Metalore Resources Limited (MET) 2011年年度報告「TSX-V」.pdf

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1、METALOR ERESOURCESLIMITEDMETALOR ERESOURCESLIMITEDOur68thYearOur68thYear2011AnnualReport2011AnnualReport$14$13$12$11$10$9$8$7$6$5$4$3$2200920102011perMMBtu“Sunrise at Paradise Point”This cover(front and back)photo captures the awe of early morning pristine wildernessfrom our base camp at Paradise Po

2、int,Lake of the Woods,Northwestern Ontario.It wastaken by Armen Chilian,P.Geo.,last October(2010),during drilling operations at ourCedartree Lake Gold Project.Metalore sells the bulk of its Natural Gas production by negotiating guaranteed delivery,multimonth,Forward“Strip”Contracts with major market

3、ers.Superimposed on the lowerpart of the cover photo is the most recent Real-time,five year summary graph,showingthe PReMIuM composite1PRICeS obtained by Metalore from these contracts comparedto the North American“Benchmark”(NYMeX)2prices.A classic example of this PReMIuM is the five month(November,

4、2008 through March,2009)Winter Strip,when Metalore contracted and sold 65.2 Million British Thermal unitsat a composite price of$13.41(per MMBtu)for a gross revenue of$874,332.During thissame five month period the average,calculated,closing weekly NYMeXprice was$5.24per MMBtu,which would have yielde

5、d a gross revenue of$341,648 for the 65.2 MMBtu.Metalore realized a PReMIuM of$532,684 from this five month strip alone.It should be noted that only one of our 21 forward contracts(during the five year period)resulted in a strip being sold at a lower average price than the NYMeX Benchmark.Metalore d

6、id not enter into any multimonth strips for the first six months of the 2011calendar year because there was no economic advantage to lock in contracts during aperiod of sustained low prices.We have resumed negotiating strip contracts as the marketconditions improved.1 Includes adjustments for locati

7、on,foreign exchange and unique proprietary contracts.2 New York Mercantile Exchange(candle chart from TDAmeritrade IPCompany Inc.)METALORE RESOURCES LIMITEDGEORGE W.CHILIAN,BAPresident,CEO and Managing Director.Vittoria,OntarioJOHN A.RYAN,CGADirector and CFO.Simcoe,OntarioBRUCE A.DAVIS,MADirector.Gr

8、and Rapids,MinnesotaTIMOTHY J.CRONKWRIGHT,BADirector.Simcoe,OntarioMICHAEL A.DEHN,MScDirector.Oakville,OntarioJOHN C.McVICAR,BADirector.Brantford,OntarioDAVID J.SLATER,MADirector.Lasalle,OntarioOfficers and DirectorsExecutive Office and Natural Gas DivisionRural Route#1.Vittoria,OntarioProduction Ma

9、nager andHydrocarbon Geologist JONATHAN CHILIAN,BSc.Vittoria,OntarioAssistantProduction ManagerCARL CHILIAN,BA.Simcoe,OntarioBankersROYAL BANK OF CANADA.Simcoe,OntarioAccountantHOWARD WALTON,BSc,CMA.Simcoe,OntarioAuditorsNPT,LLP Chartered Accountants.London,Ontario(Formerly Neal,Pallett and Townsend

10、,LLP)Registrar andTransfer AgentCOMPUTERSHARE TRUST.Toronto,OntarioShare Listingand SymbolTORONTO STOCK EXCHANGE(TSX),“MET”.Toronto,Ontario(Over the Counter,“MTLRF”).United StatesShare Price Range2010 High$8.10 (CD).2011 Low$6.25 (CD)Annual MeetingBEST WESTERN LITTLE RIVER INN.Simcoe,OntarioAtrium R

11、oomSaturday,September 17,2011,12:30 p.m.Website and E 1METALORE RESOURCES LIMITED2011 Fiscal Year End Financial StatementsBALANCE SHEET AS AT MARCH 31See accompanying notes20112010ASSETSCURRENTCash and cash equivalents$170,229$248,040Marketable securities(Note 3)1,396,2311,289,297Accounts receivable

12、125,319144,799Inventory57,26048,240Income taxes recoverable-7,004Prepaid expenses5,000-1,754,0391,737,380Natural gas properties(Note 4)10,860,22510,861,142Land78,00078,000Mining properties4,091,0023,683,781$16,783,266$16,360,303 LIABILITIES AND SHAREHOLDERS EQUITYCURRENTAccounts payable and accrued

13、liabilities$109,876$164,879Income taxes payable3,131-Current portion of long term debt(Note 5)14,30616,008127,313180,887Long term debt(Note 5)-30,515Future income taxes2,425,5002,752,000Asset retirement obligation(Note 11)261,413187,5002,814,2263,150,902SHAREHOLDERS EQUITYShare capital(Note 7)2,468,

14、8322,468,832Contributed surplus(Note 8)36,63436,634Accumulated comprehensive income(Note 15)481,174110,489Retained earnings10,982,40010,593,44613,969,04013,209,401$16,783,266$16,360,303CONTINGENT LIABILITY(Note 12)O 2Approved on behalf of the Board:John A.Ryan,John C.McVicar,Director and CFODirector

15、3METALORE RESOURCES LIMITEDSTATEMENT OF INCOMEAS AT MARCH 3120112010REVENUENatural gas production$1,131,580$1,000,651Investment income69,05862,877Royalties3,9553,5921,204,5931,067,120ROYALTIES PAID82,53257,841NET REVENUE1,122,0611,009,279EXPENSESNatural gas production476,960450,262Amortization of na

16、tural gas assets276,485219,000Administration177,603141,590Accretion15,91311,142946,961821,994INCOME FROM OPERATIONS175,100187,285OTHER INCOME(EXPENSES)(5,845)24,480INCOME BEFORE INCOME TAXES169,255211,765INCOME TAXES(RECOVERED)Current-9,000Future(326,500)(216,000)(326,500)(207,000)NET INCOME FOR THE

17、 YEAR$495,755$418,765EARNINGS PER SHARE$0.28$0.24WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING1,775,0351,775,035 See accompanying notesSTATEMENT OF COMPREHENSIVE INCOMEYEAR ENDED MARCH 31See accompanying notes20112010NET INCOME$495,755$418,765 CHANGES IN COMPREHENSIVE INCOMEUnrealized gain on availa

18、ble for sale securities364,673399,708Reclassification for realized gains(losses)6,012(102,585)OTHER COMPREHENSIVE INCOME370,685297,123COMPREHENSIVE INCOME FOR THE YEAR$866,440$715,888 4METALORE RESOURCES LIMITEDSTATEMENT OF CASH FLOWSYEAR ENDED MARCH 3120001999Operating activitiesNet income(loss).$4

19、52,792$(2,788,873)Add(subtract)items not involving cash:Depletion.94,00076,000Writedown of mining claims.5,500,000Deferred income taxes.219,000(2,321,000)_Cash flow from operations before changes in non-cash working capital765,792466,127_Changes in non-cash working capital itemsAccounts receivable.(

20、26,874)39,771Inventory of pipe and supplies,at cost.5,4202,200Accounts payable and accrued royalties.4,120(161,862)Capital taxes payable.24,00024,056Municipal taxes payable.47,12742,255Large corporations and minimal provincial taxes payable.(42,900)_Net change in non-cash working capital items.53,79

21、3(96,480)_Cash flows from operating activities.819,585369,647_Financing activitiesDecrease in bank indebtedness.(97,493)Decrease in due to shareholders.(473,086)(195,725)Decrease in long-term debt.(790,507)Sale of mining claims(note 3).2,760,000_Cash flows from financing activities.(473,086)1,676,27

22、5_Investing in capital activitiesMining exploration costs(notes 1c,4b,and 4 c).69,214(148,214)Natural gas development costs.(528,060)(366,572)Renewable fuel(Ethanol)costs.(11,410)(88,884)Investment in marketable securities.(1,260,000)_Cash flows from investing activities.(470,256)(1,863,670)_Net cha

23、nge in cash and cash equivalents during the year(123,757)182,252Cash and cash equivalents,beginning of year.182,252nd of year.$58,495$182,252 operations per share.$._See accompanying notes20112010OPERATING ACTIVITIES Net income for the year$495,755$418,765 Items not affecting cash:Amortization of pr

24、operty,plant and equipment276,485219,000 Loss(gain)on disposal of investments5,845(24,480)Future income taxes(326,500)(216,000)Accretion15,91311,142 467,498408,427 Changes in non-cash working capital:Accounts receivable19,480113,251 Inventory(9,020)(9,090)Accounts payable and accrued liabilities(55,

25、001)(82,829)Income taxes payable10,135(56,560)Prepaid expenses(5,000)-(39,406)(35,228)Cash flow from operating activities428,092373,199INVESTING ACTIVITIES Proceeds on disposal of marketable securities588,494739,530 Purchase of marketable securities(330,093)(213,760)Natural gas development and explo

26、ration costs(218,065)(717,739)Mining exploration costs(407,221)(235,331)Cash flow used by investing activities(366,885)(427,300)FINANCING ACTIVITIES Dividends paid(106,801)(45,454)Proceeds from long term financing-48,000 Repayment of long term debt(32,217)(1,477)Cash flow from(used by)financing acti

27、vities(139,018)1,069DECREASE IN CASH AND CASH EQUIVALENTS(77,811)(53,032)Cash and cash equivalents-beginning of year248,040301,072CASH AND CASH EQUIVALENTS-END OF YEAR$170,229$248,040CASH FLOWS SUPPLEMENTARY INFORMATIONInterest received$26,003$3,110Interest paid$27$254Corporate taxes paid(received)$

28、(10,135)$65,560 5INDEPENDENT AUDITORS REPORT To the Shareholders of Metalore Resources LimitedWe have audited the accompanying financial statements of Metalore Resources Limited,which comprise the balance sheets asat March 31,2011 and 2010,and the statements of income,retained earnings,comprehensive

29、 income and cash flows for theyears then ended,and a summary of significant accounting policies and other explanatory information.Managements Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance wit

30、h Canadiangenerally accepted accounting principles,and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement,whether due to fraud or error.Auditors ResponsibilityOur responsibility is to express an op

31、inion on these financial statements based on our audits.We conducted our audits inaccordance with Canadian generally accepted auditing standards.Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial s

32、tatements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditors judgment,including the assessment of the risks of material misstatement ofthe fin

33、ancial statements,whether due to fraud or error.In making those risk assessments,the auditor considers internal controlrelevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances,but not for the pu

34、rpose of expressing an opinion on the effectiveness of the entitys internalcontrol.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management,as well as evaluating the overall presentation of the financial statem

35、ents.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion,the financial statements present fairly,in all material respects,the financial position of Metalore ResourcesLimited as at March 31,2011 and 2010 and

36、the results of its operations and its cash flows for the years then ended inaccordance with Canadian generally accepted accounting principles.Those standardsr An audit includes examining,on a test basis,evidence supporting the amounts andd An audit also includes assessing the accounting principles u

37、sed ands NPT LLPChartered Accountants,Licensed Public AccountantsLondon,CanadaJune 23,2011METALORE RESOURCES LIMITEDSTATEMENT OF RETAINED EARNINGSYEAR ENDED MARCH 31See accompanying notes20112010RETAINED EARNINGS-BEGINNING OF YEAR$10,593,446$10,220,136Net income for the year495,755418,76511,089,2011

38、0,638,901Dividends(106,801)(106,766)Unclaimed dividends refunded(Note 9)-61,311RETAINED EARNINGS-END OF YEAR$10,982,400$10,593,446 61.NATURE OF OPERATIONS Metalore Resources Limited is a junior resource company dedicated to natural gas production and gold exploration in Ontario.2.SUMMARY OF SIGNIFIC

39、ANT ACCOUNTING POLICIESThese financial statements have been prepared in accordance with Canadian generally accepted accounting principles,the more significant of which are summarized below.Revenue recognitionSales of natural gas are recognized when title passes to the customer,normally at the transp

40、orters(Union Gas Limited)pipeline delivery point,and collectability is reasonablyassured.Investment income is recognized when earned.Cash and cash equivalentsCash and cash equivalents are comprised of cash and short-term investments that have a fixed maturity date less than three months from the dat

41、e of acquisition.InventoryInventory consists of pipe,fittings and processing supplies and is stated at the lower of cost and net realizable value,with the cost of pipe and fittings determined on a first-in,first-out basis.Natural gas propertiesThe Company owns and/or controls approximately 40,000 ac

42、res of petroleum,natural gas and mineral leases in Charlotteville,Walsingham and Houghton townships in NorfolkCounty,Ontario,and follows the full cost method of accounting for natural gas properties whereby all acquisition and development costs relating to the properties are capitalized.These costs

43、are depleted by the unit of production method based on estimated proven drilled gas reserves.The ratio of production to proved reserves before royalties determinesthe proportion of depletable costs to be expensed.The natural gas reserves of the Company are assessed annually.Total capitalized costs n

44、et of accumulated depletion and future income taxes is limited to an amount equal to the estimated future net revenue from proven reserves at year end,less estimated future production related general and administrative expenses,financing costs and income taxes.At March 31,2011 and 2010,no writedown

45、was required.Theprices used to estimate future cash flows are based on published forecasted prices for the NYMEX adjusted for the historical price differential between Metalores gas sales andthe benchmark.Forecasted prices,in Canadian dollars,for the following next six calendar years are:Remainder o

46、f 20116.10per Mcf20148.21per Mcf20126.92per Mcf20158.75per Mcf20137.47per Mcf20169.14per McfMining properties The Company owns a 1%net smelter return on 18 claims in the Brookbank and Beardmore area of Ontario and a 26%participating interest in approximately 600 contiguousmining claims in Sandra,Irw

47、in,Walters,Leduc and LeGault townships in Northwestern Ontario which are subject to a working option agreement with Goldstone Resources Inc.,formerly Ontex Resources Limited.The Company also owns a 100%interest in 306 mining claims in the Sioux Narrows(Cedartree Lake)area of Northwestern Ontario.Acq

48、uisition and exploration costs are capitalized.During the year,general and administrative costs of$1,537(2010-$1,785)and exploration costs of$119,257(2010-$11,572)were capitalized.Disposals of mining property and equipment are offset against the acquisition costs.If exploration activities are follow

49、ed by production,capitalized costs will beamortized on the unit of production method based on the estimated reserves in the area.If exploration activities are unsuccessful and the area is abandoned,all capitalizedcosts relating to the area will be written off.Mining properties are assessed annually

50、or as economic events dictate,for potential write-down.Financial instrumentsFinancial instruments-recognition and measurementThe Company has classified its marketable securities as available for sale assets.Accounts receivable is classified as loans and receivables.Cash and cash equivalents isclassi

51、fied as held for trading while accounts payable and accrued liabilities,and due to shareholders are classified as other financial liabilities.Purchase and sale of securities are accounted for on a trade date basis.Fair value hierarchyThe Company follows the recommendations of CICA Handbook Sections

52、3862 and 3863 for the disclosure and presentation of its financial instruments.Under Section 3862,the Company is required to classify their financial instruments within a hierarchy that prioritizes the inputs to fair market value.The three levels of the fair value hierarchy are:Level 1-unadjusted qu

53、oted prices in an active market for identical assets or liabilitiesLevel 2-inputs other than quoted market prices that are observable for the asset or liability either directly or indirectlyLevel 3-inputs that are not based on observable market data.Cash and cash equivalents,marketable securities ar

54、e measured at fair value using Level 1 inputs and accounts receivable,accounts payable and accrued liabilities and due toshareholders are measured at fair value using Level 2 inputs.Section 3863 establishes the standards for presentation of financial assets and liabilities from the perspective of th

55、e issuer as well as the classification of interest,dividends,gains and losses as well as the circumstances in which financial assets and liabilities can be offset.Impairment TestThe Company performs an impairment test annually to determine the recoverability of capitalized costs associated with rese

56、rves.Should the amount of the capitalized costsexceed the amount of the reserves,the resulting impairment loss will be recognized in earnings.The amount of the impairment loss is determined by making assumptions aboutfuture reserves,the price of natural gas and future costs all of which are subject

57、to uncertainty.By their nature,these estimates are subject to measurement uncertainty andchanges in these estimates may have a material impact on the financial statements of future periods.Asset retirement obligationThe Company recognizes the fair value of the estimated asset retirement obligations

58、on the balance sheet when a reasonable estimate of fair value can be made.The fair valueof the estimated obligation associated with the retirement and reclamation of tangible long-lived assets is recorded in the period the related assets are put into use with acorresponding increase to the carrying

59、amount of the related assets.This increase in capitalized costs is depleted to income on a basis consistent with the underlying assets.Subsequent changes in the estimated fair value of the asset retirement obligation are capitalized and depleted over the remaining useful life of the underlying asset

60、.The asset retirement obligation liabilities are carried on the balance sheet at their discounted present value and are accreted over time for the change in their present value.METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSYEAR ENDED MARCH 31,20117METALORE RESOURCES LIMITEDNOTES TO FINANCIA

61、L STATEMENTSYEAR ENDED MARCH 31,2011(Continued from previous page)Future income taxesThe liability method of tax allocation is used in accounting for income taxes.Under this method,future tax assets and liabilities are determined based on differences betweenthe financial reporting and tax basis of a

62、ssets and liabilities,and measured using the substantially enacted tax rates and laws that will be in effect when the differences areexpected to reverse.Stock optionsThe Company uses the fair value method using the Black-Scholes option pricing model to account for stock options granted to employees.

63、Under the fair value method,theCompany recognizes estimated compensation expense related to stock options over the vesting period of the options granted,with the related credit being charged to contributedsurplus.Upon exercise of any stock options,amounts previously credited to contributed surplus a

64、re reversed and credited to share capital.There were no stock options issuedduring the year or in the prior year.Earnings per shareEarnings per share has been calculated using the weighted average common shares outstanding.Fully diluted earnings per share reflects the maximum possible dilution fromt

65、he potential exercise of stock options and is anti-dilutive for fiscal 2011 and fiscal 2010.Future changes in significant accounting policiesInternational Financial Reporting StandardsIn February 2008,the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be req

66、uired to adopt International Financial ReportingStandards(IFRS)effective for all interim and annual financial statements for fiscal years beginning on or after January 1,2011,with early adoption permitted.As a result thesechanges will be effective for the Companys fiscal period ended March 31,2012.T

67、he transition date of April 1,2010 will require the restatement of comparative balances for theyear ended March 31,2011.The conversion to IFRS will impact the Companys accounting policies,information technology and data systems,internal control over financialreporting and disclosure controls and pro

68、cedures.The transition date of April 1,2010 will require the restatement of comparative balances for the year ended March 31,2011.IFRS transition planThe Company has established a comprehensive IFRS transition plan to assist with the planning and implementation of its transition to IFRS.The followin

69、g summarizes theCompanys progress and expectations with respect to the IFRS transition plan:1.Scoping and analysis of key areas for which accounting policies may be impacted by the transition to IFRS.In progress,completion during Q1 Fiscal 20122.Detailed evaluation of potential changes required to a

70、ccounting policies,information systems and business processes,including the application of IFRS 1 First Time Adoption of International Financial Reporting Standards In progress,completion during Q1 Fiscal 20123.Resolution of the accounting policy change implications on information technology,busines

71、s processes and contractual arrangements.In progress,completion during Q1 Fiscal 20124.Quantification of the financial statement impact of changes in accounting policies.In progress,completion during Q1 Fiscal 20125.Management and employee education and training.Throughout the transition process and

72、 on-going as neededImpact of adopting IFRS on the Companys businessAs part of the analysis of potential changes to significant accounting policies,the Company is assessing what changes may be required to its accounting systems and businessprocesses.The Company believes that the changes identified to

73、 date are minimal and the systems and processes can accommodate the necessary changes.To date the Company has not identified any contractual arrangements that may be affected by potential changes to significant accounting policies.The Companys staff andadvisors involved in the preparation of financi

74、al statements are being trained on the relevant aspects of IFRS and the anticipated changes to accounting policies.Employees ofthe Company that will be affected by a change to business processes as a result of the conversion to IFRS will also be trained as necessary.The Board of Directors and AuditC

75、ommittee have been regularly updated on the progress of the IFRS conversion plan and made aware of the evaluation to date of the key aspects of IFRS affecting the Company.First time adoption of IFRSThe adoption of IFRS requires the application of IFRS 1 First Time Adoption of International Financial

76、 Reporting Standards(IFRS 1),which provides guidance for an entitysinitial adoption of IFRS.IFRS 1 generally requires retrospective application of IFRS as effective at the end of its first annual IFRS reporting period.However,IFRS 1 also providescertain optional exemptions and mandatory exceptions t

77、o this retrospective treatment.The Company expects to identify the optional exemptions that it expects will apply inits preparation of an opening IFRS statement of financial position as at April 1,2010,the Companys Transition Date.Prior to reporting interim financial statements in accordance withIFR

78、S for the quarter ended June 30,2011,the Company may decide to apply other optional exemptions contained in IFRS 1.IFRS does not permit changes to estimates that have been made previously.Accordingly,estimates used in the preparation of the Companys opening IFRS statement of financialposition as at

79、the Transition Date will be consistent with those made under current Canadian GAAP.If necessary,estimates will be adjusted to reflect any difference in accounting policy.Impact of adopting IFRS on the Companys financial statementsThe adoption of IFRS will result in some changes to the Companys accou

80、nting policies that are applied in the recognition,measurement and disclosure of balances andtransactions in its financial statements.The following provides a summary of the Companys evaluation to date of potential changes to accounting policies in key areas basedon the current standards and guidanc

81、e within IFRS.This is not intended to be a complete list of areas where the adoption of IFRS will require a change in accounting policies,but to highlight the areas the Company has identified as having the most potential for significant change.The International Accounting Standards Board has a numbe

82、r of ongoingprojects,the outcome of which may have an effect on the changes required to the Companys accounting policies on adoption of IFRS.At the present time however,theCompany is not aware of any significant expected changes prior to its adoption of IFRS that would affect the summary provided be

83、low:8METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSYEAR ENDED MARCH 31,2011(Continued from previous page)1.Exploration and Evaluation ExpendituresIFRS currently allows an entity to retain its existing accounting policies related to the exploration for and evaluation of mineral properties,su

84、bject to some restrictions.The Company expects to retain its current policy of expensing exploration and evaluation expenditures are incurred.Therefore,the Company does not expect that theadoption of IFRS will result in any significant change to the related line items within its financial statements

85、.2.Impairment of(Non-Financial)AssetsIFRS requires a write down of assets if the higher of the fair market value and the value in use of a group of assets is less than its carrying value.Value in use isdetermined to be the greater of the fair value less costs to sell and the discounted estimated fut

86、ure cash flows.Current Canadian GAAP requires a write down toestimated fair value only if the undiscounted estimated future cash flows of a group of assets are less than its carrying value.The Companys accounting policies relatedto impairment of assets will bechanged to reflect these differences,how

87、ever the Company does not expect this change will have an immediate impact to the carrying value of its assets.TheCompany will perform impairment assessments as at the Transition Date in accordance with IFRS.3.Share-based PaymentsIn certain circumstances IFRS requires a different measured of stock-b

88、ased compensation related to stock options than current Canadian GAAP.The Company doesnot expect any changes to its accounting policies related to share-based payments that would result in a significant change to line items within its financial statements.4.Asset Retirement Obligations(Decommissioni

89、ng Liabilities)IFRS requires the recognition of a decommissioning liability for legal or constructive obligations,while current Canadian GAAP only requires the recognition of suchliabilities for legal obligations.A constructive obligation exists when an entity has created reasonable expectations tha

90、t will take certain actions.The Companysaccounting policies related to decommissioing liabilities will be changed to reflect these differences,however the Company does not expect this change will have animmediate impact to the carrying value of its assets.5.Property and EquipmentIFRS contains differ

91、ent guidance related to recognition and measurement of property and equipment than current Canadian GAAP.The Company does not expectany changes to its accounting policies related to property and equipment that would result in a significant change to line items within its financial statements.6.Incom

92、e TaxesIn certain circumstances IFRS contains different requirements related to recognition and measurement of future(deferred)income taxes.The Company does notexpect any changes to its accounting policies related to income taxes that would result in a significant change to line items within its fin

93、ancial statements.Subsequent disclosureFurther disclosure of the IFRS transition process is expected on the Companys first financial statements prepared in accordance with IFRS,the interim financial statements forthe three months ending June 30,2011,which will include notes disclosing transitional i

94、nformation and disclosure of new accounting policies under IFRS.The interim financialstatements for the three months ended June 30,2011 will also include 2011 financial statements for the comparative period,adjusted to comply with IFRS,and the Companystransition position(as at April 1,2010).Measurem

95、ent uncertaintyThe preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions thataffect the reported amount of assets and liabilities,disclosure of contingent assets and liabilities at the date of th

96、e financial statements and the reported amounts of revenuesand expenses during the period.Such estimates are periodically reviewed and any adjustments necessary are reported in earnings in the period in which they become known.Actual results could differ from these estimates.3.MARKETABLE SECURITIES2

97、0112010CostFMVCostFMVIncome trust units$230,313$318,500$133,492$149,072Partnership units337,728597,800326,439412,032Common shares347,016479,931718,877728,193$915,057$1,396,231$1,178,808$1,289,2974.NATURAL GAS PROPERTIES20112010CostAccumulatedNet bookNet bookamortizationvaluevalueGas wells,transmissi

98、on lines andleases$15,463,410$4,603,185$10,860,225$10,861,142A portion of general and administrative costs of$12,296(2010-$14,280)and production costs of$136,819(2010-$188,097)were capitalized to natural gas properties,theCompanys core business.5.LONG TERM DEBT20112010Royal Bank of Canada term loan

99、repayable in monthly principal payments of$1,334,bearing interest at prime plus 1.25%,secured by a general security agreement and a collateral mortgage on the land owned by the Company.$14,306$46,523Amounts payable within one year(14,306)(16,008)$30,515METALORE RESOURCES LIMITEDNOTES TO FINANCIAL ST

100、ATEMENTSYEAR ENDED MARCH 31,2011(Continued from previous page)6.RELATED PARTY TRANSACTIONSRelated party transactions are measured at the exchange amount,which is the amount of consideration established and agreed to by the related parties.The Company has an agreement with Southern Ontario Natural Ga

101、s Limited(SONG),a private company controlled by the Companys president,George W.Chilian,to providetechnical services for the gas operations for an annual fee of$78,000 plus 10%of the Companys annual gas revenue in excess of$1,000,000.The fiscal 2011 expense charged bySONG amounted to$87,773(2010-$78

102、,000).The Company and SONG also have a joint ownership(52%and 48%respectively)in natural gas properties in Houghton Township,Ontario.The Company collects the proceeds for all of the gas produced from this natural gas property and provides SONG with its proportionate share of the revenue.The Houghton

103、battery has been shut in for the past three years due to a lack of market demand.As at March 31,2011,the Company owed SONG$17,023(2010-$55,900)which is comprised of amounts payable related to technical services and natural gas production of$17,023(2010-$55,900)and$Nil(2010-$Nil)respectively.This ind

104、ebtedness is unsecured,non-interest bearing,due on demand and included with accounts payable and accruedliabilities.7.SHARE CAPITALAuthorized:4,000,000 Common shares20112010Issued:1,775,035 Common shares$2,468,832$2,468,8328.STOCK OPTIONSThere were no stock options outstanding at the end of the fisc

105、al years 2011 or 2010.9.UNCLAIMED DIVIDENDS REFUNDEDThe unclaimed dividends refunded represent dividends declared in past years for which the shareholders could not be located.These dividends have not been claimed and haveaccumulated over the years.All attempts made by the transfer agent who adminis

106、ters these dividend payments have been unsuccessful and it is not believed that the dividends willbe claimed and thus the amounts have been returned to retained earnings.10.INCOME TAXESThe provision for income taxes recorded in the financial statements varies from the amount that would be computed b

107、y applying the statutory income tax rate of 30.12%(2010-32%)as a result of the following:20112010Income before income tax provision$169,255$211,765Anticipated income tax expense50,98068,000Tax effect of the following:Adjustment for substantially enacted rates(431,860)(294,700)Corporate minimum taxes

108、_ _ 9,000Capital transactions61,17035,000Other(6,790)24,300)Provision for income taxes$(326,500)$(207,000)Tax benefits in excess of any current income are reflected in the calculation of the future income tax liability.The tax balances,available in perpetuity to reduce future taxable income,are as f

109、ollows:20112010Cumulative Canadian exploration expenses$2,397,560$2,106,100Investment in flow through shares 180,000Cumulative Canadian development expenses616,070629,800Cumulative Canadian oil and gas property expenses457,530481,300Foreign exploration and development expenses2,5602,800Undepreciated

110、 capital costs-property,plant and equipment694,510748,400Due to the use of the above tax balances in the current year,the Company has no current income taxes payable.In addition,the Company has incurred accumulated corporateminimum taxes of$140,000 which can be used to reduce future provincial incom

111、e taxes payable.This benefit has not been recognized due to the uncertainty of realizing this benefitwithin the carry-forward period.Upon the transition to harmonized corporate filing of Federal and Provincial income tax returns on January 1,2009,the Company recognized a transitional credit of appro

112、ximately$204,500.This credit is available over a period of five years to reduce future corporate income taxes payable.The Company has a capital loss of$403,100 available for application against future years capital gains,with no expiry date.11.ASSET RETIREMENT OBLIGATION20112010Asset retirement obli

113、gation-beginning of year$187,500$176,600Revisions to estimated cash flows 58,000(4,500)Additions for new wells 4,300Accretion 15,913 11,100Asset retirement obligation-end of year$261,413$187,500The total undiscounted amount of estimated cash flows required to settle the obligation at year end is$2,4

114、61,808(2010-$2,713,873)which has been discounted at 6.5%using afifty year maximum life in accordance with estimates prepared by independent engineers.Estimated future retirement costs such as dismantlement,site restoration and abandonmentcosts are subject to uncertainty associated with the method,ti

115、ming and extent of future dismantlement,site restoration and abandonment.For example,changes in legislation ortechnology may result in actual future costs that differ materially from those currently estimated.9METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSYEAR ENDED MARCH 31,2011(Continued

116、from previous page)12.COMMITMENTSThe Company is party to natural gas and mining lease commitments requiring ongoing annual compensation payments in the amount of$10,000(2010-$10,000).The leasesallow for the surrender of the agreement and termination of payment at the option of the lessee.In addition

117、 to the lease commitments there are royalty amounts ultimately payablepursuant to these agreements which are dependent on production or development,making it not practical to disclose the amount of contractual commitments.The Company has an outstanding letter of guarantee in the amount of$70,000(201

118、0-$70,000)that is required under the Regulations prescribed by the Ministry of NaturalResources.13.FINANCIAL INSTRUMENTSCredit RiskAs the Companys accounts receivable were due from two customers,there is increased exposure as a result of this concentration.In order to reduce this risk,the Companypre

119、fers selling to high quality,investment grade customers.Fair ValueThe Company has various financial instruments including cash and cash equivalents,marketable securities,accounts receivable,accounts payable and accrued royalties.Exceptfor the marketable securities,book values approximate fair value

120、due to their short-term maturity.Details of the fair market value of the marketable securities are disclosed innote 3.Interest RateInterest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates.The Organization is exposed to inte

121、rest rate riskprimarily through its floating interest rate cash reserve and long term debt.Commodity RiskThe Company is exposed to fluctuations in commodity prices for natural gas.Commodity prices are affected by many factors including supply,demand and the Canadian to U.S.dollar exchange rate.The C

122、ompany had arranged the following price commodity contracts for sales subsequent to the end of the year.April 1,2011 to April 16,2011 300 mmbtu per day$4.60 CDN/mmbtuApril 17,2011 to April 30,2011 300 mmbtu per day$4.80 CDN/mmbtuMay 1,2011 to May 31,2011 333 mmbtu per day$4.89 US/mmbtuJune 1,2011 to

123、 October 31,2011 300 mmbtu per day$5.09 US/mmbtu14.CAPITAL MANAGEMENTThe Companys objectives when managing capital are to protect the Companys ability to continue as a going concern so that it can continue to provide an appropriate return toshareholders relative to the risk of the Companys mining ex

124、ploration,natural gas properties,and long-term investments.The Company considers its capital structure to include shareholders equity and working capital.The Company manages its capital structure and makes adjustments to it in thelight of changes in economic conditions and the risk characteristics o

125、f the underlying assets noted above.In order to maintain or adjust the capital structure,the Company mayissue new shares,seek external financing or adjust its capital expenditures and other investment programs.The Company does not have any externally imposed capital requirements.The Company main obj

126、ective is to ensure sufficiency of working capital to fund operations andinvestment activities.Working capital is defined as current assets less current liabilities.At March 31,2011 the Companys working capital was$1,626,726(2010-$1,556,493).15.ACCUMULATED COMPREHENSIVE INCOME20112010Accumulated com

127、prehensive income(loss)-beginning of year$110,489$(186,634)Other comprehensive income 370,685297,123Accumulated comprehensive income-end of year$481,174$110,48910METALORE RESOURCES LIMITEDManagements Discussion&Analysis of Financial ResultsFor the Fiscal Year ended March 31,2011 The management discu

128、ssion and analysis,prepared as of June 29,2011 review and summarize the activities of Metalore Resources Ltd.(“Metalore”or the“Company”)and compare the financial results for the period ended March 31,2011 with those from March 31,2010.The following should be read together with the audited financial

129、statements for the year ended March 31,2011 and related notes attached thereto,which were prepared by management in accordance with Canadian generally accepted accounting principles.All amounts are stated in Canadian dollars unless otherwise indicated.CORPORATE PROFILE Metalore has been active in mi

130、ning exploration for over sixty-five years and in Natural Gas development for over fifty years.The company participated in early development of the Provost gas field in Alberta from 1956 through 1961 and has been the major player in developing the Norfolk gas field in Southwestern Ontario since 1964

131、,pioneering state-of-the-art completion and fracturing technology.The Ontario Natural Gas operation constitutes the“core business”of the Company and is its principal source of revenue.The consistent modi operandi of the Company has been to prioritize the allocation of operating income to(1)maintain

132、capital integrity,(2)drill sufficient wells to sustain and or increase production,(3)explore mining exploration prospects of especial merit and(4)continue to pay dividends to Shareholders from operating profits.Metalore is a unique Company in the junior resource sector.It has the lowest number of sh

133、ares outstanding of any resource stock listed on the Toronto Stock Exchange(“MET”on TSX).The Company has protected the equity of shareholders for the past forty years by financing all exploration and development costs with cash flow from operations.Metalore inaugurated payment of its first cash divi

134、dend to shareholders in the year 2000 and has since paid its eleventh consecutive annual dividend.OVERALL PERFORMANCE Management of the Company has established a record of discovering and outlining precious metal resources(Brookbank,Fox Ear,Cherbourg and Irwin,in the Windigokan Lake area,Northwester

135、n Ontario,are 43-101 compliant).The major interests in these deposits were sold in 1998 to Ontex Resources(now Premier Gold),subject to joint venture participations and royalty interests to Metalore.Although the price of Gold has been trending sharply higher since Metalore acquired its new Cedartree

136、 Lake properties,mining exploration is a very high risk business,in terms of returns on investment.Consequently,the Company continues to diligently limit and carefully direct the funds dedicated to this enterprise.Metalore manages a large portfolio of undrilled petroleum and natural gas leases and s

137、ustains production by the systematic drilling of new wells.The Company has consistently located its wells on ultra wide spacing patterns to minimize the year to year decline and maximize the longevity of production which can be verified by its forty-five year production record.Although the price of

138、Natural Gas has been trending lower for the past three years,there is considerably less risk in hydro-carbon development than with mining exploration.Consequently,the Company continues to allocate whatever funds are necessary to sustain production levels.Metalore s Natural Gas Operation continues to

139、 yield the highest MARGIN of profit(per capital invested and revenue recovered)of any actively developing gas producer in Ontario.MINING EXPLORATION UPDATE During the spring of 2010,the Company launched a new two year exploration program on its Cedartree Lake Gold properties in Northwesten Ontario.F

140、rom early April to mid July a two man crew staked an additional 172 mining claim units 1,contiguous to the original 134 claims acquired in 2002,where Metalore obtained high grade gold intersections with early drillings(November,2002,Quarterly Report to Shareholders).From mid July through late Septem

141、ber,the Company employed a local lumber/saw mill contractor to forge some seven kilometers of drill access roads through rugged wilderness terrain with heavy equipment(tree buncher,excavator,dozer and power washer).This equipment enabled Metalore s Geologist to conduct stripping operations(removal a

142、lluvial material)at several locations to examine and map the underlying rock(and mineralization)in preparation for drilling.All of this work was done at nominal cost as there was a synergetic benefit in providing timber for the sawmill from slashing the access route.This access/stripping operation r

143、equired daily supervision by the geologist for more than two months,however,and drilling was not commenced until October.From mid October to mid December just seven drill holes were completed,two on targets associated with geophysical anomalies and five on the projected southwest extension of the ma

144、in gold zone.These results will be combined and released upon completion of the forthcoming expanded drill program this season.The drilling also positively confirmed that subsurface disseminated and massive sulphide mineralization could be precisely located by correlating high tech ground geophysics

145、 2 with airborne anomolies3 in favourable geology of the Cedartree Lake area.Metalore will continue to apply the optimum of its human,technical and financial resources to evaluate the economic potential of this extensive property.1 Each claim unit measures approximately 40 acres.2 Induced Potential.

146、3 Texas Gulf Sulpher drilled 65 airborne anomolies in the spruce swamps north of Timmins before discovering the massive Kidd Creek orebody(Cu,Zn,Ag),now being mined below 10,000 feet underground by Xstrata.11METALORE RESOURCES LIMITEDMD&A(contd)12$T 0.28 0.24 0.39 S C 0.24 0.21 0.66 A A -30,515 -C .

147、06 .06 .06 127,313 180,887 297,263 E 765,329 As a Junior Mining Exploration Company that protects Shareholder Equity,Metalore diligently maintains a comfortable level of liquidity on its Balance Sheet.RESULTS OF OPERATIONS The Company had net income of$495,755 or$0.28 per share for the year ended Ma

148、rch 31,2011 compared to a net income of$418,765 or$0.24 per share for the year ended March 31,2010.No forward strip contracts were in place after the end of October 2010.Production was being sold at two week intervals on the spot market at prices shown on the cover of this report.Revenue and expense

149、s incurred during the year consist of:1.Natural gas revenue of$1,131,580(2010-$1,000,651)increased during the current fiscal year despite continuing low market prices for natural gas.Three new wells were also placed“on stream”late in fiscal 2010,also increased the overall volume of gas produced.2.In

150、vestment&interest income of$69,058(2010-$62,877)slightly increased due to a higher ratio of high dividend paying securities in its investment portfolio(all Ontex shares were liquidated).3.Royalty expenses of$82,532(2010-$57,841)normally vary in proportion to natural gas revenue.They were low in 2010

151、 because of an accrual adjustment.4.Production expenses of$476,960(2010-$450,262)have increased because of an abnormally cold winter requiring higher maintenance.5.Administrative expenses of$177,603(2010$141,590)have also increased.6.Amortization expense of$276,485(2010-$219,000)has increased in pro

152、portion to the amount of natural gas shipped.7.Future income taxes showed a recovery(negative amount)of$326,500.(2010-$216,000).In both cases this was because of a re-assessment of future income taxes based on the lower income tax rates introduced in recent years.SUMMARY OF QUARTERLY RESULTS Quarter

153、 Ended March 31 2011 Dec 31 2010 Sep 30 2010 Jun 30 2010 March 31 2010 Dec 31 2009 Sep 30 2009 Jun 30 2009 Revenue$209,982$405,875$278,927$309,809$362,664$313,905$231,409$159,142 Net Income(loss)263,749 133,572 49,867 48,567 269,555 92,348 65,579(8,717)Earnings per share 0.15 0.08 0.03 0.03 0.15 0.0

154、5 0.04 0.00 Operating Cash flow per share(0.02)0.13 0.06 0.07(0.02)0.10 0.03 0.10 Dividends per share-0.06-0.06-The comparability of selected consolidated financial information set out above is affected by the same material factors as set out under“Overall Performance”and“Results of Operations”herei

155、n.For a more detailed explanation of the Company s results of operations,please refer to items 1 and 2 in the Notes to the Financial Statements for the year ended March 31,2011.*The Company pays a minimum corporate tax;however,no tax on income is presently payable by the company because of explorati

156、on and development expenditures that are carried forward(details in Note 10,2011 Audited Financial Statements).SELECTED ANNUAL INFORMATION for the years ended:March 31,2011 March 31,2010 March 31,2009 Statement of Income$Total Revenues 1,204,593 1,067,120 2,125,061 Operating expenses 1,029,493 879,8

157、35 1,177,558 Net Income after taxes *495,755 418,765 697,243 Earnings per share(fully diluted)0.28 0.24 0.39 Statement of Cash Flows Cash flow from operations 428,091 373,199 1,179,235 Cash flow from operations per share 0.24 0.21 0.66 Accumulated Comprehensive Income Accumulated gains&losses includ

158、ed in the balance sheet at the end of the year 481,174 110,489(186,634)Total Assets 16,783,266 16,360,303 15,980,831 Total Long Term Liabilities -30,515 -Cash Dividends Per Share .06 .06 .06 CAPITAL RESOURCES&LIQUIDITY March 31,2011 March 31,2010 March 31,2009 Cash$170,229$248,040$301,072 Current As

159、sets(including cash)1,754,039 1,737,380 1,062,592 Current Liabilities 127,313 180,887 297,263 Excess of Current Assets over Current Liabilities 1,626,726 1,556,493 765,329 The Company had net income of$495,755 or$0.28 per share for the year ended March 31,2011 compared to a net income of$No forward

160、strip contracts were in place after the end of October 2010.P They were low in 2010 because of an a$405,875$278,927$309,809$362,664$313,905$231,409$159,142 N METALORE RESOURCES LIMITEDMD&A(contd)CONTRACTUAL OBLIGATIONS Report for the next five years Contractual Obligations Less than 1 year1-3 years4

161、-5 yearsTotal Natural Gas Leases$10,000$30,000$50,000$90,000 Natural Gas Royalties4$100,000$300,000$500,000$900,000 Total Contractual Obligations$110,000$330,000$550,000$990,000 Note:the Company also has an estimated Asset Retirement Obligation of$261,413 that will be incurred beyond the five year t

162、imetable.CRITICAL ACCOUNTING ESTIMATES Management is required to make estimates in preparing its financial statements in conformity with generally accepted accounting principles(GAAP).These estimates affect the reported amounts of assets and liabilities at the date of the financial statements and re

163、ported amounts of net income during the reporting period.The critical accounting estimates made by the Company are used in the determination of natural gas property costs,mining property costs,amortization and depletion of any resource established or found,and future income taxes.i.Natural Gas Prope

164、rty Costs The full cost method of accounting is used whereby acquisition and development costs relating to these properties are capitalized.These costs are depleted by the unit of production method based on estimated proven drilled gas reserves.The ratio of production to proven reserves before royal

165、ties determines the proportion of depletable costs to be expensed.The natural gas reserves of the company are assessed annually by an independent engineer,as verified by the annual filing of National Instrument Form 51-101 with SEDAR.Total capitalized costs net of accumulated depletion and future in

166、come taxes is limited to an amount equal to the estimated future net revenue from proven reserves at year end and costs,less future cash flows based on the Alberta AECO spot price,increased by$1.30 per mmbtu to allow for actual prices received near Dawn,Ontario.Forecast prices used for the next five

167、 years are listed in note 2 of the notes to the annual financial statements.The significance to the financial statements of the estimate of depletion of natural gas properties is that it historically accounts for twenty percent of total expenses before income taxes.The sensitivity of this estimate i

168、s such that an error of ten percent in its calculation would therefore affect total pre-tax expenses by two percent.The company performs an impairment test annually to determine the recoverability of capitalized costs associated with reserves of natural gas.Should the amount of the capitalized costs

169、 exceed the amount of the reserves,the resulting impairment loss will be recognized in earnings.The amount of the impairment loss is determined by making assumptions about future reserves,the price of natural gas and future costs all of which are subject to uncertainty.By their nature,these estimate

170、s are subject to measurement uncertainty and changes to these estimates may have a material impact on the financial statements of future years.For example the table of future estimated gas prices reported in note 2 to the financial statements for 2011 is approximately double the market price current

171、ly prevailing.The Company has no control over the continental market price of natural gas.ii.Mining Property Costs Acquisition and exploration costs are capitalized.Disposals of mining property and equipment are offset against the acquisition costs.If exploration activities are followed by productio

172、n,capitalized costs will be amortized using the unit of production method based on the estimated reserves in the area.Mining properties are assessed annually or as economic events dictate,for potential write down.If exploration activities are unsuccessful and or the area is abandoned,all capitalized

173、 costs are written off.The significance to the financial statements of accounting for mining properties is limited to the balance sheet.There is currently no production from the properties and for this reason no estimates for depletion are necessary.The sensitivity of the balance sheet data to carry

174、ing an abandoned asset depends on the historical cost of the asset.The risks involved in exploration for minerals have been discussed under“Risks and Uncertainties”on page 5 herein.iii.Future Income Taxes Income taxes are calculated using the liability method of tax allocation.Temporary differences

175、between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax liabilities or assets.Future income tax liabilities or assets are calculated using the substantively enacted tax rates and laws that are expected to be in effect in the

176、 periods that the temporary differences are expected to reverse.The effect of changes in rates is included in earnings in the period which includes the substantive enactment.The significance of the calculation of future income taxes to the financial statements is that it can be as much as thirty per

177、cent of pre-tax net income.Differences in the estimate of future income taxes can have a significant effect on the calculation of net income after taxes,as was the case this year and in 2009 and 2010.On the balance sheet,future income taxes account for approximately 14%of total liabilities and equit

178、y.The sensitivity of this estimate is small because historically the Company has paid only Provincial corporate minimum taxes.The Income Tax Act of Canada provides for deductions of exploration and development expenses that can be applied against current income before income tax becomes applicable.T

179、he Company has accumulated sufficient deductions of exploration and development expenses to delay payment of future income taxes for several years.Every year that wells are drilled and developed,or other exploration is conducted,this timeline is pushed still further into the future.4 Note:Natural Ga

180、s royalties are based upon minimum estimated Natural Gas production.13METALORE RESOURCES LIMITEDMD&A(contd)FINANCINGS There were no financings during fiscal year ended March 31,2011.OFF BALANCE SHEET INSTRUMENT The company maintains a surety bond in the amount of$70,000,which is the maximum required

181、 by the Ministry of Natural Resources as assurance for the abandonment of dry holes and or depleted wells.FINANCIAL INSTRUMENTS The Companys financial instruments consist of cash,cash equivalents,accounts receivable,marketable securities,accounts payable and accrued liabilities.It is the managements

182、 opinion that the Company is not exposed to abnormal interest,currency or credit risk arising from these financial instruments.Management expects to adequately meet its present and future working capital and exploration and development requirements with cash flow from operations.DISCLOSURE CONTROLS

183、and PROCEDURES Management has assessed the effectiveness of the Companys disclosure controls and procedures used for the financial statements and MD&A at March 31,2011.Although certain weaknesses are inherent with small office operations,management has implemented certain controls such as segregatio

184、n of duties within critical departments,frequent reviews and regular preparations of reconciliations of transactions to ensure absence of material irregularities.Management has concluded that the disclosure controls are effective in ensuring that all material information required to be filed has bee

185、n made known to them in a timely manner.The disclosure controls and procedures are designed to ensure effective information required to be disclosed pursuant to applicable securities laws are accumulated and communicated to management as appropriate to allow timely decisions regarding required discl

186、osure.The Audit Committee of the Board of Directors has reviewed and approved the accompanying financial statements for the Year ended,March 31,2011.REGULATION COMPLIANCE Metalore has complied with all filing requirements pursuant to National Instrument 51-101(Standards for Disclosure for Oil and Ga

187、s Activities)by filing forms 51-101 F1,F2 and F3 with SEDAR.TRANSACTIONS WITH RELATED PARTIES All related party transactions have been recorded at the exchange amount that represented the amount of consideration established and agreed to by the related parties a)The Company has an agreement with Sou

188、thern Ontario Natural Gas Limited(“SONG”),a private company controlled by the Companys president,George W.Chilian,to provide technical and consulting services for the gas operations for an annual fee of$78,000 plus 10%of the Companys annual gas revenue in excess of$1,000,000.The fiscal 2011 expense

189、charged by SONG amounted to$87,773(2010-$78,000).The Company and SONG also have a joint ownership(52%and 48%respectively)in natural gas properties in Houghton Township,Ontario.The Houghton battery has been shut in for the past three years due to a lack of market demand.As at March 31,2011,the Compan

190、y owed SONG$17,023(2010-$55,900)which is included in accounts payable and accrued liabilities.b)During the year ended March 31,2011,the Company paid the President and Chief Executive Officer$135,600 2010-$135,600 in respect of management and consulting services.c)During the year ended March 31,2011,

191、the Company paid a company influenced by the Chief Financial Officer$4,700 2010-$3,500 in respect of management and consulting services.SHAREHOLDER DIVIDEND POLICY In the year 2000,Metalore introduced a policy to pay annual dividends to shareholders(subject to applicable law).Metalore paid its eleve

192、nth consecutive annual dividend on December 19,2010,to all Shareholders of Record on November 27th.This payment of 6 cents per share was the same as for 2009.RISKS AND UNCERTAINTIES Mining exploration risks The business of exploration for minerals involves a high degree of risk.Very few properties t

193、hat are explored are ultimately developed into producing mines.Hydrocarbon risks The hunt for and development of conventional non-renewable hydrocarbons is vulnerable to price variations,dry holes and ultimately depleted reservoirs.Commodity Prices Even if Metalores exploration programs are successf

194、ul,factors beyond the control of the Company will affect the marketability of any resources discovered.Inflation,international economic and political trends,currency fluctuations,interest rates and worldwide production levels all have a bearing on commodity prices.The effect of these factors cannot

195、accurately be predicted.The Company partially mitigates the price risk factor by selling most of its gas production at least several months ahead with forward strip contracts.14METALORE RESOURCES LIMITEDMD&A(contd)FUTURE ACCOUNTING CHANGES:INTERNATIONAL FINANCIAL REPORTING STANDARDS(IFRS)In February

196、 2008,the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be required to adopt International Financial Reporting Standards(IFRS)for fiscal years beginning on or after January 1,2011,with early adoption permitted.Accordingly,the conversion to IFRS will be appl

197、icable to the Companys reporting no later than in the quarter ending June 30,2011,with restatement of comparative information presented.The conversion to IFRS will impact the Companys accounting policies,information technology and data systems,internal control over financial reporting,and disclosure

198、 controls and procedures.IFRS Transition Plan The Company has established a comprehensive IFRS transition plan to assist with the planning and implementation of its transition to IFRS.The following summarizes the Companys progress and expectations with respect to its IFRS transition plan:Transition

199、Plan Progress 1)Initial scoping and analysis of key areas for which accounting policies may be impacted by the transition to IFRS.In progress,completion expected during Q1 Fiscal 2012 2)Detailed evaluation of potential changes required to accounting policies,information systems and business processe

200、s,including the application of IFRS 1 First-time Adoption of International Financial Reporting Standards.In progress,completion expected during Q1 Fiscal 2012 3)Resolution of the accounting policy change implications on information technology,business processes and contractual arrangements.In progre

201、ss,completion expected during Q1 Fiscal 2012 4)Quantification of the Financial Statement impact of changes in accounting policies.Throughout fiscal 2012 5)Management and employee education and training.Throughout the transition process Impact of Adopting IFRS on the Companys Business As part of its

202、analysis of potential changes to significant accounting policies,the Company is assessing what changes may be required to its accounting systems and business processes.The Company believes that the changes identified to date are minimal and the systems and processes can accommodate the necessary cha

203、nges.To date,the Company has not identified any contractual arrangements that may be affected by potential changes to significant accounting policies.The Companys staff and advisers involved in the preparation of financial statements are being trained on the relevant aspects of IFRS and the anticipa

204、ted changes to accounting policies.Employees of the Company that will be affected by a change to business processes as a result of the conversion to IFRS will also be trained as necessary.The Board of Directors and Audit Committee have been regularly updated on the progress of the IFRS conversion pl

205、an,and made aware of the evaluation to date of the key aspects of IFRS affecting the Company.First-time adoption of IFRS The adoption of IFRS requires the application of IFRS 1 First-time Adoption of International Financial Reporting Standards(“IFRS 1”),which provides guidance for an entitys initial

206、 adoption of IFRS.IFRS 1 generally requires retrospective application of IFRS as effective at the end of its first annual IFRS reporting period.However,IFRS 1 also provides certain optional exemptions and mandatory exceptions to this retrospective treatment.The Company has identified the optional ex

207、emptions that it expects will apply in its preparation of an opening IFRS statement of financial position as at April 1,2011,the Companys“Transition Date”:Prior to reporting interim financial statements in accordance with IFRS for the quarter ended June 30,2011,the Company may decide to apply other

208、optional exemptions contained in IFRS 1.IFRS 1 does not permit changes to estimates that have been made previously.Accordingly,estimates used in the preparation of the Companys opening IFRS statement of financial position as at the Transition Date will be consistent with those made under current Can

209、adian GAAP.If necessary,estimates will be adjusted to reflect any difference in accounting policy.Impact of Adopting IFRS on the Companys Financial Statements The adoption of IFRS will result in some changes to the Companys accounting policies that are applied in the recognition,measurement and disc

210、losure of balances and transactions in its financial statements.The following provides a summary of the Companys evaluation to date of potential changes to accounting policies in key areas based on the current standards and guidance within IFRS.This is not intended to be a complete list of areas whe

211、re the adoption of IFRS will require a change in accounting policies,but to highlight the areas the Company has identified as having the most potential for significant change.The International Accounting Standards Board has a number of ongoing projects,the outcome of which may have an effect on the

212、changes required to the Companys accounting policies on adoption of IFRS.At the present time however,the Company is not aware of any significant expected changes prior to its adoption of IFRS that would affect the summary provided below:1)Exploration and Evaluation Expenditures IFRS currently allows

213、 an entity to retain its existing accounting policies related to the exploration for and evaluation of mineral properties,subject to some restrictions.The Company expects to retain its current policy of expensing exploration and evaluation expenditures as incurred.Therefore the Company does not expe

214、ct that the adoption of IFRS will result in any significant change to the related line items within its financial statements.15METALORE RESOURCES LIMITEDMD&A(contd)2)Impairment of(Non-Financial)Assets IFRS requires a write down of assets if the higher of the fair market value and the value in use of

215、 a group of assets is less than its carrying value.Value in use is determined using discounted estimated future cash flows.Current Canadian GAAP requires a write down to estimated fair value only if the undiscounted estimated future cash flows of a group of assets are less than its carrying value.Th

216、e Companys accounting policies related to impairment of assets will be changed to reflect these differences,however the Company does not expect this change will have an immediate impact to the carrying value of its assets.The Company will perform impairment assessments as at the Transition Date in a

217、ccordance with IFRS.3)Foreign Currency IFRS requires that the functional currency of the Company be determined separately,and the factors considered to determine functional currency are somewhat different than current Canadian GAAP.The Company does not expect any changes to its accounting policies r

218、elated to foreign currency that would result in a significant change to line items within its financial statements at the Transition Date.4)Share-based Payments In certain circumstances,IFRS requires a different measurement of stock-based compensation related to stock options than current Canadian G

219、AAP.The Company does not expect any changes to its accounting policies related to share-based payments that would result in a significant change to line items within its financial statements.5)Asset Retirement Obligations(Decommissioning Liabilities)IFRS requires the recognition of a decommissioning

220、 liability for legal or constructive obligations,while current Canadian GAAP only requires the recognition of such liabilities for legal obligations.A constructive obligation exists when an entity has created reasonable expectations that it will take certain actions.The Companys accounting policies

221、related to decommissioning liabilities will be changed to reflect these differences,however the Company does not expect this change will have an immediate impact to the carrying value of its assets.6)Property and Equipment IFRS contains different guidance related to recognition and measurement of pr

222、operty and equipment than current Canadian GAAP.The Company does not expect any changes to its accounting policies related to property and equipment that would result in a significant change to line items within its financial statements.7)Income Taxes In certain circumstances,IFRS contains different

223、 requirements related to recognition and measurement of future(deferred)income taxes.The Company does not expect any changes to its accounting policies related to income taxes that would result in a significant change to line items within its financial statements.Subsequent Disclosures Further discl

224、osures of the IFRS transition process are expected as follows:The Companys Management Discussion and Analysis for the 2011 interim periods and the year ended March 31,2012 will include updates on the progress of the transition plan,and,to the extent known,further information regarding the impact of

225、adopting IFRS on key line items in the annual financial statements.The Companys first financial statements prepared in accordance with IFRS will be the interim financial statements for the three months ending June 30,2011,which will include notes disclosing transitional information and disclosure of

226、 new accounting policies under IFRS.The interim financial statements for the three months ending June 30,2011 will also include 2011 financial statements for the comparative period,adjusted to comply with IFRS,and the Companys transition position(as at April 1,2010).DISCLOSURE OF OUTSTANDING SHARE D

227、ATA As at the date hereof and March 31,2011,the Company had 1,775,035 common shares outstanding.There are presently no stock options or warrants outstanding.AUDITOR,TRANSFER AGENT and REGISTRAR The auditors of the Company are NPT LLP,Chartered Accountants of London,Ontario.The Transfer Agent and Reg

228、istrar for the Common Shares of the Company is Computershare Trust Company of Toronto Canada.FORWARD LOOKING STATEMENTS This management discussion and analysis contains certain forward-looking statements relating but not limited to the Companys expectations,intentions,plans and beliefs.Forward-looki

229、ng information can often be identified by forward-looking words such as“anticipate”,“believe”,“expect”,“goal”,“plan”,“intend”,“estimate”,“may”and“will”or similar words suggesting future outcomes,or other expectations,beliefs,plans,objectives,assumptions,intentions or statements about future events o

230、r performance.Forward-looking statements are subject to risks,uncertainties and other factors that could cause actual results to differ materially from expected results.Potential shareholders and prospective investors should be aware that these statements are subject to known and unknown risks,uncer

231、tainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements.Shareholders are cautioned not to place undue reliance on forward-looking information.By its nature,forward-looking information involves numerous assumptions,inheren

232、t risks and uncertainties,both general and specific,that contribute to the possibility that the predictions,forecasts,projections and various future events will not occur.The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result o

233、f new information,future events or other such factors which affect this information,except as required by law.Additional information related to the Company is available for view on SEDAR at and at Companys website located at .This MD&A is dated as of June 29,2011.16This MD&A is dated as of June 29,2011John A.Ryan,CFO&Director$14$13$12$11$10$9$8$7$6$5$4$3$2200620072008Five Year NaTUraL GaS COMParaTive PriCe GraPh$PerMMBtuMeTaLOre Negotiated“Strip”Contract PricesMeTaLOre“Spot”PricesNYMex“Front Month”PricesperMMBtu