EX-99.2 3 ex99_2.htm EXHIBIT 99.02 Exhibit 99.02

CORAL GOLD RESOURCES LTD.
Consolidated Balance Sheets
(Prepared by Management)
   
July 31,
  
January 31,
  
 
  
2005
  
2005
  
    $    
$
 
  
(Unaudited)
          
(Audited
)
ASSETS
              
               
Current
              
Cash and cash equivalents
    
912,255
    
1,472,146
  
Advances receivable (note 6(b))
    
73,723
    
78,101
  
Marketable securities
    
57,359
    
57,359
  
Prepaid expenses
    
27,737
    
12,647
  
Share subscriptions receivable
    
-
    
11,945
  
               
     
1,071,074
    
1,632,198
  
               
Investment securities
    
72,575
    
72,575
  
Loan receivable (note 6(e))
    
83,000
    
50,000
  
Equipment
    
4,100
    
4,543
  
Mineral properties (note 4)
    
8,758,066
    
8,472,255
  
Reclamation deposit
    
512,742
    
518,057
  
               
 
    
10,501,557
    
10,749,628
  
               
               
LIABILITIES
              
               
Current
              
Accounts payable and accrued liabilities
    
137,157
    
85,937
  
Advances payable (note 6(c))
    
70,047
    
76,352
  
               
 
    
207,204
    
162,289
  
               
SHAREHOLDERS' EQUITY
              
               
Share capital (note 5)
    
30,755,578
    
30,754,678
  
Contributed surplus
    
379,933
    
343,533
  
Deficit
    
(20,841,158
)
  
(20,510,872
)
               
 
    
10,294,353
    
10,587,339
  
               
 
    
10,501,557
    
10,749,628
  

NOTE 1 - NATURE OF OPERATIONS

Approved by the Directors:

“Matthew Wayrynen”
  
Director
  
“Louis Wolfin”
  
Director
 
 
 
1

CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Operations and Deficit
(Unaudited - Prepared by Management)
   
Three Months ended July 31,
  
Six Months ended July 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
    $    
$
 
   $    
$
 
  
Revenue
                          
Interest income
    
2,461
    
9,392
    
5,897
    
15,754
  
     
   
   
   
 
                           
Expenses
                          
Amortization
    
159
    
285
    
443
    
568
  
Consulting fees
    
10,020
    
10,082
    
20,020
    
17,885
  
Investor relations and shareholder information
    
23,089
    
27,793
    
39,426
    
46,243
  
Legal and accounting
    
14,922
    
2,146
    
51,612
    
15,092
  
Listing and filing fees
    
4,381
    
4,027
    
7,581
    
9,347
  
Management fees
    
22,500
    
22,500
    
45,000
    
45,000
  
Office and miscellaneous
    
17,137
    
41,528
    
34,921
    
60,688
  
Salaries and benefits
    
25,614
    
10,348
    
49,735
    
24,464
  
Stock-based compensation
    
-
    
-
    
36,400
    
-
  
Transfer agent fees
    
3,136
    
2,174
    
4,890
    
5,030
  
Travel
    
17,498
    
1,702
    
39,415
    
4,917
  
                           
 
    
138,456
    
122,584
    
329,443
    
229,233
  
                           
Operating loss
    
(135,995
)
  
(113,192
)
  
(323,546
)
  
(213,479
)
                           
Other items
                          
Foreign exchange loss
    
(13,822
)
  
(620
)
  
(6,740
)
  
(620
)
Gain on sale of equipment
    
-
    
30
    
-
    
4,020
  
                           
Loss for the period
    
(149,817
)
  
(113,781
)
  
(330,286
)
  
(210,078
)
                           
Deficit, beginning of period
    
(20,691,341
)
  
(19,728,350
)
  
(20,510,872
)
  
(19,632,053
)
                           
Deficit, end of period
    
(20,841,158
)
  
(19,842,131
)
  
(20,841,158
)
  
(19,842,131
)
                           
Loss per share
    
($0.03
)
  
($0.02
)
  
($0.07
)
  
($0.05
)
                           
Weighted average number of common shares outstanding
    
4,651,155
    
4,635,305
    
4,650,030
    
4,565,200
  

 
 
2

CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Cash Flows
(Unaudited - Prepared by Management)
   
Three Months ended July 31,
  
Six Months ended July 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
    $    
$
 
   $    
$
 
  
Cash flows from (used in) operating activities
                          
 
                          
Loss for the period
    
(149,817
)
  
(113,781
)
  
(330,286
)
  
(210,078
)
Adjustments for items not involving cash:
                          
- amortization
    
159
   
285
   
443
   
568
 
- stock based compensation
    
-
   
-
   
36,400
   
-
 
     
   
   
   
 
     
(149,658
)
  
(113,496
)
  
(293,443
)
  
(209,510
)
                           
Change in non-cash working capital:
                          
- advances receivable
    
(7,779
)
  
(31,499
)
  
4,378
   
(5,331
)
- prepaid expenses
    
(18,457
)
  
4,726
   
(15,090
)
  
4,726
 
- share subscription receivable
    
11,000
   
11,945
   
11,945
   
70,645
 
- accounts payable and accrued liabilities
    
59,673
   
(23,438
)
  
51,220
   
(55,006
)
- advances payable
    
(363
)
  
(37,959
)
  
(6,305
)
  
(37,438
)
                           
 
    
(105,584
)
  
(189,721
)
  
(247,295
)
  
(231,914
)
                           
Cash flows from (used in) investing activities
                          
Mineral properties acquisition and exploration expenditures incurred
    
(206,753
)
  
(209,131
)
  
(285,811
)
  
(418,416
)
Loan receivable
    
-
   
-
   
(33,000
)
  
-
 
Decrease (increase) in reclamation deposit amounts
    
12,702
   
16,142
   
5,315
   
(1,618
)
                           
 
    
(194,051
)
  
(192,989
)
  
(313,496
)
  
(420,034
)
                           
Cash flows from financing activities
                          
Issuance of shares for cash, net
    
900
   
51,224
   
900
   
1,097,664
 
Share subscriptions
    
-
   
-
   
-
   
(791,720
)
                           
 
    
900
   
51,224
   
900
   
305,944
 
                           
Net increase (decrease) in cash and cash equivalents
    
(298,735
)
  
(331,486
)
  
(559,891
)
  
(346,004
)
                           
Cash and cash equivalents,
 beginning of period
    
1,210,990
   
2,552,638
   
1,472,146
   
2,567,156
 
                           
Cash and cash equivalents,
 end of period
    
912,255
   
2,221,152
   
912,255
   
2,221,152
 
                           
 
 
3

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)
 
1.    Nature of Operations

These financial statements have been prepared on a going-concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. The Company is in the process of exploring its mineral interests and has not yet determined whether these properties contain ore reserves that are economically recoverable. The continued operations of the Company and the recoverability of mineral property costs is dependent upon the discovery of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production.
 
The Company has incurred recurring operating losses which require additional funds to meet its obligations and maintain its operations. Management’s plan in this regard is to raise equity financing as required.
 
The Company is in the business of exploration of mineral properties and has not generated any operating revenues to date. The Company has positive working capital of $863,870 at July 31, 2005 (January 31, 2005: $1,469,909).
 
2.    Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with the instructions for the preparation of such financial statements contained in the CICA Handbook Section 1751. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such instructions. These unaudited interim financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the fiscal year ended January 31, 2005. These interim financial statements have not been reviewed by an auditor.

In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of these unaudited financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the three month period and six month period ended July 31, 2005 are not necessarily indicative of the results that can be expected for the year ended January 31, 2006.

3.    Comparative figures 

Certain of the comparative figures for 2004 have been reclassified, where applicable, to confirm to the presentation adopted for the current year.

 
4

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)

4.    Mineral Properties 

The following is a summary of mineral property expenditures for the six months ended July 31, 2005:

Balance, beginning of period
        
$
8,472,255
  
               
Robertson Project
              
Assays
  
$
15,652
        
Consulting
    
91,388
        
Drilling
    
108,535
        
Field supplies and other
    
7,889
        
Lease payments
    
45,317
        
Reclamation
    
15,669
        
Water analysis
    
1,361
        
Total expenditures for Robertson Project
          
285,811
  
               
Balance, end of period
        
$
8,758,066
  

5.    Share Capital
 
(a) Authorized Unlimited common shares without par value

(b)  
Issued

   
2005
  
2004
  
   
Shares
  
Amount
  
Shares
  
Amount
  
                   
Balance, January 31,
    
4,648,905
  
$
30,754,678
    
4,361,685
  
$
29,646,238
  
Private placements
    
-
    
-
    
255,220
    
1,039,458
  
Exercise of warrants
    
-
    
-
    
1,600
    
4,960
  
Exercise of stock options
    
-
    
-
    
10,000
    
25,000
  
Share issuance costs
    
-
    
-
    
-
    
(22,984
)
                           
Balance, April 30,
    
4,648,905
    
30,754,678
    
4,628,505
    
30,692,672
  
Exercise of stock options
    
7,000
    
11,900
    
20,400
    
51,000
  
Cancelled shares
    
(2,500
)
  
(11,000
)
  
-
    
-
  
                           
Balance, July 31,
    
4,653,405
  
$
30,755,578
    
4,648,905
  
$
30,743,672
  
 
 
5

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)
 
5.    Share Capital (continued)


(c)  
Share Purchase Warrants

A summary of share purchase warrants transactions for the year to date is as follows:

   
Number of
Underlying
Shares
  
       
Balance, January 31, 2005
    
975,501
  
Granted
    
-
  
Exercised
    
-
  
         
Balance, April 30, 2005
    
975,501
  
Granted
    
-
  
Exercised
    
-
  
Cancelled
    
(2,500
)
         
Balance, July 31, 2005
    
973,001
  


As at July 31, 2005, the following share purchase warrants were outstanding:

Number of
Underlying Shares
  
Exercise Price
  
Expiry Date
  
 
              
412,900
  
$
3.10
    
October 12, 2005
  
204,425
  
$
3.60
    
November 17, 2005
  
102,956
  
$
3.90
    
December 19, 2005
  
104,380
  
$
4.80
    
February 16, 2006
  
148,340
  
$
5.50
    
February 17, 2006
  
               
973,501
              
               


 
6

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)
 
5.    Share Capital (continued)
 
 
(d)
Stock Options

During the three months ended April 30, 2005, the Company granted 42,500 stock options to directors, officers and employees of the Company at an exercise price of $1.70 per share. These stock options vested immediately and expire over 5 years. The Company recorded a total of $36,400 for stock based compensation expense in the period.

During the three months ended July 31, 2005, there were no stock options granted by the Company.

A summary of the stock options granted and exercised at the period ended July 31, 2005 is as follows:

   
Number
of Options
  
Weighted Average Exercise Price
  
               
Balance, January 31, 2005
    
535,500
  
$
1.91
  
Granted
    
42,500
    
1.70
  
               
Balance, April 30, 2005
    
578,000
  
$
1.90
  
Exercised
    
(7,000
)
$
1.70
  
               
Balance, July 31, 2005
    
571,000
  
$
1.90
  
 
The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option pricing model with the following assumptions: risk-interest rate of 3.0%, dividend yield 0%, volatility of 101.41% and expected life of 3 years.

A summary of stock options outstanding and exercisable at the period ended July 31, 2005 is as follows:

Exercise
Price
  
Number
Outstanding
  
Weighted
Average
Remaining
Contractual
Life (yr)
  
Weighted
Average
Exercise
Price
  
$2.50
    
142,600
    
0.10
  
$
2.50
  
$1.70
    
428,400
    
4.37
  
$
1.70
  


 
7

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)

6.     Related Party Transactions

Related party transactions not disclosed elsewhere in these statements are as follows:

  a)  
During the six months ended July 31, 2005, the Company paid, or made provision for the future payment, of the following amounts to related parties:

i)  
$92,006 (2004 - $46,490) for administrative expenses to a private Company beneficially owned by the Company and a number of other public companies related through common Directors;

ii)  
$45,000 (2004 - $45,000) to a private company controlled by a director for management fees;

iii)  
$15,000 (2004 - $15,000) in consulting fees to a private company owned by a director; and

iv)  
$2,000 (2004 - $nil) in consulting fees to a private company owned by a director.

b)  
Advances receivable include $28,003 (2004 - $28,003) due from a joint venture with common management and common directors and $31,427 (2004: $11,299) with two companies with common management and common directors.

c)  
Advances payable include $19,333 (2004 - $12,658) due to Directors in regards to past directors’ fees; $32,540 (2004 - $32,540) due to a company with common management and common directors; and $18,174 to the private company that provides administrative services as disclosed in note 6(a)(i) above.

d)  
An allowance in the amount of $209,840 has been accrued in respect of advances made to a company with common management.

e)  
The loan receivable of $83,000 is due from a subsidiary of a related company that provides drilling services. The amount due is non-interest bearing, unsecured and due on demand.

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

During the quarter, the Company arranged the purchase of 1,092,959 shares of Marcus Corporation (“Marcus”), representing 77% of the total issued shares of Marcus. Marcus is a non-reporting Nevada corporation, which owns the Marcus mining claims, consisting of 39 unpatented lode claims and two placer claims, and which comprise a portion of the Company’s Robertson Property. By acquiring Marcus, the Company will control Marcus, and own an indirect interest in the mining lease between the Company and Marcus, which provides for an annual advanced royalty to Marcus of US$12,000, and a 5% net smelter returns royalty up to a maximum payment of US$2.5 million. The mining lease with Marcus expires in 2007.

 
8
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
July 31, 2005
(Unaudited - Prepared by Management)
 
7.    Commitment (continued)

In consideration of the acquisition, the Company will issue one common share of the Company for every four (4) common shares of Marcus, for a total of 273,240 common shares of the Company. In addition, each tendering Marcus shareholder will receive a non-transferable share purchase warrant, permitting such shareholders to purchase one additional common share of the Company at an exercise price of $2.00 per share for a period of up to two years from the closing date of the acquisition, for every two (2) shares of the Company received on the share exchange.

The acquisition of Marcus will be subject to the receipt of all required regulatory approvals.

8.    Subsequent Events

A required reclamation bond in regards to mineral properties held in the state of Nevada has been reduced to $277,989, a reduction of $227,435 after review by the Bureau of Land Management for Nevada.

The Company has entered into a 12 month Investor Relations Agreement with Investor Relations Services Group John Mullen & Partners (“IRS”) to provide investor relations services in Europe. In consideration for the services rendered, the Company has agreed to pay IRS fees totaling $18,000 plus expenses.

 
 
 
9