Post by portrush on May 30, 2008 12:35:46 GMT -6
6-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2008
Commission File Number: 000-50305
ENTOURAGE MINING LTD.
(Translation of registrant's name into English)
614 - 475 Howe Street
Vancouver, B.C. Canada V6C 2B3
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ X ] Form 20-F [ ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [ X ]
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________
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SUBMITTED HEREWITH
Exhibits
99.1 Interim Financial Statements for the Period Ended March 31, 2008
99.2 Management Discussion and Analysis for the Period Ended March 31, 2008
99.3 Form 52-109F2 - Certification of Interim Filings - CEO
99.4 Form 52-109F2 - Certification of Interim Filings - CFO
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Entourage Mining Ltd.
(Registrant)
Date: May 29, 2008 By: /s/ Greg Kennedy
Greg Kennedy
Title: President
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EX-99.1
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by the management)
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Stated in Canadian Dollars)
March 31, December 31,
2008 2007
$ $
ASSETS
Current
Cash $ 9,995 $ 2,239
Advances and prepaid expenses 11,084 1,084
Goods and services tax and Quebec sales tax recoverable 682 16,484
21,761 19,807
Equipment 2,589 2,763
$ 24,350 $ 22,570
LIABILITIES
Current
Accounts payable and accrued liabilities $ 94,864 $ 39,564
Amounts payable to related parties 163,129 119,653
257,993 159,217
STOCKHOLDERS’ EQUITY
Capital Stock
Authorized:
100,000,000 common voting shares without par value
Issued:
76,831,894 common voting shares (Dec 31, 2007 – 76,831,894) 12,383,714 12,383,714
Additional paid in capital 3,035,356 3,035,356
Deficit accumulated during the exploration stage (15,652,713 ) (15,555,717 )
(233,643 ) (136,647 )
$ 24,350 $ 22,570
Approved by the Board of Directors:
“Gregory F. Kennedy” “Paul Shatzko”
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in Canadian Dollars)
THREE MONTHS ENDED June 16, 1995
(inception)
MARCH 31 To
March 31,
2008 2007 2008
$ $ $
Expenses
Amortization 175 238 5,256
Consulting 15,000 9,000 223,235
Consulting – stock based compensation - 92,900 2,713,558
Financing fee – stock based compensation - - 11,300
Interest expense and bank charges 131 146 13,080
Mineral property acquisition and exploration costs
(recovery) (9,485 ) 208,007 10,981,424
Management fees 75,000 21,500 722,154
Office and sundry 3,937 22,975 452,948
Professional fees 8,068 1,471 339,334
Travel and promotion 4,170 45,945 257,586
Loss Before Taxes (96,996 ) (402,182 ) (15,719,875 )
Deferred tax recovery - - 67,162
Net Loss (96,996 ) (402,182 ) (15,652,713 )
Loss Per Share, basic and diluted (0.00 ) (0.01 )
Weighted Average Common Shares Outstanding 76,981,894 76,135,042
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION OTHER DURING
OF TO ISSUE CONTRIBUTED EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Share issued for cash 5 1 - - - 1
Loss for the period - - - - (38,624 ) (38,624 )
Balance, December 31, 1995 5 1 - - (38,624 ) (38,623 )
Shares issued for cash 9,130,000 276,500 - - - 276,500
Loss for the year - - - - (210,592 ) (210,592 )
Balance, December 31,1996 9,130,005 276,501 - - (249,216 ) 27,285
Loss for the year - - - - (74,529 ) (74,529 )
Balance, December 31, 1997 9,130,005 276,501 - - (323,745 ) (47,244 )
Loss for the year - - - - (60,148 ) (60,148 )
Balance, December 31, 1998 9,130,005 276,501 - - (383,893 ) (107,392 )
Loss for the year - - - - (70,046 ) (70,046 )
Balance, December 31, 1999 9,130,005 276,501 - - (453,939 ) (177,438 )
Loss for the year - - - - (66,855 ) (66,855 )
Balance, December 31, 2000 9,130,005 276,501 - - (520,794 ) (244,293 )
Loss for the year - - - - (58,749 ) (58,749 )
Balance, December 31, 2001 9,130,005 276,501 - - (579,543 ) (303,042 )
Forgiveness of amounts due to related
party - - - 200,671 - 200,671
Loss for the year - - - - (59,428 ) (59,428 )
Balance, December 31, 2002 9,130,005 276,501 - 200,671 (638,971 ) (161,799 )
April 25, 2003 – shares issued for
mineral property 6,000,000 60,000 - - - 60,000
Loss for the year - - - - (319,515 ) (319,515 )
Balance, December 31, 2003 15,130,005 336,501 - 200,671 (958,486 ) (421,314 )
February 5, 2004 – shares issued for
cash at $0.22 per share 997,500 219,450 - - - 219,450
February 5, 2004 – deferred tax
recovery on 108,000 flow-through - (2,376 ) - - - (2,376 )
shares
June 8, 2004 – shares issued for cash
at $0.404 per share 698,000 282,331 - - - 282,331
August 24, 2004 – stock options
exercised at $0.33 per share 100,000 32,983 - - - 32,983
December 31, 2004 – shares issued
for cash at $0.18 per share
inclusive of 132,500 shares as
finders’ fees 2,948,000 510,876 - - - 510,876
August 24, 2004 – shares issued for
mineral property database at $0.39
per share 150,000 58,788 - - - 58,788
September 24, 2004 – shares returned
on cancellation of escrow (3,750,000 ) (7,500 ) - 7,500 - -
Stock based compensation - - - 421,000 - 421,000
Loss for the year - - - - (956,446 ) (956,466 )
Balance, December 31, 2004 16,273,505 1,431,053 - 629,171 (1,914,932 ) 145,292
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION ADDITIONAL DURING
OF TO ISSUE PAID-IN EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Balance, December 31, 2004,
carried forward 16,273,505 1,431,053 - 629,171 (1,914,932 ) 145,292
January 6, 2005, refund for
overpayment in 2004 private -
placement - (3,000 ) - - (3,000 )
March 21, 2005, shares issued for
property acquisition at
U.S. $0.30 per share 125,000 45,604 - - - 45,604
Sept. 22, 2005, flow-through shares
issued at $0.20 per share 295,000 59,000 - - - 59,000
September, 2005, deferred tax
recovery on 295,000 flow-through
shares - (20,119 ) - - (20,119 )
Sept. 22, 2005, units issued at
U.S. $0.15 per unit 550,000 97,152 - - - 97,152
Oct. 7, 2005, units issued at
U.S. $0.11 per unit 1,275,000 165,154 - - - 165,154
Oct.-Dec 2005, shares issued on
exercise of stock options at -
U.S. $0.15 per share 250,000 44,147 - - 44,147
Oct. 2005, shares issued on exercise
of warrants at $0.30 per share 50,000 15,000 - - - 15,000
Nov. 17, 2005, units issued at
U.S. $0.15 per share inclusive of
200,000 shares finders’ fees 5,533,334 944,800 - - - 944,800
Stock based compensation - - - 163,400 - 163,400
Forgiveness of amounts due to
related party - - - 102,327 - 102,327
Obligation to issue shares (Note 4) - - 8,638,667 - 8,638,667
Loss for the year - - - (10,068,841 ) (10,068,841 )
Balance, December 31, 2005 24,351,839 2,778,791 8,638,667 894,898 (11,983,773 ) 328,583
January 3, 2006, shares issued for
property acquisition at a deemed
price of US $0.15 per share 48,888,888 8,638,667 (8,638,667 ) - - -
Jan.-Aug. 2006, shares issued on
exercise of stock options at
US $0.15 per share 410,000 69,317 - - - 69,317
February 2006, shares issued on
exercise of warrants at $0.30
per share 744,500 223,350 - - - 223,350
March 7, 2006, shares issued for
property acquisition at
U.S. $0.36 per share 125,000 51,772 - - - 51,772
May 24, 2006, shares issued for
flow-through private placement
at US $0.25 per share 340,000 93,585 - - - 93,585
Aug.-Nov. 2006, shares issued on
exercise of warrants at US $0.25
per share 955,000 269,149 - - - 269,149
Dec. 2006, shares issued for flow-
through private placement
at $0.23 per share 200,000 46,000 - - - 46,000
Stock based compensation - - - 2,027,384 - 2,027,384
Deferred tax recovery on 540,000
flow-through shares - (44,667 ) - - (44,667 )
Loss for the year - - - - (2,973,161 ) (2,973,161 )
Balance, December 31, 2006 76,015,227 12,125,964 - 2,922,282 (14,956,934 ) 91,312
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION ADDITIONAL DURING
OF TO ISSUE PAID-IN EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Balance, December 31, 2006,
carried forward 76,015,227 12,125,964 - 2,922,282 (14,956,934 ) 91,312
March 12, 2007, shares issued for
Property option payment at
US$0.30 per share deemed price 500,000 175,530 - - - 175,530
March 27, 2007, shares issued for
options exercise at US$0.15 per 50,000 8,760 - - - 8,760
share
March 31, 2007, shares issued for
Pvt. Placement at US$0.15per share
net of finder’s fee of $4,537 266,667 41,647 - - - 41,647
Stock based compensation - - - 113,074 - 113,074
April 3, 2007, shares issued for
Options exercise at US$0.15 per 50,000 8,507 - - - 8,507
share
June 18, 2007, shares issued for debt -
at US$0.20 per share 100,000 23,306 - - 23,306
Loss for the year - - - - (598,783 ) (598,783 )
Balance, December 31, 2007 76,981,894 12,383,714 - 3,035,356 (15,555,717 ) (136,647 )
Loss for the period ended March 31,
2008 - - - - (96,996 ) (96,996 )
Balance, March 31, 2008 76,981,894 12,383,714 - 3,035,356 (15,652,713 ) (233,643 )
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in Canadian Dollars)
June 16, 1995
THREE MONTHS ENDED (inception)
MARCH 31 To
2008 2007 March 31, 2008
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (96,996 ) (402,182 ) (15,652,713 )
Adjustments to reconcile net loss to net cash from
operating activities:
Amortization 175 238 5,256
Stock based compensation - 92,900 2,724,858
Shares issued for exploration and mineral property
Acquisition costs - 175,530 9,030,361
Shares issued for debt - - 23,306
Deferred tax recovery - - (67,162 )
Changes in non-cash operating working capital items:
Advances and prepaid expenses (10,000 ) (23,090 ) (11,084 )
Goods and Services Tax and Quebec sales tax recoverable 15,801 26,046 (683 )
Accounts payable and accrued liabilities 55,300 24,363 94,864
Amounts payable to related parties 43,476 (18,067 ) 466,127
NET CASH FLOWS USED IN OPERATING ACTIVITIES 7,756 (124,262 ) (3,386,870 )
CASH FLOWS USED IN INVESTING ACTIVITIES
Equipment - - (7,845 )
NET CASH FLOWS USED IN INVESTING ACTIVITIES - - (7,845 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on sale of common stock - 54,944 3,404,710
NET CASH FLOWS FROM FINANCING ACTIVITIES - 54,944 3,404,710
INCREASE (DECREASE) IN CASH 7,756 (69,318 ) 9,995
CASH, BEGINNING OF PERIOD 2,239 126,611 -
CASH, END OF PERIOD 9,995 57,293 9,995
The accompanying notes are an integral part of these consolidated financial statements.
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
1. BASIS OF PRESENTATION
The interim financial statements of Entourage Mining Ltd. (the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America. The interim financial statements have been prepared following the same accounting policies and methods of computation as the financial statements for the fiscal year ended December 31, 2007. The interim financial statements should be read in conjunction with the financial statements and the notes thereto in the Company’s annual report for the year ended December 31, 2007.
2. DORAN (Quebec) PROPERTY
i) By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties in south-central Quebec (the “Doran Property”) in exchange for cash payments of $220,000, the issuance of 750,000 common shares and the expenditure of $1,000,000 on the Doran Property over three years, as follows:
a. $35,000 and 125,000 common shares within ten business days of the date of approval of the agreement (paid and issued);
b. $35,000 and 125,000 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);
c. $75,000 (paid in 2007) and 250,000 common shares on or before March 15, 2007 (issued in 2007- Note 2 iv)); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. (“Abbastar”) – Note 2 iii)); and
d. $75,000 (paid in 2008 by Abbastar – Note 2 v)) and 250,000 common shares on or before March 15, 2008 (issued in 2007 – Note 2 iv)); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar).
ii) The property interest is subject to a 2.5% NSR. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.
iii) On February 13, 2007 the Company entered into an option agreement (the “Option”) with Abbastar Holdings Inc. (“Abbastar”), a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a one time cash payment of $100,000 CDN (received) to the Company and expending $5,000,000 on the Doran Property over 4 years (The Company retains the right to purchase the Net Smelter Royalty on the Doran Property). The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:
20% interest by expending $500,000 on or before February 13, 2008 (spent);
15% additional interest by expending an additional $1,000,000 on or before February 13, 2009;
15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.
iv) In consideration for the Doran Property vendor consenting to the Option Agreement with Abbastar, the Company issued the balance of shares (500,000) due to the Doran Property vendor on March 12, 2007.
v) On March 15, 2008, after the final payment of $75,000 was made by Abbastar on behalf of the Company, the Company became the owner of the Doran Property with 20% interest earned by Abbastar by spending $500,000 on the property.
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
3. CAPITAL STOCK
a) Issued Shares
There were no share transactions during the three months ended March 31, 2008. There were 76,831,894 shares issued and outstanding on March 31, 2008.
b) Stock Options
During the three months ended March 31, 2008 no stock options were granted, repriced, exercised or expired.
The following table summarizes information concerning outstanding and exercisable common stock options under the Plan at March 31, 2007:
Remaining Weighted Number of Weighted
Range of Contractual Average Options Average
Exercise Options Life Exercise Currently Exercise Price
Prices Outstanding (in years) Price Exercisable
U.S. $0.15
- U.S. $0.25 6,390,000 0.84 U.S. $0.225 6,390,000 U.S. $0.225
c) Warrants
During the three months ended March 31, 2008, no new warrants were issued nor any warrants were exercised. However, 133,333 warrants with an exercise price of US$0.25 per share expired.
The following table lists the common share warrants outstanding at March 31, 2008. Each warrant is exchangeable for one common share.
Warrants Exercise Expiry
Outstanding Price Date
170,000 U.S. $0.30 May 23, 2008
5,333,334 U.S. $0.25 November 17, 2008
100,000 CDN $0.35 December 27, 2008
5,603,334
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
4. RELATED PARTY TRANSACTIONS
During the period ended March 31, 2008, the Company incurred $75,000 (2007 – $21,500) for management fees to directors and officers of the Company.
Amounts payable to related parties at March 31, 2008 of $163,129 (December 31, 2007 - $11,285) is to directors.
The transactions with related parties have been in the normal course of operations and, in management’s opinion, undertaken with the same terms and conditions as transactions with unrelated parties.
5. CONTINGENCY
On August 27, 2007, in the Supreme Court of British Columbia, the Company filed a Writ of Summons and Statement of Claim against CMKM and 1010 seeking to have the Court put aside the Mineral Property Option and Assignment Agreements (the “Agreements”) among the parties dated October 20, 2005 for Hatchet and Smeaton properties.
As consideration for the Agreements the Company had issued 48,888,888 shares of common stock (the “Consideration Shares”) of the Company capital to acquire a 50% interest in certain mineral claims prospective for uranium (Hatchet Lake) and an 80% interest in certain mineral claims prospective for diamonds (Smeaton Property) all located in the Province of Saskatchewan.
Of the 48,888,888 Consideration shares, 15,000,000 shares were paid for the Hatchet Lake property and 33,888,888 shares were paid for the Smeaton property. Furthermore 3,888,888 shares of the Smeaton Consideration shares were paid to the property vendor, 1010 and the remaining 45,000,000 shares were paid to CMKM with the proviso that these shares were to be distributed to the CMKM shareholders.
In seeking to have the Agreements set aside, the Company claims that CMKM has breached the terms of the Agreements by not distributing the 45,000,000 shares to the CMKM shareholders as required by the Agreements; as well, the Company is seeking to have 1010 return the 3,888,888 shares as the Company contends that 1010 is in breach by not completing work on the Smeaton property in a workmanlike fashion by providing preliminary budget submissions, daily drill records and general field information as is the industry standard. As well, the Company contends that 1010 failed to provide documentation requested by the Company to have a National Instrument 43-101 compliant report completed on the Smeaton property.
The Company has filed all required documentation with the courts for the process of examination for discovery but has not received the same from CMKM or 1010. The Company has requested of both defendants appropriate dates for trial but no response is forthcoming at the time of this report.
The outcome of the above legal proceedings is not presently determinable, and the amount of the ultimate recovery, if any, cannot be reasonably estimated at this time so no accrual has been recorded in the current period or the past fiscal year.
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EX-99.2
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ENTOURAGE MINING LTD.
Management Discussion and Analysis
Interim Report May 28, 2008
This Management Discussion and Analysis of Entourage Mining Ltd. (the “Company”) provides analysis of the Company’s financial results the three month period ended March 31, 2008. The following information should be read in conjunction with the accompanying un-audited financial statements and the notes to the un-audited financial statements.
1.1 Date of Report May 28, 2008
1.2 Overall Performance
Nature of Business and Overall Performance
The Company’s shares have been publicly traded since February 2nd, 2004 when the Company was called for trading on the Over-the-Counter Bulletin Board in the United States under the symbol ETGMF. The Company is a reporting issuer in both the United States and in British Columbia.
Entourage Mining Ltd. (“Entourage”, the “Company” or “We”) was originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd. On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.
We have one subsidiary company, Entourage USA Inc., domiciled in Carson City, Nevada. This subsidiary is used to acquire additional exploration properties in the United States of America.
We are a natural resource company engaged in the acquisition and exploration of natural resource properties. We commenced operations in 1996 and currently has one mineral property option agreement:
to acquire an 80% interest in 20 prospective diamond exploration claims situated in the Forte a la Corne/Smeaton area of central Saskatchewan; and
an unencumbered 80%interest:
in 47 claim uranium prospective claim blocks in Costebelle Township known as the Doran property;
and we intend to seek and acquire additional properties worthy of exploration and development.
Entourage is an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of the properties, and further exploration will be required before a final evaluation as to the economic and legal feasibility of all of our claims is determined.
1.2.1 Mineral Properties: Background and Agreements
1.2.1(a) Hatchet Lake Properties (Abandoned)
By agreement dated April 7, 2005 as amended October 20, 2005, the Company obtained an option to acquire up to a 50% right in a certain prospective mineral property located in the Athabaska Basin area of Saskatchewan (the “Hatchet Lake Property”). 40% of the Company’s interest in the Hatchet Lake property was acquired by way of an October 20, 2005 assignment agreement among Entourage Mining Ltd., United Uranium Corp. (formerly United Carina Resources Corp.) and CMKM Diamonds Inc. (“CMKM”), a now defunct OTCBB Pink Sheet issuer.
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As a result of this assignment agreement, and the subsequent “New Hatchet Lake Option Agreement”, also dated October 20, 2005, the Company had acquired a right to earn a 50% interest in the Hatchet Lake property.
As consideration for the assignment agreement, the Company agreed to issue 15,000,000 of its common shares (issued January 3, 2006) to the CMKM shareholders. The 15,000,000 shares were to be distributed to the CMKM shareholders, but these shares have not been distributed at the time of this report and there is no indication when or if this distribution may occur.
On June 30th, 2007, United Uranium Corp. extended a July 1, 2007 $300,000 payment deadline, to be paid by the Company, until September 15, 2007. No summer or fall 2007 work program was proposed by United Uranium Corp. so the Company decided that the scant uranium values of two previous abbreviated drill programs (7 ½ drill holes over two years) did not warrant the $300,000 payment and the Company abandoned the Hatchet Lake Uranium prospect.
As well, since CMKM failed to distribute the 45,000,000 (15,000,000 for Hatchet property and 30,000,000 for Smeaton property) shares and because 101047025 Saskatchewan Ltd. (“1010”), in the opinion of the Company, failed to operate the Smeaton property in an operator like fashion and failed to comply with the Company’s various requests to have all previous claim materials sent to the Company, on August 27, 2007, the Company filed, in the Supreme Court of British Columbia, a Writ of Summons and Statement of Claim against 1010and CMKM seeking to have the court set aside the October 20, 2005 Mineral Property Option and Assignment Agreements for Hatchet and Smeaton property between the Company and the Defendants (collectively, the “Contracts”) and requesting that the defendants return the 45,000,000 shares (the “Shares”) paid to CMKM and the 3,888,888 shares paid to 1010 to consummate these agreements. This matter has yet to be resolved in the Courts.
1.2.1(b) Nevada Property (Abandoned)
In June 2004, we announced that we signed a definitive agreement with Goodsprings Development Corp. (“Goodsprings”), a Nevada based corporation, whereby we may earn a 100% interest in the GBW project in Esmeralda County, Nevada commonly known as the “Black Warrior Project” in the Company’s other disclosure documents. The agreement between Goodsprings and Entourage is a sub-lease agreement to the original property agreement between Goodsprings and Apex Deep Mines, also a Nevada based company.
All payments required under the Entourage-Goodsprings Agreement were paid in a timely manner. The Company drilled 11 holes on the Black Warrior project. The initial 9 holes did not find anomalous gold or silver showings however the final two holes intersected 30 feet of slightly anomalous gold values ranging up to .435 g/t. There was $76,670.59 exploration work done on the Black Warrior Project in 2006 but in November 2006 the Company informed Goodsprings that the Company was relinquishing its interest in the Black Warrior project.
On December 6, 2006, the Company advanced Goodsprings $7,500 to reclaim the property and to remediate it to its natural state. Some time in 2007, after the remediated areas pass the scrutiny of the Bureau of Land Management (the “BLM”) the Company will be reimbursed a portion of the $11,400 reclamation bond posted by the Company in May 2005.
As well, the Company has been informed by Goodsprings that less than $7,500 was required to remediate the property but both parties agreed that any residual would remain with Goodsprings until the BLM refunded the reclamation bond. The BLM reported to the Company in May 2007 that the Company was eligible to receive 60% of its remediation deposit by making application and the Company has done so. The deposit has not been received to date. The BLM has indicated that the full deposit refund may take five years for approval.
1.2.1(c) Smeaton/Forte a la Corne Property
On October 20, 2005, the Company announced a series of property option (earn-in interest) agreements (the “Saskatchewan Property transactions”) with CMKM, United Carina Resources Corp. and 1010 (a private company),
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whereby the Company assumed the earn-in rights to properties optioned to CMKM. CMKM was about to default on its option agreements and the Company realized an opportunity to acquire prospective diamond and uranium prospects in Saskatchewan. One such property is termed the Smeaton/Forte a la Corne/Green Lake Diamond prospect (the “Smeaton Property”).
Upon signing the Smeaton Property consisted of a 1.5 million acre parcel of claims. Previous to the Entourage-CMKM agreements, CMKM and 1010 had flown an airborne geophysical survey of the Smeaton Properties. The Company’s geologist, James Turner, P. Geo., reviewed the results of the survey and reported to the Company that 20 priority diamond targets existed on the parcel, but in light of the $12 hectare maintenance fees payable, certain of the claims should be allowed to lapse for lack of potential. The present parcel remains at approximately 22 claims.
In December 2005, the Operator, without prior consent of the Company, commenced drilling on a priority target on the property. This drilling encountered kimberlitic rock at approximately 530 feet and continued in kimberlite for over 300 feet eventually ending in dolomites at about 900 feet. An independent kimberlite expert, Harrison Cookenboo, (PhD, P. Geo.), a qualified person, reviewed initial samples and concluded:
“both pieces of core are in most respects closely similar to macro-crystic serpentine calcite kimberlite, but with some atypical features for kimberlite “sensu-stricto”, and suggests that the examined samples are best referred to as kimberlite or a closely related “kimberlitic” rock type with the potential for carrying diamonds”.
On January 10, 2006, the Operator informed the Company that the first drill target (Target: C-Gpp) on the Smeaton Property had been completed after encountering difficult drilling 1000 feet into the target. The hole finished in dolomites and the Operator decided to drill the second hole 30 meters to the northwest where geo-physical data implied that the center of the kimberlite may be situated.
The kimberlitic rock from the first drill hole was sent to Saskatchewan Research Council for caustic fusion and micro-diamond analysis. The kimberltic rock did not yield any micro-diamonds however chromites were found in the drill core. In 2005, the Company expended $200,630.00 on the Smeaton prospect; the Smeaton project has 20 priority targets to be investigated and as of the date of this report has examined four of these targets.
There has been no additional work done on the Smeaton claims subsequent to the Company’s drilling of January 2006. The Company has requested of 1010, all information on the Smeaton claims so that a compliant NI 43-101 Technical Report could be commissioned for the Smeaton claims however 1010 has not responded to these requests. The Company considers these claims as non-operational until such a report can be completed. Furthermore 1010 has never consulted the Company before commencing drilling on the Smeaton properties and no budgets or plans were discussed before exploration work was carried out.
In early 2006, the Company advised 1010, which acts as the Operator of the property, that it would not participate in any further exploration by 1010 unless the exploration was conducted in accordance with NI 43-101 recommendations and mining best practices which to date have not been met. 1010 nevertheless proceeded to perform work on the property and, on March 26, 2006, sent invoices to the Company totaling approximately $280,122.53.
The Company believes that it is not liable, under the terms of the Agreement or in any other way, for these invoices and has so advised 1010, most recently in its letter to 1010 dated April 27, 2007. To date, no collections or other proceedings have been commenced by 1010.
There is, however, the risk that 1010 might commence collections or other proceedings. In that event, while the Company would vigorously defend its position that it is not liable in any way for funds claimed pursuant to the invoices, there is the risk that a proceeding by 1010 could be successful. The Company cannot assess the probability of that risk and accordingly, the likelihood of loss, if any, is presently not determinable.
The Company issued 33,888,888 shares of the Company stock as consideration for the purchase of the Smeaton claims. 30,000,000 (thirty million) of these shares were to be distributed to the CMKM shareholders but these shares have not been distributed at this time and there is no indication when, or if, these shares will be distributed.
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Since CMKM failed to distribute the 45,000,000 (15,000,000 for Hatchet property and 30,000,000 for Smeaton property) consideration shares and because 1010, in the opinion of the Company, failed to operate the property in an operator like fashion and failed to comply with the Company’s various requests to have all previous claim materials sent to the Company, on August 27, 2007, the Company filed, in the Supreme Court of British Columbia, a Writ of Summons and Statement of Claim against 1010 and CMKM seeking to have the court set aside the October 25, 2005 Mineral Property Option and Assignment Agreements between the Company and the Defendants (collectively, the “Contracts”) and requesting that the defendants return the 45,000,000 shares (the “Shares”) paid to CMKM and the 3,888,888 shares paid to 1010 to consummate these agreements. This matter has yet to be resolved in the Courts.
1.2(d) The Doran (Quebec) Uranium Prospect
In March of 2005, the Company entered into an option agreement with Fayz Yacoub, a professional geologist and businessman from Vancouver, whereby the Company could acquire 44 claim blocks prospective for uranium situated in Costebelle Township in eastern Quebec. Subsequent to entering into the property agreement, 3 additional claims blocks have been added to the project.
The Doran Uranium property consists of 47-contiguous mineral claims (polygons) covering approximately 2473.3 hectares in the Baie Johan Beetz area of Costebelle Township, Quebec. The claim block is centered at GPS 548009 E and 5572265 N.
The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometers west of Aguanish, approximately 109 kilometers east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometers to the north.
The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.
The topography of the property for the most part is rolling hills having a maximum relief of 100 meters with elevation ranging from sea level to 100 meters. All mineralized areas of interest are located comfortably above sea and river levels..
Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled (1978) 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton uranium (U3 O8).
Entourage made a down payment of $35,000 to acquire the option and agreed to a work commitment of $200,000 of exploration in the first year of the Doran Uranium Property agreement.
The Company expended $245,591.00 in exploration work on the property in fiscal year 2005 and a compliant report by Eric Ostensoe (P. Geo,) was commissioned. In late February 2006, Mr. Ostensoe completed his report and the Company posted the report on Sedar and Edgar (March 09, 2006) as well as the Company website. In April 2007 an updated NI 43-101 Technical Report was prepared by Michel Proulx, M. Sc., P. Geo and Michel Boilly, Ph D, P Geo, both Qualified Persons as that term is described in National Instrument 43-101, and this report was filed on Sedar by Abbastar Holdings Ltd. on May 2, 2007.
In May 2006, the Company advanced to On Track Explorations, the Doran project operator, $150,000CDN to commence drilling and ground exploration work as outlined in Mr. Ostensoe’s report. Drilling commenced thereafter on the “Main Zone” of the Doran property. The Company’s option agreement on the Doran property requires that the Company expend $300,000 in year two of the agreement.
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The Company spent $346,166 on drilling and exploration in fiscal 2006 and reported drill results on July 20, 2006. As well, in July the Government of Quebec reimbursed the Company $57,745 as part of the Province’s mining exploration incentive program. This rebate was based upon the Company’s 2005 drilling exploration expenses.
In early February 2007 the Company contracted the services of Forages La Virole to commence drilling on the “L” anomaly situated in the north of the Doran property but four to six foot snow drifts prevented the drilling contractor from reaching the “L” anomaly so the work program was cancelled.
On February 13, 2007, the Company entered into a Mineral Property Option agreement with Abbastar Holdings Ltd. (Abbastar), a Vancouver based TSX Venture listed company, whereby Abbastar could earn up to 70% interest in the Doran property by paying the Company a one time $100,000 CDN payment (paid) and expending $5,000,000 (five million) over four years. The TSX Venture Exchange approved this transaction on May 30, 2007.
On May 11, 2007, the Company and Abbastar announced that drilling had commenced on the “L” anomaly of the Doran project and in all 32 holes were drilled for a total of 3,273.26 meters of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear meters or 75% of the drill hole length. The results of the Company’s Phase II drilling campaign were reported August 23, 2007. Here is a sample of these results:
Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
Hole H18A (L Anomaly): 7.25m of 0.023% U3O8 (.46lb/t),
Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
Hole H31 (N Anomaly): 0.66 meters of .29%U3O8 (5.8lb/t)(at surface).
The holes were divided into four zones with particular emphasis on the “L” zone where 18 drill holes were spotted to evaluate the lateral and depth extensions of this zone. The first four drill holes (17,17A, 18, 18A) drilled at different azimuths and plunge angles and set up to test the L19 anomaly, recorded encouraging near surface results including 16.99 meters (55 feet) of .87lb/short ton U3O8 and 24.1 meters (79 feet) of .66lb/ton U3O8, as well, holes 27 and 27A, intersected three and four pegmatites respectively. The first pegmatite, H27, returned .66lb/ton U3O8 over 5.8 meters. The L zone remains open in all directions while lateral extension and depth extension are unknown. Best interval drill results are posted on the Company website.
The 2007 drilling program confirmed the existence of uranium mineralization in the northeast grid (L, N, X and Y). Findings corroborated the channel sample results of 2006 that showed mineralization to be non-uniformly distributed among the pegmatites and even within each pegmatite. Drill holes revealed that the thickness of the radioactive pegmatites range from one meter to roughly 20 meters along holes and are presented as sub-parallel multiple slabs slightly dipping to the west and separated from each other by sterile rocks. All pegmatites have been intersected at a maximum of 90 vertical meters from surface.
To date, the Doran Showing, located at the south of Doran (drilled in 2006 & Fall 2007) and the North East grid have both been successfully drilled in confirming the presence of a series of sub-parallel uranium bearing pegmatites.
Senior Project Geologist, Michel Proulx M. Sc. (P. Geo and a qualified person) recommended follow up drilling on the Doran Showing (Phase III) as well as an additional 4,000 meters of drilling on the L zone to gain a better understanding of the behaviour of the uranium-bearing pegmatite bodies, the structural geology context and of uranium phase minerals.
The fall 2007 drilling campaign was completed in early November. This campaign was designed to further delineate the Doran Showing where the Company drilled in the summer of 2006. The Doran Showing consists of four distinct pegmatite-bearing structures: The Main Zone, the North End Zone, Dyke Zone and Hot Spot.
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Results from this drill campaign were announced on February 4, 2008. In total over 6000 meters have been completed on the Doran property by the Company and Abbastar and the companies are encouraged that the goal of delineating a Rossing type (Namibia) uranium deposit may be realized. More drilling on the “L” will be completed in the spring of 2008.
Competitive factors in the market for mineral resources
The Company is prospecting for uranium in Quebec. It is anticipated that uranium generated power will become more popular in the decades to come as rising oil prices and political strife in the world’s oil producing regions continue. In 2005, the annual spot volume of U3O8 reached 35 million pounds and production of uranium, if any, by the Company would have no significant effect on the price of uranium.
The market for diamonds, for which the Company’s Smeaton Lake properties are prospective, is primarily managed by cartel. However, although the CSO (the Central Selling Organization) still distributes and markets the majority of the world's rough production, the introduction of new sources of rough (Australia, Russia, Canada, and parts of Africa) has considerably changed the controlled single market system. Any production of diamonds by the Company would likely have no measurable effect on the world prices.
Applicable Regulations and Permits
The Company has obtained the necessary work, environmental and regulatory permits required to undertake the exploration programs it is undertaking on its mineral properties. The Company anticipates that, assuming further planned work will be done, there will be no difficulties in obtaining necessary work, environmental and regulatory permits for further exploration work. The jurisdictions wherein our properties are located have long histories in mining exploration and are friendly and accommodating to mineral exploration.
Capital Expenditures and Exploration Programs
(a) Hatchet Lake Uranium Prospect (Abandoned)
2007 Drilling Update
On March 17, 2007 the companies began stage two of the drilling program at Hatchet Lake. This phase is to consist of 8 drill holes and is designed to continue where the 2006 program was terminated. Three and one half holes were drilled on the project in 2007 before warm weather set in and drilling was halted..
The Company advanced $320,000CDN in option and work commitments. The Company requested and received an extension until July 1st, 2006 of an additional $300,000 payment to United Carina that was due on February 1st, 2006 and a further extension to September 15, 2007 was granted by the United Uranium Corp. (formerly United Carina). However, because uranium values encountered in the 2006 and 2007 drilling campaigns were negligible the Company decided to drop the Hatchet Lake properties and the Company did not advance the outstanding $300,000 payable on September 15, 2007 and the project was abandoned.
b) Black Warrior Exploration Activities (Abandoned)
In November 2006, with slight anomalous gold showings from an 11-hole drill program, the Company decided to abandon the Black Warrior project. The was no exploration completed in 2006 in advance of the Company’s decision to abandon the Black Warrior project
c) Smeaton/Forte a la Corne Exploration Activities
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The Smeaton/Forte a la Corne properties were acquired by way of an option agreement between the Company and 1010. The original claim blocks consisted of 1087 claims encompassing approximately 1.5 million acres situated in the Smeaton, Forte a la Corne, Candle Lake areas of central Saskatchewan. At the present time, the Company holds approximately 22 of these claims and after repeated requests to have all previous work records of the claims forwarded to the Company, the Company decided to initiate legal proceeding to have the consideration for the claims returned to the Company in exchange for the Company returning the claims to 1010.
There has been no work completed on the claims since the spring of 2006 wherein the lack of communication between the Company and the Operator/Vendor precluded additional monies being expended on the property until National Instrument 43-101 compliance of the claims was completed. This compliance was not forthcoming.
d) Doran Uranium Project Exploration Activities
2005 Doran Exploration
In fiscal year 2005, the Company expended a total of $245,591 on exploration of the Doran Uranium Project and, in December of 2005, filed an NI 43-101 geological report on the SEDAR system regarding this Project.
The results of exploration in fiscal year 2005 were encouraging, as detailed in the report. The report recommended the following for fiscal year 2006:
1. A technical survey and sampling program of $59,100;
2. A Phase I diamond drilling program of shallow drill holes costing $141,795; and
3. A Phase II program of work, the details of which are contingent upon the results of (1) and (2) above, of approximately $300,000.
2006 Doran Exploration
The 2006 Doran exploration season consisted of channel sampling on the northern sections of the property and a 16-hole drill program to test the Main Zone situated in the southern half of the property. The above recommendations were completed in the spring of 2006. The work included line cutting and trench sampling of the North Zone (“G zone) as well as additional anomalies “E”, “I”, “L”, “N” and "X”.
On August 30, 2006 the Company reported: The comprehensive rock saw channel sampling program was successful in identifying previously unrecognized uranium targets. A total of twelve anomalies (N, X, L, Y, R, H, K, I, G, E, A, S) were tested. Selected highlights of the chemical results are as follows:
Anomaly N returned values between 1.77Lb/t U3O8 across 3 meter and over 4.7 Lb/t U3O8 across 1.5 meter (this value is over the detection limit and the Company is waiting for a final results from ACME Laboratories). Another sample returned over 3 Lb/t U3O8 over 1.50 meters.
Anomaly X tested by six samples: one sample above 2 Lb/t U3O8, one sample over 1 Lb/t U3O8, three samples returned values over 0.5 Lb/t U3O8 and 1 sample returned a value less than 0.5 Lb/t U3O8. Sample widths varied between 1 and 5 meters.
Anomaly L is characterized by a north-south trending radioactive pegmatitic ridge approximately 200 meters long by 80 meters wide, a total of 18 rock channel samples were collected, six samples returned values over 1 Lb/t U3O8, 7 samples returned values between 0.5 Lb/t U3O8 and 1 Lb/t U3O8 and 5 samples returned values less than 0.5 Lb/t U3O8. Sample widths varied between 1 and 12 meters. (All values (t) refer to short tons)
Anomalies A, E, G, H, K R and Y all returned elevated values of U3O8 and the results of these samples are available on the Company web site (www.entouragemining.com) under Projects-Doran.
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As well the Company reported: A total of 63 rock saw samples were tested of which four samples returned over 2 Lb/t U3O8, 13 samples returned values of more than 1 Lb/t U3O8, 15 samples returned values greater than .5Lb/t U3O8 and 12 samples above .25Lb/t U3O8. A detailed interpretation of the results was completed by the project geologist Mr. Michel Proulx (a “Qualified Person” as that term is defined in NI 43-101) and a drilling program is being designed to test anomalies N, X and L before the end of the season. Since the number of drill targets is high the Company will not be able to drill all of the anomalies in this drilling season. The Company planned to drill the remaining anomalies in early 2007 but deep snow prevented the drilling contractor from accessing the northern parts of the property. Additional holes in the Main Zone, situated in the southern portion of the property, are also planned. The Main Zone was drilled in May 2006.
The 2006 exploration expenditures total $356,198.34 with an additional $106,000 expended in the attempt to drill the “L” anomaly in February 2007. The Company made the $75,000 property payment to the vendor, Fayz Yacoub, on March 8, 2007
On February 13, 2007, the Company entered into a Mineral Property Option agreement with Abbastar, whereby Abbastar could earn up to 70% interest in the Doran property by paying the Company a one time $100,000 CDN payment (paid upon filing of the agreement) and expending $5,000,000 (five million) over four years. The TSX Venture Exchange approved this transaction effective May 30, 2007.
Doran 2007 Drilling
On May 11, 2007, Entourage and Abbastar Holdings announced that Phase One of the second drill program had begun and in all 32 holes were drilled for a total of 3,273.26 meters of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear meters or 75% of the drill-hole length. The results of the Company’s Phase II drilling campaign were reported August 23, 2007. Here is a sample of these results:
Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
Hole H18A (L Anomaly): 7.25m of 0.023% U3O8 (.46lb/t),
Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
Hole H31 (N Anomaly): 0.66 meters of .29%U3O8 (5.8lb/t)(at surface).
The holes were divided into four zones with particular emph
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2008
Commission File Number: 000-50305
ENTOURAGE MINING LTD.
(Translation of registrant's name into English)
614 - 475 Howe Street
Vancouver, B.C. Canada V6C 2B3
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ X ] Form 20-F [ ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [ X ]
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________
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SUBMITTED HEREWITH
Exhibits
99.1 Interim Financial Statements for the Period Ended March 31, 2008
99.2 Management Discussion and Analysis for the Period Ended March 31, 2008
99.3 Form 52-109F2 - Certification of Interim Filings - CEO
99.4 Form 52-109F2 - Certification of Interim Filings - CFO
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Entourage Mining Ltd.
(Registrant)
Date: May 29, 2008 By: /s/ Greg Kennedy
Greg Kennedy
Title: President
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EX-99.1
--------------------------------------------------------------------------------
ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by the management)
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Stated in Canadian Dollars)
March 31, December 31,
2008 2007
$ $
ASSETS
Current
Cash $ 9,995 $ 2,239
Advances and prepaid expenses 11,084 1,084
Goods and services tax and Quebec sales tax recoverable 682 16,484
21,761 19,807
Equipment 2,589 2,763
$ 24,350 $ 22,570
LIABILITIES
Current
Accounts payable and accrued liabilities $ 94,864 $ 39,564
Amounts payable to related parties 163,129 119,653
257,993 159,217
STOCKHOLDERS’ EQUITY
Capital Stock
Authorized:
100,000,000 common voting shares without par value
Issued:
76,831,894 common voting shares (Dec 31, 2007 – 76,831,894) 12,383,714 12,383,714
Additional paid in capital 3,035,356 3,035,356
Deficit accumulated during the exploration stage (15,652,713 ) (15,555,717 )
(233,643 ) (136,647 )
$ 24,350 $ 22,570
Approved by the Board of Directors:
“Gregory F. Kennedy” “Paul Shatzko”
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in Canadian Dollars)
THREE MONTHS ENDED June 16, 1995
(inception)
MARCH 31 To
March 31,
2008 2007 2008
$ $ $
Expenses
Amortization 175 238 5,256
Consulting 15,000 9,000 223,235
Consulting – stock based compensation - 92,900 2,713,558
Financing fee – stock based compensation - - 11,300
Interest expense and bank charges 131 146 13,080
Mineral property acquisition and exploration costs
(recovery) (9,485 ) 208,007 10,981,424
Management fees 75,000 21,500 722,154
Office and sundry 3,937 22,975 452,948
Professional fees 8,068 1,471 339,334
Travel and promotion 4,170 45,945 257,586
Loss Before Taxes (96,996 ) (402,182 ) (15,719,875 )
Deferred tax recovery - - 67,162
Net Loss (96,996 ) (402,182 ) (15,652,713 )
Loss Per Share, basic and diluted (0.00 ) (0.01 )
Weighted Average Common Shares Outstanding 76,981,894 76,135,042
The accompanying notes are an integral part of these consolidated financial statements
--------------------------------------------------------------------------------
ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION OTHER DURING
OF TO ISSUE CONTRIBUTED EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Share issued for cash 5 1 - - - 1
Loss for the period - - - - (38,624 ) (38,624 )
Balance, December 31, 1995 5 1 - - (38,624 ) (38,623 )
Shares issued for cash 9,130,000 276,500 - - - 276,500
Loss for the year - - - - (210,592 ) (210,592 )
Balance, December 31,1996 9,130,005 276,501 - - (249,216 ) 27,285
Loss for the year - - - - (74,529 ) (74,529 )
Balance, December 31, 1997 9,130,005 276,501 - - (323,745 ) (47,244 )
Loss for the year - - - - (60,148 ) (60,148 )
Balance, December 31, 1998 9,130,005 276,501 - - (383,893 ) (107,392 )
Loss for the year - - - - (70,046 ) (70,046 )
Balance, December 31, 1999 9,130,005 276,501 - - (453,939 ) (177,438 )
Loss for the year - - - - (66,855 ) (66,855 )
Balance, December 31, 2000 9,130,005 276,501 - - (520,794 ) (244,293 )
Loss for the year - - - - (58,749 ) (58,749 )
Balance, December 31, 2001 9,130,005 276,501 - - (579,543 ) (303,042 )
Forgiveness of amounts due to related
party - - - 200,671 - 200,671
Loss for the year - - - - (59,428 ) (59,428 )
Balance, December 31, 2002 9,130,005 276,501 - 200,671 (638,971 ) (161,799 )
April 25, 2003 – shares issued for
mineral property 6,000,000 60,000 - - - 60,000
Loss for the year - - - - (319,515 ) (319,515 )
Balance, December 31, 2003 15,130,005 336,501 - 200,671 (958,486 ) (421,314 )
February 5, 2004 – shares issued for
cash at $0.22 per share 997,500 219,450 - - - 219,450
February 5, 2004 – deferred tax
recovery on 108,000 flow-through - (2,376 ) - - - (2,376 )
shares
June 8, 2004 – shares issued for cash
at $0.404 per share 698,000 282,331 - - - 282,331
August 24, 2004 – stock options
exercised at $0.33 per share 100,000 32,983 - - - 32,983
December 31, 2004 – shares issued
for cash at $0.18 per share
inclusive of 132,500 shares as
finders’ fees 2,948,000 510,876 - - - 510,876
August 24, 2004 – shares issued for
mineral property database at $0.39
per share 150,000 58,788 - - - 58,788
September 24, 2004 – shares returned
on cancellation of escrow (3,750,000 ) (7,500 ) - 7,500 - -
Stock based compensation - - - 421,000 - 421,000
Loss for the year - - - - (956,446 ) (956,466 )
Balance, December 31, 2004 16,273,505 1,431,053 - 629,171 (1,914,932 ) 145,292
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION ADDITIONAL DURING
OF TO ISSUE PAID-IN EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Balance, December 31, 2004,
carried forward 16,273,505 1,431,053 - 629,171 (1,914,932 ) 145,292
January 6, 2005, refund for
overpayment in 2004 private -
placement - (3,000 ) - - (3,000 )
March 21, 2005, shares issued for
property acquisition at
U.S. $0.30 per share 125,000 45,604 - - - 45,604
Sept. 22, 2005, flow-through shares
issued at $0.20 per share 295,000 59,000 - - - 59,000
September, 2005, deferred tax
recovery on 295,000 flow-through
shares - (20,119 ) - - (20,119 )
Sept. 22, 2005, units issued at
U.S. $0.15 per unit 550,000 97,152 - - - 97,152
Oct. 7, 2005, units issued at
U.S. $0.11 per unit 1,275,000 165,154 - - - 165,154
Oct.-Dec 2005, shares issued on
exercise of stock options at -
U.S. $0.15 per share 250,000 44,147 - - 44,147
Oct. 2005, shares issued on exercise
of warrants at $0.30 per share 50,000 15,000 - - - 15,000
Nov. 17, 2005, units issued at
U.S. $0.15 per share inclusive of
200,000 shares finders’ fees 5,533,334 944,800 - - - 944,800
Stock based compensation - - - 163,400 - 163,400
Forgiveness of amounts due to
related party - - - 102,327 - 102,327
Obligation to issue shares (Note 4) - - 8,638,667 - 8,638,667
Loss for the year - - - (10,068,841 ) (10,068,841 )
Balance, December 31, 2005 24,351,839 2,778,791 8,638,667 894,898 (11,983,773 ) 328,583
January 3, 2006, shares issued for
property acquisition at a deemed
price of US $0.15 per share 48,888,888 8,638,667 (8,638,667 ) - - -
Jan.-Aug. 2006, shares issued on
exercise of stock options at
US $0.15 per share 410,000 69,317 - - - 69,317
February 2006, shares issued on
exercise of warrants at $0.30
per share 744,500 223,350 - - - 223,350
March 7, 2006, shares issued for
property acquisition at
U.S. $0.36 per share 125,000 51,772 - - - 51,772
May 24, 2006, shares issued for
flow-through private placement
at US $0.25 per share 340,000 93,585 - - - 93,585
Aug.-Nov. 2006, shares issued on
exercise of warrants at US $0.25
per share 955,000 269,149 - - - 269,149
Dec. 2006, shares issued for flow-
through private placement
at $0.23 per share 200,000 46,000 - - - 46,000
Stock based compensation - - - 2,027,384 - 2,027,384
Deferred tax recovery on 540,000
flow-through shares - (44,667 ) - - (44,667 )
Loss for the year - - - - (2,973,161 ) (2,973,161 )
Balance, December 31, 2006 76,015,227 12,125,964 - 2,922,282 (14,956,934 ) 91,312
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in Canadian Dollars)
DEFICIT
ACCUMULATED
NUMBER OBLIGATION ADDITIONAL DURING
OF TO ISSUE PAID-IN EXPLORATION
SHARES AMOUNT SHARES CAPITAL STAGE TOTAL
$ $ $ $ $
Balance, December 31, 2006,
carried forward 76,015,227 12,125,964 - 2,922,282 (14,956,934 ) 91,312
March 12, 2007, shares issued for
Property option payment at
US$0.30 per share deemed price 500,000 175,530 - - - 175,530
March 27, 2007, shares issued for
options exercise at US$0.15 per 50,000 8,760 - - - 8,760
share
March 31, 2007, shares issued for
Pvt. Placement at US$0.15per share
net of finder’s fee of $4,537 266,667 41,647 - - - 41,647
Stock based compensation - - - 113,074 - 113,074
April 3, 2007, shares issued for
Options exercise at US$0.15 per 50,000 8,507 - - - 8,507
share
June 18, 2007, shares issued for debt -
at US$0.20 per share 100,000 23,306 - - 23,306
Loss for the year - - - - (598,783 ) (598,783 )
Balance, December 31, 2007 76,981,894 12,383,714 - 3,035,356 (15,555,717 ) (136,647 )
Loss for the period ended March 31,
2008 - - - - (96,996 ) (96,996 )
Balance, March 31, 2008 76,981,894 12,383,714 - 3,035,356 (15,652,713 ) (233,643 )
The accompanying notes are an integral part of these consolidated financial statements
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in Canadian Dollars)
June 16, 1995
THREE MONTHS ENDED (inception)
MARCH 31 To
2008 2007 March 31, 2008
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (96,996 ) (402,182 ) (15,652,713 )
Adjustments to reconcile net loss to net cash from
operating activities:
Amortization 175 238 5,256
Stock based compensation - 92,900 2,724,858
Shares issued for exploration and mineral property
Acquisition costs - 175,530 9,030,361
Shares issued for debt - - 23,306
Deferred tax recovery - - (67,162 )
Changes in non-cash operating working capital items:
Advances and prepaid expenses (10,000 ) (23,090 ) (11,084 )
Goods and Services Tax and Quebec sales tax recoverable 15,801 26,046 (683 )
Accounts payable and accrued liabilities 55,300 24,363 94,864
Amounts payable to related parties 43,476 (18,067 ) 466,127
NET CASH FLOWS USED IN OPERATING ACTIVITIES 7,756 (124,262 ) (3,386,870 )
CASH FLOWS USED IN INVESTING ACTIVITIES
Equipment - - (7,845 )
NET CASH FLOWS USED IN INVESTING ACTIVITIES - - (7,845 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on sale of common stock - 54,944 3,404,710
NET CASH FLOWS FROM FINANCING ACTIVITIES - 54,944 3,404,710
INCREASE (DECREASE) IN CASH 7,756 (69,318 ) 9,995
CASH, BEGINNING OF PERIOD 2,239 126,611 -
CASH, END OF PERIOD 9,995 57,293 9,995
The accompanying notes are an integral part of these consolidated financial statements.
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
1. BASIS OF PRESENTATION
The interim financial statements of Entourage Mining Ltd. (the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America. The interim financial statements have been prepared following the same accounting policies and methods of computation as the financial statements for the fiscal year ended December 31, 2007. The interim financial statements should be read in conjunction with the financial statements and the notes thereto in the Company’s annual report for the year ended December 31, 2007.
2. DORAN (Quebec) PROPERTY
i) By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties in south-central Quebec (the “Doran Property”) in exchange for cash payments of $220,000, the issuance of 750,000 common shares and the expenditure of $1,000,000 on the Doran Property over three years, as follows:
a. $35,000 and 125,000 common shares within ten business days of the date of approval of the agreement (paid and issued);
b. $35,000 and 125,000 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);
c. $75,000 (paid in 2007) and 250,000 common shares on or before March 15, 2007 (issued in 2007- Note 2 iv)); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. (“Abbastar”) – Note 2 iii)); and
d. $75,000 (paid in 2008 by Abbastar – Note 2 v)) and 250,000 common shares on or before March 15, 2008 (issued in 2007 – Note 2 iv)); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar).
ii) The property interest is subject to a 2.5% NSR. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.
iii) On February 13, 2007 the Company entered into an option agreement (the “Option”) with Abbastar Holdings Inc. (“Abbastar”), a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a one time cash payment of $100,000 CDN (received) to the Company and expending $5,000,000 on the Doran Property over 4 years (The Company retains the right to purchase the Net Smelter Royalty on the Doran Property). The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:
20% interest by expending $500,000 on or before February 13, 2008 (spent);
15% additional interest by expending an additional $1,000,000 on or before February 13, 2009;
15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.
iv) In consideration for the Doran Property vendor consenting to the Option Agreement with Abbastar, the Company issued the balance of shares (500,000) due to the Doran Property vendor on March 12, 2007.
v) On March 15, 2008, after the final payment of $75,000 was made by Abbastar on behalf of the Company, the Company became the owner of the Doran Property with 20% interest earned by Abbastar by spending $500,000 on the property.
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
3. CAPITAL STOCK
a) Issued Shares
There were no share transactions during the three months ended March 31, 2008. There were 76,831,894 shares issued and outstanding on March 31, 2008.
b) Stock Options
During the three months ended March 31, 2008 no stock options were granted, repriced, exercised or expired.
The following table summarizes information concerning outstanding and exercisable common stock options under the Plan at March 31, 2007:
Remaining Weighted Number of Weighted
Range of Contractual Average Options Average
Exercise Options Life Exercise Currently Exercise Price
Prices Outstanding (in years) Price Exercisable
U.S. $0.15
- U.S. $0.25 6,390,000 0.84 U.S. $0.225 6,390,000 U.S. $0.225
c) Warrants
During the three months ended March 31, 2008, no new warrants were issued nor any warrants were exercised. However, 133,333 warrants with an exercise price of US$0.25 per share expired.
The following table lists the common share warrants outstanding at March 31, 2008. Each warrant is exchangeable for one common share.
Warrants Exercise Expiry
Outstanding Price Date
170,000 U.S. $0.30 May 23, 2008
5,333,334 U.S. $0.25 November 17, 2008
100,000 CDN $0.35 December 27, 2008
5,603,334
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ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2008 AND 2007
(Stated in Canadian Dollars)
4. RELATED PARTY TRANSACTIONS
During the period ended March 31, 2008, the Company incurred $75,000 (2007 – $21,500) for management fees to directors and officers of the Company.
Amounts payable to related parties at March 31, 2008 of $163,129 (December 31, 2007 - $11,285) is to directors.
The transactions with related parties have been in the normal course of operations and, in management’s opinion, undertaken with the same terms and conditions as transactions with unrelated parties.
5. CONTINGENCY
On August 27, 2007, in the Supreme Court of British Columbia, the Company filed a Writ of Summons and Statement of Claim against CMKM and 1010 seeking to have the Court put aside the Mineral Property Option and Assignment Agreements (the “Agreements”) among the parties dated October 20, 2005 for Hatchet and Smeaton properties.
As consideration for the Agreements the Company had issued 48,888,888 shares of common stock (the “Consideration Shares”) of the Company capital to acquire a 50% interest in certain mineral claims prospective for uranium (Hatchet Lake) and an 80% interest in certain mineral claims prospective for diamonds (Smeaton Property) all located in the Province of Saskatchewan.
Of the 48,888,888 Consideration shares, 15,000,000 shares were paid for the Hatchet Lake property and 33,888,888 shares were paid for the Smeaton property. Furthermore 3,888,888 shares of the Smeaton Consideration shares were paid to the property vendor, 1010 and the remaining 45,000,000 shares were paid to CMKM with the proviso that these shares were to be distributed to the CMKM shareholders.
In seeking to have the Agreements set aside, the Company claims that CMKM has breached the terms of the Agreements by not distributing the 45,000,000 shares to the CMKM shareholders as required by the Agreements; as well, the Company is seeking to have 1010 return the 3,888,888 shares as the Company contends that 1010 is in breach by not completing work on the Smeaton property in a workmanlike fashion by providing preliminary budget submissions, daily drill records and general field information as is the industry standard. As well, the Company contends that 1010 failed to provide documentation requested by the Company to have a National Instrument 43-101 compliant report completed on the Smeaton property.
The Company has filed all required documentation with the courts for the process of examination for discovery but has not received the same from CMKM or 1010. The Company has requested of both defendants appropriate dates for trial but no response is forthcoming at the time of this report.
The outcome of the above legal proceedings is not presently determinable, and the amount of the ultimate recovery, if any, cannot be reasonably estimated at this time so no accrual has been recorded in the current period or the past fiscal year.
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EX-99.2
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ENTOURAGE MINING LTD.
Management Discussion and Analysis
Interim Report May 28, 2008
This Management Discussion and Analysis of Entourage Mining Ltd. (the “Company”) provides analysis of the Company’s financial results the three month period ended March 31, 2008. The following information should be read in conjunction with the accompanying un-audited financial statements and the notes to the un-audited financial statements.
1.1 Date of Report May 28, 2008
1.2 Overall Performance
Nature of Business and Overall Performance
The Company’s shares have been publicly traded since February 2nd, 2004 when the Company was called for trading on the Over-the-Counter Bulletin Board in the United States under the symbol ETGMF. The Company is a reporting issuer in both the United States and in British Columbia.
Entourage Mining Ltd. (“Entourage”, the “Company” or “We”) was originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd. On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.
We have one subsidiary company, Entourage USA Inc., domiciled in Carson City, Nevada. This subsidiary is used to acquire additional exploration properties in the United States of America.
We are a natural resource company engaged in the acquisition and exploration of natural resource properties. We commenced operations in 1996 and currently has one mineral property option agreement:
to acquire an 80% interest in 20 prospective diamond exploration claims situated in the Forte a la Corne/Smeaton area of central Saskatchewan; and
an unencumbered 80%interest:
in 47 claim uranium prospective claim blocks in Costebelle Township known as the Doran property;
and we intend to seek and acquire additional properties worthy of exploration and development.
Entourage is an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of the properties, and further exploration will be required before a final evaluation as to the economic and legal feasibility of all of our claims is determined.
1.2.1 Mineral Properties: Background and Agreements
1.2.1(a) Hatchet Lake Properties (Abandoned)
By agreement dated April 7, 2005 as amended October 20, 2005, the Company obtained an option to acquire up to a 50% right in a certain prospective mineral property located in the Athabaska Basin area of Saskatchewan (the “Hatchet Lake Property”). 40% of the Company’s interest in the Hatchet Lake property was acquired by way of an October 20, 2005 assignment agreement among Entourage Mining Ltd., United Uranium Corp. (formerly United Carina Resources Corp.) and CMKM Diamonds Inc. (“CMKM”), a now defunct OTCBB Pink Sheet issuer.
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As a result of this assignment agreement, and the subsequent “New Hatchet Lake Option Agreement”, also dated October 20, 2005, the Company had acquired a right to earn a 50% interest in the Hatchet Lake property.
As consideration for the assignment agreement, the Company agreed to issue 15,000,000 of its common shares (issued January 3, 2006) to the CMKM shareholders. The 15,000,000 shares were to be distributed to the CMKM shareholders, but these shares have not been distributed at the time of this report and there is no indication when or if this distribution may occur.
On June 30th, 2007, United Uranium Corp. extended a July 1, 2007 $300,000 payment deadline, to be paid by the Company, until September 15, 2007. No summer or fall 2007 work program was proposed by United Uranium Corp. so the Company decided that the scant uranium values of two previous abbreviated drill programs (7 ½ drill holes over two years) did not warrant the $300,000 payment and the Company abandoned the Hatchet Lake Uranium prospect.
As well, since CMKM failed to distribute the 45,000,000 (15,000,000 for Hatchet property and 30,000,000 for Smeaton property) shares and because 101047025 Saskatchewan Ltd. (“1010”), in the opinion of the Company, failed to operate the Smeaton property in an operator like fashion and failed to comply with the Company’s various requests to have all previous claim materials sent to the Company, on August 27, 2007, the Company filed, in the Supreme Court of British Columbia, a Writ of Summons and Statement of Claim against 1010and CMKM seeking to have the court set aside the October 20, 2005 Mineral Property Option and Assignment Agreements for Hatchet and Smeaton property between the Company and the Defendants (collectively, the “Contracts”) and requesting that the defendants return the 45,000,000 shares (the “Shares”) paid to CMKM and the 3,888,888 shares paid to 1010 to consummate these agreements. This matter has yet to be resolved in the Courts.
1.2.1(b) Nevada Property (Abandoned)
In June 2004, we announced that we signed a definitive agreement with Goodsprings Development Corp. (“Goodsprings”), a Nevada based corporation, whereby we may earn a 100% interest in the GBW project in Esmeralda County, Nevada commonly known as the “Black Warrior Project” in the Company’s other disclosure documents. The agreement between Goodsprings and Entourage is a sub-lease agreement to the original property agreement between Goodsprings and Apex Deep Mines, also a Nevada based company.
All payments required under the Entourage-Goodsprings Agreement were paid in a timely manner. The Company drilled 11 holes on the Black Warrior project. The initial 9 holes did not find anomalous gold or silver showings however the final two holes intersected 30 feet of slightly anomalous gold values ranging up to .435 g/t. There was $76,670.59 exploration work done on the Black Warrior Project in 2006 but in November 2006 the Company informed Goodsprings that the Company was relinquishing its interest in the Black Warrior project.
On December 6, 2006, the Company advanced Goodsprings $7,500 to reclaim the property and to remediate it to its natural state. Some time in 2007, after the remediated areas pass the scrutiny of the Bureau of Land Management (the “BLM”) the Company will be reimbursed a portion of the $11,400 reclamation bond posted by the Company in May 2005.
As well, the Company has been informed by Goodsprings that less than $7,500 was required to remediate the property but both parties agreed that any residual would remain with Goodsprings until the BLM refunded the reclamation bond. The BLM reported to the Company in May 2007 that the Company was eligible to receive 60% of its remediation deposit by making application and the Company has done so. The deposit has not been received to date. The BLM has indicated that the full deposit refund may take five years for approval.
1.2.1(c) Smeaton/Forte a la Corne Property
On October 20, 2005, the Company announced a series of property option (earn-in interest) agreements (the “Saskatchewan Property transactions”) with CMKM, United Carina Resources Corp. and 1010 (a private company),
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whereby the Company assumed the earn-in rights to properties optioned to CMKM. CMKM was about to default on its option agreements and the Company realized an opportunity to acquire prospective diamond and uranium prospects in Saskatchewan. One such property is termed the Smeaton/Forte a la Corne/Green Lake Diamond prospect (the “Smeaton Property”).
Upon signing the Smeaton Property consisted of a 1.5 million acre parcel of claims. Previous to the Entourage-CMKM agreements, CMKM and 1010 had flown an airborne geophysical survey of the Smeaton Properties. The Company’s geologist, James Turner, P. Geo., reviewed the results of the survey and reported to the Company that 20 priority diamond targets existed on the parcel, but in light of the $12 hectare maintenance fees payable, certain of the claims should be allowed to lapse for lack of potential. The present parcel remains at approximately 22 claims.
In December 2005, the Operator, without prior consent of the Company, commenced drilling on a priority target on the property. This drilling encountered kimberlitic rock at approximately 530 feet and continued in kimberlite for over 300 feet eventually ending in dolomites at about 900 feet. An independent kimberlite expert, Harrison Cookenboo, (PhD, P. Geo.), a qualified person, reviewed initial samples and concluded:
“both pieces of core are in most respects closely similar to macro-crystic serpentine calcite kimberlite, but with some atypical features for kimberlite “sensu-stricto”, and suggests that the examined samples are best referred to as kimberlite or a closely related “kimberlitic” rock type with the potential for carrying diamonds”.
On January 10, 2006, the Operator informed the Company that the first drill target (Target: C-Gpp) on the Smeaton Property had been completed after encountering difficult drilling 1000 feet into the target. The hole finished in dolomites and the Operator decided to drill the second hole 30 meters to the northwest where geo-physical data implied that the center of the kimberlite may be situated.
The kimberlitic rock from the first drill hole was sent to Saskatchewan Research Council for caustic fusion and micro-diamond analysis. The kimberltic rock did not yield any micro-diamonds however chromites were found in the drill core. In 2005, the Company expended $200,630.00 on the Smeaton prospect; the Smeaton project has 20 priority targets to be investigated and as of the date of this report has examined four of these targets.
There has been no additional work done on the Smeaton claims subsequent to the Company’s drilling of January 2006. The Company has requested of 1010, all information on the Smeaton claims so that a compliant NI 43-101 Technical Report could be commissioned for the Smeaton claims however 1010 has not responded to these requests. The Company considers these claims as non-operational until such a report can be completed. Furthermore 1010 has never consulted the Company before commencing drilling on the Smeaton properties and no budgets or plans were discussed before exploration work was carried out.
In early 2006, the Company advised 1010, which acts as the Operator of the property, that it would not participate in any further exploration by 1010 unless the exploration was conducted in accordance with NI 43-101 recommendations and mining best practices which to date have not been met. 1010 nevertheless proceeded to perform work on the property and, on March 26, 2006, sent invoices to the Company totaling approximately $280,122.53.
The Company believes that it is not liable, under the terms of the Agreement or in any other way, for these invoices and has so advised 1010, most recently in its letter to 1010 dated April 27, 2007. To date, no collections or other proceedings have been commenced by 1010.
There is, however, the risk that 1010 might commence collections or other proceedings. In that event, while the Company would vigorously defend its position that it is not liable in any way for funds claimed pursuant to the invoices, there is the risk that a proceeding by 1010 could be successful. The Company cannot assess the probability of that risk and accordingly, the likelihood of loss, if any, is presently not determinable.
The Company issued 33,888,888 shares of the Company stock as consideration for the purchase of the Smeaton claims. 30,000,000 (thirty million) of these shares were to be distributed to the CMKM shareholders but these shares have not been distributed at this time and there is no indication when, or if, these shares will be distributed.
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Since CMKM failed to distribute the 45,000,000 (15,000,000 for Hatchet property and 30,000,000 for Smeaton property) consideration shares and because 1010, in the opinion of the Company, failed to operate the property in an operator like fashion and failed to comply with the Company’s various requests to have all previous claim materials sent to the Company, on August 27, 2007, the Company filed, in the Supreme Court of British Columbia, a Writ of Summons and Statement of Claim against 1010 and CMKM seeking to have the court set aside the October 25, 2005 Mineral Property Option and Assignment Agreements between the Company and the Defendants (collectively, the “Contracts”) and requesting that the defendants return the 45,000,000 shares (the “Shares”) paid to CMKM and the 3,888,888 shares paid to 1010 to consummate these agreements. This matter has yet to be resolved in the Courts.
1.2(d) The Doran (Quebec) Uranium Prospect
In March of 2005, the Company entered into an option agreement with Fayz Yacoub, a professional geologist and businessman from Vancouver, whereby the Company could acquire 44 claim blocks prospective for uranium situated in Costebelle Township in eastern Quebec. Subsequent to entering into the property agreement, 3 additional claims blocks have been added to the project.
The Doran Uranium property consists of 47-contiguous mineral claims (polygons) covering approximately 2473.3 hectares in the Baie Johan Beetz area of Costebelle Township, Quebec. The claim block is centered at GPS 548009 E and 5572265 N.
The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometers west of Aguanish, approximately 109 kilometers east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometers to the north.
The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.
The topography of the property for the most part is rolling hills having a maximum relief of 100 meters with elevation ranging from sea level to 100 meters. All mineralized areas of interest are located comfortably above sea and river levels..
Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled (1978) 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton uranium (U3 O8).
Entourage made a down payment of $35,000 to acquire the option and agreed to a work commitment of $200,000 of exploration in the first year of the Doran Uranium Property agreement.
The Company expended $245,591.00 in exploration work on the property in fiscal year 2005 and a compliant report by Eric Ostensoe (P. Geo,) was commissioned. In late February 2006, Mr. Ostensoe completed his report and the Company posted the report on Sedar and Edgar (March 09, 2006) as well as the Company website. In April 2007 an updated NI 43-101 Technical Report was prepared by Michel Proulx, M. Sc., P. Geo and Michel Boilly, Ph D, P Geo, both Qualified Persons as that term is described in National Instrument 43-101, and this report was filed on Sedar by Abbastar Holdings Ltd. on May 2, 2007.
In May 2006, the Company advanced to On Track Explorations, the Doran project operator, $150,000CDN to commence drilling and ground exploration work as outlined in Mr. Ostensoe’s report. Drilling commenced thereafter on the “Main Zone” of the Doran property. The Company’s option agreement on the Doran property requires that the Company expend $300,000 in year two of the agreement.
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The Company spent $346,166 on drilling and exploration in fiscal 2006 and reported drill results on July 20, 2006. As well, in July the Government of Quebec reimbursed the Company $57,745 as part of the Province’s mining exploration incentive program. This rebate was based upon the Company’s 2005 drilling exploration expenses.
In early February 2007 the Company contracted the services of Forages La Virole to commence drilling on the “L” anomaly situated in the north of the Doran property but four to six foot snow drifts prevented the drilling contractor from reaching the “L” anomaly so the work program was cancelled.
On February 13, 2007, the Company entered into a Mineral Property Option agreement with Abbastar Holdings Ltd. (Abbastar), a Vancouver based TSX Venture listed company, whereby Abbastar could earn up to 70% interest in the Doran property by paying the Company a one time $100,000 CDN payment (paid) and expending $5,000,000 (five million) over four years. The TSX Venture Exchange approved this transaction on May 30, 2007.
On May 11, 2007, the Company and Abbastar announced that drilling had commenced on the “L” anomaly of the Doran project and in all 32 holes were drilled for a total of 3,273.26 meters of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear meters or 75% of the drill hole length. The results of the Company’s Phase II drilling campaign were reported August 23, 2007. Here is a sample of these results:
Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
Hole H18A (L Anomaly): 7.25m of 0.023% U3O8 (.46lb/t),
Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
Hole H31 (N Anomaly): 0.66 meters of .29%U3O8 (5.8lb/t)(at surface).
The holes were divided into four zones with particular emphasis on the “L” zone where 18 drill holes were spotted to evaluate the lateral and depth extensions of this zone. The first four drill holes (17,17A, 18, 18A) drilled at different azimuths and plunge angles and set up to test the L19 anomaly, recorded encouraging near surface results including 16.99 meters (55 feet) of .87lb/short ton U3O8 and 24.1 meters (79 feet) of .66lb/ton U3O8, as well, holes 27 and 27A, intersected three and four pegmatites respectively. The first pegmatite, H27, returned .66lb/ton U3O8 over 5.8 meters. The L zone remains open in all directions while lateral extension and depth extension are unknown. Best interval drill results are posted on the Company website.
The 2007 drilling program confirmed the existence of uranium mineralization in the northeast grid (L, N, X and Y). Findings corroborated the channel sample results of 2006 that showed mineralization to be non-uniformly distributed among the pegmatites and even within each pegmatite. Drill holes revealed that the thickness of the radioactive pegmatites range from one meter to roughly 20 meters along holes and are presented as sub-parallel multiple slabs slightly dipping to the west and separated from each other by sterile rocks. All pegmatites have been intersected at a maximum of 90 vertical meters from surface.
To date, the Doran Showing, located at the south of Doran (drilled in 2006 & Fall 2007) and the North East grid have both been successfully drilled in confirming the presence of a series of sub-parallel uranium bearing pegmatites.
Senior Project Geologist, Michel Proulx M. Sc. (P. Geo and a qualified person) recommended follow up drilling on the Doran Showing (Phase III) as well as an additional 4,000 meters of drilling on the L zone to gain a better understanding of the behaviour of the uranium-bearing pegmatite bodies, the structural geology context and of uranium phase minerals.
The fall 2007 drilling campaign was completed in early November. This campaign was designed to further delineate the Doran Showing where the Company drilled in the summer of 2006. The Doran Showing consists of four distinct pegmatite-bearing structures: The Main Zone, the North End Zone, Dyke Zone and Hot Spot.
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Results from this drill campaign were announced on February 4, 2008. In total over 6000 meters have been completed on the Doran property by the Company and Abbastar and the companies are encouraged that the goal of delineating a Rossing type (Namibia) uranium deposit may be realized. More drilling on the “L” will be completed in the spring of 2008.
Competitive factors in the market for mineral resources
The Company is prospecting for uranium in Quebec. It is anticipated that uranium generated power will become more popular in the decades to come as rising oil prices and political strife in the world’s oil producing regions continue. In 2005, the annual spot volume of U3O8 reached 35 million pounds and production of uranium, if any, by the Company would have no significant effect on the price of uranium.
The market for diamonds, for which the Company’s Smeaton Lake properties are prospective, is primarily managed by cartel. However, although the CSO (the Central Selling Organization) still distributes and markets the majority of the world's rough production, the introduction of new sources of rough (Australia, Russia, Canada, and parts of Africa) has considerably changed the controlled single market system. Any production of diamonds by the Company would likely have no measurable effect on the world prices.
Applicable Regulations and Permits
The Company has obtained the necessary work, environmental and regulatory permits required to undertake the exploration programs it is undertaking on its mineral properties. The Company anticipates that, assuming further planned work will be done, there will be no difficulties in obtaining necessary work, environmental and regulatory permits for further exploration work. The jurisdictions wherein our properties are located have long histories in mining exploration and are friendly and accommodating to mineral exploration.
Capital Expenditures and Exploration Programs
(a) Hatchet Lake Uranium Prospect (Abandoned)
2007 Drilling Update
On March 17, 2007 the companies began stage two of the drilling program at Hatchet Lake. This phase is to consist of 8 drill holes and is designed to continue where the 2006 program was terminated. Three and one half holes were drilled on the project in 2007 before warm weather set in and drilling was halted..
The Company advanced $320,000CDN in option and work commitments. The Company requested and received an extension until July 1st, 2006 of an additional $300,000 payment to United Carina that was due on February 1st, 2006 and a further extension to September 15, 2007 was granted by the United Uranium Corp. (formerly United Carina). However, because uranium values encountered in the 2006 and 2007 drilling campaigns were negligible the Company decided to drop the Hatchet Lake properties and the Company did not advance the outstanding $300,000 payable on September 15, 2007 and the project was abandoned.
b) Black Warrior Exploration Activities (Abandoned)
In November 2006, with slight anomalous gold showings from an 11-hole drill program, the Company decided to abandon the Black Warrior project. The was no exploration completed in 2006 in advance of the Company’s decision to abandon the Black Warrior project
c) Smeaton/Forte a la Corne Exploration Activities
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The Smeaton/Forte a la Corne properties were acquired by way of an option agreement between the Company and 1010. The original claim blocks consisted of 1087 claims encompassing approximately 1.5 million acres situated in the Smeaton, Forte a la Corne, Candle Lake areas of central Saskatchewan. At the present time, the Company holds approximately 22 of these claims and after repeated requests to have all previous work records of the claims forwarded to the Company, the Company decided to initiate legal proceeding to have the consideration for the claims returned to the Company in exchange for the Company returning the claims to 1010.
There has been no work completed on the claims since the spring of 2006 wherein the lack of communication between the Company and the Operator/Vendor precluded additional monies being expended on the property until National Instrument 43-101 compliance of the claims was completed. This compliance was not forthcoming.
d) Doran Uranium Project Exploration Activities
2005 Doran Exploration
In fiscal year 2005, the Company expended a total of $245,591 on exploration of the Doran Uranium Project and, in December of 2005, filed an NI 43-101 geological report on the SEDAR system regarding this Project.
The results of exploration in fiscal year 2005 were encouraging, as detailed in the report. The report recommended the following for fiscal year 2006:
1. A technical survey and sampling program of $59,100;
2. A Phase I diamond drilling program of shallow drill holes costing $141,795; and
3. A Phase II program of work, the details of which are contingent upon the results of (1) and (2) above, of approximately $300,000.
2006 Doran Exploration
The 2006 Doran exploration season consisted of channel sampling on the northern sections of the property and a 16-hole drill program to test the Main Zone situated in the southern half of the property. The above recommendations were completed in the spring of 2006. The work included line cutting and trench sampling of the North Zone (“G zone) as well as additional anomalies “E”, “I”, “L”, “N” and "X”.
On August 30, 2006 the Company reported: The comprehensive rock saw channel sampling program was successful in identifying previously unrecognized uranium targets. A total of twelve anomalies (N, X, L, Y, R, H, K, I, G, E, A, S) were tested. Selected highlights of the chemical results are as follows:
Anomaly N returned values between 1.77Lb/t U3O8 across 3 meter and over 4.7 Lb/t U3O8 across 1.5 meter (this value is over the detection limit and the Company is waiting for a final results from ACME Laboratories). Another sample returned over 3 Lb/t U3O8 over 1.50 meters.
Anomaly X tested by six samples: one sample above 2 Lb/t U3O8, one sample over 1 Lb/t U3O8, three samples returned values over 0.5 Lb/t U3O8 and 1 sample returned a value less than 0.5 Lb/t U3O8. Sample widths varied between 1 and 5 meters.
Anomaly L is characterized by a north-south trending radioactive pegmatitic ridge approximately 200 meters long by 80 meters wide, a total of 18 rock channel samples were collected, six samples returned values over 1 Lb/t U3O8, 7 samples returned values between 0.5 Lb/t U3O8 and 1 Lb/t U3O8 and 5 samples returned values less than 0.5 Lb/t U3O8. Sample widths varied between 1 and 12 meters. (All values (t) refer to short tons)
Anomalies A, E, G, H, K R and Y all returned elevated values of U3O8 and the results of these samples are available on the Company web site (www.entouragemining.com) under Projects-Doran.
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As well the Company reported: A total of 63 rock saw samples were tested of which four samples returned over 2 Lb/t U3O8, 13 samples returned values of more than 1 Lb/t U3O8, 15 samples returned values greater than .5Lb/t U3O8 and 12 samples above .25Lb/t U3O8. A detailed interpretation of the results was completed by the project geologist Mr. Michel Proulx (a “Qualified Person” as that term is defined in NI 43-101) and a drilling program is being designed to test anomalies N, X and L before the end of the season. Since the number of drill targets is high the Company will not be able to drill all of the anomalies in this drilling season. The Company planned to drill the remaining anomalies in early 2007 but deep snow prevented the drilling contractor from accessing the northern parts of the property. Additional holes in the Main Zone, situated in the southern portion of the property, are also planned. The Main Zone was drilled in May 2006.
The 2006 exploration expenditures total $356,198.34 with an additional $106,000 expended in the attempt to drill the “L” anomaly in February 2007. The Company made the $75,000 property payment to the vendor, Fayz Yacoub, on March 8, 2007
On February 13, 2007, the Company entered into a Mineral Property Option agreement with Abbastar, whereby Abbastar could earn up to 70% interest in the Doran property by paying the Company a one time $100,000 CDN payment (paid upon filing of the agreement) and expending $5,000,000 (five million) over four years. The TSX Venture Exchange approved this transaction effective May 30, 2007.
Doran 2007 Drilling
On May 11, 2007, Entourage and Abbastar Holdings announced that Phase One of the second drill program had begun and in all 32 holes were drilled for a total of 3,273.26 meters of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear meters or 75% of the drill-hole length. The results of the Company’s Phase II drilling campaign were reported August 23, 2007. Here is a sample of these results:
Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
Hole H18A (L Anomaly): 7.25m of 0.023% U3O8 (.46lb/t),
Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
Hole H31 (N Anomaly): 0.66 meters of .29%U3O8 (5.8lb/t)(at surface).
The holes were divided into four zones with particular emph