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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
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X
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the
quarter period ended
June 30, 2008
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TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the
transition period from___________ to __________
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Commission
file number
333-115550
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NEWPORT GOLD, INC.
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(Name of
small business issuer as specified in its charter)
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NEVADA
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N/A
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S.
Employer Identification No.)
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220
– 1495 Ridgeview Drive, Reno, Nevada
89509
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(Address of principal executive
offices)
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(905) 542-4990
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(Issuer’s
telephone number)
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Not Applicable
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(Former
name, address or fiscal year if changed since last report)
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Check
whether the issuer (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
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Yes
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X
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No
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
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Yes
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X
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No
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State
the number of shares outstanding of each of the issuer’s classes of
common equity, as of the latest practicable date.
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20,386,500 common shares issued
and outstanding as of August 18, 2008
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Transitional
Small Business Disclosure Format (Check one):
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Yes
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No
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X
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i
Newport Gold, Inc.
INDEX
ii
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The information in this report for the Three
and Six months ended June 30, 2008, is unaudited but includes all adjustments
(consisting only of normal recurring accruals, unless otherwise indicated)
which Newport Gold, Inc. ("Newport" or the "Company")
considers necessary for a fair presentation of the financial position, results
of operations, changes in stockholders' equity and cash flows for the period.
The condensed consolidated financial
statements should be read in conjunction with Newport's financial statements
and the notes thereto contained in Newport's Audited Financial Statements for
the year ended December 31, 2007, in the Form 10KSB and filed with the SEC on
April 15, 2008.
Interim results are not necessarily indicative of results
for the full fiscal year.
3
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Condensed Consolidated Balance Sheets
(US Dollars)
|
|
June 30
2008
(Unaudited)
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|
December 31
2007
(Audited)
|
|
Assets
|
|
|
|
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Current
|
|
|
|
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Cash
|
$
2,119
|
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$
59,071
|
|
Prepaid expenses
|
9,729
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|
9,304
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|
|
11,848
|
|
68,375
|
|
|
|
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Resource Properties
(note
3)
|
2,338,271
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2,251,434
|
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Equipment
|
2,350
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|
3,102
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Total Assets
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$
2,352,469
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$ 2,322,911
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Liabilities
|
|
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Current
|
|
|
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Accounts payable and
accrued liabilities
|
$
231,590
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$
236,659
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Due to related
parties (note 4)
|
326,098
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193,578
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557,688
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430,237
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Loan payable
(note
5)
|
302,000
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300,000
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Total Liabilities
|
859,688
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|
730,237
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Stockholders' Equity
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Capital Stock
|
|
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Authorized
100,000,000 Common shares
par value of $0.001 per share
|
|
|
|
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Issued and
outstanding
20,386,500
(2007 -18,186,500) Common shares
|
20,386
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|
18,186
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Additional paid-in
capital
|
2,800,164
|
|
2,619,364
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Other Comprehensive Income
|
90,423
|
|
152,943
|
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Deficit
|
(1,418,192)
|
|
(1,197,819)
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Total Stockholders'
Equity
|
1,492,781
|
|
1, 592,674
|
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Total Liabilities and
Stockholders' Equity
|
$
2,352,469
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|
$
2,322,911
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See notes to condensed consolidated financial statements.
4
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Condensed Consolidated Statement of Operations
(US Dollars)
|
|
Six Months Ended June 30,
|
|
Three Months Ended June 30,
|
Cumulative Period
from July 16, 2003
(inception)
Through June 30
|
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2008
|
2007
|
|
2008
|
|
2007
|
2008
|
|
|
|
|
|
|
|
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Expenses
|
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|
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Geological consulting fees (note 7)
|
$
120,844
|
$
|
121,655
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$
|
69,247
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$
|
101,200
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$
|
594,512
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Consulting
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0
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0
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0
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0
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110,000
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Accounting
and legal
|
55,980
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35,279
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40,632
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25,816
|
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289,411
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Office and
travel
|
(2,743)
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6,304
|
|
(9,724)
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4,929
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|
89,425
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Investor
relations (note 7)
|
890
|
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0
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|
890
|
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0
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115,415
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Expenditures on resource properties
|
39,328
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|
0
|
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0
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0
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187,793
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Filing and
transfer agent fees
|
5,504
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|
2,626
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1,629
|
|
1,981
|
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28,677
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Foreign
exchange loss (gain)
|
0
|
|
0
|
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0
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0
|
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(128)
|
Amortization
|
570
|
|
508
|
|
299
|
|
254
|
|
3,088
|
|
|
|
|
|
|
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Net
Loss
|
220,373
|
|
166,372
|
|
102,973
|
|
134,180
|
|
1,418,192
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Other Comprehensive Loss (Gain)
|
62,520
|
|
(30,009)
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(18,416)
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(27,352)
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(90,423)
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Total Comprehensive Loss
|
$
282,893
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$
|
136,363
|
$
|
84,557
|
$
|
106,828
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$
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1,327,769
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|
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Loss per share
|
$
(0.01)
|
$
|
(0.01)
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$
|
(0.00)
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$
|
(0.01)
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Weighted Average Number of Common
|
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Shares Outstanding
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19,131,555
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15,118,646
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19,812,874
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15,161,813
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|
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|
|
|
|
|
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See notes to condensed consolidated financial statements.
5
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Condensed Consolidated Statements of
Stockholders' Equity
Period from July 16, 2003 (Inception)
through June 30, 2008
(US Dollars)
|
|
|
|
|
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Accumulated
|
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|
|
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Deficit
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Total
|
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Additional
|
Share
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Other
|
During
|
Stockholders’
|
|
|
Par
|
Paid-in
|
Subscriptions
|
Comprehensive
|
Exploration
|
Equity
|
|
Shares
|
Value
|
Capital
|
Received
|
Income
(Loss)
|
Stage
|
(Deficit)
|
|
|
|
|
|
|
(note 3(e))
|
(note 3(e))
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Share
subscriptions
|
|
|
|
|
|
|
|
- cash
|
0
|
$ 0
|
$ 0
|
$ 93,150
|
$
0
|
$
0
|
$ 93,150
|
- property
|
0
|
0
|
0
|
22,500
|
0
|
0
|
22,500
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
(3,409)
|
0
|
(3,409)
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Net
loss
|
0
|
0
|
0
|
0
|
0
|
(161,681)
|
(161,681)
|
|
|
|
|
|
|
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Balance,
|
|
|
|
|
|
|
|
December 31, 2003
|
0
|
0
|
0
|
115,650
|
(3,409)
|
(161,681)
|
(49,440)
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
(1,124)
|
0
|
(1,124)
|
Net
loss
|
0
|
0
|
0
|
0
|
0
|
(95,960)
|
(95,960)
|
|
|
|
|
|
|
|
|
Balance,
|
|
|
|
|
|
|
|
December 31, 2004
|
0
|
0
|
0
|
115,650
|
(4,533)
|
(257,641)
|
(146,524)
|
Share
subscriptions
|
|
|
|
|
|
|
|
- cash
|
0
|
0
|
0
|
144,000
|
0
|
0
|
144,000
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
(2,476)
|
0
|
(2,476)
|
Net
loss
|
0
|
0
|
0
|
0
|
0
|
(93,207)
|
(93,207)
|
|
|
|
|
|
|
|
|
Balance,
|
|
|
|
|
|
|
|
December 31, 2005
|
0
|
0
|
0
|
259,650
|
(7,009)
|
(350,848)
|
(98,207)
|
Common
shares issued
|
|
|
|
|
|
|
|
for cash (note 8(b))
|
4,200,000
|
4,200
|
271,800
|
0
|
0
|
0
|
276,000
|
Common
shares issued
|
|
|
|
|
|
|
|
for mining claims
|
|
|
|
|
|
|
|
(note 8(b))
|
2,500,000
|
2,500
|
247,500
|
0
|
0
|
0
|
250,000
|
Common shares
issued
|
|
|
|
|
|
|
|
for share subscriptions
|
8,375,000
|
8,375
|
251,275
|
(259,650)
|
0
|
0
|
0
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
577
|
0
|
577
|
Net
loss
|
0
|
0
|
0
|
0
|
0
|
(339,331)
|
(339,331)
|
|
|
|
|
|
|
|
|
Balance,
|
|
|
|
|
|
|
|
December 31, 2006
|
15,075,000
|
$15,075
|
$770,575
|
$ 0
|
$ (6,432)
|
$ (690,179)
|
$ 89,039
|
See notes to condensed consolidated financial
statements.
6
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Condensed Consolidated Statements of
Stockholders' Equity (Continued)
Period from July 16, 2003 (Inception)
through June 30, 2008
(US Dollars)
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Deficit
|
Total
|
|
|
|
Additional
|
Share
|
Other
|
During
|
Stockholders’
|
|
|
Par
|
Paid-in
|
Subscriptions
|
Comprehensive
|
Exploration
|
Equity
|
|
Shares
|
Value
|
Capital
|
Received
|
Income
(Loss)
|
Stage
|
(Deficit)
|
|
|
|
|
|
|
(note 3(e))
|
(note 3(e))
|
Balance,
|
|
|
|
|
|
|
|
December 31, 2006
|
15,075,000
|
$ 15,075
|
$770,575
|
$ 0
|
$ (6,432)
|
$ (690,179)
|
$ 89,039
|
Common
shares issued
|
|
|
|
|
|
|
|
for mining claims
|
3,111,500
|
3,111
|
1,848,789
|
0
|
0
|
0
|
1,851,900
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
159,375
|
0
|
159,375
|
Net
loss
|
0
|
0
|
0
|
0
|
0
|
(507,640)
|
(507,640)
|
|
|
|
|
|
|
|
|
Balance,
|
|
|
|
|
|
|
|
December 31, 2007
|
18,186,500
|
$18,186
|
$2,619,364
|
$ 0
|
$ 152,943
|
$ (1,197,819)
|
$ 1,592,674
|
Common
shares issued
|
|
|
|
|
|
|
|
for mining claims
|
2,200,000
|
2,200
|
180,800
|
0
|
0
|
0
|
183,000
|
Foreign
currency
|
|
|
|
|
|
|
|
translation adjustment
|
0
|
0
|
0
|
0
|
(62,520)
|
0
|
(62,520)
|
Net
loss
|
0
|
0
|
0
|
0
|
0
|
(220,373)
|
(220,373)
|
|
|
|
|
|
|
|
|
Balance,
|
|
|
|
|
|
|
|
June 30, 2008
|
20,386,500
|
$20,386
|
$2,800,164
|
$ 0
|
$ 90,423
|
$ (1,418,192)
|
$ 1,492,781
|
See notes to condensed consolidated financial statements.
7
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Condensed Consolidated Statements
of Cash Flows
(US Dollars)
|
|
|
|
|
|
Cumulative
Period
from July 16,
2003
(Inception)
Through
June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
Net
loss
|
$
|
(220,373)
|
$
|
(166,372)
|
$
|
(1,418,192)
|
Items
not involving cash
|
|
|
|
|
|
|
Amortization
|
|
570
|
|
508
|
|
3,088
|
Shares
issued for property agreement extension
|
|
33,000
|
|
0
|
|
80,611
|
|
|
|
|
|
|
|
|
|
(186,803)
|
|
(165,864)
|
|
(1,334,493)
|
|
|
|
|
|
|
|
Changes
in operating assets
|
|
|
|
|
|
|
Prepaid
expenses
|
|
(683)
|
|
(8,816)
|
|
(9,245)
|
Accounts
payable and accrued liabilities
|
|
1,680
|
|
108,295
|
|
210,942
|
Due
to related parties
|
|
139,475
|
|
(17,216)
|
|
297,592
|
|
|
|
|
|
|
|
|
|
140,472
|
|
82,263
|
|
499,289
|
|
|
|
|
|
|
|
Cash Used in Operating
Activities
|
|
(46,331)
|
|
(83,601)
|
|
(835,204)
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
Purchase
of equipment
|
|
0
|
|
0
|
|
(5,034)
|
Acquisition
of resource property
|
|
0
|
|
0
|
|
(12,364)
|
|
|
|
|
|
|
|
Cash Used in Investing
Activities
|
|
0
|
|
0
|
|
(17,398)
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
Loan
payable
|
|
7,574
|
|
0
|
|
284,473
|
Common
shares issued
|
|
0
|
|
0
|
|
276,000
|
Subscriptions
received (note 8)
|
|
0
|
|
0
|
|
237,150
|
|
|
|
|
|
|
|
Cash Provided by Financing
Activities
|
|
7,574
|
|
0
|
|
797,623
|
|
|
|
|
|
|
|
Inflow (Outflow) of Cash
|
|
(38,757)
|
|
(83,601)
|
|
(54,979)
|
Effect of Exchange Rate Change
on
|
|
|
|
|
|
|
Cash Balance Held in Foreign Currency
|
|
(18,195)
|
|
35,466
|
|
57,098
|
Cash, Beginning of Year
|
|
59,071
|
|
129,366
|
|
0
|
|
|
|
|
|
|
|
Cash, End of Year
|
$
|
2,119
|
$
|
81,231
|
$
|
2,119
|
|
|
|
|
|
|
|
Non-Cash Financing Activity
|
|
|
|
|
|
|
Common stock issued for properties
|
$
|
150,000
|
$
|
45,000
|
$
|
2,372,325
|
See notes to condensed consolidated financial statements.
8
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Notes to Condensed Consolidated Financial Statements
Six Months Ended June 30, 2008 and 2007 and the Period from July 16,
2003 (Inception) to June 30, 2008
(US Dollars)
(Unaudited)
1. OPERATIONS
AND BASIS OF PRESENTATION
The
Company was incorporated under the laws of Nevada on July 16, 2003, and is involved in
the acquisition, exploration and development of mineral and energy properties.
The Company is currently evaluating opportunities both in the mineral sector
and otherwise. The Company is in the exploration stage and follows the
provisions of Statement No. 7 of the Financial Accounting Standards Board
(“FASB”).
These
condensed consolidated financial statements include the accounts of the Company
and its wholly-owned Canadian subsidiary, 2038052 Ontario Inc., incorporated
under the laws of the province of Ontario, Canada. All inter-company
transactions and balances have been eliminated.
2. GOING-CONCERN
These condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America on a
going-concern basis. This presumes funds will be available to finance on-going
development, operations and capital expenditures and the realization of assets
and the payment of liabilities in the normal course of operations for the
foreseeable future.
9
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Notes to Condensed Consolidated Financial Statements
Six Months Ended June 30, 2008 and 2007 and the Period from July 16,
2003 (Inception) to June 30, 2008
(US Dollars)
(Unaudited)
2. GOING-CONCERN
(Continued)
The general business strategy of the
Company is to explore and research an existing mineral property and to
potentially acquire further claims either directly or through the acquisition
of operating entities. The continued operations of the Company depends upon the
recoverability of mineral property reserves, confirmation of the
Company’s interest in the underlying mineral claims, the ability of the
Company to obtain necessary financing to complete the development of these
claims and upon the future profitable production of the claims. Management
intends to raise additional capital through share issuances to finance
operations and invest in the resource properties as described in note 3.
The Company has a working capital
deficit of $545,840 (December 31, 2007 - $371,166), has accumulated losses
during the exploration stage of $1,418,192 (December 31, 2007 - $1,197,819),
has not generated any operating revenue to date, and has no capital resources
presently available to meet obligations, which normally can be expected to be
incurred by similar companies. These factors raise substantial doubt about the
Company’s ability to continue as a going-concern, which is dependent on
the Company’s ability to obtain and maintain an appropriate level of
financing on a timely basis and to achieve sufficient cash flows to cover
obligations and expenses. The outcome of the above matters cannot be predicted
at this time. These financial statements do not give effect to any adjustments
to the amounts and classifications of assets and liabilities, which might be
necessary should the Company be unable to continue as a going-concern.
3. RESOURCE
PROPERTIES
(a) On
June 18, 2003, the Company entered into an option agreement to acquire nine
mineral claims consisting of 47 units, each unit consisting of approximately 25
hectares, title to which is held by an unrecorded warranty deed. The mineral
claims are located 25 kilometres northeast of the city of Grand
Forks, British Columbia, Canada, known as the Burnt Basin
mineral claims numbered 393541, 393542, and 393681 to 393687. The option
agreement is subject to an underlying agreement dated July 29, 2002 between the
property owners and the optionor.
Under
the terms of the option agreement, the Company can acquire a 100% undivided
interest in the property, subject to two separate net smelter return royalties
(“NSR”) (totaling 2%), and cash and share payments totaling $12,364
(Cdn $17,000) (paid) and 225,000 shares of common stock (issued). The Company
also had to incur exploration expenses totaling $243,000 (Cdn $250,000) (paid) over
a three-year period, ending June 18, 2006 (extended to June 18, 2008).
The
first NSR consists of a 1% NSR payable to the property owner capped at $245,000
(Cdn $250,000), that will be provided by making annual $9,800 (Cdn $10,000)
prepaid NSR payments beginning in September, 2003, $42,816 (Cdn $50,000) paid
to December 31, 2007). A further 1% NSR is payable to the optionor. One-half of
the latter 1% NSR may be bought out for the sum of $491,000 (Cdn $500,000).
To
date, the Company has not performed any drilling on the property, but has
performed aerial and ground geophysics , soil sampling , rock sampling and
power trenching. The Company is presently in the pre-exploration state and
there is no assurance that a commercially viable mineral deposit exists in the
property until further exploration is done and a comprehensive evaluation
concludes economic and legal feasibility. The Company intends to develop
mineral deposits it finds, or enter into a joint venture with another mining
company with more experience at that stage of operation.
10
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Notes to Condensed Consolidated Financial Statements
Six Months Ended June 30, 2008 and 2007 and the Period from July 16,
2003 (Inception) to June 30, 2008
(US Dollars)
(Unaudited)
3. RESOURCE
PROPERTIES
(Continued)
(b)
By an agreement dated November 17, 2006, the Company acquired an option
to earn a 20%
interest of a 50% interest held by the optionors in
certain mineral exploration rights located in Inner Mongolia, China. The option
agreement is subject to an underlying agreement dated February 1, 2006 between
the vendor and the optionors.
In order to earn its interest in the property, the
Company issued 2,200,000 common shares to the optionors and an additional
300,000 common shares to the vendor of the property.
The common shares were valued by the Company at $0.10 per share. The Company
also granted a total of 2.2% NSR to the optionors on all metals produced from
the optionors’ interest in the property. The optionors also granted the
Company a first right of refusal on acquiring the remainder of their 50%
interest for a period of one year.
In addition to the 2,200,000
common shares issued as noted above, the company must issue an additional
500,000 common shares to the vendor by February 1, 2009 and incur $750,000 of
exploration expenditures, $250,000 in the first year (extended to
February 1, 2008 in consideration of 100,000 common shares of the
Company, fair valued at $0.45 per share).
By agreement dated August 7,
2007, the Company exercised its option to earn the remaining 30% option
interest in the property. In order
to earn the additional 30% option interest in the property, the Company issued
3,011,500 common shares to the Optionors.
These shares were issued at $0.60 per share, a price determined to be
fair value.
On January
15, 2008, the Company received an extension on completing $500,000 of exploration
expenditures required by February 1, 2008 in its option agreement dated
November 17, 2006 regarding the Inner Mongolia Property to February 1, 2009 in
consideration for 100,000 shares of the Company. The 100,000 common
shares were issued at $0.33 per share, a price determined to be fair value.
On January
28, 2008, the Company issued 300,000 common shares, at a price of $0.20 per
share, a price determined to be fair value, as required under the option
agreement dated November 17, 2006.
(c) On
February 26, 2008, the Company acquired 50% of TMBW International Resources
Corporation's Mac Property, a 331-hectare gold property located approximately
55 kilometres southeast of Vernon, British Columbia, for 1,800,000 common
shares of the Company. The Company will also assume all obligations to the
original vendors. The Company
issued the 1,800,000 shares to TMBW International Resources Corporation
at a price of $0.05, a price determined to be fair value.
4. RELATED
PARTY TRANSACTIONS
(i)
As of June 30, 2008, the total balance owing for investor relations by the son
of the president of the Company was $48,239 (December 31, 2007 - $48,239). The
amount owed is without interest or stated terms of repayment and is unsecured
.
(ii)
As of June 30, 2008, the president is owed $277,859 (December 31, 2007 -
$145,339), which is included in due to related parties. The amount owed is
without interest or stated terms of repayment and is unsecured.
11
NEWPORT GOLD, INC.
(An Exploration Stage Company)
Notes to Condensed Consolidated Financial Statements
Six Months Ended June 30, 2008 and 2007 and the Period from July 16,
2003 (Inception) to June 30, 2008
(US Dollars)
(Unaudited)
4. RELATED
PARTY TRANSACTIONS (continued)
All
transactions with related parties are in the normal course of operations and
are measured at the exchanged amount, which is the amount of consideration
agreed to between the parties.
5. LOAN
PAYABLE
The loan is unsecured,
without interest or stated terms of
repayment
.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
Forward Looking Information
This section of the prospectus includes a number of forward- looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this prospectus. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
Our Proposed Plan of Operation
General
The following discussion and analysis should be read in
conjunction with the financial statements, including the notes thereto,
appearing elsewhere in this document.
Plan of Operations
Burnt Basin Property
Newport has obtained an option to acquire nine mineral
claims consisting of 47 units consiting of approximately 25 hectres (the
"Burnt Basin Property").
The mineral claims are located 25 kilometres northeast of
the city of Grand Forks, British Columbia, Canada. These mineral claims entitle us to the
minerals located on the Burnt Basin Property subject to the option agreement.
However, since title to the Burnt Basin Property is in the name of Mr. John
Carson, should he choose to transfer title to a third party, Newport would lose the mineral claims. Newport entered into the
option agreement with Steve Baran June 18, 2003. Mr. Baran is not related to Newport.
Newport Gold Inc. has now earned a 100% interest in the Burnt Basin Property, subject to a separate NSR
payment.
A large number of mineral occurrences occur on the Burnt
Basin Property, most of which have seen limited or no recent exploration. The
known showings belong to 3 main styles, including zinc-lead (+/- silver,
copper) mineralization in argillaceous limestone, gold-silver quartz veins, and
auriferous massive pyrrhotitepyrite mineralization.
Examples of zinc-lead (+/- silver, copper)
mineralization include the Eva Bell, Halifax, Ennismore, Hastings, Ajax and
Breckle showings. The bulk of the previous exploration on the property,
primarily done in the 1960’s and 1970’s, was directed at this type
of mineralization. Detailed geological mapping is needed to determine which
model best explains the mineralization, and in particular, whether
mineralization has undergone the same degree of deformation as the host
rocks. This mapping is expected to
be completed through further extensive trenching and rock sampling.
Significant gold values (in the 15-30 g/t Au range)
occur at the Molly Gibson showing. As with the zinc-lead (+/- silver, copper)
showings described above, previous workers have classified the Molly Gibson
mineralization as contact metasomatic, or skarn type mineralization. Newport
believes that a better interpretation is that the mineralization represents a
deeper portion of the same mineralizing system as the massive sulfide/oxide
showings.
13
Several showings were discovered on the Burnt Basin
property during Newport Gold’s 2007 work program, which were unknown from
previous work or were referenced in the historic literature but had not been
located and sampled during previous work programs. Three significant new
discoveries in outcrop include the Gold Knoll, Unexpected and Ajax showings. None of these discoveries have
been tested by trenching or drilling. Follow-up is needed at all of these new
discoveries, in order to assess their significance.
The 2007 soil geochemical and ground magnetometer
surveys were both successful at outlining anomalies which require follow-up. A
large strong zinc-lead-copper soil anomaly in the Eva Bell-Halifax area ranges
from 150 to 300 meters in width, and, assuming continuity across the Manitou
crown grant, exceeds 1 kilometer in length. A zinc-lead soil anomaly,
approximately 100 by 400 meters in size, occurs in the vicinity of the
Ennismore showing. A strong northwest trending mag high anomaly in the Breckle
– Upper Eva Bell area is another high priority target for follow-up.
Further work is recommended for the Burnt Basin
property, to explore for both zinc-lead (+/- silver, copper) mineralization and
for gold mineralization on the property. A two-phase $1,100,000 work program is
recommended. Phase 1 has a budget of $680,000 and includes trench and drill
follow-up to test anomalies resulting from the 2007 exploration program. In
addition, the Phase 1 program includes extending the 2007 grid to the south and
west, to cover the Hastings, Molly Gibson and Ajax showings, and
completing soil geochemical and ground magnetometer surveys over these areas.
The Phase 2 program will involve follow-up diamond drilling to further test
known showings, and to test any targets resulting from the Phase 1 program.
Phase 2 has a budget of $420,000 and is in-part contingent on the results of
the Phase 1 program.
To achieve our goals and objectives for the next 12
months, we plan to raise additional capital through private placements of our
equity securities and, if available on satisfactory terms, debt financing. If we are unsuccessful in obtaining new
capital, our ability to continue our exploration programs and meet our current
financial obligations could be adversely affected.
There are no proven or probably mineral reserves on the
Burnt Basin Property at this time.
Mongolia Property
By an agreement dated November 17, 2006, Newport acquired an option to
earn a 20%
interest of a 50%
interest held by the optionors in certain mineral exploration rights located in
Inner Mongolia, China the “China Property”).
During the first quarter of 2008 Newport received a very
preliminary geophysical report on the Tiejiangzie China Property in Inner
Mongolia, China. This report was
prepared by Daniel Huang, our consulting geologist. These results were sent to a Canadian geophysical
company for interpretation. Newport intends to drill the China
Property this year however the scope and size of the program will be based on
the interpretation from the geophysical data which is not expected to be
available until September 2008.
The existing copper gold pit has been mined down in excess of
40 feet by local people. Initial
assays from the 2005, 2006 and 2007 field season suggest many copper gold
targets that would be amenable to drilling but these need to be examined in
conjunction with the geophysical anomalies in order to systematically pick the
best drilling locations.
Outlining potential mineralization will require very selective drill
targets and several field seasons.
Noront Bataou, the Canadian foreign subsidiary, wholly owned
by Newport’s joint venture partner in this project, Noront Resources
Limited, is the company started by Noront and Newport to explore the China
property. It is important to note
that the exploration license has been secured until 2010.
14
Mac Gold Property
On February 26, 2008, Newport acquired 50% of TMBW
International Resources Corporation's Mac Property, a 331-hectare gold property
located approximately 55 kilometres southeast of Vernon, British Columbia, for
1,800,000 common shares of Newport. Newport also agreed to assume all
obligations to the original vendors. Newport issued the 1,800,000 shares to TMBW
International Resources Corporation.
Study and careful examination of past drill intercepts has
determined that metallurgical work is necessary before drill targets are
selected. In the early nineties a
decline was driven to follow up on some encouraging drill holes. It has been determined that this decline
should be tested for its metallurgy as the gold mineralization that is present
is refractory. Newport intends to
have Linda Caron, consulting geologist on the Burnt Basin property, follow up
with a small program of rock sampling
The Mac Gold Property is readily accessible and does have
decline access to an underground zone which assayed 10m of .42 oz/t gold. Several consultants that have been
contacted suggest that the mineralization would be amenable to favorable
recoveries using known methods which currently process refractory gold ores.
Off-balance
sheet arrangements
As of June 30, 2008, Newport has had no off-balance
sheet arrangements.
Revenues
REVENUE - Newport has not generated any revenues for the
quarter ended June 30, 2008, or since inception.
COMMON STOCK – Newport has issued 1,800,000 common
shares during the most recent quarter.
As of the date of June 30, 2008 Newport has 20,386,500 common shares
issued and outstanding.
Expenses
EXPENSES - Expenses for the six months ended June 30,
2008, was $220,373 as compared to $166,372 for the six months ended June
30,2007.
We expect continued increases in expenses during the
next twelve months, as we continue to implement our business plan. We expect the
increase to be primarily exploration related expenses, such as geological consulting
fees, and expenditures on resoure properties.
For the six months ended June 30, 2008, $120,844 in geological
consulting fees was incurred as compared to $121,655 incurred in the six month
period ended June 30, 2007. For the
six month period ended June 30,
2008, $39,328 expended on resource properties (nil- June 30, 2007). For the six month period ended June 30,
2008, $55,980 was incurred in legal and accounting fees up from $35,279 having
been incurred in the six month period ended June 30, 2007. The increase in this category was
primarily related to increases in accounting fees.
Newport intends to carefully control its expenses and
overall costs as it moves forward with the development of its business plan.
Liquidity and Capital
Resources Liquidity
As of June 30, 2008, Newport total cash on hand was $2,119
($81,231 – June 30, 2007). Newport had
15
$859,688 in liabilities ($456,326- June 30, 2007) of which $326,098 ($193,578- June 30,
2007) is owed due to related parties
and $231,590($262,748- June 30, 2007) is owed for Accounts Payable.
Our cash reserves are not sufficient to meet our
obligations for the next twelve-month period. We will require additional funding in
order to cover all anticipated administration costs and to proceed with our
proposed exploration program on the Burnt
Basin property, estimated
to cost a minimum of $540,000 over the next twelve months. We do not have any arrangements in place
for any future equity financing and there is no guarantee we will be able to
obtain the funding necessary to continue as a going concern.
ITEM 3: CONTROLS AND PROCEDURES
(a)
Evaluation of
Disclosure Controls and Procedures
Based on the management’s evaluation (with the participation our
President and Chief Financial Officer), our President and Chief Financial
Officer have concluded that as of June 30, 2008, the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange of 1934 (the "Exchange Act") are effective to
provide reasonable assurance that the information required to be disclosed in
this quarterly report on Form 10-QSB is recorded, processed, summarized and reported
within the time period specified in Securities and Exchange Commission rules
and forms. and that such information is accumulated and communicated to the
Company’s management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow for timely decisions regarding
required disclosure.
(b)
Internal
control over financial reporting
Management's annual report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Our internal control over financial reporting
is intended to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. GAAP. Our internal control over financial
reporting should include those policies and procedures that:
·
pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets;
·
provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with applicable GAAP, and that receipts and expenditures are being
made only in accordance with authorizations of management and the Board of
Directors; and
·
provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including
our President and Chief Executive Officer, and our Chief Financial Officer, we
have evaluated the effectiveness of our internal control over financial
reporting and preparation of our annual financial statements as of December 31,
2007 and based upon their evaluation determined our internal controls were not
effective as the issuance of 3,011,500 common shares shares in August 2007 was not recorded in the
September 30, 2007 quarterly financial statements and this oversight was only
discovered at the time of the preparation of the audited financial
statements. Our auditors have
informed the Company that they considered the matter described above to be
material weaknesses in the Company's internal controls over financial
reporting. The Company has taken corrective action to address the material
weakness identified and filed an
amended Form 10-QSB for the quarter ended September 30, 2007on May 16, 2008.
16
Changes in Internal Controls
As stated above, based on the evaluation as of December 31, 2007, by our
President and Chief Executive Officer, and our Chief Financial Officer we have
concluded that there are material weaknesses in our current internal controls
which we need to take immediate corrective action with regard to certain
deficiencies and material weakness to ensure the effectivness of our internal controls going forward in
the future. There were no changes to internal controls of the Company in the second
quarter of 2008.
ITEM 3A(T): CONTROLS AND PROCEDURES
See Item 3A
– Controls and Procedures above.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
To Newport's knowledge, no lawsuits were commenced against Newport
during the six months ended June 30, 2008, nor did Newport commence any
lawsuits during the same period. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered
Sales of Equity Securities
On February 26, 2008, the Company acquired 50% of TMBW International Resources
Corporation’s Mac Property, a 331-hectare gold property located
approximately 55 kilometres southeast of Vernon, British Columbia, for
1,800,000 common shares of the Company. The Company will also assume all
obligations to the original vendors. The Company issued the 1,800,000 shares to
TMBW International Resources Corporation on April 30, 2008.
The issuance of shares in the transactions noted above was completed
pursuant to Rule 903 of Regulation S of the
Securities Act of 1933
on the basis that the issuance of the
shares was completed in an offshore transaction, as defined in Rule 902(h) of
Regulation S with a non U.S. person or entity, as defined in Regulation S, and
the acquirer was not acquiring the shares for the account or benefit of a U.S.
person. All securities issued were
endorsed with a restrictive legend.
These shares may not be offered or sold in the United States unless the
securities are registered under the
Securities
Act of 1933
or pursuant to an exemption from the
Securities Act of 1933
.
Use
of Proceeds
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR
SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
17
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
Exhibits
The following Exhibits are furnished as part of this Form
10-QSB, pursuant to Item 601 of Regulation S-B.
Exhibit Number
|
|
Exhibit Title
|
3.1
|
|
Articles of Incorporation (incorporated by reference from our Form SB-1
Registration Statement, filed June 8, 2005).
|
3.2
|
|
Bylaws (incorporated by reference
from our Form SB-1 Registration Statement, filed June 8, 2005)
|
10.1
|
|
Burnt Basin mineral claims (incorporated by reference from our Form SB-1 Registration
Statement, filed June 8, 2005).
|
10.2
|
|
Option Agreement to Acquire Burnt Basin Mineral Claims (incorporated by
reference from our Form SB-1 Registration Statement, filed June 8, 2005).
|
10.3
|
|
Option Agreement to Acquire 20% interest of Certain
Mineral Claims in Inner Mongolia dated as of November 17,
2006 (incorporated by reference from our Form 10-KSB Annual Report, filed April
15, 2008).
|
10.4
|
|
Option Agreement to Acquire an additional 30% interest
of Certain Mineral Claims in Inner Mongolia dated as of
August 7, 2007 (incorporated by reference from our Form 10-KSB Annual Report,
filed April 15, 2008).
|
10.5
|
|
Extension Agreement to Complete Inner Mongolia
Exploration Expenditures dated as of January 15, 2008 (incorporated by reference from our Form 10-KSB Annual
Report, filed April 15, 2008).
|
10.6
|
|
Acquisition Agreement to Acquire 50% interest of Mac
Property held by TMBW International Resources dated February 26, 2008 (incorporated by reference from our Form 10-KSB Annual
Report, filed April 15, 2008).
|
21
|
|
List of Subsidiaries (incorporated by reference from our Form SB-1 Registration
Statement, filed June 8, 2005)
|
31.a
|
|
Section 906 Certificate of CEO
|
31.b
|
|
Section 906 Certificate of CFO
|
32.a
|
|
Section 302 Certificate of CEO and
CFO
|
99.1
|
|
Technical Report on the Burnt Basin Property dated
July 18, 2003 (incorporated
by reference from our Form SB-1 Registration Statement, filed June 8, 2005).
|
18
SIGNATURES
In accordance with
the requirements of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
|
NEWPORT GOLD, INC.
|
|
|
Date: August 19, 2008
|
/s/ Derek Bartlett
|
By:
|
Derek Bartlett,
President, CEO, Secretary, and a member of the
Board of Directors
|
|
|
|
|
|
|
|
|
Date: August 19, 2008
|
/s/ John Arnold
|
By:
|
John Arnold,
Treasurer, Acting Chief Financial Officer, and
Principal Accounting Officer
|
19
Grafico Azioni Newport Gold (PK) (USOTC:NWPG)
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Da Giu 2024 a Lug 2024
Grafico Azioni Newport Gold (PK) (USOTC:NWPG)
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Da Lug 2023 a Lug 2024