GTO Resources Inc. Files Interim, Unaudited Statement With SEDAR

GTO Resources Inc. [NEX: GTR.H] has filed interim, unaudited financial statements for the second quarter of FY '07, ended August 31st, along with the accompanying Management Discussion and Analysis. According to the financials [PDF file], cash and cash equivalents increased from $268,368 as of the end of FY '06 (ended Feb. 28th) to $965,644 as of the end of 2Q '07. Working capital increased from $465,842 as of the former date (as fortified by a $200,000 term deposit that was liquidated later) to $962,548. The only item in current liabilities, accounts payable, fell from $12,177 to $8,654. The increase in cash, as well as an increase in the book value from 7.70 cents/share as of the former date to 12.0 cents/share as of the latter date, is due to $514,150 worth of proceeds from the exerise of warrants in 1Q '07. Other than the purchase and redemption of the term deposit, there were no investment activities since the first quarter of FY '06. (Unusually, the proceeds from the redemption of the term deposit was $20,000 less than the money invested in it, according to the statement of cash flows.)

Expenses for 2Q '07 dropped slightly from expenses in 2Q '06. This drop was due to a $1,268 decrease in shareholder information expenses, to $78 for 2Q '07. Professional fees increased by $1,056 to $2,055, and office & miscellaneous expenses increased slightly. Transfer agent, listing and filing fees dropped by $303 to $6,148

The only income GTO had in the quarter was interest income, which increased from $2,032 in 2Q '06 to $9,614 in 2Q '07. As a result, the net loss shrunk from $14,506, or 0.289 cents/share, to $6,443, or 0.0802 cents/share. Net loss for the first six months of 2007 from the first six months of FY 2006 shrunk by $10,406, to $17,444 or 0.219 cents/share. The drop in cash used in operating activities for the second quarter was slighter, from $14,380 in 2Q '06 to $10,351 in 2Q '07. In note 5, Related Party Transactions, part (a) discloses: "Pursuant to an agreement dated December 31, 2004 the Company pays Quest Management Corp. ('Quest'), a company related by virtue of an officer and director in common, a fee of $2,500 per month plus expenses for office space, supplies, and accounting services. The Company paid $15,000 for the six months ending August 31, 2007." The other disclosure is of $2,669 due to related parties, which was put in accounts payable and accrued liabilities.

The accompanying M D & A [PDF file] notes that "[t]he Company wrote off all mineral property expenditures during the fiscal year ending February 28, 2004 and has not conducted any mineral property exploration work since the fiscal year ended February 28, 2000." Later noted is, "[t]he Company is a 15.99% participant in an early stage exploration joint venture" which is unidentified by name. GTR.H's last close was on October 17th, at 65 cents/share.