Interim Financial Statements - June 30, 2011 - SEDAR Final A

8/4/2019 Interim Financial Statements - June 30, 2011 - SEDAR Final A

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VENGA AEROSPACE SYSTEMS INC.

Condensed Interim Consolidated Financial Statementsfor the Three and Six Month Period Ended June 30, 2011

(Expressed in Canadian Dollars)

(Unaudited Prepared by Management)


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Notice of No Auditor Review of Condensed InterimConsolidated Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor hasnot performed a review of interim consolidated financial statements, they must beaccompanied by a notice indicating that the financial statements have not beenreviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statementsof the company have been prepared by and are the responsibility of theCompany's management. These condensed interim consolidated financialstatements reflect management's best estimates and judgment based on

information currently available as of August 19, 2011.

The Company's independent auditor has not performed a review of thesecondensed interim consolidated financial statements in accordance with thestandards established by the Canadian Institute of Chartered Accountants for areview of interim consolidated financial statements by an entity's auditor.


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Venga Aerospace Systems Inc.(Incorporated under the laws of the Province of Ontario)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

As at June 30, 2011 December 31, 2010 January 1, 201

$ $ $(Unaudited) (Audited) (Unaudited

ASSETS (Note 6) (Note 6

Current Assets

Cash and cash equivalents 1,919 9,809 42,02

Prepaids and sundry receivables 705 717 10,10

2,624 10,526 52,12

Other Assets

Investment (Notes 3(b) and 11) 200,000 200,000 300,00

Investment in Global Mineral Investments, LLC(Notes 3 (c) and 14) 485,400 485,400 485,40

Total Assets 688,024 695,926 837,52

LIABILITIES AND SHAREHOLDERS EQUITY

Current Liabilities

Accounts payable and accrued charges 23,588 37,896 24,78Due to Director (Note 9) 19,000 0

Total Liabilities 42,588 37,896 24,78

Shareholders' Equity

Capital Stock (Note 8) 17,268,966 17,268,966 17,268,96

Contributed Surplus 890,684 890,684 890,68

Deficit (17,514,214) (17,501,620) (17,346,90

Total Equity 645,436 658,030 812,74

Total Liabilities and Shareholders' Equity 688,024 695,926 837,52

Going Concern (Note 2)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements

Approved on behalf of the Board

"Hirsh Kwinter" (signed) Director "Dr. Ezra Franken ("signed") Director

Hirsh Kwinter Dr. Ezra Franken


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Venga Aerospace Systems Inc.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Three Months Ended Six Months Ended

June 30, 2011 June 30, 2010 June 30, 2011 June 30, 20

EXPENSES

Office and general $ 5,075 $ 5,543 $ 10,734 $..............24

Professional fees 476 1,416 1,860 1

5,551 6,959 12,594 26

Net loss and comprehensive loss for the period $ (5,551) $ (6,959) $ (12,594) $ (26

Basic and diluted loss per common share $ (0.00002) $ (0.00003) $ (0.00005) $ (0.

Weighted average number of shares outstanding 239,171,893 239,171,893 239,171,893 239,171



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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Share Capital

# of Shares AmountContributed

Surplus Deficit Total

alance January 1, 2010 239,171,893 $ 17,268,966 $ 890,684 $ (17,346,907) $ 812,74

Net loss and comprehensiveoss for the six month periodended June 30, 2010 (26,171) (26,1

alance June 30, 2010 239,171,893 $ 17,268,966 $ 890,684 $ (17,373,078) $ 786,57

Net loss and comprehensiveoss for the six month periodended December 31, 2010 (128,542) (128,54

alance December 31, 2010 239,171,893 $ 17,268,966 $ 890,684 $ (17,501,620) $ 658,03

Net loss and comprehensiveoss for the six month periodended June 30, 2011 (12,594) (12,59

alance June 30, 2011 239,171,893 $ 17,268,966 $ 890,684 $ (17,514,214) $ 645,43



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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Three Months Ended Six Months Ended

June 30, 2011 June 30, 2010 June 30, 2011 June 30, 20

(Not

OPERATING ACTIVITIES

Net Loss $ (5,551) $ (6,959) $ (12,594) $ (26,1

Changes in non-cash working capital items

Prepaids and sundry receivables (319) 1,020 12 (

Accounts payable and accrued charges (5,515) (6,109) (14,308) (

Cash Flow Used in Operating Activities (11,385) (12,048) (26,890) (26,

FINANCING ACTIVITIES

Loan from Director 12,000 0 19,000

Cash Flow From Financing Activities 12,000 0 19,000

Net Increase (Decrease) in Cash 615 (12,048) (7,890) (26,6

Cash beginning of period 1,304 27,456 9809 42,0

Cash end of period $ 1,919 $ 15,408 $ 1,919 $ 15,4



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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended June 30, 2011(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

____________________________________________________________________________________

1. CORPORATE PROFILE

Venga Aerospace Systems Inc. (the Company) was originally incorporated under the Business Corporations A(Ontario) by certificates of amalgamation dated April 26, 1979, amalgamating Frodac Mines Ltd., Great Bear SilvMines Limited and Silver Monarch Mines Limited to become Frodac Consolidated Energy Resources Ltd. On July 21985, the Company changed its name to Global Aerospace Systems Inc. and on November 3, 1987, the Compafurther changed its name to Venga Aerospace Systems Inc.

In addition, these condensed interim consolidated financial statements include the wholly owned subsidiary Venga JoiVenture Ltd., which is inactive.

2. GOING CONCERN

These financial statements have been prepared in accordance with IFRS applicable accounting principles to tpresentation of interim financial statements and to a going concern which assumes that the Company will be able realize its assets, including the ultimate realization of its long-term investments, and discharge its liabilities in the normcourse of business. Recurring sources of revenue have not yet proven to be sufficient. The Company needs to obtaadditional financing to enable it to continue its business. In the absence of additional financing, the Company may nhave sufficient funds to meet its obligations. Management continues to monitor the cash needs and consider varioalternatives to raise additional financing. However, management is reasonably confident but can offer no guarantee thit will be able to secure the necessary financing to enable the Company to continue as a going concern. These financstatements do not give effect to adjustments that would be necessary should the Company be unable to continue asgoing concern. There is no assurance that this will be successful.

If the going concern basis is not appropriate, material adjustments may be necessary in the carrying amounts and/or

classification of assets and liabilities and the loss for the period reported in these financial statements.

3. OPERATIONS

(a) Aerospace Unit

The Company, in association with ARINC Incorporated (www.arinc.com), has made an unsolicited proposal to tCanadian government to provide replacement jet aircraft for the Canadian Forces' Snowbirds aerial demonstratisquadron. In July of 2007, ARINC advised the Company that as a consequence of ARINC's decision to discontinue aircraft maintenance division, ARINC was withdrawing from further participation in the Company's Snowbirds' aircrreplacement proposal. As a direct result of the continuing delays in the Canadian government's decision with respectselecting a program to replace or upgrade the Snowbirds' aircraft, the Company is holding its Snowbirds' aircrareplacement proposal in abeyance pending receipt of a positive response from the Canadian government

(b) 3D Graphics Unit

In November of 2006, the Company entered into a joint venture agreement (the JV Agreement) with 3DP NoAmerica, Inc., of Kenner, Louisiana; United Business & Capital Services, LLC of Kenner, Louisiana; EKG, LLC Lafayette, Louisiana and Armadillo Photo Supply, Inc. of Houston, Texas creating a new commercial entity, the 3DNorth America Joint Venture (the New JV), to provide a range of advanced 3D products and print services for bocommercial and consumer customers. The Company retains a 30% ownership interest in the New JV with 3DP NoAmerica, Inc., who acts as the managing venturer of the New JV, owning the remaining 70% of the venture. Pursuant


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__________________________________________________________________________________

3. OPERATIONS (continued)

(b) 3D Graphics Unit

to the terms of the JV Agreement, and in order to provide the New JV with working or operational capital, theCompany advanced $600,000 USD to the New JV. The Company has no management rights or further fundingrequirements or obligations with respect to the New JV. The Companys participation in the New JV is limited to theCompanys right to receive 30% of the New JVs net profits as and when such profits are distributed to the jointventurers in accordance with the terms and provisions of the JV Agreement. The New JV purchased two, Chinesemanufactured, specialized 3D printer / processors, with the first of these 3D printer/processors having beendelivered to the New JV's Houston, Texas production facility in January of 2008 and the second of the 3Dprinter/processors being delivered in March of 2009. In compliance with the terms of the initial purchase agreement

in November of 2009, two technicians from the Chinese manufacturers of the 3D printer / processors attended atthe New JV's production facility to complete the installation and calibration of the 3D printer / processors. As aconsequence of both the continuing delays in the New JV becoming operational and the New JVs outstanding andunfulfilled obligation to pay the Company a licensing fee as required pursuant to the terms of the JV Agreement,Management elected in 2008 to take a 50 % write down of its investment interest in the New JV and to take afurther $100,00 write down of its said investment interest in 2010.

(c) Mining and Resource Unit

The Company initially acquired a 3% interest, together with an option to acquire up to an additional 15% interest, inGlobal Mineral Investments, LLC (GMI), a private U.S. corporation that proposed to lease and develop gold miningconcessions in West Africa. On August 31, 2007, GMI was awarded four Class B Gold Mining Licences (the GMIMining Licences) by the Ministry of Lands, Mines and Energy of the Republic of Liberia (the Ministry) for four,

separate concessions (the GMI Concessions) located in the Sanquin Mining Zone in the Republic of Liberia. Inconsideration for business and management services that the Company rendered GMI, on September 6, 2007, theCompanys ownership interest in GMI was increased from 3% to 4%. In April of 2010, the Company was advised byGMI that the GMI Mining Licences had been renewed by the Ministry until February of 2011.

On October 10, 2008, the Company announced that it entered into a funding and operating agreement (the FundingAgreement) with GMI and a number of investors to raise, by way of a non-brokered private placement (theOffering or the Placement), the sum of $535,000.00 through the issue of 10,700,000 common shares at a priceof $0.05 per share. The announced use of the proceeds from the Offering was to fund GMIs Proposed DredgingOperations (the "Proposed Dredging Operations") that GMI planned to carry out in those portions of the UpperTartweh River system flowing through the GMI Concessions; to acquire an additional 16% equity interest in GMI(giving Venga a 20% total interest) and for general corporate purposes. The Company and GMI specifically agreedthat the Funding Agreement did not create (whether directly or by implication) a partnership between the Companyand GMI, nor did the Funding Agreement create, whether directly or indirectly, a joint venture between the parties.Under the terms of the Funding Agreement, the Company secured an immediate 20% investment interest in GMIwith:

GMI retaining full and complete operational control of all GMIs business operations including, butnot limited to, the Proposed Dredging Operations and Venga being given management of the financialaffairs of the Proposed Dredging Operations;

Venga being given the entitlement to receive an annual financial management fee (yet to bereceived) calculated as being the greater of $120,000.00 or an amount equal to 1% of all monies received,disbursed or distributed by the Company as the financial manager of the Proposed Dredging Operations;


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__________________________________________________________________________________________

3. OPERATIONS (continued)

(c) Mining and Resource Unit (continued)

Revenues derived from the recovery of all minerals other than gold, including diamonds, being forthe benefit of all parties to the Funding Agreement so that such revenues will be included in the calculationof the distributable profits from the Proposed Dredging Operations that are payable to such parties pursuantto the terms of the Funding Agreement;

Subject to the approval of the Ministry, the records of the Ministry with respect to the GMIsConcessions to be amended to reflect Vengas direct ownership of these concessions in a percentage thatis equal to Vengas then equity ownership position in GMI;

Venga being granted an option (having expired in October, 2010) to acquire up to an additional 5%equity interest in GMI at a cost of $100,000.00 per 1% so acquired; and

Any additional mining concessions secured or negotiated by GMI or Venga in Liberia or West Africato be acquired in the joint names of GMI and Venga reflecting the parties equal ownership of suchadditional concessions.

Operations

In June of 2009, the Company announced that GMI had commenced both land and river based gold miningoperations at one of the GMI Concessions and that these initial mining operations had produced 14 ounces of gold.GMI suspended all gold mining operations in July of 2009 with the onset of the Liberian rainy season. In November o2009, GMI resumed its Liberian gold mining operations with dredging activities at GMI's Dugbe River site. In each ofthe months of March and April, 2010 GMI's gold mining operations produced a further 19 ounces of gold. As a direc

consequence of the early on set of the Liberian rainy season, GMI ceased all mining operations in early May of 2010and only recommenced dredge mining operations at GMI's Dugbe River site in late February, 2011.

Financings

In February of 2010, the Company announced that GMI had signed a letter of intent ("LOI") with RAM Consulting Group("RAM Consulting") of Charlotte, North Carolina wherein RAM agreed, on a best efforts basis, to raise $12 million dollars tofinance GMI's proposed land based gold mining operations in Liberia. As of the date of these financial statements GMhas not finalized or received any funding from RAM Consulting with respect to the LOI or otherwise.

On April 11, 2011, the Company announced that GMI had signed a funding and operational agreement (the"Operational Agreement") with Kiwi, Inc., a Liberian based mining company to fund and manage GMI's planned landbased mining operations at GMI's Kumasi Hill 15 and Kumasi Hill 18 concessions ("GMI's Planned Land BasedOperations") located in Sinoe County, Liberia. Pursuant to the terms of the Operational Agreement, Kiwi, Inc. haagreed to provide $10 Million of financing to fund GMI's Planned Land Based Operations (the "Operational Funding"

and to commence full mining operations at GMI's two Kumasi Hill sites by October 1, 2011. The OperationaAgreement further provides that Kiwi, Inc. will have full operational management of GMI's Planned Land BasedOperations, with all profit derived from such operations being divided equally between Kiwi, Inc. and GMI. ThOperational Agreement specifically requires Kiwi, Inc. to make the Operational Funding available for GMI's PlannedLand based Operations by September 5, 2011, failing which, the Operational Agreement will be deemed to be null anvoid. The Company further announced on April 11, 2011 that GMI will continue to manage the ongoing dredgingoperations being carried on in the Dugbe River system.


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_________________________________________________________________________________________

4.BASIS OF PREPARATION

(a) Statement of Compliance

These condensed interim consolidated financial statements are unaudited and have been prepared in accordancewith IAS 34 Interim Financial Reporting (IAS 34) using accounting policies consistent with the InternationalFinancial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) andInterpretations of the International Financial Reporting Interpretations Committee (IFRIC). These are theCompanys second IFRS condensed interim consolidated financial statements for part of the period covered by theCompanys first IFRS consolidated annual financial statements for the year ending December 31, 2011. Previously,the Company prepared its consolidated annual and consolidated interim financial statements in accordance withCanadian Generally Accepted Accounting Principles (GAAP). These condensed unaudited interim consolidated

financial statements follow the same accounting policies and methods of application as the Company's most recentannual financial statement except for those changes recognized on change over to IFRS, as are described in Note6b discloses the impact, if any, of the transitions to IFRS on the Company's reported financial position, financialperformance and cash flows. These condensed unaudited interim consolidated financial statements do not includeall the information required for full annual financial statements under IFRS.

(b)Basis of Presentation

These condensed unaudited interim consolidated financial statements have been prepared on the historical costbasis except for certain noncurrent assets and financial instruments, which are measured at fair value, asexplained in the accounting policies set out below. Any comparative figures presented in these condensedunaudited interim consolidated financial statements are in accordance with IFRS and have not been audited.

(c)Adoption of New and Revised Standards and Interpretations

The IASB issued a number of new and revised International Accounting Standards, International FinancialReporting Standards, amendments and related interpretations which are effective for the Companys financial yearbeginning on or after January 1, 2011. For the purpose of preparing and presenting the financial information for therelevant periods, the Company has consistently adopted all these new standards for the relevant reporting periods.

At the date of authorization of these condensed interim consolidated financial statements, the IASB and IFRIC hasissued the following new and revised Standards and Interpretations which are not yet effective for the relevantreporting periods:

IFRS 9 Financial Instruments: Classification and Measurement effective for annual periods beginning onor after January 1, 2013, with early adoption permitted, introduces new requirements for the classification

and measurement of financial instruments. IFRS 10 Consolidated Financial Statements effective for annual periods beginning on or after January 1,2013, with early adoption permitted, establishes principles for the presentation and preparation ofconsolidated financial statements when an entity controls one or more other entities.

IFRS 11 Joint Arrangements -effective for annual periods beginning on or after January 1, 2013, with earlyadoption permitted, provides for a more realistic reflection of joint arrangements by focusing on the rights andobligations of the arrangement, rather than its legal form. IFRS 12 Disclosure of Interests in Other Entities - effective for annual periods beginning on or afterJanuary 1, 2013, with early adoption permitted, requires the disclosure of information that enables users offinancial statements to evaluate the nature of, and risks associated with its interests in other entities and theeffects of those interests on its financial position, financial performance and cash flows.


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_________________________________________________________________________________________

4.Basis of Preparation (continued)

(c)Adoption of New and Revised Standards and Interpretations (continued)

IFRS 13 Fair Value Measurement -effective for annual periods beginning on or after January 1, 2013, withearly adoption permitted, provides the guidance on the measurement of fair value and related disclosuresthrough a fair value hierarchy.

Management anticipates that the above standards will, where applicable, be adopted in the Companys financialstatements for the period beginning January 1, 2013, and has not yet considered the impact of the adoption ofthese standards.

5.EXPLANATION OF TRANSITION TO IFRS

The Company prepares its financial statements in accordance with Canadian generally accepted accounting principles as sout in the Handbook of Canadian Institute of Chartered Accountants (CICA Handbook). In 2010, the CICA Handbook wrevised to incorporate International Financial Reporting Standards (IFRS), and require publicly accountable enterprisesapply such standards effective for years beginning on or after January 1, 2011. Accordingly, commencing the three monperiod ended March 31, 2011 and continuing in these condensed unaudited consolidated interim financial statements, tCompany has commenced reporting on this basis. This is therefore the first year that the Corporation has presented condensed consolidated financial statements in accordance with IFRS. In the year ended December 31, 2010, the Corporatreported under previous Canadian GAAP and therefore in these condensed interim consolidated financial statements, tterm Canadian GAAP refers to Canadian GAAP before the adoption of IFRS.

The accounting policies set out in Note 6 of the condensed consolidated financial statements of the Corporation for the thremonths ended March 31, 2011 have been applied in preparing the condensed consolidated financial statements for the thr

and six months ended June 30, 2011.

These condensed interim consolidated financial statements have been prepared by the Company in accordance withIFRS applicable to the preparation of interim financial statements, including IAS 34 - Interim Financial Reporting. Subjectto certain transition elections disclosed in Note 6(a), the Company has consistently applied the same accounting policiesin its opening IFRS statement of financial position at January 1, 2010 and throughout all periods presented, as if theseaccounting policies had always been in effect. Note 6(b) discloses the impact of the transition to IFRS on the Companysreported financial position, financial performance and cash flows, including, if any, the nature and effect of significantchanges in accounting policies from those used in the Companys annual financial statements for the year endedDecember 31, 2010.

The policies applied in these condensed interim consolidated financial statements are based on IFRS issued andoutstanding as of August 19, 2011, the date that the Board of Directors approved the financial statements. Anysubsequent changes to IFRS that are given effect in the Company's annual financial statements for the year endingDecember 31, 2011 could result in restatement of these condensed interim consolidated financial statements, includingthe transition adjustments recognized on change-over to IFRS.

IFRS employs a conceptual framework that is similar to Canadian GAAP. The adoption of IFRS has not changed theCompany's Statement of Financial Position, Statement of Comprehensive Loss, Statement of Changes in Equity andStatement of Cash Flows as previously reported under GAAP. As noted below, no transitional adjustments were madewhen converting from GAAP to IFRS. These condensed interim consolidated financial statements should therefore beread in conjunction with the Company's audited Canadian GAAP annual financial statements for the year endedDecember 31, 2010 and the accompanying notes as well as the Company's condensed interim consolidated financialstatements for the period ended March 31, 2011.


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_________________________________________________________________________________________

6. TRANSITION TO IFRS

The effect, if any, of the Companys transition to IFRS, is summarized in as follows:

a) Exemptions and exceptions from full retrospective application elected by the Company

A number of optional exemptions from full retrospective application are available to the Company upon adoption of IFRS.The impact or non impact of all these optional exemptions on the Company is listed below:

The Company has applied the following exemptions:

Exemption Application of exemption

Business Combinations exemption The Company has applied the business combinations exemptionIFRS 1. It has not restated business combinations that took plaprior to January 1, 2010 transition date. No adjustment wrequired.

The Company has not applied the following exemptions:

Exemption Reason for not applying the exemption

Compound financial instruments exemption The Company has not issued any compound instruments. Texemption is not applicable.

Cumulative translation differences exemption There was no cumulative translation differences previously recordunder Canadian GAAP. This exemption is not applicable.

Designation of financial assets and financial liabilitiesexemption

The Company has no securities classified as available-for-sainvestments or as financial assets at the fair value through profit aloss. This exemption is not applicable.

Employee benefits exemption The Company has no defined benefit plans. This exemption is napplicable.

Exemption from restatement of comparatives for IAS32 and IAS 39

The Company has no hedging relationships or derivatives. Texemption is not applicable.

Fair value as deemed cost exemption The Company has elected not to measure any items of properplant and equipment at fair value as at January 1, 2010. Texemption is not applicable.

Fair value measurement of financial assets orliabilities at initial recognition

The Company has not applied the exemption offered by the revisiof IAS 39 on the initial recognition of the financial instrumenmeasured at the fair value through profit and loss where there is active market. This exemption is not applicable.


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Notes to the Condensed Interim Consolidated Financial Statementsfor Period Ended June 30, 2011(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

____________________________________________________________________________________________

6.TRANSITION TO IFRS (continued)

a) Exemptions and exceptions from full retrospective application elected by the Company (continued)

Share-Based payment transaction exemption The Company has elected not to apply the share-based paymeexemption. No adjustment was required.

The Company has applied the following mandatory exceptions from retrospective application:

Exception Description of exception and application to the Compan

Assets held for sale and discontinued operationsexception

Assets held for sale or discontinued operations are recognizin accordance with IFRS 5. The Company did not have aassets that met the held-for-sale criteria during the peripresented. No adjustment was required.

De-recognition of financial assets and liabilities exception Financial assets and liabilities derecognized before January2010 are not re-recognized under IFRS. The Company has financial assets and liabilities that were de-recognized thus tapplication of this exemption has no impact on the Company.

Estimates exception Estimates under IFRS at January 1, 2010 should be consistewith estimates made for the same date under previous GAA

unless there is evidence that those estimates were in error. Nadjustments for estimates have been made.

Hedge accounting exception The Company has never applied hedge accounting. Texception is not applicable.

b) Reconciliation between IFRS and Canadian GAAP

IFRS employs a conceptual framework that is similar to Canadian GAAP. The adoption of IFRS may result in significachanges to a company's reported financial position, results of operations, and cash flows. Presented below are tCompany's determinations as to any reconciliations necessary or required to reconcile IFRS treatment the Companyassets, liabilities, equity, net loss and cash flows as such items may differ from those reported under Canadian GAAP

Reconciliation of theStatements of Financial Position

There were no material differences between the Statements of Financial Position presented under IFRS and the caflow statements presented under Canadian GAAP for the three and six months ended June 30, 2010 and the yeended December 31, 2010 on the Company's adoption of IFRS.

Reconciliation of theStatements of Assets, Liabilities and Equity

There were no material differences between the Statements of Assets, Liabilities and Equity presented under IFRand the Statements of Assets, Liabilities and Equity presented under Canadian GAAP for the three and six montended June 30, 2010 and the year ended December 31, 2010 on the Company's adoption of IFRS.


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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended June 30,, 2011(Expressed in Canadian Dollars)

(Unaudited - Prepared by Management)_________________________________________________________________________________________

b) Reconciliation between IFRS and Canadian GAAP (continued)

Reconciliation of Loss and Comprehensive Loss

There were no material differences between the Statements of Reconciliation of Loss and Comprehensive Lopresented under IFRS and the Statements of Reconciliation of Loss and Comprehensive Loss presented undCanadian GAAP for the three and six months ended June 30, 2010 and the year ended December 31, 2010 on thCompany's adoption of IFRS.

Reconciliation of the Statements of Cash Flows

There were no material differences between the Statements of Cash Flowspresented under IFRS and the Statemenof Cash Flows presented under Canadian GAAP for the three and six months ended June 30, 2010 and the yeended December 31, 2010 on the Company's adoption of IFRS.

7. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These condensed unaudited interim consolidated financial statements follow the same accounting policies and methoof application as the Company's most recent annual financial statement.

(a) Principles of Consolidation

The consolidated unaudited interim financial statements include the accounts of the Company and its subsidiary.

b) Basis of Presentation

The Company has prepared these comparative financial statements on a consolidated basis which includes its wholowned subsidiary, Venga Joint Venture Ltd.

(c) Use of Estimates

The preparation of these condensed interim consolidated financial statements, in conformity with Canadian generaaccepted accounting principles, requires management to make estimates and assumptions that affect the reportamounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statemenand the reported amounts of revenue and expense during the reporting period. Actual results could differ from theestimates. Significant estimates include prepaid expenses and certain accrued liabilities.

(d) Financial Instruments

Fair Value

The Company's financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities aloan from a director. Fair value is the amount at which a financial instrument could be exchanged between willinparties, based on the current markets for instruments with the same risk, principal and remaining maturity. The fvalues of these financial instruments approximate their carrying values, unless otherwise noted.


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_________________________________________________________________________________________

7. Summary of Significant Accounting Policies(continued)

(d) Financial Instruments (continued)

Fair Value (continued)

Fair Value Measurements Using

Quoted prices inactive markets for

identical instrumentsSignificant other

observable inputsSignificant

unobservableinputs

BalanceJune 30, 2011

(Level 1) (Level 2) (Level 3)

$ $ $ $

Cash 1,919 - - 1,919

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identicaassets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 thaare not observable for the asset or liability, either directly(i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset oliability that are not based on observable market data.

The fair values of other financial instruments, which include accounts receivable, accounts payable and accruliabilities and loan from director approximate their carrying values due to the relatively short-term maturity of theinstruments.

Risk

The Company has exposure to a credit risk; liquidity risk; foreign currency risk and interest risk from its use of financinstruments. The Company's cash is held in major Canadian banks and their subsidiaries. Management approves amonitors the risk management process. There has been no change in the Company's risk management process for tperiod ending June 30, 2011 or for the year ended December 31, 2010.

Credit Risk

Credit risk represents the financial loss that the Company would experience if a counterparty to a financial instrume

failed to meet its obligations to the Company. Cash consists of cash bank balances held in a major Canadian financinstitution. The Company's secondary exposure to risk is on its receivables. This risk is minimal as receivables consof refundable, government of Canada taxes. As a result, there is no significant credit risk related to the Companassets. The carrying amounts of this financial asset represent the maximum credit exposure.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Compahas a planning and budgeting process in place to help determine the funds required to support the Company's normoperating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its shoterm business requirements, taking into account its anticipated cash flows and its holding of cash. Historically, tCompany's principal sources of funding have been the issuance of equity securities for cash; solely through private


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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended June 30, 2011(Expressed in Canadian Dollars)

(Unaudited - Prepared by Management)_________________________________________________________________________________________


(d) Financial Instruments (continued)

Risk(continued)

Liquidity Risk (continued)

placements ("Financing"), revenues earned through the provision of consulting services and through the arranging loans by directors to the Company. The Company's access to additional Financing is always uncertain. There can no assurance of continued access to significant additional Financing or that the Company can earn additional consultirevenues or successfully arrange further loans from directors. The Company's cash is held in major Canadian banand their subsidiaries. As at June 30, 2011, the Company had cash of $1,919.00 and thus faces a material liquidity ris

Foreign Currency Risk

While the Company's functional currency is the Canadian dollar, the Company is subject to normal market risincluding fluctuations in foreign exchange rates. The Company has not entered into any derivatives or contractshedge or otherwise mitigate this exposure. As at June 30, 2011, the Company held no financial instruments subjectforeign exchange rates.

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes market interest rates. The risk that the Company will realize a loss due to a change in interest rates is limited becauthe Company as of June 30, 2011, had no interest bearing financial assets or liabilities.

(e) Income Taxes

The Company uses the asset and liability method of accounting for income taxes under which future tax assets aliabilities are recognized for differences between the financial statement carrying amounts of existing assets aliabilities and their respective tax bases. Future tax assets and liabilities are measured using substantively enacted trates in effect in the year in which those temporary differences are expected to be recovered or settled. The effect future tax assets and liabilities of a change in tax rates is recognized as part of the provision for income taxes in tyear that includes the enactment date. A valuation allowance is recorded to the extent there is uncertainty regardirealization of future tax assets.

(f) Translation of Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at t

year end, non-monetary assets and liabilities are translated at historical rates and revenue and expenses are translatat the rate of exchange in effect on the transaction dates. Exchange gains and losses arising on translation of monetaitems are included in income in the year in which they occur.

(g) Long-term Investments

Long-term investments are recorded at cost. Long-term investments classified as held-to maturity financial instrumenare valued at amortized cost, with changes in valuation charged to operations. Long-term investments classified available-for-sale financial instruments, are valued at fair market value, with changes in valuation charged comprehensive income. Gains and losses are recognized when investments are sold. Income is recognized only to textent dividends are received.


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h) Impairment of Long-lived Assets

Long-lived assets, including capital assets, are amortized over their useful lives. The Company reviews long-livassets for impairment when events or changes in circumstances indicate that the carrying amount may not recoverable. If the sum of the undiscounted cash flows expected to result from the use and eventual disposition ofgroup of assets is less than its carrying amount, it is considered impaired. An impairment loss is measured as tamount by which the carrying amount of the group of assets exceeds its fair value.

(i) Basic and Diluted Loss per Share

The Canadian Institute of Chartered Accountants ("CICA") recommends the use of the treasury stock method computing earnings/loss per share. Under this method, basic loss per share is computed by dividing earnings availabto common shareholders by the weighted average number of common shares outstanding during the year. In computithe loss per share on a fully diluted basis, the treasury stock method assumes that proceeds received from in-thmoney stock options are used to repurchase common shares at the prevailing market rate. The weighted averanumber of common shares outstanding during the period was 239,171,893 (2010 - 239,171,893).

(j) Revenue Recognition

Revenue is earned from the provision of consulting services, licence fees and if and when the Company receives share of profits from the Company's 3D graphics and mining and resources business units . The Company recognizrevenue from consulting services when performance of the consulting services are complete and recognizes revenfrom the Company's 3D graphics and mining and resources business units when such profit distributions are receiveThe licence fees represent fees that the New JV is contractually required to pay the Company for use of the Company

CLIK 3D trade name.

8.CAPITAL STOCK

Authorized: Unlimited common stock and special shares without par value

Issued: June 30, 2011 June 30, 2010

239,171,893 239,171,893

$17,268,966 $17,268,966

As of June 30, 2011, the Company had not issued any warrants or options nor were there any outstanding warrants ooptions.

9. RELATED PARTY TRANSACTIONS

A director of the Company advanced the Company the sum of $19,000 as a loan due and payable on demand whiloan is non - interest bearing. These funds were to be used by the Company for it's ongoing corporate and busineoperations.


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10.CAPITAL MANAGEMENT

The Companys objectives when managing capital are to safeguard its ability to continue as a going concern topursue the development of its three business segments and to maintain a flexible capital structure which optimizesthe cost of capital within a framework of acceptable risk. In the management of capital, the Company includes sharecapital, contributed surplus and deficit.

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

The Company is dependent on the capital markets and potential private investors as its sole source of operating

capital and the Companys capital resources are largely determined by the strength of the junior public markets andby the status of the Companys projects in relation to these markets and its ability to compete for investor support ofits projects.

11. INVESTMENT IN NEW JV

The Company, which holds a 30% interest in the New JV has no management rights or ongoing funding requirementsor obligations with respect to the New JV. The Company's participation in the management and operation of the NewJV is limited to the Company's right to receive 30% of the New JV's net profits or losses as and when such profits orlosses are distributed to the joint venturers in accordance with the terms and provisions of the New JV AgreementThe Company is only liable to the extent of its investment and is indemnified from the other joint venturers for anyexcess losses and liabilities. Upon termination of the New JV, the Company is entitled to its capital account share in

net assets of the New JV.

12. VENGA'S LICENCE FEE

Pursuant to the terms of the JV Agreement, the Company granted the New JV a licence (the "Venga Licence") durithe currency of the JV Agreement to use, market, operate and commercially exploit the business trade name 'CLIK 3DIn consideration of the Company's granting of the Venga Licence, the New JV agreed to pay Venga, the sum of fifthousand ($50,000.00) dollars (the "Venga Licence Fee") each year or part year during the currency of the JAgreement. Notwithstanding the terms of the JV Agreement, the New JV has failed to pay the Company the requireVenga Licence Fee for the years 2006 through 2010. The Company has advised the New JV that the Company is nwaiving any right to recover any portion of the accumulated, unpaid and outstanding amount for the Venga Licence Feand that the Company is and continues to regard the accumulated, unpaid and outstanding amount for the VenLicence Fee a valid, legal debt owed by the New JV to the Company.

13. IMPAIRMENT OF LONG TERM INVESTMENT

In fiscal year 2008, as a direct consequence of the accumulated and unexpected delays that the New JV (notes 3(b)and 8) has encountered in becoming operational, management decided to record approximately 50% as a write-downof the Company's investment interest in the New JV. As a result of the further delays that the New JV hasexperienced in becoming operational Management decided in 2010 to a further $100,00 write-down of the Company'sinvestment in the New JV.


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14. INVESTMENT IN PRIVATE COMPANY

Pursuant to the terms and provisions of the Funding Agreement, the Company, currently has a 20% (June 30, 201020%) interest. The Funding Agreement provides that the Company will participate in the profits generated throuGMIs business operations in an amount that is equal to the Companys then investment/equity interest in GMI. Asifrom the Companys management of the financial aspects of the Proposed Dredging Operation, for which the Compais entitled to receive a management fee in accordance with the terms of the Funding Agreement, the Company has management rights or ongoing funding requirements with respect to GMI or the Proposed Dredging Operation. TCompany and GMI have specifically agreed that no term, condition or provision in the Funding Agreement will act to, be deemed to, create or establish in law, or otherwise, a form of partnership between GMI and the Company nor will tterms, conditions and provisions of the Funding Agreement create, or be deemed to create or establish, in law otherwise, a joint venture between the Company and GMI with respect to the Proposed Dredging Operation

otherwise.

15. INCOME TAX

The Company has accumulated losses for income tax purposes totaling approximately $1,041,872 for which the taxbenefits have not been recognized in the financial statements. These losses can be deducted from future yearstaxable income and expire as follows:

$

2014 345,2772015 244,7802026 219,473

2027 82,4462028 60,8242029 34,3592030 54,713

1,041,872

16. SUBSEQUENT EVENTS

On July 18, 2011, the Company announced that GMI, in association with Kiwi, Inc. had signed an Exploration andDevelopment Agreement (the "Exploration Agreement") with Tawana Resources NL ("Tawana") wherein GMI grantedTawana exclusive exploration rights to the GMI's mining concession areas (the "Sinoe Project") in Sinoe County, LiberiaTawana has paid GMI an initial exclusivity option fee to secure binding exclusivity and exclusive rights to due diligence overwhat Tawana has described as GMI's 'highly prospective ground in Liberia'. The financial details of the ExplorationAgreement remain commercial - in confidence, with full acquisition details to be provided on completion of successful duediligence by Tawana.

In a July 13, 2011 press release, Tawana provided the following information and comments on the nature the ExplorationAgreement and the potential of the Sinoe Project:

that pending successful due diligence, Tawana had acquired from GMI, a highly prospective land package witharguably one of the most prospective Birimian gold structures currently being explored in Liberia - the Dugbe Shethat the Sinoe Project is 25 km along strike from Hummingbird's (AIM:HBR) 0.8Moz Dugbe Project and 40 km alonstrike from NT Resources (ASX: NTR) Bukon Jedeh Project. Both of these projects are hosted along secondary an


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16. SUBSEQUENT EVENTS (continued)

tertiary order structures adjacent to the main Dugbe Shear. Similar structural targets have been defined in tgovernment regional aeromagnetics data over the Sinoe Project area;

that the Sinoe Project area is characterized by numerous artisanal gold workings observed in the field during recensite due diligence activities and the area is characterized by numerous quartzite, graphite and manganeseoccurrences on the USGS geological map of Liberia all of which favorably indicate gold prospectivity;

that an aggressive field sampling and mapping program is being designed to commence within the coming weekswith blanket, wide spaced soil traverses within the license area and closer spaced soil traverses over high prioritytargets including, hard-rock artisanal workings, being planned. Assessment of access, artisanal workings in thearea and geological mapping will also be undertaken;

that a communitys consultation program will be undertaken on commencement of field work to ensure a socialicense to operate; and

that under the terms of the Exploration Agreement, Tawana has secured the services of the GMIs site manager tobuild access tracks, additional camp facilities and maintain logistical supplies to facilitate exploration activities.

Pursuant to the terms of the Exploration Agreement, GMI, in association with Kiwi, Inc. will actively participate and assistTawana in the development and operation of the Sinoe Project, retain and independently develop certain identified goldmining sites within the Sinoe Project and continue to pursue GMI's current and planned gold dredging operations in GMI'smining concessions.

On August 16, 2011, the Company announced that Tawana Resources NL ("Tawana") had advised GMI that Tawana hadsuccessfully completed its due diligence and that Tawana was proceeding with its planned acquisition of the exclusiveexploration and development rights to the Sinoe Project and that Tawana had secured an option to purchase outright themineral exploration licence over the Sinoe Project held by GMI.

In an August 16, 2011 press release, Tawana provided the following information and comments on its agreement with GMto acquire what Tawana described as a 'highly' prospective land package' in Sinoe County Liberia:

that GMI's mineral exploration licence covers an area of Birimian aged rocks along probablythe most prospective gomineralized structure being explored in Liberia today - the Dugbe Shear;

that the Sinoe Project is 25 km along strike from Hummingbird's (AIM:HBR) 0.8Moz Dugbe Project and 40 km alostrike from NT Resources (ASX: NTR) Bukon Jedeh Project. Both of these projects are hosted along secondary atertiary order structures adjacent to the main Dugbe Shear. Similar structural targets have been defined in tgovernment regional aeromagnetics data over the Sinoe Project area;

that the Sinoe Project area is characterized by numerous artisanal gold workings observed in the field during recensite due diligence activities and the area is characterized by numerous quartzite, graphite and manganeseoccurrences on the USGS geological map of Liberia all of which favorably indicate gold prospectivity;

that an aggressive field sampling and mapping program has been commenced in the Sinoe Project, with field teamscurrently on site conducting soil sampling traverses over high priority targets areas. Blanket, wide spaced soiltraverses within GMI's license area and closer spaced soil traverses over high priority targets including, hard-rockartisanal workings are being planned;

that it is expected that initial soil sampling data will delineate high priority targets for drilling in the first quarter o2012;


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16. SUBSEQUENT EVENTS (continued)

that a community's consultation program has now been successfully completed to ensure a social license tooperate;

that Tawana has secured the services of the GMIs site manager to build access tracks, additional camp facilitiesand maintain logistical supplies to facilitate exploration activities. and

that Tawana will fully exploration operations at the Sinoe Project during the first year of the development agreemenand then have the option to purchase GMI's licence outright through the payment to GMI of a combination oTawana common shares and cash.

Documents

Interim Financial Statements - June 30, 2011 - SEDAR Final A