-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TOAJxeNZjEW2in7yS4znjwwX/m/3gdSV9voLPPjzjpIG0yXc28VwiAIIATUmhzt9 pw+5ZgZt/hidC/tZgd78lQ== 0001217160-09-000371.txt : 20091222 0001217160-09-000371.hdr.sgml : 20091222 20091221205542 ACCESSION NUMBER: 0001217160-09-000371 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20091130 FILED AS OF DATE: 20091222 DATE AS OF CHANGE: 20091221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Portal Resources Ltd. CENTRAL INDEX KEY: 0001326910 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51352 FILM NUMBER: 091253542 BUSINESS ADDRESS: STREET 1: SUITE 750, 625 HOWE ST. CITY: VANCOUVER STATE: A1 ZIP: V6C 2T6 BUSINESS PHONE: 604-629-1929 MAIL ADDRESS: STREET 1: SUITE 750, 625 HOWE ST. CITY: VANCOUVER STATE: A1 ZIP: V6C 2T6 6-K 1 portalnov3020096k.htm PORTAL FORM 6-K FOR NOVEMBER 2009 Portal Form 6-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

            

FORM 6-K


REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934


For the Period   November 2009            File No.    0-51352


PORTAL RESOURCES LTD.

(Name of Registrant)


Suite 750, 625 Howe Street, Vancouver, British Columbia, Canada, V6C 2T6

(Address of principal executive offices)


1.

Interim Financial Statements (unaudited) for the 3 month period ended September 30, 2009

2.

Management Discussion and Analysis for the period ended September 30, 2009.

3.

Certification of CEO

4.

Certification of CFO



Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.     


FORM 20-F XXX

FORM 40-F ____


Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.     

Yes _____

No XXX

SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.


Portal Resources Ltd.

(Registrant)


Dated:  November 30, 2009

By:   /s/  David Hottman

David Hottman

President and CEO



EX-99.1 2 pdosep09fs.htm INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2009 Interim Financial Statements














PORTAL RESOURCES LTD.









Consolidated Financial Statements

(Unaudited)


For the three months ended

September 30, 2009




(An exploration stage company)












Portal Resources Ltd.

 

Trading Symbol: PDO

Head Office: Suite 750 – 625 Howe Street

 

Telephone:  604-629-1929

Vancouver, British Columbia, Canada V6C 2T6

 

Facsimile:   604-629-1930







NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS



Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.



The accompanying unaudited interim consolidated financial statements of Portal Resources Ltd. have been prepared by and are the responsibility of the Company’s management.



The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.





PORTAL RESOURCES LTD.

CONSOLIDATED BALANCE SHEETS

(stated in Canadian dollars)

(Unaudited – prepared by management)


 

September 30,

2009

(Unaudited)

 

June 30,

2009

(Audited)

    

ASSETS

   

Current

   

   Cash and cash equivalents

$           168,723

 

$             248,572

   Short-term investments (Note 3)

1,074,925

 

1,255,956

   Marketable securities (Note 4)

41,816

 

34,875

   Amounts receivable

5,935

 

4,395

   Prepaid expenses

30,036

 

21,916

 

1,321,435

 

1,565,714

    

Equipment (Note 5)

35,977

 

38,839

Oil and gas properties (Note 7)

389,815

 

361,437

    
 

$       1,747,227

 

$          1,965,990

    

LIABILITIES

   
    

Current

   

   Accounts payable and accrued liabilities

$            43,232

 

$               72,092

    
    

SHAREHOLDERS’ EQUITY

   
    

Share capital (Note 8)

$     14,760,161

 

$        14,760,161

Contributed surplus (Note 8)

858,785

 

805,151

Deficit

(13,914,951)

 

(13,671,414)

 

1,703,995

 

1,893,898

    

   

$       1,747,227

 

$          1,965,990


Nature of operations (Note 1)

Commitments (Note 9)


         Approved by the Board of Directors:


“David Hottman”

 

“Mark Brown”

David Hottman, Director

 

Mark Brown, Director


See notes to consolidated financial statements





PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

For the three months ended September 30,

 (stated in Canadian dollars)

(Unaudited – prepared by management)


 

2009

 

2008

    

Expenses

   

   Accounting and audit

$       5,250

 

$           10,727

   Amortization

3,717

 

6,796

   Bank charges and interest

526

 

2,408

   Consulting and management fees

24,750

 

24,702

   Director fees

7,833

 

-

   Foreign asset tax

-

 

342

   Foreign exchange

8,240

 

1,626

   Investor relations

3,784

 

73,551

   Legal

12,422

 

34,462

   Office and miscellaneous

23,767

 

41,341

   Rent

25,384

 

16,606

   Project investigation

33,487

 

38,485

   Salaries and benefits

46,576

 

267,828

   Stock-based compensation (Note 8)

53,634

 

1,800

   Travel

4,121

 

28,103

   Transfer agent and filing fees

752

 

726

   Valuation allowance for foreign value added tax credit (IVA)

-

 

1,673

    
 

254,243

 

529,647

    

Other Items

   

   Interest income

(3,765)

 

(24,968)

   Write-off of unproven mineral rights

-

 

3,438

   Unrealized gain on marketable securities (Note 4)

(6,941)

 

-

 

(10,706)

 

(21,530)

    

Net loss for the period

$   (243,537)

 

$      (529,647)

    

Loss per share (Note 2)

$         (0.01)

 

$            (0.02)

    

Weighted average number of common

  shares outstanding


29,651,539

 


29,651,539

    






PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 (stated in Canadian dollars)


 


Number of

Shares


Amount


Shares

Subscribed


Contributed

Surplus


Deficit

Total

Shareholders

Equity

       

Balance at June 30, 2007 (Audited)

21,759,539

9,823,918

59,800

636,998

(4,016,745)

6,503,971

Share issues:

      

Private placement

7,887,000

5,126,550

(59,800)

-

-

5,066,750

Exercise of options

5,000

2,600

-

-

-

2,600

Fair market value of stock options exercised

-

1,402

-

(1,402)

-

-

Stock based compensation

-

-

-

147,744

-

147,744

Finders fees

-

(151,997)

-

-

-

(151,997)

Share issue costs

-

(42,312)

-

-

-

(42,312)

Net loss and comprehensive income

-

-

-

-

(3,288,433)

(3,288,433)

       

Balance June 30, 2008 (Audited)

29,651,539

14,760,161

-

783,340

(7,305,178)

8,238,323

Share issues:

      

   Stock based compensation

-

-

-

21,811

-

21,811

Net loss and comprehensive income

-

-

-

-

(6,366,236)

(6,366,236)

       

Balance June 30, 2009 (Audited)

29,651,539

$  14,760,161

$              -

$    805,151

$ (13,671,414)

$  1,893,898

Share issues:

      

   Stock-based compensation

-

-

-

53,634

-

53,634

Net loss and comprehensive income

-

-

-

-

(243,537)

(243,537)

       

Balance, September 30, 2009 (Unaudited)

29,651,539

14,760,161

-

858,785

(13,914,951)

1,703,995









PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended September 30,

(stated in Canadian dollars)

(Unaudited – prepared by management)


 

2009

 

2008

    
    

Cash provided by (used for):

   

Operating Activities

   

  Net loss for the period

$     (243,537)

 

$         (529,647)

  Items not involving cash:

   

     Stock-based compensation

53,634

 

1,800

     Amortization

3,717

 

6,796

     Unrealized gain on marketable securities

(6,941)

 

-

    
 

(193,127)

 

(521,051)

    

Changes in non-cash working capital:

   

  Amounts receivable

(1,540)

 

100,602

  Prepaid expenses

(8,120)

 

66,733

  Accounts payable and accrued liabilities

(28,860)

 

129,686

    
 

(231,647)

 

(224,030)

    

Investing Activities

   

  Purchase of equipment and software

(855)

 

-

  Short-term investments

181,031

 

490,934

  Expenditures on unproven mineral rights

-

 

        (220,507)

  Expenditures on oil and gas properties

(28,378)

 

-

    
 

151,798

 

        270,427

    

Net increase (decrease) in cash and cash

equivalents


(79,849)

 


46,397

Cash and cash equivalents – beginning of

period


248,572

 


187,551

    

Cash and cash equivalents– end of period

$      168,723

 

$        233,948

    
    

Supplementary disclosure of non-cash Investing

and Financing Activities:

   

Deferred expenditures on unproven mineral rights

included in accounts payable


$                 -



    $        114,812







PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF DEFERRED EXPENDITURES ON UNPROVEN MINERAL RIGHTS

For the years ended June 30, 2008 and 2009 (audited), and the three months ended September 30, 2009 (unaudited)

(stated in Canadian dollars)


 


Arroyo Verde

(Argentina)


San Rafael

(Argentina)

La Pampa Uranium

(Argentina)

Tiger Uranium

(Argentina)

Slick Rock Uranium

(USA)

Golden Snow,

Fish and CPG

(USA)



Total

        

Total as at June 30, 2007

3,839,209

1,477,757

171,636

61,239

133,518

-

5,683,359

        

Land acquisition & holding costs

108,687

(27,301)

11,523

-

16,873

-

109,782

Environment

3,611

206

4,778

1,894

21,907

-

32,396

Geology

155,866

101,517

415,886

6,416

62,353

-

742,038

Geophysics

6,164

26,985

104

-

-

-

33,253

Surface geochemistry

4,654

297

4,806

-

9,848

-

19,605

Drilling

3,636

499

-

-

123,831

-

127,966

Total expenditures

282,618

102,203

437,097

8,310

234,812

-

1,065,040

Property write offs

-

(1,414,474)

-

-

(368,330)

-

(1,782,804)

      

-

 

Total as at June 30, 2008

$  4,121,827

$     165,486

$   608,733

$    69,549

$              -

$              -

$   4,965,595

        

Land acquisition & holding costs

53,853

2,087

37,481

-

-

30,677

124,098

Environment

123

-

-

-

-

-

123

Geology

26,034

15,342

32,958

22,934

4,215

4,136

105,619

Geophysics

-

-

-

-

-

-

-

Surface geochemistry

-

852

171

-

-

193

1,216

Drilling

-

-

-

-

-

-

-

Total expenditures

80,010

18,281

70,610

22,934

4,215

35,006

231,056

Gain (loss) on sale of properties

(99,127)

-

-

-

-

(41,104)

(140,231)

Property write-offs

(4,102,710)

(183,767)

(679,343)

(92,483)

(4,215)

6,098

(5,056,420)

        

Total as at June 30, 2009

$                 -

$                -

$              -

$              -

$              -

$                -

$                -

        

Total expenditures

-

-

-

-

-

-

-

Property write-offs

-

-

-

-

-

-

-

        

Total as at September  30, 2009

$                 -

$                -

$              -

$              -

$              -

$                -

$                -






PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)



1.

NATURE OF OPERATIONS


Portal Resources Ltd. was incorporated on August 14, 2000 under the Company Act of the Province of British Columbia.  


The Company is an exploration stage company whose business activity is the exploration of mineral rights located in Mexico, and the exploration of oil and gas in Central Alberta, Canada. The Company has not yet determined if any of these rights contain economic mineral reserves, oil or gas reserves, and, accordingly, the amounts shown for deferred exploration costs represent costs incurred to date, less write-downs, and do not necessarily reflect present or future values.  The recovery of these amounts is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration of the rights, and upon the commencement of future profitable production or, alternatively, upon the Company’s ability to dispose of its interests on an advantageous basis. To date, the Company has not earned significant revenues and has an accumulated operation defici t of $13,914,951.


Current economic conditions have limited the Company’s ability to access financing through equity markets and this has created significant uncertainty as to the Company’s ability to fund ongoing operations for the next operating period. In a response to conserve capital the Company has significantly curtailed operations.


The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and the classification of liabilities that might be necessary should the Company be unable to continue in the normal course of business.



2.

SIGNIFICANT ACCOUNTING POLICIES


Basis of presentation and principles of consolidation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). These interim consolidated financial statements have been prepared in accordance with the accounting policies described in the Company’s annual consolidated financial statements, do not include in all respects the annual disclosure requirements of generally accepted accounting principles, and should be read in conjunction with the most recent annual consolidated financial statements. The differences between those principles and the ones that would be applied under U.S. generally accepted accounting principles (U.S. GAAP) are disclosed in Note 14.


References to the Company are inclusive of the Canadian parent company, its wholly owned U.S. subsidiary, Portal Resources US Inc., and its formerly owned subsidiary Portal del Oro S.A.  All significant inter-company transactions and balances have been eliminated.


The accounting policies followed by the Company are set out in Note 2 to the audited consolidated financial statements for the year ended June 30, 2009 and have been consistently followed in preparation of these interim consolidated financial statements, except with respect to the following new and revised accounting standards which the Company is required to adopt under Canadian GAAP for interim and annual financial statements relating to its fiscal year commencing July 1, 2009.




PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)


Accounting Policies Not Yet Adopted


Convergence to international Financial Reporting Standards (“IFRS”)


In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. The transition date of July 1, 2011 will require the restatement for comparative purposes, amounts reported by the Company for the year ended June 30, 2011, for which the current and comparative information will be prepared under IFRS.


The Company has commenced its IFRS conversion project in 2008. The Company’s IFRS project consists of three phases – scoping, evaluation and design, and implementation and review. The Company has commenced the scoping phase of the project, which consists of project initiation and awareness, identification of high-level differences between Canadian GAAP and IFRS and project planning and resourcing. The Company has completed a high level scoping exercise and has prepared a preliminary comparison of financial statement areas that will be impacted by the conversion.


A detailed assessment of the impact of adopting IFRS on the Company’s consolidated financial statements, accounting policies, information technology and data systems, internal controls over financial reporting, disclosure controls and procedures, and the various covenants and capital requirements and business activities has not been completed. The impact on such elements will depend on the particular circumstances prevailing at the adoption date and the IFRS accounting policy choices made by the Company. The Company has not completed its quantification of the effects of adopting IFRS. The financial performance and financial position as disclosed in our Canadian GAAP financial statements may be significantly different when presented in accordance with IFRS.


Business combinations


In January 2009, the CICA issued the new handbook Section 1582, “Business Combinations” effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of Section 1582 is permitted. This pronouncement further aligns Canadian GAAP with US GAAP and IFRS and changes the accounting for business combinations in a number of areas. It establishes principles and requirements governing how an acquiring company recognizes and measures in its financial statements identifiable assets acquired, liabilities assumed, any non-controlling interest in the acquisition, and goodwill acquired. The section also establishes disclosure requirements that will enable users of the acquiring company’s financial statements to evaluate the nature and financial effects of its business combinations. Although the Company is considering the impact of adopting this pronouncement on the consolidated financial statements, it will be li mited to any future acquisitions beginning in fiscal 2012.


Consolidated financial statement and non-controlling interests


In January 2009, the CICA issued the new handbook Section 1601, “Consolidated Financial Statements”, and Section1602, “Non-controlling Interests”, effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of these recommendations is permitted. These pronouncements further align Canadian GAAP with US GAAP and IFRS. Sections 1601 and 1602 change the accounting and reporting for ownership interest in subsidiaries held by parties other than the parent. Non-controlling interests are to be presented in the consolidated statement of financial position within equity but separate from the parent’s equity. The amount of consolidated net income attributable to the parent and to the non-controlling interest is to be clearly identified and presented on the face of the consolidated statement of income. In addition, these pronouncements establish standards for a change in a parent’s ownership interest in a subsidiary and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. They also establish reporting requirements for providing sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company is currently considering the impact of adopting these pronouncements on its consolidated financial statements in fiscal 2012 in connection with the conversion to IFRS.





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


3.

SHORT TERM INVESTMENTS


Short term investments consists of highly liquid investments, including guaranteed investment certificates with major financial institutions, having a maturity of 12 months or less at acquisition and that are readily convertible to contracted amounts of cash.


4.

MARKETABLE SECURITIES


On May 29, 2009 Portal Resources Inc. acquired 150,000 shares of Pengram Corporation (“Pengram”) in return of assigning all of its interest in an option agreement.  At September 30, 2009, the fair value of the Pengram shares was $41,816 (June 30, 2009 - $ 34,875). Consequently, Portal recorded an unrealized gain of $6,941.



5.

EQUIPMENT AND SOFTWARE


  

September 30,

2009

 

June 30,

2008

             
  


Cost

 

Accumulated

amortization

 

Net book value

 


Cost

 

Accumulated

amortization

 

Net book value

             
 

Computer equipment

$   17,458

 

$   14,256

 

$   3,202

 

$   16,603

 

$   13,815

 

$   2,788

 

Computer software

20,854

 

20,603

 

251

 

20,854

 

20,553

 

301

 

Furniture & fixtures

5,655

 

2,957

 

2,698

 

5,655

 

2,717

 

2,938

 

Vehicles

25,896

 

5,827

 

20,069

 

25,896

 

3,884

 

22,012

 

Field equipment

20,867

 

11,110

 

9,757

 

20,867

 

10,067

 

10,800

  

$   90,730

 

$   54,753

 

$ 35,977

 

$   89,875

 

$   51,036

 

$ 38,839



6.

UNPROVEN MINERAL RIGHTS


Argentina


As at May 14, 2009, the Company held a subsidiary and mineral properties in Argentina. During the most recent completed fiscal year the Company after reviewing work done on the properties, concluded that the potential did not justify further work and renounced the mining rights held under the projects. As such the project expenditures were written off and subsequently Portal’s Argentinean subsidiary was sold.


United States


On September 2, 2008, the Company announced that it had entered into an option agreement under which it has the right to acquire, from Claremont Nevada Mines, Scoonover Exploration and JR Exploration, three properties located in the Walker Lane Belt and Battle Mountain/Eureka Trend in Nevada, USA.


On May 29, 2009, the Company closed an Assignment Agreement with Pengram Corporation (“Pengram”) to transfer all the rights on the Nevada claims, in exchange of 150,000 shares of Pengram’s common stock. The Company has no further commitments on the Nevada properties.





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


7.

OIL AND GAS PROPERTIES


The Company’s oil and gas interests are all located in Central Alberta, Canada.


Oil and Gas Joint Ventures


Bigwave Joint Venture


On November 1, 2008 the Company signed a Joint Venture Agreement to participate for a 15% interest in the exploration, exploitation and production of petroleum and natural gas relating to lands located in Central Alberta. In December of 2008 the agreement was modified to allow the Company to participate to a 20% interest. During the quarter the Company increased its interest in the Joint Venture to 22% interest.


Within the area of interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations payable to the Bigwave Ltd partnership.


As at September 30, 2009 the Company contributed a total of $371,815 to the Operator (Bigwave).


On January 5, 2009 the Company signed an agreement, “Participation Agreement”, with certain other partners in the Bigwave Joint Venture. Portal agreeing to pay 100% of the Company’s cost per Drill Spacing Unit to earn 100% of their interest until pay-out and then after pay-out to drop to 70% interest per Drill Spacing Unit.


Manito Joint Venture


On March 9, 2009 the Company signed the Manito Joint Venture Agreement to participate as to a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources in Central Alberta.


The area of interest covered by the agreement is 72 square miles and the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced.


The Manito Joint Venture has acquired one section of land to date through Alberta Crown Sale.


As at September 30, 2009 the Company contributed a total of $18,000 to the Operator (Bigwave).


Oil and gas expenditures  


  

Bigwave

Manito

Total

     
 

As at July 1, 2008

$                 -

$                 -

$                -

 

Oil and Gas expenditures

    343,437

18,000

361,437

 

Total as at June 30, 2009

$     343,437

$       18,000

$    361,437

 

Oil and Gas expenditures

28,378

-

$      28,378

 

Total as at September 30, 2009

$  371,815

$       18,000

$    389,815





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


8.

SHARE CAPITAL


Authorized

100,000,000 Common Shares without par value

100,000,000 Preferred shares issuable in series


Stock-based Compensation


The Company has a stock option plan as described in the most recent annual financial statements of the Company.  The maximum aggregate number of common shares reserved and authorized to be issued pursuant to options granted under the Stock Option Plan is 4,447,730 common shares.  


The exercise price for options granted under the Stock Option Plan is determined by the Board upon grant provided the price is not less than the closing trading price on the day immediately preceding the date of grant, less any discounts permitted by the TSX Venture Exchange or such other stock exchanges on which the common shares are listed.  Options granted under the Stock Option Plan are subject to a minimum one year vesting schedule whereby 25% of each option will vest on each of the three month anniversaries of the date of grant, up to and including the end of the first year after such grant, or such other more restrictive vesting schedule as the administrator of the Stock Option Plan may determine.  Options are non-assignable and are exercisable for a period of up to five years from the date the option is granted, subject to earlier termination after certain events such as the optionee’s cessation of service to the Company or death.< /P>


The Company accounts for its grants in accordance with the fair value method of accounting for stock-based compensation.  For the three months ended September 30, 2009, the Company recognized $53,634 (2008 - $1,800) in stock-based compensation for employees, directors and consultants.


The fair value of the options has been calculated using the Black-Scholes option-pricing model, based on the following assumptions:


 

2009

 

2008

 

2007

      

Stock compensation

$      21,811

 

$    147,744

 

$      340,206

      

Risk-free interest rate

1.50% - 2.90%

 

4.00%

 

3.4% – 4.6%

Expected stock price volatility

121% - 227%

 

74%

 

49% - 76%

Expected option life in years

5 years

 

1 year

 

3 years

Expected dividend yield

Nil

 

Nil

 

Nil


Option prices models require the input of highly subjective assumptions regarding the expected volatility and expected life. Changes in assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide the reliable measure of the fair value of the company’s stock options at the date of grant.





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


8.

SHARE CAPITAL, (Continued)


Stock-based Compensation, (Continued)


A summary of changes to stock options outstanding is as follows:


 

September 30

June 30

 

2009

2009

  

Weighted

Average

 

Weighted

Average

 

Number

of shares

Exercise

Price

Number

of shares

Exercise

Price

Outstanding at beginning of period

3,688,600

$0.35

2,753,600

$0.54

Granted under plan

-

-

2,132,200

$0.16

Forfeited or cancelled

(675,000)

$0.31

(1,197,200)

$0.44

Outstanding at end of period

3,013,600

$0.30

3,688,600

$0.35

     

Options vested and exercisable at

end of period


2,235,700


$0.36


2,113,900


$0.50


At September 30, 2009, the weighted average remaining life of the outstanding options is 3.54 years (June 30, 2009 – 3.59 years).


Stock options outstanding as at September 30, 2009 are as follows:


Number

Exercise Price

Expiry Date

150,000

$0.86

14-Apr-10

75,000

$0.70

20-Jan-11

766,400

$0.52

5-Dec-11

985,000

$0.20

7-Oct-13

   1,037,200

$0.12

8-Jun-14

   3,013,600

  


9.

COMMITMENTS


The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2013.  The remaining future minimum lease payments for the non-cancellable lease are:


2010

$64,843

2011

$90,709

2012

$94,961

2013

$65,197


10.

RELATED PARTY TRANSACTIOINS


Payments to related parties were made in the normal course of operations and were valued at fair value as determined by management.  Amounts due to or from related parties are unsecured, non-interest bearing and due on demand.





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


10.

RELATED PARTY TRANSACTIOINS, (Continued)


During the three months ended September 30, 2009


a)

$8,661 (2008 - $10,549) was charged to a public company with a director in common with the Company for rent.  As at September 30, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this public company.


b)

$1,575 (2008 - $15,484) was charged to a private company with certain directors in common with the Company for administrative fees. As at September 30, 2009, $1,575 (June 30, 2009 - $Nil) was receivable from this private company.


c)

$1,050 (2008 - $Nil) was charged to a private company with a director in common with the Company for rent.  As at September 30, 2009, $307 (June 30, 2009 - $Nil) was receivable from this private company.


d)

the Company paid or accrued to pay a private company with a director in common with the Company an aggregate of $767 (2008 - $1,575) for fees and expense. As at September 30, 2009, the Company owed this company an aggregate of $399 (June 30, 2009 - $Nil).


e)

the Company Incurred director fees of $7,833 (2008 - $Nil) to four directors.



11.

FINANCIAL INSTRUMENTS


The fair values of the Company’s cash and cash equivalents, marketable securities, short-term investments, amounts receivable, accounts payables and accrued liabilities approximate their carrying values.


The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest risk.


(a)

Currency risk


The Company’s property interests in Mexico make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks.


(b)

Credit risk


The Company’s cash and cash equivalents are held in a Canadian financial institution. The Company does not have any asset-backed commercial paper in its cash and cash equivalents or short-term investments. The Company’s amount receivable consists primarily of recovered rent and office expense, and tax due from the federal government of Canada.


(c)

Liquidity risk


Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.


(d)

Interest rate risk


Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash and cash equivalents is limited because they are generally held to maturity. A 1% change





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


11.

FINANCIAL INSTRUMENTS, (Continued)


(d)

Interest rate risk, (continued)


in the interest rate, with other variables unchanged, would affect the Company by an annualized amount of interest equal to approximately $1,000.


12.

MANAGEMENT OF CAPITAL RISK


The Company manages its cash and cash equivalents, common shares and stock options as capital (see Note 8). The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral and oil and gas properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.


The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents.


In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.


In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.


The Company expects its current capital resources will be sufficient to carry its exploration plans and operations through its current operating period.


13.      SEGMENTED INFORMATION


The Company operates in a single reportable operating segment, being exploration and development of mineral properties.


Summarized financial information for the geographic segments the Company operates in are as follows:


 

Canada

USA

Argentina

Total

Three months ended September 30, 2009

    

Loss for the period

$    243,537

$                -

$               -

$      243,537

     

Three months ended September 30, 2008

    

Loss for the period

$    306,653

$        5,155

$    217,839

$      529,647

     

As at September 30, 2009

    

Assets

$  1,747,227

$               -

$               -

$   1,747,227

     

As at June 30, 2009

    

Assets

$  1,965,990

$               -

$               -

$   1,965,990





PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)


Under Canadian GAAP for junior mining exploration companies, mineral exploration expenditures are deferred on prospective mineral rights until such time as it is determined that further exploration work is not warranted, at which time the mineral right costs are written-off. Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the mineral rights are capable of economic commercial production. The following items (a) to (g) provide a summary of the impact of these financial statements that would result from the application of U.S. accounting principles to preferred mineral rights.


 

Three months ended

September 30,

Year ended

June 30,

 

2009

 

2008

 

2009

      

a)  Assets

     

     Unproven Mineral Rights Costs

     

     Unproven mineral rights costs under Canadian GAAP:

$                     -

 

$      5,071,290

 

$                     -

     Add oil and gas properties costs under Canadian GAAP

389,815

 

-

 

361,437

     Less unproven mineral rights costs and oil and gas properties

(389,815)

 

(5,071,290)

 

(361,437)

     Unproven mineral rights and oil and gas properties costs

     under U.S. GAAP


$                     -

 


$                    -

 


$                     -


b)  Operations

     

      Net loss under Canadian GAAP

$      (243,537)

 

$      (529,647)

 

$   (6,366,236)

      Unproven mineral rights costs expensed under U.S. GAAP

-

 

(105,965)

 

4,965,595

      Oil and Gas Properties under U.S. GAAP

(28,378)

 

-

 

(361,437)

      

      Net loss under U.S. GAAP

$      (271,915)

 

$      (635,612)

 

$   (1,762,078)

      

c)  Deficit

     

     Closing deficit under Canadian GAAP

$ (13,914,951)

 

$   (7,834,825)

 

$ (13,671,414)

     Adjustment to deficit for accumulated unproven mineral rights and

     

     expensed under U.S. GAAP net of income items

(389,815)

 

(5,071,290)

 

(361,437)

      

     Closing deficit under U.S. GAAP

$  (14,304,766)

 

$ (12,906,115)

 

$  (14,032,851


d)  Cash Flows – Operating Activities

     

     Cash applied to operations under Canadian GAAP

$       (231,646)

 

$       (224,030

 

$  (1,097,448)

     Add net loss following Canadian GAAP

243,537

 

529,647

 

6,366,236

     Add change in non cash unproven mineral rights expensed

     U.S. GAAP


-

 


(114,812)

 


8,637

     Add proceeds on sale of mineral properties

-

 

-

 

99,127

     Less net loss under U.S. GAAP

(271,915)

 

(635,342)

 

(11,693,268)

     Less unproven mineral rights costs expensed under Canadian GAAP

-

 

-

 

(5,056,420)

     Cash applied to operations under U.S. GAAP

$      (260,024)

 

$     (444,537)

 

$  (11,373,136)

      

e)  Cash Flows – Investing Activities

     

     Cash applied under Canadian GAAP

$        151,797

 

$       270,427

 

$     1,158,469

     Less change in non cash unproven mineral rights expensed under

     U.S. GAAP


-

 


114,812

 


(99,127)

     Add unproven mineral right costs expensed under U.S. GAAP

-

 

105,695

 

261,054

     Add oil and gas properties under U.S. GAAP

28,378

 

-

 

322,802

     Cash applied under U.S. GAAP

$        180,175

 

$       490,934

 

$    1,643,198





 

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the three months ended September 30 2009 (Unaudited – prepared by management)

(stated in Canadian dollars)


14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), (Continued)


OTHER DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP


f)

Stockholders’ Equity

Common Stock

There are no differences between Canadian and U.S. GAAP for the years ended June 30, 2009, 2008 and 2007 or the three months ended September 30, 2009 with respect to the disclosure of stock-based compensation.


g)

Loss per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted loss per share calculations.  Diluted loss per share is not presented as it is anti-dilutive.




 

For the three months ended

  

Year ended

 

    

September 30,

  

June 30,

  

2009

 

2008

  

2009

 


Numerator: Net loss for the period under U.S. GAAP


   

    $(271,915)

 


    

     $(635,342)

  



 $(1,762,078)

        
 


Denominator: Weighted-average number of shares under Canadian and U.S. GAAP




    29,651,539

 




  29,651,539

  




  29,651,539

        
 

Basic and fully diluted loss per share under U.S. GAAP


$       (0.01)

 


$        (0.02)

 


  $      (0.06)









EX-99.2 3 pdosept2009mda.htm MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis

PORTAL RESOURCES LTD.


MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended September 30, 2009


NOTE TO READER


This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Portal Resources Ltd. (“Portal” or the “Company”), its history, business environment, strategies, performance and risk factors from the viewpoint of management.  The information provided should be read in conjunction with the Company’s audited annual consolidated financial statements and notes for the years ended June 30, 2009 and 2008, and the Company’s unaudited interim consolidated financial statements and notes for the three months ended September 30, 2009.  The Company’s consolidated financial statements and related notes have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and all amounts are presented in Canadian dollars unless otherwise noted.


The following comments may contain management estimates of anticipated future trends, activities or results. These are not a guarantee of future performance, since actual results will change based on other factors and variables beyond management control.


Management is responsible for the preparation and integrity of the consolidated financial statements, including the maintenance of appropriate information systems, procedures and internal controls, and to ensure that information used internally or disclosed externally, including the consolidated financial statements and MD&A, is complete and reliable.


The Company’s board of directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders.  The board’s audit committee meets with management regularly to review financial statement results, including the MD&A and to discuss other financial, operating and internal control matters.


The reader is encouraged to review Company statutory filings on www.sedar.com and to review general information, including maps on the Company’s website at www.portalresources.net.


DATE


This MD&A is prepared as of November 30, 2009.  


DESCRIPTION OF BUSINESS AND OVERVIEW


Portal is a growth oriented natural resource exploration company focused primarily on the acquisition exploration and development of mineral rights in Mexico and Canada and light crude oil projects in Canada. The Company is concentrating on identifying early stage mineral and or oil or gas properties that have potential for discovery of large deposits as well as acquiring more advanced projects that with further development have good production potential.


On November 1, 2008, the Company signed a Joint Venture Agreement to participate for the exploration, exploitation and production of petroleum and natural gas located in Central Alberta – see “Exploration review”.


EXPLORATION REVIEW


HIGHLIGHTS


Portal has opened an administrative office in Hermosillo, Sonora State, Mexico with the mandate to focus primarily on the acquisition and development of mineral rights.


Portal entered the Bigwave Joint Venture Agreement to participate for a 22% interest in the exploration, exploitation and production of petroleum and natural gas from lands located in Central Alberta.


Portal entered the Manito Joint Venture Agreement to participate as to a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources in Central Alberta.



OIL AND GAS JOINT VENTURES


Bigwave Joint Venture


On November 1, 2008 Portal signed the Bigwave Joint Venture Agreement to participate for a 15% interest in the exploration, exploitation and production of petroleum and natural gas from lands located in Central Alberta. In December of 2008 the agreement was modified to allow Portal to participate for a 20% interest. During the quarter the Company increased its interest in the Joint Venture to 22% interest.


Within the area of interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations, payable to the Bigwave Ltd. partnership.


The first prospect acquired through Alberta Crown Sale is a source oil sand shale sequence with several potential reservoirs.


During the quarter, the Company commenced drilling on the Bigwave Joint Venture in eastern Alberta, Canada. The first horizontal well is operated by partner Bigwave Exploration Inc. of Calgary, Alberta. The Bigwave Joint Venture now controls a footprint of 10,720 acres of land covering a source oil sand-shale sequence with several potential reservoirs (Bakken Formation type play).


On January 5, 2009, the Company signed an agreement, “Participation Agreement”, with certain other partners in the Bigwave Joint Venture. Portal agreed to pay 100% of the Company’s cost per Drill Spacing Unit to earn 100% of their interest until pay-out and then after pay-out to drop to 70% interest per Drill Spacing Unit.


Manito Joint Venture


On March 9th, 2009 Portal signed the Manito Joint Venture Agreement to participate as to a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources in Central Alberta.


The area of interest covered by the agreement is 72 square miles and Portal has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations


The Manito Joint Venture has acquired one section of land to date through Alberta Crown Sale.


  

Bigwave

Manito

Total

     
 

As at July 1, 2008

$                 -

$              -

$                -

 

Oil and Gas expenditures

    343,437

18,000

361,437

 

Total as at June 30, 2009

$     343,437

$    18,000

$    361,437

 

Oil and Gas expenditures

28,378

-

$      28,378

 

Total as at September 30, 2009

$  371,815

$    18,000

$    389,815



MINERAL PROPERTY EXPENDITURES


During the three months ended September 30, 2009, the Company capitalized $Nil of mineral property expenditures (2008 - $109,133).The Company wrote off all its mineral properties in fiscal year ending June 30, 2009. The Company did not own any mineral properties during the period. A breakdown of carrying values by property and significant expenditures by category is as follows:


 


Arroyo Verde

(Argentina)


San Rafael

(Argentina)

La Pampa Uranium

(Argentina)

Tiger Uranium

(Argentina)

Slick Rock Uranium

(USA)

Golden Snow,

Fish and CPG

(USA)



Total

        

Total as at June 30, 2007

3,839,209

1,477,757

171,636

61,239

133,518

-

5,683,359

        

Land acquisition & holding costs

108,687

(27,301)

11,523

-

16,873

-

109,782

Environment

3,611

206

4,778

1,894

21,907

-

32,396

Geology

155,866

101,517

415,886

6,416

62,353

-

742,038

Geophysics

6,164

26,985

104

-

-

-

33,253

Surface geochemistry

4,654

297

4,806

-

9,848

-

19,605

Drilling

3,636

499

-

-

123,831

-

127,966

Total expenditures

282,618

102,203

437,097

8,310

234,812

-

1,065,040

Property write offs

-

(1,414,474)

-

-

(368,330)

-

(1,782,804)

      

-

 

Total as at June 30, 2008

$  4,121,827

$     165,486

$   608,733

$    69,549

$              -

$              -

$   4,965,595

        

Land acquisition & holding costs

53,853

2,087

37,481

-

-

30,677

124,098

Environment

123

-

-

-

-

-

123

Geology

26,034

15,342

32,958

22,934

4,215

4,136

105,619

Geophysics

-

-

-

-

-

-

-

Surface geochemistry

-

852

171

-

-

193

1,216

Drilling

-

-

-

-

-

-

-

Total expenditures

80,010

18,281

70,610

22,934

4,215

35,006

231,056

Gain (loss) on sale of properties

(99,127)

-

-

-

-

(41,104)

(140,231)

Property write-offs

(4,102,710)

(183,767)

(679,343)

(92,483)

(4,215)

6,098

(5,056,420)

        

Total as at June 30, 2009

$                 -

$                -

$              -

$              -

$              -

$                -

$                -

        

Total expenditures

-

-

-

-

-

-

-

Property write-offs

-

-

-

-

-

-

-

        

Total as at September  30, 2009

$                 -

$                -

$              -

$              -

$              -

$                -

$                -


SUMMARY OF QUARTERLY RESULTS


 

Three Months Ended

 

September 30

2009

June 30

2009

March 31

2009

December 31

2008

 

$

$

$

$

     

Interest Income

3,765

10,447

12,567

17,436

General & Administration

(excluding property write-offs)


247,302


242,751


250,248


314,094

Property write-offs on sale of subsidiary

-

58,194

5,134,856

163

Net loss

243,537

152,802

5,372,537

313,125

Net loss per share

0.01

0.01

0.18

0.01

     



 

Three Months Ended

 

September 30

2008

June 30

2008

March 31

2008

December 31

2007

 

$

$

$

$

     

Interest Income

24,968

33,617

40,834

47,594

General & Administration

(excluding property write-offs)


551,177


396,004


385,575


453,482

Property write-offs

3,438

1,782,804

Nil

Nil

Net loss

529,647

2,145,191

344,738

405,888

Net loss per share

0.02

0.07

0.01

0.01



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008


This review of the Results of Operations should be read in conjunction with the unaudited Consolidated Financial Statements of the Company for the three months ended September 30, 2009 and 2008.


Results of Operations for the three months ended September 30, 2009 and 2008


Loss for the period

For the three months ended September 30, 2009 the Company incurred a net loss of $243,537 ($0.01 per share) compared to a net loss of $529,647 ($0.02 per share) for the three months ended September 30, 2008. The decrease of $286,110 in the net loss for the period from 2008 to 2009 is primarily due to: (a) a decrease in salaries and benefits of $221,252 due to a reduction of staff and a compensation package paid to the former CEO of the Company in August 2008; (b) a decrease in investor relations expenses of $69,767 due to a reduced number of trade show attendances and a decrease in the cost of the Annual General Meeting material; (c) a decrease of travel expenses of $23,982 due to reduction of trips to Argentina since the sale of the subsidiary; (d) a decrease of legal fees and expenses of $22,040 due to the sale of the Argentinean subsidiary and (e) a decrease of office and miscellaneous expenses of $17,575 due to the sale of the Argentinean subsidiary, offset by an incre ase in stock based compensation expense of $51,834.


Expenses

General and administrative costs were $254,243 for the three months ended September 30, 2009, a decrease of $296,934 as compared to $551,177 for the same period in the prior year.  The six largest expense items for this fiscal period, which account for 82% (2008 – 71%) of total general and administrative expenditures are: stock based compensation expense of $53,634 (2008 – $1,800), salaries and benefits of $46,576 (2008 - $267,828), project investigation of $33,487 (2008 – $38,485), consulting and management fees of $24,750 (2008 – $24,702), rent of $25,384 (2008 - $16,606) and office and miscellaneous expenses of $23,767 (2008 – $41,342).  The increase on stock based compensation expense is due to the vesting of officers’, consultants’ and employees’ stock options; the decrease in salaries and benefits is the result of the decrease in the number of salaried employees and the payment of a compensation package to the former CEO in August 2008, as well as the sale of the Argentinean subsidiary. The increase in rent is result of the decrease in the recovery charge for rent to related parties which moved out of the space. The decrease in office and miscellaneous expenses is the result of the sale of the Argentinean subsidiary.



SELECTED ANNUAL INFORMATION


For the years ended June 30th


 

2009

 

2008

 

2007

      

Interest Income

$      65,418

 

$       161,429

 

$       106,674

Net income (loss)

(6,366,236)

 

(3,288,433)

 

(1,877,224)

Basic and diluted EPS

(0.21)

 

(0.11)

 

(0.09)

Total assets

1,965,990

 

8,319,819

 

7,007,477

Total long-term liabilities

Nil

 

Nil

 

Nil

Cash dividends declared

Nil

 

Nil

 

Nil


LIQUIDITY AND CAPITAL RESOURCES


The Company had cash and short term investments of $1,243,648 and working capital of $1,278,203 as of September 30, 2009 (June 30, 2009: $1,504,528 and $1,493,622 respectively).  The decrease in working capital is primarily due to expenditures on oil and gas properties of $28,378 and the funding of operating activities.  


The Company has sufficient cash to meet its on-going obligations as they become due and will modify budgeted exploration activities as necessary to ensure it continues to meet its on-going obligations.


The Company’s authorized capital consists of 100,000,000 common shares without par value and 100,000,000 preferred shares, issuable in series.  As at September 30, 2009, the Company’s share capital was $14,760,161 representing 29,651,539 common shares (June 30, 2009 - $14,760,161 representing 29,651,539 common shares).  


As at September 30, 2009, contributed surplus totaled $858,785 (June 30, 2009 - $805,151).  During the three months ended September 30, 2009, the Company recognized $53,634 in compensation expense for share purchase options that vested during the period.


Stock options outstanding as at September 30, 2009 are as follows:


Number

Exercise Price

Expiry Date

150,000

$0.86

14-Apr-10

75,000

$0.70

20-Jan-11

766,400

$0.52

5-Dec-11

985,000

$0.20

7-Oct-13

   1,037,200

$0.12

8-Jun-14

   3,013,600

  


At September 30, 2009 the Company had 3,013,600 (June 30, 2009 – 3,688,600) outstanding stock options with a weighted average exercise price of $0.30. If the remaining outstanding options were exercised, the Company’s available cash would increase by $901,492.


As the date of the MD&A there were 29,651,539 common shares issued and outstanding and 32,665,139 common shares outstanding on a diluted basis.


The Company relies on equity financings to fund its exploration activities and corporate overhead expenses.  There is no guarantee that the Company will be able to secure additional financing in the future at terms that are favourable.  To date, the Company has not used debt or other means of financing to further its exploration programs, and the Company has no plans to use debt financing at the present time.



TRANSACTIONS WITH RELATED PARTIES


During the three months ended September 30, 2009


a)

$8,661 (2008 - $10,549) was charged to a public company with a director in common with the Company for rent.  As at September 30, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this public company.


b)

$1,575 (2008 - $15,484) was charged to a private company with certain directors in common with the Company for administrative fees. As at September 30, 2009, $1,575 (June 30, 2009 - $Nil) was receivable from this private company.


c)

$1,050 (2008 - $Nil) was charged to a private company with a director in common with the Company for rent.  As at September 30, 2009, $307 (June 30, 2009 - $Nil) was receivable from this private company.


d)

the Company paid or accrued to pay a private company with a director in common with the Company an aggregate of $767 (2008 - $1,575) for fees and expense. As at September 30, 2009, the Company owed this company an aggregate of $399 (June 30, 2009 - $Nil).


e)

the Company Incurred director fees of $7,833 (2008 - $Nil) to four directors.



ADDITIONAL INFORMATION


Additional information about the Company is available on SEDAR at www.sedar.com.


Outstanding Share Data


As at November 30, 2009 the Company had the following items issued and outstanding:

29,651,539 common shares

3,013,600 common stock options with a weighted average exercise price of $0.30 expiring at various dates until June 9, 2014.


Commitments and Contingencies


The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2013.  The remaining future minimum lease payments for the non-cancellable lease are:  2010 - $64,843; 2011 - $90,709; 2012 - $94,961; and 2013 - $65,197.



RISK FACTORS


The Company’s financial success will be dependent upon the extent to which it can discover mineralization, oil and gas reserves or acquire mineral or oil and gas properties and the economic viability of developing its properties.


The Company competes with many companies possessing greater financial resources and technical facilities than itself.  The market price of minerals, metals and/or oil and gas is volatile and cannot be controlled. There is no assurance that the Company’s mineral exploration, oil and gas exploration and development activities will be successful. The development of mineral resources and oil and gas properties involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome.


The development of mineral and oil and gas resources in Mexico and Canada are subject to a comprehensive review, approval and permitting process that involves various federal and regional agencies.  There can be no assurance given that the required approvals and permits for a mining or oil and gas project, if technically and economically warranted, on the Company’s claims can be obtained in a timely or cost effective manner.


All of the Company’s short to medium term operating and cash flow must be derived from external financing.  Actual funding may vary from what is planned due to a number of factors including the progress of exploration and development on its current properties.  Should changes in equity market conditions prevent the Company from obtaining additional external financing, the Company will need to review its exploration and oil and gas property holdings to prioritise project expenditures based on funding availability.


The Company competes with larger and better financed companies for exploration personnel, contractors and equipment.  Increased exploration activity has increased the demand for equipment and services.  There can be no assurance that the Company can obtain required equipment and services in a timely or cost effective manner.


The Company’s operations in Mexico and Canada and financing activities in Canada make it subject to foreign currency fluctuations and such fluctuations may materially affect its financial position and results.



OUTLOOK


Portal has planned exploration programs for the oil and gas project in Central Alberta and it is continuing to review other mineral exploration projects for acquisition.

The recently opened office in Hermosillo, Sonora, Mexico, brings together the core corporate functions and management personnel released after the takeover of Nevada Pacific Gold by US Gold in late 2007. When combined with the directors of the Company this group has the collective experience and success of acquiring, developing and producing from three different open pit gold mines in Mexico over the last 17 years. Portal will leverage this knowledge and the business relationships built to acquire a portfolio of quality mineral properties.


FORWARD LOOKING STATEMENTS


Certain information set forth in this report contains forward-looking statements.  By their nature, forward-looking statements are subject to numerous risks and uncertainties including: the results of current operation and exploration activities; market reaction to future operation and exploration activities; significant changes in metal prices; currency fluctuations; general market and industry conditions; and other factors detailed in the Company’s public filings. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.  Portal Resources Ltd.’s actual results, programs and financial position could differ materially from those expressed in or implied by these forward-looking statements, and accordingly, no assurance can be given that the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Portal Resources Ltd. will derive therefrom.  Portal Resources Ltd. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



INTERNAL CONTROLS AND PROCEDURES OVER FINANCIAL REPORTING


Changes in Internal Control Over Financial Reporting (“ICFR”)


No changes occurred in the current period of the Company’s ICFR that have materially affected or are reasonable likely to materially affect the Company’s ICFR



INTERNATIONAL FINANCIAL REPORTING STANDARDS


On February 13, 2008, the Canadian Accounting Standards Board (“AcSB”) confirmed the mandatory changeover date to International Financial Reporting Standards (“IFRS”) for Canadian profit-oriented publicly accountable entities (“PAE’s”) such as the Company.

The AcSB requires that IFRS compliant financial statements be prepared for annual and interim financial statements commencing on or after January 1, 2011. For PAE’s with a June 30 year-end, the first unaudited interim financial statements under IFRS will be the quarter ending September 30, 2011, with comparative financial information for the quarter ended September 30, 2010. The first audited annual financial statements will be for the year ending June 30, 2012, with comparative financial information for the year ended June 30, 2011. This also means that all the opening balance sheet adjustments relating to the adoption of IFRS must be reflected in the July 1, 2010 opening balance sheet which will be issued as part of the comparative financial information in the September 30, 2011 unaudited interim financial statements.


The Company intends to adopt these requirements as set out by the AcSB and other regulatory bodies. At this time, the impact of adopting IFRS cannot be reasonably quantify areas relating to IFRS that could materially affect the Company . During the fiscal 2010, the Company will continue to evaluate the impact of IFRS on the Company, The actual conversion work will occur in 2010 and 2011, in anticipation of the preparation of the July 1, 2010 balance sheet that will be required for comparative purposes for all periods ending in fiscal 2012.



FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS


The fair values of the Company’s cash and cash equivalents, marketable securities, short-term investments, amounts receivable, accounts payables and accrued liabilities approximate their carrying values.


The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest risk.


(a)

Currency risk


The Company’s property interests in Mexico make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks.


(b)

Credit risk


The Company’s cash and cash equivalents are held in a Canadian financial institution. The Company does not have any asset-backed commercial paper in its cash and cash equivalents or short-term investments. The Company’s amount receivable consists primarily of recovered rent and office expense, and tax due from the federal government of Canada.


(c)

Liquidity risk


Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.


(d)

Interest rate risk


Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash and cash equivalents is limited because they are generally held to maturity. A 1% change in the interest rate, with other variables unchanged, would affect the Company by an annualized amount of interest equal to approximately $1,000.








#



EX-99.3 4 ceocertification.htm CERTIFICATION OF CEO CEO Certification

Form 52-109FV2

Certification of interim filings - venture issuer basic certificate



I, David Hottman, Chief Executive Officer & President, certify the following:

1.

Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Portal Resources Ltd. (the “issuer”) for the interim period ended September 30, 2009.


2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.


3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.


Date: November 30, 2009


“David Hottman”

_______________________

David Hottman

Chief Executive Officer & President




NOTE TO READER


In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of


i)

controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and


ii)

a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.


The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.






#



EX-99.4 5 cfocertificationsept.htm CERTIFICATION OF CFO CFO Certification

Form 52-109FV2

Certification of interim filings - venture issuer basic certificate



I, Mark T. Brown, Chief Financial Officer, certify the following:

1.

Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Portal Resources Ltd. (the “issuer”) for the interim period ended September 30, 2009.


2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.


3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.


Date: November 30, 2009


“Mark T Brown”

_______________________

Mark T. Brown

Chief Financial Officer




NOTE TO READER


In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of


i)

controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and


ii)

a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.


The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.





#



-----END PRIVACY-ENHANCED MESSAGE-----