MD&A highlights.... The Company incurred a net loss of $2,120,902, during the nine months ended March 31, 2012 as compared to a net loss of $145,592 for the nine months ended March 31, 2011, for a difference of $1,975,310.
The significant changes in operating costs from the prior year are as follows: Bank charges and interest of $14,462 (2011 - $26,476). The decrease is because the Company repaid the loan payable on December, 2011. Consulting fees of $130,060 (2011 - $30,523) which includes the payment of $40,000 bonuses paid on December, 2011 and monthly fee increase of $500 to a consultant. Depletion of $169,351 (2011 - $131,711). Management fees of $189,019 (2011 - $129,500) includes the payment of bonuses of $32,019 and monthly fee increase of $2,500 to a director. Office and miscellaneous of $111,872 (2011 - $94,805) includes the payment of $34,654 to CM-Equity Global investment. Professional fees of $131,967 (2011 -$51,673). The Company incurred more professional services in regards to the Company’s increased issuance of private placements and flow-through shares. Rent of $15,333 (2010 - $nil). There was no rent accrued by the Company in previous years. Travel and promotion of $96,669 (2011 -$16,191). Payments include $7,070 in donations, $3,000 to Kcrew Communications for investor relations, $3,432 to Marketwire LP dealing with news releases, $12,487 to Cambridge House International Investment Conference and travels to Calgary and Toronto by the director. The Company entered into a year’s marketing and social media program with RBL Enterprises and $2,500 is charged in this quarter. Site decommissioning costs of $3,062 (2011 - $5,205). The adjustment was due to the difference between the discount rate used under Canadian GAAP: CICA 3110 – Asset Retirement Obligations and IFRS: IAS 37 – Provision. Stock-based compensation of $405,637 (2011 - $nil) was recorded upon the issuance of 700,000 stock options exercisable at a price of
.15 and 2,075,000 stock options exercisable at a price of
.20. Deferred income taxes of $976,042 (2011- $nil). The deferred taxes were recorded in accordance with treatment of the renouncement of flow-through share expenditures under IFRS.
Three Months ended March 31, 2012
The Company incurred a net loss of $875,113 during the three months ended March 31, 2012 as compared to a net income of $5,769 for the three months ended March 31, 2011, for a difference of $880,882.
The significant increases in operating costs from the prior three month are as follows: Depletion of $150,612 (2011 - $39,397). Management fees of $63,000 (2011 - $41,500) which includes monthly fee increase of $2,500 to a director. Professional fees of $40,220 (2011 - $16,242) which includes consultations on the tax and legal implications of the flow-through shares subscription agreements. Regulatory and transfer agent fees of $26,318 (2011 -$12,174) which includes $12,900 filing fees paid to TSX Ventures Exchange on the private placements done in quarter. Rent of $3,503 (2011 - $nil). There was no rent accrued by the Company in previous years. Travel & promotion of $49,914 (2011 - $5,390). Payments include $12,487 to Cambridge House International Investment Conference, $3,432 to Marketwire LP handling news releases and travels to Calgary and Toronto. The Company entered into year’s marketing and social media program with RBL Enterprises and $2,500 is charged in this quarter. Site decommissioning costs reduction to $990 (2011 - $727). The adjustment was due to the difference between the discount rate used under Canadian GAAP: CICA 3110 – Asset Retirement Obligations and IFRS: IAS 37 - Provision. Deferred income taxes of $509,627 (2011- $nil). The deferred taxes were recorded in accordance with treatment of the renouncement of flow-through share expenditures under IFRS.
During the Company’s year ended June 30, 2011, the total expenses were $1,952,857.
The significant expenses are as follows:- Consulting fees $89,480. Management fees $177,200. Professional fees $68,721. Property investigation fees $51,993. Regulatory and transfer agent fees $68,576. Rent expenses $41,009. Travel & promotion $50,022. Stock-based compensation $126,558. Write-down of oil & gas properties $377,346.