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Cooper Minerals Inc V.CQ



TSXV:CQ - Post by User

Post by bababasheep88on Apr 01, 2009 3:08pm
488 Views
Post# 15888816

latest sedar

latest sedarForm 51-102F1
Management’s Discussion and Analysis

Dated March 27, 2009

This management’s discussion and analysis (MD&A) regarding Cooper Minerals Inc. (the “Company”) is a
review of the Company’s financial and operating results and should be read in conjunction with the audited
financial statements and the accompanying notes for the years ended November 30, 2007 and November 30,
2008.  The  results  reported  therein  have  been  prepared  in  accordance  with  Canadian  generally  accepted
principles (“GAAP”) and are presented in Canadian dollars unless otherwise stated.    

All  monetary  amounts  in  this  MD&A  and  in  the  Company’s  consolidated  financial  statements  are
expressed in Canadian dollars, unless otherwise stated.    The Company’s financial statements include the
results of the operations of the Company’s wholly owned subsidiary Namura Finland Ltd. for the years
ended November 30, 2007 and November 30, 2008.

This MD&A may contain forward-looking statements. Such statements are subject to known and unknown
risks and uncertainties that may cause actual results in the future to differ materially from those anticipated in
forward-looking statements.

Description of Business and Overall Performance

Cooper Minerals Inc. (the “Company”) is a Canadian junior resource company engaged in the acquisition,
exploration  and  development  of  properties  with  the  potential  for  uranium  and  mineral  commodities.  The
Company  was  incorporated  in  the  Yukon  Territories  and  continued  its  business  in  British  Columbia.  It,
either directly or through joint venture partnerships, holds exploration interests in mineral properties located
in  Canada  and  Finland.  The  common  shares  of  the  Company  are  listed  for  trading  on  the  TSX  Venture
Exchange under the trading symbol “CQ” and on the Frankfurt Stock Exchange under the symbol “JM6”.
The  objective  of  the  Company  is  to  develop  mineral  properties  to  a  stage  where  they  can  be  operated
profitably.

Heron Lake Uranium Property

By  agreement  dated  September  16,  2005,  the  Company  acquired  a  100%  interest  in  the  Heron  Lake
Uranium Property entailing approximately 3,357 acres located 270 kilometres southwest of Yellowknife
in  the  Northwest  Territories.  Upon  commencement  of  commercial  production,  the  optionor  will  be
entitled to a net smelter royalty of 2% on all minerals.    The Company can buy down to a 1% net smelter
royalty  at  a  cost  of  $1,000,000.    The  purchase  price  of  $247,500  was  paid  by  issuance  of  1,550,000
shares of the Company and payment of $15,000 cash. Included in the purchase price are 150,000 shares
issued for finder’s fees.

The property is located approximately 270 kilometers southeast of Yellowknife, Northwest Territories. It
consists  of  two  claim  blocks,  with  a  total  area  of  approximately  1,356  hectares  (3,350  acres).    The
property includes a shear-hosted radioactive zone 600 meters long and at least 200 meters deep.    This
zone ranges up to 15 meters wide.    Work  by Uranerz Exploration and Mining Ltd. between 1977 and
1982 produced grab samples grading up to 0.370% U3O8 and minimal diamond drilling produced a best
intersection of 0.211% U3O8 over a 5 meter width.

During the fiscal year 2008, the Company did not undertake any exploration work on the property. Due to
the recent global economic downturn, the Company will delay the exploration program on this property to
future years to conserve cash resources for its core businesses. The Company’s strategy is to maintain the
property in good standing and review opportunities as circumstances demand.
Contact Lake Uranium Property

By agreement dated October 4, 2005, the Company acquired a 100% interest in the Contact Lake Property
entailing  approximately  74,505  acres  located  423  kilometres  north  of  Yellowknife  in  the  Northwest
Territories. Upon commencement of commercial production, the optionor will be entitled to a net smelter
royalty  of  2%  on  all  minerals.    The  Company  can  buy  down  to  a  1%  net  smelter  royalty  at  a  cost  of
$2,000,000.    The  purchase  price  of  $1,033,437  was  paid  by  issuance  of  2,208,594  shares  of  the
Company  and  payment  of  $150,000  cash.  Included  in  the  purchase  price  are  208,594  shares  issued  for
finder’s fees.

By agreement dated March 12, 2007, the Company acquired a 100% interest in the Contact Lake Property
entailing 45 claims and covering approximately 98,800 acres located 423 kilometres north of Yellowknife
in  the  Northwest  Territories.  Upon  commencement  of  commercial  production,  the  optioneer  will  be
entitled  to  a  net  smelter  royalty  of  2%  on  all  minerals.    The  Company  can  buy  down  to  a  1.5%  net
smelter  royalty  at  a  cost  of  $2,000,000.    The  purchase  price  of  $1,897,294  was  paid  by  issuance  of
3,223,529  shares  of  the  Company  and  payment  of  $350,000  cash.  Included  in  the  purchase  price  are
223,529 shares issued for finder’s fees.

By  agreement  dated  November  12,  2007,  the  Company  acquired  a  100%  interest  in  the  Contact  Lake
Property entailing 131 claims and covering approximately 306,027 acres located 423 kilometres north of
Yellowknife in the Northwest Territories.    This property is adjacent to the two properties already held by
the  Company.  Upon  commencement  of  commercial  production,  the  Vendor  will  be  entitled  to  a  net
smelter royalty of 2.5% on all minerals.    The Company can buy down to a 1.5% net smelter royalty at a
cost of $2,000,000. The purchase price included cash payment of $900,000 and 4,000,000 common shares
of the Company.

The  Company  has  acquired  the  Contact  Lake  properties  for  their  IOCG  (iron-oxide,  copper,  gold  and
uranium)  potential.  Some  of  this  land  adjoins  the  Alberta  Star  (TSX-V  Symbol:  ASX)  Contact  Lake
project and its newly acquired Port Radium-Crossfault Lake Property, which are being explored for iron
oxide,  copper,  gold,  silver  and  uranium  targets.  These  polymetallic  targets  have  the  potential  to  host
billions of tons of copper, gold, and uranium mineralization (Olympic Dam-type).

The Contact Lake claims  are in  the vicinity of two past producing  silver  and uranium  mines, the Echo
Bay  Mine  and  the  Port  Radium  Eldorado  Mine.    This  area  has  been  under-explored  and  has  lacked
advanced exploration geophysics.    The Contact Lake Mineral Belt is approximately 15 kilometers long
and   is   the   northern   extension   of   the   same   mineral   belt   that   hosts   Fortune   Minerals   NICO
Gold-Cobalt-Bismuth deposit.

During the 2007 and 2008 field season, the Company completed a 2 million exploration program on the
property.  The  program  included  airborne  surveys,  surface  grab  samples  and  core  drilling.  Sample
collection  was  designed  to  follow  up  on  the  previously  reported  widespread  mineralization  and
geophysical targets in a historic mining camp. A suite of 50 samples representing the different types of
alternation, mineralization, structures and host rocks were collected and submitted for assay.    Four drill
holes were completed in the vicinity of near surface underground workings to test the alternation system
observed in association with the mined conjugate vein system.    The surface samples and drill core were
collected  to  test  the  possibility  that  much  larger  systems  of  alternation  and  polymetallic  mineralization
indicative of IOCG type deposits occur in close association to previously mined high-grade bonanza-type
veins.  

Details of the assays results have been released in the Company’s news release dated November 21, 2007,
December 3, 2007 and March 25, 2008. The reported drill core and surface sample results confirm that a
much wider zone of alternation and high-grade polymetallic mineralization is present at the Terra Mine site
than was previously known. The Company had anticipated a phase 2 exploration program on the Contact
Lake Property upon completion of the phase 1 program. However due to unfavourable market conditions
and high field costs, the Company currently plans to delay its 2009 program to the fall of 2009 or beginning
of 2010, thereby providing the Company with increased financial flexibility to continue its businesses. The
Company intends  to  monitor and provide updates on  its  future  exploration programs  as  market  conditions
change.    

As  at  November  30,  2008,  the  Company  had  invested  a  total  $8,234,513  in  the  Contact  Lake  Property.  
The major components of the expenditures incurred and deferred to-date are as follows:

November 30 November 30
2008 2007
$ $

Acquisition costs
5,630,732 2,930,731
Exploration costs
Assaying, fees and general  320,042 147,126
Camp, labour and field equipments  244,658 11,469
Drilling  274,344 274,344
Geological and geophysical  1,012,752 963,987
Survey, evaluation, mapping  751,985 739,539
Total Exploration Costs
2,603,781 2,136,465

Total Deferred Costs - Contact Lake Property  8,234,513 5,067,196


Paukkajanvaara Uranium Deposit, Eastern Finland

By an option agreement dated February 14, 2006, the Company entered into a joint venture with Agricola
Resources   PLC   (“Agricola”)   of   United   Kingdom   to   acquire   an   undivided   50%   interest   in   the
Paukkajanvaara uranium  project (the  “Property”)  located  in  the  Joensuu  magistrate, Eastern  Finland. The
project  area  is  made up of ten  claim reservations totaling 90 square kilometers. These  claims include  the
only previously operated uranium mine in Finland, called Paukkajanvaara. Consideration is a commitment
by  the  Company  to  spend  $500,000  in  exploration  expenditures  on  the  property  over  two  years  and  the
Company’s commitment to subscribe 1,650,000 ordinary shares of Agricola at a subscription price of £0.03
per share. Since the shares of Agricolar were trading at £0.0194 at the time of purchase the excess amount of
£0.0106 was allocated to the purchase price of the mineral property.

Under  the  Agreement,  the  Company  is  to  also  contribute  in  equal  shares  to  the  costs  of  converting  the
Property to full exploration licence in May 2006 (such costs being estimated to be €100,000 in aggregate).  

Test  mining  of  the  Paukkajanvaara  Uranium  Deposit  in  1960  and  1961  by  the  Finnish  company
Atomienergia Oy at Paukkajanvaara produced about 30 tonnes of yellowcake (U3O8) from 30,700 tonnes
of  ore  assaying  0.12  per  cent  U3O8.    The  mineralization  at  Paukkajanvaara  shows  similarities  to  the
well-known  unconformity-type  uranium  deposit.  Approximately  53  drill  holes  have  been  drilled  in  the
immediate vicinity of the Paukkajanvaara uranium deposit.

Uraniferous  boulders  are  found  throughout  the  area  but  are  especially  prevalent  down  ice  from  the
Paukkajanvaara  uranium  deposit.  During  a  recent  radon  survey  Agricola  identified  six  radioactive
boulders;  these  boulders  contained  abundant  yellowish  uranophane  and  pitchblende.  Samples  of  these
boulders were sent to Chemex in Vancouver for analysis. Results received from Chemex indicate that the
uranium  content  of  the  boulders  are  as  follows,  0.170,  0.303,  0.471,  0.711,  0.745  and  1.170  per  cent
U3O8.

As at November 30, 2008, the Company had spent a total of $84,382 exploration cost on the property. These
costs were incurred in 2007 and chiefly related to the geological consulting fees, permits fees and legal fees.
For the year 2008, the Company had not contributed any exploration costs as Agricolar, the joint-venture
partner was unable to obtain an exploration licence. The Company is currently reviewing and assessing the
joint venture with Agricolar with an objective to negotiate revised terms to the Option Agreement.    

As  at  November  30,  2008,  the  Company  had  invested  a  total  $135,849  in  Paukkajanvaara  property.  The
major components of the expenditures incurred and deferred to-date are as follows:

November 30 November 30
2008 2007
$ $

Acquisition costs
51,467 51,467
Exploration costs
Application fees, legal and general  26,662 26,662
Geological and geophysical  25,000 25,000
Survey, evaluation, mapping  32,720 32,720
Total Exploration Costs
84,382 84,382

Total Deferred Cost - Paukkajanvaara Property  135,849 135,849


Acquisition of Namura Finland Ltd

In January 2007, the Company acquired a 100-per-cent of the issued and outstanding shares of Namura
Finland Ltd.(“Namura”), a private company based in Finland. Consideration for the purchase was to make
cash payment of $335,000 and to issue 6,000,000 common shares to the vendors. Namura Finland Ltd. is
now a wholly-owned subsidiary of the Company based in Finland.  

Namura Finland Ltd. currently holds 33 claim reservations over 27 known uranium occurrences. These
are all located in central and southern Finland. The Company intends to examine each of these uranium
occurrences and to decide whether or not to apply for a full mineral exploration licence. All of these claim
areas have been covered by airborne radiometric surveys carried out by the Geological Survey of Finland
(“GTK”).    Most of these surveys were carried out using a line spacing of 200 metres. This radiometric
data  is  available  from  the  Geological  Survey  and  the  Company  has  purchased  the  data  sets  for
examination. Cooper’s planned exploration program will be directed towards determining the extent and
depth of the uranium mineralisation at Kouvervaara.
The  Company  believes  that  this  portfolio  of  uranium  projects  in  Finland  represents  an  opportunity  to
acquire a full spectrum of uranium projects, ranging from a “blue-sky” scenario to a number of projects
with   “historically   inferred   resources”.   These   new   projects   will   supplement   Cooper’s   current
Paukkajanvaara uranium project.
During the year 2008, the Company’s major activity on the property was to obtain exploration licenses
through  its  Finland  subsidiary.  The  Company  found  that  this  was  a  time  consuming  and  expensive
process  which  involved  numerous  parties  such  as  environmental  concern  groups,  land-holders,  native
people and various local regulatory authority. The Company will only provide an exploration budget on
the  property  when  the  exploration  licenses  have  been  granted.  The  Company  hopes  to  get  the  licenses
before the year ended November 2009.
As at November 30, 2008, the Company had invested a total $3,189,288 in Namura Finland Ltd.    The
major components of the expenditures incurred and deferred to-date are as follows:
November 30 November 30
2008 2007
$ $

Acquisition costs
2,455,600 2,455,600
Exploration costs
Application fees, legal and general  96,563 26,662
Geological Consulting  637,125 358,208
Total Exploration Costs
733,688 384,870

Total Deferred Costs - Namura Finland Ltd.    3,189,288 2,840,470


Selected Annual Information

The  following  financial  date,  which  has  been  prepared  in  accordance  with  Canadian  generally  accepted
accounting  principles,  is  derived  from  the  Company’s  audited  financial  statements  for  the  year  ended
November 30, 2008, 2007 and 2006.

As at and for the financial year ended November 30
2008 2007  2006
(a)        Net sales or total revenues  Nil Nil  Nil
(b)        Net Income (loss)    
In total    ($238,542)          ($1,342,461)  ($620,518)
On a per share basis  ($0.01) ($0.04)  ($0.03)
©         Other    Comprehensive    income(loss)
(See changes in Accounting    policies)
($53,566) $32,550  Nil
(c)        Total Assets  $15,714,629          $14,266,157  $4,432,537
(d)        Total long term financial liabilities  Nil Nil  Nil
(e)        Cash dividends declared per share  Nil Nil  Nil



Results of Operations  

The Company had no producing properties, and consequently no sales or revenues. The only source of
income during the year was from interest earned on bank deposits. The amount fluctuates from period to
period depending on the Company’s cash balance and interest rates. The Company’s excess cash reserves
are held in short term flexible GIC’s with a major bank.

The net loss for the year ended November 30, 2008 was $238,542 or $0.01 per share as compared to the
net  loss  of  $1,342,461  or  $0.04  per  share  for  the  year  ended  November  30,  2007.  The  decrease  of
$1,103,919 in net loss was a result of substantial reduction in the operating expenses.

Operating expenses in the twelve months of fiscal 2008 were $363,119 (2007 - $1,543,736), a decrease of
$1,180,617.  The  most  important  category  attributed  to  the  decrease  was  stock  based  compensation
expense. Stock-based compensation, a non-cash expense, is comprised of the fair value of stock options
granted to directors, officers and consultants that vest in the period. The Company did not grant any stock
options during the year 2008 and therefore no stock compensation expense was recorded. In comparison,
the  Company  recognized  $973,112  stock  based  compensation  expense  during  the  year  2007.  Another
factor  for  the  changes  during  the  year  arose  from  the  reduction  $187,374  in  marketing  &  promotion
expenses when compared to the prior year. The reason was that the Company did not participate in certain
marketing activities such as trade shows and mining conference in Europe. Moreover, transfer agent and
exchanges  fees had decreased  from $76,089  in 2007 to $19,383 in 2008 because  the Company did not
complete any financing and thereby reduced the associated fees during the year. Certain categories of the
operating expenses had increased to reflect the on-going activities of the Company. Consulting fees had
increased by $75,490 (2008 - $174,490, 2007 - $99,000) largely due to the engagement of an independent
advisor for corporate communication. Rent for the office had increased (2008 - $15,000, 2007- $12,000)
as the monthly rent had increased by $500 since June 2008.

Summary of Quarterly Results

The following tables summarize information derived from the Company’s financial statements for each of the
eight most recently completed quarters:

Quarter Ended         Nov 30          Aug 31         May 31          Feb 29          Nov 30          Aug 31          May 31           Feb 28
Year  2008  2008  2008 2008 2007 2007  2007  2007
Revenues  Nil  Nil  Nil Nil Nil Nil  Nil  Nil
Net Income (Loss)          $45,254     $(117,761)      $(99,389)      $(66,646)     $(919,768)    $(175,502)     $(190,813)      $(56,378)
Basic & Diluted
Income(Loss) per
share
(0.00)  (0.00)  (0.00) (0.00) (0.04) (0.00)  (0.01)  (0.00)

Significant variances in the Company’s report loss from quarter to quarter are largely due to the granting of
stock options, which results in the recording of amounts for stock-based compensation expense. The large
increase  in  net  loss  from  the  third  quarter  to  the  fourth  quarter  2007  was  due  to  a  $973,112  stock  based
compensation expense being recorded. As there were no stock options granted in each quarter of 2008, there
was no stock based compensation expense incurred during the respective quarters.  

Liquidity and Capital Resources

As at November 30, 2008 the Company had net working capital of $3,772,611 compared to $5,653,488 as at
November 30, 2007 representing a decrease in working capital by $1,880,877. The decrease was primarily
due  to  cash  used  for  exploration  activities.  The  Company  had  net  cash  on  hand  of  $3,689,956.  The
Company  believes  that  it  has  sufficient  cash  on  hand  to  finance  its  expected  level  of  operations  and
working capital requirements through 2009.  

The Company has no operations that generate cash flow. In the event that the Company’s plans change, its
assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any,
prove  to  be  insufficient  to  fund  operations,  the  Company  may  be  required  to  seek  additional  financing.
Although the Company has been successfully in raising the above funds, there is no assurance that equity
funding will be accessible to the Company at the times and in the amounts required to fund the Company’s
activities.  

The Company is not exposed to any significant liquidity risk at this time. Given the global financial and
economic turmoil, it has been increasingly difficult for early stage exploration companies to raise required
financing. The Company continues to monitor its overhead and look for additional avenues to conserve its
working capital with the intent to continue to develop or acquire economic mineral deposit.    

Off-Balance Sheet Arrangement

The  Company  has  no  debt,  does  not  have  any  used  lines  of  credit  or  other  arrangements  in  place  to
borrow funds, and has no off-balance sheet arrangements.

Transaction with related parties

During the fiscal year ended November 30, 2008,  the  Company entered  into the following  transactions
with related parties:

a)   Paid or accrued $60,000 (2007 - $57,500) to a company owned by one of the directors for consulting
services.
b)   Paid or accrued $15,000 (2007 - $12,000) to a company related to a director for rental fees.
c)   Paid or accrued $30,000 (2007 - $20,000) to a company related to a director for accounting services.
d)   Paid or accrued $nil (2007 - $10,000) to a former director of the Company for consulting services.

These transactions are in the normal course of operations and are measured at the exchange amount, which is
the amount of consideration established and agreed to by the related parties, unless otherwise noted.

Fourth Quarter and subsequent events

On November 20, 2008, the Company announced that it had entered into a Joint Venture Agreement with
Rochester  Resources  Ltd.  (“Rochester”)  whereby  the  Company  has  an  Option  to  acquire  10%  equity
interest in the Mina Real Mexico S.A. de C.V. and thereby acquire indirect interests in the Mina Real and
Santa  Fe  gold  and  silver  properties.  In  consideration,  the  Company  is  required  to  make  payments  of
$1,475,000  and subscribing for 3,500,000 common shares of Rochester at  a deemed price  of $0.15 per
share equaling $525,000.

Upon the exercise of the Option all Net Profit received by Rochester from the Properties shall be divided
on  a  90%  /  10%  basis,  between  Rochester  and  the  Company.  The  Company  will  also  be  subject  to  a
"Gross  Overriding  Advance  Royalty"  of  $25,000  per  month  paid  free  and  clear  of  any  and  all  cost  or
expense incurred in connection with the operation of the Mina Real Property payable by Rochester to the
Company.  Furthermore,  upon  exercise  of  the  Option,  the  Company  shall  be  deemed  to  have  granted
Rochester  a  Back-In-Option,  to  re-acquire  in  whole  and  not  in  part  the  Equity  Interest  in  Mina  Real
Mexico S.A. de C.V.    The Back-In Option shall have a term of 3 years wherein:

-    During year 1 the Back-In Option shall not be exercisable;  
-    During year 2 the Back-In Option shall be exercisable by a cash payment of $2,075,000; and
-    During year 3 the Back-In Option shall be exercisable by a cash payment of $2,000,000.
-    
.  
The  Company  has  been  searching  for  a  strategic  partner  and  project  that  fulfilled  its  objectives  of
generating  revenue  streams  and  potential  for  significant  mineral  discovery.    With  the  Joint  Venture
Agreement  with  Rochester  Resources  Ltd.,  the  Company  feels  that  it  has  secured  an  agreement  that
achieves this objective.

As at the date of report, the Company concluded the transaction upon receiving regulatory approval. The
Company  had  made  the  required  payments  and  bought  3,500,000  common  shares  of  Rochester.  The
common  shares  of  Rochester  are  listed  on  the  TSX  Venture  Exchange  and  are  subject  to  a  resale
restriction for a period of four months expiring April 23 2009. The Company believes the investments in
the Mexico properties will diversify the Company’s operation and generate some cash flows.


Changes in accounting policies including initial adoption

Effective  December  1,  2007,  the  Company  adopted  new  recommendations  of  the  Canadian  Institute  of
Chartered Accountants (CICA) under the CICA Handbook sections as follows:

Going-concern  

In  June  2007,  the  CICA  amended  Handbook  Section  1400,  “General  Standards  of  Financial  Statement
Presentation”, which requires management to make an assessment of a company's ability to continue as a
going  concern.  When  financial  statements  are  not  prepared  on  a  going-concern  basis  that  fact  shall  be
disclosed together with the basis on which the financial statements are prepared and the reason why the
company is not considered a going-concern.  

Capital Disclosures  

Section 1535 specifies the disclosure of (i) an entity’s objectives, policies and processes for managing capital;
(ii) quantitative date 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 adoption
of  this  standard  has  had  no  material  impact  on  the  financial  statements  as  the  standard  relates  to  note
disclosure.

Financial Instruments – Disclosure and Presentation  

Sections 3862 and 3863 replace Section 3861 Financial Instruments – Disclosure and Presentation, revising
and enhancing 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  adoption  of  this  standard  has  had  no
material impact on the financial statements as the standard relates to note disclosure.


Recent Accounting Pronouncements

Goodwill and Intangibles

In February 2008, the CICA issued Handbook Section 3064, “Goodwill and Intangible Assets”, replacing
Section  3062,  “Goodwill  and  Other  Intangible  Assets”,  and  Section  3450,  “Research  and  Development
Costs”. This section establishes standards for the recognition, measurement, presentation and disclosure
of  goodwill  subsequent  to  its  initial  recognition  and  of  intangible  assets  by  profit-oriented  enterprises.
Standards concerning goodwill are unchanged from the standards included in the previous Section 3062.
The  new  section  is  effective  for  years  beginning  on  or  after  October  1,  2008.  The  Company  is  in  the
process of assessing the impact of this new section on its financial statements.

International Financial Reporting Standards (“IFRS”)

In  2006,  the  Canadian  Accounting  Standards  Board  (“AcSB”)  published  a  new  strategic  plan  that  will
significantly  affect  financial  reporting  requirements  for  Canadian  companies.  The  AcSB  strategic  plan
outlines  the  convergence  of  Canadian  generally  accepted  accounting  principles  with  IFRS  over  an
expected five year transitional period. In February 2008, the AcSB announced that 2011 is the changeover
date  for  publicly-listed  companies  to  use  IFRS,  replacing  Canada's  own  generally  accepted  accounting
principles. The date is for interim and annual financial statements relating to fiscal years beginning on or
after January 1, 2011. The transition date of January 1, 2011 will require the restatement for comparative
purposes  of  amounts  reported  by  the  Company  for  the  year  ended  December  31,  2010.  While  the
Company  has  begun  assessing  the  adoption  of  IFRS  for  2011,  the  financial  reporting  impact  of  the
transition to IFRS cannot be reasonably estimated at this time.

Financial Instruments

The  Company’s  financial  instruments  consist  of  cash,  short-term  investments,  receivables  and  accounts
payable. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant
interest,  currency  or  credit  risks  arising  from  these  financial  statements.  The  fair  value  of  these  financial
instruments approximates their carrying values, unless otherwise noted.  

Outstanding Share Data as at March 27, 2009

The Company is authorized to issue an unlimited number of common shares without par value. At March 27,
2009,  there  were  44,019,220  issued  and  outstanding  common  shares  compared  to  44,019,220  issued  and
outstanding shares at November 30, 2008. There was no change in the shares capital. As at the date of report,
all warrants exercisable expired and there were no warrants outstanding. There were 3,330,000 stock options
outstanding under the Company’s incentive stock option plan.    These stock options are exercisable at price
ranging from $0.30 to $0.80, with expiry dates ranging to November 13, 2012.  

Disclosure Controls and Procedures

The  Company  has  established  and  maintained  disclosure  controls  and  procedures  and  internal  control
over financial reporting. The certifying officers carried out an evaluation of the effectiveness of the design
and  operation  of  the  Company’s  disclosure  controls  and  procedures  as  of  November  30,  2008.  The
Company has very limited administrative staffing. As a result, internal controls which rely on segregation
of  duties  in  many  cases  are  not  appropriate  or  possible.  Management  has  implemented  certain  controls
such as frequent reviews and regular preparations of reconciliations of transactions to ensure absence of
material irregularities. Based on that evaluation, the CEO and CFO have concluded that the Company’s
disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a
timely  basis,  information  required  to  be  disclosed  by  the  Company  to  satisfy  its  continuous  disclosure
obligations, and are effective in ensuring that information required to be disclosed in the reports that the
Company  files  is  accumulated  and  communicated  to  management  as  appropriate  to  allow  for  timely
decisions regarding required disclosure.   
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