NFX Gold Inc.

 

 

Bewegung in die Bude!  

http://www.alphatrade.com/news/stories/AM/2007-05-15/MRW/200…  

Ist doch schon ungewöhnlich das einige so zuschlagen.  

NFX Gold Options Gold Properties in Harker-Holloway Gold Camp
May 15, 2007 11:56:00 AM

TORONTO, ONTARIO -- (MARKET WIRE) -- 05/15/07 -- NFX Gold Inc. ("NFX" or the "Company") (TSX VENTURE: NFX) is pleased to announce that it has been granted an option (the "Option Agreement"), subject to Board approval and TSXV acceptance, to earn up to a 70% interest in 101 mining claims in Holloway and Marriot Townships in northeastern Ontario (the "PG 101 Property"). The PG 101 Property is located in the prolific Harker-Holloway gold camp and proximal to St. Andrew Goldfield's Holloway and Holt Mines. The optionor of the PG 101 Property is The Perron Gold Corporation and Tiger Gold Exploration Corporation. Pursuant to the Option Agreement the Company has also been granted exclusive negotiating rights and a right of first refusal to option into or acquire all of the interests of each member of the Perron Group's other mineral properties, namely the Kerr Mine, Chesterville Mine, Keneccott, Rouyn-Noranda, Clenor Gold Mine, Bradette and other properties in the Harker-Holloway gold camp (the "Other Properties"), but excluding the Kerr Mine tailings.

The Company can earn an initial 50% interest (the "Initial Option") in the PG 101 Property by: a) the payment to Tiger Gold Exploration Corporation (the "Optionor") of CDN$60,000, which has already been made, b) funding not less than CDN $3,000,000 in aggregate exploration expenditures by December 31, 2010: i) at least $600,000 by December 31, 2007, ii) at least $1,200,000 (inclusive of year one amounts) by December 31, 2008, iii) at least $2,000,000 (inclusive of year one and two amounts) by December 31, 2009, and iv) at least $3,000,000 (inclusive of year one, two and three amounts) by December 31, 2010, and c) issuing 600,000 common shares of the Company (the "Shares") to the Optionor as follows: i) 150,000 Shares after receipt of all necessary regulatory approvals, ii) 150,000 Shares on or before December 31, 2007, iii) 150,000 Shares on or before December 31, 2008, and iv) 150,000 Shares on or before December 31, 2009. Pursuant to the Option Agreement, the Company has been granted the right to increase its interest in the PG 101 Property to 70% by satisfying all of the requirements of the Initial Option and by completing a bankable feasibility study on the PG 101 Property for placing the property into commercial production at a rate of not less than 250 tons per day. The PG 101 Property is currently encumbered with a 3% Net Smelter Returns royalty of which one-half may be purchased at any time for $2,000,000.

Pursuant to the Option Agreement, each member of the Perron Group has granted to NFX the exclusive right to negotiate, for a period expiring November 15, 2007, an option to acquire or earn a 50% interest in any and all of the Other Properties (as defined above) or an agreement for a business transaction involving all or substantially all of the Other Properties to consolidate them into one entity owned, operated and managed by NFX. From and after the date of expiry of the exclusivity period and continuing until May 31, 2008, each member of the Perron Group has granted NFX a right of first refusal on its respective interest in each of the Other Properties.

The PG 101 Property is adjacent to the eastern boundary of St. Andrew Goldfield's producing Holt Mine Property and only a few kilometres east of their Holloway Mine property. Historic production (1988-2004) from the Holt (McDermott) Mine totals 8.18 million tons at a grade of 0.162 opt Au(1) (7.42 million tonnes @ 5.6 gpt Au). Measured and indicated resources reported in 2006 for the Holt Mine are 2.99 million tonnes at a grade of 7.3 gpt Au(2). Production at the Holloway Mine to 2004 is reported as 4.73 million tons at a grade of 0.166 opt Au(1) (4.29 million tonnes @ 5.7 gpt Au). Measured and indicated resources reported in 2006 for the Holloway Mine are 1.04 million tonnes at a grade of 7.8 gpt Au(2). Several other smaller deposits in the Harker-Holloway gold camp and in the vicinity of the PG 101 Property include the Buffonta, Mattawasaga and East zone deposits.

The PG 101 Property is underlain by the same succession of mafic volcanic flows, breccias, and tuffs that host the known gold deposits of the area. These volcanic rocks are cut by ENE trending faults that splay from the Destor-Porcupine fault ("DPF"). The DPF is a major deformation zone that crosses along the north boundary of the PG 101 claims in Marriott Township. Proximity to the DPF, Kirkland-Larder and other similar regional faults are characteristic of significant gold deposits of the Eastern Abitibi greenstone belt.

An historic work report indicates that an Induced Polarization (IP) geophysical survey completed in 1988 on the PG 101 Property detected 11 anomalies. One of the anomalies was large and occurred at the western boundary extending and expanding eastward onto the claims. Historic reports also suggest the possibility that this anomaly was a possible extension of the Holt McDermott orebody onto the PG 101 property.

NFX plans to complete due diligence, compilation of historic work, geological modeling, identification of high priority targets and commence drilling on the PG 101 Property in 2007.

"The option of the PG 101 Property and Right of First Refusal to option other Perron Holdings properties is a major accomplishment. NFX has a strong cash position and is well positioned as a Tier 1 TSX Venture Exchange company to finance the acquisition, exploration and development of projects that offer the highest opportunity for success", states NFX president and CEO, Mr. Thomas Larsen.

Since 2006, NFX has acquired or optioned several key properties in the Larder Lake and Harker-Holloway gold camps and is in a position to acquire several other key properties within the next 6 months. The Company's principal assets prior to these acquistions were the Larder-Lake Properties (see About NFX below).

"Our new property holdings in the Larder Lake and Harker-Holloway gold camps have significantly improved NFX's opportunity to make an important discovery in the near future. Our priorities will focus on the recently optioned PG 101 Property where we believe there are high priority targets ready for drill testing", added Mr. Larsen."

About NFX

NFX is involved in the acquisition, exploration and development of gold properties in Northern Ontario. NFX's primary holdings include the Larder Lake Properties which comprise the Cheminis, Bear Lake, Fernland properties (collectively 100% owned) and the Barber Larder property (75% owned), that extend 8kms along the prolific Cadillac Larder Break. The Larder Lake Properties are currently being explored pursuant to an option and joint venture agreement with Maximus Ventures Ltd. ("Maximus"), whereby Maximus acquired the right to earn a 60% interest in NFX's interest at the Larder Lake Properties by expending $6 million on exploration thereon by December 31, 2008. Drilling is ongoing at the Larder Lake Properties.

(1) Historic production figures were obtained from the Ontario MNDM website (www.mndm.gov.on.ca). The original imperial tons and ounce per ton (opt) grades are quoted and the equivalent metric tonnes and grams per tonne (gpt) grades indicated in parentheses.

(2) Resources for St. Andrew Goldfield's Holt and Holloway Mines are quoted from St. Andrew Goldfield's website (www.standrewgoldfields.com) and the company's NI 43-101 Compliant Technical Report dated October 2, 2006. Only Measured and Indicated Resources are quoted. Inferred Resources have not been quoted.

This release contains certain "forward-looking statements". All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, are forward-looking statements. Forward-looking statements reflect the current internal projections, expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties, including those detailed from time to time in filings made by the Company with securities regulatory authorities, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company.



The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contacts:
NFX Gold Inc.
Thomas G. Larsen
President and CEO
(416) 360-8006 or Toll Free: 1-800-360-8006
(416) 361-1333 (FAX)
Website: www.nfxgold.com

 

 

Jetzt geht`s up!  

 

geht auch ein wenig!  

 

wieder eine Schlußrally!!  

  Frankfurt  
510.500st   0,215   0,22  10.000st   20:00h
          §  

aber man soll den Tag nicht vor dem Abend loben,
denn der war richtig nett und wenn die Canadier jetzt noch irgendwann
ins grüne drehen dann gibts auch noch eine gute Nacht!!!!  

schon schön, wenns mal aufwärts ehen würde( über ne längere Zeit), so bis 029 oder so, als kleine Trendwende.
P.S. Danke für  die Grafiken und so. Top angagement!  

der 38-Tagelinie von oben!!!
Hoffentlich hält die!!  

Welche aber die richtige ist, weiß keiner!!!

Das ist ja das Dumme!  

fragt sich nur, wann Du noch blau und gelb hinzuzeichnest...  

In Canada 75k im Bid!  

Aber Canada geht halt nicht .  

Für euch einen schönen Feiertag!!  

 

ob der leichte aufwärtstrend hält!!??  

ist zur Zeit eine schöne stabile Linie!!  

NFX Gold Inc.
(A Development Stage Company)
Consolidated Financial Statements
December 31, 2006 and 2005
Page
Auditors’ Report 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations and Deficit 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-12
1
AUDITORS' REPORT
To the Shareholders of
NFX Gold Inc.
(a development stage company)
We have audited the consolidated balance sheets of NFX Gold Inc. (a development
stage company) as at December 31, 2006 and 2005, the consolidated statements of
operations and deficit, and cash flows for the years then ended and the cumulative
period from inception on July 19, 1996 through to December 31, 2006. The
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. 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 NFX Gold Inc. as at December 31, 2006 and 2005
and the results of its operations and its cash flows for the years ended December
31, 2006 and 2005 and the cumulative period from inception July 19, 1996 through
to December 31, 2006 in accordance with Canadian generally accepted accounting
principles.
"SF PARTNERSHIP, LLP"
Toronto, Canada
April 20, 2007 LICENSED PUBLIC ACCOUNTANTS
NFX Gold Inc.
(A Development Stage Company)
Consolidated Balance Sheets
December 31, December 31,
2006 2005
$ $
Assets
Current
Cash 3,189,597 1,416
Marketable securities (note 3) 172,354 127,049
Sundry receivables (note 11) 102,135 77,858
Due from Northfield Metals Inc. (note 4) 16,462 16,000
Prepaid expenses 15,080 -
3,495,628 222,323
Plant and equipment (note 5) 71,593 89,481
Mineral resource properties (notes 6 and 12) 8,261,529 7,404,375
11,828,750 7,716,179
Liabilities
Current
153,785 247,692
Due to Eloro Resources Ltd. (note 7) 23,789 23,789
177,574 271,481
Non-controlling interest 11,770 11,770
Commitments and contingencies (note 10)
Shareholders’ equity
Share capital (note 8) 15,927,891 10,066,037
Contributed surplus (note 8) 1,326,579 1,568,488
Deficit (5,615,064) (4,201,597)
11,639,406 7,432,928
11,828,750 7,716,179
Approved by the Board: Thomas Larsen Francis Sauve
Director Director
Accounts payable and accrued liabilities
The accompanying notes are an integral part of these consolidated financial statements. 2
NFX Gold Inc.
(A Development Stage Company)
Consolidated Statements of Operations and Deficit
Cumulative from
inception on
July 19, 1996 to
December 31,
2006 2005 2006
$ $ $
General and administrative expenses
Professional fees 65,936 33,555 371,307
Consulting fees 330,000 168,000 1,628,811
Stock-based compensation 650,487 2,388 1,238,210
General and office 509,861 292,997 1,840,074
Investor relations - - 75,401
Amortization 588 732 193,682
Loss before the undernoted items 1,556,872 497,672 5,347,485
Interest income (37,421) (5,705) (56,722)
Other income - - (19,774)
Gain on sale of investments (89,890) (23,374) (113,264)
Gain on settlement of accounts payable (16,094) (30,154) (178,792)
Writedown of due from Northfield Metals Inc. - 32,501 305,695
Writedown of mineral resource properties - - 116,004
Loss for the period 1,413,467 470,940 5,400,632
Change in policy for stock-based compensation - - 214,432
Deficit, beginning of period 4,201,597 3,730,657 -
Deficit, end of period 5,615,064 4,201,597 5,615,064
Loss per share-basic and diluted 0.04 0.01
shares outstanding during the yearbasic
and diluted 41,957,481 32,603,406
Weighted average number of common
Years ended December 31
The accompanying notes are an integral part of these consolidated financial statements. 3
NFX Gold Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
Cumulative from
inception on
July 19, 1996 to
December 31,
2006 2005 2006
$ $ $
Cash provided by (used in)
Operating activities
Loss for the period (1,413,467) (470,940) (5,400,632)
Items not affecting cash
Stock-based compensation 650,487 2,388 1,238,210
Amortization 588 732 193,682
Gain on sale of marketable securities (89,890) (23,374) (113,264)
Gain on settlement of accounts payable (16,094) (30,154) (178,792)
Writedown of amount due from Northfield Metals Inc. - 32,501 305,695
Writedown of mineral resource properties - - 116,004
Changes in non-cash operating working capital
Sundry receivables (24,277) (51,068) (102,135)
Prepaid expenses (15,080) - (15,080)
Accounts payable and accrued liabilities 22,185 124,758 561,410
(885,548) (415,157) (3,394,902)
Financing activities
Issuance of common shares for cash 600,000 - 6,378,798
Exercise of options 1,096,253 - 2,775,139
Exercise of warrants 2,461,533 - 2,461,533
Share issue costs (51,627) - (252,262)
Non-controlling minority interest - - 11,770
Due to Northfield Metals Inc. - - 1,863,416
Due to Eloro Resources Ltd. - 55,789 23,789
- 4,106,159 55,789 13,262,183
Investing activities
Proceeds on sale of marketable securities 224,325 80,193 304,518
Proceeds on sale of plant and equipment - - 24,988
Marketable securities (179,740) (136,369) (363,609)
Plant and equipment - - (713,207)
Mineral resource properties expenditures (76,554) (235,048) (5,303,426)
Due from Northfield Metals Inc. (462) (48,501) (454,661)
Organization costs - - (172,288)
(32,431) (339,725) (6,677,685)
Net increase (decrease) in cash 3,188,181 (699,093) 3,189,597
Cash, beginning of period 1,416 700,509 -
Cash, end of period 3,189,597 1,416 3,189,597
Supplementary information
Interest paid - - -
Income taxes paid - - -
Years ended December 31,
The accompanying notes are an integral part of these consolidated financial statements. 4
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
5
1. Nature of operations and going concern
NFX Gold Inc. (the “Company”) was incorporated under the laws of Ontario. The Company and its subsidiary operate
solely in the exploration and development of mineral properties and extraction of precious metals in Canada. The
Company has not yet determined whether its properties contain ore reserves that are economically recoverable.
The Company is in the development stage and the continued operations of the Company and the recoverability of amounts
shown for mineral resource properties is dependent upon the existence of economically recoverable reserves, the ability of
the Company to obtain financing to complete the development of the properties and upon future profitable production, or
alternatively, upon the Company’s ability to recover its costs through a disposition of its interests. The amounts shown for
mineral resource properties represent costs to date, less amounts written off, and do not necessarily represent present or
future value. Changes in future conditions could require a material change in the amount recorded for mineral resource
properties.
At December 31, 2006, the Company reported a deficit of $5,615,064 and a loss for the year then ended of $1,413,467.
These circumstances lend doubt as to the ability of the Company to continue as a going concern. The consolidated
financial statements of the Company have been prepared on a going concern basis which contemplates the continuity of
operations and the ability of the Company to meet its obligations as they come due.
2. Summary of significant accounting policies
The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting
principles and include the following significant accounting policies:
Principles of consolidation
These consolidated financial statements include the accounts of the Company and its 90.5% owned subsidiary,
Towerlands Properties Inc.
Marketable securities
Marketable securities are stated at cost and are written down to quoted market values when there is evidence of a decline
in value that is other than temporary.
Mineral resource properties
Costs relating to the acquisition, exploration and development of mineral resource properties are deferred until the
properties are brought into commercial production, at which time, they are amortized over the estimated useful life of the
related property on a unit-of-production basis. When a property is determined to be non-commercial, non-productive, or its
value impaired, those costs in excess of estimated recoveries are charged to operations.
The cost of mineral resource properties includes the cash consideration and the fair value of shares issued on the date the
property is acquired. The proceeds from options granted on properties are credited to the cost of the related property.
Plant and equipment
Plant and equipment are recorded at cost. Amortization based on the estimated useful lives of the assets, is provided as
follows:
Furniture, fixtures and computer equipment 20% declining balance
Plant and equipment relating to mineral resource properties 20% declining balance
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
6
Impairment of long-lived assets
The Company reviews for impairment of its long-lived assets, including mineral properties and related deferred costs,
development costs, and plant and equipment, for events or changes in circumstances that might indicate 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.
The Company's mineral exploration and development activities are subject to various laws and regulations regarding
protection of the environment. As a result of these, the Company is expected in the future to incur expenses from time to
time to discharge its obligations under these laws and regulations. Certain of these expenses will meet the definition of an
asset and other expenses will not meet this definition. The assets will be capitalized and the other costs will be expensed
as incurred. When estimating the costs which are expected to be incurred there are many factors to be considered such
as the extended period over which the costs are to be incurred, the discount factors and significant judgments and
estimates. As such the fair value of the retirement obligations could change materially from year to year. In addition,
changes in laws and regulations could cause significant changes in the expected costs and the related fair value.
Asset retirement obligations
The Company recognizes statutory, contractual or other legal obligations related to the retirement of tangible long-lived
assets when such obligations are incurred, if a reasonable estimate of fair value can be made. These obligations are
measured initially at fair value and the resulting costs capitalized to the carrying value of the related asset. In subsequent
periods, the liability is adjusted for any changes in the amount or timing and for the discounting of the underlying future
cash flows. The capitalized asset retirement cost is amortized to operations over the life of the asset. The Company has
no material asset retirement obligations as the disturbance to date is minimal.
Flow-through shares
The Company finances a portion of its exploration and development activities through the issue of flow-through shares
issued pursuant to the Income Tax Act (Canada). Under the terms of these share issues, the deductions for income tax
purposes of the related expenditures are renounced to the subscriber of the flow-through shares. Share capital is reduced
and future income taxes are increased by the estimated income tax benefits renounced by the Company to the
subscribers, except to the extent that the Company has unrecorded loss carryforwards and income tax pools in excess of
book value available for deduction.
Stock-based compensation
The Company enters into transactions in which services are the consideration received for the issuance of equity
instruments. The value of these transactions are measured and accounted for, based on the fair value of the equity
instruments issued or the value of the services, whichever is more reliably measurable. The services are expensed in the
year during which the services are rendered.
The Company applies the fair value-based method of accounting to all stock-based compensation payments to both
employees and non-employees.
Income taxes
Income taxes are recorded using the asset and liability method of income tax allocation. Future income tax relates to the
expected consequences of differences between the carrying amount of balance sheet items and their corresponding tax
values. Future tax assets are recognized only to the extent that, in the opinion of management, it is more likely than not
that the future income tax assets will be realized. Future income tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment or substantive enactment.
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
7
Loss per share
The basic loss per share is calculated by dividing the loss applicable to the common shares by the weighted average
number of common shares outstanding during the year. Diluted loss per share is calculated using the treasury stock
method and reflects the potential dilution by including stock options and contingently issuable shares, in the weighted
average number of common shares outstanding for the year, if dilutive. As the Company incurred net losses for the year
ended December 31, 2006, the dilutive effect of outstanding options and warrants and their equivalents is not reflected in
diluted earnings per share because their effect would be antidilutive.
Estimates
The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and
expenses and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could
differ from those estimates.
Financial instruments
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.
Fair value
The carrying amounts of financial instruments approximate their fair values due to their short-term maturities.
3. Marketable securities
As at December 31, 2006, marketable securities include an investment of $167,354 (2005-$73,331) in Eloro Resources
Ltd. (“Eloro”) with a market value of $362,166 (2005-$113,267) and an investment of $nil (2005-$47,217) in Forsys Metals
Corp. (“Forsys”) with a market value of $nil (2005-$63,140). Three directors of the Company are directors of Eloro. Two
officers of the Company are officers of Forsys.
4. Due from Northfield Metals Inc.
The amount due from Northfield Metals Inc. (“Northfield”) is unsecured, bears no interest and is due on demand.
Subsequent to year-end, $16,462 was received however the Company is continuing its efforts to recover $305,695 owed
by Northfield that was written off by the Company in prior years. Two directors of Northfield are directors of the Company.
5. Plant and equipment
2006 2005
$ $
Furniture, fixtures and computer equipment 23,385 23,385
Accumulated amortization 21,029 20,440
2,356 2,945
Plant and equipment relating to mineral resource properties 646,823 646,822
Accumulated amortization 577,586 560,286
69,237 86,536
71,593 89,481
Amortization on plant and equipment relating to mineral resource properties amounted to $17,300 (2005-$21,632) and was
capitalized to mineral resource properties.
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
8
6. Mineral resource properties
At December 31, 2006, the Company owns:
(a) a 100% interest in the Cheminis property which consists of 58 patented claims and 2 licenses of occupation in
McGarry and McVittie Townships near Kirkland Lake, Ontario;
(b) a 75% interest in the Barber Larder property which consists of 7 patented claims and 2 licenses of occupation in
McGarry Township, Ontario;
(c) a 100% interest in the Lake Abitibi property which consists of 1 mining claim in Bonis Township, Ontario;
(d) a 100% interest in the McVittie McGarry properties which consists of 10 mining claims in McVittie Township, 2 mining
claims in McGarry Township and 1 mining claim in Gauthier Township near Kirkland Lake, Ontario; and
(e) a 100% interest in the Kirkland Wright properties which consists of 16 mining claims in McGarry, Hearst and
McFadden Townships, Ontario.
Cheminis
$
Barber
Larder
$
Abitibi
$
McVittie
McGarry
$
Kirkland
Wright
$
Total
$
Balance, January 1, 2005 6,781,444 253,001 113,250 — — 7,147,695
Exploration costs 256,680 — — — — 256,680
Balance, December 31, 2005 7,038,124 253,001 113,250 — — 7,404,375
Acquisition costs — — — 267,500 53,800 321,300
Exploration costs 535,854 — — — — 535,854
Balance, December 31, 2006 7,573,978 253,001 113,250 267,500 53,800 8,261,529
Option and Joint Venture Agreement
On March 7, 2006, the Company and Maximus Ventures Ltd. (“Maximus”) entered into an option and joint venture
agreement (the “Agreement”) which provides Maximus with a right to acquire a 60% interest of the Company’s interest in
the Cheminis property and Barber Larder property by expending $6,000,000 on exploration (the “Expenditures”) in the
following increments: i) $220,000 by December 31, 2005, which was expended; ii) $480,000 by July 31, 2006, which was
expended; iii)$500,000 by December 31, 2006, which was expended; iv) $2,000,000 by December 31, 2007; and v)
$2,800,000 by December 31, 2008.
Should Maximus default or fail to make any of the Expenditures, Maximus will be permitted 60 days to remedy such
default, failing which Maximus will forfeit any rights it has to an interest in the Cheminis property and Barber Larder
property and the Agreement shall be terminated.
Under the terms of the Agreement and as compensation for the Expenditures, the Company issued to Maximus 8,000,000
common share purchase warrants as follows: i) 1,500,000 warrants entitling the holder to purchase 1,500,000 common
shares at a price of $0.20 per common share until December 31, 2006 (the “Year One Warrants”); ii) 2,500,000 warrants
entitling the holder to purchase 2,500,000 common shares at an exercise price of $0.20 per common share until
December 31, 2007 (the Year Two Warrants”); and iii) 4,000,000 warrants entitling the holder to purchase 4,000,000
common shares at an exercise price of $0.30 per common share until December 31, 2008 (the “Year Three Warrants”).
The Company provided Maximus with written notice pursuant to the terms of the Year One Warrants, Year Two Warrants
and Year Three Warrants, that the average closing price of the common shares of the Company was over $0.60 per share
for 60 consecutive business days, and accordingly, on July 10, 2006, the Year One Warrants, Year Two Warrants and
Year Three Warrants were exercised and 8,000,000 common shares of the Company were issued for proceeds of
$2,000,000.
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
9
Acquisition of Properties
On May 8, 2006, the Company acquired from an arm’s length party, 16 mining claims in McGarry, Hearst and McFadden
Townships (the “Kirkland Wright Properties”). The Company acquired a 100% interest in the Kirkland Wright Properties
by: i) payment of $25,000; ii) the issue of 20,000 common shares of Company at a price of $1.44 per common share; iii)
incurring sufficient exploration expenditures to maintain the Kirkland Wright Properties in good standing; and iv) the
issuance of 10,000 common shares of the Company annually for three years beginning on the first anniversary of the
agreement. The vendor retained a 1% net smelter return royalty on the Kirkland Wright Properties, of which, the Company
has the option to purchase 0.5% for $500,000.
On July 26, 2006, the Company acquired from Eloro, a related party (see note 7), 10 mining claims in McVittie Township, 2
mining claims in McGarry Township and 1 mining claim located in Gauthier Township, near Kirkland Lake, Ontario (the
“McVittie McGarry Properties”). The Company acquired a 100% interest in the McVittie McGarry Properties in exchange
for the issue of 250,000 common shares of the Company at a deemed price of $1.07 per common share, which was the
price approved by the TSX Venture Exchange. The McVittie McGarry Properties are encumbered with a 1% net smelter
return royalty, of which, Eloro has the option to purchase 0.5% for $500,000. The obligations of the existing net smelter
royalty agreement were assigned to the Company by Eloro. The Company also granted to Eloro a net smelter return
royalty of 0.5%.
7. Due to Eloro Resources Ltd.
The amount due to Eloro is unsecured, bears no interest and is due on demand. Three directors of Eloro are also directors
of the Company.
8. Share capital
Authorized
An unlimited number of common shares without par value.
Issued
2006 2005
Number of
shares
Amount
$
Number of
shares
Amount
$
Common shares, beginning of year 32,603,406 10,066,037 32,603,406 10,066,037
Issued for cash:
Private placement of units 2,000,000 600,000 — —
Exercise of stock options 4,327,500 1,096,253 — —
Exercise of Maximus warrants (note 6) 8,000,000 2,000,000 — —
Exercise of warrants 1,203,833 461,533 — —
Issued as payment for:
Technical and business advisory services agreement 229,163 91,665 — —
Mineral resource properties (note 6) 270,000 296,300 — —
Share issue costs — (51,627) — —
Fair value assigned to warrants issued — (207,000) — —
Fair value assigned to exercise of stock options — 933,006 — —
Fair value assigned to exercise of Maximus warrants — 442,000 — —
Fair value assigned to exercise of warrants — 199,724 — —
Common shares, end of year 48,633,902 15,927,891 32,603,406 10,066,037
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
10
Private placement of units
On February 13, 2006, the Company completed a private placement of 2,000,000 Units at a price of $0.30 per Unit for total
gross proceeds of $600,000. Each Unit consisted of one common share and one half of a common share purchase
warrant. Each whole warrant entitles the holder to acquire one common share of the Company at a price of $0.40 per
common share until August 13, 2007. In connection with the private placement, the Company paid a finder’s fee of
$48,000 and 200,000 Unit Purchase Warrants. Each Unit Purchase Warrant entitles the holder to acquire a Unit at a price
of $0.30 per Unit until August 13, 2007.
Technical and business advisory services agreement
On March 3, 2006, the Company issued 208,330 common shares of the Company at a deemed price of $0.40 per
common share to a related party, International Goldfields Limited (“IGL”), pursuant to a technical and business advisory
services agreement (“Services Agreement”) provided for the period May 2005 to February 2006. On June 2, 2006, the
Company issued 20,833 common shares of the Company at a deemed price of $0.40 per common share to IGL pursuant
to the Services Agreement for the month of March 2006. IGL is a shareholder of the Company and a director of the
Company was a director of IGL.
Stock options
Under a fixed stock option plan, the Company may grant options to its employees for up to 7,500,000 common shares.
The exercise price of each option shall not be less than the closing price of the Company’s common shares on the TSX
Venture Exchange on the last trading day immediately preceding the date of grant of the option, less the applicable
discount discounted price for option used by the TSX Venture Exchange. The option period for each option shall not
exceed 5 years. Options granted vest in 4 equal installments on the date of grant, at 6 months, 12 months and 18 months
after the date of grant. At December 31, 2006, there are 1,835,000 options available to be granted under the stock option
plan.
On January 30, 2006, the Company granted 1,200,000 stock options to an officer and director and consultants to the
Company. Each stock option entitles the holder to acquire one common share of the Company for $0.55 per common
share until January 30, 2011.
A summary of the Company's fixed stock option plan is presented below:
2006 2005
Number of
options
Weightedaverage
exercise
price
Number of
options
Weightedaverage
exercise
price
Outstanding, beginning of year 4,465,000 0.24 3,940,000 0.23
Granted 1,200,000 0.55 525,000 0.30
Exercised (4,327,500) 0.25 — —
Forfeited (112,500) 0.30 — —
Outstanding, end of year 1,225,000 0.50 4,465,000 0.24
Options exercisable 531,250 3,940,000
A summary of the Company’s fixed stock options outstanding and exercisable at December 31, 2006 is presented below:
Exercise price
Options
outstanding
Options
exercisable
Expiry date
$0.30 225,000 131,250 December 16, 2010
$0.55 1,000,000 400,000 January 30, 2011
1,225,000 531,250
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
11
The fair value of options issued was determined using the Black-Scholes option pricing model with the following
assumptions:
2006 2005
Risk-free interest rate 3.92% 3.84%
Expected volatility 287% 112%
Expected life of options 3 years 3 years
Expected dividend yield 0% 0%
The fair value of $783,000 for options issued during the year (2005 – $131,000) is being expensed as stock-based
compensation over the vesting period.
Warrants
A summary of the Company's warrants is presented below:
2006
Number of
warrants
Weightedaverage
exercise
price
Outstanding, beginning of year — —
Issued 9,300,000 0.27
Exercised (9,203,833) 0.27
Outstanding, end of year 96,167 0.40
A summary of the Company’s warrants outstanding at December 31, 2006 is presented below:
Exercise price
Warrants
outstanding
Expiry date
$0.40 96,167 August 13, 2007
Contributed surplus
2006 2005
$ $
Balance, beginning of year 1,568,488 1,566,100
Fair value assigned to warrants issued for private placement of units 207,000 —
Fair value assigned to warrants issued to Maximus 442,000 —
Premium on shares issued to IGL 33,334 —
Transferred to share capital on exercise of stock options (933,006) —
Transferred to share capital on exercise of Maximus warrants (442,000) —
Transferred to share capital on exercise of warrants (199,724) —
Stock-based compensation 650,487 2,388
Balance, end of year 1,326,579 1,568,488
9. Income taxes
The Company’s effective income tax rate differs from the amount that would be computed by applying the federal and
provincial statutory rate of 36% (2005 – 36%) to the net loss for the year. The reasons for the difference are as follows:
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
12
2006 2005
$ $
Income tax recovery based on statutory rate (509,000) (165,000)
Stock-based compensation 234,000 1,000
Other 38,000 (14,000)
Unrecorded tax benefit of losses 237,000 178,000
— —
The Company’s future income tax assets were as follows:
2006 2005
$ $
Non-capital loss carryforward 783,000 705,000
Mineral resource properties 1,123,000 1,123,000
Plant and equipment 76,000 69,000
1,982,000 1,897,000
Valuation allowance (1,982,000) (1,897,000)
— —
Due to losses incurred in the current year and expected future operating results, management determined that it is more
likely than not that the future income tax assets will not be realized, and accordingly, a valuation allowance has been
recorded for the future income tax assets.
At December 31, 2006, the Company had non-capital loss carryforwards which expire as follows:
$
2007 281,000
2008 136,000
2009 129,000
2010 89,000
2014 423,000
2015 462,000
2016 656,000
2,176,000
10. Commitments and contingencies
In conjunction with the Ontario Ministry of Northern Development (the “Ministry”), the Company has established a trust fund
(the "Fund") to guarantee the payment of the costs anticipated for the rehabilitation of the mine site following a permanent
closure of the mine at the Cheminis property. The Fund, which is controlled by the Ministry, will accumulate $92,100 and
will be returned to the Company when the mine closure is completed. The costs anticipated for the rehabilitation of the
mine site will be accrued over the life of the mine.
11. Related party transactions
For the year ended December 31, 2006, consulting fees included $254,000 (2005-$168,000) expensed to companies
controlled by a director and management of the Company; mineral resource properties included $25,000 (2005-$100,000)
paid pursuant to Services Agreement with IGL. IGL is a shareholder of the Company and a director of the Company was a
director of IGL.
NFX GOLD INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
13
Sundry receivables included $62,535 due from a director, which was received subsequent to the year end. Sundry
receivables include $4,000 due from Wavex International Inc. (“Wavex”) which is unsecured, bears no interest and is due
on demand. Two directors of Wavex are directors of the Company. Sundry receivables include $25,089 due from
Champion Minerals Inc. (“Champion”) which is unsecured, bears no interest and is due on demand. One director of
Champion is a director of the Company. Accounts payable includes $8,764 (2005-$39,416) owed to a director.
These transactions were in the normal course of business and are recorded at an exchange value established and agreed
upon by the related parties.
12. Subsequent event
On April 3, 2007, the Company entered an agreement to acquire from an arm’s length party, 2 mining claims in McVittie
Township (the “McVittie Property”). The Company will acquire a 100% interest in the McVittie Property by the issuance of
100,000 common shares of the Company. The vendor will retain a 0.5% net smelter return royalty on the McVittie
Property, of which, the Company will have the option to purchase 0.25% for $250,000. The completion of the acquisition is
subject to receipt of all necessary regulatory approvals including that of the TSX Venture Exchange.