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Actionable news in EGI: ENTREE GOLD Inc,

Entree Gold: (Unaudited - Expressed In United States Dollars)

Other assets

97,846

111,252

Total assets

69,896,179

79,690,498

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued liabilities

516,943

1,903,472

Loans payable to Oyu Tolgoi LLC (Note 8)

6,484,864

6,355,408

Deferred revenue (Note 9)

32,092,353

34,507,372

Deferred income tax liabilities

3,171,947

3,407,124

Total liabilities

42,266,107

46,173,376

Stockholders' equity

Common stock, no par value, unlimited number authorized, (Note 10)

177,145,971

177,138,693

147,014,385 (December 31, 2014 - 146,984,385) issued and outstanding

Additional paid-in capital

20,344,396

20,346,551

Accumulated other comprehensive loss (Note 14)

(5,132,596

(2,850,122

Accumulated deficit

(164,727,699

(161,118,000

Total stockholders' equity

27,630,072

33,517,122

Total liabilities and stockholders' equity

ture and continuance of operations

(Note 1)

Commitments and Contingencies

(Note 16)

Subsequent events

(Note 18)

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months

Ended

June 30,

Six Months

EXPENSES

Exploration (Note 7)

1,329,058

757,325

3,226,667

2,321,471

General and administration

801,585

980,107

1,740,325

2,124,197

Consultancy and advisory fees

234,070

125,000

519,742

Depreciation

11,037

17,160

22,763

34,835

Gain on sale of mineral property interests

(28,096

Foreign exchange loss (gain)

368,843

882,044

(1,380,106

(189,413

Loss from operations

(2,510,523

(2,842,610

(3,734,649

(4,782,736

Interest income

25,054

97,064

72,081

180,290

Interest expense (Note 5)

(65,006

(65,524

(129,295

(130,385

Loss from equity investee (Note 5)

(26,824

(28,772

(52,970

(49,564

Loss before income taxes

(2,577,299

(2,839,842

(3,844,833

(4,782,395

Current income tax recovery (expense)

246,609

133,379

Deferred income tax recovery (expense)

(471,679

(332,558

235,177

443,240

Net loss

(3,049,021

(2,925,791

(3,609,699

(4,205,776

Comprehensive loss:

Foreign currency translation adjustment (Note 14)

552,868

1,439,608

(2,282,474

(256,680

(2,496,153

(1,486,183

(5,892,173

(4,462,456

Basic and diluted net loss per share

Weighted average number of common shares outstanding

147,009,989

146,827,792

146,997,258

146,781,346

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

Number of

Shares

Stock

Paid-in Capital

Income (Loss)

Deficit

Equity

Balance, June 30, 2014

20,095,161

208,935

(156,654,588

40,788,201

(1,879,527

(1,399,598

Balance, September 30, 2014

(1,670,592

(158,054,186

37,509,076

Stock-based compensation

251,390

(1,179,530

(3,063,814

Balance, December 31, 2014

(2,835,342

(560,678

Balance, March 31, 2015

(5,685,464

(161,678,678

30,121,102

Shares issued:

Exercise of stock options

30,000

(2,155

Balance, June 30, 2015

CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES

Items not affecting cash:

(235,177

(443,240

Unrealized foreign exchange gain

(1,423,735

(191,352

Changes in assets and liabilities:

107,564

429,484

332,866

(47,452

13,982

(1,258,602

(440,230

Net cash used in operating activities

(5,934,851

(4,639,498

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of capital stock

Net cash provided by financing activities

CASH FLOWS FROM INVESTING ACTIVITIES

(100,000

(3,628

52,152

Acquisition of equipment

(2,997

(6,292

Proceeds from sale of mineral property interests

Net cash used in investing activities

(6,625

(26,044

Effect of foreign currency translation on cash and

(205,052

(23,775

Change in cash and cash equivalents

during the period

(6,141,405

(4,689,317

Cash and cash equivalents, beginning of period

46,701,216

Cash and cash equivalents, end of period

42,011,899

Cash paid for interest during the period

Cash paid for income taxes during the period

Supplemental disclosure with respect to cash flows (Note 15)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE AND CONTINUANCE OF OPERATIONS

Entrée Gold Inc. was incorporated under the laws of the Province of British Columbia on July 19, 1995 and continued under the laws of the Yukon Territory on January 22, 2003. On May 27, 2005, Entrée Gold Inc. changed its governing jurisdiction from the Yukon Territory to British Columbia by continuing into British Columbia under the

Business Corporations Act

(British Columbia). The principal business activity of Entrée Gold Inc., together with its subsidiaries (collectively referred to as the “Company”), is the exploration of mineral property interests. To date, the Company has not generated significant revenues from its operations and is considered to be in the exploration stage.

All amounts are expressed in United States dollars, except for certain amounts denoted in Canadian dollars ("C$").

These consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company currently earns no operating revenues. Continued operations of the Company are dependent upon the Company’s ability to secure additional equity capital or receive other financial support, and in the longer term to generate profits from business operations. Management believes that the Company has sufficient working capital to maintain its operations for the next 12 months.

2. BASIS OF PRESENTATION

The interim period financial statements have been prepared by the Company in conformity with generally accepted accounting principles in the United States of America. The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of annual financial statements, and in the opinion of management these financial statements contain all adjustments necessary (consisting of normally recurring adjustments) to present fairly the financial information contained therein. Certain information and footnote disclosure normally included in the financial statements prepared in conformity with generally accepted accounting principles in the United States of America have been condensed or omitted. These interim period statements should be read together with the most recent audited financial statements and the accompanying notes for the year ended December 31, 2014. The results of operations for the six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015.

3. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements follow the same significant accounting principles as those outlined in the notes to the audited consolidated financial statements for the year ended December 31, 2014.

4. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash at bank and in hand of $27,375,691 as at June 30, 2015 (December 31, 2014 - $33,517,096).

5. LONG-TERM INVESTMENTS

Equity Method Investment

The Company accounts for its interest in a joint venture with Oyu Tolgoi LLC (“OTLLC”), a company owned 66% by Turquoise Hill Resources Ltd. (“Turquoise Hill”) and 34% by the Government of Mongolia (Note 7), as a 20% equity investment. The Company’s share of the loss of the joint venture is $52,970 for the six months ended June 30, 2015 (June 30, 2014 - $49,564) plus accrued interest expense of $129,295 for the six months ended June 30, 2015 (June 30, 2014 - $130,385).

6. EQUIPMENT

Net Book

Office...


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