Marlowe Regulatory News (MRL)

21 Nov 2007 07:00

Medoro Announces 2007 Third Quarter Results

TORONTO, Nov. 20 /CNW/ - Medoro Resources Ltd. announced today results for the three and nine-month periods ended September 30, 2007. For the quarter, Medoro reported a net loss of $0.6 million or $0.01 per share as compared to a loss of $0.2 million or $0.00 per share in the third quarter of last year. For the nine months ended September 30, 2007 the company reported a loss of $2.6 million or $0.05 per share as compared to a loss of $1.2 million or $0.04 per share in the same period last year.

The 2007 loss in the quarter largely reflects general and administrative costs of $0.9 million to support the increased exploration activities compared to the previous year. At September 30, 2007 the company had cash and short-term investments of $2.4 million and no debt. Included at page 4 of the management's discussion and analysis for the third quarter ended September 30, 2007 is disclosure with respect to the company's 2006 acquisition of Panwest Seas Corporation Ltd. pursuant to which the company acquired rights to the Lo Increible 4A and 4B properties and information regarding the historical exploration done on the properties prior to their acquisition by the company.

The company is continuing its diamond drilling program at the La Cruz, La Sofia and El Tapon prospects in Venezuela, which will provide the basis for reclassifying the existing historical resources and identifying additional resources. The company has also completed a geochemical sampling program that allowed it to start drilling new target areas within the properties using a recently contracted third drilling rig. As previously announced on September 17, 2007, the company has acquired nine properties in Mali and plans to commence a drill program there in the fourth quarter of this year.

The company also announced that it intends to raise approximately $2.3 million through the sale of up to 3.5 million units on a private placement basis, and is continuing to look at additional options to raise equity.

Each unit will be offered at a price of $0.68 per unit and will consist of one common share of the company and one common share purchase warrant, with each whole warrant being exercisable for a period of 24 months from the closing date at an exercise price of $1.00.

The funds will be used for general corporate and working capital purposes, which may include costs associated with the identification of potential acquisitions.

The financing is subject to regulatory approval. The Company intends to apply to have the common shares issuable as part of the units and the common shares issuable upon exercise of the warrants forming part of the units listed on the TSX Venture Exchange and admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange plc.

The complete financial statements and management's discussion and analysis for the third quarter ended September 30, 2007 are available on the Company's website at www.medororesources.com and on SEDAR at www.sedar.com.

Medoro Resources is a gold exploration and development company focused on acquiring properties of merit for potential joint ventures with senior producers. The company holds a 100% interest in the Lo Increible 4A and 4B concessions in Venezuela and interests in nine gold exploration areas in the Republic of Mali. Additional information on the company can be found by visiting the company's website at www.medororesources.com. Medoro's Nominated Adviser for the purposes of AIM is Canaccord Adams Ltd. (Ryan Gaffney/Robin Birchall), +44 (0) 20 7050 6500.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE Medoro Resources Ltd. Consolidated statements of operations, deficit and comprehensive loss three and nine month periods ended September 30, (Expressed in thousands of Canadian dollars, except share and per share amounts) (Unaudited) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 --------------------------------------------- --------------------------- $ $ $ $ (restated- (restated- note 2) note 2) Operating expenses General and administrative (Schedule) 862 833 2,892 2,256 Stock-based compensation (Note 5) 123 1,316 156 1,316 --------------------------------------------- --------------------------- 985 2,149 3,048 3,572 --------------------------------------------- --------------------------- Other income Accreted interest on note and shares receivable - - - 34 Foreign exchange gain 310 348 204 451 Interest income 1 26 5 156 Other income 51 144 256 260 Gain on sale of investments - 1,464 - 1,464 --------------------------------------------- --------------------------- 362 1,982 465 2,365 --------------------------------------------- --------------------------- Net loss and comprehensive loss for the period (623) (167) (2,583) (1,207) Deficit, beginning of period (32,222) (29,205) (30,262) (28,165) --------------------------------------------- --------------------------- Deficit, end of period (32,845) (29,372) (32,845) (29,372) --------------------------------------------- --------------------------- --------------------------------------------- --------------------------- Basic and diluted loss per share (0.01) (0.00) (0.05) (0.04) --------------------------------------------- --------------------------- --------------------------------------------- --------------------------- Basic and diluted weighted average number of common shares outstanding 50,359,118 47,262,869 49,730,746 34,124,672 --------------------------------------------- --------------------------- --------------------------------------------- --------------------------- Medoro Resources Ltd. Consolidated balance sheets (Expressed in thousands of Canadian dollars) (Unaudited) September 30, December 31, 2007 2006 ------------------------------------------------------------------------- $ $ Assets Current assets Cash 647 910 Short-term investments 1,709 12,520 Prepaid and other assets 1,158 583 ------------------------------------------------------------------------- 3,514 14,013 Property, plant and equipment, net (Note 4) 36,874 19,677 ------------------------------------------------------------------------- 40,388 33,690 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 1,304 760 Future income taxes 11,189 5,759 ------------------------------------------------------------------------- 12,493 6,519 ------------------------------------------------------------------------- Shareholders' equity Share capital (Note 5) 56,825 53,663 Contributed surplus (Note 5) 3,915 3,770 Deficit (32,845) (30,262) ------------------------------------------------------------------------- 27,895 27,171 ------------------------------------------------------------------------- 40,388 33,690 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Nature of operations (Note 1) Medoro Resources Ltd. Consolidated statements of cash flows three and nine month periods ended September 30, (Expressed in thousands of Canadian dollars) (Unaudited) Three months Nine months 2007 2006 2007 2006 ------------------------------------------------------------------------- $ $ $ $ (restated- (restated- note 2) note 2) Operating activities Net loss (623) (167) (2,583) (1,208) Items not affecting cash Gain on sale of investments - (1,464) - (1,464) Depreciation 42 - 131 - Stock-based compensation 123 1,316 156 1,316 Foreign exchange loss (451) - (960) - Accreted interest on note and shares receivable - - - (34) Changes in non-cash working capital items Accounts receivable - 73 - (340) Prepaid and other assets (86) (116) (575) (116) Accounts payable and accrued liabilities 725 96 544 282 ------------------------------------------------------------------------- (270) (262) (3,287) (1,564) ------------------------------------------------------------------------- Investing activities Short-term investments 3,253 (2,225) 10,811 (9,122) Cash held in escrow - 3,130 - - Acquisition of Panwest - (1,395) - (1,395) Proceeds on sale of Sardinia and SGM Ricerche - 2,721 - 2,721 Acquisition of African Gold Resources S.A (2,461) - (3,269) - Acquisition of property, plant and equipment (2,524) (899) (4,549) (1,414) ------------------------------------------------------------------------- (1,732) 1,332 2,993 (9,210) ------------------------------------------------------------------------- Financing activities Subscription receipts exchanged for shares - (3,099) - - Issuance of warrants - 1,057 - 1,057 Issuance of common shares for cash 3 1,756 31 10,957 ------------------------------------------------------------------------- 3 (286) 31 12,014 ------------------------------------------------------------------------- Net (decrease) increase in cash (1,999) 784 (263) 1,240 Cash, beginning of period 2,646 575 910 119 ------------------------------------------------------------------------- Cash, end of period 647 1,359 647 1,359 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SEE NOTE 7 FOR SUPPLEMENTAL CASH FLOW INFORMATION Medoro Resources Ltd. Notes to the consolidated financial statements September 30, 2007 (tabular amounts expressed in thousands of Canadian dollars, except share and per share amounts) 1. Nature of operations The Company is currently engaged in the exploration and development of mineral properties; as such, the Company is considered to be in the development stage. On May 24, 2006, the Company completed a share consolidation whereby 7 pre-consolidation shares were exchanged for 1 post-consolidation share. All information related to common shares has been restated to give effect to the share consolidation. These financial statements have been prepared under the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. Continued operations of the Company are dependent on the Company's ability to receive continued financial support, complete equity financings, and successfully acquire an interest in assets or a business and the ability to generate profitable operations in the future. These financial statements have been reviewed by the Company's audit committee and approved by its Board of Directors. 2. Basis of presentation These unaudited interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles for interim financial statements. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial information reflects all adjustments, consisting primarily of normal recurring adjustments, which are necessary for a fair presentation of results for the interim periods. Operating results for the nine month period ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. These interim consolidated financial statements follow the same accounting policies as the audited consolidated financial statements of the Company for the year ended December 31, 2006, except for the new policies disclosed below. Accordingly, these interim consolidated financial statements should be read in conjunction with the Company's 2006 annual audited consolidated financial statements and notes thereto. (i) Restatement of comparative figures a) The comparative figures have been restated to reflect adjustments that were recorded in the three month period ended December 31, 2006 which relate to the three and nine month periods ended September 30, 2006. The adjustments include an increase to Stock based compensation of $686,637, a $173,005 increase in property due to foreign exchange and the expensing of general and administrative costs that were capitalized to exploration costs of $149,518 for the three months ended September 30, 2006 ($346,139 for the nine months ended September 30, 2006). The adjustment to the stock based compensation was a result of correcting the fair value calculation of stock options that were granted during the three months ended September 30, 2006. There is no effect on the financial statements reported for the year ended December 31, 2006. The effects of the restatement are summarized below: As at September 30, 2006 --------------------------- Balance sheet As reported As restated ($) ($) Property Plant and Equipment 16,608 16,632 Contributed Surplus 2,513 3,199 Deficit 28,514 29,373 For the period ended September 30, 2006 Three Nine months months --------------------------- --------------------------- Statement of operations and deficit As reported As restated As reported As restated ($) ($) ($) ($) General and administrative 684 833 1,910 2,256 Stock based compensation 630 1,316 630 1,316 Foreign exchange gain (loss) 175 348 278 451 Net earnings (loss) 495 (167) (349) (1,208) Deficit - beginning of period 29,009 29,206 28,165 28,165 Deficit - end of period 28,514 29,373 28,514 29,373 Earnings (Loss) per share 0.01 (0.00) (0.01) (0.04) Weighted average 51,469,808 34,124,672 Additionally the cash flow statement have been restated to reflect the impact of the above changes and to remove a non cash transaction for the purchase of Panwest for the issuance of shares of $13,626,000 to the supplemental cash flow information (note 7). b) Comparative amounts have been reclassified to conform with the current period's presentation. (ii) Effective January 1, 2007, the Company adopted CICA Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3855, Financial Instruments - Recognition and Measurement, CICA Handbook Section 3861, Financial Instruments - Disclosure and Presentation, CICA Handbook Section 3865, Hedges, and CICA Handbook Section 3251, Equity. These accounting policy changes were adopted on a prospective basis with no restatement of prior period financial statements. The new standards and accounting policy changes are as follows: (a) Comprehensive income (Section 1530) Comprehensive income is the change in shareholders' equity during a period from transactions and other events and circumstances from non-owner sources. In accordance with this new standard, the Company now reports a statement of comprehensive income and a new category, accumulated other comprehensive income, in the shareholders' equity section of the consolidated balance sheet. The components of this new category may include unrealized gains and losses on financial assets classified as available-for-sale, exchange gains and losses arising from the translation of financial statements of a self-sustaining foreign operation and the effective portion of the changes in fair value of cash flow hedging instruments. During the nine month period ended September 30, 2007, there were no changes in shareholders' equity that resulted from the non-owner sources and consequently, the adoption of the standard noted above had no effect on the presentation of the Company's consolidated financial statements. (b) Financial instruments - recognition and measurement (CICA Handbook Section 3855) and disclosure and presentation (CICA Handbook Section 3861) In accordance with these new standards, the Company now classifies all financial instruments as either held-for- trading, available for sale, held-to-maturity, loans and receivables or other financial liabilities. Financial instruments classified as held-for-trading are measured at fair value with unrealized gains and losses recognized in operating results. Financial instruments classified as available for sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income. Financial instruments classified as held-to-maturity, loans and receivables or other financial liabilities are measured at amortized cost. Upon adoption of these new standards, the Company has designated its cash and short-term investments as held-for-trading, which are measured at fair value. Accounts payable and accrued liabilities and notes payable are classified as other liabilities, which are measured at amortized cost. As at September 30, 2007, the Company did not have any financial assets classified as available for sale and did not under take any hedging activities therefore, the adoption of the standard noted above had no effect on the presentation of the Company's consolidated financial statements. (c) Equity (CICA Section 3251) The Company's adoption of CICA section 3251 resulted in expanded disclosure of its components of shareholders' equity. 3. 2006 Acquisition On July 10, 2006, the Company acquired all of the issued and outstanding shares of Panwest Seas Corporation Ltd. ("Panwest", (a company incorporated in the British Virgin Islands), which holds the right to the Lo Increible 4A and 4B exploration properties located in the El Callao area of the State of Bolivar, Venezuela for $10,788,545 (including $276,645 in acquisition costs). In consideration for the acquisition of Panwest, the Company issued 15,140,000 common shares, paid $1,125,000 (US$1,000,000) in cash and also agreed to pay to the sellers a royalty of US$15 per ounce of gold on all production from the Lo Increible 4A and 4B mining properties. The properties are held under mining contracts granted by Corporacion Venezolana de Guayana. The common shares issued have been valued at a price of $0.62 per common share, being the average closing price of the common shares of the Company for the two days before, the day of, and two days after the date of announcement of the acquisition agreement on June 12, 2006. The business combination has been accounted for as a purchase transaction with the Company as the acquirer of Panwest. The allocation of the purchase price is based on the consideration paid and the fair value of Panwest's net assets acquired. Net assets acquired at fair values is as follows: $ Mineral properties 16,346 Future income tax liability (5,557) --------------------------------------------------------------------- 10,789 --------------------------------------------------------------------- --------------------------------------------------------------------- Total consideration paid consists of the following: Cash 1,125 Common shares 9,387 Acquisition costs 277 --------------------------------------------------------------------- 10,789 --------------------------------------------------------------------- --------------------------------------------------------------------- 4. Property, plant and equipment a) Asset acquisition On September 14, 2007 the Company exercised its option to acquire all the issued and outstanding shares of African Gold Resources, S.A, a Panamanian company, which holds the options to acquire seven properties in Mali for $8,626,000 (including $307,564 in acquisition costs). In consideration for the acquisition of African Gold Resources, the Company paid $2,962,000 (US$2,810,000) and issued 5,200,000 common shares. The cash consideration consisted of $808,000 (US$720,000) paid on April 23, 2007 for the option to acquire all of the issued and outstanding shares of African Gold Resources S.A, and $2,154,000 (US$2,090,000) cash paid on the exercise of the option. The Company will also assume African Gold's obligations under the option arrangements it has entered into with the holders of the properties, including cash payments totalling US$224,000 and a one time payment of US$9.00 per ounce of measured gold resources and US$4.00 per ounce of indicated gold resources. The agreement also provides that if any of the individual properties contain an aggregate of 500,000 ounces or more of measured and indicated gold resources, then Gold Resources will receive a one-time payment of US$6.00 per ounce of measured gold resources and US$4.00 per ounce of indicated gold resources. The common shares issued have been valued at a price of $0.60 per common share, being the closing price on the day of the exercise of the Company's option to acquire African Gold Resources S.A. The total costs capitalized to Mineral Properties on the asset acquisition were as follow: $ Cash paid for the option to purchase African Gold Resources S.A 808 Cash paid on the exercise of the option 2,154 Common shares issued 3,120 Acquisition costs 308 Future income tax liability 6,389 ------------------------------------------------------------------ 12,779 ------------------------------------------------------------------ ------------------------------------------------------------------ b) The following table summarizes the Company's property, plant and equipment as at September 30, 2007 and December 31, 2006: September 30, 2006 ------------------------------------------------------------------ Accumulated Net book Cost depreciation value ------------------------------------------------------------------ $ $ $ Mineral properties Lo Increible A and B 22,369 - 22,369 Mali properties 13,620 - 13,620 Plant and equipment Lo Increible A and B 622 171 451 Mali properties 431 431 Other 3 - 3 ------------------------------------------------------------------ 37,045 171 36,874 ------------------------------------------------------------------ ------------------------------------------------------------------ December 31, 2006 ------------------------------------------------------------------ Accumulated Net book Cost depreciation value ------------------------------------------------------------------ $ $ $ Mineral properties Lo Increible A and B 19,180 - 19,180 Plant and equipment 558 61 497 ------------------------------------------------------------------ 19,738 61 19,677 ------------------------------------------------------------------ ------------------------------------------------------------------ During the nine months ended September 30, 2007, $65,751 of depreciation of plant and equipment used in exploration activities have been capitalized in mineral properties. 5. Share capital (a) Common shares Authorized: an unlimited number of common shares with no par value Issued and outstanding Number of Contributed shares Amount surplus ----------------------------------------------------------------- $ $ Balance, December 31, 2005 17,816,425 34,111 587 Issued on acquisition of Panwest (Note 3) 15,140,000 9,387 - Private placement (Note 5 (b)) 14,285,714 8,305 890 Private placement (Note 5 (c)) 2,150,000 1,852 962 Exercise of stock options 7,142 8 (2) Stock-based compensation - - 1,333 ----------------------------------------------------------------- Balance, December 31, 2006 49,399,281 53,663 3,770 Issued on acquisition of African Gold Resources (Note 4) 5,200,000 3,120 Exercise of stock options 70,000 42 (11) Stock-based compensation - - 156 ----------------------------------------------------------------- Balance, September 30, 2007 54,669,281 56,825 3,915 ----------------------------------------------------------------- ----------------------------------------------------------------- (b) On February 28, 2006, the Company completed a private placement of 14,285,714 common shares at $0.70 per share for net proceeds of $9,195,045. In connection with the private placement, 857,143 agent compensation warrants were issued. Each agent compensation warrant entitled the holder to purchase one common share of the Company at a price of $0.70 per common share until August 28, 2007. All securities issued as part of this placement were subject to a four-month hold. The agent compensation warrants were fair valued using an option pricing model with the following assumptions: no dividends are paid, a volatility of the Company's share price of 140%, an expected life of the warrants of 18 months and an annual risk free rate of 3.96%. (c) On July 21, 2006, the Company completed a private placement with Gold Fields Ltd. of 2,150,000 units at a price of $1.40 for net proceeds of $2,813,943. Each unit consisted of a share and one-half of a warrant, with each whole warrant being exercisable for two years at a price of $2.80. The warrants were fair valued using an option pricing model with the following assumptions: no dividends are paid, a volatility of the Company's share price of 134%, an expected life of the warrants of two years and an annual risk free rate of 4.16%. (d) Warrants September 30, December 31, 2007 2006 ----------------------------------------------------------------- Weighted Weighted average average Number of exercise Number of exercise warrants price warrants price ----------------------------------------------------------------- $ $ Balance, outstanding beginning of period 4,628,232 2.14 2,837,089 2.38 Issued on private placement - - 1,932,143 1.87 Warrants expired during the period (3,000,000) 1.40 (141,000) 3.92 ----------------------------------------------------------------- Balance, end of period 1,628,232 1.76 4,628,232 2.14 ----------------------------------------------------------------- ----------------------------------------------------------------- The following table summarizes information concerning outstanding and exercisable warrants at September 30, 2007: Outstanding and Exercise exercisable price Expiry date -------------------------------------------- $ 553,232 4.90 December 17, 2008 1,075,000 2.80 May 8, 2008 -------------------------------------------- 1,628,232 -------------------------------------------- -------------------------------------------- (e) Incentive stock option plan The Company has an incentive stock option plan. Under the plan, the exercise price of each option should not be less than the discounted market price as defined in the policies of the TSX Venture Exchange, and an option's maximum term is five years. Options may be granted by the board of directors at any time, to directors, senior officers or employees of the Company and consultants to the Company or any of its designated affiliates, who, by the nature of their position or duties are, in the opinion of the board, upon recommendation of the Compensation Committee, in a position to contribute to the success of the Company. A summary of the changes in the Company's incentive stock option plan for the nine months ended September 30, 2007 and the year ended December 31, 2006 are as follows: September 30, December 31, 2007 2006 ----------------------------------------------------------------- Weighted Weighted average average exercise exercise Options price Options price ----------------------------------------------------------------- $ $ Outstanding, beginning of period 4,638,571 0.92 720,097 3.64 Options granted 257,000 0.73 3,970,000 0.52 Options cancelled (40,714) 0.71 (44,384) 8.05 Options exercised (70,000) 0.51 (7,142) 0.77 ----------------------------------------------------------------- Outstanding, end of period 4,784,857 0.92 4,638,571 0.92 ----------------------------------------------------------------- ----------------------------------------------------------------- The following table summarizes information concerning outstanding and exercisable options at September 30, 2007: Options outstanding and exercisable ---------------------------------------- Weighted Weighted average average Number remaining exercise outstanding life in years price $ 382,857 1.06 4.90 2,144 1.02 2.66 272,856 1.88 1.26 100,000 4.65 0.91 90,000 3.88 0.82 77,000 4.99 0.70 80,000 4.28 0.53 3,725,000 3.80 0.51 10,000 4.07 0.48 45,000 4.05 0.45 ---------------------------------------- 4,784,857 3.52 0.92 ---------------------------------------- ---------------------------------------- The fair value of options issued by the Company in 2007 and 2006 was determined using the Black-Scholes option pricing model using the following weighted average assumptions: September 30, December 31, 2007 2006 Weighted average risk-free rate 4.14% 4.10% Dividend yield Nil Nil Volatility factor of the expected market price of the Company's shares 194% 110% Average expected option life - years 2.5 2.5 Weighted average grant date fair value per share of options issued during the period $0.56 $0.34 6. Related party transactions During the nine month periods ended September 30, 2007 and 2006, the Company paid the following amounts to related parties: (a) Consulting fees of $ nil (2006 - $50,058) to a company in which a director of the Company is an officer; and (b) Consulting fees of $283,652 (2006 - $337,637) to directors of the Company. (c) The Company paid $14,060 (2006 - $Nil) to a related party controlled by three directors of the Company in respect of its office lease in Caracas, Venezuela. These transactions are in the normal course of operations and are measured at the exchange amounts, which is the amount of consideration established and agreed to by the related parties. 7. Supplemental cash flow information Three Months ended Nine months ended 2007 2006 2007 2006 --------------------------------------------------------------------- a) Interest paid $ - $ - $ - $ - Income taxes paid - - - - b) Non-cash transactions Acquisition of Panwest (note 3) (13,626) (13,626) Acquisition of African Gold Resources S.A (note 4) (9,509) (9,509) Issue of common shares 3,120 13,626 3,432 13,626 Increase in future tax liability 6,389 6,389 8. Segmented information (a) The Company currently operates in one reportable operating segment, being the acquisition and exploration of mineral properties. (b) As at September 30, 2007 the Company's mineral properties are in Venezuela and Mali. As at September 30, 2006 all of the Company's mineral properties were in Venezuela. During the year ended December 31, 2006, the Company disposed of all its properties in Italy. The Company's assets and results of operations by geographic areas are as follows: As at September 30, 2007 ------------------------------------------------------------------------- Venezuela Mali Canada Total ------------------------------------------------------------------------- Property, plant and equipment $ 22,820 $ 14,051 $ 3 $ 36,874 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total assets $ 23,922 $ 14,366 $ 2,100 $ 40,388 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended September 30, 2007 ------------------------------------------------------------------------- Venezuela Mali Canada Total ------------------------------------------------------------------------- General and administrative expenses $ 191 $ 101 $ 570 $ 862 Stock based compensation - - 123 123 Other income (loss) 785 17 (440) 362 ------------------------------------------------------------------------- Net earnings (loss) $ 594 $ (84) $ (1,133) $ (623) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital Expenditures net of non-cash transactions $ 1,557 $ 3,428 $ - $ 4,985 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Nine months ended September 30, 2007 ------------------------------------------------------------------------- Venezuela Mali Canada Total ------------------------------------------------------------------------- General and administrative expenses $ 600 $ 101 $ 2,191 $ 2,892 Stock based compensation - - 156 156 Other income (loss) 1,346 17 (898) 465 ------------------------------------------------------------------------- Net earnings (loss) $ 746 $ (84) $ (3,245) $ (2,583) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital Expenditures net of non-cash transactions $ 3,276 $ 4,542 $ - $ 7,818 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Medoro Resources Ltd. Consolidated schedules of general and administrative expenses three and nine month periods ended September 30, (Expressed in thousands of Canadian dollars) (Unaudited) Three months Nine months 2007 2006 2007 2006 ----------------------------------------------- ------------------------- $ $ $ $ (restated- (restated- note 2) note 2) General and administrative Office and administration 321 221 742 623 Consulting fees 261 362 997 642 Director fees 20 22 63 53 Investor relations, transfer agent and filing fees 25 65 125 295 Legal and accounting fees 72 89 272 254 Salaries and benefits 121 78 443 245 Travel and promotion 19 (22) 172 114 Depreciation 21 17 65 26 Bank charges and interest 2 1 13 4 ----------------------------------------------- ------------------------- 862 833 2,892 2,256 ----------------------------------------------- ------------------------- ----------------------------------------------- -------------------------

For further information: Nelson Lee, Chief Financial Officer, (416) 603-4653, nlee(at)medororesources.com (MRL)