Consolidated Financial Statements for the Three...
GALANTAS GOLD CORPORATION
Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
For the Three and Nine Months Ended September 30, 2007
28 November 2007
Responsibility for Interim Consolidated Financial Statements
The accompanying unaudited interim consolidated financial statements for Galantas Gold Corporation have been prepared by
management in accordance with Canadian generally accepted accounting principles consistently applied. The most
significant of these accounting principles have been set out in the audited December 31, 2006 consolidated financial
statements. Only changes in accounting information have been disclosed in these unaudited interim consolidated financial
statements. These unaudited interim consolidated financial statements are presented on the accrual basis of accounting.
Accordingly, a precise determination of many assets and liabilities is dependent upon future events. Therefore,
estimates and approximations have been made using careful judgment. Recognizing that the Company is responsible for
both the integrity and objectivity of these unaudited interim consolidated financial statements, management is satisfied
that these unaudited interim consolidated financial statements have been fairly presented.
The accompanying unaudited interim consolidated financial statements of Galantas Gold Corporation for the three and nine
months ended September 30, 2007 have been approved by the Audit Committee and Board of Directors of the Company. These
interim consolidated financial statements have not been audited, reviewed or verified by the Company's external auditors
or any other accounting firm.
INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
September 30, December 31,
(Unaudited) 2007 2006
Assets
Current
Cash $ 991,265 $ 234,909
Accounts receivable and advances 597,300 397,953
Inventory 116,030 100,839
Future income taxes 213,366 213,366
_________ _________
1,917,961 947,067
Property, plant and equipment (Note 4) 15,289,632 13,385,929
Deferred exploration costs (Note 5) 1,159,511 267,348
Future income taxes 958,934 958,934
_________ _________
$ 19,326,038 $ 15,559,278
========= =========
Liabilities
Current
Accounts payable and accrued liabilities $ 1,342,616 $ 1,499,678
Current portion of financing facility (Note 6) 680,310 253,529
Due to related party (Note 8) 64,703 -
_________ _________
2,087,629 1,753,207
Long term portion of financing facility (Note 6) 1,060,474 379,773
_________ _________
3,148,103 2,132,980
_________ _________
Shareholders' Equity
Share capital (Note 7(a)) 25,791,005 22,458,500
Warrants (Note 7(b)) 2,776,238 1,913,100
Contributed surplus 500,095 848,985
_________ ________
29,067,338 25,220,585
Deficit (12,889,403) (11,794,287)
__________ _________
16,177,935 13,426,298
__________ _________
$ 19,326,038 $ 15,559,278
========== =========
Going concern (Note 1)
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian Dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2007 2006 2007 2006
Revenues
Gold sales $ 715,080 $ 15,673 $ 717,647 $ 30,565 __________
_________ __________ _________
Costs and expenses of mining operations
Cost of sales 909,123 2,023 910,415 7,923 Amortization 266,449 163 267,933
3,180 __________ _________ __________ _________
1,175,572 2,186 1,178,348 11,103
__________ _________ __________ _________
(Loss) income from mining operations (460,492) 13,487 (460,701) 19,462
__________ _________ __________ _________
Expenses and other income
Accounting and corporate 13,423 4,350 26,737 27,205 Bank charges and interest 21,112
7,780 25,678 11,114 Consulting fees - - 5,489 14,007 Foreign exchange (gain) loss
(82,662) 93,784 (137,207) 115,975 Legal and audit 5,306 6,325 55,354 186,759 Operating
expenses 290,427 32,215 349,592 80,247 Shareholder communication
and public relations 46,328 64,137 172,873 512,210 Stock based compensation (Note 7(c)) 24,015
15,638 85,110 179,304 Transfer agent 3,443 4,782 19,638 21,736 General office
7,208 23,130 31,951 54,478 Interest income (611) - (800) -
________ _______ _______ ________
327,989 252,141 634,415 1,203,035 ________ _______
_______ ________
Net loss and comprehensive loss $ (788,481) $ (238,654) $ (1,095,116) $ (1,183,573)
======== ======= ======= ========
__________________________________________________________________________________________________
Basic and diluted loss per share $ (0.00) $ (0.00) $ (0.01) $ (0.01)
__________________________________________________________________________________________________
Weighted average number of
shares outstanding 170,190,978 153,977,882 166,525,784 141,870,343
__________________________________________________________________________________________________
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian Dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2007 2006 2007 2006
Share Capital
Balance, beginning of period $ 24,243,290 $ 21,203,528 $ 22,458,500 $ 18,400,862
Issued under private placements,
net of issue costs 1,552,945 3,168,072 3,171,643 3,168,072
Warrants issued (139,230) (2,417,400) (863,138) (2,417,400)
Stock options exercised 50,000 - 590,000 -
Stock options exercised - valuation 84,000 - 434,000 -
Warrants exercised - - - 2,627,500
Warrants exercised - valuation - - - 175,166 __________ __________
__________ __________
Balance, end of period $ 25,791,005 $ 21,954,200 $ 25,791,005 $ 21,954,200
========== ========== ========== ==========
Warrants
Balance, beginning of period $ 2,637,008 $ - $ 1,913,100 $ 175,166
Issued 139,230 2,417,400 863,138 2,417,400
Exercised - - - (175,166) _________ __________
__________ __________
Balance, end of period $ 2,776,238 $ 2,417,400 $ 2,776,238 $ 2,417,400
========= ========== ========== ==========
Contributed Surplus
Balance, beginning of period $ 560,080 $ 820,324 $ 848,985 $ 656,658
Stock options granted 24,015 15,638 85,110 179,304
Stock options exercised (84,000) - (434,000) - _________
__________ __________ __________
Balance, end of period $ 500,095 $ 835,962 $ 500,095 $ 835,962
========= ========== ========== ==========
Deficit
Balance, beginning of period $ (12,100,922) $ (11,743,956) $ (11,794,287) $ (10,799,037)
Net loss (788,481) (238,654) (1,095,116) (1,183,573) _________
__________ __________ __________
Balance, end of period $ (12,889,403) $ (11,982,610) $ (12,889,403) $ (11,982,610)
========= ========== ========== ==========
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2007 2006 2007 2006
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss $ (788,481) $ (238,654) $ (1,095,116) $ (1,183,573)
Adjustments for non cash items:
Amortization 266,449 163 267,933 3,180
Stock based compensation (Note 7(c)) 24,015 15,638 85,110 179,304
Foreign exchange loss 51,349 - 51,807 -
Net change in non cash
working capital (Note 9) 43,606 260,154 (371,600) 402,550 ________
________ __________ _________
(403,062) 37,301 (1,061,866) (598,539)
INVESTING ACTIVITIES
Purchase of property,
plant and equipment (147,921) (908,780) (2,171,636) (2,573,130)
Deferred exploration costs (441,885) (582,427) (892,163) (1,749,328) ________
_______ _________ _________
(589,806) (1,491,207) (3,063,799) (4,322,458) ________
________ _________ _________
FINANCING ACTIVITIES
Issue of common shares 1,690,000 3,500,000 3,947,300 6,127,500
Share issue costs (87,055) (331,928) (185,657) (331,928)
Advances from financing facility 498,674 - 1,456,869 365,400
Repayments of financing facility (184,992) (29,691) (349,387) (102,723)
Advances from (repayment to)
related party 64,703 - 64,703 (253,103) _________
________ _________ ________
1,981,330 3,138,381 4,933,828 5,805,146 _________
________ _________ ________
NET CHANGE IN CASH 988,462 1,684,475 808,163 884,149
Effect of exchange rate changes on
cash held in foreign currencies (51,349) - (51,807) -
CASH, BEGINNING OF PERIOD 54,152 321,659 234,909 1,121,985 ________
________ ________ _________
CASH, END OF PERIOD $ 991,265 $ 2,006,134 $ 991,265 $ 2,006,134 ========
======== ======== =========
Supplemental cash flow information (Note 9)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007
1. GOING CONCERN
These unaudited interim consolidated financial statements have been prepared on a going concern basis which contemplates
that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal
course of business. The recoverability of these consolidated amounts, which includes the consolidated results of the
Company's wholly owned subsidiary Cavanacaw Corporation ("Cavanacaw"), is dependent on the ability of the Company to
obtain future financing and to recover its investment in Omagh Minerals Limited ("Omagh"). Cavanacaw has a 100%
shareholding in Omagh which is engaged in the acquisition, exploration and development of gold properties, mainly in
Omagh, Northern Ireland.
As at December 31, 2001, studies performed on Omagh's mineral property confirmed the existence of economically
recoverable reserves. As of July 1, 2007, the mineral property is in the production stage and the directors believe that
the capitalized development expenditures will be fully recovered by the operation of the mine. The recoverability of
Omagh's capitalized development costs is thus dependent on the ability to secure financing, future profitable production
or proceeds from the disposition of the mineral property.
Management is confident that it will be able to secure the required financing to enable the Company to continue as a
going concern. However, this is subject to a number of factors including market conditions. These interim consolidated
financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported expenses
and balance sheet classifications used that would be necessary if the going concern assumption was not appropriate.
Such adjustments could be material.
2. INCORPORATION AND NATURE OF OPERATIONS
The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479
Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by
articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources
Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties,
principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern
Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to
bring its property into production.
The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a
private Ontario corporation, acquired Omagh. The Company is developing an open pit mine to extract the Company's gold
deposit near Omagh, Northern Ireland. The Company also has developed a premium jewelry business founded on the gold
produced under the name Galántas Irish Gold Limited ("Galántas").
As at July 1, 2007, the Company's Omagh mine began production.
The Company's operations include the consolidated results of Cavanacaw and its wholly owned subsidiaries Omagh and
Galántas.
3. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The unaudited interim consolidated financial statements have been prepared in accordance with Canadian generally
accepted accounting principles for interim financial information. Accordingly, they do not include all of the
information and notes to the consolidated financial statements required by Canadian generally accepted accounting
principles for annual consolidated financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the three and nine month periods ended
September 30, 2007 may not necessarily be indicative of the results that may be expected for the year ended December 31,
2007.
The consolidated balance sheet at December 31, 2006 has been derived from the audited consolidated financial statements
at that date but does not include all of the information and footnotes required by Canadian generally accepted
accounting principles for annual consolidated financial statements. The interim consolidated financial statements have
been prepared by management in accordance with the accounting policies described in the Company's annual audited
consolidated financial statements for the year ended December 31, 2006, except as noted below. For further information,
refer to the audited consolidated financial statements and notes thereto for the year ended December 31, 2006.
Accounting changes
In July 2006, the Accounting Standards Board ("AcSB") issued a replacement of The Canadian Institute of Chartered
Accountants' Handbook ("CICA Handbook") Section 1506, Accounting Changes. The new standard allows for voluntary changes
in accounting policy only when they result in the financial statements providing reliable and more relevant information,
requires changes in accounting policy to be applied retrospectively unless doing so is impracticable, requires prior
period errors to be corrected retrospectively and calls for enhanced disclosures about the effects of changes in
accounting policies, estimates and errors on the financial statements. The impact that the adoption of Section 1506 will
have on the Company's results of operations and financial condition will depend on the nature of future accounting
changes.
Financial instruments, comprehensive income (loss) and hedges
In January 2005, the CICA issued Handbook Sections 3855, "Financial Instruments - Recognition and Measurement", 1530,
"Comprehensive Income", and 3865, "Hedges". These new standards are effective for interim and annual financial
statements relating to fiscal years commencing on or after October 1, 2006 on a prospective basis; accordingly,
comparative amounts for prior periods have not been restated. The Company has adopted these new standards effective
January 1, 2007.
(a) Financial instruments recognition and measurement
Section 3855 prescribes when a financial instrument is to be recognized on the balance sheet and at what amount. It
also specifies how financial instrument gains and losses are to be presented. This Section requires that:
· All financial assets be measured at fair value on initial recognition and certain financial assets to be measured at
fair value subsequent to initial recognition;
· All financial liabilities be measured at fair value if they are classified as held for trading purposes. Other
financial liabilities are measured at amortized cost using the effective interest method; and
· All derivative financial instruments be measured at fair value on the balance sheet, even when they are part of an
effective hedging relationship.
Financial instruments, comprehensive income (loss) and hedges (Continued)
(b) Comprehensive income (loss)
Section 1530 introduces a new requirement to temporarily present certain gains and losses from changes in fair value
outside net income. It includes unrealized gains and losses, such as: changes in the currency translation adjustment
relating to self sustaining foreign operations; unrealized gains or losses on available for sale investments; and the
effective portion of gains or losses on derivatives designated as cash flow hedges or hedges of the net investment in
self sustaining foreign operations.
(c) Hedges
Section 3865 provides alternative treatments to Section 3855 for entities which choose to designate qualifying
transactions as hedges for accounting purposes. It replaces and expands on Accounting Guideline 13 "Hedging
Relationships", and the hedging guidance in Section 1650 "Foreign Currency Translation" by specifying how hedge
accounting is applied and what disclosures are necessary when it is applied.
(d) Impact upon adoption of Sections 1530, 3855 and 3865
Under adoption of these new standards, the Company designated its cash as held for trading, which is measured at fair
value. Accounts receivable and advances are classified as loans and receivables, which are measured at amortized cost.
Accounts payable and accrued liabilities, financing facility and due to related party are classified as other financial
liabilities, which are measured at amortized cost.
The adoption of these Handbook Sections had no impact on opening deficit.
Accounting policy choice for transaction costs
On June 1, 2007, the Emerging Issues Committee of the CICA issued Abstract No. 166, Accounting Policy Choice for
Transaction Costs (EIC 166). This EIC addresses the accounting policy choice of expensing or adding transaction costs
related to the acquisition of financial assets and financial liabilities that are classified as other than held for
trading. Specifically, it requires that the same accounting policy choice be applied to all similar financial
instruments classified as other than held for trading, but permits a different policy choice for financial instruments
that are not similar. The Company has adopted EIC 166 effective September 30, 2007 and requires retroactive application
to all transaction costs accounted for in accordance with CICA Handbook Section 3855, Financial Instruments Recognition
and Measurement. The Company has evaluated the impact of EIC 166 and determined that no adjustments are currently
required.
New revenue recognition policy
Sales of gold are recognized when title and risk have passed under the terms of the relevant sales contracts.
Future accounting changes
Capital Disclosures and Financial Instruments - Disclosures and Presentation
On December 1, 2006, the CICA issued three new accounting standards: Handbook Section 1535, Capital Disclosures,
Handbook Section 3862, Financial Instruments - Disclosures, and Handbook Section 3863, Financial Instruments -
Presentation. These new standards are effective for interim and annual consolidated financial statements for the
Company's reporting period beginning on January 1, 2008.
Section 1535 specifies the disclosure of (i) an entity's objectives, policies and processes for managing capital; (ii)
quantitative data about what the entity regards as capital; (iii) whether the entity has complied with any capital
requirements; and (iv) if it has not complied, the consequences of such non compliance.
The new Sections 3862 and 3863 replace Handbook Section 3861, Financial Instruments - Disclosure and Presentation,
revising and enhancing its disclosure requirements, and carrying forward unchanged its presentation requirements. These
new sections place increased emphasis on disclosures about the nature and extent of risks arising from financial
instruments and how the entity manages those risks.
The Company is currently assessing the impact of these new accounting standards on its consolidated financial
statements.
4. PROPERTY, PLANT AND EQUIPMENT
September 30, 2007
Accumulated
Cost Amortization Net
Deferred development costs (1) $ 9,044,613 $ 51,258 $ 8,993,355
Freehold land and buildings 3,000,940 113,139 2,887,801
Plant and machinery 4,542,949 1,191,378 3,351,571
Motor vehicles 61,438 37,609 23,829
Office equipment 79,575 46,499 33,076
Moulds 81,802 81,802 -
_______________________________________________________________________________________________
$ 16,811,317 $ 1,521,685 $ 15,289,632
===============================================================================================
(1) Included in deferred development costs are sample income of $411,257 recognized prior to the Company went into
production.
December 31, 2006
Accumulated
Cost Amortization Net
Deferred development costs $ 7,275,572 $ - $ 7,275,572
Freehold land and buildings 2,962,629 32,999 2,929,630
Plant and machinery 3,773,982 657,702 3,116,280
Motor vehicles 61,438 31,851 29,587
Office equipment 77,303 42,443 34,860
Moulds 81,802 81,802 -
______________________________________________________________________________________________
$ 14,232,726 $ 846,797 $ 13,385,929
==============================================================================================
Freehold land and buildings includes an asset retirement obligation of $101,900.
5. DEFERRED EXPLORATION COSTS
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Opening balance $ 717,626 $ - $ 267,348 $ -
_________ ______ _________ ______
Additions during the period:
Wages 10,966 - 36,095 -
Drilling 389,430 - 792,494 -
Laboratory 41,489 - 63,574 -
________ ______ _________ ______
441,885 - 892,163 -
________ ______ _________ ______
Total deferred exploration costs $ 1,159,511 $ - $ 1,159,511 $ -
======== ====== ========= ======
6. FINANCING FACILITY
(i) In June 2007, the Company obtained financing from Barclays Mercantile Business Finance Ltd. in the amount of
$404,554 (£199,160 GBP) for the purchase of mining equipment. The loan is for a period of four years at 4.03% with
monthly principal and interest payments of $9,004 (£4,101 GBP), except for the third payment, which was paid for the
amount of $74,129 (£33,764 GBP).
(ii) In June 2007, the Company obtained a loan facility from Allied Irish Bank plc in the amount of $507,825 (£250,000
GBP). The term loan is for a period of three years at 7.25% with monthly principal and interest payments of $17,000
(£7,743 GBP).
(iii) In September 2007, the Company obtained a loan facility from Welsh Gold plc, a company controlled by a director of
the Company, in the amount of $544,490 (£268,050 GBP). The term loan is for a period of three years at 7.75% with
monthly principal and interest payments of $18,374 (£8,369 GBP).
Borrowings are secured by a legal mortgage charge over the land and a letter of guarantee.
Amounts payable on the long term debt are as follows:
September 30, December 31,
Interest 2007 2006
Financing facility (£238,700 GBP) 3.71% $ 194,610 $ 319,201
Financing facility (£180,000 GBP) 3.97% 192,808 314,101
Financing facility (£199,160 GBP) (i) 4.03% 319,771 -
Term loan facility (£250,000 GBP) (ii) 7.25% 489,105 -
Term loan facility (£268,050 GBP) (iii) 7.75% 544,490 -
________ _________
1,740,784 633,302
Less current portion 680,310 253,529
________ _________
$ 1,060,474 $ 379,773
======== =========
Principal repayments over the next four years are as follows:
2008 $ 680,310
2009 586,377
2010 409,153
2011 64,944
________
$ 1,740,784
========
7. SHARE CAPITAL
(a) Authorized and issued
Authorized
Unlimited number of common and preference shares issuable in Series
Issued common shares
Number of Stated
Shares Value
Balance, December 31, 2006 157,851,855 $ 22,458,500
Issued under private placement (i) and (ii) 12,924,000 3,357,300
Warrants issued (i) and (ii) - (863,138)
Stock options exercised 4,900,000 590,000
Stock options exercised valuation - 434,000
Share issue costs (i) and (ii) - (185,657)
_________________________________
Balance, September 30, 2007 175,675,855 $ 25,791,005
=================================
(i) On March 2, 2007, the Company closed a placement of 5,284,000 units for gross proceeds of $1,717,300. Each unit is
priced at $0.325 and is comprised of one common share and one warrant. Each warrant entitles the holder to purchase one
common share within 18 months from closing at a price of $0.45. An arrangement fee of 5% for $85,865 was paid to the
broker.
Other costs associated directly with the placing amounted to $12,737.
The placing shares are subject to a 4 month hold period which has expired on July 3, 2007.
The fair value of the 5,284,000 warrants was estimated using the Black Scholes option pricing model with the following
assumptions: dividend yield 0%; volatility 115%; risk free interest rate 3.91% and an expected life of 1.5 years.
The fair value attributed to the warrants was $723,908.
(ii) On September 4, 2007, the Company closed a placement of 7,640,000 units for gross proceeds of $1,640,000 (£764,000
GBP). Each unit is priced at approximately $0.21 (£0.10 GBP) and is comprised of one common share and one half warrant.
Each warrant entitles the holder to purchase one common share within 12 months from closing at a price of approximately
$0.32 (£0.15 GBP). Total arrangement fee of $70,838 (£33,000 GBP) was paid to the broker.
Other costs associated directly with the placing amounted to $16,217.
The placing shares are subject to a 4 month hold period that will expire on January 4, 2008.
The fair value of the 3,820,000 warrants was estimated on the date of grant using the Black Scholes option pricing model
with the following assumptions: dividend yield 0%; volatility 87.4%; risk free interest rate 4.36% and an expected
life of 1 year. The fair value attributed to the warrants was $139,230.
(b) Warrants
The following table shows the continuity of warrants for the period ended September 30, 2007:
Weighted
Average
Number of Warrants Price
Balance, December 31, 2006 15,300,000 $ 0.32
Issued (Notes 7(a)(i) and 7(a)(ii)) 9,104,000 0.40
______________ ____________
Balance, September 30, 2007 24,404,000 $ 0.34
============== ============
As at September 30, 2007, the following warrants were outstanding:
Number Fair Exercise Expiry
of Warrants Value ($) Price ($) Date
14,000,000 1,735,000 0.32 July 26, 2008
1,300,000 178,100 0.25 July 26, 2008
5,284,000 723,908 0.45 September 2, 2008
3,820,000 139,230 0.32 September 4, 2008
__________________________________________________________________
24,404,000 2,776,238
__________________________________________________________________
(c) Stock options
The following table shows the continuity of options for the nine months ended September 30, 2007:
Weighted
Average
Number of Options Price
Balance, December 31, 2006 7,500,000 $ 0.14
Exercised (4,900,000) 0.12
Granted (i) 500,000 0.23
____________________________________________________________________________
Balance, September 30, 2007 3,100,000 $ 0.20
============================================================================
(i) On June 15, 2007, 500,000 stock options were granted to an employee of the Company to purchase common shares at a
price of $0.23 per share until June 15, 2012. The options vest one third upon grant, one third on the first anniversary
of grant and one third on the second anniversary of grant. The fair value of the options was estimated using the Black
Scholes option pricing model with the following assumptions: dividend yield 0%; volatility 107%; risk free interest
rate 4.63% and an expected life of 5 years. The fair value attributed to these options was $96,000 and will be
expensed in the statements of loss and comprehensive loss and credited to contributed surplus as the options vest.
Included in the stock based compensation for the three and nine months ended September 30, 2007 is $12,000 and $48,000
respectively related to the vested portion of these stock options.
(ii) Stock based compensation expense includes $12,015 and $37,110 relating to stock options granted in previous years
that vested during the three and nine months ended September 30, 2007.
As at September 30, 2007, the following stock options were outstanding:
Exercisable Number Exercise Expiry
Options of Options Price ($) Date
1,400,000 1,400,000 0.15 April 10, 2008
200,000 200,000 0.10 May 13, 2010
666,667 1,000,000 0.26 June 14, 2011
166,667 500,000 0.23 June 15, 2012
_____________________________________________________________
2,433,334 3,100,000
=============================================================
8. RELATED PARTY TRANSACTIONS
For the three and nine months ended September 30, 2007, the Company was charged $14,202 and $33,546 (three and nine
months ended September 30, 2006 $7,995 and $32,921) for accounting and corporate secretarial services by companies
associated to an officer of the Company. Accounts payable includes $32,976 (September 30, 2006 $5,922) owing to these
companies.
During the three and nine months ended September 30, 2007, the Company paid or accrued to management in salary $76,240
and $210,400 (three and nine months ended September 30, 2006 $62,700 and $188,100). $nil and $134,160 (three and nine
months ended September 30, 2006 $62,700 and $188,100) of these amounts were capitalized to deferred development costs
and $76,240 (three and nine months ended September 30, 2006 $nil) was expensed to the statements of loss and
comprehensive loss as operating expenses.
Director fees of $4,500 and $23,000 (three and nine months ended September 30, 2006 $10,447 and $17,447) were paid or
accrued during the three and nine months ended September 30, 2007.
Included due to related party is $64,703 (£31,853 GBP) (September 30, 2006 $nil) owing to a director of the Company.
The loan is unsecured and non interest bearing with no specific terms of repayment.
Transactions with related parties were in the normal course of operations and were measured at the exchange amounts.
9. SUPPLEMENTAL CASH FLOW INFORMATION
(a) Net change in non cash working capital
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Accounts receivable and advances $ (120,861) $ 8,634 $ (199,347) $ (90,488)
Inventory (3,183) (1,462) (15,191) 1,385
Accounts payable and accrued liabilities 167,650 252,982 (157,062) 491,653
_________ ________ _________ _________
$ 43,606 $ 260,154 $ (371,600) $ 402,550
========= ======== ========= =========
(b) Supplemental information
Amortization capitalized to deferred
development costs $ - $ 86,978 $ 406,955 $ 224,742
========= ========= ========= =========
Interest paid $ 27,324 $ 19,901 $ 49,839 $ 43,124
========= ========= ========= =========
Interest paid includes $27,324 and $49,839 (three and nine months ended September 30, 2006 $12,121 and $32,010) of
interest paid on the financing facility for the three and nine months ended September 30, 2007. Of these amounts, $nil
and $22,515 (three and nine months ended September 30, 2006 $12,121 and $32,010) were charged to deferred development
costs and $27,324 (three and nine months ended September 30, 2006 $nil) was expensed to the statements of loss and
comprehensive loss.
10. SEGMENT DISCLOSURE
The Company, after reviewing its reporting systems, has determined that it has one reportable segment. The Company's
operations are substantially all related to its investment in Cavanacaw Corporation and its subsidiaries, Omagh and
Galantas. Substantially all of the Company's revenues, costs and assets of the business that support these operations
are derived or located in Northern Ireland.
11. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform to the current period presentation.
Latest directors dealings
- 11 hours ago Rathbones Group
- 12 hours ago The Artisanal Spirits Company
- 12 hours ago Tritax Eurobox (EUR)
- 13 hours ago Videndum
- 13 hours ago Legal & General Group