Read Report - Nuinsco Resources Limited

32
2005 ANNUAL REPORT
The Company also issued 1,145,410 common share units at $0.22 per share for gross proceeds of $251,990.
Each common share unit is comprised of one common share and one common share purchase warrant. Each
common share purchase warrant is exercisable to purchase one common share at $0.40 per share until April 2007.
As part of the financing the agents were granted 751,432 compensation warrants (“Compensation Warrants”)
which entitle the holder to purchase one common share and one common share purchase warrant for $0.26
until April 2007 for each Compensation Warrant held. Each warrant entitles the holder to purchase one
common share for $0.40 until April 2007
(iv) In January 2005, the Company issued 700,000 common shares at $0.20 per share for gross proceeds of
$140,000. As part of the financing, investors were granted 700,000 half share purchase warrants. Each whole
warrant entitles the holder to purchase one common share at $0.30 until January 2007.
As part of the financing the agents were granted 19,500 compensation warrants (the “Compensation
Warrants”). Until January 2007, the Compensation Warrants entitle the holder to purchase one common share
for $0.20 and receive an equivalent number of half warrants. Each whole warrant entitles the holder to
purchase one common share at $0.30 per share until January, 2007.
(v)
During the year ended December 31, 2004 the Company completed a flow-through common share financing
for gross proceeds of $618,266 to finance part of the 2005 exploration program. At December 31, 2004 none of
the exploration expenditures of the flow-through shares issued had been incurred and that amount has been
set-aside on the balance sheet.
During the year ended December 31, 2004, the Company completed a private placement of 3,000,000 common
shares at $0.20 per share for gross proceeds of $600,000. As part of the financing, investors who were not
insiders of the Company were granted 1,000,000 half share purchase warrants. Each whole share purchase
warrant entitles the holder to purchase one share for $0.30 until December 2006.
As part of the above two financings in 2004 the agents were granted 243,102 compensation warrants (the
“Compensation Warrants”). On exercise, the holder is entitled to purchase one common share for $0.20 and
receive an equivalent number of half warrants. Each whole warrant entitles the holder to purchase one share
at $0.30. The Compensation Warrants and underlying warrants expire December 2006.
(vi) In February 2005, the Company renounced $618,000 (2004 - $3,489,000) in Canadian exploration expenditures
to purchasers of flow-through shares in 2004. The tax value of this renunciation amounts to $211,000 (2004 -
$1,190,000) and has been recorded as a liability and charged against share capital. Since the Company has a
valuation allowance which reduces the future income tax assets, the valuation allowance has been reduced
and an income tax recovery has been recognized in the statement of operations.
(b) Stock Options
The Company has a stock option plan (the “Plan”) to encourage ownership of its shares by directors, officers,
employees and others, and to provide compensation for certain services. The terms of the Plan provide that the
directors have the right to grant options to acquire common shares of the Company at not less than the closing
market price of the shares on the day preceding the grant at terms of up to 10 years. No compensation is
recognized when options are exercised. The number of shares reserved for issuance is not to exceed 15% of the
aggregate number of common shares issued and outstanding (calculated on a non-diluted basis) from time to time.
At December 31, 2005, the Company had 4,034,000 common shares available for the granting of future options.
NOTES TO FINANCIAL STATEMENTS