Nugget Resources Largely Catches Up With SEDAR Filings

Nugget Resources [NEX: NUG.H], a NEX stock that's been suspended, has filed financials and management discussions & analyses with SEDAR, for fiscal years going all the way back to 2004. The first two filed documents comprise a 3-in-1 set of audited annual reports for fiscal years 2004-2006 [PDF file] and the accompanying M D & A [another PDF file].

As might be expected, the annual reports show no activity. Nugget had no cash for any of those three years, and the only current assets were for prepaid expenses of a near-constant amount. Current liabilities went from $91,286 in FY 2004 to $92,971 in FY 2005 to $103,321 in FY 2006, showing an increasing working-capital deficit. Book value was negative, and decreasing, for all of those three years: -0.595 cents/share in FY '04, -0.607 cents/share in FY '05, and -0.676 cents/share in FY '06. This decrease is reflective of the fact that Nugget had no income for any of those years. The only expenses were for professional fees, in the amount of $5,000 for each year, and transfer agent and filing fees, which increased through the three years to $5,350 in FY '06 from $2,729 in FY '04. The M D & A specifies that the professional fees were accounting (auditing) fees, presumably for the preparation of the financials. A $8,184 gain on a settlement of a debt in FY '05 kept the loss from increasing relative to FY '04, as FY '06's did. Note 4 of the annuals explains that a former subsidiary company forgave a debt owed it by Nugget, which gave rise to the gain.

The loss for FY '06 was $10,350, as compared with $1,711 for FY '05 [$9,895 excluding the gain] and $7,729 for FY '04. For all three years, the annual loss was less than a cent/share. The only inflow of cash was from increases in accounts payable and "Advances from related parties," in the amount of $2,729 for FY '04, $4,869 for FY '05 and $5,350 for FY '06. Note 1 of the financials is quite blunt about the status of Nugget Resources: "The Company has no assets, and no source of cash flow. The ability of the Company to continue as a going concern is dependent on the identification of new opportunities, in the mineral exploration area or other opportunities, and obtaining additional financing from its existing or new shareholders." The same point, made on p. 2 of the M D & A for those three years, adds this sentence: "Failure to obtain such additional financing could result in the dissolution of the Company."

Note 5, dealing with income taxes, spells out how much tax-loss carry-forward Nugget has, with a yearly itemization and this summing up: "At June 30, 2006, the Company has available capital losses of $1,015,002 (2005 and 2004 $1,015,002) which may be carried forward to reduce taxable capital gains in future years. The Company has available mineral resource related expenditure pools totaling approximately $77,680 (2005 and 2004 - $77,680) which may be deducted against future taxable income on a discretionary basis." And that's basically all that it has - all non-vendible. The bulk of Nugget's annuals' M D & A is devoted to explaining the corporate-governance structures it has in place.

The interim financial statements, filed for the first, second and third quarters of FY 2007 which end on Sept. 30/06 [PDF file], Dec. 31st/06 [another PDF file] and March 31 of this year [a third PDF file] show a similar picture except for an increase in General and Administrative expenses to $7,950, $7,507 and $7,500 for each respective quarter. All cash needs were, once again, met by advances from related parties. The respective M D & As for the three quarters [PDF file for 1Q, PDF file for 2Q and PDF file for 3Q '07] all explain the increase in the costs as re-activation consulting fees. For all of the above periods, the company's expenses were paid for by related party "Drillsearch Energy (Canada) Inc. ('Drillsearch') a company with directors in common."