Read Report - Nuinsco Resources Limited

12
2005 ANNUAL REPORT
SELECTED ANNUAL INFORMATION
Summary Operating Results
($’000s except per share amounts) 2005 2004 2003
Interest income 8 18 10
Gain on sale of marketable securities 400 – –
Operating costs 1,351 1,504 826
Loss 5,010 8,706 3,515
Loss per share 0.05 0.11 0.05
Summary Balance Sheets
($’000s) 2005 2004 2003
Current assets 4,041 2,063 3,217
Exploration and development projects 5,076 7,124 14,914
Long-term receivable – 1,000 –
Total assets 9,158 10,237 18,173
Long-term liabilities 200 200 200
Total shareholders equity 8,244 9,454 17,420
RESULTS OF OPERATIONS
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
The Company’s net loss for 2005 was $5.0 million or $0.05 per share, compared to a net loss for 2004 of
$8.7 million or $0.11 per share. The lower loss for 2005 was primarily the result of the lower property
write-downs in 2005. In 2005, the write-down of $4.8 million included $3.9 million for the Mel property as
the option agreement expired on February 28, 2006. The Company is in discussions with its joint venture
partner to extend the agreement but no arrangements have been finalized. In 2004, a loss of $7.2 million was
recognized on the sale of the Rainy River property and write-downs of exploration projects totalled
$1.2 million. In 2005, expenses were offset in part by the recognition of previously unrecorded tax assets
amounting to $0.3 million compared to $1.2 million in 2004. The tax recovery was recognized with the
renunciation of the tax benefits of the flow-through share expenditures in 2005 and 2004.
Administrative costs excluding the stock option compensation have increased to $1.0 million in 2005 from
$0.7 million in 2004, in step with the increasing cost of compliance for public companies. During 2005,
approximately $0.5 million was spent on compliance and shareholder costs, compared to $0.2 million during
2004. These costs do not include salaries of the individuals involved in compliance activities. Stock option
compensation decreased by $0.4 million to $0.4 million in 2005. To date, the Company has paid minimal
salaries to senior executives and directors and has had to provide stock options to attract highly experienced
management and directors. One of the major concerns in the industry today is the ability to attract such
individuals. As the Company’s projects advance from pure exploration to potential development, the need
for a variety of disciplines is growing. It is likely that salaries will increase during 2006 as the need for these
disciplines is met.
On an ongoing basis, the Company sorts out its priority projects, and non-core properties are either being
sold or abandoned. As a result, property write-downs are being recognized. For 2005, the Company wrote
MANAGEMENT’S DISCUSSION & ANALYSIS