Finder's fees
to a maximum of $300,000 was payable on the KPM Property, of which $103,282 had
been incurred as at October 31, 2006.
B. GLASS TOWNSHIP PROPERTY
During fiscal 2004, the Company acquired an option from 1544230 Ontario Inc.
(Perry English) of Souris, Manitoba to earn a 100% interest in approximately 21
claim units covering 840 acres in the Glass Township, Shoal Lake, Ontario.
Consideration is, over a 4-year period, to pay $93,000 (as at October 31, 2006,
$33,000 has been paid) and issue 100,000 shares of the Company (as at October
31, 2006, 75,000 shares have been issued). In addition, the property is subject
to a 1.25% net smelter royalty ("NSR") with the Company given the right to
purchase 0.5% of the NSR for $500,000.
During the year ended October 31, 2006, the Company abandoned and wrote off all
costs incurred with respect to the Kenora Property Group.
RED LAKE PROPERTY GROUP
A. TODD TOWNSHIP PROPERTY, ONTARIO
On June 23, 2004, the Company acquired an option from 1304850 Ontario Inc.
(Perry English) of Souris, Manitoba to earn a 100% interest in 5 claim units
covering 200 acres in the old Fahrenheit / Golden Arm Mines Ltd. patents located
about 22 kilometers west of the Red Lake Mine. Consideration is, over a 4-year
period, to pay $69,000 (as at October 31, 2006, $21,000 has been paid) and issue
100,000 common shares of the Company (as at October 31, 2006, 75,000 shares have
been issued). In addition, the property is subject to a 2% net smelter royalty
("NSR") with the Company given the right to purchase 1% of the NSR for $600,000.
The agreement was accepted for filing by the Exchange on July 13, 2004.
The property lies within the Pipestone Bay - St. Paul Bay Deformation Zone, a
prominent structural feature characterized by pervasive iron carbonate
alteration. The Mount Jamie, Rowan Lake and Red Crest deposits are located in
the immediate vicinity of the Todd Property and all are spatially associated
with the Pipestone Bay - St. Paul Bay Deformation Zone. The property is
underlain by a varied assemblage of east-west striking mafic volcanic flows,
metasedimentary rocks and chert-magnetite iron formation. Trenches established
in the 1930's exposed quartz veins hosted within iron formation.
A grid has been established over the property and numerous VLF EM and magnetic
anomalies have been identified for follow-up by prospecting and geochem prior to
trenching or drilling.
Page 20
B. MASKOOTCH LAKE PROPERTY, ONTARIO
On June 23, 2004, the Company acquired an option from 1304850 Ontario Inc.
(Perry English) of Souris, Manitoba to earn a 100% interest in approximately 32
claim units covering 1,280 acres in the Birch-Uchi Confederation Lakes belt
located 85 kilometers east of Red Lake, Ontario, known as the Maskootch Lake
property. Consideration is, over a 4-year period, to pay $88,000 (as at October
31, 2006, $28,000 has been paid) and issue 100,000 shares of the Company (as at
October 31, 2006, 75,000 shares have been issued). In addition, the property is
subject to a 2% NSR with the Company given the right to purchase 1% of the NSR
for $1,000,000. The agreement was accepted for filing by the Exchange on July
13, 2004.
The property is situated 20 kilometers southeast of the past-producing South Bay
Mine. The South Bay copper-zinc-silver massive sulphide deposit produced 1.6
million tons of ore with an average grade of 1.8% Cu, 11.06% Zn and 2.12 ounces
silver per ton. The Maskootch Lake property covers a geologic environment
permissive for the discovery of volcanogenic massive sulphide and precious metal
mineralization. A number of co-incident Horizontal Loop EM and magnetic
anomalies remain untested from the initial work carried out by St Joseph
Explorations Ltd., Noranda Exploration Company Ltd. and Getty Canadian Metals
Ltd. from the late 1970's to the mid 1980's. The north arm of a tightly folded
sequence of sericitized, intermediate to felsic pyroclastic rocks and sulphide
facies iron formation has been traced by airborne and ground follow-up
geophysics and mechanical stripping and trenching over a strike length of 2.5
kilometers. Stripped outcrops southeast of Maskootch Lake has exposed
synvolcanic, amphibole-garnet-magnetite alteration identified as autoclastic
breccia and strong gossanous alteration reflecting widespread chalcopyrite,
pyrrhotite and pyrite mineralization. The mineralization occurs across widths of
up to 20 meters over a 200 meter strike length.
A grid has been established over the property and strong VLF EM and magnetic
anomalies appear to coincide with existing mineralized showings. The main
anomaly is over 800 metres long, trends under a lake to the west and may be
folded to the east where a large 300m by 300m anomaly occurs at what might be
the nose of the fold. The grid will be extended over the lake in the winter.
Prospecting and geochem sampling are planned in the spring prior to trenching or
drilling.
SILVER PROPERTIES, ONTARIO
A. SILVER STRIKE PROPERTY
On March 28, 2005, the Company acquired an option from Aurora-Larder Lake Mining
Corporation Limited to earn a 100% interest in the Silver Strike Property
located in the northwestern corner of James Township, Ontario. Consideration is,
over a 4-year period, to pay $50,000 (as at October 31, 2006, $20,000 has been
paid), issue 150,000 common shares of the Company (as at October 31, 2006,
60,000 shares have been issued) and incur an aggregate of $80,000 in exploration
expenses (as at October 31, 2006, $28,529 has been expended). The property is
subject to a 2% NSR with a buy back of 1% for $1,000,000. The agreement was
accepted for filing by the Exchange on May 11, 2005.
The Silver Strike Property comprises 256 hectares. The Property is made up of a
number of old workings with four shafts being found dating back to the early
20th Century. Previous work has consisted of limited prospecting with
interesting copper, silver, nickel and cobalt mineralization being found. The
Silver Strike Property is easily accessed by vehicle.
Compilation of historical data has identified the preferred orientation of
silver vein systems on the property. A grid was established over part of the
property followed by an Induced Polarization (IP)
Page 21
geophysical survey. The next step will be to complete a soil geochemical survey
over the grid followed by trenching or drilling.
B. SILVERCLAIM PROPERTY
On March 28, 2005, the Company acquired an option from Canadian Prospecting
Ventures Inc. to earn a 100% interest in the Silverclaim Property located in the
Mickle Township, northern Ontario. Consideration is, over a 4-year period, to
pay $150,000 (as at October 31, 2006, $30,000 has been paid), issue 200,000
common shares of the Company (as at October 31, 2006, 100,000 shares have been
issued) and incur an aggregate of $200,000 in exploration expenses (as at
October 31, 2006, $56,438 has been expended). The property is subject to a 2%
NSR with a buy back of 1% for $1,000,000. The agreement was accepted for filing
by the Exchange on May 11, 2005.
The Silverclaim Property comprises 256 hectares. The Property has been
extensively worked and is a system of parallel veins with high grade
mineralization. In 1980, ENR Partnership and Silver Lake Resources Inc.
completed 7,338 feet of surface diamond drilling and in 1982, 18,230 feet of
diamond drilling was completed by Silver Lake Resources Inc.
In 1983, Teck Corporation, Silver Lake Resources Inc. and Lacana Mining
Corporation completed a 1,049 foot ramp decline and 3,822 feet of underground
drilling. A bulk sample weighing 7.5 tons was taken from the floor of the ramp
for 15 feet long and 6 feet wide and assayed 11.277 ounces silver per ton. Also
in 1983 a bulk sample weighing 10.3 tons was taken from a 20 foot length and 4
foot width of the vein and assayed 14.390 ounces silver per ton. 110 feet west
of the decline a 30 foot drift was driven north on a vein. A bulk sample
weighing 624 pounds from a 3 foot wide and 4 foot high section assayed 18.075
ounces silver per ton. This vein was projected north for more than 500 feet. In
1984 Teck carried out 6,600 feet of drilling south of the ramp with several of
the holes hitting high grade narrow veins.
Limited work has been carried out since 1984, partly due to the Temagami Land
Caution and partly due to a consolidation of the land position in the area. The
Silverclaim Property covers the majority of the known silver showings in the
area and recent prospecting has identified a number of other untested parallel
veins. Compilation of historical data followed by ground work will be undertaken
prior to trenching, drilling and/or additional bulk sampling to further
delineate and expand existing silver resources on the Property.
Compilation of historical data has identified the preferred orientation of
silver vein systems and a massive copper sulphide vein on the property. An
intial grid with Induced Polarization (IP) survey has been completed. The grid
and geophysics will be expanded to cover the Cotley zone prior to drilling to
test for silver and/or copper mineralization.
C. CAPITOL SILVER PROPERTY
On June 21, 2005, the Company acquired an option from Canadian Prospecting
Ventures Inc. to earn a 100% interest in the Capitol Silver Mine property,
located approximately 4 km northeast of Gowganda, Ontario. Consideration is,
over a 3-year period, to pay $35,000 (as at October 31, 2006, $10,000 has been
paid), issue 350,000 common shares (as at October 31, 2006, 100,000 shares have
been issued) and incur an aggregate of $60,000 in exploration expenses (as at
October 31, 2006, $3,893 has been expended). There is a 2% NSR of which half may
be purchased for $1,000,000. The agreement was accepted for filing by the
Exchange on September 22, 2005.
Page 22
High grade nickel, cobalt and silver veins were first discovered on the Capital
Silver Property in 1908. The veins were mined during the late 1930's and the
latter half of the 1960's. No further exploration or development has been
recorded for the property. Potential exists for additional high grade
mineralized zones along strike and down dip from the existing workings. Amador
will also assess opportunities for bulk tonnage, lower grade nickel, cobalt and
silver mineralized zones on the property.
Compilation of historical data is on-going.
DONOVAN BASIN GROUP, ONTARIO
During the spring of 2006, the Company staked 676 units (approximately 27,000
acres) to form one large land package that incorporates the following three
properties and all the land in between. This large property covers a newly
identified potential silver basin (called the Donovan Basin) that is similar in
geology and style to the mineralization in the Cobalt Silver Camp basin and the
Gowganda Silver Camp basin.
A. THOMPSON PROPERTY, ONTARIO
On March 28, 2005, the Company acquired an option from Aurora-Larder Lake Mining
Corporation Limited, CJP Exploration Inc. and Barry McCombe to earn a 100%
interest in the Thompson Property located in the northeastern corner of Donovan
and southern part of Charters Township, Ontario. Consideration is, over a 4-year
period, to pay $30,000 (as at October 31, 2006, $10,000 has been paid), issue
150,000 common shares of the Company (as at October 31, 2006, 60,000 shares have
been issued) and incur $60,000 in exploration expenses (as at October 31, 2006,
$12,168 has been expended). The property is subject to a 2% NSR with a buy back
of 1% for $1,000,000. The agreement was accepted for filing by the Exchange on
May 11, 2005.
The Thompson Property comprises 416 hectares. This area had been closed to
staking and prospecting for twenty years because of the Temagami Land Caution
and has never been explored with modern methods and geophysics. The last work
conducted on the Property consisted of geophysical surveys in 1960 which
identified targets with recommendations for drilling. No drilling was done.
The Thompson Property is easily accessed by vehicle.
The Company plans to complete a grid and conduct geophysical surveys to outline
existing mineralized silver zones and their strike extent prior to testing by
trenching or drilling.
Page 23
B. KELL MINE PROPERTY, ONTARIO
On March 28, 2005, the Company acquired an option from Aurora-Larder Lake Mining
Corporation Limited (as to 65%), CJP Exploration Inc. (as to 25%) and Barry
McCombe (as to 10%) to earn a 100% interest in the Kell Mine Property located in
the southwestern corner of Corkill Township, Ontario (the "Kell Property").
Consideration is, over a 4-year period, to pay $30,000 (as at October 31, 2006,
$10,000 has been paid), issue 150,000 common shares of the Company (as at
October 31, 2006, 60,000 shares have been issued) and incur $60,000 in
exploration expenses (as at October 31, 2006, $10,455 has been expended). The
property is subject to a 2% NSR with a buy back of 1% for $1,000,000. The
agreement was accepted for filing by the Exchange on May 11, 2005.
The Kell Property comprises 112 hectares. The area hosts a multiple of known
deposits with significant mineralization. This area had been closed to staking
and prospecting for twenty years because of the Temagami Land Caution and has
never been explored with modern methods and geophysics. The Kell Mine Property
exhibits potential for future mineral discoveries of copper, silver, nickel and
cobalt.
Magnetometer and VLF-EM surveys have been completed over the property. A VLF-EM
anomaly occurs adjacent to the known mineralized zones. A second larger anomaly
is over 500 metres north and parallel to the first anomaly. Both anomalies occur
in overburden or swamp. The Kell Property is easily accessed by vehicle.
Magnetometer and VLF-EM surveys have been completed over the property. A VLF-EM
anomaly occurs adjacent to the known mineralized zones. A second larger anomaly
is over 500 metres north and parallel to the first anomaly. Both anomalies occur
in overburden or swamp. The Company plans to complete an MMI soil survey over
anomalous zones prior to drilling for slver, cobalt and nickel.
C. HUDSON BAY SILVER MINE PROPERTY, ONTARIO
On June 21, 2005, the Company acquired an option from Aurora-Larder Mining
Corporation Limited to earn a 100% interest in the Hudson Bay Silver Mine
Property located in southeastern Leith Township, Ontario. Consideration is, over
a 3-year period, to pay $35,000 (as at October 31, 2006, $10,000 has been paid),
issue 300,000 common shares of the Company (as at October 31, 2006, 100,000
shares have been issued) and incur $60,000 in exploration expenses (as at
October 31, 2006, $16,871 has been expended). The property is subject to a 2%
NSR, half of which can be purchased for $1,000,000. The agreement was accepted
for filing by the Exchange on July 26, 2005.
The original Hudson Bay property was staked in 1908 and subsequently acquired
and operated by the Hudson Bay Mining Company from 1910 to 1913. Four shafts
were sunk, 3 by the Hudson Bay Mining Company and one by Silverado Gowganda in
1936. Production was from a system of parallel veins and consisted of silver and
cobalt. No work has been done on this property since the mid 1970s. The Company
has compiled historical and plans to conduct ground surveys such as mapping,
geophysics and geochem to identify potential mineralized zones on strike and at
depth.
AJAX GROUP
A. AJAX PROPERTY, ONTARIO
On June 13, 2005, the Company entered into a purchase and sale agreement with
Aurora-Larder Mining Corporation Limited (as to 50%) and Kirnova Corp. (as to
50%) whereby the Company agreed to
Page 24
purchase an undivided 100% interest in the Ajax Property, Ontario. Consideration
is $80,000 (paid) and 300,000 common shares of the Company at a deemed price of
$0.085 per share (issued). The property is subject to a 2% net smelter return
royalty with a buy back of 1% for $1,000,000. The agreement was accepted for
filing by the Exchange on June 30, 2005.
Nickel, copper, gold, platinum, palladium, silver and cobalt mineralization
occur in disseminated blebs and aggregates of sulphides in a peridotite body
with serpentinized horizons.
Historical reports indicate the property was first staked in 1910 with platinum
being discovered in 1929. In 1934, a vertical shaft was sunk to a depth of 245
feet with lateral mine development on the 100 and 200 foot levels totaling 2,200
feet. By 1937, 3,318 tons were milled from the underground workings and an open
pit (metal content was not reported). The next reported production occurred from
1974-1976 when Kanichee Mining and Jack Koza Limited enlarged the open pit and
removed the shaft pillar. During this period, 1,393,144 lbs of nickel and
3,117,490 lbs of copper were recovered from 278,263 tons milled. The mine was
forced to close February 6, 1976 when Falconbridge Nickel terminated its
contract to buy the concentrates. The open pit and workings have remained
flooded since 1976.
Reports suggest that the depth and strike potential of mineralized zones have
not been fully explored. In addition, mineralized zones on the property contain
precious metals (Pt, Pd, Au, Ag) and cobalt that do not appear to have been
fully assessed. Higher grade zones may also occur within the existing resource
or elsewhere on the property that are amenable to underground mining.
Peter Caldbick. P. Geo. is the Qualified Person for the purposes of National
Instrument 43-101 for the Company's Ajax Project.
In December 2005, the Company had a detailed Geotech airborne VTEM geophysical
survey flown over the Ajax property to follow the down plunge extension of the
Ajax nickel-copper-pgm sulphide resource, and to evaluate possible untested new
zones at depth. The new VTEM system has identified the known mineralized zone
associated with the Ajax mine and new potential mineralized targets at depth
that have not been tested. The Company has also established a grid over part of
the property and completed an Induced Polarisation (IP) geophysical survey to
identify disseminated nickel and PGM mineralization that would not be seen by
the VTEM survey. Results of this work are pending. When received, the survey
results will be compiled with historical data to help outline existing and
identify new zones for testing. The results will also be used to design a drill
program to outline a 43-101 compatible resource calculation for existing
mineralization beneath the Ajax open pit and its extension.
B. BANTING CHAMBERS PROPERTY, ONTARIO
On July 21, 2005, the Company acquired an option from Kirnova Corp. and Todd
Keast to earn a 100% interest in the Banting Chambers Property located
approximately 20 km northwest of Temagami, Ontario. Consideration is to pay
$22,500 (as at October 31, 2006, $12,500 has been paid), issue 150,000 common
shares of the Company (as at October 31, 2006, 100,000 shares have been issued)
over two years and incur $110,000 in exploration expenditures (as at October 31,
2006, $18,661 has been expended) over three years. The property is subject to a
2% NSR is payable on the property half of which can be purchased for $500,000.
The agreement was accepted for filing by the Exchange on August 23, 2005.
The Banting Chambers Property is a copper-nickel-platinum-palladium-gold-silver
prospect which consists of four, 62 unit claims. The targets are two gabbroic
intrusives located in Banting and Chambers
Page 25
Townships which may be similar to the Ajax Mine, located 6.5 kilometers
southwest, which are hosted in a gabbroic intrusive. Amador recently acquired
the property which has the Ajax Mine situated on it (see News Release dated June
23, 2005). Surface bedrock exposure on both the Banting and Chambers intrusives
is less than 5% which limited historical surface mapping.
In addition, Temex Resources announced a high grade gold discovery assaying
6,222 grams per tonne from a 10 centimetre vein in a mafic intrusive boulder on
March 30, 2004. Temex has acquired a large land package in efforts to trace the
source of the boulder. The land package is adjacent to the Banting/Chambers
gabbro intrusions.
In December 2005, the Company had a detailed Geotech airborne VTEM geophysical
survey flown over the Banting-Chambers property. The VTEM survey identified a
number of targets that will be followed up by prospecting and geochem prior to
trenching or drilling to test for nickel-copper-pgm sulphide zones similar to
those at Ajax.
C. STRATHY TOWNSHIP PROPERTY, ONTARIO
On July 19, 2005, the Company agreed to acquire from Pat Gryba of Timmons,
Ontario a 100% interest in three (3) mineral claims comprising a total of 11
units located in the Strathy Township, Ontario in the Sudbury Mining Division,
Ontario. Under terms of the agreement Amador agreed to pay $20,000 (paid). The
property is subject to a 1% net smelter return royalty is payable on the
property which can be purchased for $250,000.
This property is adjacent to the Ajax property and was also flown with the
Geotech VTEM airborne survey (refer to Ajax Property discussion above).
D. BOMPAS-STRATHY PROPERTIES, ONTARIO
On December 9, 2005, the Company acquired an option from Pat Gryba to earn a
100% interest in 2 mineral claims (comprising a total of 17 units) situated in
the Bompas and Strathy Townships, Ontario. Consideration is $10,000 (paid).
There is a 2% NSR payable, of which half may be purchased for $250,000.
The Strathy Property is being assessed for nickel-copper-PGM mineralization
potential as part of the Ajax work program. The Bompas property will be explored
for Molly mineralization.
MAGNUM PROPERTY, QUEBEC
On March 24, 2005, the Company entered into an Assignment Agreement with Vault
Minerals Inc. of Kirkland Lake, Ontario to acquire a 100% interest in the Magnum
Property. Under terms of the agreement, the Company is to pay $50,000 (paid) and
issue 300,000 common shares (issued at a deemed price of $0.08 per share). The
underlying agreement requires the Company to spend $25,000 in exploration
expenditures by June 12, 2005 ($25,000 paid) and an additional $225,000 by
October 25, 2007 ($14,481 paid). A 2% royalty is payable on the property, half
of which can be purchased for $1,000,000. The agreement was accepted for filing
by the Exchange on May 10, 2005. During the year ended October 31, 2006, the
Company abandoned and wrote off all costs incurred with respect to this
property.
Page 26
TETAGOUCHE PROPERTY, NEW BRUNSWICK
On May 6, 2005, the Company acquired an option from Merton Stewart to earn a
100% interest in the Tetagouche Property, New Brunswick. Consideration is over a
3-year period, to pay $40,000 (as at October 31, 2006, $20,000 has been paid)
and issue 150,000 common shares of the Company (as at October 31, 2006, 60,000
shares have been issued). The property is subject to a 2% NSR with a buy back of
1% for $750,000. The agreement was accepted for filing by the Exchange on June
30, 2005.
Gold and silver mineralization on the Tetagouche Property is associated with
silicified zones in shears within a meta-sedimentary/volcanic sequence of
sericite and chlorite-sericite schists. Mineralization within silicified zones
consists mainly of arsenopyrite with associated silver and gold. Higher grade
zones contain patches of sphalerite and galena. Disseminated arsenopyrite can be
found in the sericite and chlorite schists adjacent to the silicified zones and
increases in concentration closer to the zones.
Silver - gold intercepts (10.33oz Ag/ton, 0.012 oz. Au/ton over 5.9m core
length, and 4.27 oz Ag/ton, 0.044 oz. Au/ton over 9.66m ) cored in two previous
drill holes in 1989 are open along strike and at depth. Mineralization occurs
within silicified felsic tuffs of the Ordovician Tetagouche Group as well as in
Devonian gabbro. Pyrite, arsenopyrite, galena and sphalerite are the principal
sulfides accompanying mineralization.
Subsequent to year end, the Company drilled four diamond drill holes totalling
263 metres. DDH-TS-05-01 intersected 3.1 metres of 621.3 g/t Ag, 0.74g/t
Au/t./3.1 metres. DDH-TS-05-04 intersected 174.9g/t Ag, 0.66g/t.Au over a core
length of 7.7 metres. Included in this latter intercept was a higher grade zone
of 416g/t Ag, 1.16g Au/g/t over 2.3 metres. Hole TS-05-04 tested the down dip
extension of a silver-gold zone drilled in 1989 that intersected 353.2/t Ag,
0.42g/t Au over 5.88 metres, including 1.52m of 1062g/t Ag and 0.76g/t Au.
The precious metal mineralization has been explored to shallow depths over a
strike length of 120 metres and is open along strike and to depth. Two discrete
mineralized zones were intersected in most drill holes. The vein - breccia type
mineralization, which also contains lead and zinc, occurs within Ordovician
felsic volcanics and tuffs of the Bathurst base metal mining district. The
breccia veins are characterized by silica flooding and strong sericite
alteration.
Seven diamond drill holes were completed during 2006. Drill results indicate the
presence of an argentiferous, brecciated, silicified zone over 200 metres in
length and containing significant concentrations of precious metals over narrow
to significant widths. The 2006 drill results were significantly lower than
those of 2005 although the zone looks visually similar. Samples from the current
drilling as well as from the 2005 drilling will be re-analyzed and submitted for
polished thin section examination in order to determine whether or not there is
a significant difference in mineralogy with increased depth. This work will be
used to assess potential for an increase in silver grade along strike or at
depth.
MENNIN LAKE PROPERTY, ONTARIO
On July 28, 2005, the Company acquired an option from Ken Fenwick (as to 60%)
and George Lucuik (as to 40%) to earn a 100% interest in the Mennin Lake
Property, Ontario. Consideration is, over a 4-year period, to pay $142,000 (as
at October 31, 2006, $37,000 has been paid), issue 300,000 common shares of the
Company (as at October 31, 2006, 100,000 shares have been issued) and incur an
aggregate of $160,000 in exploration expenditures (as at October 31, 2006,
$25,169 has been
Page 27
expended). The property is subject to a 2% NSR, half of which may be purchased
for $2,000,000. Commencing on the fifth anniversary of the agreement advance
royalty payments of $15,000 are payable each year. The agreement was accepted
for filing by the Exchange on August 24, 2005.
The Mennin Lake Property consists of 7 mining claims in the Kenora Mining
Division, Ontario. The Property is located 53 km south of Dryden, Ontario. Dome
Exploration first found molybdenum mineralization in narrow quartz veins within
granodiorite while prospecting in 1965. In 1966, Dome's soil survey outlined a
1700m long and 300-800m wide molybdenum anomaly.
Three holes were drilled to test part of the anomaly late in 1966. According to
Ontario Geological Survey (OGS) Report #5659, "No single, discrete
mineralization zone was intersected by the drilling; it was found instead that
the granodiorite is invaded by numerous quartz veins and stringers ranging from
a fraction of a centimeter to over 15 cm. wide mineralized with molybdenite
flakes, and fine gained films on slip planes and minor chalcopyrite, pyrite and
fluorite. All three drill holes revealed similar mineralization patterns and
vein distributions." No assays are available, however intersections were
considered not economic at the time and no further work was reported.
In 1982, the OGS discovered more molybdenum mineralization in north trending
quartz veins approximately 3 km north of the initial Dome Discovery, on the
Mennin Lake Property. OGS report #5659 indicates the style of mineralization is
the same for both occurrences and "every quartz vein, regardless of width,
carries at least some molybdenite".
The primary exploration target for the Mennin Lake property is a large tonnage
molybdenum-copper body. Reports suggest there may also be tungsten and/or tin
associated with the mineralization. The Company has completed two grids over
mineralized zones identified in historical documents and by prospecting on the
property. Magnetometer and VLF-EM surveys have identified numerous geophysical
targets that could be associated with structures controlling molybdenum and/or
gold mineralization on the property. Soil geochemical samples have been taken
and sent for analyses, results are pending. The next step will include soil
geochemical surveys to outline the extent of mineralization followed by Induced
Polarization (IP) and/or to outline areas with increased sulphide mineralization
for follow-up trenching and drilling.
FRIPP PROPERTY, ONTARIO
On August 22, 2005, the Company acquired an option Filo Exploration Services
Limited and David V. Jones (each as to 50%) to purchase a 100% interest in the
Fripp Property, Ontario. Consideration is, over a 4-year period, to pay $5,000
(paid), issue 100,000 common shares of the Company (as at October 31, 2006,
50,000 shares have been issued) and incur $20,000 in exploration expenditures by
December 31, 2005 (paid). The property is subject to a 1% NSR is payable on the
property half of which can be purchased for $500,000. The agreement was accepted
for filing by the Exchange on September 30, 2005.
Trenching in 1965 uncovered narrow pyrrhotite veins in a serpentinized
ultramafic sill on the Property. Grab samples returned assays as high 1.28% Ni
from vein material with samples of disseminated pyrrhotite in the ultramafic
near its' contact with diorite returning up to 0.5% nickel. The Company plans to
explore this zone and other parts of the Property that have not been thoroughly
tested for massive nickel-copper mineralization. A VTEM airborne survey has been
flown over the property to identify potential nickel and copper sulphide
mineralization for follow-up by ground soil geochemical surveys, trenching or
drilling in 2007.
Page 28
HUNTER GOLD PROPERTY, ONTARIO
On September 19, 2005, the Company acquired from Aurora-Larder Mining
Corporation Limited and Katrine Exploration and Development Inc. (each as to
50%) an option to earn a 100% undivided interest in the Hunter Gold Property,
located in the Catharine Township, Ontario. Consideration is, over a 3-year
period, to pay $45,000 (as at October 31, 2006, $10,000 has been paid), issue
250,000 common shares of the Company (as at October 31, 2006, (75,000 shares
have been issued) and incur an aggregate of $75,000 in exploration expenditures
(as at October 31, 2006, $1,219 has been expended). There is a 2% net smelter
return royalty payable on the property, of which half may be purchased for
$500,000 and an additional .5% may be purchased for an additional $500,000.
There is an underlying royalty on portions of the property ranging from 2 to 4%.
The agreement was accepted for filing by the Exchange on November 21, 2005.
The property covers an historical showing that was examined by Goldfields
Canadian Mining Limited back in 1993. Goldfields' stripping uncovered two
parallel gold bearing structures that have not been fully tested.
The Company plans to establish grids for sampling and geophysics of known
mineralized zones and their potential extensions prior to trenching and
drilling.
CONNOR CREEK PROPERTY, BRITISH COLUMBIA
On September 20, 2005, the Company acquired an option from Kootenay Gold Inc.
("Kootenay") to earn a 50% undivided interest in the Connor Creek Property,
British Columbia (Nelson Mining Division). Consideration is, over a 4-year
period, to issue 400,000 common shares of the Company (as at October 31, 2006,
200,000 shares have been issued) and incur an aggregate of $1,000,000 in
exploration expenditures (as at October 31, 2006, $59,517 has been expended). If
commercial production is reached, an additional 250,000 shares are payable. The
agreement was accepted for filing by the Exchange on December 22, 2005.
The Connor Creek property contains a NEW SHEAR HOSTED GOLD DISCOVERY in an area
with previously known gold occurrences. There are two styles of gold
mineralization found on the property:
o GOLD BEARING SEMI-MASSIVE TO MASSIVE SULFIDE VEINS containing
pyrrhotite, chalcopyrite, arsenopyrite, sphalerite, and
galena. Three previously known occurrences of mineralization
occur on the property.
o NEW GOLD MINERALIZED SHEAR ZONE containing disseminated to
semi massive sulfides. Grab samples from bedrock contained
gold values ranging from background to 30,765 ppb gold,
greater than 10,000 ppm copper, 10,000 ppm zinc and 1000 ppm
silver. The new shear zone has been traced for over 300 meters
of strike and previous untested gold anomalies in soils and
old pits occurring along the strike of the shear suggest a
significant minimum lateral extent of gold mineralization of
1000 meters . The shear is open in both directions and is
about 50 meters wide. Sampling to date are grab samples.
A soil sampling survey was conducted late in the 2005 season over the new gold
mineralized shear and one of the historic gold occurrences. A grid measuring 2.0
km by 650 meters was established with wing lines each 50 meters and samples
collected on them at every 25 meters. In areas of greater overburden wing lines
were spaced at 100 meters. Results of the survey are positive showing good
coincident gold,
Page 29
copper and zinc geochemical anomalies. The primary anomaly trends north south
for at least 1.5 km by 500 meters. It trends off of the grid coverage in both
directions. Gold values range to a high of 1554.1 ppb, copper to 603.8 ppm and
zinc to 1472 ppm from background levels of less than 6 ppb gold, less than 30
ppm copper and less than 110 ppm zinc. A second coincident anomaly sits in the
northwest part of the grid and spans discontinuously between 450 and 650 meters
by 175 and 300 meters. This anomaly also trends north south and contains highs
of 414.5 ppb gold, 326.4 ppm copper and 668 ppm zinc against the same background
values. Internal to the overall trend are north northeast and northwest trends.
The anomalies seem to reflect structural zones and possibly an intrusive
contact.
During the 2006 season geophysical, geochemical and geological surveys were
completed resulting in the discovery of several excellent geochemical and
geophysical anomalies. A total of 350 line kilometers of airborne geophysical
survey using AeroTem II time domain EM and high cesium Magnetometer were flown
and 3.0 square kilometers of soil grid was established to follow up on anomalies
identified in 2005. A total of 685 soil samples were taken from the extended
grid.
Results of the 2006 season are very encouraging. The extended soil grid has now
established a broad area of anomalous gold, copper, lead, zinc and silver across
the 1.2 by 3.2 kilometer grid. There are 5 distinct groupings of soil anomalies
variably associated with northwest magnetic low lineaments, north or northeast
trending magnetic highs, EM anomalies with areas of shearing, silicification,
sericitization and sulfide mineralization typically hosted in Jurassic aged
sediments within 100 to 200 meters of Jurassic aged granodiorite intrusives.
Values in soils range from background to a maximum of 1554 ppb (parts per
billion) for gold, 2.2 ppm (parts per million) for silver, 604 ppm for copper,
216 ppm for lead and 4382 ppm for zinc. A summary of the 5 distinct soil
anomalies are:
1. The northwest end of the grid a broad zone about 1 kilometer
square in area with coincident copper (57 to >170 ppm), lead
(20 to >72 ppm), zinc (160 ppm to >704 ppm) and gold (16 ppb
to >123 ppb). A strong EM anomaly 200 by 300 meters in size is
coincident with the higher values of copper, lead, zinc and
gold.
2. The original powerline showing forms an area of anomalous gold
in soils (16 ppb to 1554 ppb) along a north south trend 1.5
kilometers long by 50 to 150 meters and open at both ends. The
northern 800 meters of this anomaly contains better than 39
ppb gold. Previously reported grabs of rock samples returned
6184 ppb, 7277 ppb, 11,920 ppb gold. Gold is associated with a
silicified shear with disseminated pyrrhotite, pyrite,
arsenopyrite and chalcopyrite adjacent and parallel to a
magnetic high.
3. A coincident lead, zinc and arsenic anomaly sitting on the
western edge mid way down the grid this anomaly is open to the
north and south. Lead values are 20 to >72 ppm, zinc values
are . 162 ppm and arsenic varies from 14 to > 80 ppm.
4. Sitting to the southeast of anomaly 2 this northeast trending
anomaly consists of coincident copper, zinc, lead silver and
gold along a 1.0 kilometer by 300 meter area open to the
northeast. Copper values are > 57 ppm and zinc values vary
from 162 to > 704 ppm. The lead, silver and gold values appear
as discrete bulls eyes. A single circular EM anomaly 100
meters wide sits upslope at the edge of the soil anomaly. The
soil anomaly also sits along the edge of a northeast trending
magnetic high. This anomaly overlies and extends the potential
of the mineral occurrence called the Debbie.
5. Located in the southeast corner of the grid coverage this
anomaly is a strong north south trending silver dominant
anomaly 450 meters by 125 meters and open at both ends. Silver
is > 0.5 ppm over the entire length with the northern 200
meters being greater than 0.9 ppm. Coincident lead, zinc and
copper anomalies occur with the silver. The geochemical
anomaly sits on the flank of a magnetic high.
Page 30
Besides the magnetic and EM anomalies mentioned above there are 4 EM anomalies
outside of the grid coverage. The largest is 350 by 90 meters and has the min
file occurrence called the Hungary Man at its southern edge. The remainder of
the anomalies are circular and from 100 to 125 meters across. The airborne
survey also revealed the min file occurrence known as the Root corresponds with
a north trending magnetic high within sediments of the Ymir Group indicating
possible extensions to the historic occurrence.
An extensive program of trenching and drilling along with soil sampling to close
off open anomalies and geologic mapping are all planned for 2007.
Kootenay is the operator of the project and geologic mapping, gridding, soil
geochemistry and preliminary trenching are planned over the shear hosted gold
system.
All samples were assayed by Acme Analytical Labs in Vancouver, B.C. using an ICP
package with geochem gold. The foregoing geological disclosure has been reviewed
and verified by Kootenay's CEO, James McDonald, P.Geo. (A QUALIFIED PERSON FOR
THE PURPOSE OF NATIONAL INSTRUMENT 43-101, STANDARDS OF DISCLOSURE FOR MINERAL
PROJECTS). Mr. McDonald is a director of the Company.
WILLET PROPERTY, ONTARIO
On October 12, 2005, the Company acquired an option from Canadian Prospecting
Ventures Inc. to earn a 100% undivided interest in the Willet Property, located
in Willet Township, Ontario. Consideration is, over a 3-year period, to pay
$30,000 (as at October 31, 2006, $5,000 has been paid), issue 200,000 common
shares of the Company (as at October 31, 2006, 50,000 shares have been issued)
and incur an aggregate of $75,000 in exploration expenditures (as at October 31,
2006, $1,220 has been expended). There is a 2% NSR payable on the property, of
which half may be purchased for $1,000,000. The agreement was accepted for
filing by the Exchange on March 1, 2006.
The Willet Property consists of 640 acres and is underlain by Nippising Diabase
and the Lorrain Formation. Located on the Property is the Lucky Godfrey Mine
which has a shaft to 102 feet with a level at 100 feet with 300 feet of
drifting. The mine shipped one car load of silver ore in 1910. The Property has
two vein systems ranging from 1 to 3 feet wide and is prospective for
silver-cobalt and for diamonds as it is located just west of the Montreal River
Fault. The Company plans prospecting, mapping and geophysics for the Property
during the summer and fall of 2007.
HORWOOD GROUP, ONTARIO
In January 2006, the Company assembled a large land package of over 10,920 acres
in the Horwood Lake area of Ontario, approximately 30 miles southwest of
Timmins, by optioning from various vendors four properties: Horwood Gold,
Horwood Gold 2, Labbe and Ross-Windsor. These properties cover the main part of
the Horwood Lake peninsula. Their amalgamation as the "Horwood Property"
represents the first time the area will be explored systematically by one
company.
The Horwood Property possesses significant exploration potential to host
economic gold mineralization within both altered carbonate-silica-pyrite rich
zones in porphyritic phases of the Horwood Peninsula Pluton (HPP), and quartz
veins located close to the HPP in footwall mafic volcanic flows. Drilling within
the HPP by past operators suggests that gold mineralization may be linked to
bleached mineralized
Page 31
quartz carbonate veins. The actual orientations of the vein systems have yet to
be defined or thoroughly investigated. Such is the case for the Labbe occurrence
where 3 seperate mineralized pyritic zones occur within quartz carbonate vein
stockworks hosted by sheared bleached and silicified granodiorite. (a recent
grab sample of the Labbe #3 occurrence returned a value of 10.30 g/t Au).
A vertical drill hole testing the up-dip projection of an earlier drill
intersection of 0.042 oz/t Au over 1.0 meter intersected 0.34 oz/t Au over 1.45
meters. A Mise A La Masse survey suggests that the gold/sulphide zone trends in
an easterly direction parallel to the local metavolcanic stratigraphy for at
least 220 meters and the strike extensions have yet to be drill tested. Two grab
samples taken from a trench near these drill holes returned values of 3.33 g/t
Au and 3.02 g/t Au. These occurrences suggest that gold mineralization occurs
within a variety of environments that are structurally controlled.
Trenching has discovered a new unexplored gold zone. Compilation of the gold
analyses is underway. Next steps include detailed gridding and geophysics to
assess the potential strike and width extent of the mineralized zone prior to
further trenching and drilling.
A. HORWOOD GOLD PROPERTY, ONTARIO
On January 4, 2006, the Company acquired an option from Frederick J. Ross,
Christina McManus, Jennah Durham, Denis Laforest and Garry Windsor (each as to
20%) to earn a 100% undivided interest in the Horwood Gold Property.
Consideration is, over a 2-year period, to pay $50,000 (as at October 31, 2006,
$15,000 has been paid) and issue 200,000 common shares of the Company (as at
October 31, 2006, 100,000 shares have been issued). There is a 3% NSR payable,
of which two-thirds may be purchased for $1,000,000. The agreement was accepted
for filing by the Exchange on March 22, 2006.
B. HORWOOD GOLD 2, ONTARIO
On January 4, 2006, the Company purchased one mineral claim from Jennah Durham,
Christina McManus, Tina Petroni and Denis Laforest. Under the terms of the
agreement, the Company paid $6,000. There is a 2% NSR payable, of which half may
be purchased for $500,000.
C. LABBE PROPERTY, ONTARIO
On January 4, 2006, the Company acquired an option from Frederick J. Ross,
Christina McManus, Denis Morin, Fernand Morin and Roger Dennomme (each as to
20%) to earn a 100% undivided interest in the Labbe Property. Consideration is,
over a 2-year period, to pay $30,000 (as at October 31, 2006, $5,000 has been
paid)) and issue 200,000 common shares of the Company (as at October 31, 2006,
50,000 shares have been issued). There is a 3% NSR payable, of which two-thirds
may be purchased for $1,000,000. The agreement was accepted for filing by the
Exchange on March 22, 2006.
D. ROSS WINDSOR PROPERTY, ONTARIO
On January 4, 2006, the Company acquired an option from Frederick J. Ross (as to
60%) and Garry Frederick Windsor (as to 40%) to earn a 100% undivided interest
in the Ross Windsor Property. Consideration is, over a 3-year period, to pay
$35,000 (as at October 31, 2006, $5,000 has been paid), issue 175,000 common
shares of the Company (as at October 31, 2006, 25,000 shares have been issued)
and incur an aggregate of $20,000 in exploration expenditures (as at October 31,
2006, $636 has been expended). There is a 3% NSR payable, of which two-thirds
may be purchased for $1,000,000. The agreement was accepted for filing by the
Exchange on March 22, 2006.
Page 32
EAST BRECCIA PROPERTY, ONTARIO
On March 1, 2006, the Company acquired an option from Ken Fenwick (as to 43%),
George Lucuik (as to 42%) and Daniel Shelly (as to 15%) to earn a 100% undivided
interest in the East Breccia Property located in the Nicolet Township, Ontario.
Consideration is, over a 4-year period, to pay $142,000 (as at October 31, 2006,
$12,000 has been paid), issue 300,000 common shares (as at October 31, 2006,
50,000 shares have been issued) and incur an aggregate of $160,000 in
exploration expenditures (as at October 31, 2006, $3,370 has been expended).
There is a 2% NSR payable, which may be purchased for $2,000,000. The agreement
was accepted for filing by the Exchange on June 1, 2006.
The property hosts the East Breccia, and half of the West Breccia that were
formerly owned along with the South and Breton Breccias by the Tribag Mining
Company. Between 1967 and 1974, the Tribag Mining Company produced about 1.25
million tonnes of ore averaging 2% copper from the Breton Breccia and part of
the West Breccia.
The East Breccia is the largest of the breccias and has never been mined. It has
been explored by a 294 foot adit and drilling during the late 1960's and early
1980's.
Trenching has discovered a new unexplored gold zone. Compilation of the gold
analyses is underway. Next steps include detailed gridding and geophysics to
assess the potential strike and width extent of the mineralized zone prior to
further trenching and drilling.
GOULD COPPER MINE PROPERTY, ONTARIO
On September 19, 2005, the Company acquired an option from 733526 Ontario Inc.
and Jim Ralph (each as to 50%) to earn a 100% undivided interest in the Gould
Copper Mine Property located in the Sault St. Marie Mining Division, Ontario.
Consideration is, over a 4-year period, to pay $50,000 (as at October 31, 2006,
$12,000 has been paid), issue 140,000 common shares of the Company (as at
October 31, 2006, 25,000 shares have been issued) and incur an aggregate of
$100,000 in exploration expenditures (as at October 31, 2006, $4,118 has been
expended). There is a 2% NSR payable, half of which may be purchased for
$750,000. The agreement was accepted for filing by the Exchange on June 2, 2006.
The Property is located 26 km west of Elliot Lake and is road accessible. Five
quartz vein and stockwok zones have been exposed by historical trenching,
drilling and an adit along a 3 km strike length on the Property. Exploration
activities will focus on delineating the strike and down dip extent of the zones
along with the potential for parallel zones on the Property.
Compilation of existing data is underway. This information will be used to
identify extensions of existing copper zones and new potential zones for testing
by drilling or trenching.
PATENT GOLD PROPERTY, ONTARIO
On May 2, 2006 the Company acquired an option from Frederick J. Ross (as to
50%), Garry Windsor as to 25%) and Bruce Durham (as to 25%) to earn a 100%
interest in the Patent Gold Property located in the Sewell and Reeves Townships,
Ontario. Consideration is, over a 3-year period, to pay $70,000 (as at October
31, 2006, $15,000 has been paid), issue 250,000 common shares of the Company (as
at October 31, 2006, 50,000 shares have been issued) and incur an aggregate of
$130,000 in exploration expenditures (as at October 31, 2006, $838 has been
expended). There is a 3% net smelter return of which two-thirds may be purchased
for $1,500,000.
Page 33
The patent property is located 1.5 km south of Highway 101 and is accessible by
gravel road and an ATV trail in Sewell Township. Gold mineralization was first
discovered in 1916. According to government reports, trenching and stripping at
that time uncovered a north-south oriented chlorite-carbonate altered shear zone
in mafic to intermediate volcanics. The shear zone is largely filled with
irregular masses of quartz. The vein material mixed with altered country rock
can reach up-to 50 feet in width. Pyrite, pyrrhotite, chalcopyrite, calcite,
tourmaline, and mariposite (chrome mica) are associated with the quartz veins.
The country rock is also reportedly to be liberally impregnated with sulphides.
Limited work has been done on the property since it was initially trenched and
stripped.
Historical trenches and stripped areas have slumped in and are largely overgrown
with vegetation. The Company plans to reopen the trenches, and conduct an
extensive sampling programme to establish the gold potential for the area in
2007.
HOLLOWAY PROPERTY GROUP, ONTARIO
On May 18, 2006 the Company acquired an option to earn a 100% interest in the
Holloway 1 Property located in the Holloway and Frecheville Township, Ontario
and on May 18, 2006 the Company acquired an option to earn a 100% interest in
the Holloway 2 Property located in the Holloway Township, Ontario.
Consideration for the HOLLOWAY 1 property, over a 4 1/2 period, is to pay
$250,000 (as at October 31, 2006, $25,000 has been paid) and issue, over a
4-year period, 500,000 common shares of the Company (as at October 31, 2006,
100,000 shares have been issued).
On December 21, 2006, this agreement was terminated.
Consideration for the HOLLOWAY 2 property, over a 1-year period, is to pay
$20,000 (paid) and issue 200,000 common shares of the Company (as at October 31,
2006, 100,000 shares were issued). On December 21, 2006, this agreement was
terminated.
LOVELAND PROPERTY GROUP, ONTARIO
On May 18, 2006 the Company acquired an option from Larry Gervais (as to 75%),
Bruce Pigeon (as to 12.5%) and Lance Eden (as to 12.5%) to earn a 100% interest
in the Loveland 1 Property located in the Loveland and Byers Townships, Ontario.
On May 18, 2006, the Company acquired an option from Larry Gervais (as to 98.9%)
and Johnny Gull (as to 1.1%) to earn a 100% interest in the Loveland 2 Property
located in the Loveland, Byers and Thorburn Townships, Ontario.
Consideration, for each of the Loveland properties, over a 5-year period, is to
pay $300,000 (as at October 31, 2006, $25,000 has been paid on each property),
issue 600,000 common shares of the Company (as at October 31, 2006, 100,000
shares have been issued for each property) and incur an aggregate of $150,000 in
exploration expenditures (as at October 31, 2006, $2,568 has been expended on
the Loveland 1 property). For each of the Loveland properties, there is a 3% net
smelter return of which one-third may be purchased for $1,000,000 and an
additional one-third may be purchased for $1,000,000. In addition, there are
100,000 issuable after completion of a positive feasibility study and $12,500 in
advance royalty payments every six months commencing after all other payments
are made. The agreements were accepted for filing by the Exchange on July 19,
2006.
Page 34
The recent Megatem Airborne Geophysical Survey, flown as part of the Discovery
Abitibi initiative, has identified numerous electromagnetic anomalies that could
represent massive sulphide mineralization on the properties. The properties are
underlain by felsic to ultramafic volcanics and intrusives that are favourable
for hosting volcanogenic copper-zinc, or ultramafic related nickel-copper
deposits. The Loveland 2 property also hosts an historical nickel-copper
sulphide zone discovered by Cominco. The properties are about 25 km due west of
the Kidd Creek copper-zinc-silver deposit, and 30 km due east of the Montcalm
nickel-copper deposit.
The Company's consulting geophysicist is assessing the Megatem data to identify
the most favourable targets for ground follow-up by prospecting, geophysics, and
geochem, prior to testing by trenching or drilling.
KEITH-SEWELL AND MORIN PROPERTY GROUP, ONTARIO
On April 10, 2006 the Company acquired from Frederick J. Ross (as to 66 2/3%)
and Garry Windsor (as to 33 1/3%) an option to earn a 100% interest in the
Keith-Sewell Property located in the Keith and Sewell Townships, Ontario.
On May 28, 2006 the Company acquired from Denis Morin and Roger Denomme (each as
to 50%) an option to earn a 100% interest in the Morin Property located in the
Keith Township, Ontario.
The Keith-Sewell Property consists of two properties - the Keith Property and
the Sewell Property. Consideration is, for the Keith Property, over a 2-year
period, to pay $90,000 (as at October 31, $21,000 has been paid), issue 270,000
common shares of the Company and incur an aggregate of $90,000 in exploration
expenditures (as at October 31, 2006, $26,875 has been expended on the Keith
property) and for the Sewell Property, over a 2-year period, issue 150,000
common shares of the Company. As at October 31, 2006, 110,000 shares have been
issued for the Keith-Sewell properties. There is a 3% net smelter return on the
Keith-Sewell properties of which two-thirds may be purchased for $1,500,000.
Consideration for the Morin property is, over a 3-year period, to pay $110,000
(as at October 31, 2006, $10,000 has been paid) and issue 220,000 common shares
of the Company (as at October 31, 2006, 20,000 shares have been issued). There
is a 3% net smelter return on the Morin property of which half may be purchased
for $1,000,000.
The agreements were accepted for filing by the Exchange on July 12, 2006.
The Keith-Sewell properties consist of separate claim blocks in Keith Township
and Sewell Township. The properties are road accessible and are underlain by a
volcano-sedimentary sequence ranging from variably altered, and locally sheared,
ultramafic sills to felsic volcanics and clastic sediments.
Historical work on the claim groups has identified sporadic nickel and/or gold
mineralization. One of the Keith Township claim blocks is located immediately
south of the former gold producing Joburke mine. It is also adjacent to the west
boundary of PGM Ventures' Sangold Property. In January, 2006, PGM reported that
drill holes SND-05-09 (a) and SND-05-18 (a) intersected 24.05m averaging 2.59
g/t gold and 8.90m of 13.04 g/t gold, respectively.
The Morin property is road accessible and is underlain by a volcano-sedimentary
sequence ranging from variably altered, and locally sheared, mafic to felsic
volcanics and clastic sediments.
Page 35
The Property is located east and south-east of the former gold producing Joburke
mine. It is also adjacent to PGM Ventures' Sangold Property. In January, 2006,
PGM reported that drill holes SND-05-09 (a) and SND-05-18 (a) intersected 24.05m
averaging 2.59 g/t gold and 8.90m of 13.04 g/t gold, respectively.
The Company has gridded part of the property and identified numerous mag and
VLF-EM anomalies. These targets will be assessed for nickel, copper and gold
mineralization by ground geochemical surveys, prospecting followed by trenching
or drilling in 2007. Gridding and geophysics may also be expanded to follow
existing zones on strike.
ANDERSON LAKE PROPERTY, ONTARIO
On June 23, 2006, the Company acquired an option from Ken Fenwick, Karl Bjorkman
and Don Devereaux to earn a 100% interest in the Anderson Lake Property, located
about 45 km east of Thunder Bay, Ontario. Consideration is, over a 4-year
period, to pay $142,000 (as at October 31, 2006, $12,000 has been paid) issue
300,000 shares of the Company (as at October 31, 2006, 50,000 shares have been
issued) and incur an aggregate of $160,000 in exploration expenditures (as at
October 31, 2006, $1,210 has been expended). There is a 3% NSR payable, of which
two-thirds may be purchased for $1,500,000. Advance royalty payments of $15,000
per year will commence on the fifth year anniversary date of signing the
agreement.
The Anderson Lake Property is accessible by highway, secondary gravel roads and
an ATV trail. A power line is located adjacent to the south east corner of the
property.
The property is underlain by Precambrian highly altered sediments
(biotite-schist) and granite. Molybdenite mineralization is associated with
pegmatite dykes along the sediment granite contact. The property has seen very
limited exploration since it was first trenched in the late 1930's. Historical
trenching traced molybdenite mineralization for more that 790 metres along
strike with the average true width of the mineralized zone reported at 12.8
metres.
Eighteen holes were drilled in 1958. The mineralized zone was found to strike
north-south with a 40 degree dip to the east. Hole 8 reportedly intersected a
high grade zone assaying 16.63% molybdenite over 2.13 metres of core length. The
Company plans to re-open historical trenches and strip new areas to map and
sample in order to produce an average grade for the zone. Drilling to define a
resource will be considered based on the results of surface sampling.
CHEWETT PROPERTY, ONTARIO
On June 28, 2006, the Company entered into an agreement (the "Agreement") with
Frederick J. Ross (as to 50%) and Garry Windsor (as to 50%) (the "Vendors") to
acquire an option to earn a 100% interest in 6 mineral claims (comprising a
total of 52 units) situated in the Chewett Township, Ontario. Consideration is
$15,000 (paid). There is a 2% NSR payable, of which half may be purchased for
$750,000.
Ground geophysics and geochem sampling will outline circular airborne magnetic
anomalies for kimberlite potential prior to being considered for testing by
drilling.
Page 36
BLACKSTOCK PROPERTY, ONTARIO AND OKE & FORD PROPERTY, ONTARIO
The Blackstock Property and the Oke & Ford Property were acquired by staking.
There were no underlying agreements. The staking was done based on management's
interpretation of geological structures found on the properties from government
files.
FORGE LAKE PROPERTY, ONTARIO AND OTTER POND PROPERTY, ONTARIO
The Company entered into joint venture agreements with Golden Chalice Resources
Inc. ("Golden Chalice"). Consideration consists of the following:
FORGE LAKE PROPERTY - $58,500 payable over three years (as at October
31, 2006, $34,000 has been paid), 40,000 shares of Golden Chalice to be
reimbursed in cash by the Company, payable after three years, and a
payment of $100,000 and the issuance of 100,000 shares at the earlier
of 90 days of sustained commercial production and six years from the
date of the agreement. The costs will be split 50/50 and the Company
will pay a 15% administration fee. The lease entered into by Golden
Chalice and half assigned to the Company provides for annual cash
payments, paying of taxes and minimum work expenditures. In addition,
there is a royalty payable.
OTTER POND PROPERTY - $158,500 payable over four years (as at October
31, 2006, $27,495 has been paid), 75,000 shares of Golden Chalice to be
reimbursed at fair market value of the Golden Chalice shares as at the
time of issuance, a payment of $100,000 and the issuance of 100,000
shares at the earlier of 90 days of sustained commercial production and
six years from the date of the agreement. The Company is responsible
for 47% of these costs.
CHAPLEAU PROPERTY, ONTARIO
The Company acquired 34,900 acres of prospective kimberlite ground in the
Chapleau area of Ontario from Chalice Diamond Corp. (formerly Golden Chalice
Resources Inc.) ("Chalice"), a public company related by common directors. The
Company agreed to pay for staking or leasing costs, estimated to be $150,000
($159,406 paid), plus 15% for administration, to earn a 50% working interest in
the property. Upon payment of the acquisition cost, a joint venture will be
formed to perform further exploration work on a pro rata basis plus a 15%
administration fee with Chalice as the operator.
Recent staking has covered numerous zones with kimberlitic indicator minerals in
sediments and till samples, and a series of circular airborne magnetic anomalies
on strike with the discovery ground. The Company will further explore these
anomalies and their magnetic pipe-like features.
Exploration work in the area by joint venture partner, Chalice, has confirmed
the presence of a kimberlite dyke. Historical data from government assessment
files refer to a thin section analysis which indicates the discovery dyke is
indeed kimberlitic. The Company has sent rock, till and lake sediment samples
for further analysis to determine the presence of diamonds in the area,
particularly in light of government assessment files which indicate a macro
diamond was recovered from the discovery ground.
This acquisition follows a six month in-house compilation programme by Chalice
followed by field work to explore for diamonds in Ontario. Compilation of
geological, geochemical, geophysical, assessment file and other data held or
prepared by the Ministry of Northern Development of Mines, Ontario Geological
Survey, Natural Resources Canada and the Geological Survey of Canada led to the
discovery.
Page 37
During fiscal 2006, the Company increased the number of acres that fall under
this arrangement to 47,278.
Chalice, as the operator for exploration activities, has conducted ground
geophysical, geochemical, and prospecting surveys to evaluate a significant
number of potential kimberlite targets on the Amador/Chalice Diamond joint
venture properties. Sample results and assessment of this initial work are
pending. Geophysical and geochemical work is on-going to evaluate all the
targets on the large land package. Once the results are compiled, targets will
be identified for trenching and drilling during 2007.
SAVARD & SHARPE PROPERTY, ONTARIO
On December 8, 2005, the Company acquired an option from Pat Gryba to earn a
100% undivided interest in the Savard & Sharpe Property, located in Savard &
Sharpe Township, Ontario (the "Option"). Consideration is, over a 3-year period,
to pay $175,000 (as at October 31, 2006, $10,000 has been paid). There is a 2%
NSR payable, half of which may be purchased by the Company for $500,000. The
Company may at any time prior to the first anniversary date of signing the
agreement pay $50,000 to Pat Gryba in which case the Option shall be deemed to
have been exercised and the Company will have acquired an undivided 100%
interest in the Property.
This property has a number of circular airborne magnetic anomalies that could
represent kimberlite pipes hosting diamonds.
Field work to assess the kimberlite portenial of the magnetic anomalies on the
property is planned for 2007.
NOTE: At a special meeting held on September 21, 2006, the shareholders of the
Company approved and adopted a statutory plan of arrangement (the "Arrangement")
pursuant to section 289 of the BUSINESS CORPORATIONS ACT (British Columbia). The
purpose of the Arrangement ("Arrangement") is to reorganize the Company's
mineral property assets in an effort to maximize shareholder value.
Specifically, the Company's Chapleau Diamond Property in the Sault Ste. Marie
Mining Division of Ontario and the Savard & Sharpe Property, located in Savard &
Sharpe Township, Ontario will be transferred into Diamondcorp Resources Inc.
("Diamondcorp"). Under the terms of the Arrangement, Company shareholders of
record on closing of the Arrangement will receive one share of Diamondcorp for
every three Amador Gold Corp. shares held. The Company has provided a working
capital loan to Diamondcorp for working capital and to ensure that work
continues on the Properties until Diamondcorp can complete its financing.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not Applicable
Page 38
MAP OF ONTARIO INCLUDING THE GLASS, TODD, MASKOOTCH, KELL MINE, SILVER STRIKE,
SILVERCLAIM, THOMPSON, AJAX, STRATHY, BANTING CHAMBERS, MENNIN LAKE, FRIPP,
HUNTER GOLD, CHAPLEAU, WILLET, SAVARD SHARPE, BOMPASS-STRATHY,
HORWOOD GOLD, LABBE, ROSS WINDSOR, MORIN, KEITH-SEWELL, EAST BRECCIA,
GOULD COPPER, PATENT GOLD, LOVELAND, ANDERSON LAKE, CHEWETT, BLACKSTOCK,
OKE, FORD, FORGE LAKE, OTTER POND, GOGAMA, DALE GOLD AND
METEOR LAKE PROPERTIES IN ONTARIO
Graphic is included as Exhibit 15.1 to this Form 20-F
Page 39
MAP OF NEW BRUNSWICK INCLUDING THE TETAGOUCHE PROPERTY
Graphic is included as Exhibit 15.2 to this Form 20-F
Page 40
MAP OF BRITISH COLUMBIA INCLUDING THE CONNOR CREEK PROPERTY
Graphic is included as Exhibit 15.3 to this Form 20-F
Page 41
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of the financial condition and changes in financial
condition and results of operations of the Company for the year ended October
31, 2006, the year ended October 31, 2005 and the year ended October 31, 2004
should be read in conjunction with our financial statements and related notes
included therein. The Company's financial statements presented in Canadian
dollars have been prepared in accordance with Canadian GAAP. Under Canadian
GAAP, exploration and development costs related to our mineral properties are
capitalized and are written-off if the properties are abandoned or sold or if
management decides not to pursue the properties. Under U.S. GAAP, the
exploration costs related to our mineral properties under exploration are
expensed as incurred. As a result, net loss and net loss per share increase
under U.S. GAAP to reflect the exploration expenses, when compared to Canadian
GAAP. In addition, shareholders' equity and our total assets are decreased under
U.S. GAAP because exploration costs related to our mineral properties are
expensed as incurred. Note 11 of the October 31, 2006 financial statements sets
forth the material differences between Canadian and U.S. GAAP.
THE COMPANY EXPLORES FOR MINERALS AND DOES NOT HAVE ANY PROPERTIES THAT ARE IN
PRODUCTION. THE COMPANY HAS NO EARNINGS AND, THEREFORE, FINANCES THESE
EXPLORATION ACTIVITIES BY THE SALE OF ITS EQUITY SECURITIES. The key
determinants of its operating results are the following:
(a) the state of capital markets, which affects our ability to finance our
exploration activities;
(b) the write-down and abandonment of mineral properties as exploration
results provide further information relating to the underlying value of
such properties; and
(c) market prices for gold and other precious metals and minerals.
A. OPERATING RESULTS
FISCAL YEAR ENDED OCTOBER 31, 2005 VS. FISCAL 2004
The Company had no revenue and realized a loss for the year of $(339,777) for
the twelve-month period ended October 31, 2005 compared to $(527,212) in the
twelve-months ended October 31, 2004. The 2004 loss includes a recovery of
mineral property expenditures of $11,788. The main expenses were for management
fees of $137,000 (2004 - $27,000) which was paid to companies owned 100% by
directors of the Company. This figure includes office rent, secretarial and
basic accounting. Other expenses for the twelve-month period include $49,033
(2004 - $79,570) for legal and accounting, $28,982 (2004 - $34,808) for
regulatory fees and $8,587 (2004 - $10,116) for transfer agent fees. Other
categories of interest are: (a) investor relations of $17,370 (2004 - $132,154)
as the Company had materials prepared for display and hand out at various
investment forums across North America that directors travel to and (b) interest
on debt of $Nil (2004 - $49,779) which is related to interest on the promissory
note and convertible debenture. During the first quarter of fiscal 2005,
interest in the amount of $46,029, and principal on the promissory note were
settled for 3,046,374 units at a price of $0.13 per unit. Each unit is comprised
of one (1) common share and one (1) non-transferable share purchase warrant
exercisable on or before December 23, 2006 at a price of $0.13 per share. In
addition, during the first quarter of fiscal 2005, the remaining interest of
$3,892 and principal on the convertible debenture was settled for 991,480 units
at a price of $0.13 per unit. Each unit is comprised of one (1) common share and
one (1) non-transferable share purchase warrant exercisable on or before
December 23, 2006 at a price of $0.13 per share.
Under Canadian GAAP, exploration and development costs related to our mineral
properties are capitalized and are written-off if the properties are abandoned
or sold or if management decides not to pursue the properties. Under U.S. GAAP,
the exploration costs related to our mineral properties under
Page 42
exploration are expensed as incurred. These exploration costs, net of mineral
costs written off during the year, totaled $Nil for fiscal 2005 as compared to
$11,788 for fiscal 2004. If these exploration costs were expensed under U.S.
GAAP, net loss and net loss per share would increase to reflect the exploration
expenses, when compared to Canadian GAAP. As a result, net loss under U.S. GAAP
for fiscal 2005 would be $(1,399,839) (versus $(339,777) under Canadian GAAP),
as compared to $(1,983,032) under U.S. GAAP for fiscal 2004 (versus $(527,212)
under Canadian GAAP). Net loss per share under U.S. GAAP for fiscal 2005 would
be $(0.06) (versus $(0.01) under Canadian GAAP), as compared to $(0.14) under
U.S. GAAP for fiscal 2004 (versus $(0.04) under Canadian GAAP).
FISCAL YEAR ENDED OCTOBER 31, 2006 VS. FISCAL 2005
The Company had no revenue and realized a loss (consolidated) for the year of
$(4,197,401) for the twelve-month period ended October 31, 2006 compared to
$(339,777) in the twelve-months ended October 31, 2005. The main expenses were
for management fees of $395,760 (2005 - $137,000) which was paid to companies
owned 100% by directors of the Company. This figure includes office rent,
secretarial and basic accounting. Other expenses for the twelve-month period
include $79,028 (2005 - $49,033) for legal and basic accounting, $36,000 (2005 -
$28,982) for regulatory fees, $19,029 (2005 - $8,587) for transfer agent fees
and $30,103 (2005 - $17,370) for investor relations. Mineral properties
abandoned and written off in the year amounted to $3,261,819.
Under Canadian GAAP, exploration and development costs related to our mineral
properties are capitalized and are written-off if the properties are abandoned
or sold or if management decides not to pursue the properties. Under U.S. GAAP,
the exploration costs related to our mineral properties under exploration are
expensed as incurred. These exploration costs, net of mineral costs written off
during the year, totalled $3,261,819 for fiscal 2006 as compared to $Nil for
fiscal 2005. If these exploration costs were expensed under U.S. GAAP, net loss
and net loss per share would increase to reflect the exploration expenses, when
compared to Canadian GAAP. As a result, net loss under U.S. GAAP for fiscal 2006
would be $(2,753,817) (versus $(4,197,401) under Canadian GAAP), as compared to
$(1,399,839) under U.S. GAAP for fiscal 2005 (versus $(339,777) under Canadian
GAAP). Net loss per share under U.S. GAAP for fiscal 2006 would be $(0.05)
(versus $(0.08) under Canadian GAAP), as compared to $(0.06) under U.S. GAAP for
fiscal 2005 (versus $(0.01) under Canadian GAAP).
B. LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations almost exclusively through the sale of
its common shares to investors and will be required to continue to do so for the
foreseeable future.
FISCAL 2004
At the beginning of the fiscal year, the Company had cash of $98,463. It raised
gross proceeds of $1,750,000 through the issuance of share capital. During the
year, it acquired three new mineral properties. Acquisition costs for the KPM
Property and the new properties were $362,582 and $1,075,238 was spent on
exploration on the KPM Property.
In December 2003, the Company closed a private placement consisting of 4,400,000
units, of which 3,100,000 units were flow-through units at a price of $0.35 per
unit with a share purchase warrant exercisable into one common share of the
Company at a price of $0.35 per share on or before December 22, 2005 and
1,300,000 units were non-flow-through units at a price of $0.30 per unit with a
share purchase warrant exercisable into one common share of the Company at a
price of $0.30 per share on or before December 22, 2005. The flow-through
proceeds ($1,085,000) were used for a 10,000 metre diamond drill
Page 43
program on the Company's KPM Property. The non-flow-through proceeds ($390,000)
were used for general corporate purposes. The Company paid cash finder's fees
totaling $132,750.
During fiscal 2004, the Company agreed to issue 4,730,688 units in settlement of
debt, in the amount of $614,989, each unit comprising one common share of the
Company and one non-transferable share purchase warrant exercisable at $0.13 per
share for a period of two years. The units were treated as allotted in the
audited financial statements but were formally issued in December 2004
(subsequent to year end). The warrants are exercisable on or before December 23,
2006.
FISCAL 2005
At the beginning of the fiscal year, the Company had cash of $23,017. It raised
$1,732,500 (of which $167,000 was collected subsequent to the year end - net
$1,568,501) through the issuance of share capital. During the year, it acquired
sixteen new mineral properties. Acquisition costs amounted to $589,108 and
$361,793 was spent on exploration. At the end of the fiscal year, working
capital was $152,601. The Company's historical capital needs have been met by
equity financing.
In fiscal 2005, the Company closed the following private placements:
o 500,000 units at $0.40 per unit, each unit comprised of two
flow-through common shares, one non-flow-through common share, and
three non-transferable warrants, each warrant to purchase one common
share at an exercise price of $0.14 per share, exercisable until
December 8, 2006.
o 1,000,000 units at $0.15 per unit, each unit comprised of one
flow-through common share and one-half of a non-transferable warrant,
each full warrant to purchase one non-flow-through common share at an
exercise price of $0.20 per share, exercisable until December 30, 2005.
The Company paid an advisory fee of $12,000 and issued 100,000 broker's
warrants. Each broker warrant entitles the holder thereof to purchase
one common share at a price of $0.15 until December 30, 2005.
o 1,000,000 units at $0.10 per unit, each unit comprised of one common
share and one non-transferable warrant, each warrant to purchase one
common share at an exercise price of $0.10 per share, until March 23,
2007.
o 750,000 units at $0.10 per unit, each unit comprised of one common
share and one non-transferable warrant, each warrant to purchase one
common share at an exercise price of $0.10 per share, until June 3,
2007.
o 3,960,000 flow-through units and 8,115,000 non-flow-through units at
$0.10 per unit, each unit comprised of one common share and one
non-transferable share purchase warrant, each warrant to purchase one
non-flow-through common shares at an exercise price of $0.10 per share,
until October 7, 2007.
As referred to above, in fiscal 2005, the Company issued 4,730,688 units in
settlement of debt, in the amount of $614,989.42, each unit comprising one
common share of the Company and one non-transferable share purchase warrant
exercisable at $0.13 per share on or before December 23, 2006.
FISCAL 2006
At the beginning of the fiscal year, the Company had cash of $189,341. It raised
$2,843,875 through the issuance of share capital. During the year, it acquired
fourteen new mineral properties. Acquisition costs amounted to $916,167 and
$579,083 was spent on exploration. At the end of the fiscal year, working
capital was $463,591. The Company's historical capital needs have been met by
equity financing.
Page 44
In fiscal 2006, the Company closed the following private placements:
o 5,650,000 units (of which 2,500,000 are flow-through units and
3,150,000 are non-flow-through units) for cash of $0.10 per unit, each
unit comprised of one common share and one non-transferable share
purchase warrant, each warrant to purchase one common share at an
exercise price of $0.10 per share, until January 17, 2008. During the
fiscal year, a total of 200,000 shares were issued on exercise of share
purchase warrants from this private placement; and
o 13,467,833 units (of which 11,911,833 are flow-through units and
1,556,000 are non-flow-through units) for cash of $0.15 per unit, each
unit comprised of one common share and one non-transferable share
purchase warrant, each warrant to purchase one common share at an
exercise price of $0.20 per share, until May 17, 2008. During the
fiscal year, no share purchase warrants were exercised from this
private placement.
The Company believes it does not have sufficient working capital to meet its
obligations for the next 12 months. The Company has a very large portfolio of
exploration properties and has entered into several option agreements which
provide for significant work expenditures. Additional capital will be required
to meet the obligations of the option agreements and to continue work on its
properties and to meet the working capital requirements. Management is actively
pursuing such additional sources of financing, and while it has been successful
in doing so in the past, it may not be able to do so in the future. Because of
this uncertainty, there is doubt about the ability of the Company to continue as
a going concern. The financial statements do not include the adjustments that
would be necessary should the Company be unable to continue as a going concern.
EFFECTS OF U.S. GAAP
Under Canadian GAAP, exploration costs related to our mineral properties are
capitalized and are written off if the properties are abandoned or sold or if
management decides not to pursue the properties. The capitalized costs are shown
as an asset "Mineral properties" on our balance sheet. Under U.S. GAAP,
exploration costs related to our mineral properties are expensed as incurred,
which decreases our deficit and total assets by a like amount. Cumulative
capitalized exploration costs totalled $2,083,357 for fiscal 2006 as compared to
$3,526,941 for fiscal 2005, which resulted in a total stockholders' equity under
U.S. GAAP for fiscal 2006 of $467,736 (versus $2,551,093 under Canadian GAAP),
as compared to fiscal 2005 total stockholders' equity of $153,867 under U.S.
GAAP for the prior year period (versus stockholders' equity of $3,680,628 under
Canadian GAAP), and resulted in total mineral property assets under U.S. GAAP
for fiscal 2006 of $Nil (versus $3,680,628 under Canadian GAAP), as compared to
fiscal 2005 total assets of $Nil under U.S. GAAP for the prior year (versus
$3,526,941 under Canadian GAAP).
STOCK BASED COMPENSATION PLAN
Effective November 1, 2003, the Company adopted, on a prospective basis, the
recommendations of the Canadian Institute of Chartered Accountants with respect
to the recognition, measurement, and disclosure of stock-based compensation and
other stock based payments. Under this policy the Company has elected to value
stock-based compensation granted at the fair value as determined using the
Black-Scholes option valuation model.
Page 45
CORPORATE PLAN
The current corporate plan envisions expenditures of approximately $1,000,000
for property payments for this year. Plans for obtaining the funds include:
a. Private placements;
b. Exercise of warrants
In the opinion of management, the Company's working capital as at January 31,
2006 of $605,384 (unaudited) is sufficient for approximately six months, by
which time the Company intends to complete a financing to conduct further
exploration on its properties. This proposed financing will include funds for
general corporate purposes. Failure to obtain additional financing on a timely
basis will cause the Company to forfeit its interest in its properties, dilute
its interests in the properties and/or reduce or terminate its operations. See
Item 3.D., "Risk Factors - Uncertainty of Obtaining Additional Funding
Requirements."
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
The Company is a mineral exploration company and is not involved in any
research, development, patenting or licensing activities.
D. TREND INFORMATION
The prices of precious metals and base metals fluctuate widely and are affected
by numerous factors beyond the Company's control, including expectations with
respect to the rate of inflation, the strength of the U.S. dollar and of other
currencies, interest rates, and global or regional political or economic crisis.
The demand for and supply of precious metals and base metals may affect precious
metals and base metals prices but not necessarily in the same manner as supply
and demand affect the prices of other commodities.
E. OFF-BALANCE SHEET INFORMATION
Not applicable.
F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table provides information about the payment schedule for
the Company's known contractual obligations:
Page 46
OPTION PAYMENTS REQUIRED TO RETAIN PROPERTY INTERESTS
- ------------------ ---------------------------- --------------------------- --------------------------- ----------------------------
CONTRACTUAL TOTAL LESS THAN 1 YEAR 1-3 YEARS 3-5 YEARS
OBLIGATIONS
- ------------------ ---------------------------- --------------------------- --------------------------- ----------------------------
PROPERTY NAME PROPERTY PROPERTY PROPERTY PROPERTY PROPERTY PROPERTY PROPERTY PROPERTY
PAYMENT EXPENDITURE PAYMENT EXPENDITURE PAYMENT EXPENDITURE PAYMENT EXPENDITURE
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
KENORA PROPERTY
GROUP
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Glass Township $60,000 N/A $20,000 N/A $40,000 N/A N/A N/A
================== ============= ============== ============= ============= ============ ============== ============= ==============
================== ============= ============== ============= ============= ============ ============== ============= ==============
RED LAKE PROPERTY
GROUP
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Todd Township $48,000 N/A $18,000 N/A $30,000 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Maskootch Lake $60,000 N/A $20,000 N/A $40,000 N/A N/A N/A
================== ============= ============== ============= ============= ============ ============== ============= ==============
================== ============= ============== ============= ============= ============ ============== ============= ==============
SILVER STRIKE
GROUP
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Silver Strike $30,000 $51,471 $10,000 $11,471 $20,000 $40,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Silverclaim $120,000 $143,562 $20,000 $23,562 $100,000 $120,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Kell Mine $20,000 $49,545 $5,000 $19,545 $15,000 $30,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Thompson $20,000 $47,832 $5,000 $17,832 $15,000 $30,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Capitol Silver $25,000 $56,107 $10,000 $36,107 $15,000 $20,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Hudson Bay $25,000 $43,129 $10,000 $23,129 $15,000 $20,000 N/A N/A
Silver Mine (AGGREGATE)
================== ============= ============== ============= ============= ============ ============== ============= ==============
================== ============= ============== ============= ============= ============ ============== ============= ==============
AJAX GROUP
(SEE NOTE BELOW)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Banting Chambers $10,000 $91,339 $10,000 $41,339 N/A $50,000 N/A N/A
(AGGREGATE)
================== ============= ============== ============= ============= ============ ============== ============= ==============
================== ============= ============== ============= ============= ============ ============== ============= ==============
Tetagouche $20,000 N/A $10,000 N/A $10,000 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Mennin Lake $105,000 $134,831 $25,000 $34,831 $80,000 $100,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Connor Creek N/A $915,483 N/A $165,483 N/A $750,000 N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Hunter Gold $35,000 $73,781 $5,000 $48,781 $30,000 $25,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Willet $25,000 $78,780 $5,000 $48,780 $20,000 $30,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Horwood Gold $35,000 N/A N/A $35,000 N/A N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Labbe $25,000 N/A $25,000 N/A N/A N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Ross Windsor $30,000 $119,364 $5,000 $69,364 $25,000 $50,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Savard & Sharpe $165,000 N/A $15,000 N/A $150,000 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
East Breccia $130,000 $156,630 $25,000 $20,000 $105,000 $136,630 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Gould Copper $38,000 $95,882 $10,000 $25,000 $28,000 $70,882 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Patent Gold $55,000 $129,162 $15,000 $30,000 $40,000 $99,162 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Loveland 1 $275,000 $147,432 $75,000 $22,432 $100,000 $75,000 $100,000 $50,000
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Loveland 2 $275,000 $150,000 $75,000 $25,000 $100,000 $75,000 $100,000 $50,000
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Keith $69,000 $63,125 $30,000 N/A $39,000 $63,125 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Morin $100,000 N/A $20,000 N/A $80,000 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Anderson Lake $130,000 $158,790 $25,000 $18,790 $105,000 $140,000 N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Forge Lake $12,500 N/A $8,000 N/A $4,250 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Otter Pond $47,000 N/A $14,100 N/A $32,900 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Gogama $35,000 $75,000 $15,000 $25,000 $20,000 $50,000 N/A N/A
(AGGREGATE)
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
Dale Gold $40,000 N/A $15,000 N/A $25,000 N/A N/A N/A
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
TOTAL $2,064,250 $2,781,245 $580,100 $706,446 $1,284,150 $1,974,799 $200,000 $100,000
- ------------------ ------------- -------------- ------------- ------------- ------------ -------------- ------------- --------------
GRAND TOTAL $4,845,495 $1,286,546 $3,258,949 $300,000
- ------------------ ---------------------------- --------------------------- --------------------------- ----------------------------
Page 47
Notes: a) The other properties in the Ajax Group (the Ajax Property and
the Strathy Property) have been fully paid for;
b) The Company has no contractual obligations beyond five years.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. DIRECTORS AND SENIOR MANAGEMENT
RICHARD W. HUGHES (age 73) has been a Director of the Company since December 19,
2002. Mr. Hughes was appointed the President and Chief Executive Officer of the
Company on May 11, 2005. Mr. Hughes is the President and owner of Hastings
Management Corp. since 1982, a company providing administrative and professional
services to public and private companies primarily in the mineral exploration
industry. In addition, Mr. Hughes is currently involved with the following
companies that are reporting companies in British Columbia and Alberta:
- ------------------------------------ ------------------------------------- --------------------------
NAME OF COMPANY POSITION TERM OF SERVICE
- ------------------------------------ ------------------------------------- --------------------------
Abitibi Mining Corp. President and Director Jun/1983 to present
Golden Goliath Resources Ltd. Director Jun/1998 to present
Kalahari Resources Inc. Director Feb/1994 to present
Klondike Gold Corp. President and Director Aug/1985 to present
Alamos Gold Corp. Director Mar/2000 to present
Radiant Resources Inc. Director Aug/1997 to present
Neodym Technologies Inc. Director Feb/1987 to present
Sedex Mining Corp. President and Director Nov/1980 to present
Director Oct/1988 to present
Golden Chalice Resources Inc. President and Director Feb/2004 to Nov/2004
Chairman of the Board and Director Nov/2004 to present
Chalice Diamond Corp. Director July 2006 to present
Genco Resources Ltd. Director Nov 10/04 to present
Gryphon Gold Corporation Director June 2003 to present
Klondike Silver Corp. Director March 2005 to present
Kootenay Gold Inc. Director March 2005 to present
Fortune River Resources Corp. Director July 2002 to present
Yale Resources Ltd. Director October 31/88 to present
- ------------------------------------ ------------------------------------- --------------------------
Mr. Hughes is widely recognized as one of the discoverers of the Hemlo gold
mines in Ontario and was involved in the discovery of the Balmoral Mine in
Quebec. He was also instrumental in discovering and launching the production of
the Sleeping Giant Mine (owned jointly by Aurizon Mines and Cambior), as well as
the Beaufor Mine, owned by Aurizon.
ALAN D. CAMPBELL (age 62) has been a Director and the Chief Financial Officer of
the Company since May 11, 2005. Mr. Campbell is an independent business
consultant and a director and officer of the following other mining and
exploration companies:
Page 48
- ------------------------------ -------------------- ----------------------------
NAME OF COMPANY POSITION TERM OF SERVICE
- ------------------------------ -------------------- ----------------------------
Abitibi Mining Corp. Director April 24, 2006 to present
Chalice Diamond Corp. Director July 31, 2006 to present
Kalahari Resources Inc. Director Feb. 15/94 to present
Golden Chalice Resources Inc. Director Feb. 2/04 to present
Klondike Silver Corp. Director July 2005 to present
Klondike Gold Corp. Director August 22, 2006 to present
Sedex Mining Corp. Director April 24, 2006 to present
- ------------------------------ -------------------- ----------------------------
LYNN W. EVOY (age 67) has been a Director of the Company since July 31, 2000.
Mr. Evoy has been involved with many companies on various stock exchanges,
serving as president, director and secretary since 1980. He is a pilot and was a
Captain for Canadian Airlines, flying over 33 years until his retirement in
1999. Mr. Evoy was also a director of Golden Chalice Resources Inc. (from 1999
to February 2004).
JOHN KEATING (age 50) has been a Director of the Company and the Vice-President
of Exploration since May 11, 2005. From January 2000 to September 2004, Mr.
Keating was the President of Black Bull Resources where he designed and
implemented strategies that resulted in the successful development, financing
and commencement of commercial production at the White Rock Mine in Nova Scotia.
Mr. Keating worked for the federal government for 10 years as a Senior
Commodity/Policy Analyst in the Department of Natural Resources. Prior to that,
he served as Exploration Project Manager for Noranda Exploration Company Limited
for 11 years working out of their Timmins, Vancouver, Kamloops and Yellowknife
offices over that period. Since November 2004, Mr. Keating has been the
President, Chief Executive Officer and a Director of Golden Chalice Resources
Inc. Mr. Keating is also President and a Director of Chalice Diamond Corp. and a
Director of Klondike Silver Corp.
JAMES M. MCDONALD, P.Geo. (age 46) has been a Director of the Company and the
Vice-President of Exploration since May 11, 2005 and has served as a director
and/or officer of the following companies:
- ---------------------------------- --------------------- -----------------------
NAME OF COMPANY POSITION TERM OF SERVICE
- ---------------------------------- --------------------- -----------------------
Genco Resources Ltd. President & Director 2003 to present
Alamos Gold Inc. Director June 16/83 to present
Kootenay Gold Inc. Director March 7/05 to present
Golden Chalice Resources Inc. Director Feb. 2/04 to present
- ---------------------------------- --------------------- -----------------------
JOSEPH MONTGOMERY, PhD., P.Eng. (age 79), a consulting geologist, has been a
Director of the Company since September 19, 2005. Mr. Montgomery is a director
and officer of the following other mining and exploration companies:
- ---------------------------------- --------------------- -----------------------
NAME OF COMPANY POSITION TERM OF SERVICE
- ---------------------------------- --------------------- -----------------------
Abitibi Mining Corp. Director June 16/83 to present
Klondike Gold Corp. Director August 15/85 to present
Golden Chalice Resources Inc. Director Feb. 2/04 to present
Sedex Mining Corp. Director 1997 to present
Bluerock Resources Ltd. (formerly Director August 9, 1989 to
Better Resources Limited) August 25, 2005
Daren Industries Ltd. Director June 1993 to present
- ---------------------------------- --------------------- -----------------------
Page 49
BEVERLY J. BULLOCK (age 58) was re-appointed Corporate Secretary of the Company
on September 24, 2003. Mrs. Bullock was a director and Corporate Secretary of
the Company from 2000 until December 19, 2002. Mrs. Bullock is the sole
shareholder of Vanwest Administrative Services Ltd. ("VAS"), a private company
providing administrative consulting services to the securities industry since
1991. VAS was incorporated in British Columbia in August 1990. Prior to 1991,
Mrs. Bullock was a legal assistant with a Vancouver securities law firm for 10
years. Mrs. Bullock was Corporate Secretary of Golden Chalice Resources Inc.
(from 1999 to February 2004) and Corporate Secretary of National Challenge
Systems Inc. (from 1995 to 2006).
Messrs. McDonald and Montgomery have technical credentials in mineral
exploration and advise the Board on technical matters and recommend the future
course of exploration. Mr. Keating is also instrumental in advising the Company
on exploration matters. During the past year, the officers have spent
approximately 1/3 of their time on affairs of the Company.
There are no family relationships between any of the directors and senior
management.
B. COMPENSATION
The Company does not compensate its directors or senior management for their
services as directors or senior management. Directors and senior management are
entitled to reimbursements for reasonable travel and other out-of-pocket
expenses incurred in connection with corporate matters pertaining to the
Company. The Board of Directors may award special remuneration to any director
or senior management undertaking any special services on behalf of the Company
other than services ordinarily required of a director or senior management.
Other than as indicated below, no other directors or senior management received
any compensation for his/her services as a director or senior management,
including committee participation and/or special assignments:
The Company grants stock options to directors, and senior management and
consultants - see "Options to Purchase Securities from Company".
The following table sets forth details of the compensation paid during the
Company's fiscal year ended October 31, 2006 to directors and senior management:
LONG-TERM COMPENSATION
-----------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- ----------------------------- -----------
SECURITIES RESTRICTED
OTHER UNDER SHARES OR ALL
ANNUAL OPTIONS/ RESTRICTED OTHER
COMPEN- SARS SHARE LTIP COMPEN-
NAME AND SALARY BONUS SATION GRANTED (1) UNITS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($) ($) ($)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
Richard W. Hughes 2006 Nil Nil $78,000 1,708,000/Nil Nil Nil Nil
(PRESIDENT AND CHIEF
EXECUTIVE OFFICER)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
Alan Campbell 2006 Nil Nil $30,000 320,000/Nil Nil Nil Nil
(CHIEF FINANCIAL OFFICER)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
Lynn W. Evoy 2006 Nil Nil $12,000 350,000/Nil Nil Nil Nil
(DIRECTOR)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
John Keating 2006 Nil Nil $43,500 375,000/Nil Nil Nil Nil
(VICE-PRESIDENT,
EXPLORATIONS)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
James M. McDonald 2006 Nil Nil $12,000 120,000/Nil Nil Nil Nil
(VICE-PRESIDENT,
EXPLORATIONS)
- ---------------------------- -------- ---------- -------- ------------- ---------------- ------------ ----------- -------------
Page 50
Notes:
(1) Figures represent options granted during a particular year. See
"Aggregate Option" table for the aggregate number of options outstanding
at year end. SARs refers to Stock Appreciation Rights;
HASTINGS MANAGEMENT CORP.
Hastings Management Corp. ("HMC"), a company wholly owned by Richard W. Hughes,
a director and officer of the Company, was paid $395,760 for the year ending
October 31, 2006, pursuant to administrative services provided to the Company
including supervising and administering the financial requirements of the
Company's business, communication with various regulatory authorities in order
to ensure compliance with all applicable laws; assisting in the preparation of
news releases, promotional materials and other documents required to be
disseminated to the public and responding to any requests for information or
questions which may be posed by the public; providing access to secretarial
services and legal consultation; providing office space, office furniture,
boardroom facilities, access to photocopier, fax and such other amenities
normally associated with executive offices. HMC receives a monthly management
fee of $35,000, a maximum monthly fee of $45,000 in higher activity periods, and
a reimbursement of actual out-of-pocket costs plus 5% for administrative
overhead.
OTHER COMPENSATION
No amounts have been set aside or accrued by the Company during fiscal 2005 to
provide for pension, retirement or similar benefits for directors or senior
management of the Company pursuant to any plan provided for or contributed to by
the Company. Except as discussed in "Options to Purchase Securities From
Company", the Company has no material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to the Company's directors
and senior management.
As of the date of this Annual Report, the Company has no compensatory plan or
arrangement with respect to any officer that results or will result in the
payment of compensation in any form from the resignation, retirement or any
other termination of employment of such officer's employment with the Company,
from a change in control of the Company or a change in such officer's
responsibilities following a change in control.
C. BOARD PRACTICES
The Company's Board of Directors consists of six members. The directors are
elected and the officers are re-appointed at the annual general meeting of
shareholders. Directors are elected by a majority of the votes of our common
shares present in person or represented by proxy at the Company's annual meeting
of shareholders and entitled to vote at such election. Each director holds
office until his or her term expires and his or her successor has been elected
and qualified. Executive officers serve at the discretion of the board of
directors. The last annual general meeting was held on March 22, 2006, and the
terms of office of each of our current directors and officers will expire at our
next annual general meeting.
Page 51
The members of our audit committee include Alan D. Campbell, Lynn W. Evoy and
James M. McDonald. The audit committee reviews and approves the scope of the
audit procedures employed by the Company's independent auditors, reviews the
results of the auditor's examination, the scope of audits, the auditor's opinion
on the adequacy of internal controls and quality of financial reporting and the
Company's accounting and reporting principles, policies and practices, as well
as its accounting, financial and operating controls. The audit committee also
reports to the board of directors with respect to such matters and recommends
the selection of independent auditors. Before financial statements that are to
be submitted to the shareholders at an annual general meeting are considered by
the board of directors, such financial statements are submitted to the audit
committee for review with the independent auditors, following which the report
of the audit committee on the financial statements is submitted to the board of
directors.
The Company does not currently have a remuneration or compensation committee.
As of the date of this Annual Report, the Company does not have any contract
with any director of the Company that provides for benefits upon termination of
employment.
D. EMPLOYEES
The Company has no employees. When required, the Company has retained geological
and other consultants.
E. SHARE OWNERSHIP
At February 28, 2007 (the voting record date for the April 4, 2007 annual
general meeting), directors and senior management of the Company beneficially
owned directly or indirectly or exercised control or discretion over common
shares of the Company as follows:
- ------------------------------- --------------------------------------------- --------------------- ------------------
NAME POSITION SHARES % OF SHARES
OUTSTANDING
- ------------------------------- --------------------------------------------- --------------------- ------------------
Richard W. Hughes President, Chief Executive Officer & 6,953,000 (1) 8.9%
Director
- ------------------------------- --------------------------------------------- --------------------- ------------------
Alan D. Campbell Chief Financial Officer & Director 450,000 .58%
- ------------------------------- --------------------------------------------- --------------------- ------------------
Lynn W. Evoy Director 299,000 .38%
- ------------------------------- --------------------------------------------- --------------------- ------------------
John Keating Vice-President, Exploration & Director 100,000 .13%
- ------------------------------- --------------------------------------------- --------------------- ------------------
James M. McDonald Vice-President, Exploration & Director 230,000 .29%
- ------------------------------- --------------------------------------------- --------------------- ------------------
Joseph Montgomery Director Nil Nil
- ------------------------------- --------------------------------------------- --------------------- ------------------
Beverly J. Bullock Corporate Secretary Nil Nil
- ------------------------------- --------------------------------------------- --------------------- ------------------
(1) Of these shares, a total of 2,430,000 shares are held by Hastings
Management Corp., a private company owned as to 100% by Richard W.
Hughes; and
(2) Of these shares, a total of 230,000 shares are held by Jo-Ann Evoy,
wife of Lynn W. Evoy.
OPTIONS TO PURCHASE SECURITIES OF THE COMPANY
In order to attract and retain highly qualified personnel, the Company provides
incentives in the form of stock options to certain of its directors, officers
and consultants on terms and conditions which are in accordance with the
prevailing rules and policies of the TSX Venture Exchange Inc. (the "TSXV") and
its Board of Directors. The Company has a stock option plan (the "Plan") that
was approved by its
Page 52
shareholders at its last annual and special general meeting held on March 22,
2006. The 2007 Stock Option Plan is subject to approval at the shareholders'
meeting scheduled for April 4, 2007. The Plan is administered by the Company's
Board of Directors.
The prevailing incentive stock option policy of the TSXV applicable to the
Company provides that stock options may be exercisable for a period of not more
than five years from the date of grant, must be non-assignable, and must have an
exercise price not lower than the last closing price of the Company's common
shares on the TSXV preceding the date of the grant less the applicable discount.
The aggregate number of shares reserved for issuance must not exceed 10% of the
Company's issued and outstanding shares, with the aggregate number of shares
reserved to any one person not to exceed 5% of the outstanding shares.
Shareholder approval must be obtained for amendment(s) of options granted to
insiders.
As at March 31, 2007, the following stock options were outstanding:
OPTIONS:
- --------------------------------------------------------------------------------
NUMBER OF OPTIONS EXERCISE PRICE EXPIRY DATE
- --------------------------------------------------------------------------------
255,000 $0.10 October 8, 2007
85,000 $0.20 (re-priced from $0.23)(1) December 18, 2007
248,000 $0.20 (re-priced from $0.25)(1) March 2, 2008
50,000 $0.20 (re-priced from $0.30)(1) June 16, 2008
430,000 $0.20 (re-priced from $0.56)(1) January 5, 2009
1,510,000 $0.10 July 28, 2010
1,331,000 $0.10 November 17, 2010
635,000 $0.20 February 2, 2011
1,440,000 $0.15 July 6, 2011
112,500 $0.15 November 3, 2011
- --------------------------------------------------------------------------------
6,096,500
- --------------------------------------------------------------------------------
(1) Effective September 16, 2005, the exercise price for these options was
reduced to $0.20, subject to disinterested shareholder approval (where
applicable).
No options have been exercised to date by the Company's current directors and
officers.
At March 31, 2007, the following share purchase warrants, in connection with
private placement financings, were outstanding:
SHARE PURCHASE WARRANTS:
- --------------------------------------------------------------------------------
NUMBER OF WARRANTS EXERCISE PRICE EXPIRY DATE
- --------------------------------------------------------------------------------
750,000 $0.10 June 3, 2007
11,715,000 $0.10 October 7, 2007
5,450,000 $0.10 January 17, 2008
13,467,833 $0.20 May 17, 2008
13,965,000 $0.15 December 21, 2008
2,350,000 $0.15 February 5, 2009
- --------------------------------------------------------------------------------
47,697,833
- --------------------------------------------------------------------------------
Page 53
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. MAJOR SHAREHOLDERS
The Company is not owned or controlled, directly or indirectly, by another
corporation or by any foreign government or by any other natural or legal
person(s).
As of February 28, 2007 (the voting record date for the April 4, 2007 annual
general meeting), the only persons or company holding RECORD OWNERSHIP of common
shares carrying more than 5% of the voting rights attached to all outstanding
common shares of the Company were:
- ----------------------- ------------------------------- ------------------------
NAME NUMBER OF SHARES PERCENTAGE
- ----------------------- ------------------------------- ------------------------
CDS & Co. 54,142,574 (1) 69.8%
Munday Home Sales Ltd. 7,390,000 (2) 9.5%
(1) CDS & Co. is a depository enterprise. It is the Company's understanding
that CDS & Co. holds the specified common shares as shareholders of
record in a nominal, fiduciary, trustee or similar capacity.
Accordingly, the names of the beneficial owners are not available to
the Company unless the shareholders voluntarily elect to contact the
Company or request disclosure of his, her or its identity. The Company
is unaware of the identities of the beneficial owners of these common
shares.
(2) Munday Home Sales Ltd. is a private company owned as to 100% by Maxwell
Munday of Burnaby, British Columbia, Canada.
As of February 28, 2007 (the voting record date for the April 4, 2007 annual
general meeting), to the knowledge of the Company the only persons or company
who BENEFICIALLY OWNED directly or indirectly or exercised control or discretion
over common shares carrying more than 5% of the voting rights attached to all
outstanding common shares of the Company were:
- ------------------------ ------------------------------ ------------------------
NAME NUMBER OF SHARES PERCENTAGE
- ------------------------ ------------------------------ ------------------------
Maxwell Munday 7,390,000 (1) 9.5%
Richard W. Hughes 6,953,000 (3) 8.9%
(1) These shares are held by Munday Home Sales Ltd. (as disclosed above), a
private company owned as to 100% by Maxwell Munday;
(2) Of these shares, a total of 1,850,000 shares are held by Hastings
Management Corp., a private company owned as to 100% by Richard W.
Hughes, a director and officer of the Company.
The information as to shares beneficially owned, not being with the knowledge of
the Company, has been furnished by the respective individuals. The Company's
major shareholders do not have different voting rights. There are no
arrangements known to the Company which may at a subsequent date result in a
change of control of the Company.
There were 77,540,728 (unaudited) common shares issued and outstanding at
February 28, 2007. Based on the records of the Company's transfer agent, Pacific
Corporate Trust Company, 3rd Floor, 510 Burrard Street, Vancouver, British
Columbia, Canada, V6C 3B9, to the best of the Company's knowledge, there were at
February 28, 2007, of record, 154 Canadian shareholders, 4 U.S. shareholders and
1 international shareholder and 2 reserved accounts, representing 77,377,520,
159,204, 15,472 and 188,552 common shares respectively, being 99.5%, .2%%, .02%
and .24% respectively of the Company's common shares then outstanding.
Page 54
B. RELATED PARTY TRANSACTIONS
Except as set forth below, none of the following persons had or is to have any
material interest, direct or indirect, in any transaction or loan for the period
since the beginning of the Company's fiscal year ended October 31, 2006 and the
date of this Annual Report, or any presently proposed transaction to which we
were or are to be a party:
1. an enterprise that directly or indirectly through one or more
intermediaries, control or are controlled by, or are controlled by, or
are under common control with, us;
2. associates (an unconsolidated enterprise in which we have a significant
influence or which has a significant influence over us);
3. individuals owning, directly or indirectly, an interest in the voting
power of the Company that gives them significant influence over us
(i.e. 10% shareholders);
4. key management personnel (persons having authority and responsibility
for planning, directing and controlling our activities, including our
directors and senior management and close members of such individuals'
families); and
5. an enterprise in which a substantial interest in the voting power is
owned, directly or indirectly, by a person described in (3) or (4)
above or over which such a person is able to exercise significant
influence.
PRIVATE PLACEMENTS
In January 2006, the Company issued 2,500,000 flow-through units and 3,150,000
non-flow-through units for cash at $0.10 per unit, each unit comprised of one
common share and one non-transferable share purchase warrant, each warrant to
purchase one non-flow-through common shares at an exercise price of $0.10 per
share, until January 17, 2008. Of the foregoing, Richard W. Hughes subscribed
for 1,000,000 non-flow-through units and Hastings Management Corp. subscribed
for 250,000 non-flow-through units.
In May 2006, the Company issued 11,911,833 flow-through units and 1,556,000
non-flow-through units for cash at $0.15 per unit, each unit comprised of one
common share and one non-transferable share purchase warrant, each warrant to
purchase one non-flow-through common shares at an exercise price of $0.20 per
share, until May 18, 2008. Of the foregoing, Alan Campbell subscribed for
200,000 flow-through units, Richard W. Hughes subscribed for 1,000,000
flow-through units, Hastings Management Corp. subscribed for 500,000
flow-through units and 100,000 non-flow-through units, Lynn W. Evoy subscribed
for 50,000 flow-through units, John Keating subscribed for 54,000 flow-through
units and James McDonald subscribed for 100,000 flow-through units.
MANAGEMENT AGREEMENTS
HASTINGS MANAGEMENT CORP.
Hastings Management Corp. ("HMC"), a company wholly owned by Richard W. Hughes,
a director and officer of the Company, was paid $395,760 for the year ending
October 31, 2006, pursuant to
Page 55
administrative services provided to the Company including supervising and
administering the financial requirements of the Company's business,
communication with various regulatory authorities in order to ensure compliance
with all applicable laws; assisting in the preparation of news releases,
promotional materials and other documents required to be disseminated to the
public and responding to any requests for information or questions which may be
posed by the public; providing access to secretarial services and legal
consultation; providing office space, office furniture, boardroom facilities,
access to photocopier, fax and such other amenities normally associated with
executive offices. HMC receives a monthly management fee of $35,000, a maximum
monthly fee of $45,000 in higher activity periods, and a reimbursement of actual
out-of-pocket costs plus 5% for administrative overhead.
INDEBTEDNESS TO COMPANY OF DIRECTORS AND SENIOR MANAGEMENT
None of the current or former directors, executive officers, employees of the
Company or the proposed nominees for election to the Board of Directors, nor any
associate and affiliate of such persons, are or have been indebted to the
Company since the beginning of the financial year of the Company ended October
31, 2006.
C. INTERESTS OF EXPERTS AND COUNSEL
Not Applicable.
ITEM 8. FINANCIAL INFORMATION
A. FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION
FINANCIAL STATEMENTS FILED AS PART OF THE FORM 20-F
The Company's audited financial statements are stated in Canadian Dollars (CDN$)
and are prepared in accordance with Canadian Generally Accepted Accounting
Principles. In this Annual Report, unless otherwise specified, all dollar
amounts are expressed in Canadian Dollars.
This Annual Report contains the audited financial statements for the Company for
the fiscal years ended October 31, 2006, October 31, 2005 reported on by Morgan
& Company, Chartered Accountants and October 31, 2004 Staley, Okada & Partners,
Chartered Accountants, as follows:
Auditors' Report
Balance Sheets
Statements of Operations and Deficit
Statements of Cash Flows
Notes to the Financial Statements
Schedule of Mineral Property Expenditures
LEGAL OR ARBITRATION PROCEEDINGS
As of the date hereof, the Company is not party to any active or pending legal
proceedings initiated by it and, to the best of its knowledge, the Company is
not subject to any active or pending legal proceedings or claims against it or
any of its properties. However, from time to time, the Company may become
subject to claims and litigation generally associated with any business venture.
In addition, the operations of the Company are subject to risks of accident and
injury, possible violations of environmental and other regulations, and claims
associated with the risks of exploration operations in foreign areas some of
which
Page 56
cannot be covered by insurance or other risk reduction strategies. Since the
Company is a Canadian corporation and the officers, directors and certain of the
persons involved with the Company as professional advisers are resident in
Canada, it may be difficult to effect service within the United States upon such
persons or to realize on any judgment by a court of the United States which is
predicated on civil liabilities under the 1933 Act. The Company's Canadian
counsel have advised that there is doubt as to the enforceability in Canada,
either in original actions or through enforcement of United States judgments, of
liabilities predicated solely upon violations of the 1933 Act or the rules and
regulations promulgated thereunder.
DIVIDEND DISTRIBUTION POLICY
The Company has not paid any cash dividends on its common stock and has no
present intention of paying any dividends. The current policy of the Company is
to retain earnings, if any, for use in operations and in the development of its
business. The future dividend policy of the Company will be determined from time
to time by the Board of Directors.
B. SIGNIFICANT CHANGES
PRIVATE PLACEMENTS
On December 27, 2006, the Company closed a private placement consisting of
13,965,000 flow-through units at $0.12 per unit, for gross proceeds of
$1,675,800. Each unit is comprised of one common share and one non-transferable
share purchase warrant, each warrant to purchase one non-flow-through common
shares at an exercise price of $0.15 per share, until December 21, 2008. Cash
finder's fees of $61,664 were paid. On February 8, 2007, the closed a private
placement of 2,350,000 units (of which 1,600,000 are flow-through units and
750,000 are non-flow-through units) at $0.12 per unit. Each unit is comprised of
one common share and one non-transferable share purchase warrant entitling the
holder to purchase one additional common share at $0.15 per share on or before
February 5, 2009. Cash finder's fees of $32,832 were paid. The proceeds from the
private placements are being used by the Company for exploration on its
properties and for working capital.
PROPERTY ACQUISITIONS
On February 5, 2007, the Company entered into an option agreement with Ashley
Gold Mines Limited and James R. Healey (each as to 50%) to acquire a 100%
interest in the Gogama Moly Property, located approximately 58 kilometres
southwest of Thunder Bay, Ontario. Consideration for the property consists of
$45,000, 200,000 shares and a work commitment of $75,000 all over a period of 2
years. There is a 2% net smelter return payable, of which half may be purchased
for $1,000,000. The agreement was accepted for filing by the TSX Venture
Exchange on February 20, 2007.
On February 5, 2007, the Company entered into an option agreement with Frederick
Ross, Garry Windsor, Bruce Durham and Charles Hartley (each as to 25%) to
acquire a 100% interest in the Dale Gold Property, comprised of six claims (61
units) located approximately 95 kilometres southwest of Timmins, Ontario.
Consideration for the property consists of $55,000 and 300,000 shares all over a
period of 2 years. There is a 2% net smelter return payable, of which half may
be purchased for $1,000,000. The agreement is subject to acceptance by the TSX
Venture Exchange.
On March 1, 2007, the Company entered into an option agreement with CJP
Exploration Inc. and Ashley Gold Mines Limited (each as to 50%) to acquire a 20%
interest in the Meteor Lake Property, located in the Larder Lake and Sudbury
Mining Division, Ontario. The Company's partners in this agreement
Page 57
include Klondike Gold Corp. ("Klondike Gold") (20%), Golden Chalice Resources
Inc. ("Golden Chalice") (20%) and Hastings Management Corp. (40%). Klondike Gold
and Golden Chalice are public companies related by common directors. Hastings
Management is a private company owned as to 100% by Richard W. Hughes, the
President and a director of the Company. Consideration for the property consists
of $20,000 (20% paid by the Company and the balance by its partners) and 200,000
shares of Klondike Gold. The Company will reimburse Klondike Gold for the value
of the shares up to 20%, based on the closing price of the shares as at the date
of issuance. The agreement is subject to acceptance by the TSX Venture Exchange.
ITEM 9. THE OFFER AND LISTING
A. OFFER AND LISTING DETAILS
The Company's shares have traded on the TSX Venture Exchange or its predecessors
the Vancouver Stock Exchange and the Canadian Venture Exchange (which was formed
by the merger of the Vancouver Stock Exchange and the Alberta Stock Exchange on
November 26, 1999 and which changed its name to the TSX Venture Exchange on May
1, 2002) since April 29, 1987. The following tables set forth the price history
of the Company's common shares for the periods indicated, as reported by the TSX
Venture Exchange. These figures reflect inter-dealer prices, without retail
markup, markdown or commissions, and may not represent actual transactions.
------------------------------ ------------------- -------------------
CALENDAR YEAR HIGH LOW
------------------------------ ------------------- -------------------
2002 $0.25 $0.08
------------------------------ ------------------- -------------------
2003 $0.55 $0.22
------------------------------ ------------------- -------------------
2004 $0.63 $0.12
------------------------------ ------------------- -------------------
2005 $0.15 $0.075
------------------------------ ------------------- -------------------
2006 $0.295 $0.095
------------------------------ ------------------- -------------------
FISCAL YEAR - 2005 HIGH LOW
------------------------------ ------------------- -------------------
1st Quarter $0.15 $0.085
------------------------------ ------------------- -------------------
2nd Quarter $0.115 $0.08
------------------------------ ------------------- -------------------
3rd Quarter $0.11 $0.075
------------------------------ ------------------- -------------------
4th Quarter $0.15 $0.09
------------------------------ ------------------- -------------------
FISCAL YEAR - 2006 HIGH LOW
------------------------------ ------------------- -------------------
1st Quarter $0.17 $0.085
------------------------------ ------------------- -------------------
2nd Quarter $0.295 $0.13
------------------------------ ------------------- -------------------
3rd Quarter $0.29 $0.12
------------------------------ ------------------- -------------------
4th Quarter $0.19 $0.12
------------------------------ ------------------- -------------------
The following is a summary of trading, on a monthly basis, of the shares of the
Company on the TSX Venture Exchange in Canada during the past six months:
- -------------------- ------------------- ---------------- ----------------------
MONTH AND YEAR HIGH (CDN $) LOW (CDN $) VOLUME
- -------------------- ------------------- ---------------- ----------------------
October 2006 $0.155 $0.12 1,396,300
- -------------------- ------------------- ---------------- ----------------------
November 2006 $0.17 $0.125 2,535,000
- -------------------- ------------------- ---------------- ----------------------
December 2006 $0.145 $0.11 4,024,769
- -------------------- ------------------- ---------------- ----------------------
January 2007 $0.16 $0.13 2,574,278
- -------------------- ------------------- ---------------- ----------------------
February 2008 $0.155 $0.13 1,470,500
- -------------------- ------------------- ---------------- ----------------------
March 2007 $0.15 $0.11 2,349,962
- -------------------- ------------------- ---------------- ----------------------
Page 58
The closing price of the Company's common shares on March 30, 2007 was $0.115.
The Company has no established trading market in the United States.
TYPE AND CLASS OF SECURITIES
The Company is authorized to issue up to an unlimited number of common shares.
TRANSFERABILITY
There are no restrictions on the transferability of the Company's common shares,
except under applicable securities laws. The transfer of its common shares is
managed by its transfer agent, Pacific Corporate Trust Company, 3rd Floor, 510
Burrard Street, Vancouver, British Columbia, Canada, V6C 3B9; Telephone: (604)
689-9853; Facsimile: (604) 689-8144).
B. PLAN OF DISTRIBUTION
Not Applicable
C. MARKETS
The Company's common shares trade on the TSX Venture Exchange. The Company's
symbol for its common shares is "AGX" and its CUSIP number is 02264P101.
D. SELLING SHAREHOLDERS
Not Applicable
E. DILUTION
Not Applicable
F. EXPENSES OF THE ISSUE
Not Applicable
ITEM 10. ADDITIONAL INFORMATION
A. SHARE CAPITAL
Not Applicable
B. MEMORANDUM AND ARTICLES OF ASSOCIATION
On March 29, 2004, the British Columbia legislature enacted the British Columbia
BUSINESS CORPORATIONS ACT ("BCBCA") and repealed the British Columbia COMPANY
ACT (the "Company Act"). The BCBCA removes many of the restrictions contained in
the Company Act, including restrictions on the residency of directors, the
location of annual general meetings and limits on authorized share capital. As
well, the BCBCA uses new forms and terminology and has replaced the Memorandum
with a Notice of Articles. At the Company's annual and special general meeting,
held on May 11, 2005, shareholders approved:
Page 59
a) a special resolution to remove the application of the
Pre-existing Company Provisions, as defined in the BUSINESS
CORPORATIONS ACT (British Columbia);
b) a special resolution to alter the Company's share structure to
an unlimited number of common shares without par value; and
c) a special resolution to approve new articles for the Company.
The regulations under the BCBCA effectively added certain provisions, called
"Pre-Existing Company Provisions" or "PCPs", to every company's Notice of
Articles. The PCPs provide that the number of votes required to pass a special
resolution (formerly also referred to as a special resolution under the Company
Act) or a special separate resolution is at least three-quarters of the votes
cast by shareholders present in person or by proxy at the meeting. This is the
majority that was required under the Company Act. The BCBCA allows a special
resolution to be passed by at least two-thirds of the votes cast by shareholders
present in person or by proxy at the meeting. The Company amended its Notice of
Articles to delete the PCPs so that the provisions of the BCBCA permitting a
two-thirds majority will apply to the Company. Management believes that this
provides the Company with greater flexibility for future corporate activities
and is consistent with special resolution requirements for companies in other
jurisdictions.
All other information in this item has been reported previously in the Company's
registration statement on Form 20-F, which became effective on August 20, 2004.
Such information is incorporated herein by this reference.
C. MATERIAL CONTRACTS
The following are summaries of all material contracts entered into by the
Company for the past two years:
a) Subscription Agreements dated March 2005 between the Company
and various purchasers. Pursuant to these agreements, the
purchasers purchased a total of 1,000,000 units at $0.10 per
unit, each unit consisting of one common share and one
non-transferable share purchase warrant entitling the
purchasers to purchase one additional common share of the
Company at a price of $0.10 per share on or before March 23,
2007;
b) Subscription Agreement dated April 13, 2005 between the
Company and Hastings Management Corp. whereby HMC has agreed
to purchase a total of 750,000 units at $0.10 per unit, each
unit consisting of one common share and one non-transferable
share purchase warrant entitling HMC to purchase one
additional common share of the Company at a price of $0.10
within two years of closing;
c) Assignment Agreement dated March 24, 2005 between the Company
and Vault Minerals Inc. whereby the Company acquired a 100%
interest in the Magnum Property in Urban Township, Quebec;
d) Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited (as to
65%), CJP Exploration Inc. (as to 25%) and Barry McCombe (as
to 10%) whereby the Company was granted an option to earn a
100% interest in the Kell Mine Property located in the
southwestern corner of Corkill Township, Ontario;
Page 60
e) Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited whereby
the Company was granted an option to earn a 100% interest in
the Silver Strike Property located in the northwestern corner
of James Township, Ontario;
f) Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited (as to
65%), CJP Exploration Inc. (as to 25%) and Barry McCombe (as
to 10%) whereby the Company was granted an option to earn a
100% interest in the Thompson Property located in the
northeastern corner of Donovan and southern part of Charters
Township, Ontario;
g) Mining Option Agreement dated March 28, 2005 between the
Company and Canadian Prospecting Ventures Inc. whereby the
Company was granted an option to earn a 100% interest in the
Silver Claim Property located in the Mickle Township, Ontario;
h) Mining Option Agreement dated May 6, 2005 between the Company
and Merton Stewart whereby the Company was granted an option
to earn a 100% interest in the Tetagouche Property, New
Brunswick;
i) Administrative Services Agreement dated June 1, 2005 between
the Company and Hastings Management Corp.;
j) Purchase and Sale Agreement dated June 13, 2005 between the
Company and Aurora-Larder Mining Corporation Limited (as to
50%) and Kirnova Corp. (as to 50%) whereby the Company agreed
to purchase an undivided 100% interest in the Ajax Property,
Ontario;
k) Mining Option Agreement dated June 21, 2005 between the
Company and Canadian Prospecting Ventures Inc. whereby the
Company was granted an option to earn a 100% interest in the
Capitol Silver Property located approximately 4 km northeast
of Gowganda, Ontario;
l) Mining Option Agreement dated June 21, 2005 between the
Company and Aurora-Larder Mining Corporation Limited whereby
the Company was granted an option to earn a 100% interest in
the Hudson Bay Silver Mine Property located in southeastern
Leith Township, Ontario;
m) Letter agreement dated July 19, 2005 between the Company and
Pat Gryba whereby the Company agreed to acquire a 100%
interest in three mineral claims located in the Strathy
Township, Ontario in the Sudbury Mining Division, Ontario;
n) Mining Option Agreement dated July 21, 2005 between the
Company and Kirnova Corp. (as to 75%) and Todd Keast (as to
25%) whereby the Company was granted an option to earn a 100%
interest in the Banting Chambers Property located
approximately 20 km northwest of Temagami, Ontario;
o) Mining Option Agreement dated July 28, 2005 between the
Company and Ken Fenwick (as to 60%) and George Lucuik (as to
40%) whereby the Company was granted an option to earn a 100%
interest in the Mennin Lake Property, Ontario;
p) Stock Option Agreements dated July 28, 2005 between the
Company and officers, directors, consultants or management
company employees. Pursuant to these agreements, the optionees
were granted options to purchase in the aggregate 1,510,000
common shares of the Company, exercisable on or before July
28, 2010 at a price of $0.10 per share;
q) Flow-Through Subscription Agreements dated August 3, 2005
between the Company and various purchasers. Pursuant to these
agreements, the purchasers purchased a total of 3,965,000
flow-through units at $0.10 per unit. Each flow-through common
unit consists of one flow-through common share and one share
purchase warrant entitling the purchasers to purchase one
additional non-flow-through common share of the Company at a
price of $0.10 per share on or before October 7, 2007;
Page 61
r) Mining Option Agreement dated August 22, 2005 between the
Company and Filo Exploration Services Limited and David V.
Jones (each as to 50%) whereby the Company was granted an
option to each a 100% undivided interest in the Fripp
Property, Ontario;
s) Mining Option Agreement dated September 19, 2005 between the
Company and 733526 Ontario Inc. and Jim Ralph (each as to 50%)
whereby the Company was granted an option to each a 100%
undivided interest in the Gould Copper Mine Property located
in the Sault St. Marie Mining Division, Ontario;
t) Mining Option Agreement dated September 19, 2005 between the
Company and Aurora-Larder Mining Corporation Limited and
Katrine Exploration and Development Inc. (each as to 50%)
whereby the Company was granted an option to each a 100%
undivided interest in the Hunter Gold Property located in the
Catharine Township, Ontario;
u) Mining Option Agreement dated September 20, 2005 between the
Company and Kootenay Gold Inc. whereby the Company was granted
an option to each a 50% undivided interest in the Connor Creek
Property located in the Nelson Mining Division, British
Columbia;
v) Mining Option Agreement dated October 12, 2005 between the
Company and Canadian Prospecting Ventures Inc. whereby the
Company was granted an option to each a 100% undivided
interest in the Willet Property located in the Willet
Township, Ontario;
w) Subscription Agreements dated December 2005 between the
Company and various investors. Pursuant to these agreements,
the purchasers purchased a total of 5,650,000 units (of which
2,500,000 are flow-through units and 3,150,000 are
non-flow-through units) for cash of $0.10 per unit, each unit
comprised of one common share and one non-transferable share
purchase warrant, each warrant to purchase one common share at
an exercise price of $0.10 per share, until January 17, 2008;
x) Mining Option Agreement dated December 8, 2005 between the
Company and Pat Gryba whereby the Company was granted an
option to each a 100% undivided interest in the Savard &
Sharpe Property, located in the Savard & Sharpe Township,
Ontario;
y) Mining Option Agreement dated December 9, 2005 between the
Company and Pat Gryba whereby the Company was granted an
option to earn a 100% undivided interest in 2 mineral claims
situated in the Bompas and Strathy Townships, Ontario;
z) Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross, Christina McManus, Jennah
Durham, Denis Laforest and Garry Windsor (each as to 20%)
whereby the Company was granted an option to earn a 100%
undivided interest in the Horwood Gold Property, Ontario;
aa) Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross, Christina McManus, Denis Morin,
Fernand Morin and Roger Dennomme (each as to 20%) whereby the
Company was granted an option to earn a 100% undivided
interest in the Labbe Property, Ontario;
bb) Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross (as to 60%) and Garry Frederick
Windsor (as to 40%) whereby the Company was granted an option
to earn a 100% undivided interest in the Ross Windsor
Property, Ontario;
cc) Stock Option Agreements dated February 2, 2006 between the
Company and officers, directors, consultants or management
company employees. Pursuant to these agreements, the optionees
were granted options to purchase in the aggregate 635,000
common shares of the Company, exercisable on or before
February 2, 2011 at a price of $0.20 per share;
dd) Mining Option Agreement dated March 1, 2006 between the
Company and Ken Fenwick (as to 43%), George Lucuik (as to 42%)
and Daniel Shelly (as to 15%) to earn a 100% undivided
interest in the East Breccia Property, Ontario;
Page 62
ee) Subscription Agreements dated April 2006 between the Company
and various investors. Pursuant to these agreements, the
purchasers purchased a total of 13,467,833 units (of which
11,911,833 are flow-through units and 1,556,000 are
non-flow-through units) for cash of $0.15 per unit, each unit
comprised of one common share and one non-transferable share
purchase warrant, each warrant to purchase one common share at
an exercise price of $0.20 per share, until May 17, 2008.
During the fiscal year, no share purchase warrants were
exercised from this private placement.
ff) Mining Option Agreement dated May 2, 2006 between the Company
and Frederick J. Ross (as to 50%), Garry Windsor (as to 25%)
and Bruce Durham (as to 25%) whereby the Company was granted
an option to each a 100% undivided interest in the Patent Gold
Property located in the Sewell and Reeves Townships, Ontario;
gg) Mining Option Agreement dated May 18, 2006 between the Company
and Larry Gervais (as to 75%), Bruce Pigeon (as to 12.5%) and
Lance Eden (as to 12.5%) whereby the Company was granted an
option to earn a 100% interest in the Loveland 1 Property
located in the Loveland and Byers Townships, Ontario;
hh) Mining Option Agreement dated May 18, 2006 between the Company
and Larry Gervais (as to 98.9%) and Johnny Gull (as to 1.1%)
whereby the Company was granted an option to earn a 100%
interest in the Loveland 2 Property located in the Loveland,
Byers and Thorburn Townships, Ontario;
ii) Mining Option Agreement dated May 28, 2006 between the Company
and Frederick J. Ross (as to 66 2/3%) and Garry Windsor (as to
33 1/3%) whereby the Company was granted an option to earn a
100% interest in the Keith & Sewell Properties located in the
Keith and Sewell Townships, Ontario;
jj) Mining Option Agreement dated May 28, 2006 between the Company
and Denis Morin and Roger Denomme (each as to 50%) whereby the
Company was granted an option to earn a 100% interest in the
Morin Property located in the Keith Township, Ontario;
kk) Mining Option Agreement dated June 23, 2006 between the
Company and Ken Fenwick (as to 75%), Karl Bjorkman (as to 15%)
and Don Devereaux (as to 10%) whereby the Company was granted
an option to earn a 100% interest in the Anderson Lake
Property, Ontario;
ll) Letter Agreement dated June 28, 2006 between the Company and
Frederick J. Ross (as to 50%) and Garry Windsor (as to 50%)
whereby the Company purchased a 100% interest in the Chewett
Property, Ontario;
mm) Mining Option Agreement dated February 5, 2007 between the
Company and Ashley Gold Mines Limited and David R. Healey
whereby the Company was granted an option to earn a 100%
interest in the Gogama Moly Property, Ontario;
oo) Mining Option Agreement dated February 5, 2007 between the
Company and Frederick Ross, Garry Windsor, Bruce Durham and
Charles Hartley (each as to 25%) whereby the Company was
granted an option to earn a 100% interest in the Dale Gold
Property, Ontario; and
pp) Mining Option Agreement dated March 1, 2007 between the
Company and CJP Exploration and Ashley Gold Mines Limited
(each as to 50%) whereby the Company was granted an option to
earn a 20% interest in the Meteor Lake Property, Ontario.
D. EXCHANGE CONTROLS
There are no government laws, decrees or regulations in Canada which restrict
the export or import of capital or which affect the remittance of dividends,
interest or other payments to non-resident holders of the Company's common
shares. Any remittances of dividends to United States residents and to other
non-residents are, however, subject to withholding tax. See "Taxation" below.
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E. TAXATION
CANADIAN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of all material Canadian federal income
tax consequences, under current law, generally applicable to a holder (a
"Holder") of one or more common shares of Amador Gold Corp. (the "Company") who
for the purposes of the Income Tax Act (Canada) (the "Act") is a non-resident of
Canada, holds his common shares as capital property and deals at arm's length
with the Company and is restricted to such circumstances.
DIVIDENDS
A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to
25%, or such lower rate as may be available under an applicable tax treaty, of
the gross amount of any dividend paid or deemed to be paid on the common shares.
Under the 1995 Protocol amending the Canada-U.S. Income Tax Convention (1980)
(the "Treaty") the rate of Part XIII Tax applicable to a dividend on common
shares paid to a Holder who is a resident of the United States is reduced from
the 25% rate. Under the Treaty, the Company will be required to withhold Part
XIII Tax at 15% from each dividend so paid and remit the withheld amount
directly to the Receiver General for Canada for the account of the Holder. The
15% rate is further reduced to 5% if the shareholder is a company owning at
least 10% of the outstanding common shares of the Company.
DISPOSITION OF COMMON SHARES
A Holder who disposes of a common share, including by deemed disposition on
death, will not be subject to Canadian tax on any capital gain (or capital loss)
thereby realized unless the common share constituted "taxable Canadian property"
as defined by the Act. Generally, a common share will not constitute taxable
Canadian property of a Holder unless he held the common shares as capital
property used by him carrying on a business (other than an insurance business)
in Canada, or he or persons with whom he did not deal at arm's length alone or
together held or held options to acquire, at any time within the five years
preceding the disposition, 25% or more of the shares of any class of the capital
stock of the Company. The disposition of a common share that constitutes
"taxable Canadian property" of a Holder could also result in a capital loss,
which can be used cannot be used to reduce all taxable income (only that portion
of taxable income derived from a capital gain).
A capital gain occurs when proceeds from the disposition of a share of other
capital property exceeds the original cost. A capital loss occurs when the
proceeds from the disposition of a share are less than the original cost. Under
the Act, capital gain is effectively taxed at a lower rate as only 50% of the
gain is effectively included in the Holder's taxable income.
A Holder who is a resident of the United States and realizes a capital gain on
disposition of a common share that was taxable Canadian property will
nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax
thereon unless (a) more than 50% of the value of the common share is derived
from, or forms an interest in, Canadian real estate, including Canadian mineral
resource properties, (b) the common share formed part of the business property
of a permanent establishment that the Holder has or had in Canada within the 12
months preceding disposition, or (c) the Holder (i) was a resident of Canada at
any time within the ten years immediately, and for a total of 120 months during
the 20 years, preceding the disposition, and (ii) owned the common share when he
ceased to be resident in Canada.
Page 64
A Holder who is subject to Canadian tax in respect of a capital gain realized on
disposition of a common share must include one half of the capital gain (taxable
capital gain) in computing his taxable income earned in Canada. This Holder may,
subject to certain limitations, deduct one half of any capital loss (allowable
capital loss) arising on disposition of taxable Canadian property from taxable
capital gains realized in the year of disposition in respect to taxable Canadian
property. To the extent the capital loss is not deductible in the current year
the taxpayer may deduct the capital loss (after taking into account the
inclusion rate of a previous year) from such taxable capital gains of any of the
three preceding years or any subsequent year.
UNITED STATES FEDERAL INCOME TAXATION
The following discussion is based upon the sections of the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations, published Internal
Revenue Service ("IRS") rulings, published administrative positions of the IRS
and court decisions that are currently applicable, any or all of which could be
materially and adversely changed, possibly on a retroactive basis, at any time
and which are subject to differing interpretations. This discussion does not
consider the potential effects, both adverse and beneficial, of any proposed
legislation which, if enacted, could be applied, possibly on a retroactive
basis, at any time. This discussion is for general information only and it is
not intended to be, nor should it be construed to be, legal or tax advice to any
holder or prospective holder of common shares of the Company and no opinion or
representation with respect to the United States federal income tax consequences
to any such holder or prospective holder is made. Accordingly, holders and
prospective holders of common shares of the Company are encouraged to consult
their own tax advisers about the federal, state, local, and foreign tax
consequences of purchasing, owning and disposing of common shares of the
Company.
U.S. HOLDERS
As used herein, a "U.S. Holder" means a holder of common shares of the Company
who is (i) a citizen or individual resident of the United States, (ii) a
corporation or partnership created or organized in or under the laws of the
United States or of any political subdivision thereof, (iii) an estate whose
income is taxable in the United States irrespective of source or (iv) a trust
subject to the primary supervision of a court within the United States and
control of a United States fiduciary as described Section 7701(a)(30) of the
Code. This summary does not address the tax consequences to, and U.S. Holder
does not include, persons subject to specific provisions of federal income tax
law, such as tax-exempt organizations, qualified retirement plans, individual
retirement accounts and other tax-deferred accounts, financial institutions,
insurance companies, real estate investment trusts, regulated investment
companies, broker-dealers, persons or entities that have a "functional currency"
other than the U.S. dollar, shareholders subject to the alternative minimum tax,
shareholders who hold common shares as part of a straddle, hedging, conversion
transaction, constructive sale or other arrangement involving more than one
position, and shareholders who acquired their common shares through the exercise
of employee stock options or otherwise as compensation for services. This
summary is limited to U.S. Holders who own common shares as capital assets
within the meaning of Section 1221 of the Code. This summary does not address
the consequences to a person or entity holding an interest in a shareholder or
the consequences to a person of the ownership, exercise or disposition of any
options, warrants or other rights to acquire common shares.
Page 65
DIVIDEND DISTRIBUTION ON SHARES OF THE COMPANY
U.S. Holders receiving dividend distributions (including constructive dividends)
with respect to common shares of the Company are required to include in gross
income for United States federal income tax purposes the gross amount of such
distributions, equal to the U.S. dollar value of such distributions on the date
of receipt (based on the exchange rate on such date), to the extent that the
Company has current or accumulated earnings and profits, without reduction for
any Canadian income tax withheld from such distributions. Such Canadian tax
withheld may be credited, subject to certain limitations, against the U.S.
Holder's federal income tax liability or, alternatively, may be deducted in
computing the U.S. Holder's federal taxable income by those who itemize
deductions. (See more detailed discussion at "Foreign Tax Credit" below). To the
extent that distributions exceed current or accumulated earnings and profits of
the Company, they will be treated first as a return of capital up to the U.S.
Holder's adjusted basis in the common shares and thereafter as gain from the
sale or exchange of the common shares. Preferential tax rates for long-term
capital gains are applicable to a U.S. Holder that is an individual, estate or
trust. There are currently no preferential tax rates for long-term capital gains
for a U.S. Holder that is a corporation.
REDUCED DIVIDEND RATES FOR INDIVIDUALS
Certain dividends received by an individual shareholder from domestic and
qualified foreign corporations are taxed at the same rates that apply to capital
gains. Thus, dividends will be taxed at rates of 5% (0%, in 2008) and 15%. These
lower rates apply to dividends received in taxable years beginning after 2002
and before 2009. The lower rates on dividends apply for purposes of both the
regular and alternative minimum tax. To qualify for the reduced rates, the
dividends must be from domestic corporations and qualified foreign corporations.
The following are qualified foreign corporations:
o a foreign corporation incorporated in a possession of the
United States,
o a foreign corporation eligible for the benefits of a U.S.
income tax treaty that the IRS determines to be satisfactory
and that includes an exchange of information program, and
o a foreign corporation if the stock with respect to which the
dividend is paid is readily tradable on an established
securities market in the United States.
A special holding period rule is apparently designed to discourage certain
short-term trading strategies. Under this rule, to qualify for the reduced
rates, the stock on which the dividend is paid must be held for more than 60
days during the 120-day period beginning 60 days before the ex-dividend date.
(For certain preferred dividends, the stock must be held for more than 90 days
during the 180-day period beginning 90 days before the ex-dividend date.)
Dividends from certain corporations are not eligible, including tax-exempt
charities, tax-exempt farmers' cooperatives, foreign personal holding companies,
foreign investment companies, and passive foreign investment companies. The
Company is unable to determine at this time whether its dividends will qualify
for the lower rates and each U.S. Holder of the Company is urged to consult
their own tax adviser with respect to the reduced dividend rates.
Page 66
FOREIGN TAX CREDIT
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax
with respect to the ownership of common shares of the Company may be entitled,
at the option of the U.S. Holder, to either receive a deduction or a tax credit
for such foreign tax paid or withheld. Generally, it will be more advantageous
to claim a credit because a credit reduces United States federal income taxes on
a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's
income subject to tax. This election is made on a year-by-year basis and applies
to all foreign taxes paid by (or withheld from) the U.S. Holder during that
year. There are significant and complex limitations which apply to the credit,
among which is the general limitation that the credit cannot exceed the
proportionate share of the U.S. Holder's United States income tax liability that
the U.S. Holder's foreign source income bears to his or its worldwide taxable
income. In the determination of the application of this limitation, the various
items of income and deduction must be classified into foreign and domestic
sources. Complex rules govern this classification process. In addition, this
limitation is calculated separately with respect to specific classes of income
such as "passive income", "high withholding tax interest," "financial services
income," "shipping income," and certain other classifications of income.
Dividends distributed by the Company will generally constitute "passive income"
or, in the case of certain U.S. Holders, "financial services income" for these
purposes. In addition, U.S. Holders which are corporations that own 10% or more
of the voting stock of the Company may be entitled to an "indirect" foreign tax
credit under Section 902 with respect to the payment of dividends by the Company
under certain circumstances and subject to complex rules and limitations. The
availability of the foreign tax credit and the application of the limitations on
the credit are fact specific, and U.S. Holders of common shares of the Company
are encouraged to consult their own tax advisers regarding their particular
circumstances.
DISPOSITION OF COMMON SHARES
A U.S. Holder will recognize gain or loss upon the sale of common shares of the
Company equal to the difference, if any, between (i) the amount of cash plus the
fair market value of any property received, and (ii) the shareholder's tax basis
in the common shares of the Company. Preferential tax rates apply to long-term
capital gains of U.S. Holders which are individuals, estates or trusts. This
gain or loss will be capital gain or loss if the common shares are a capital
asset in the hands of the U.S. Holder, which will be long-term capital gain or
loss if the common shares of the Company are held for more than one year.
Deductions for net capital losses are subject to significant limitations. For
U.S. Holders which are not corporations, any unused portion of such net capital
loss may be carried over to be used in later tax years until such net capital
loss is thereby exhausted. For U.S. Holders that are corporations (other than
corporations subject to Subchapter S of the Code), an unused net capital loss
may be carried back three years and carried forward five years from the loss
year to be offset against capital gains until such net capital loss is thereby
exhausted.
OTHER CONSIDERATIONS FOR U.S. HOLDERS
In the following circumstances, the above sections of this discussion may not
describe the United States Federal income tax consequences resulting from the
holding and disposition of common shares of the Company. Management of the
Company is of the opinion that there is little, if not, any likelihood of the
Company being deemed a "Foreign Personal Holding Company", a "Foreign Investment
Company" or a "Controlled Foreign Corporation" (each as defined below) under
current and anticipated conditions.
Page 67
FOREIGN PERSONAL HOLDING COMPANY
If at any time during a taxable year (i) more than 50% of the total combined
voting power or the total value of the Company's outstanding shares is owned,
directly or indirectly, by five or fewer individuals who are citizens or
residents of the United States and (ii) 60% (50% in some circumstances) or more
of the Company's gross income for such year was "foreign personal holding
company income" (e.g. dividends, interest and similar income), the Company may
be treated as a "foreign personal holding company." In that event, U.S. Holders
that hold common shares would be required to include in gross income for such
year their allocable portions of such "foreign personal holding company income"
to the extent the Company does not actually distribute such income. The Company
does not believe that it currently qualifies as a foreign personal holding
company.
FOREIGN INVESTMENT COMPANY
If 50% or more of the combined voting power or total value of the Company's
outstanding shares is held, directly or indirectly, by citizens or residents of
the United States, United States domestic partnerships or corporations, or
estates or trusts other than foreign estates or trusts (as defined by the Code
Section 7701(a)(31)), and the Company is found to be engaged primarily in the
business of investing, reinvesting, or trading in securities, commodities, or
any interest therein, it is possible that the Company may be treated as a
"foreign investment company" as defined in Section 1246 of the Code, causing all
or part of any gain realized by a U.S. Holder selling or exchanging common
shares to be treated as ordinary income rather than capital gain. The Company
does not believe that it currently qualifies as a foreign investment company.
PASSIVE FOREIGN INVESTMENT COMPANY
Certain United States income tax legislation contains rules governing "passive
foreign investment companies" ("PFIC") which can have significant tax effects on
U.S. Holders of foreign corporations. These rules do not apply to non-U.S.
Holders. Section 1297 of the Code defines a PFIC as a corporation that is not
formed in the United States and, for any taxable year, either (i) 75% or more of
its gross income is "passive income," which includes interest, dividends and
certain rents and royalties or (ii) the average percentage, by fair market value
(or, if the corporation is not publicly traded and either is a controlled
foreign corporation or makes an election, by adjusted tax basis), of its assets
that produce or are held for the production of "passive income" is 50% or more.
If a foreign corporation owns, directly or indirectly, at least 25% by value of
the stock a second corporation, then for purposes of the PFIC tests described
above, the first corporation will be treated as owning a proportionate share of
the assets of, and as receiving a proportionate share of the income of, the
second corporation.
The Company believes that it qualified as a PFIC for the fiscal year ended
October 31, 2002 and may have qualified as a PFIC in prior years. The Company
may or may not qualify as a PFIC in subsequent years due to changes in its
assets and business operations. The Company's determination concerning its PFIC
status may be challenged and accordingly, the Company may be unable to satisfy
record keeping requirements that will be imposed on a qualified electing fund
("QEF"). Each U.S. Holder of the Company is urged to consult a tax adviser with
respect to how the PFIC rules affect their tax situation.
A U.S. Holder who holds stock in a foreign corporation during any year in which
such corporation qualifies as a PFIC is subject to United States federal income
taxation under one of two alternative tax regimes at the election of each such
U.S. Holder. The following is a discussion of such two alternative tax regimes
applied to such U.S. Holders of the Company. In addition, special rules apply if
a foreign corporation qualifies as both a PFIC and a "controlled foreign
corporation" (as defined below) and a U.S.
Page 68
Holder owns, actually or constructively, 10% or more of the total combined
voting power of all classes of stock entitled to vote of such foreign
corporation (See more detailed discussion at "Controlled Foreign Corporation"
below).
A U.S. Holder who elects in a timely manner to treat the Company as a QEF (an
"Electing U.S. Holder") will be subject, under Section 1293 of the Code, to
current federal income tax for any taxable year in which the Company qualifies
as a PFIC on his pro rata share of the Company's (i) "net capital gain" (the
excess of net long-term capital gain over net short-term capital loss), which
will be taxed as long-term capital gain to the Electing U.S. Holder and (ii)
"ordinary earnings" (the excess of earnings and profits over net capital gain),
which will be taxed as ordinary income to the Electing U.S. Holder, in each
case, for the shareholder's taxable year in which (or with which) the Company's
taxable year ends, regardless of whether such amounts are actually distributed.
The effective QEF election also allows the Electing U.S. Holder to (i) generally
treat any gain realized on the disposition of his Company common shares (or
deemed to be realized on the pledge of his shares) as capital gain; (ii) treat
his share of the Company's net capital gain, if any, as long-term capital gain
instead of ordinary income; and (iii) either avoid interest charges resulting
from PFIC status altogether, or make an annual election, subject to certain
limitations, to defer payment of current taxes on his share of the Company's
annual realized net capital gain and ordinary earnings subject, however, to an
interest charge. If the Electing U.S. Holder is not a corporation, such an
interest charge would be treated as "personal interest" that is not deductible.
The procedure a U.S. Holder must comply with in making an effective QEF election
will depend on whether the year of the election is the first year in the U.S.
Holder's holding period in which the Company is a PFIC. If the U.S. Holder makes
a QEF election in such first year, i.e., a timely QEF election, then the U.S.
Holder may make the QEF election by simply filing the appropriate documents at
the time the U.S. Holder files his tax return for such first year. If, however,
the Company qualified as a PFIC in a prior year, then in addition to filing
documents, the U.S. Holder must elect to recognize (i) under the rules of
Section 1291 of the Code (discussed herein), any gain that he would otherwise
recognize if the U.S. Holder sold his stock on the qualification date or (ii) if
the Company is a controlled foreign corporation, the U.S. Holder's pro rata
share of the Company's post-1986 earnings and profits as of the qualification
date. The qualification date is the first day of the Company's first tax year in
which the Company qualified as a QEF with respect to such U.S. Holder. The
elections to recognize such gain or earnings and profits can only be made if
such U.S. Holder's holding period for the common shares of the Company includes
the qualification date. By electing to recognize such gain or earnings and
profits, the U.S. Holder will be deemed to have made a timely QEF election. A
U.S. Holder who made elections to recognize gain or earnings and profits after
May 1, 1992 and before January 27, 1997 may, under certain circumstances, elect
to change such U.S. Holder's qualification date to the first day of the first
QEF year. U.S. Holders are urged to consult a tax adviser regarding the
availability of and procedure for electing to recognize gain or earnings and
profits under the foregoing rules.
A QEF election, once made with respect to the Company, applies to the tax year
for which it was made and to all subsequent tax years, unless the election is
invalidated or terminated, or the IRS consents to revocation of the election. If
a U.S. Holder makes a QEF election and the Company ceases to qualify as a PFIC
in a subsequent tax year, the QEF election will remain in effect, although not
applicable, during those tax years in which the Company does not qualify as a
PFIC. Therefore, if the Company again qualifies as a PFIC in a subsequent tax
year, the QEF election will be effective and the U.S. Holder will be subject to
the rules described above for Electing U.S. Holders in such tax year and any
subsequent tax years in which the Company qualifies as a PFIC. In addition, the
QEF election remains in effect, although not applicable, with respect to an
Electing U.S. Holder even after such U.S. Holder disposes of
Page 69
all of his or its direct and indirect interest in the shares of the Company.
Therefore, if such U.S. Holder reacquires an interest in the Company, that U.S.
Holder will be subject to the rules described above for Electing U.S. Holders
for each tax year in which the Company qualifies as a PFIC.
If a U.S. Holder does not make a timely QEF election during a year in which it
holds (or is deemed to have held) the common shares in question and the Company
is a PFIC (a "Non-Electing U.S. Holder"), then special taxation rules under
Section 1291 of the Code will apply to (i) gains realized on the disposition (or
deemed to be realized by reasons of a pledge) of his Company common shares and
(ii) certain "excess distributions" (generally, distributions received in the
current taxable year that are in excess of 125% of the average distributions
received during the three preceding years or, if shorter, the U.S. Holder's
holding period) by the Company.
A Non-Electing U.S. Holder generally would be required to pro rate all gains
realized on the disposition of his Company common shares and all excess
distributions on his Company common shares over the entire holding period for
the common shares. All gains or excess distributions allocated to prior years of
the U.S. Holder (other than years prior to the first taxable year of the Company
during such U.S. Holder's holding period and beginning after January 1, 1987 for
which it was a PFIC) would be taxed at the highest tax rate for each such prior
year applicable to ordinary income. The Non-Electing U.S. Holder also would be
liable for interest on the foregoing tax liability for each such prior year
calculated as if such liability had been due with respect to each such prior
year. A Non-Electing U.S. Holder that is not a corporation must treat this
interest charge as "personal interest" which, as discussed above, is wholly
nondeductible. The balance of the gain or the excess distribution will be
treated as ordinary income in the year of the disposition or distribution, and
no interest charge will be incurred with respect to such balance.
If the Company is a PFIC for any taxable year during which a Non-Electing U.S.
Holder holds Company common shares, then the Company will continue to be treated
as a PFIC with respect to such Company common shares, even if it is no longer
definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC
status by electing to recognize gain (which will be taxed under the rules
discussed above for Non-Electing U.S. Holders) as if such Company common shares
had been sold on the last day of the last taxable year for which it was a PFIC.
Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S.
Holders who hold, actually or constructively, marketable stock (as specifically
defined in the Treasury Regulations) of a foreign corporation that qualifies as
a PFIC may annually elect to mark such stock to the market (a "mark-to-market
election"). If such an election is made, such U.S. Holder will generally not be
subject to the special taxation rules of Section 1291 discussed above. However,
if the mark-to-market election is made by a Non-Electing U.S. Holder after the
beginning of the holding period for the PFIC stock, then the Section 1291 rules
will apply to certain dispositions of, distributions on and other amounts
taxable with respect to the Company common shares. A U.S. Holder who makes the
mark-to market election will include in income for the taxable year for which
the election was made an amount equal to the excess, if any, of the fair market
value of the common shares of the Company as of the close of such tax year over
such U.S. Holder's adjusted basis in such common shares. In addition, the U.S.
Holder is allowed a deduction for the lesser of (i) the excess, if any, of such
U.S. Holder's adjusted tax basis in the common shares over the fair market value
of such shares as of the close of the tax year, or (ii) the excess, if any, of
(A) the mark-to-market gains for the common shares in the Company included by
such U.S. Holder for prior tax years, including any amount which would have been
included for any prior tax year but for the Section 1291 interest on tax
deferral rules discussed above with respect to Non-Electing U.S. Holders, over
(B) the mark-to-market losses for shares that were allowed as deductions for
prior tax years. A U.S. Holder's adjusted tax basis in the common shares of the
Company will be adjusted to reflect the amount
Page 70
included in or deducted from income as a result of a mark-to-market election. A
mark-to-market election applies to the taxable year in which the election is
made and to each subsequent taxable year, unless the Company common shares cease
to be marketable, as specifically defined, or the IRS consents to revocation of
the election. Because the IRS has not established procedures for making a
mark-to-market election, U.S. Holders are encouraged to consult their tax
adviser regarding the manner of making such an election.
Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury
Regulations that, subject to certain exceptions, would treat as taxable certain
transfers of PFIC stock by Non-Electing U.S. Holders that are generally not
otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations,
and transfers at death. Generally, in such cases the basis of the Company common
shares in the hands of the transferee and the basis of any property received in
the exchange for those common shares would be increased by the amount of gain
recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder
would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges
pursuant to corporate reorganizations, and transfers at death. The transferee's
basis in this case will depend on the manner of the transfer. The specific tax
effect to the U.S. Holder and the transferee may vary based on the manner in
which the common shares are transferred. Each U.S. Holder of the Company is
urged to consult a tax adviser with respect to how the PFIC rules affect their
tax situation.
Certain special, generally adverse, rules will apply with respect to Company
common shares while the Company is a PFIC whether or not it is treated as a QEF.
For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC
stock as security for a loan (including a margin loan) will, except as may be
provided in regulations, be treated as having made a taxable disposition of such
shares.
CONTROLLED FOREIGN CORPORATION STATUS
If more than 50% of the total combined voting power of all classes of shares
entitled to vote or the total value of the shares of the Company is owned,
actually or constructively, by citizens or residents of the United States,
United States domestic partnerships or corporations, or estates or trusts other
than foreign estates or trusts (as defined by the Code Section 7701(a)(31)),
each of which own, actually or constructively, 10% or more of the total combined
voting power of all classes of shares entitled to vote of the Company ("United
States Shareholder"), the Company could be treated as a controlled foreign
corporation ("CFC") under Subpart F of the Code. This classification would
effect many complex results, one of which is the inclusion of certain income of
a CFC which is subject to current U.S. tax. The United States generally taxes
United States Shareholders of a CFC currently on their pro rata shares of the
Subpart F income of the CFC. Such United States Shareholders are generally
treated as having received a current distribution out of the CFC's Subpart F
income and are also subject to current U.S. tax on their pro rata shares of the
CFC's earnings invested in U.S. property. The foreign tax credit described above
may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the
Code, gain from the sale or exchange of shares by a U.S. Holder of common shares
of the Company which is or was a United States Shareholder at any time during
the five-year period ending with the sale or exchange is treated as ordinary
income to the extent of earnings and profits of the Company attributable to the
shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the
foreign corporation generally will not be treated as a PFIC with respect to
United States Shareholders of the CFC. This rule generally will be effective for
taxable years of United States Shareholders beginning after 1997 and for taxable
years of foreign corporations ending with or within such taxable years of United
States Shareholders. Special rules apply to United States Shareholders who are
subject to the special taxation rules under Section 1291 discussed above with
respect to a PFIC. Because of the complexity of Subpart F, a more detailed
review of these rules is outside of the scope of this discussion. The Company
does not believe
Page 71
that it currently qualifies as a CFC. The Company may, however, be considered a
CFC for the current or any future taxable year.
FILING OF INFORMATION RETURNS
Under a number of circumstances, a U.S. Holder acquiring shares of the Company
may be required to file an information return with the Internal Revenue Service
Center where they are required to file their tax returns, with a duplicate copy
to the Internal Revenue Center, Philadelphia, PA 19255. In particular, any U.S.
Holder who becomes the owner, directly or indirectly, of 10% or more of the
shares of the Company will be required to file such a return. Other filing
requirements may apply, and management urges U.S. Holders to consult their own
tax advisers about these requirements.
ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR
OWN TAX ADVISERS WITH RESPECT TO THE SPECIFIC TAX
CONSEQUENCES OF PURCHASING THE COMMON SHARES OF THE COMPANY.
F. DIVIDENDS AND PAYING AGENTS
Not Applicable.
G. STATEMENT OF EXPERTS
Not Applicable.
H. DOCUMENTS ON DISPLAY
The Company has filed with the Securities and Exchange Commission this annual
report on Form 20-F, including exhibits, under the Securities and Exchange Act
of 1934 with respect to its class of common shares.
You may read and copy all or any portion of this annual report on Form 20-F or
other information in the Company's files in the Commission's public reference
room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. You can request copies of these documents upon payment of a duplicating
fee, by writing to the Commission. Please call the Commission at 1-800-SEC-0330
for further information on the operation of the public reference rooms. The SEC
maintains a web site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding companies that file
electronically with the SEC.
The documents concerning the Company that are referred to in this annual report
may be viewed on the SEC's web site and may also be viewed at the office of the
Company at 711-675 West Hastings Street, Vancouver, British Columbia, Canada,
V6B 1N2, during normal business hours.
I. SUBSIDIARY INFORMATION
Not Applicable
Page 72
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company was incorporated under the laws of British Columbia, Canada and its
financial results are quantified in Canadian dollars. The Company raises equity
funding through the sale of securities denominated in Canadian dollars. The
Company does not use financial instruments for trading purposes and is not party
to any leverage derivatives. The Company does not currently engage in hedging
transactions.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not Applicable.
Page 73
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not Applicable
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
Not Applicable
ITEM 15. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the participation of
the Company's management, including Richard W. Hughes, the Company's President
and Chief Executive Officer and Alan D. Campbell, the Company's Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Rules 13a-15(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") as of October 31, 2006. Based upon
that evaluation, Messrs. Hughes and Campbell concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
There was no change in the Company's internal control over financial reporting
that occurred during the fiscal year ended October 31, 2006 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting. Nor were there any deficiencies or material weaknesses
in the Company's internal controls requiring corrective actions.
ITEM 16.
Not Applicable
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Company has determined that the Company has at
least one audit committee financial expert, Alan D. Campbell, the Company's
Chief Financial Officer, who serves on the Company's audit committee. Mr.
Campbell is not considered to be an "independent director" as that term is
defined in Rule 4200(a)(15) of the National Association of Securities Dealers.
ITEM 16B. CODE OF ETHICS
The Company has not yet adopted a code of ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer, or controller, or persons performing similar functions. Given the
Company's current operations, management does not believe a code of ethics is
necessary at this stage of the Company's development.
Page 74
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
For the fiscal year ended October 31, 2006, the Company's principal accountant
billed $37,000 for the audit of the Company's annual financial statements and
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for fiscal 2006. For the fiscal
year ended October 31, 2005, the Company's principal accountant billed $28,450
for the audit of the Company's annual financial statements or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for fiscal 2005.
AUDIT-RELATED FEES
For the fiscal year ended October 31, 2006, the Company's principal accountant
billed $Nil for assurance and related services that were reasonably related to
the performance of the audit or review of the Company's financial statements
outside of those fees disclosed above under "Audit Fees". For the fiscal year
ended October 31, 2005, the Company's principal accountant billed $Nil for
assurance and related services that were reasonably related to the performance
of the audit or review of the Company's financial statements outside of those
fees disclosed above under "Audit Fees".
TAX FEES
For the fiscal years ended October 31, 2006 and 2005, the Company's principal
accountant billed $Nil and $Nil, respectively, for tax compliance, tax advice,
and tax planning services.
ALL OTHER FEES
For the fiscal years ended October 31, 2006 and 2005, the Company's principal
accountant billed $6,800 and $Nil, respectively, for products and services other
than those set forth above.
PRE-APPROVAL POLICIES AND PROCEDURES
Prior to engaging the Company's accountants to perform a particular service, the
Company's audit committee obtains an estimate for the service to be performed.
The Company's audit committee reviews and pre-approves all audit and
audit-related services and the fees and other compensation related thereto, and
any non-audit services provided by the Company's external auditors. Provided the
pre-approval of the non-audit services is presented to the audit committee's
first scheduled meeting following such approval such authority may be delegated
by the audit committee to one or more independent members of the audit
committee. The audit committee in accordance with procedures for the Company
approved all of the services described above.
At no time since the commencement of the Company's most recently completed
financial year has the Company relied on the waiver in paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X.
Page 75
PRINCIPAL ACCOUNTANT SERVICES
To the best of the Company's knowledge, the percentage of hours expended on the
Company's principal accountant's engagement to audit the Company's financial
statements for the fiscal year ended October 31, 2006, that were attributed to
work performed by persons other than the principal accountant's full-time
permanent employees was less than fifty percent (50%).
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not Applicable
Page 76
PART III
ITEM 17. FINANCIAL STATEMENTS
The audited financial statements of the Company and exhibits listed below are
filed with this Annual Report on Form 20-F in the United States. This Annual
Report is also filed in Canada as an Annual Information Form and the Canadian
filing does not include the audited financial statements listed below. Canadian
investors should refer to the audited financial statements of the Company at
October 31, 2006 as filed with the Canadian Securities Regulators.
The Company's audited financial statements for the fiscal years ended October
31, 2006, 2005 and 2004 are attached hereto immediately following the text of
this Annual Report. They include:
o Auditor's Report (Predecessor Auditor) dated January 5, 2005
o Auditor's Report (Report of independent registered public
accounting firm) dated February 20, 2007
o Balance Sheets
o Statements of Operations and Deficit
o Statements of Cash Flows
o Notes to the Financial Statements
o Schedules of Mineral Property Expenditures
The audited financial statements are prepared in accordance with generally
accepted accounting principles in Canada and are reconciled to United States
generally accepted accounting principles in Note 11. All figures are expressed
in Canadian dollars.
ITEM 18. FINANCIAL STATEMENTS
See Item 17 - Financial Statements.
ITEM 19. EXHIBITS
The documents listed in the Exhibit Index at the end of this annual report have
been filed as exhibits to this annual report. The list of documents in the
Exhibit Index is incorporated in this item by reference.
Page 77
SIGNATURES
The Company hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this Annual Report on its behalf.
Date: April 20, 2007 Amador Gold Corp.
/s/ Richard W. Hughes
--------------------------------
Richard W. Hughes, President and
Chief Executive Officer
AMADOR GOLD CORP.
CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN CANADIAN DOLLARS)
OCTOBER 31, 2006 AND 2005
AUDITORS' REPORT
To the Shareholders of
AMADOR GOLD CORP.
We have audited the consolidated balance sheets of Amador Gold Corp. as at
October 31, 2006 and 2005, and the consolidated statements of operations and
deficit, and cash flows for each of the years in the two-year period ended
October 31, 2006. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at October 31, 2006
and 2005, and the results of its operations and its cash flows for each of the
years in the two-year period ended October 31, 2006 in accordance with Canadian
generally accepted accounting principles.
The consolidated statements of operations and deficit, and cash flows for the
year ended October 31, 2004 were audited by other auditors who expressed an
opinion without reservation on those statements in their report dated January 5,
2005.
Vancouver, Canada /s/ Morgan & Company
---------------------------
February 20, 2007 Chartered Accountants
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE
The reporting standards of the Public Company Accounting Oversight Board (United
States) for auditors require the addition of an explanatory paragraph (following
the opinion paragraph) when the financial statements are affected by conditions
and events that cast substantial doubt on the Company's ability to continue as a
going concern, such as those described in Note 1 to the consolidated financial
statements. Our report to the shareholders, dated February 20, 2007, is
expressed in accordance with Canadian reporting standards, which do not permit a
reference to such events and conditions in the Auditors' Report when these are
adequately disclosed in the consolidated financial statements.
Vancouver, Canada /s/ Morgan & Company
---------------------------
February 20, 2007 Chartered Accountants
2
STALEY, OKADA & PARTNERS Suite 400 - 889 West Pender Street
CHARTERED ACCOUNTANTS Vancouver, BC Canada V6C 3B2
TEL 604 694-6070
FAX 604 585-3800
info@staleyokada.com
www.staleyokada.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE DIRECTORS AND SHAREHOLDERS OF AMADOR GOLD CORP.:
We have audited the accompanying balance sheets of Amador Gold Corp. (AN
EXPLORATION STAGE COMPANY) as at October 31, 2004 and 2003 and the related
statements of operations, and cash flows for the years then ended October 31,
2004, 2003 and 2002. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audit provides a
reasonable basis of our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of October 31,
2004 and 2003, and the results of its operations and its cash flows for the
years ended October 31, 2004, 2003 and 2002, in conformity with Canadian
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As at October 31, 2004, the company
has an accumulated deficit off $3,931,824. As discussed in Note 1 to the
financial statements, additional capital will be necessary to fund the company's
long-term operations. These conditions, among others, raise substantial doubt
about the company's ability to continue as a going concern. Management's plans
regarding these matters are also described in Note 1. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/S/ STALEY, OKADA & PARTNERS
-------------------------------
Vancouver, B.C. STALEY, OKADA & PARTNERS
January 5, 2005 CHARTERED ACCOUNTANTS
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANT
We have reviewed the Form 20-F filed by Amador Gold Corp. (the "Company") with
the Securities and Exchange Commission. We consent to the use of our audit
report dated January 5, 2005, included therein and to the reference to our firm
in this registration statement on Form 20-F.
/S/ STALEY, OKADA & PARTNERS
- ----------------------------
STALEY, OKADA & PARTNERS
CHARTERED ACCOUNTANTS
Vancouver, BC
April 3, 2007
3
- --------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006 2005
- --------------------------------------------------------------------------------
ASSETS
CURRENT
Cash and cash equivalents .................. $ 540,099 $ 189,341
Goods and services tax recoverable ......... 30,055 16,038
Prepaid expenses ........................... 2,318 483
------------ ------------
572,472 205,862
MINERAL PROPERTIES (note 3) .................... 2,083,357 3,526,941
EXPLORATION ADVANCES (note 4) .................. 3,385 --
EQUIPMENT ...................................... 760 1,086
------------ ------------
$ 2,659,974 $ 3,733,889
============ ============
LIABILITIES
CURRENT
Accounts payable and accrued liabilities ... $ 62,204 $ 48,981
Due to related parties (note 5) ............ 46,677 4,280
------------ ------------
108,881 53,261
------------ ------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (note 6) ......................... 10,480,845 7,866,229
CONTRIBUTED SURPLUS (note 6) ................... 539,250 253,000
SHARE SUBSCRIPTIONS RECEIVABLE ................. -- (167,000)
DEFICIT ........................................ (8,469,002) (4,271,601)
------------ ------------
2,551,093 3,680,628
------------ ------------
$ 2,659,974 $ 3,733,889
============ ============
Going concern (note 1)
Commitments (note 7)
APPROVED BY THE DIRECTORS:
/S/ ALAN D. CAMPBELL Director /S/ LYNN W. EVOY Director
- -------------------------- ----------------------------
- See Accompanying Notes -
4
- ------------------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
- ------------------------------------------------------------------------------------------
FOR THE YEARS ENDED OCTOBER 31, 2006 2005 2004
- ------------------------------------------------------------------------------------------
ADMINISTRATIVE EXPENSES
Bank charges .......................... $ 761 $ 1,608 $ 832
Consulting fees ....................... 290,461 107,551 46,519
Amortization .......................... 326 466 274
Interest on debt ...................... -- -- 49,779
Investor relations and promotion ...... 30,103 17,370 132,154
Legal and accounting .................. 79,028 49,033 79,570
Management fees ....................... 395,760 137,000 27,000
Office administration and miscellaneous 12,790 11,799 15,108
Part XII.6 tax ........................ 9,056 -- 3,800
Regulatory fees ....................... 36,000 28,982 34,808
Transfer agent fees ................... 19,029 8,587 10,116
Stock based compensation .............. 286,000 79,000 144,000
Less: interest earned ................. (43) (619) (4,960)
------------ ------------ ------------
1,159,271 440,777 539,000
------------ ------------ ------------
LOSS BEFORE OTHER ITEMS AND INCOME TAXES .. (1,159,271) (440,777) (539,000)
OTHER ITEMS
(Write-off) recovery of mineral property
expenditures ......................... (3,261,819) -- 11,788
------------ ------------ ------------
LOSS BEFORE INCOME TAX .................... (4,421,090) (440,777) (527,212)
FUTURE INCOME TAX BENEFIT RECOGNIZED ON
ISSUANCE OF FLOW THROUGH SHARES .......... 223,689 101,000 --
------------ ------------ ------------
NET LOSS FOR THE YEAR ..................... (4,197,401) (339,777) (527,212)
DEFICIT, BEGINNING OF YEAR ................ (4,271,601) (3,931,824) (3,812,612)
FUTURE INCOME TAX BENEFIT RECOGNIZED ON
ISSUANCE OF FLOW THROUGH SHARES .......... -- -- 408,000
------------ ------------ ------------
DEFICIT, END OF YEAR ...................... $ (8,469,002) $ (4,271,601) $ (3,931,824)
============ ============ ============
LOSS PER SHARE - BASIC AND DILUTED ........ $ (0.08) $ (0.01) $ (0.04)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES ......... 50,996,691 26,010,641 14,545,967
============ ============ ============
- See Accompanying Notes -
5
- ---------------------------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ---------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED OCTOBER 31, 2006 2005 2004
- ---------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Net loss for the year ............................. $(4,197,401) $ (339,777) $ (527,212)
Add items not affecting cash:
Amortization ................................... 326 466 274
Future income tax benefit recognized on
issuance of flow through shares .............. (223,689) (101,000) --
Write-off of mineral property expenditures ..... 3,261,819 -- --
Stock based compensation ....................... 286,000 79,000 144,000
Change in non-cash operating working capital items:
Tax credits recoverable ........................ -- 12,909 (12,909)
Goods and services tax recoverable ............. (14,017) (9,450) (2,673)
Prepaid expenses ............................... (1,835) 5,117 (5,167)
Accounts payable, accrued liabilities and due
to related parties ........................... (21,165) (20,008) 48,395
----------- ----------- -----------
(909,962) (372,743) (355,292)
----------- ----------- -----------
FINANCING ACTIVITIES
Loans received ..................................... -- -- 187,500
Repayment of loans ................................. -- -- (100,000)
Due to related parties ............................. -- (6,408) 6,742
Issuance of share capital .......................... 2,843,875 1,568,501 1,750,000
Share issuance costs ............................... (84,520) (72,125) (132,750)
----------- ----------- -----------
2,759,355 1,489,968 1,711,492
----------- ----------- -----------
INVESTING ACTIVITIES
Purchase of equipment .............................. -- -- (1,826)
Exploration advances ............................... (3,385) -- --
Mineral properties acquisition ..................... (916,167) (589,108) (370,582)
Deferred exploration expenditures .................. (579,083) (361,793) (1,059,238)
----------- ----------- -----------
(1,498,635) (950,901) (1,431,646)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .. 350,758 166,324 (75,446)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR .......... 189,341 23,017 98,463
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR ................ $ 540,099 $ 189,341 $ 23,017
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid .................................... $ -- $ -- $ 26,250
Income taxes paid ................................ $ -- $ -- $ --
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES (Note 9)
- --------------------------------------------------------------------------------
- See Accompanying Notes -
6
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
1. NATURE OF OPERATIONS AND GOING CONCERN
Amador Gold Corp. (the "Company") is a public company in the natural
resource industry, and trades on the TSX Venture Exchange. At October
31, 2006, the Company has interests in properties in the Provinces of
Ontario, New Brunswick and British Columbia, Canada.
These consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles on a
going concern basis, which presume the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The Company's ability to continue as a going
concern is dependent upon achieving profitable operations and upon
obtaining additional financing. While the Company is expending its best
efforts in this regard, the outcome of these matters cannot be
predicted at this time. These consolidated financial statements do not
include any adjustments to the amounts and classification of assets and
liabilities that might be necessary should the Company be unable to
continue in business.
During the year, the Company incurred a loss of $4,197,401 (2005 -
$339,777; 2004 - $527,212) before income taxes and has an accumulated
deficit of $8,469,002 (2005 - $4,271,601; 2004 - $3,931,824). The
operations of the Company have primarily been funded by the issuance of
common shares. Continued operations of the Company are dependent on the
Company's ability to complete equity financing or generate profitable
operations in the future. Management's plan in this regard is to secure
additional funds through future equity financings, which may not be
available or may not be available on reasonable terms.
2. SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements are prepared in accordance with
Canadian generally accepted accounting principles.
a) BASIS OF CONSOLIDATION
These consolidated financial statements include the accounts
of the Company and its wholly owned subsidiary, Diamondcorp
Resources Inc., incorporated on August 2, 2006.
b) CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Company considers
cash and short-term investments to include amounts held in
banks and highly liquid investments with remaining maturities
at point of purchase of 90 days or less. The Company places
its cash and cash investments with institutions of high-credit
worthiness.
c) MINERAL PROPERTIES
Mineral properties consist of exploration and mining
concessions, options and contracts. Acquisition and leasehold
costs and exploration costs are deferred until such time as
the property is put into production or the properties are
disposed of either through sale or abandonment. If put into
production, the deferred costs will be amortized over the life
of the property, based on estimated economic reserves.
Proceeds received from the sale of any interest in a property
will first be credited against the carrying value of the
property, with any excess included in operations for the
period. If a property is abandoned, the property and deferred
exploration costs will be written off to operations.
7
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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2. SIGNIFICANT ACCOUNTING POLICIES (continued)
c) MINERAL PROPERTIES (continued)
Recorded costs of mineral properties and deferred exploration
and development expenditures are not intended to reflect
present or future values of resource properties.
Although the Company has taken steps to verify title to
mineral properties in which it has an interest, in accordance
with industry standards for the current stage of exploration
of such properties, these procedures do not guarantee the
Company's title. Property may be subject to unregistered prior
agreements and non-compliance with regulatory requirements.
d) EQUIPMENT AND AMORTIZATION
Equipment is recorded at cost. Amortization of computer
equipment is provided at a rate of 30% per annum on the
declining balance method.
e) ENVIRONMENTAL EXPENDITURES
The operations of the Company may in the future be affected
from time to time in varying degree by changes in
environmental regulations, including those for future removal
and site restoration costs. Both the likelihood of new
regulations and their overall effect upon the Company vary
greatly and are not predictable. The Company's policy is to
meet or, if possible, surpass standards set by relevant
legislation, by application of technically proven and
economically feasible measures.
Environmental expenditures that relate to ongoing
environmental and reclamation programs are charged against
earnings as incurred or capitalized and amortized depending on
their future economic benefits. Estimated future removal and
site restoration costs, when the ultimate liability is
reasonably determinable, are charged against earnings over the
estimated remaining life of the related business operation,
net of expected recoveries.
f) REPORTING CURRENCY AND FOREIGN CURRENCY TRANSLATION
The consolidated financial statements have been presented in
Canadian dollars, as the Company's principal operations and
cash flows are influenced primarily by the Canadian currency.
Monetary assets and liabilities are translated at year-end
exchange rates; other assets and liabilities are translated at
the rates prevailing at the date of transaction. Revenue and
expense items, except for amortization, are translated at the
average rate of exchange for the year. Amortization is
converted using rates prevailing at the date of acquisition of
the related asset.
g) SHARE CAPITAL
i) The proceeds from the exercise of stock options,
warrants and escrow shares are recorded as share
capital in the amount for which the option, warrant
or escrow share enabled the holder to acquire a share
in the Company.
ii) Costs directly attributable to the issue of the
Company's shares are a capital transaction and are
charged directly against share capital.
8
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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2. SIGNIFICANT ACCOUNTING POLICIES (continued)
h) STOCK BASED COMPENSATION
The Company applies Accounting Standard 3870 - "Stock Based
Compensation and Other Stock Based Payments" requirement of
the Canadian Institute of Chartered Accountants ("CICA").
Under this standard, compensation costs attributable to stock
options granted to employees, directors and consultants are
measured at fair value at the grant date, and expensed over
the expected exercise time frame with a corresponding increase
to contributed surplus. Upon exercise of the stock options,
consideration paid by the option holder, together with the
amount previously recognized in contributed surplus, is
recorded as an increase to share capital.
i) FLOW THROUGH SHARES
Resource expenditure deductions for income tax purposes
related to exploration and development activities funded by
flow-through share arrangements are renounced to investors in
accordance with Canadian income tax legislation. In 2004, the
Company adopted on a prospective basis for flow-through share
transactions initiated after March 19, 2004, CICA EIC-146
"Flow-through Shares", which requires a reduction in share
capital and the recognition of the related future income tax
liability, on the date the expenditures are renounced. The
future tax liability is concurrently extinguished on the
transfer of the resource expenditure income tax deductions to
the flow-through shareholders and the Company recognizes the
corresponding future income tax benefit in the consolidated
statement of operations for the year then ended.
In 2004 the future income tax benefits from the issue of
flow-through shares are reported as a direct reduction in the
deficit.
j) INCOME TAXES
Income taxes are calculated using the liability method of
accounting. Temporary differences arising from the difference
between the tax basis of an asset or liability and its
carrying amount on the balance sheet are used to calculate
future income tax liabilities or assets. The future income tax
liabilities or assets are measured using tax rates and laws
expected to apply in the periods that the temporary
differences are expected to reverse. Valuation allowances are
provided where (net) future income tax assets are not more
likely than not to be realized.
k) LOSS PER SHARE
Basic loss per share is computed by dividing income available
to common shareholders by the weighted average number of
common shares outstanding during the year. The computation of
diluted loss per share assumes the conversion, exercise or
contingent issuance of securities only when such conversion,
exercise or issuance would have a dilutive effect on loss per
share. The dilutive effect of convertible securities is
reflected in diluted loss per share by application of the "if
converted" method. The dilutive effect of outstanding options
and warrants and their equivalents is reflected in diluted
loss per share by application of the treasury stock method.
The assumed conversion of outstanding common share options and
warrants has an anti-dilutive impact.
9
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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2. SIGNIFICANT ACCOUNTING POLICIES (continued)
l) NON-MONETARY CONSIDERATION
In situations where share capital is issued, or received, as
non-monetary consideration and the fair value of the asset
received, or given up is not readily determinable, the fair
market value (as defined) of the shares is used to record the
transaction. The fair market value of the shares issued, or
received, is based on the trading price of those shares on the
appropriate Exchange on the date of the agreement to issue
shares as determined by the Board of Directors.
m) FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash
equivalents, accounts payable and accrued liabilities, and
amounts due to related parties. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from
the financial instruments. The fair value of these financial
instruments approximates their carrying value due to their
short-term maturity or capacity of prompt liquidation.
n) ESTIMATES
The preparation of consolidated financial statements in
conformity with Canadian generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities at the
date of the consolidated financial statements, and the
reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from those
reported.
o) ASSET RETIREMENT OBLIGATIONS
The Company follows the recommendations in CICA Handbook
Section 3110 - "Asset Retirement Obligations". Under Section
3110, legal obligations associated with the retirement of
tangible long-lived assets are recorded as liabilities. The
liabilities are calculated using the net present value of the
cash flows required to settle the obligation. A corresponding
amount is capitalized to the related asset. Asset retirement
costs are amortized to earnings in a manner consistent with
the depreciation or depletion of the underlying asset. The
liabilities are subject to accretion over time for increases
in the fair value of asset retirement obligations. Management
estimates may be subject to material adjustment as a result of
changes in regulations, or changes in the means and extent of
environmental remediation. Accretions and changes in estimates
are accounted for prospectively in the consolidated statement
of operations commencing in the period revisions are made.
As at October 31, 2006, the Company does not have asset
retirement obligations.
10
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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2. SIGNIFICANT ACCOUNTING POLICIES (continued)
p) IMPAIRMENT OF LONG-LIVED ASSETS
The Company follows the recommendations in CICA Handbook
Section 3063 - "Impairment of Long-Lived Assets". Section 3063
requires that the Company review for impairment of long-lived
assets, including mineral properties and related deferred
costs, development costs, and equipment, to be held and used,
annually, and whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be
recoverable. If such conditions exist, assets are considered
impaired if the sum of the undiscounted expected future cash
flows expected to result from the use and eventual disposition
of an asset is less than its carrying amount. An impairment
loss is measured at the amount by which the carrying amount of
the asset exceeds its fair value. When quoted market value
prices are not available, the Company uses the expected future
cash flows discounted at a rate commensurate with the risks
associated with the recovery of the asset as an estimate of
fair value.
q) VARIABLE INTEREST ENTITIES
The Canadian Institute of Chartered Accountants (CICA) issued
Accounting Guideline 15, "Consolidation of Variable Interest
Entities", to provide accounting guidance related to variable
interest entities ("VIE"). A VIE exists when the entity's
equity investment is at risk. When a VIE is determined to
exist, the guidance requires the VIE to be consolidated by the
primary beneficiary. The Company adopted the Guideline
effective November 1, 2005 and has determined that it does not
have a primary beneficiary interest in VIEs.
3. MINERAL PROPERTIES
a) KENORA PROPERTY GROUP, ONTARIO
i) KENORA
During fiscal 2003 the Company entered into a letter
of intent for the assignment of an option agreement
to acquire a 100% interest in 40 patented claims and
2 mineral claims 60 kilometres west of Kenora,
Ontario (the "KPM Property"). The agreement was
amended in August 2004. Consideration, as amended,
consisted of $35,000 to the assignor (paid), $225,000
before February 14, 2003 (paid), $250,000 on August
27, 2003 (paid), $250,000 on each of August 27, 2004
(paid), and 2005 (paid), $500,000 on each of August
27, 2006, 2007, 2008, and 2009. Finders fees to a
maximum of $300,000 was payable on this property of
which $103,282 had been incurred to date.
ii) GLASS CLAIMS
During fiscal 2004, the Company was granted an option
to earn a 100% interest in the Glass Claims covering
840 acres in Ontario. Consideration is the issuance
of 100,000 common shares (75,000 issued) and $93,000
cash ($33,000 paid) over a 4-year period. In
addition, the property is subject to a 1.25% net
smelter royalty in favour of the optionor, of which
the Company may purchase 0.5% of the royalty for
$500,000.
During the year ended October 31, 2006, the Company
abandoned and wrote off all costs incurred with
respect to the Kenora Property Group.
11
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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3. MINERAL PROPERTIES (continued)
b) RED LAKE PROPERTY GROUP, ONTARIO
i) TODD TOWNSHIP PROPERTY
During fiscal 2004, the Company was granted an option
to earn a 100% interest in the Todd Township
Property, 5 claim units, 200 acres, in the Red Lake
Mining Division, Ontario. Consideration is the
issuance of 100,000 common shares (75,000 issued) and
$69,000 cash ($21,000 paid) over a 4 year period. In
addition, the property is subject to a 2% net smelter
royalty in favour of the optionor, of which the
Company may purchase 1% of the royalty for $600,000.
ii) MASKOOTCH LAKE PROPERTY
During fiscal 2004, the Company was granted an option
to earn a 100% interest in the Maskootch Lake
Property, approximately 32 claim units, 1280 acres,
in the Red Lake Mining Division, Ontario.
Consideration is the issuance of 100,000 common
shares (75,000 issued) and $88,000 cash ($28,000
paid) over a 4 year period. In addition, the property
is subject to a 2% net smelter royalty in favour of
the optionor, of which the Company may purchase 1% of
the royalty for $1,000,000.
c) SILVERSTRIKE GROUP, ONTARIO
i) SILVER STRIKE PROPERTY
Option agreement to acquire a 100% interest in the
Silver Strike Property, Ontario. Consideration is
$50,000 ($20,000 paid), 150,000 common shares (60,000
issued) and $80,000 in exploration expenses over 4
years. The property is subject to a 2% net smelter
return royalty with a buy back of 1% for $1,000,000.
ii) SILVER CLAIM PROPERTY
Option agreement to acquire a 100% interest in the
Silver Claim Property, Ontario. Consideration is
$150,000 cash ($30,000 paid), 200,000 common shares
(100,000 issued) and $200,000 in exploration expenses
over 4 years. The property is subject to a 2% net
smelter return royalty with a buy back of 1% for
$1,000,000.
iii) CAPITOL SILVER PROPERTY
Option agreement to acquire a 100% interest in the
Capitol Silver Mine property, located approximately 4
km northeast of Gowganda, Ontario. Consideration is
$35,000 cash ($10,000 paid) and 350,000 shares
(100,000 issued) payable over 3 years. The Company
must incur an aggregate of $60,000 in exploration
expenses on the property over 3 years. The property
is subject to a 2% net smelter return of which half
may be purchased for $1,000,000.
12
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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3. MINERAL PROPERTIES (continued)
d) DONOVAN BASIN GROUP, ONTARIO
i) THOMPSON PROPERTY
Option agreement to acquire a 100% interest in the
Thompson Property, Ontario. Consideration is $30,000
($10,000 paid), 150,000 common shares (60,000 issued)
and $60,000 in exploration expenditures over 4 years.
The property is subject to a 2% net smelter return
royalty with a buy back of 1% for $1,000,000.
ii) KELL MINE PROPERTY
Option agreement to acquire a 100% interest in the
Kell Mine Property, Ontario. Consideration is $30,000
($10,000 paid), 150,000 common shares (60,000 issued)
and $60,000 in exploration expenses over 4 years. The
property is subject to a 2% net smelter return
royalty with a buy back of 1% for $1,000,000.
iii) HUDSON BAY PROPERTY
Option agreement to acquire a 100% interest in the
Hudson Bay Silver Mine Property, Ontario.
Consideration is $35,000 cash ($10,000 paid), 300,000
common shares (100,000 issued) and $60,000 in
exploration expenses over 3 years. The property is
subject to a 2% net smelter return royalty, half of
which can be purchased for $1,000,000.
e) AJAX GROUP, ONTARIO
i) AJAX PROPERTY
Purchase and sale agreement to acquire a 100%
interest in the Ajax Property, Ontario. Consideration
is $80,000 cash (paid) and 300,000 common shares
(300,000 issued). The property is subject to a 2% net
smelter return royalty with a buy back of 1% for
$1,000,000.
ii) BANTING CHAMBERS PROPERTY
Option agreement to acquire a 100% interest in the
Banting Chambers Property, Ontario. Consideration is
$22,500 cash ($12,500 paid), 150,000 shares (100,000
issued) over two years and $110,000 in exploration
expenditures over 3 years. A 2% royalty is payable on
the property, half of which can be purchased for
$500,000.
iii) STRATHY PROPERTY
During fiscal 2005, the Company acquired a 100%
interest in 3 claims in the Strathy Township property
located in Ontario. Consideration was $20,000 cash
(paid). The property is subject to a 1% net smelter
return royalty, which may be purchased for $250,000
at any time.
iv) BOMPAS PROPERTY
During fiscal 2006, the Company acquired a 100%
interest in 2 claims in the Bompas property.
Consideration was $10,000 cash (paid). The property
is subject to a 2% net smelter return royalty, half
of which can be purchased for $250,000.
13
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
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3. MINERAL PROPERTIES (continued)
f) MAGNUM PROPERTY, QUEBEC
Assignment agreement to acquire a 100% interest in the Magnum
Property, Quebec. Consideration is $50,000 (paid) and 300,000
common shares (issued). The underlying agreement requires
exploration expenditures of $25,000 by June 12, 2005
(incurred) and an additional $225,000 by October 25, 2007. The
property is subject to a 2% net smelter return royalty, half
of which can be purchased for $1,000,000. During the year
ended October 31, 2006, the Company abandoned and wrote off
all costs incurred with respect to this property.
g) TETAGOUCHE PROPERTY, NEW BRUNSWICK
Option agreement to acquire a 100% interest in the Tetagouche
Property, New Brunswick. Consideration is $40,000 cash
($20,000 paid) and 150,000 common shares (60,000 issued) over
3 years. The property is subject to a 2% net smelter return
royalty with a buy back of 1% for $750,000.
h) MENNIN LAKE PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Mennin Lake
Property, Ontario. Consideration is $142,000 ($37,000 paid),
300,000 common shares (100,000 issued) and $160,000 in
exploration expenses over 4 years. The property is subject to
a 2% net smelter return royalty, half of which may be
purchased for $2,000,000. Commencing on the fifth anniversary
of the agreement, advanced royalty payments of $15,000 are
payable each year.
i) FRIPP PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Fripp
Property, Ontario. Consideration is $5,000 cash (paid),
100,000 common shares (50,000 issued) payable over 4 years and
$20,000 in exploration by December 31, 2005. There is a 1% net
smelter return of which half may be purchased for $500,000.
j) CONNOR CREEK PROPERTY, BRITISH COLUMBIA
Option agreement to acquire a 50% interest in the Connor Creek
Property, located in Nelson Mining Division, British Columbia.
Consideration is 400,000 common shares (200,000 issued) and
exploration expenditures of $1,000,000 over a 4 year period.
If commercial production is reached, an additional 250,000
shares are due to the vendor. During fiscal 2005, $12,500 was
paid to the optionor in respect of trenching costs previously
incurred.
k) HUNTER GOLD PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Hunter Gold
Property, located in Catharine Township, Ontario.
Consideration for the property consists of $45,000 cash
($10,000 paid), 250,000 common shares (75,000 issued) and a
work commitment of $75,000 over a 3 year period. There is a 2%
net smelter return payable to the optionor of which half may
be purchased for $500,000 and an additional 0.5% may be
purchased for an additional $500,000. There is an underlying
royalty on portions of the property ranging from 2 to 4%.
14
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
- --------------------------------------------------------------------------------
3. MINERAL PROPERTIES (continued)
l) CHAPLEAU PROPERTY, ONTARIO
Acquisition agreement with a public company related by common
directors to acquire a 50% working interest in 47,278 acres of
prospective kimberlite ground in the Chapleau area of Ontario.
The Company agreed to pay for staking or leasing costs
estimated to be approximately $150,000 plus 15% for
administration. Upon payment of the acquisition cost, an
agreement was formed to perform further exploration work on a
pro rata basis plus a 15% administration fee .
m) WILLET PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Willet
Property, located in Willet Township, Ontario. Consideration
is $30,000 cash ($5,000 paid), 200,000 common shares (50,000
issued) and a work commitment of $75,000 over a 3 year period.
There is a 2% net smelter return payable to the optionor, of
which half may be purchased for $1,000,000.
n) SAVARD & SHARPE PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Savard &
Sharpe Property, located in Savard & Sharpe Township, Ontario.
Consideration is $175,000 cash over 3 years ($10,000 paid).
There is a 2% net smelter return payable to the optionor, of
which half may be purchased for $500,000.
o) HORWOOD GROUP, ONTARIO
i) HORWOOD GOLD PROPERTY
Option agreement to acquire a 100% interest in the
Horwood Gold Property, located in Horwood Township,
Ontario. Consideration is $50,000 cash ($15,000 paid)
and 300,000 common shares (100,000 issued) over a 2
year period. There is a 3% net smelter return payable
to the optionor, of which two-thirds may be purchased
for $1,000,000.
ii) HORWOOD GOLD 2 PROPERTY
Agreement to acquire a 100% interest in the Horwood
Gold 2 Property, located in Horwood Township,
Ontario. Consideration is $6,000 (paid). There is a
2% net smelter return payable to the optionor, of
which half may be purchased for $500,000.
iii) LABBE PROPERTY
Option agreement to acquire a 100% interest in the
Labbe Property, located in Horwood Township, Ontario.
Consideration is $30,000 cash ($5,000 paid) and
200,000 common shares (50,000 issued) over a 2 year
period. There is a 3% net smelter return payable to
the optionor, of which two-thirds may be purchased
for $1,000,000.
15
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
- --------------------------------------------------------------------------------
3. MINERAL PROPERTIES (continued)
o) HORWOOD GROUP, ONTARIO (continued)
iv) ROSS WINDSOR PROPERTY
Option agreement to acquire a 100% interest in the
Ross Windsor Property, located in Horwood Township,
Ontario. Consideration is $35,000 cash ($5,000 paid)
and 175,000 common shares (25,000 issued) over a 3
year period. There is a 3% net smelter return payable
to the optionor, of which two-thirds may be purchased
for $1,000,000.
p) EAST BRECCIA PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the East
Breccia Property, located approximately 65 km north of Saulte
Ste. Marie in Nicolet Township, Ontario. Consideration is
$142,000 cash ($12,000 paid), 300,000 shares (50,000 issued),
and a work commitment of $160,000 over four years. There is a
2% net smelter return payable to the optionor, which may be
purchased for $2,000,000. Commencing on the fifth anniversary
of the agreement, advanced royalty payments of $15,000 are
payable each year.
q) GOULD COPPER MINE PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Gould
Copper Mine Property, located in the Gould Township, Ontario.
Consideration for the Property consists of $50,000 cash
($12,000 paid), 140,000 shares (25,000 issued), and a work
commitment of $100,000 over 4 years. There is a 2% net smelter
return payable to the optionor of which half may be purchased
for $750,000.
r) KEITH & SEWELL GROUP, ONTARIO
Option agreement to acquire a 100% interest in the Keith and
Sewell Property, located in Keith and Sewell Townships,
Ontario. Consideration for the Property consists of $90,000
cash payable over 2 years ($21,000 paid), 370,000 shares over
4 years (110,000 issued), and a work commitment of $90,000
over 3 years. There is a 3% net smelter return payable to the
optionor of which two-thirds may be purchased for $1,500,000.
s) ANDERSON LAKE, ONTARIO
Option agreement to acquire a 100% interest in the Anderson
Lake Property, located in the McTavish Township, Ontario.
Consideration for the Property consists of $142,000 cash
($12,000 paid), 300,000 shares (50,000 issued), and a work
commitment of $160,000 over 4 years. There is a 3% net smelter
return payable to the optionor, of which two-thirds may be
purchased for $1,500,000. Commencing on the fifth anniversary
of the agreement, advanced royalty payments of $15,000 are
payable each year.
t) PATENT PROPERTY, ONTARIO
Option agreement to acquire a 100% interest in the Patent
Property, located in Sewell and Reeves Townships, Ontario.
Consideration for the Property consists of $70,000 cash
($15,000 paid), 250,000 shares (50,000 issued), and a work
commitment of $130,000 over 3 years. There is a 3% net smelter
return payable to the optionor, of which two-thirds may be
purchased for $1,500,000.
16
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AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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OCTOBER 31, 2006
- --------------------------------------------------------------------------------
3. MINERAL PROPERTIES (continued)
u) HOLLOWAY/FRECHEVILLE PROPERTY GROUP, ONTARIO
i) Option agreement to acquire a 100% interest in the
Holloway Property, located in Holloway and
Frecheville Townships, Ontario. Consideration for the
Property consists of $250,000 cash ($25,000 paid) and
500,000 shares over 4 years (100,000 issued). There
is a 3% net smelter return payable to the optionor,
of which one-third may be purchased for $1,000,000
and at any time an additional one-third for
$2,000,000.
Commencing 66 months after the date of the agreement,
advanced royalty payments of $12,500 are payable
every 6 months thereafter, until commercial
production commences on the property. A further
100,000 shares will be issued after the completion of
a positive feasibility study.
ii) Option agreement to acquire a 100% interest in the
Holloway 2 Property, located in the Holloway
Townships, Ontario. Consideration for the Property
consists of $20,000 payable within 10 days of
regulatory approval ($20,000 paid) and 200,000 shares
payable over 12 months (100,000 issued). There is a
2% net smelter return payable to the optionor.
During the year ended October 31, 2006, the Company
abandoned and wrote off all costs incurred with
respect to the Holloway Property Group.
v) MORIN, ONTARIO
Option agreement to acquire a 100% interest in the Morin
Property, located in the Keith Township, Ontario.
Consideration for the Property consists of $110,000 cash
($10,000 paid) and 220,000 shares over 3 years (20,000
issued). There is a 3% net smelter return payable to the
optionor, of which half may be purchased for $1,000,000.
w) LOVELAND PROPERTY GROUP, ONTARIO
i) Option agreement to acquire a 100% interest in the
Loveland 1 Property, located in the Byers and
Loveland Townships, Ontario. Consideration for the
Property consists of $300,000 cash over 5 years
($25,000 paid), 600,000 shares (100,000 issued), and
a work commitment of $150,000 over 5 years. There is
a 3% net smelter return payable to the optionor, of
which one-third may be purchased for $1,000,000 and
an additional one-third may be purchased for
$1,000,000.
Commencing 66 months after the date of the agreement,
advanced royalty payments of $12,500 are payable
every 6 months thereafter, until commercial
production commences on the property. A further
100,000 shares will be issued after the completion of
a positive feasibility study.
ii) Option agreement to acquire a 100% interest in the
Loveland 2 Property, located in the Byers, Thorburn
and Loveland Townships, Ontario. Consideration for
the Property consists of $300,000 payable over 5
years ($25,000 paid), 600,000 shares payable over 5
years (100,000 issued), and a work commitment of
$150,000 over 5 years. There is a 3% net smelter
return payable to the optionor of which one-third may
be purchased for $1,000,000 and an additional
one-third may be purchased for $1,000,000.
17
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
3. MINERAL PROPERTIES (continued)
w) LOVELAND PROPERTY GROUP, ONTARIO (continued)
Commencing 66 months after the date of the agreement, advanced
royalty payments of $12,500 are payable every 6 months
thereafter, until commercial production commences on the
property. A further 100,000 shares will be issued after the
completion of a positive feasibility study.
x) CHEWETT PROPERTY, ONTARIO
The Company acquired a 100% interest in 6 claims in the
Chewett Township property located in Ontario for consideration
of $15,000 cash (paid). The property is subject to a 2% net
smelter return royalty, of which half may be purchased for
$750,000.
y) BLACKSTOCK PROPERTY, ONTARIO AND OKE & FORD PROPERTY, ONTARIO
The Blackstock property and the Oke & Ford property were
acquired by staking. There were no underlying agreements. The
staking was done based on management's interpretation of
geological structures found on the properties from government
files.
z) FORGE LAKE PROPERTY, ONTARIO AND OTTER POND PROPERTY, ONTARIO
i) Agreement with a public company related by common
directors to acquire a 50% interest in the Forge Lake
property. Consideration is $58,500 payable over three
years, 40,000 shares of the related company to be
reimbursed in cash by the Company, payable after
three years, and a payment of $100,000 and the
issuance of 100,000 shares at the earlier of 90 days
of sustained commercial production and six years from
the date of the agreement. In addition, there is a
royalty payable. Costs comprising annual cash
payments, paying of taxes and minimum work
expenditures will be split 50/50 and the Company will
pay a 15% administration fee to the related company.
ii) Agreement with a public company related by common
directors to acquire a 47% interest in the Otter Lake
property. Consideration is $158,500 payable over four
years, 75,000 shares of the related company at the
fair market value of the shares as at the time of
issuance to be reimbursed by the Company over three
years, a payment of $100,000 and the issuance of
100,000 shares at the earlier of 90 days of sustained
commercial production and six years from the date of
the agreement. The Company is responsible for 47% of
the costs incurred on this property.
4. EXPLORATION ADVANCES
The Company advanced $3,385 to a company for exploration expenditures
at October 31, 2006 (2005 - $Nil). These advances were subsequently
incurred for expenditures on the Tetagouche property.
18
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
5. RELATED PARTY TRANSACTIONS
Related party transactions are in the normal course of operations and
are measured at the exchange amount, which is the amount established
and agreed to by the related parties. The amount due to related parties
is unsecured, non-interest bearing and have no specific terms of
repayment.
a) During the year, the Company recorded management fees of
$395,760 (2005 - $137,000; 2004 - $27,000) to companies
controlled by a director and former director of the Company.
b) During the year, fees for consulting services in the amount of
$236,040 (2005 - $110,155; 2004 - $32,164) were paid to
directors and officers of the Company and to companies
controlled by directors and officers of the Company. At
October 31, 2006, $4,240 (2005 - $4,280) was owed to one of
the related parties.
c) During the year, the Company acquired interests in the
Chapleau (50%), Forge Lake (50%), and Otter Pond (47%) mineral
properties from a company with common directors. The Company
incurred and deferred $282,834 (2005 - $Nil; 2004 - $Nil) for
acquisition and exploration expenses and management fees of
$42,504 (2005 - $Nil; 2004 - $Nil) charged by the related
company on these properties. At October 31, 2006, $42,437
(2005 - $Nil) was owed to the related company.
6. SHARE CAPITAL
a) AUTHORIZED - Unlimited number of common shares without par
value.
b) ISSUED
NUMBER OF SHARE
SHARES AMOUNT
- -------------------------------------------------- ------------ ------------
Balance, October 31, 2004 21,997,915 $ 6,203,328
Issued for:
Property acquisitions ......................... 1,095,000 103,525
Issued for cash:
Private placements ............................ 16,325,000 1,732,500
Share issuance costs ............................. -- (72,124)
Income tax benefits renounced on
flow-through shares ........................... -- (101,000)
- -------------------------------------------------- ------------ ------------
Balance, October 31, 2005 ........................ 39,417,915 $ 7,866,229
Issued for:
Property acquisitions ......................... 1,675,000 246,200
Issued for cash:
Private placements ............................ 19,117,833 2,585,175
Exercise of warrants .......................... 815,000 91,700
Share issuance costs ............................. -- (84,520)
Income tax benefits renounced on
flow-through shares ........................... -- (223,689)
Cancellation of escrow shares (25,000) (250)
- -------------------------------------------------- ------------ ------------
BALANCE, OCTOBER 31, 2006 ........................ 61,000,748 $ 10,480,845
- -------------------------------------------------- ------------ ------------
19
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
c) PRIVATE PLACEMENTS
i) During fiscal 2005, the Company issued 500,000 units
for cash of $0.40 per unit, each unit comprised of
two flow-through common shares, one non-flow-through
common share, and three non-transferable warrants,
each warrant to purchase one common share at an
exercise price of $0.14 per share, exercisable until
December 8, 2006.
ii) During fiscal 2005, the Company issued 1,000,000
units for cash of $0.15 per unit, each unit comprised
of one flow-through common share and one-half of a
non-transferable warrant, each full warrant to
purchase one non-flow-through common share at an
exercise price of $0.20 per share, exercisable for a
period of 12 months. The Company paid an advisory fee
of $12,000 and issued 100,000 warrants. Each broker
warrant entitles the holder thereof to purchase one
common share at a price of $0.15 until December 30,
2005. The fair value of the broker warrants has been
estimated using the Black-Scholes option pricing
model. The assumptions used for the valuation of the
respective warrants were: dividend yield 0%, expected
volatility 72%, a risk-free interest rate of 3.06%
and an expected life of one year. The value assigned
to the 100,000 broker warrants was $3,000.
iii) During fiscal 2005, the Company issued 1,000,000
units for cash of $0.10 per unit, each unit comprised
of one common share and one non-transferable warrant,
each warrant to purchase one common share at an
exercise price of $0.10 per share, until March 23,
2007. The Company paid a finders fee of $8,550, and
other share issue costs of $1,075.
iv) During fiscal 2005, the Company issued 750,000 units
for cash of $0.10 per unit, each unit comprised of
one common share and one non-transferable warrant,
each warrant to purchase one common share at an
exercise price of $0.10 per share, until June 3,
2007.
v) During fiscal 2005, the Company issued 3,960,000
flow-through units and 8,115,000 non-flow-through
units for cash of $0.10 per unit, each unit comprised
of one common share and one non-transferable share
purchase warrant, each warrant to purchase one
non-flow-through common share at an exercise price of
$0.10 per share, until October 7, 2007. Subscriptions
receivable as at October 31, 2005 of $167,000 were
received in February 2006.
vi) On January 18, 2006, the Company closed a private
placement consisting of 5,650,000 units (of which
2,500,000 are flow-through units and 3,150,000 are
non-flow-through units) for cash of $0.10 per unit.
Each unit is comprised of one common share and one
non-transferable share purchase warrant. Each warrant
entitles the holder to purchase one common share at
an exercise price of $0.10 per share, until January
17, 2008.
vii) On May 18, 2006, the Company closed a private
placement consisting of 13,467,833 units (of which
11,911,833 are flow-through units and 1,556,000 are
non-flow-through units) for cash of $0.15 per unit.
Each unit is comprised of one common share and one
non-transferable share purchase warrant. Each warrant
entitles the holder to purchase one common share at
an exercise price of $0.20 per share, until May 17,
2008.
20
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
6. SHARE CAPITAL (continued)
d) OPTIONS
Weighted
Average
Number of Exercise
Options Price
- ----------------------------------------------------- ---------- ----------
Outstanding and exercisable at October 31, 2004 ..... 1,285,000 0.33
Options expired .................................. (217,000) 0.18
Options granted .................................. 1,510,000 0.10
- ----------------------------------------------------- ---------- ----------
Outstanding and exercisable at October 31, 2005 ..... 2,578,000 0.13
Options granted .................................. 3,406,000 0.14
- ----------------------------------------------------- ---------- ----------
OUTSTANDING AND EXERCISABLE AT OCTOBER 31, 2006 .... 5,984,000 0.14
- ----------------------------------------------------- ---------- ----------
As at October 31, 2006, there were 5,984,000 (2005 -
2,578,000) options outstanding as follows:
Expiry date Exercise price Number of options
------------------ ---------------------------- -----------------
October 8, 2007 $0.10 255,000
December 18, 2007 (re-priced from $0.23) $0.20 85,000
March 2, 2008 (re-priced from $0.25) $0.20 248,000
June 16, 2008 (re-priced from $0.30) $0.20 50,000
January 5, 2009 (re-priced from $0.56) $0.20 430,000
July 28, 2010 $0.10 1,510,000
November 17, 2010 $0.10 1,331,000
February 2, 2011 $0.20 635,000
July 6, 2011 $0.15 1,440,000
e) WARRANTS
As at October 31, 2006, there were 38,358,521 (2005 -
25,055,688) warrants outstanding with a weighted average
exercise price of $0.14 as follows:
Expiry date Exercise price Number of warrants
------------------ ---------------------------- ------------------
December 8, 2006 $0.14 *1,245,000
December 22, 2006 $0.13 *4,730,688
March 23, 2007 $0.10 900,000
June 3, 2007 $0.10 750,000
October 7, 2007 $0.10 11,815,000
January 17, 2008 $0.10 5,450,000
May 17, 2008 $0.20 13,467,833
* Subsequently expired unexercised
f) ESCROW SHARES
At October 31, 2005, 25,000 common shares were held in escrow.
During the year ended October 31, 2006, the Company cancelled
these shares and returned them to treasury.
21
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
6. SHARE CAPITAL (continued)
g) STOCK BASED COMPENSATION
The Company, in accordance with the policies of the TSX
Venture Exchange, is authorized to grant options to directors,
officers, and employees to acquire up to 10% of the issued and
outstanding common stock. The fair value of share options were
estimated using the Black-Scholes option-pricing model with
the following assumptions:
Dividend Expected Risk Free Expected Average Stock Based
Yield Volatility Interest Rate Life Compensation
- ----- -------- ---------- ------------- ----------------- ------------
2006 Nil 94% - 98% 3.7% - 4.2% 3 YEARS $ 286,000
2005 Nil 96% - 99% 3.0% - 3.2% 2.25 - 3.33 years $ 79,000
h) CONTRIBUTED SURPLUS
The following table summarizes the Company's Contributed
Surplus:
Balance, October 31, 2004 ................................. $ 171,000
Stock options granted ..................................... 56,000
Broker's warrants granted ................................. 3,000
Stock options re-priced ................................... 23,000
----------
Balance, October 31, 2005 ................................. 253,000
Stock options granted ..................................... 286,000
Cancellation of escrow shares ............................. 250
----------
Balance, October 31, 2006 ................................. $ 539,250
==========
7. COMMITMENTS
a) On September 21, 2006, the Company's shareholders approved a
Plan of Arrangement ("the Arrangement") dated August 11, 2006
to reorganize certain of the Company's diamond properties. On
September 26, 2006, the final court order approving the
Arrangement between the Company and its newly formed
subsidiary, Diamondcorp Resources Inc. ("Diamondcorp"), was
accepted.
On the effective date of the Arrangement, the Company's common
shares will be restructured into new common shares and
reorganization shares. On the effective date, each shareholder
will receive three new common shares and one reorganization
share for each three common shares of the Company held on the
effective date. Each reorganization share will be exchanged
for one Diamondcorp common share such that Diamondcorp will
hold all of the reorganization shares. The Company will then
redeem all of the reorganization shares and the transfer of
the certain mineral properties to Diamondcorp will satisfy the
aggregate redemption price.
The transferred mineral properties and related obligations in
respect of these properties held by the Company will be at
their carrying values in consideration for a corresponding
number of Diamondcorp shares issued at fair value. In addition
as contingent consideration from Diamondcorp, certain of the
Company's mineral property agreements contain anti-dilution
provisions such that the issue of the Company's shares will
also require the issue of Diamondcorp shares on a three to one
basis.
22
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
On the effective date, the exercise price of all outstanding
options and warrants will be adjusted and the options and
warrants shall be separated so as to be exercisable separately
into new common shares and Diamondcorp common shares on the
basis that for every three common shares purchasable on
exercise of the options and warrants prior to the effective
date, the holder thereof will be entitled to purchase, on
exercise of options and warrants, three new common shares and
separately one Diamondcorp Common Share.
b) By an agreement dated June 1, 2005, the Company entered into
an administrative services agreement with a company controlled
by a director and officer. A management fee was payable at a
minimum monthly fee of $35,000, a maximum monthly fee of
$45,000 in higher activity periods, and a reimbursement of
actual out-of-pocket costs plus 5% for administrative
overhead.
c) At October 31, 2006, the Company is obligated to incur
approximately $1,702,000 (2005 - $490,000) in eligible
Canadian Exploration Expenses prior to December 31, 2007 in
order to complete obligations entered into pursuant to
flow-through share purchase agreements.
8. INCOME TAXES
A reconciliation of income taxes at statutory rates to the Company's
effective income tax expense is as follows:
2006 2005 2004
----------- ----------- -----------
Statutory tax rate .............. 34% 35% 35%
----------- ----------- -----------
Computed tax recovery ........... $(1,437,000) $ (121,000) $ (188,000)
Changes in temporary
differences ................... (26,000) (21,000) (16,000)
Unrecognized items for
tax purposes .................. 1,215,000 29,000 68,000
Benefit of income tax
losses not recognized.......... 248,000 113,000 136,000
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
The significant components of the Company's future income tax assets
are as follows:
2006 2005 2004
----------- ----------- -----------
Exploration and development
deductions ...................... $ 584,000 $ (442,000) $ (55,000)
Non-capital losses carried
forward ......................... 717,000 437,000 317,000
Other temporary differences ....... 60,000 60,000 57,000
----------- ----------- -----------
1,361,000 55,000 319,000
Valuation allowance ............... (1,361,000) (55,000) (319,000)
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
The Company has Canadian non-capital losses carried forward of
approximately $2,093,000 (2005 - $1,226,000) that may be available for
tax purposes. The potential tax benefits of these losses have not been
recognized as realization is not considered more likely than not. The
losses expire as follows:
23
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
8. INCOME TAXES (continued)
2007 $ 80,000
2008 $ 49,000
2009 $ 70,000
2010 $ 276,000
2014 $ 319,000
2015 $ 349,000
2026 $ 950,000
The Company has resource pools of approximately $3.8 million (2005 -
$2.3 million) available to offset future taxable income. The tax
benefit of these amounts is available for carry-forward indefinitely.
In connection with the issuance of flow-through shares, to date the
Company has renounced, to the shareholders, the tax benefits associated
with $646,500 (2005 - $283,333) in Canadian exploration expenditures
incurred.
9. SUPPLEMENTAL CASH FLOW INFORMATION
The following non-cash transactions were recorded during the year
ended:
OCTOBER 31, 2006 2005 2004
- ---------------------------------------------- -------- -------- --------
Investing activities
Mineral property acquisition ............. $246,200 $103,525 $ 10,000
Stock based compensation capitalized to
deferred exploration ..................... --
-- 16,000
-------- -------- --------
$246,200 $103,525 $ 26,000
======== ======== ========
OCTOBER 31, 2006 2005 2004
- ---------------------------------------------- -------- -------- --------
Financing activities
Share for debt settlement, principal ..... $ -- $ -- $562,500
Share for debt settlement, interest ...... -- -- 52,489
Stock based compensation included in
Contributed Surplus ...................... 286,000
82,000 160,000
-------- -------- --------
$286,000 $ 82,000 $774,989
======== ======== ========
10. SUBSEQUENT EVENTS
In addition to information disclosed elsewhere in these notes, the
following occurred during the period subsequent to October 31, 2006:
a) The Company granted 112,500 options exercisable at $0.15 per
share until November 3, 2011.
b) On December 27, 2006, the Company closed a private placement
consisting of 13,965,000 units at a price of $0.12 per unit.
On February 8, 2007 a second tranche of 2,350,000 units was
completed at $0.12 per unit. Each unit is comprised of one
common share and one non-flow-through non-transferable share
purchase warrant entitling the holder to purchase one
additional common share for a period of two years at a price
of $0.15 per share.
24
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
10. SUBSEQUENT EVENTS (continued)
c) The Company issued 225,000 common shares pursuant to mineral
property option agreements.
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP")
These financial statements are prepared in accordance with GAAP in
Canada, which differ in some respects from GAAP in the United States.
The material differences between Canadian and US GAAP, in respect of
these financial statements, are as follows:
a) MINERAL PROPERTY EXPLORATION AND DEVELOPMENT
Under US GAAP, mineral exploration and development property
expenditures are expensed as operating activities in the year
incurred in a development stage company until there is
substantial evidence that a commercial body of ore has been
located. Canadian GAAP allows resource exploration and
development property expenditures to be deferred as investment
activities during this process.
US GAAP also requires a separate statement for stockholders'
equity whereas Canadian GAAP does not.
The effects on the Company's consolidated financial statements
are summarized below:
For the years ended October 31,
-----------------------------------------
2006 2005 2004
----------- ----------- -----------
Consolidated Statements of
Operations and Deficit
Net loss for the year under:
Canadian GAAP .................... $(4,197,401) $ (339,777) $ (527,212)
Add: Write-off of mineral property
expenditures ..................... 3,261,819 -- --
Less: Mineral property exploration
expenditures ..................... (1,818,235) (1,060,062) (1,455,820)
----------- ----------- -----------
Net loss under US GAAP ............. $(2,753,817) $(1,399,839) $(1,983,032)
----------- ----------- -----------
Loss per share - US GAAP ........... $ (0.05) $ (0.06) $ (0.14)
----------- ----------- -----------
Consolidated Statements of Cash Flows
Cash flows (used in) operating
activities - Canadian GAAP ....... $ (909,962) $ (372,743) $ (355,292)
Mineral exploration costs
capitalized in the year
and not expensed ................. (1,495,250) (950,901) (1,429,820)
----------- ----------- -----------
Cash flows (used in) operating
activities - US GAAP ............. $(2,405,212) $(1,323,644) $(1,785,112)
=========== =========== ===========
25
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP") (continued)
a) MINERAL PROPERTY EXPLORATION AND DEVELOPMENT (continued)
For the years ended October 31,
-----------------------------------------
2006 2005 2004
----------- ----------- -----------
Consolidated Statements of Cash Flows
Cash flows (used in) investing
activities - Canadian GAAP ....... $(1,498,635) $ (950,901) $(1,431,646)
Mineral exploration costs
capitalized in the year
and not expensed ................. 1,495,250 950,901 1,429,820
----------- ----------- -----------
Cash flows (used in) investing
activities - US GAAP ............. $ (3,385) $ -- $ (1,826)
----------- ----------- -----------
Consolidated Balance Sheets
Assets
Mineral Properties
Canadian GAAP .................... $ 2,083,357 $ 3,526,941 $ 2,466,879
Resource property expenditures
(cumulative) ................... (2,083,357) (3,526,941) (2,466,879)
----------- ----------- -----------
United States GAAP ................. $ -- $ -- $ --
----------- ----------- -----------
Stockholders' Equity
Canadian GAAP .................... $ 2,551,093 $ 3,680,628 $ 2,442,504
Resource property expenditures
(cumulative) ................... (2,083,357) (3,526,941) (2,466,879)
----------- ----------- -----------
United States GAAP ................. $ 467,736 $ 153,687 $ (24,375)
----------- ----------- -----------
b) NEW ACCOUNTING PRONOUNCEMENTS
i) September 2006 - FASB issued Statement No. 157, "Fair
Value Measures". This Statement defines fair value,
establishes a framework for measuring fair value in
GAAP, expands disclosures about fair value
measurements, and applies under other accounting
pronouncements that require or permit fair value
measurements. Statement No. 157 does not require any
new fair value measurements. However, the FASB
anticipates that for some entities, the application
of Statement No. 157 will change current practice.
Statement No. 157 is effective for financial
statements issued for fiscal years beginning after
November 15, 2007. The Company is currently
evaluating the impact of Statement No. 157 but does
not expect that it will have a material impact on the
consolidated financial statements.
26
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP") (continued)
b) NEW ACCOUNTING PRONOUNCEMENTS (continued)
ii) June 2006 - FASB issued Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes-an
Interpretation of FASB Statement No. 109." This
Interpretation clarifies the accounting for
uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with
FASB No. 109, "Accounting for Income Taxes." This
Interpretation prescribes a recognition threshold and
measurement attribute for the financial statement
recognition and measurement of a tax position taken
or expected to be taken in a tax return. This
Interpretation also provides guidance on
derecognition, classification, interest and
penalties, accounting in interim periods, disclosure
and transition. This Interpretation is effective for
fiscal years beginning after December 15, 2006.
iii) In February 2006 - FASB issued Statement No. 155,
"Accounting for Certain Hybrid Financial Instruments,
an amendment of FASB Statements No. 133 and 140."
This statement permits fair value re-measurement for
any hybrid financial instrument that contains an
embedded derivative that otherwise would require
bifurcation. It establishes a requirement to evaluate
interests in securitized financial assets to identify
interests that are freestanding derivatives or that
are a hybrid financial instrument that contain an
embedded derivative requiring bifurcation. In
addition, Statement No. 155 clarifies which
interest-only strips and principal-only strips are
not subject to the requirements of Statement No. 133.
It also clarifies that concentrations of credit risk
in the form of subordination are not embedded
derivatives. Statement No. 155 amends Statement No.
140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial
interest other than another derivative financial
instrument. This Statement is effective for all
financial instruments acquired or issued after the
beginning of an entity's first fiscal year that
begins after September 15, 2006.
iv) November 2005 - FASB issued Staff Position No. FSP
(FASB Staff Position) FAS (Financial Accounting
Standard) 115-1 - "The Meeting of
Other-Than-Temporary Impairment and Its Application
to Certain Investments". FAS FSP 115-1 provides
accounting guidance for identifying and recognizing
other-than-temporary impairments of debt and equity
securities, as well as cost method investments in
addition to disclosure requirements. FAS FSP 115-1 is
effective for reporting periods beginning after
December 15, 2005, and earlier application is
permitted.
v) May 2005 - FASB issued Statement No. 154, "Accounting
Changes and Error Corrections - A Replacement of APB
Opinion No. 20 and FAS No. 3 ". FAS 154 changes the
requirements for the accounting for and reporting of
a change in accounting principle and applies to all
voluntary changes in accounting principles. It also
applies to changes required by an accounting
pronouncement in the unusual instance that the
pronouncement does not include specific transition
provisions. FAS 154 requires retrospective
application to prior periods' financial statements of
changes in an accounting principle, unless it is
impracticable to determine either the period-specific
effects or the cumulative effect of the change. The
provisions of FAS 154 are effective for accounting
changes and correction of errors made in fiscal years
beginning after June 1, 2006.
27
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP") (continued)
b) NEW ACCOUNTING PRONOUNCEMENTS (continued)
vi) March 2005 - FASB issued Interpretation No. ("FIN")
47 - "Accounting for Conditional Asset Retirement
Obligations". FIN 47 clarifies that an entity must
record a liability for a conditional asset retirement
obligation if the fair value of the obligation can be
reasonably estimated. This interpretation also
clarifies the circumstances under which an entity
would have sufficient information to reasonably
estimate the fair value of an asset retirement
obligation. This Interpretation is effective no later
than the end of fiscal years ending after December
15, 2005.
vii) March 2005 - The Emerging Issues Task Force issued
EITF Issue 04-6 - "Accounting for Stripping Costs in
the Mining Industry", stating that post-production
stripping costs are a component of mineral inventory
costs subject to the provisions of the American
Institute of Certified Public Accountants Accounting
Research Bulletin No. 43 - "Restatement and Revision
of Accounting Research Bulletins, Chapter 4,
"Inventory Pricing", ("ARB No. 43")". Based upon this
statement, post-production stripping costs are
considered as costs of the extracted minerals under a
full absorption costing system and are recognized as
a component of inventory to be recognized in costs of
sales in the same period as the revenue from the sale
of the inventory. In addition, capitalization of such
costs would be appropriate only to the extent
inventory exists at the end of a reporting period.
The provisions will be effective for financial
statements issued for the first reporting period in
fiscal years beginning after December 15, 2005, with
early adoption permitted. The Company has determined
that the adoption of EITF Issue 04-6 does not have an
impact on its results of operations or financial
position since the Company is in the exploration
stage.
viii) December 2004 - FASB issued Statement No. 123
(revised 2004) ("FAS 123(R)"), "SHARE-BASED PAYMENT".
This Statement requires that the cost resulting from
all share-based transactions be recorded in the
financial statements. FAS 123(R) establishes fair
value as the measurement objective in accounting for
share-based payment arrangements and requires all
entities to apply a fair-value-based measurement in
accounting for share-based payment transactions with
employees. FAS 123(R) also establishes fair value as
the measurement objective for transactions in which
an entity acquires goods or services from
non-employees in share-based payment transactions.
FAS 123(R) replaces FASB Statement No. 123
"ACCOUNTING FOR STOCK-BASED COMPENSATION" and
supersedes APB (Accounting Principles Board) Opinion
No. 25 "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES".
ix) In December 2004, FASB issued SFAS No. 153,
"Exchanges of Non-monetary Assets". SFAS 153 amends
APB Opinion No. 29, to eliminate certain exceptions
when there are non-monetary exchanges of similar
productive assets and replaces it with a general
exception for exchanges of non-monetary assets that
do not have commercial substance. This amendment is
effective for periods beginning after June 15, 2005.
x) March 2004 - EITF issued EITF 04-3, "Mining Assets'
Impairment and Business Combinations" which concluded
that entities should generally include values in
mining properties beyond proven and probable reserves
and the effects of anticipated fluctuations in the
future market price of minerals in determining the
fair value of mining assets. The Company is in the
exploration stage and has not yet established proven
or probable reserves.
28
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP") (continued)
b) NEW ACCOUNTING PRONOUNCEMENTS (continued)
The adoption of these new pronouncements is not expected to
have a material effect on the Company's consolidated financial
position or consolidated results of operations.
c) CUMULATIVE INCEPTION TO DATE INFORMATION
Statement of Financial Accounting Standards No. 7, "Accounting
and Reporting by Development Stage Enterprises" requires
mining companies in the exploration stage to report additional
cumulative information from inception. The Company changed its
business in August 2002 and entered the mining exploration
business. Cumulative inception to date information from August
2002 is as follows:
CONSOLIDATED BALANCE SHEET
CUMULATIVE AMOUNTS FROM
INCEPTION
SHAREHOLDERS' EQUITY (STOCKHOLDERS' EQUITY) ----------------------------
NUMBER OF SHARE
SHARE CAPITAL SHARES AMOUNT
------------ ------------
Issued for
Loan bonus ................................ 311,111 $ 70,000
Property acquisition ...................... 2,820,000 359,725
Issued for cash
Private placements ........................ 44,323,548 6,752,875
Exercise of options/warrants .............. 3,712,000 401,750
Shares for debt ............................. 4,730,688 614,989
Share issuance costs ........................ -- (360,594)
Income tax benefits renounced
on flow-through shares..................... -- (861,454)
Cancellation of the escrow shares ........... (25,000) (250)
------------ ------------
55,872,347 $ 6,977,041
============ ============
CONTRIBUTED SURPLUS ............................ $ 539,250
============
DEFICIT ACCUMULATED DURING THE
EXPLORATION STAGE ........................... $ (7,035,970)
============
29
- --------------------------------------------------------------------------------
AMADOR GOLD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2006
- --------------------------------------------------------------------------------
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("GAAP") (continued)
c) CUMULATIVE INCEPTION TO DATE INFORMATION (continued)
CUMULATIVE
AMOUNTS FROM
CONSOLIDATED STATEMENT OF OPERATIONS INCEPTION
-----------
EXPENSES
Bank charges ........................................... $ 3,821
Consulting fees ........................................ 473,763
Amortization ........................................... 1,066
Financing fees ......................................... 102,500
Interest on debt ....................................... 74,527
Investor relations and promotion ....................... 257,887
Legal and accounting ................................... 270,675
Management fees ........................................ 603,760
Mineral properties ..................................... 4,867,970
Office and miscellaneous ............................... 44,944
Part XII.6 tax ......................................... 12,856
Regulatory fees ........................................ 115,656
Transfer agent fees .................................... 44,543
Stock based compensation ............................... 509,000
Recovery of prior year expenses ........................ (13,478)
Less: interest earned .................................. (8,831)
Future income tax benefit renounced
on flow through shares ............................... (324,689)
-----------
NET LOSS FROM INCEPTION ................................... $(7,035,970)
===========
STATEMENT OF CASH FLOWS
CASH (USED FOR) OPERATING ACTIVITIES
Net loss from inception ................................. $(7,035,970)
Add items not affecting cash:
Amortization .......................................... 1,066
Financing fee ......................................... 70,000
Future income tax benefit renounced
on flow through shares .............................. (324,689)
Stock based compensation .............................. 509,000
-----------
(6,780,593)
Change in non-cash operating working capital items ........ 15,584
-----------
(6,765,009)
-----------
CASH PROVIDED BY FINANCING ACTIVITIES
Loans received and promissory note issued ............... 541,780
Repayment of loans ...................................... (100,000)
Issuance of share capital ............................... 7,157,626
Share issuance costs .................................... (360,595)
-----------
7,238,811
-----------
CASH (USED FOR) INVESTING ACTIVITIES
Purchase of equipment ................................... (1,826)
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS ................. $ 471,976
===========
30
- --------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED SCHEDULES OF MINERAL PROPERTY EXPENDITURES
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, 2006
- --------------------------------------------------------------------------------
RED LAKE SILVERSTRIKE DONOVAN TETA-GOUCHE
KENORA GROUP GROUP GROUP BASIN MAGNUM NEW MENNIN
ONTARIO ONTARIO ONTARIO ONTARIO QUEBEC BRUNSWICK LAKE ONTARIO
----------- ----------- ----------- ----------- ----------- ----------- -----------
ACQUISITION COSTS
Opening balance ...... $ 1,262,157 $ 42,000 $ 41,182 $ 24,600 $ 74,000 $ 12,250 $ 16,000
Staking costs ........ 2,701 2,880 2,785 71,260 -- -- --
Option payments cash . 15,000 27,000 30,000 15,000 -- 10,000 25,000
Option payments shares 5,000 10,000 10,500 9,600 -- 2,250 4,000
Finder's fees cash ... 168 -- -- -- -- -- --
Write-off ............ (1,285,026) -- -- -- (74,000) -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Closing balance ..... -- 81,880 84,517 120,460 -- 24,500 45,000
----------- ----------- ----------- ----------- ----------- ----------- -----------
DEFERRED EXPLORATION
Opening balance ...... 1,739,824 -- -- 600 40,392 12,109 8,547
Consulting ........... 8,894 -- 12,645 13,058 -- 13,214 --
Drilling ............. -- -- -- -- -- 61,530 --
Geological ........... -- 3,566 500 -- (1,680) 7,365 --
Line cutting ......... -- 45,550 12,005 17,970 -- -- 7,736
Mapping and sampling . -- -- -- -- -- 2,345 --
Miscellaneous ........ 999 -- 122 66 -- (10,500) 51
Management fee ....... -- -- 141 -- -- -- --
Surveying ............ -- 2,688 61,400 -- -- 30,110 8,835
Write-off ............ (1,749,717) -- -- -- (38,712) -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Closing balance ...... -- 51,804 86,813 31,694 -- 116,173 25,169
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE, END OF YEAR .. $ -- $ 133,684 $ 171,330 $ 152,154 $ -- $ 140,673 $ 70,169
=========== =========== =========== =========== =========== =========== ===========
CONNOR CREEK HUNTER AJAX
FRIPP BRITISH GOLD GROUP
ONTARIO COLUMBIA ONTARIO ONTARIO
----------- ----------- ----------- -----------
ACQUISITION COSTS
Opening balance ...... $ 8,787 $ -- $ 1,800 $ 135,568
Staking costs ........ 7,560 -- 1,880 5,985
Option payments cash . -- -- 10,000 17,500
Option payments shares 3,125 18,000 7,125 4,500
Finder's fees cash ... -- -- -- --
Write-off ............ -- -- -- --
----------- ----------- ----------- -----------
Closing balance ..... 19,472 18,000 20,805 163,553
----------- ----------- ----------- -----------
DEFERRED EXPLORATION
Opening balance ...... -- 12,500 -- 94,150
Consulting ........... 5,400 46,237 -- 1,400
Drilling ............. -- -- -- --
Geological ........... -- -- -- --
Line cutting ......... -- -- -- 4,496
Mapping and sampling . 820 -- -- 1,930
Miscellaneous ........ 932 780 1,219 570
Management fee ....... 60 -- -- 212
Surveying ............ 33,305 -- -- 23,217
Write-off ............ -- -- -- --
----------- ----------- ----------- -----------
Closing balance ...... 40,517 59,517 1,219 125,975
----------- ----------- ----------- -----------
BALANCE, END OF YEAR .. $ 59,989 $ 77,517 $ 22,024 $ 289,528
=========== =========== =========== ===========
31
- --------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED SCHEDULES OF MINERAL PROPERTY EXPENDITURES
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, 2006
- --------------------------------------------------------------------------------
GOULD EAST ANDERSON
COPPER BREACCIA WILLET HORWOOD KEITH & SEWELL PATENT LAKE
ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO
----------- ----------- ----------- ----------- ----------- ----------- -----------
ACQUISITION COSTS
Opening balance ...... $ -- $ -- $ -- $ -- $ -- $ -- $ --
Staking costs ........ 11,340 15,170 -- 900 7,232 5,500 7,700
Option payments cash . 12,000 12,000 5,000 31,000 21,000 15,000 12,000
Option payments shares 2,375 7,500 6,000 27,125 19,800 13,500 8,250
Finder's fees cash ... -- -- -- -- -- -- --
Write-off ............ -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Closing balance ..... 25,715 34,670 11,000 59,025 48,032 34,000 27,950
----------- ----------- ----------- ----------- ----------- ----------- -----------
DEFERRED EXPLORATION
Opening balance ...... -- -- -- -- -- -- --
Consulting ........... -- -- -- -- -- -- --
Drilling ............. -- -- -- -- -- -- --
Geological ........... 3,150 2,000 -- -- -- -- --
Line cutting ......... -- -- -- -- 17,962 -- --
Mapping and sampling . -- -- -- -- -- -- --
Miscellaneous ........ 968 1,070 1,220 2,071 951 838 1,210
Management fee ....... -- 300 -- -- -- -- --
Surveying ............ -- -- -- -- 7,962 -- --
Write-off ............ -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Closing balance ...... 4,118 3,370 1,220 2,071 26,875 838 1,210
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE, END OF YEAR .. $ 29,833 $ 38,040 $ 12,220 $ 61,096 $ 74,907 $ 34,838 $ 29,160
=========== =========== =========== =========== =========== =========== ===========
HOLLOWAY
LOVELAND FRECHEVILLE
PROPERTY PROPERTY MORIN
GROUP GROUP PROPERTY
ONTARIO ONTARIO ONTARIO
----------- ----------- -----------
ACQUISITION COSTS
Opening balance ...... $ -- $ -- $ --
Staking costs ........ -- -- 1,500
Option payments cash . 50,000 45,000 10,000
Option payments shares 42,000 42,000 3,500
Finder's fees cash ... -- -- --
Write-off ............ -- (87,000) --
----------- ----------- -----------
Closing balance ..... 92,000 -- 15,000
----------- ----------- -----------
DEFERRED EXPLORATION
Opening balance ...... -- -- --
Consulting ........... -- 502 --
Drilling ............. -- -- --
Geological ........... 550 -- --
Line cutting ......... -- 3,310 --
Mapping and sampling . -- -- --
Miscellaneous ........ 1,935 1,428 751
Management fee ....... 83 -- --
Surveying ............ -- 22,125 --
Write-off ............ -- (27,365) --
----------- ----------- -----------
Closing balance ...... 2,568 -- 751
----------- ----------- -----------
BALANCE, END OF YEAR .. $ 94,568 $ -- $ 15,751
=========== =========== ===========
32
- --------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED SCHEDULES OF MINERAL PROPERTY EXPENDITURES
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, 2006
- --------------------------------------------------------------------------------
SHARPE CHEWETT FORGE OKE & FORD OTTER POND
SAVARD CHAPLEAU PROPERTY BLACKSTOCK LAKE PROPERTY PROPERTY
ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO ONTARIO TOTAL
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
ACQUISITION COSTS
Opening balance ...... $ -- $ 475 $ -- $ -- $ -- $ -- $ -- $1,618,819
Staking costs ........ -- 159,406 4,680 15,840 -- 134,300 -- 458,619
Option payments cash . 10,000 8,385 15,000 -- 34,000 -- 27,495 457,380
Option payments shares -- -- -- -- -- -- -- 246,200
Finder's fees cash ... -- -- -- -- -- -- -- 168
Write-off ............ -- -- -- -- -- -- -- (1,446,026)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Closing balance ..... 10,000 168,266 19,680 15,840 34,000 134,300 27,495 1,335,160
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
DEFERRED EXPLORATION
Opening balance ...... -- -- -- -- -- -- -- 1,908,122
Consulting ........... -- 7,228 -- -- -- -- -- 108,578
Drilling ............. -- 16,857 -- -- -- -- -- 78,387
Geological ........... -- 54,169 -- -- -- -- -- 69,620
Line cutting ......... -- 9,155 -- -- -- -- -- 118,184
Mapping and sampling . -- 26,058 -- -- -- -- -- 31,153
Miscellaneous ........ -- -- -- -- -- -- -- 6,681
Management fee ....... -- 42,504 -- -- 5,100 -- 4,124 52,524
Surveying ............ -- 1,100 -- -- -- -- -- 190,742
Write-off ............ -- -- -- -- -- -- -- (1,815,794)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Closing balance ...... -- 157,071 -- -- 5,100 -- 4,124 748,197
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
BALANCE, END OF YEAR .. $ 10,000 $ 325,337 $ 19,680 $ 15,840 $ 39,100 $ 134,300 $ 31,619 $2,083,357
========== ========== ========== ========== ========== ========== ========== ==========
33
- --------------------------------------------------------------------------------
AMADOR GOLD CORP.
CONSOLIDATED SCHEDULES OF MINERAL PROPERTY EXPENDITURES
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, 2006
- --------------------------------------------------------------------------------
TETA-
KENORA RED LAKE SILVERSTRIKE AJAX GOUCHE MENNIN
GROUP GROUP GROUP GROUP MAGNUM NEW LAKE FRIPP
ONTARIO ONTARIO ONTARIO ONTARIO QUEBEC BRUNSWICK ONTARIO ONTARIO
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
ACQUISITION COSTS
Opening balance ...... $ 915,082 $ 18,000 $ -- $ -- $ -- $ -- $ -- $ --
Staking costs ........ 6,145 -- -- 20,000 -- -- -- --
Option payments cash . 318,000 14,000 45,632 85,568 50,000 10,000 12,000 5,662
Option payments shares 10,000 10,000 20,150 30,000 24,000 2,250 4,000 3,125
Finder's fees cash ... 12,930 -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Closing balance ..... 1,262,157 42,000 65,782 135,568 74,000 12,250 16,000 8,787
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
DEFERRED EXPLORATION
Opening balance ...... 1,533,797 -- -- -- -- -- -- --
Consulting ........... 32,861 -- -- -- -- -- -- --
Drilling ............. 3,500 -- -- -- -- 12,109 -- --
Geological ........... 3,584 -- -- 93,712 -- -- -- --
Line cutting ......... 32,862 -- -- -- -- -- -- --
Mapping and sampling . 87,478 -- -- -- -- -- -- --
Miscellaneous ........ 43,555 -- 600 438 40,392 -- 8,547 --
Surveying ............ 2,187 -- -- -- -- -- -- --
Trenching ............ -- -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Closing balance ...... 1,739,824 -- 600 94,150 40,392 12,109 8,547 --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
BALANCE, END OF YEAR .. $3,001,981 $ 42,000 $ 66,382 $ 229,718 $ 114,392 $ 24,359 $ 24,547 $ 8,787
========== ========== ========== ========== ========== ========== ========== ==========
CONNOR HUNTER
CREEK GOLD CHAPLEAU
B.C. ONTARIO ONTARIO TOTAL
---------- ---------- ---------- ----------
ACQUISITION COSTS
Opening balance ...... $ -- $ -- $ -- $ 933,082
Staking costs ........ -- -- -- 26,145
Option payments cash . -- 1,800 475 543,137
Option payments shares -- -- -- 103,525
Finder's fees cash ... -- -- -- 12,930
---------- ---------- ---------- ----------
Closing balance ..... -- 1,800 475 1,618,819
---------- ---------- ---------- ----------
DEFERRED EXPLORATION
Opening balance ...... -- -- -- 1,533,797
Consulting ........... -- -- -- 32,861
Drilling ............. -- -- -- 15,609
Geological ........... -- -- -- 97,296
Line cutting ......... -- -- -- 32,862
Mapping and sampling . -- -- -- 87,478
Miscellaneous ........ -- -- -- 93,532
Surveying ............ -- -- -- 2,187
Trenching ............ 12,500 -- -- 12,500
---------- ---------- ---------- ----------
Closing balance ...... 12,500 -- -- 1,908,122
---------- ---------- ---------- ----------
BALANCE, END OF YEAR .. $ 12,500 $ 1,800 $ 475 $3,526,941
========== ========== ========== ==========
34
EXHIBIT INDEX
Following is a list of all of the exhibits that are filed as part of this Form
20-F:
Exhibit 1.1 Memorandum of Incorporation of Golden Trend Energy Ltd. dated
October 24, 1980(1)
Exhibit 1.2 Certificate of Incorporation of Golden Trend Energy Ltd. dated
October 24, 1980(1)
Exhibit 1.3 Altered Memorandum dated December 11, 1990 (filed on January
9, 1991)(1)
Exhibit 1.4 Certificate of Change of Name from Golden Trend Energy Ltd. to
World Power Bike Inc. dated January 9, 1991(1)
Exhibit 1.5 Altered Memorandum dated February 15, 2000 (filed on March 13,
2000)(1)
Exhibit 1.6 Certificate of Change of Name from World Power Bike Inc. to
Parkside 2000 Resources Corp. dated March 13, 2000(1)
Exhibit 1.7 Altered Memorandum dated May 8, 2003 (filed on May 16,
2003)(1)
Exhibit 1.8 Certificate of Change of Name from Parkside 2000 Resources
Corp. to Amador Gold Corp. dated May 16, 2003(1)
Exhibit 1.9 Articles of the Company (formerly known as Golden Trend Energy
Ltd.)(1)
Exhibit 1.10 Transition Application dated January 5, 2005(3)
Exhibit 1.11 Notice of Articles dated January 5, 2005(3)
Exhibit 1.12 Notice of Alteration dated May 30, 2005 (filed on June 2,
2005)(4)
Exhibit 1.13 Articles of the Company (filed on June 2, 2005)(4)
Exhibit 4.1 Mineral Exploration Option Agreement dated May 30, 2002
between the Company and Goldrea Resources Corp.(1)
Exhibit 4.2 Amending Agreement dated August 27, 2002 between the Company
and Goldrea Resources Corp.(1)
Exhibit 4.3 Flow-Through Subscription Agreements dated September 10, 2002
between the Company and various purchasers(1)
Exhibit 4.4 on Flow-Through Subscription Agreements dated September 10,
2002 between the Company and various purchasers including
Richard W. Hughes(1)
Exhibit 4.5 Debt Settlement Agreement dated September 10, 2002 between the
Company and Bullock Consulting Ltd.(1)
Exhibit 4.6 Form of Warrant Certificate dated October 7, 2002 issued to
various purchasers including Richard W. Hughes in connection
with a private placement(1)
Exhibit 4.7 Director Stock Option Agreement dated October 9, 2002 between
the Company and Rupert L. Bullock(1)
Exhibit 4.8 Director Stock Option Agreement dated October 9, 2002 between
the Company and Lynn W. Evoy(1)
Exhibit 4.9 Director Stock Option Agreement dated October 9, 2002 between
the Company and Philip J. Southam(1)
Exhibit 4.10 Officer Stock Option Agreement dated October 9, 2002 between
the Company and Ronda Ross-Love(1)
Exhibit 4.11 Convertible Debenture dated October 16, 2002 for Tri-Pol
Energy Corporation(1)
Exhibit 4.12 Warrant Certificate dated October 16, 2002 for Tri-Pol Energy
Corporation(1)
Exhibit 4.13 Letter of Intent dated October 18, 2002 between the Company
and Richard W. Hughes(1)
Exhibit 4.14 Subscription Agreement dated November 6, 2002 between the
Company and Richard W. Hughes(1)
Exhibit 4.15 Warrant Certificate dated November 14, 2002 for Richard W.
Hughes(1)
Exhibit 4.16 Director Stock Option Agreement dated December 19, 2002
between the Company and Richard W. Hughes(1)
EX-1
Exhibit 4.17 Officer Stock Option Agreement dated December 19, 2002 between
the Company and Stephen Pearce(1)
Exhibit 4.18 Flow-Through Subscription Agreements dated January/February
2003 between the Company and various purchasers(1)
Exhibit 4.19 Non Flow-Through Subscription Agreements dated
January/February 2003 between the Company and various
purchasers(1)
Exhibit 4.20 Form of Warrant Certificate dated February 28, 2003 issued to
various purchasers in connection with a private placement(1)
Exhibit 4.21 Mineral Exploration Option Agreement dated January 31, 2003
between the Company and Kenora Prospectors & Miners,
Limited(1)
Exhibit 4.22 Mineral Exploration Option Agreement dated January 31, 2003
between the Company and Machin Mines Ltd.(1)
Exhibit 4.23 Amendment to Stock Option Agreement dated February 7, 2003
between the Company and Richard W. Hughes(1)
Exhibit 4.24 Amendment to Stock Option Agreement dated February 7, 2003
between the Company and Stephen Pearce(1)
Exhibit 4.25 Form of Warrant Certificate dated February 28, 2003 issued to
various purchasers in connection with a private placement(1)
Exhibit 4.26 Director Stock Option Agreement dated March 3, 2003 between
the Company and Rupert L. Bullock(1)
Exhibit 4.27 Director Stock Option Agreement dated March 3, 2003 between
the Company and Lynn W. Evoy(1)
Exhibit 4.28 Director Stock Option Agreement dated March 3, 2003 between
the Company and Philip J. Southam(1)
Exhibit 4.29 Director Stock Option Agreement dated March 3, 2003 between
the Company and Richard W. Hughes(1)
Exhibit 4.30 Officer Stock Option Agreement dated March 3, 2003 between the
Company and Stephen Pearce(1)
Exhibit 4.31 Officer Stock Option Agreement dated March 3, 2003 between the
Company and Ronda Ross-Love(1)
Exhibit 4.32 Non-Flow Subscription Agreement dated May 2003 between the
Company and various purchasers(1)
Exhibit 4.33 Form of Warrant Certificate dated May 29, 2003 issued to
various purchasers in connection with a private placement(1)
Exhibit 4.34 Letter of Termination dated June 6, 2003 from the Company to
Goldrea Resources Corp. (1)
Exhibit 4.35 Consultant Stock Option Agreement dated June 16, 2003 between
the Company and Kevin Leonard(1)
Exhibit 4.36 Loan Agreement dated July 4, 2003 between the Company and
Munday Home Sales Ltd.(1)
Exhibit 4.37 Subscription Agreement dated September 16, 2003 between the
Company and Munday-Maxwell & Gaylene-Association(1)
Exhibit 4.38 Form of Warrant Certificate dated May 29, 2003 issued to
Munday-Maxwell & Gaylene Association in connection with a
private placement(1)
Exhibit 4.39 Finder's Fee Agreement dated July 18, 2002 between Richard
Hughes and Donald E. Cross(2)
Exhibit 4.40 Consulting Agreement dated November 1, 2003 between the
Company and Kevin Leonard(2)
EX-2
Exhibit 4.41 Flow-Through Subscription Agreements dated November/December
2003 between the Company and various purchasers(2)
Exhibit 4.42 Non Flow-Through Subscription Agreements dated
November/December 2003 between the Company and various
purchasers(2)
Exhibit 4.43 Form of Warrant Certificate dated December 22, 2003 issued to
various purchasers in connection with a private placement(2)
Exhibit 4.44 Management Agreement dated January 1, 2004 between the Company
and Bullock Consulting Ltd.(2)
Exhibit 4.45 Director Stock Option Agreement dated January 6, 2004 between
the Company and Rupert L. Bullock(2)
Exhibit 4.46 Director Stock Option Agreement dated January 6, 2004 between
the Company and Lynn W. Evoy(2)
Exhibit 4.47 Director Stock Option Agreement dated January 6, 2004 between
the Company and Philip J. Southam(2)
Exhibit 4.48 Director Stock Option Agreement dated January 6, 2004 between
the Company and Richard W. Hughes(2)
Exhibit 4.49 Officer Stock Option Agreement dated January 6, 2004 between
the Company and Beverly J. Bullock(2)
Exhibit 4.50 Officer Stock Option Agreement dated January 6, 2004 between
the Company and Ronda Ross-Love(2)
Exhibit 4.51 Consultant Stock Option Agreement dated January 6, 2004
between the Company and Kevin Leonard(2)
Exhibit 4.52 Stock Option Plan effective April 8, 2004(2)
Exhibit 4.53 Amending Agreement dated August 10, 2004 between the Company
and Kenora Prospectors & Miners, Limited(3)
Exhibit 4.54 Amending Agreement dated August 10, 2004 between the Company
and Machin Mines Ltd.(3)
Exhibit 4.55 Loan Agreement dated August 19, 2004 between the Company and
Munday Home Sales Ltd.(3)
Exhibit 4.56 Mining Option Agreement dated June 23, 2004 between the
Company and 1304850 Ontario Inc. - Todd Township Property(3)
Exhibit 4.57 Mining Option Agreement dated June 23, 2004 between the
Company and 1304850 Ontario Inc. - Maskootch Lake Property(3)
Exhibit 4.58 Mining Option Agreement dated August 31, 2004 between the
Company and 1544230 Ontario Inc.(3)
Exhibit 4.59 Debt Settlement Agreement dated October 8, 2004 between the
Company and Munday Home Sales Ltd. ("MHS")(3)
Exhibit 4.60 Debt Settlement Agreement dated October 8, 2004 between the
Company and Tri-Pol Energy Corporation ("Tri-Pol")(3)
Exhibit 4.61 Form of Warrant Certificate dated December 23, 2004 for each
of MHS and Tri-Pol(3)
Exhibit 4.62 Subscription Agreements dated November 2004 between the
Company and various purchasers(3)
Exhibit 4.63 Form of Warrant Certificate dated December 8, 2004 issued to
various purchasers in connection with a private placement(3)
Exhibit 4.64 Subscription and Renunciation Agreement between the Company
and Canadian Small Cap Resource Fund 2004 Limited Partnership
dated December 23, 2004(3)
Exhibit 4.65 Form of Warrant Certificate dated December 30, 2004 issued to
Canadian Small Cap Resource Fund 2004 Limited Partnership(3)
Exhibit 4.66 Form of Warrant Certificate dated December 30, 2004 issued to
First Associates Inc.(3)
EX-3
Exhibit 4.67 Subscription Agreements dated March 2005 between the Company
and various purchasers(3)
Exhibit 4.68 Form of Warrant Certificate dated March 23, 2005 issued to
various purchasers in connection with a private placement(3)
Exhibit 4.69 Subscription Agreement between the Company and Hastings
Management Corp. dated April 13, 2005(3)
Exhibit 4.70 Assignment Agreement dated March 24, 2005 between the Company
and Vault Minerals Inc.(4)
Exhibit 4.71 Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited, CJP
Exploration Inc. and Barry McCombe(4)
Exhibit 4.72 Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited(4)
Exhibit 4.73 Mining Option Agreement dated March 28, 2005 between the
Company and Aurora-Larder Mining Corporation Limited, CJP
Exploration Inc. and Barry McCombe(4)
Exhibit 4.74 Mining Option Agreement dated March 28, 2005 between the
Company and Canadian Prospecting Ventures Inc.(4)
Exhibit 4.75 Mining Option Agreement dated May 6, 2005 between the Company
and Merton Stewart(4)
Exhibit 4.76 Administrative Services Agreement dated January 1, 2006
between the Company and Hastings Management Corp.(4)
Exhibit 4.77 Purchase and Sale Agreement dated June 13, 2005 between the
Company and Aurora-Larder Mining Corporation Limited and
Kirnova Corp.(4)
Exhibit 4.78 Mining Option Agreement dated June 21, 2005 between the
Company and Canadian Prospecting Ventures Inc.(4)
Exhibit 4.79 Mining Option Agreement dated June 21, 2005 between the
Company and Aurora-Larder Mining Corporation Limited(4)
Exhibit 4.80 Letter agreement dated July 19, 2005 between the Company and
Pat Gryba(4)
Exhibit 4.81 Mining Option Agreement dated July 22, 2005 between the
Company and Kirnova Corp. (as to 75%) and Todd Keast (as to
25%)(4)
Exhibit 4.82 Mining Option Agreement dated July 28, 2005 between the
Company and Ken Fenwick and George Lucuik(4)
Exhibit 4.83 Form of Stock Option Agreement dated July 28, 2005 between the
Company and, directors(4)
Exhibit 4.84 Form of Stock Option Agreement dated July 28, 2005 between the
Company and consultants(4)
Exhibit 4.85 Form of Stock Option Agreement dated July 28, 2005 between the
Company and management company employees(4)
Exhibit 4.86 Flow-Through Subscription Agreements dated August 3, 2005
between the Company and various purchasers(4)
Exhibit 4.87 Non-Flow Subscription Agreements dated August 3, 2005 between
the Company and various purchasers(4)
Exhibit 4.88 Form of Warrant Certificate dated October 7, 2005 issued to
various purchasers in connection with a private placement(4)
Exhibit 4.89 Mining Option Agreement dated August 22, 2005 between the
Company and Filo Exploration Services Limited and David V.
Jones(4)
Exhibit 4.90 Mining Option Agreement dated September 19, 2005 between the
Company and Aurora-Larder Mining Corporation Limited and
Katrine Exploration and Development Inc.(4)
Exhibit 4.91 Mining Option Agreement dated September 20, 2005 between the
Company and Kootenay Gold Inc.(4)
EX-4
Exhibit 4.92 Letter Agreement dated October 1, 2005 between the Company and
Golden Chalice Resources Inc.(4)
Exhibit 4.93 Form of letter dated September 16, 2005 from the Company to
insiders or consultant(4)
Exhibit 4.94 Mining Option Agreement dated October 12, 2005 between the
Company and Canadian Prospecting Ventures Inc.(4)
Exhibit 4.95 Form of Stock Option Agreement dated November 18, 2005 between
the Company and directors(4)
Exhibit 4.96 Form of Stock Option Agreement dated November 18, 2005 between
the Company and consultants(4)
Exhibit 4.97 Form of Stock Option Agreement dated November 18, 2005 between
the Company and management company employees(4)
Exhibit 4.98 Flow-Through Subscription Agreements dated November 30, 2005
between the Company and various purchasers(4)
Exhibit 4.99 Non-Flow Subscription Agreements dated November 30, 2005
between the Company and various purchasers(4)
Exhibit 4.100 Form of Warrant Certificate dated January 18, 2006 issued to
various purchasers in connection with a private placement(4)
Exhibit 4.101 Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross, Christina McManus, Jennah
Durham, Denis LaForest and Garry Windsor(4)
Exhibit 4.102 Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross, Christina McManus, Denis Morin,
Fernand Morin and Roger Dennomme(4)
Exhibit 4.103 Mining Option Agreement dated January 4, 2006 between the
Company and Frederick J. Ross and Garry Frederick Windsor(4)
Exhibit 4.104 Form of Stock Option Agreement dated February 2, 2006 between
the Company and directors(4)
Exhibit 4.105 Form of Stock Option Agreement dated February 2, 2006 between
the Company and consultants(4)
Exhibit 4.106 Form of Stock Option Agreement dated February 2, 2006 between
the Company and management company employees(4)
Exhibit 4.107 Mining Option Agreement dated March 1, 2006 between the
Company and Ken Fenwick, George Lucuik and Daniel Shelly(6)
Exhibit 4.108 Stock Option Plan (effective March 22, 2006)(6)
Exhibit 4.109 Form of Flow-Through Subscription Agreement dated April
2006(6)
Exhibit 4.110 Form of Non-Flow-Through Subscription Agreement dated April
2006(6)
Exhibit 4.111 Form of Warrant Certificate dated May 18, 2006 issued to
various purchasers in connection with a private placement(6)
Exhibit 4.112 Mining Option Agreement dated May 2, 2006 between the Company
and Frederick J. Ross, Garry Windsor and Bruce Durham(6)
Exhibit 4.113 Mining Option Agreement dated May 18, 2006 between the Company
and Larry Gervais, Bruce Pigeon and Lance Eden(6)
Exhibit 4.114 Mining Option Agreement dated May 18, 2006 between the Company
and Larry Gervais and Johnny Gull(6)
Exhibit 4.115 Mining Option Agreement dated May 28, 2006 between the Company
and Frederick J. Ross and Garry Windsor(6)
Exhibit 4.116 Mining Option Agreement dated May 28, 2006 between the Company
and Denis Morin and Roger Denomme(6)
Exhibit 4.117 Mining Option Agreement dated June 23, 2006 between the
Company and Ken Fenwick, Karl Bjorkman and Don Devereaux(6)
Exhibit 4.118 Letter Agreement dated June 28, 2006 between the Company and
Frederick J. Ross and Garry Windsor(6)
EX-5
Exhibit 4.119 Form of Joint Venture Agreement between the Company and Golden
Chalice Resources Ltd.(6);
Exhibit 4.120 Form of Flow-Through Subscription Agreement dated December
2006(6)
Exhibit 4.121 Form of Non-Flow-Through Subscription Agreement dated December
2006(6)
Exhibit 4.122 Form of Warrant Certificate dated December 22, 2006 issued to
various purchasers in connection with a private placement(6)
Exhibit 4.123 Mining Option Agreement dated February 5, 2007 between the
Company and Ashley Gold Mines Limited and David R. Healey(6)
Exhibit 4.124 Mining Option Agreement dated February 5, 2007 between the
Company and Frederick Ross, Garry Windsor, Bruce Durham and
Charles Hartley(6);
Exhibit 4.125 Form of Warrant Certificate dated February 6, 2007 issued to
various purchasers in connection with a private placement(6)
Exhibit 4.126 Mining Option Agreement dated March 1, 2007 between the
Company and CJP Exploration Inc. and Ashley Gold Mines
Limited(6)
Exhibit 12.1 Certification of Richard W. Hughes Pursuant to Rule
13a-14(a)(6)
Exhibit 12.2 Certification of Alan D. Campbell Pursuant to Rule
13a-14(a)(6)
Exhibit 13.1 Certification of Richard W. Hughes Pursuant to 18 U.S.C.
Section 1350(6)
Exhibit 13.2 Certification of Alan D. Campbell Pursuant to 18 U.S.C.
Section 1350(6)
Exhibit 15.1 Map of Ontario and Quebec including the Glass, Todd,
Maskootch, Kell Mine, Silver Strike, Silverclaim, Thompson,
Ajax, Strathy, Banting Chambers, Mennin Lake, Fripp, Hunter
Gold, Chapleau, Willet, Savard & Sharpe, Bompass-Strathy,
Horwood Gold, Labbe, Ross Windsor, Morin, Keith Sewell, East
Breccia, Gould Copper, Patent Gold, Loveland, Anderson Lake,
Chewett, Blackstock, Oke, Ford, Forge Lake, Otter Pond,
Gogama, Dale Gold and Meteor Lake Properties in Ontario(6)
Exhibit 15.2 Map of New Brunswick including the Tetagouche Property(5)
Exhibit 15.3 Map of British Columbia including the Connor Creek Property(5)
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(1) Previously filed as an exhibit to the Company's Registration Statement on
Form 20-F, filed with the Commission on October 14, 2003, and
incorporated herein by reference.
(2) Previously filed as an exhibit to Amendment No. 1 to the Company's
Registration Statement on Form 20-F, filed with the Commission on June
21, 2004, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Annual Report on Form
20-F, filed with the Commission on April 20, 2005, and incorporated
herein by reference.
(4) Previously filed as an exhibit to the Company's Annual Report on Form
20-F, filed with the Commission on April 24, 2006, and incorporated
herein by reference.
(5) Previously filed as an exhibit to the Company's amended Annual Report on
Form 20-FA, filed with the Commission on November 16, 2006, and
incorporated herein by reference.
(6) Filed herewith
EX-6