Professional Documents
Culture Documents
FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2007
(UNAUDITED)
Management’s Responsibility for Financial Reporting
The accompanying unaudited interim consolidated financial statements of Cadillac Ventures Inc. (A Development
Stage Company) were prepared by management in accordance with Canadian generally accepted accounting
principles. The most significant of these accounting principles have been set out in the May 31, 2007 audited
consolidated financial statements. Only changes in accounting policies have been disclosed in these unaudited
interim consolidated financial statements. Management acknowledges responsibility for the preparation and
presentation of the unaudited interim consolidated financial statements, including responsibility for significant
accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the
Company’s circumstances.
Management has established processes, which are in place to provide them sufficient knowledge to support
management representations that they have exercised reasonable diligence that (i) the unaudited interim
consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact
required to be stated or that is necessary to make a statement not misleading in light of the circumstances under
which it is made, as of the date of and for the periods presented by the unaudited interim consolidated financial
statements and (ii) the unaudited interim consolidated financial statements fairly present in all material respects the
financial condition, results of operations and cash flows of the Company, as of the date of and for the periods
presented by the unaudited interim consolidated financial statements.
The Board of Directors is responsible for reviewing and approving the unaudited interim consolidated financial
statements together with other financial information of the Company and for ensuring that management fulfills its
financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility.
The Audit Committee meets with management to review the financial reporting process and the unaudited interim
consolidated financial statements together with other financial information of the Company. The Audit Committee
reports its findings to the Board of Directors for its consideration in approving the unaudited interim consolidated
financial statements together with other financial information of the Company for issuance to the shareholders.
Management recognizes its responsibility for conducting the Company’s affairs in compliance with established
financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its
activities.
Notice to Reader
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim
financial statements; they must be accompanied by a notice indicating that the financial statements have not been
reviewed by an auditor.
The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and
are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these unaudited interim consolidated financial
statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review
of interim financial statements by an entity's auditor.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Interim Consolidated Balance Sheets
(Unaudited - Expressed in Canadian Dollars)
November 30, May 31,
2007 2007
ASSETS
Current
Cash (Note 3) $ 643,286 $ 1,305,811
Accounts receivable 6,806 99,263
Quebec refundable tax credits and mining duty refunds 2,436 2,436
652,528 1,407,510
Mineral properties (Note 4) 2,892,693 616,556
$ 3,545,221 $ 2,024,066
LIABILITIES
Current
Accounts payable and accrued liabilities $ 278,039 $ 93,050
SHAREHOLDERS' EQUITY
Share capital (Note 5(b)) 4,736,474 3,236,474
Warrants (Note 5(c)) 864,441 864,441
Contributed surplus 454,506 354,550
Deficit (2,788,239) (2,524,449)
3,267,182 1,931,016
$ 3,545,221 $ 2,024,066
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CADILLAC VENTURES INC.
(A Development Stage Company)
Interim Consolidated Statements of Loss and Other Comprehensive Loss
(Unaudited - Expressed in Canadian Dollars)
Cumulative
from date
Three Months Six Months of inception of
Ended Ended the development
November 30, November 30, stage
2007 2006 2007 2006 (April 28, 2006)
Expenses
Stock-option compensation (Note 5(d)) $ 99,956 $ - $ 99,956 $ - $ 453,456
Legal and audit 26,581 26,803 26,581 50,992 174,805
Consulting fees 25,500 15,000 49,500 15,000 155,600
Shareholder relations 36,817 17,894 59,696 30,575 121,965
Accounting and corporate services 8,220 11,466 16,420 14,323 51,005
Office and general 4,814 2,799 11,637 5,568 30,363
Management fees - 30,600 - 34,100 3,500
Net loss before the following (201,888) (104,562) (263,790) (150,558) (990,694)
Future income tax recovery - - - - 348,467
Net loss and other comprehensive loss $ (201,888) $ (104,562) $ (263,790) $ (150,558) $ (642,227)
Loss per share - basic and diluted $ (0.01) $ (0.01) $ (0.01) $ (0.01)
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CADILLAC VENTURES INC.
(A Development Stage Company)
Interim Consolidated Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Cumulative
from date
Three Months Six Months of inception of
Ended Ended the development
November 30, November 30, stage
2007 2006 2007 2006 (April 28, 2006)
OPERATING ACTIVITIES
Net loss $ (201,888) $ (104,562) $ (263,790) $ (150,558) $ (642,227)
Adjustments for:
Future income tax recovery - - - - (348,467)
Stock-option compensation (Note 5(d)) 99,956 - 99,956 - 453,456
Changes in non-cash working capital
Accounts receivable 114,930 1,495 92,457 3,041 (1,521)
Prepaids - (23,691) - (23,691) 458
Accounts payable and accrued liabilities 126,906 (49,642) 184,989 (68,544) 165,547
Effect on non-cash working capital as a
result of acquisition of subsidiary - - - - (5,885)
FINANCING ACTIVITIES
Proceeds from issuance of common shares - 144,000 - 269,000 1,914,350
Shares to be issued - 228,500 - 228,500 -
Proceeds from exercise of warrants - - - - 84,700
Cost of share capital issuance - - - (6,000) (30,799)
INVESTING ACTIVITIES
Expenditures on mineral properties (702,916) (60,742) (776,137) (64,930) (1,365,233)
Cash acquired on acquisition of subsidiary - - - - 10,363
Costs of acquisition of subsidiary - - - - (30,357)
Effect on mining interests as a result of
acquisition of subsidiary - - - - 275,879
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CADILLAC VENTURES INC.
(A Development Stage Company)
Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Expressed in Canadian Dollars)
Cumulative
from date
Three Months Six Months of inception of
Ended Ended the development
November 30, November 30, stage
2007 2006 2007 2006 (April 28, 2006)
Share capital
Balance, beginning of period $ 3,236,474 $ 2,429,123 $ 3,236,474 $ 2,394,498 $ 2,394,498
Private placements - 144,000 - 269,000 1,914,350
Fair value of warrants issued - (84,375) (864,441)
Exercise of warrants - - - - 84,700
Fair value of warrants exercised - - - - 25,410
Flow-through tax effect - - - - (287,244)
Share issue costs - - - (6,000) (30,799)
Shares issued for Burnt Hill
property (Note 5(b)) 1,500,000 - 1,500,000 - 1,500,000
Shares to be issued
Balance, beginning of period $ - $ - $ - $ - $ -
Shares to be issued - 228,500 - 228,500 -
Warrants
Balance, beginning of period $ 864,441 $ 109,800 $ 864,441 $ 25,425 $ 25,425
Fair value of warrants issued - - - 84,375 864,441
Fair value of warrants exercised - - - - (25,410)
Fair value of warrants expire - - - - (15)
Contributed surplus
Balance, beginning of period $ 354,550 $ 1,035 $ 354,550 $ 1,035 $ 1,035
Fair value of options granted (Note 5(d)) 99,956 - 99,956 - 453,456
Fair value of warrants expired - - - - 15
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CADILLAC VENTURES INC.
(A Development Stage Company)
Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Expressed in Canadian Dollars)
Cumulative
from date
Three Months Six Months of inception of
Ended Ended the development
November 30, November 30, stage
2007 2006 2007 2006 (April 28, 2006)
Deficit
Balance, beginning of period $(2,586,351) $(2,147,017) $(2,524,449) $(2,101,021) $(2,135,104)
Net loss (201,888) (104,562) (263,790) (150,558) (642,227)
Restructuring cost - - - - (10,908)
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
Cadillac Ventures Inc. ("Cadillac" or the "Company") is publicly traded on the CNQ under the symbol CDEX.
Currently, in addition to the joint venture on the Burnt Hill Project, Cadillac also holds the New Alger Project
which encompasses the historic New Alger Mine, located in the highly prospective Cadillac Break Mining
Camp. The New Alger Mine has been sporadically productive but has not been fully explored or exploited.
The property is situated contiguous to the O’Brien Mine and approximately 300 m to the SE of the LaRonde
Mine.
Cadillac is a development stage company, as defined by AcG 11 of the Canadian Institute of Chartered
Accountants' Handbook ("CICA Handbook"). The Company is in the business of mineral exploration and the
continued operations of the Company and the recoverability of amounts shown for mineral properties is
dependent upon the existence of a deposit and upon future profitable production, or alternatively, upon the
Company's ability to recover its costs through a disposition of its interest. The amounts shown for mineral
properties represent costs to date, less amounts written off, and do not necessarily represent the future
value. Changes in future conditions could require a material change in the amount recorded for mineral
properties.
These unaudited interim consolidated financial statements are prepared using Canadian generally accepted
accounting principles ("GAAP") that are applicable to a going concern which assumes the Company will
continue to operate throughout the next twelve months subsequent to November 30, 2007. The use of these
principles may be inappropriate since there is significant doubt regarding the appropriateness of this
assumption. Significant doubt exists because there has been substantial operating losses in the current and
prior years and the Company has no operating assets. The future of the Company is currently dependent
upon its ability to obtain sufficient cash from external financing, and/or related parties to fund the Company's
ongoing operations and expenditures on the property.
These interim statements do not include any adjustments which would be necessary if the going concern
assumption was not used.
The unaudited interim consolidated financial statements have been prepared in accordance with GAAP for
interim financial information. Accordingly, they do not include all of the information and notes required by
GAAP for annual consolidated financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating results for the three and six
months ended November 30, 2007 may not necessarily be indicative of the results that may be expected for
the year ending May 31, 2008.
The interim consolidated financial statements have been prepared by management in accordance with the
accounting policies described in the Company's annual audited consolidated financial statements for the year
ended May 31, 2007, except as noted below. For further information, refer to the audited consolidated
financial statements and notes thereto for the year ended May 31, 2007.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
In July 2006, the Accounting Standards Board ("AcSB") issued a replacement of CICA Handbook Section
1506, Accounting Changes. The new standard allows for voluntary changes in accounting policy only when
they result in the financial statements providing reliable and more relevant information, requires changes in
accounting policy to be applied retrospectively unless doing so is impracticable, requires prior period errors to
be corrected retrospectively and calls for enhanced disclosures about the effects of changes in accounting
policies, estimates and errors on the financial statements. The impact that the adoption of Section 1506 will
have on the Company's results of operations and financial condition will depend on the nature of future
accounting changes.
On June 1, 2007, the Emerging Issues Committee of the CICA issued Abstract No. 166, Accounting Policy
Choice for Transaction Costs (EIC-166). This EIC addresses the accounting policy choice of expensing or
adding transaction costs related to the acquisition of financial assets and financial liabilities that are classified
as other than held-for-trading. Specifically, it requires that the same accounting policy choice be applied to all
similar financial instruments classified as other than held-for-trading, but permits a different policy choice for
financial instruments that are not similar. The Company has adopted EIC-166 effective November 30, 2007
and requires retroactive application to all transaction costs accounted for in accordance with CICA Handbook
Section 3855, Financial Instruments - Recognition and Measurement. The Company has evaluated the
impact of EIC-166 and determined that no adjustments are currently required.
On June 1, 2007, the Company adopted CICA Handbook Sections 1530, "Comprehensive Income", Section
3251 "Equity", Section 3855, "Financial Instruments - Recognition and Measurement", Section 3861,
"Financial Instruments - Disclosure and Presentation" and Section 3865, "Hedges." Section 1530 establishes
standards for reporting and presenting comprehensive income, which is defined as the change in equity from
transactions and other events from non-owner sources. Other comprehensive income refers to items
recognized in comprehensive income that are excluded from net income calculated in accordance with
GAAP.
Section 3861 establishes standards for presentation of financial instruments and non-financial derivatives,
and identifies the information that should be disclosed about them. Under the new standards, policies
followed for periods prior to the effective date generally are not reversed and therefore, the comparative
figures have not been restated except for the requirement to restate currency translation adjustments as part
of other comprehensive income.
Section 3865 describes when and how hedge accounting can be applied as well as the disclosure
requirements. Hedge accounting enables the recording of gains, losses, revenues and expenses from
derivative financial instruments in the same period as for those related to the hedged item. Section 3855
prescribes when a financial asset, financial liability or non-financial derivative is to be recognized on the
balance sheet and at what amount, requiring fair value or cost-based measures under different
circumstances.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
Under Section 3855, financial instruments must be classified into one of these five categories: held-for-
trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities.
All financial instruments, including derivatives, are measured in the balance sheet at fair value except for
loans and receivables, held to maturity investments and other financial liabilities which are measured at
amortized cost. Subsequent measurement and changes in fair value will depend on their initial classification,
as follows: held-for-trading financial assets are measured at fair value and changes in fair value are
recognized in net earnings; available-for-sale financial instruments are measured at fair value with changes
in fair value recorded in other comprehensive income until the investment is de-recognized or impaired at
which time the amounts would be recorded in net earnings.
The Company has evaluated the impact of these new standards on its consolidated financial statements and
determined that no adjustments are currently required.
On December 1, 2006, the CICA issued three new accounting standards: Handbook Section 1535, Capital
Disclosures, Handbook Section 3862, Financial Instruments – Disclosures, and Handbook Section 3863,
Financial Instruments – Presentation. These new standards are effective for interim and annual financial
statements for the Company's reporting period beginning on June 1, 2008.
Section 1535 specifies the disclosure of (i) an entity’s objectives, policies and processes for managing
capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with
any capital requirements; and (iv) if it has not complied, the consequences of such non-compliance.
The new Sections 3862 and 3863 replace Handbook Section 3861, Financial Instruments — Disclosure and
Presentation, revising and enhancing its disclosure requirements, and carrying forward unchanged its
presentation requirements. These new sections place increased emphasis on disclosures about the nature
and extent of risks arising from financial instruments and how the entity manages those risks.
The Company is currently assessing the impact of these new accounting standards on its consolidated
financial statements.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
Flow through common shares require the Company to pay an amount equivalent to the proceeds of the issue
on prescribed resource expenditures. If the Company does not incur the committed resource expenditures, it
will be required to indemnify the holders of the shares for any tax and other costs payable by them as a result
of the Company not making the required resource expenditures. As at November 30, 2007, the Company's
remaining commitment with respect to unspent resource expenditures under flow-through common share
agreements is $130,000. The Company has until December 31, 2007 to spend these funds.
4. MINERAL PROPERTIES
On a quarterly basis, management of the Company review exploration costs to ensure deferred expenditures
include only costs and projects that are eligible for capitalization. For a description of the Company's mineral
properties, refer to Note 4 of the audited consolidated financial statements as at May 31, 2007. Specific
changes to mineral properties that occurred from June 1, 2007 to November 30, 2007 are as follows:
(a) On June 11, 2007 the Company and Noront Resources Inc. ("Noront") have agreed to amend the option
agreement on the Burnt Hill Project. Under the terms of this amendment Noront will immediately commence a
$1,500,000 exploration program on the Burnt Hill project. The Company will issue to Noront, on or prior to
December 31, 2007, $1,500,000 worth of common shares of the Company to be valued at no more than
$1.00 per share, or at the same price as a proposed financing contemplated by the Company to be
completed in the future. The Company will remain the operator of the program during this time.
(b) On September 20, 2007, the Company announced that Cadillac and Noront have signed a License
Agreement with a J.D. Irving, Limited company of Saint John New Brunswick. This agreement contains terms
and conditions regarding land usage during the exploration phase of the Burnt Hill Project, and will be in force
until June 30, 2008.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
(c) (continued) The continuity of mineral property expenditures of the Company is as follows:
Cumulative
from date
Three Months Six Months of inception of
Ended Ended the development
November 30, November 30, stage
2007 2006 2007 2006 (April 28, 2006)
5. SHARE CAPITAL
(a) AUTHORIZED
Unlimited number of non-participating, redeemable, voting Class B preference shares
Unlimited number of Class C preference shares issuable in series
Unlimited number of common shares
(1) On September 21, 2007, the Company issued 2,500,000 common shares at a deemed price of $0.60 per
common share to comply with one of the conditions of the Burnt Hill Property (the "Property") agreement to
earn an initial 51% interest in the Property. The Company must meet all the conditions of the Burnt Hill
Property agreement to earn an initial 51% interest in the Property. The Company intends to meet these
conditions.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
Balance, May 31, 2007 and November 30, 2007 5,946,545 $ 864,441
5,946,545 $ 864,441
(d) OPTIONS
The continuity of outstanding options for the purchase of common shares of the Company is as follows:
WEIGHTED
AVERAGE
NUMBER OF EXERCISE
OPTIONS PRICE
(1) On October 22, 2007, the Company issued incentive stock options to a director and an officer of the
Company, totaling 200,000 options at $0.72 with a expiry date of October 22, 2012. For the purposes of the
200,000 options, the fair value of each option was estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions: dividend yield of 0%; expected volatility of 70.5%; risk-
free interest rate of 4.23% and an expected life of 5 years. The options vest immediately on the date of grant.
For the three and six months ended November 30, 2007, the impact on expenses is $88,400.
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
(1) (continued) In addition, the Company issued incentive stock options to a consultant of the Company,
totaling 160,000 options at $0.85 with a expiry date of October 22, 2012. For the purposes of the 160,000
options, the fair value of each option was estimated on the date of grant using the Black-Scholes option
pricing model with the following assumptions: dividend yield of 0%; expected volatility of 70.5%; risk-free
interest rate of 4.23% and an expected life of 5 years. The estimated value of $66,560 will be classified as
stock-based compensation and credited to contributed surplus as the options vest. The options vest over one
year as to one-quarter after three months, one-quarter after six months, one-quarter after nine months and
one-quarter after twelve months. For the three and six months ended November 30, 2007, the impact on
expenses is $11,556.
2,560,000 $ 453,456
(i) Fair value is based on the Black-Scholes option pricing model. The weighted average fair value per option
is $0.20.
(ii) Option pricing models require the input of highly subjective assumptions including the expected volatility.
Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the
existing models do not necessarily provide a reliable measure of the fair value of the Company's stock
options.
The Company has engaged Billiken Management Services Inc. ("Billiken") to manage the New Alger
Property. Billiken charges a fee based on a percentage of expenses incurred on behalf of the Company.
The former President/CEO, corporate secretary and director of the Company holds a 15% ownership interest
in Billiken through a private company. For the three and six months ended November 30, 2007, the fee
totaled $38,837 and $40,523 (three and six months ended November 30, 2006 - $3,089). As at November 30,
2007, there was a balance owing of $173,521 to Billiken from the Company (As of May 31, 2007, $11,439
was due to the Company from Billiken).
During the three and six months ended November 30, 2007, consulting fees paid/payable to the former
President/CEO, corporate secretary and director of the Company amounted to $4,000 and $20,000 (three
and six months ended November, 2006 - $19,000).
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CADILLAC VENTURES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Unaudited - Expressed in Canadian Dollars)
Three and Six Months Ended November 30, 2007
As at November 30, 2006, pursuant to the financing disclosed in Note 6(a)(vi) of the May 31, 2007 audited
consolidated financial statements, the following related parties of the Company participated in the private
placement by purchasing offered units: Nominex Ltd. (of which Neil Novak, a director of the Company, is the
President) - 62,500 units; Nicole Brewster, the former Secretary and a former director of the Company -
62,500 units; Jim Voisin, the former President/CEO, corporate secretary and a director of the Company -
62,500 units; and Norm Brewster, the President/CEO of the Company - 250,000 units.
7. SEGMENTED INFORMATION
The Company's operations comprise a single reporting operating segment engaged in resource exploration.
As the operations comprise a single reporting segment, amounts disclosed in the interim consolidated
financial statements for loss and comprehensive loss for the period and loss per share also represent
segment amounts.
8. SUBSEQUENT EVENT
On January 3, 2008, the Company announced that it has completed a non-brokered private placement
financing. The Company issued 675,500 common shares at a price of $0.80 per share to raise gross
proceeds of $540,400 in flow through funds. Each share issued as a result of the financing is restricted from
trading until May 1, 2008.
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