EX-99.2 3 ex99_2.htm EXHIBIT 99.2 Exhibit 99.2
CORAL GOLD RESOURCES LTD.
Consolidated Balance Sheets
(Prepared by Management)
 
   
October 31,
  
January 31,
  
 
  
2005
  
2005
  
     $    
$
 
  
 
     (Unaudited
)
  
(Audited
)
ASSETS
              
               
Current
              
Cash and cash equivalents
    
643,748
    
1,472,146
  
Advances receivable (note 7(b))
    
87,702
    
78,101
  
Marketable securities
    
57,359
    
57,359
  
Prepaid expenses
    
15,716
    
12,647
  
Share subscriptions receivable
    
-
    
11,945
  
               
     
804,525
    
1,632,198
  
               
Investment securities
    
72,575
    
72,575
  
Investment in subsidiary (note 4)
    
549,785
    
-
  
Loan receivable (note 7(e))
    
83,000
    
50,000
  
Equipment
    
3,895
    
4,543
  
Mineral properties (note 5)
    
9,015,648
    
8,472,255
  
Reclamation deposit
    
274,965
    
518,057
  
               
 
    
10,804,393
    
10,749,628
  
               
               
LIABILITIES
              
               
Current
              
Accounts payable and accrued liabilities
    
41,295
    
85,937
  
Advances payable (note 7(c))
    
87,213
    
76,352
  
               
 
    
128,508
    
162,289
  
               
SHAREHOLDERS' EQUITY
              
               
Share capital (note 6)
    
31,305,363
    
30,754,678
  
Contributed surplus
    
379,933
    
343,533
  
Deficit
    
(21,009,411
)
  
(20,510,872
)
               
 
    
10,675,885
    
10,587,339
  
               
 
    
10,804,393
    
10,749,628
  

NOTE 1 - NATURE OF OPERATIONS

Approved by the Directors:

“Matthew Wayrynen”
  
Director
  
“Louis Wolfin”
  
Director

 
 

CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Operations and Deficit
(Unaudited - Prepared by Management)

   
Three months ended
  
Nine months ended
  
   
October 31,
  
October 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
     $    
$
 
    $    
$
 
  
Revenue
                          
Interest income
    
3,071
    
8,378
    
8,968
    
24,132
  
                   
                           
Expenses
                          
Amortization
    
205
    
285
    
648
    
852
  
Consulting fees
    
7,656
    
12,345
    
27,676
    
30,230
  
Investor relations and shareholder information
    
16,467
    
10,979
    
55,893
    
57,222
  
Legal and accounting
    
45,253
    
20,542
    
96,865
    
35,634
  
Listing and filing fees
    
6,124
    
7,555
    
13,705
    
16,902
  
Management fees
    
22,500
    
22,500
    
67,500
    
67,500
  
Office and miscellaneous
    
11,482
    
26,827
    
46,403
    
87,515
  
Salaries and benefits
    
21,649
    
22,747
    
71,384
    
47,211
  
Stock-based compensation
    
-
    
-
    
36,400
    
-
  
Transfer agent fees
    
1,621
    
6,390
    
6,511
    
11,420
  
Travel
    
9,343
    
11,389
    
48,758
    
16,306
  
                           
 
    
142,300
    
141,559
    
471,743
    
370,792
  
                           
Operating loss
    
(139,229
)
  
(133,181
)
  
(462,775
)
  
(346,660
)
                           
Other items
                          
Foreign exchange loss
    
(29,024
)
  
(62,669
)
  
(35,764
)
  
(63,289
)
Gain on sale of equipment
    
-
    
-
    
-
    
4,020
  
                           
Loss for the period
    
(168,253
)
  
(195,850
)
  
(498,539
)
  
(405,929
)
                           
Deficit, beginning of period
    
(20,841,158
)
  
(19,842,132
)
  
(20,510,872
)
  
(19,632,053
)
                           
Deficit, end of period
    
(21,009,411
)
  
(20,037,982
)
  
(21,009,411
)
  
(20,037,982
)
                           
Loss per share
    
($0.03
)
  
($0.04
)
  
($0.11
)
  
($0.09
)
                           
Weighted average number of common shares outstanding
    
4,827,387
    
4,648,905
    
4,710,232
    
4,642,105
  


 

CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Cash Flows
(Unaudited - Prepared by Management)
   
Three months ended
  
Nine months ended
  
   
October 31,
  
October 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
     $    
$
 
    $    
$
 
  
Cash flows from (used in) operating activities
                          
 
                          
Loss for the period
    
(168,253
)
  
(195,850
)
  
(498,539
)
  
(405,929
)
Adjustments for items not involving cash:
                          
- amortization
    
205
    
285
    
648
    
852
  
- stock based compensation
    
-
    
-
    
36,400
    
-
  
                   
     
(168,048
)
  
(195,565
)
  
(461,491
)
  
(405,077
)
                           
Change in non-cash working capital:
                          
- advances receivable
    
(13,979
)
  
(7,818
)
  
(9,601
)
  
(13,149
)
- prepaid expenses
    
12,021
    
(730
)
  
(3,069
)
  
3,998
  
- share subscription receivable
    
-
    
(11,945
)
  
11,945
    
58,700
  
- accounts payable and accrued liabilities
    
(95,862
)
  
(10,891
)
  
(44,642
)
  
(65,897
)
- advances payable
    
17,166
    
(33,435
)
  
10,861
    
(70,873
)
                           
 
    
(248,702
)
  
(260,384
)
  
(495,997
)
  
(492,298
)
                           
Cash flows from (used in) investing activities
                          
Mineral properties acquisition and exploration expenditures incurred
    
(257,582
)
  
(238,747
)
  
(543,393
)
  
(657,163
)
Investment in subsidiary
    
(549,785
)
  
-
    
(549,785
)
  
-
  
Loan receivable
    
-
    
-
    
(33,000
)
  
-
  
Decrease (increase) in reclamation deposit amounts
    
237,777
    
45,364
    
243,092
    
43,746
  
                           
 
    
(569,590
)
  
(193,383
)
  
(883,086
)
  
(613,417
)
                           
Cash flows from financing activities
                          
Issuance of shares for cash, net
    
-
    
-
    
900
    
1,097,664
  
Issuance of shares for subsidiary
    
549,785
    
-
    
549,785
    
-
  
Share subscriptions
    
-
    
-
    
-
    
(791,720
)
                           
 
    
549,785
    
-
    
550,685
    
305,944
  
                           
Net increase (decrease) in cash and cash equivalents
    
(268,507
)
  
(453,767
)
  
(828,398
)
  
(799,771
)
                           
Cash and cash equivalents, beginning of period
    
912,255
    
2,221,152
    
1,472,146
    
2,567,156
  
                           
Cash and cash equivalents, end of period
    
643,748
    
1,767,385
    
643,748
    
1,767,385
  



 

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 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 $676,017 at October 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 nine month period ended October 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 conform to the presentation adopted for the current year.
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
 
4.    Investment in Subsidiary

During the quarter, the Company arranged the purchase of 1,391,860 shares of Marcus Corporation (“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 the Marcus shares, the Company controls Marcus, and owns 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.

In consideration of the acquisition, the Company issued one common share of the Company for every four (4) common shares of Marcus, for a total of 347,965 common shares of the Company. In addition, each tendering Marcus shareholder received 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 September 15, 2005, for every two (2) shares of the Company received on the share exchange.

5.    Mineral Properties 

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

Balance, beginning of period
        
$
8,472,255
  
               
Robertson Project
              
Assays
  
$
46,607
        
Drilling
    
195,887
        
Eng consulting
    
29,146
        
General supplies
    
1,526
        
Geo consulting
    
80,838
        
Lease payments
    
76,159
        
Reclamation
    
6,617
        
Reclamation bond insurance
    
9,640
        
Repairs and maintenance
    
801
        
Salaries and benefits
    
214
        
Taxes, licenses & permits
    
89,293
        
Water analysis
    
1,324
        
Total expenditures for Robertson Project
          
538,051
  
               
Eagle Property
              
Taxes, licenses & permits
    
3,338
        
Total expenditures for Eagle Property
          
3,338
  
               
JDN Property
              
Taxes, licenses & permits
    
2,004
        
Total expenditures for JDN Property
          
2,004
  
               
Balance, end of period
        
$
9,015,648
  


 
 

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

6.    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
  
Share exchange (Marcus)
    
318,014
    
502,462
    
-
    
-
  
Share exchange (Marcus)
    
29,950
    
47,323
    
-
    
-
  
                           
Balance, October 31,
    
5,001,369
  
$
31,305,363
    
4,648,905
  
$
30,743,672
  


(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
Expired
  
(12,900)
Granted
  
159,001
Granted
  
14,974
     
Balance, October 31, 2005
  
1,134,076





6.    Share Capital (continued)

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

Number of
Underlying Shares
Exercise Price
Expiry Date
     
400,000
$3.10
October 12, 2006
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
159,001
$2.00
September 15, 2007
14,974
$2.00
September 15, 2007
     
1,134,076
    
     
 
(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 and three months ended October 31, 2005, there were no stock options granted by the Company.

A summary of the stock options granted and exercised at the period ended October 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
  
Expired
    
(142,600
)
$
2.50
  
               
Balance, October 31, 2005
    
428,400
  
$
1.70
  


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

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 October 31, 2005 is as follows:

Exercise Price
  
Number Outstanding
  
Weighted Average Remaining Contractual Life (yr)
  
Weighted Average Exercise Price
  
$1.70
    
385,900
    
4.08
  
$
1.70
  
$1.70
    
42,500
    
4.45
  
$
1.70
  
 
7.    Related Party Transactions

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

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

i)  
$127,392 (2004 - $77,161) for administrative expenses to a private Company beneficially owned by the Company and a number of other public companies related through common Directors;

ii)  
$67,500 (2004 - $67,500) to a private company controlled by a Director for management fees;

iii)  
$22,500 (2004 - $22,500) 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 $52,958 (2004 - $11,299) due from 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; $26,713 (2004 - $nil) due to the private company that provides administrative services as disclosed in note 6(a)(i) above; $7,675 to a private company controlled by a Director of the Company in regards to management fees and $952 (2004 - $nil) due to a private company controlled by a Director of the Company for expense reimbursements.

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.

 

CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
 
7.     Related Party Transactions (continued)

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.

8.    Commitment

The Company entered into an Investor Relations Agreement with a firm to provide investor relations services in Europe. The Company will pay $1,500 per month for twelve months with the agreement being effective July 1, 2005.

9.    Subsequent Events

Subsequent to the period end, 204,425 warrants expiring on November 17, 2005 at $3.60 were extended until November 17, 2006 and 102,956 warrants expiring on December 19, 2005 at $3.90 were extended until December 19, 2006.

The Company arranged a non-brokered private placement of up to 1,500,000 common shares at a price of $3.00 per share. The placee for up to 1,250,000 shares is Mr. Robert R. McEwen and upon closing he will hold just under 20% of the outstanding shares.

The Company also announced the appointment of Mr. Robert R. McEwen to the Board of Directors and as Executive Chairman of the Company.