Comaplex Minerals Corp.
TSX : CMF

Comaplex Minerals Corp.

March 06, 2007 23:59 ET

Comaplex Minerals Corp. Announces Fourth Quarter and Annual 2006 Results

CALGARY, ALBERTA--(Marketwire - March 6, 2007) - Comaplex Minerals Corp. (www.comaplex.com) (TSX:CMF) is pleased to announce its financial and operational results for the three months and year ended December 31, 2006.

FORWARD-LOOKING INFORMATION
---------------------------

Certain information set forth in this document contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Comaplex's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. 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. Comaplex's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements, and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Comaplex will derive there from. Comaplex disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that net present value of reserves does not represent fair market value of reserves.




ANNUAL FINANCIAL AND OPERATIONAL HIGHLIGHTS

2006 2005 2004
----------------------------------

Financial ($000, except $ per share)

Net Revenue

Mineral Division $ 1,287 $ 486 $ 1,937
Oil and Gas Division 3,511 4,191 3,570
Funds Flow from Operations(1) 2,457 2,935 2,241
Per Share Basic 0.06 0.08 0.06
Per Share Diluted 0.06 0.08 0.06
Net Earnings 2,084 3,589 2,464
Per Share Basic 0.05 0.09 0.07
Per Share Diluted 0.05 0.09 0.07
Capital Expenditures and Acquisitions
Mineral Division 9,022 6,982 4,336
Oil and Gas Division 168 52 167
Total Assets
Mineral Division 52,475 49,022 37,811
Oil and Gas Division 4,943 5,134 4,119
-------------------------------------------------------------------------
Oil and Gas Operations
Barrel of Oil Equivalent (BOE) per day(2) 293 227 251
-------------------------------------------------------------------------
(1) Funds flow from operations is not a recognized measure under GAAP.

Management believes that in addition to net earnings, funds flow from
operations is a useful supplemental measure as it demonstrates the
Company's ability to generate the cash necessary to fund future
growth through capital investment. Investors are cautioned, however,
that this measure should not be construed as an indication of the
Company's performance. The Company's method of calculating this
measure may differ from other issuers and accordingly, it may not be
comparable to that used by other issuers. For these purposes, the
Company defines funds flow from operations as funds provided by
operations before changes in non-cash operating working capital items
and asset retirement expenditures.

(2) BOE's are calculated using a conversion ratio of 6 MCF to 1 barrel of
oil. The conversion is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent
a value equivalency at the wellhead and as such may be misleading if
used in isolation.

QUARTERLY FINANCIAL AND OPERATIONAL HIGHLIGHTS

2006
----------------------------------
4th 3rd 2nd 1st
Financial ($000, except $ per share)
Net Revenue
Mineral Division $ 61 $ 618 $ 528 $ 80
Oil and Gas Division 893 701 949 968
Funds Flow from Operations 676 549 625 607
Per Share Basic 0.02 0.01 0.02 0.01
Per Share Diluted 0.02 0.01 0.02 0.01
Net Earnings 614 650 623 197
Per Share Basic 0.01 0.02 0.02 0.00
Per Share Diluted 0.01 0.02 0.02 0.00
Capital Expenditures and Acquisitions
Mineral Division 1,010 3,250 2,468 2,294
Oil and Gas Division 30 9 71 58
-------------------------------------------------------------------------
Oil and Gas Operations
Barrel of Oil Equivalent (BOE) per day 274 249 342 308
-------------------------------------------------------------------------
2005
----------------------------------
4th 3rd 2nd 1st

Financial ($000, except $ per share)

Net Revenue

Mineral Division $ 90 98 $ 254 $ 44
Oil and Gas Division 1,457 1,047 742 945
Funds Flow from Operations 1,194 839 587 315
Per Share Basic 0.03 0.02 0.02 0.01
Per Share Diluted 0.03 0.02 0.01 0.01
Net Earnings 2,784 210 239 356
Per Share Basic 0.07 0.01 0.01 0.01
Per Share Diluted 0.07 0.01 0.01 0.01
Capital Expenditures and Acquisitions
Mineral Division 650 4,095 1,045 1,192
Oil and Gas Division (38) 68 32 (11)
-------------------------------------------------------------------------
Oil and Gas Operations
Barrel of Oil Equivalent (BOE) per day 247 230 191 239
-------------------------------------------------------------------------



RESULTS OF OPERATIONS

Business Synopsis

Comaplex's principal business is the exploration and development of both base and precious metal properties. The Company, however, also has interests in four, non-operated, oil and natural gas producing properties that provide operating cash flow to cover administrative costs, mineral property acquisition costs and grass roots exploration activities. Comaplex's management has no immediate plans to acquire additional interests in other oil and natural gas properties.

Revenue

Mineral Properties

Gross revenue from the Company's mineral division totalled $1,287,000 in 2006 compared to $486,000 in 2005. The increase resulted primarily from an increase in the gain on sale of investments to $977,000 in 2006 from $136,000 in 2005. The gains resulted from the sale of shares that the Company held in various other public minerals companies. The Company continues to hold interests in various public mineral companies with the fair market value of these investments as of December 31, 2006 of $225,000 (2005 - $691,000). The Company also received no option payments in 2006 (2005 - $42,000).

Interest income of $251,000 (2005 - $258,000) related to interest earned from cash balances. The decrease was due primarily to reduced cash balances resulting from the funding of the Company's 2006 mineral exploration programs. Please refer to Liquidity and Capital Resources for further details.

Commencing in 2005, the Company received a gold production royalty on one of its Quebec properties. This interest was acquired as part of the WMC International Limited (WMC) merger in 2003. The royalty which is a flat fee for each tonne of ore produced through a mill is currently payable by a company who went into receivership on June 30, 2005.

Petroleum and Natural Gas

Revenue from the Company's petroleum and natural gas properties before royalties decreased to $3,654,000 in 2006 from $4,402,000 in 2005. The decrease was primarily due to reduced natural gas prices, an operational audit adjustment related to one of the Company's properties (see below) offset partially by increased production volumes.

Production volumes averaged 293 BOE's per day in 2006 compared to 227 BOE's per day in 2005. The increase is due to a change in the reporting of ethane sales at the Garrington Elkton plant. Effective January 1, 2006, the operator of the plant has been providing the Company with ethane sales volumes. In the past only ethane revenues were reported and pricing and ethane volumes were not provided. As such the revenues were recorded as part of natural gas sales with only nominal ethane volumes being recorded. This change resulted in approximately 450 MCF equivalent per day of additional ethane volumes (year over year) being reported and included in natural gas volumes. Historically the Company has reported a normal decline rate of 12 to 13 percent on its oil and gas property production, however, during 2006 production from all the Company's oil and gas properties remained relatively stable with normal production declines being offset by field and gas plant optimization processes implemented by the various third party operators.

Natural gas prices decreased to $4.83 in 2006 from $8.69 in 2005. As discussed above, the reporting of correct ethane volumes has resulted in more volumes but no adjustment to revenues (as these were previously reported). The impact of the volume adjustment is approximately a 20 percent reduction in price per MCF in 2006 from previous periods. The Company did not have any commodity hedges in place during 2006 or 2005 and as such incurred no hedging gains or losses.

The decrease in net revenue was partially due to the final resolution of an operational audit which resulted in a reduction in sales volumes for the years 2002 to 2004 at the Garrington Elkton plant. This adjustment resulted in the Company paying out approximately $56,000 in net revenues (approximately 8,400 MCF of natural gas and 550 barrels of natural gas liquids) to a third party.

Fourth quarter production revenue was $864,000, an overall increase of approximately $170,000 over the third quarter. The increase was due to increased Q4 production due to the annual maintenance programs being completed in Q3 and increased natural gas prices to $5.03 per MCF from $4.38 per MCF in the third quarter.

Comaplex was eligible for a partial rebate on all of the Alberta Crown royalties that it pays. This rebate program (the Alberta Royalty Tax Credit) provided the Company with total credits of $163,000 in 2006 compared to $179,000 in 2005. Effective January 1, 2007 the Alberta government has discontinued the program.

The Company did not dispose of any of its petroleum related investments in 2006. In 2005 the Company reported a gain on sale of investments of $210,000 resulting from its disposition of its interest in Novitas Energy Ltd. (a company with common directors and officers) on its takeover by Bonterra Energy Income Trust (Bonterra) (see discussion under Related Party Transactions).

Trust distribution income from Bonterra for 2006 amounted to $577,000 compared to $429,000 in 2005. The increase of $148,000 is due primarily to an increase of $0.45 per unit pay out by Bonterra in 2006 compared to 2005. Fourth quarter distributions totalled $196,000 compared to $146,000 in the third quarter as Bonterra declares its January distribution on December 30, 2006, resulting in four distributions being recorded in the fourth quarter.

Expenses

Mineral Properties - General and Administrative

General and administrative expenses related to mineral exploration increased to $914,000 in 2006 from $759,000 in 2005. Total minerals division general and administrative expenses prior to capitalization were $1,167,000 compared to $1,017,000 in 2005. The Company capitalized $255,000 (2005 - $258,000) of general and administrative expenses directly related to the Company's mineral exploration activities. Increases in salary compensation ($28,000), insurance costs ($29,000), management fees ($60,000) and provision for doubtful accounts ($55,000) were the primary reasons for the increase. The increase in salaries represents a 5.5 percent increase in overall employee compensation which is representative of the Alberta market place. Increased insurance costs relate to higher coverage limits required for the field operation at the Meliadine camp. The $60,000 increase in management fees represents added time and resources spent by Comstate on managing the corporate affairs of Comaplex. The provision in doubtful accounts relates to disputed items relating the to Company's Mexican property. The Company's interest in the property has been disposed of subsequent to year end. Please see discussion under Liquidity and Capital Resources.

Fourth quarter general and administration expenses decreased to $179,000 from $201,000 in the third quarter. The decrease was due primarily to reduced salary compensation expense relating to the Company's bonus plan as net earnings before taxes were reduced in the fourth quarter by $1,123,000 as a result of the provision for abandonment of mineral property (see discussion under Depletion, Depreciation, Accretion and Abandonment) and a fourth quarter charge of $291,000 for stock based compensation. This reduction was offset partially by the provision for doubtful accounts which was recorded in the fourth quarter.

Petroleum and Natural Gas Properties - Production Costs

Comaplex incurred $315,000 in petroleum and natural gas production costs in 2006 compared to $504,000 in 2005. On a barrel of oil equivalent basis using a conversion of 6 MCF of gas to 1 barrel of crude oil, average production costs were $2.95 in 2006 compared to $6.09 in 2005. The decrease production costs in 2006 over 2005 was due mainly to increased third party plant processing fee recoveries in 2006 as well as to approximately $93,000 of processing operating credits received pertaining to prior year operations. These processing recoveries are now being received on a monthly basis resulting in an approximately $80,000 annual reduction in oil and gas production costs. The BOE per day figures are correspondingly affected by the ethane volume change. The impact is an approximate 15 percent reduction in costs per BOE in 2006 over previous periods.

Petroleum and Natural Gas Properties - General and Administrative Costs

General and administrative costs increased marginally from $118,000 in 2005 to $120,000 in 2006. Increased management fee pertaining to petroleum and natural gas operations of $30,000 was mostly offset by the decline in oil and gas engineering costs.

The Company continues to have nominal general and administrative costs relative to its petroleum and natural gas operations as it does not operate any of its petroleum and natural gas properties.

Depletion, Depreciation, Accretion and Abandonment

Mineral Exploration - Abandonment of Claims

Abandonment of mineral properties increased to $1,123,000 in 2006 from $317,000 in 2005. The current year provision relates to two projects. Exploration costs ($448,000) associated with the Company's Southampton Island (diamonds), Nunavut have been written off as results were not sufficient to continue current development of the property. In February 2007, Comaplex disposed of its interests in the Caballo Blanco property for proceeds of $1,250,000 US. The Company wrote off $991,000 related to December 31, 2006 costs that were in excess of this value. The Company's policy with regard to abandonment provision is to reduce the carried value of properties if management determines prior capitalized costs are greater than realizable value.

The Company also recorded a depletion provision of $111,000 (2005 - $111,000) related to its mineral production royalty. The annual provision represents one quarter of the value attributable to the royalty at the time of the Company's merger with WMC.

Petroleum and Natural Gas

The Company follows the successful efforts method of accounting for petroleum and natural gas exploration and development costs. Under this method, the costs associated with dry holes are charged to operations. For intangible capital costs that result in the addition of reserves, the Company depletes its oil and natural gas intangible assets using the unit-of- production basis by field. The Company believes that successful efforts method of accounting provides a more accurate cost of the producing properties than the alternative measure of full cost accounting.

For tangible assets such as well equipment, a life span of ten years is estimated and the related tangible costs are depreciated at one-tenth of original cost per year. The use of a ten year life span instead of calculating depreciation over the life of reserves was determined to be more representative of actual costs of tangible property. Given the Company's long production life, wells and plants generally require replacement of some tangible assets more than once during their lifespan.

Provisions are made for asset retirement obligations for the Company's oil and gas and mineral properties. The amount of the asset retirement obligations is based on management's estimation of the discounted amount of the total abandonment and site reclamation costs to be incurred using escalating cost assumptions. The calculated amount is recorded as a liability and as part of the cost of the related intangible assets. The adjustment to the intangible assets is depleted as per the above discussion. A charge (accretion expense) related to the discounting of the asset retirement obligation is made each year.

At December 31, 2006, the estimated total (mineral and oil and gas) undiscounted amount required to settle the asset retirement obligations was $800,000 (2005 - $704,000). These obligations will be settled based on the useful lives of the underlying assets, which extend up to 18 years into the future. This amount has been discounted using a credit adjusted risk-free interest rate of 5 percent. The discount rate is reviewed annually and adjusted if considered necessary. A change in the rate would not have a significant impact on the amount recorded for asset retirement obligations. Based on the above estimates the Company has recorded a liability for asset retirement obligations in respect of its mineral operations of $370,000 (2005 - $354,000) related to its Meliadine project and $218,000 (2005 - $159,000) in respect of its oil and gas operations.

Depletion, depreciation and accretion expenses related to oil and gas assets were $571,000 in 2006 compared to $558,000 in 2005. These calculations require an estimation of the amount of the Company's petroleum reserves by field. This figure is calculated annually by an independent engineering firm and is used to calculate depletion. This calculation is to a large extent subjective. Reserves are affected by economic assumptions as well as estimates of petroleum products in place and methods of recovering those reserves. When reserves are increased or decreased depletion costs generally will be affected.

Income Taxes

The Company has adopted the liability method of accounting for income taxes under which the future income tax provision is based on the temporary differences in the accounts calculated using income tax rates expected to apply in the year in which the temporary differences will reverse. The Company has no current income tax expense as it has sufficient tax pools to ensure that no current income taxes are payable.

Future income tax recovery of $848,000 was recognized in 2006 compared to future income tax recovery of $1,463,000 in 2005. The large 2006 and 2005 future income tax recoveries were due to the ability to record as a future tax asset a larger portion of Comaplex's income tax pools (see below) due to the enhanced value of its mineral (see Mineral Property discussion) and oil and gas reserves (see Liquidity and Capital Resources)

The tax pool balances at the end of 2006 totalled $74,363,000 and consist of the following pool balances.




Rate of
Utilization
% Amount
-------------------------------------------------------------------------
Undepreciated capital costs 10-100 $ 483,000
Foreign exploration expenditures 10 2,433,000
Share issue costs 20 79,000
Earned depletion expenses (successored) 25 2,299,000
Canadian development expenditures 30 16,200,000
Non-capital losses carried forward 100 6,750,000
Canadian exploration expenditures (successored) 100 33,368,000
Canadian exploration expenditures 100 12,751,000
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$74,363,000
-------------------------------------------------------------------------



The ability to claim the above successored amounts is restricted to income from 56 percent of the Meliadine property.

Net Earnings

The Company earned $2,084,000 in 2006 compared to $3,589,000 in 2005. The decrease in net earnings was due to decreases in oil and gas revenue as a result of lower commodity prices, increased stock based compensation, increased mineral property write-offs and a reduction in future income tax recovery offset by increases in gain on sale of investments and trust distributions.

The Company continues to hold a significant amount of marketable investments that have a value in excess of their recorded amounts. In addition, high commodity prices continue to generate significant oil and gas earnings.

Comaplex is still in the mineral exploration stage of development and will not record significant levels of net earnings until production is achieved on its mineral properties. Earnings from its oil and gas operations will continue to be reinvested towards the development of its Meliadine property.

Funds Flow from Operations

Funds flow from operations decreased to $2,457,000 in 2006 from $2,935,000 in 2005. Funds flow from operations is not a recognized measure under GAAP. Management believes that in addition to net earnings, funds flow from operations is a useful supplemental measure as it demonstrates the Company's ability to generate the cash necessary to fund future growth through capital investment. Investors are cautioned, however, that this measure should not be construed as an indication of the Company's performance. The Company's method of calculating this measure may differ from other issuers and accordingly, it may not be comparable to that used by other issuers. For these purposes, the Company defines funds flow from operations as funds provided by operations before changes in non-cash operating working capital items and asset retirement expenditures.

Petroleum and natural gas operations generated all of the funds flow. The Company is still in the exploration and preliminary development stage with its mineral properties, and therefore, these properties generate minimum funds flow.

The following reconciliation compares funds flow to the Company's cash flow from operating activities as calculated according to Canadian generally accepted accounting principles:




2006 2005
Cash flow from operating activities $2,371,000 $2,677,000
Items not affecting funds flow
Accounts receivable (324,000) 175,000
Prepaid expenses - 143,000
Accounts payable and accrued liabilities 400,000 (194,000)
Asset retirement obligations settled 10,000 134,000
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Funds flow for the period 2,457,000 2,935,000
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Liquidity and Capital Resources

Management of Comaplex is pleased with the current financial position of the Company. At December 31, 2006, the Company had a working capital position of $7,203,000 (2005 - $12,119,000) without adjusting for the fair market value of its investments. Total working capital including the investment market value adjustment was $10,308,000 (2005 - $15,228,000).

Comaplex is presently planning the details of an underground exploration decline into the Tiriganiaq deposit in the last quarter of 2007 to early 2008. The decline and development will access both the 1000 and 1100 gold lodes and a bulk sample (round by round test through a sample tower) will be extracted. The underground work will determine continuity, mine ability, and will be used to compare drill-hole grades to chip sample grades, to underground grades to upgrade the understanding and resource status of the deposit. The tendering and permitting process for the decline is anticipated to commence in the first quarter of 2007.

The 2007 surface exploration program on the Meliadine West property will commence in early March. A drill budget of approximately 17,000 meters is planned with approximately 2,500 meters of this amount proposed for the winter/spring drill program. The winter drilling will test parts of the Tiriganiaq deposit and water covered portions of the satellite deposits. Geotechnical drilling will be completed in the area of the portal and decline, as well as test work in proposed locations for mill and tailings pond facilities. Upgrading and extension of the road between camp and the deposit will also take place in the winter months.

The summer drilling into the Tiriganiaq deposit will be targeting the deeper (below 200 meters) 'Inferred' resources with the intent of increasing the confidence and size of these mineralized zones. This phase of the program is expected to commence in early June and to continue into September. Surface exploration will continue on various targets on the property in 2007. Prospecting, mapping, and ground geophysical programs are being contemplated for several different targets on the property in an effort to define additional gold targets. Depending on results from the 2006 till samples, additional exploration for diamonds on the east end of the property may also take place in 2007.

Fuel and supplies sufficient for the duration of the 2007 drill program have been purchased and are presently in Rankin Inlet and will be mobilized to site in the winter months. Additional tanks and fuel for the underground exploration program in late 2007 / early 2008 will be ordered in the first quarter of 2007 and barged to Rankin during the late summer. Personnel for the programs have been hired and it is expected that the underground contractor will be selected in the coming months.

The Company currently has a projected capital expenditure budget for 2007 of $15,500,000 for the above mentioned projects. A further $900,000 is planned to be spent on the Company's miscellaneous other exploration plays and oil and gas development in 2007. The planned expenditures will be funded out of the Company's working capital, anticipated funds flow from oil and gas operations as well as an equity issuance scheduled to be completed in early spring of 2007. The Company currently anticipates issuing between $20 and $25 million worth of common stock to finance the current year and a portion of the 2008 exploration programs on Meliadine.

The Company engaged the services of Sproule Associates Limited to prepare a reserve evaluation with an effective date of December 31, 2006. The reserves are located in the Province of Alberta. The majority of the Company's production is comprised of natural gas. Comaplex's main natural gas producing properties are the Harmattan Elkton and Garrington Elkton Units. The gross figures in the following charts represent the Company's ownership interest before royalties and the net figure is after royalties.




SUMMARY OF OIL AND GAS RESERVES AS OF DECEMBER 31, 2006
(FORECAST PRICES AND COSTS)
RESERVES
Natural Natural Gas
Gas Liquids
Gross Net Gross Net
RESERVE CATEGORY (MMcf) (MMcf) (Mbbl) (Mbbl)
-------------------------------------------------------------------------
PROVED DEVELOPED PRODUCING 2,253 1,739 85 61
PROBABLE 690 538 32 21
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 2,943 2,277 117 82
-------------------------------------------------------------------------
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SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2006 (FORECAST PRICES AND COSTS)

NET PRESENT VALUE OF FUTURE NET REVENUE
Before and After Income Taxes
Discounted at (%/year)
0 5 10 15 20
(MM$)
RESERVE CATEGORY
-------------------------------------------------------------------------
PROVED DEVELOPED PRODUCING 10,376 8,488 7,229 6,336 5,671

PROBABLE 3,566 1,969 1,305 959 750
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 13,942 10,457 8,535 7,296 6,421
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Commodity prices used in the above calculations of reserves are as follows:

Year Edmonton Alberta Gas Propane Butane Pentane
Par Price Reference
Price Plantgate
(Cdn $ (Cdn $ per MCF) (Cdn $ (Cdn $ (Cdn $
per barrel) per barrel) per barrel) per barrel)
------------------------------------------------------------------
2007 74.10 7.51 43.94 55.23 75.88
2008 77.62 8.38 46.03 57.85 79.49
2009 70.25 7.55 41.66 52.36 71.94
2010 65.56 7.37 38.88 48.87 67.14
2011 61.90 7.54 36.71 46.14 63.40
2012 63.15 7.68 37.45 47.07 64.67
2013 64.42 7.79 38.21 48.02 65.98
2014 65.72 7.93 38.97 48.98 67.30
2015 67.04 8.07 39.76 49.97 68.66
2016 68.39 8.21 40.56 50.97 70.04
2017 69.76 8.35 41.38 52.00 71.45



Crude oil, natural gas and liquid prices escalate at two percent thereafter.

The following cautionary statements are specifically required by



NI 51-101

- It should not be assumed that the estimates of future net revenue
presented in the above tables represent the fair market value of the
reserves. There is no assurance that the forecast prices and costs
assumptions will be attained and variances could be material.

- Disclosure provided herein in respect of BOE's may be misleading,
particularly if used in isolation. In accordance with NI 51-101, a
BOE conversion ratio of 6mcf:1bbl has been used in all cases in this
disclosure. This BOE conversion ratio is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.

- Estimates of reserves and future net revenues for individual
properties may not reflect the same confidence level as estimates of
reserves and future net revenues for all properties due to the
effects of aggregation.



The following exploration programs were conducted on the Company's mineral projects. Total exploration and administrative costs incurred by Comaplex in 2006 were as follows:




Property Amount
-------------------------------------------------------------------------
Meliadine $8,266,000
Caballo Blanco, Mexico 640,000
Other 116,000
-------------------------------------------------------------------------
Total $9,022,000
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Changes in Accounting Policies

The AcSB has issued new accounting standards for financial instruments standards that comprehensively address when an entity should recognize a financial instrument on its balance sheet, or how it should measure the financial instrument once recognized. The new standards comprise three handbook sections:



- CICA Section 3855 - Financial Instruments - Recognition and
Measurement establishes the criteria for recognizing and measuring
financial assets, financial liabilities and non-financial
derivatives. It also specifies how financial instrument gain and
losses are to be presented.

- CICA Section 3865 - Hedges provides optional alternative treatments
to Section 3855 for entities which choose to designate qualifying
transactions as hedges for accounting purposes. It will replace
Accounting Guideline 13 (AcG - 13), Hedging Relationships, and
build on Section 1650, Foreign Currency Translation, by specifying
how hedge accounting is applied and what disclosures are necessary
when it is applied.

- CICA Section 1530 - Comprehensive Income introduces a new
requirement to temporarily present certain gains and losses as part
of a new earnings measurement called comprehensive income.



All three standards are effective for annual and interim periods in fiscal years beginning on or after October 1, 2006. The Company plans on implementing them effective January 1, 2007.

The impact to the new standards to the Company is moderate. The Company will be recording on its balance sheet its investments at their fair value, which was $5,637,000 as of December 31, 2006. These investments will be adjusted each quarter to reflect changes in their market value. These adjustments along with the initial fair value adjustment will be recorded in the new statement of comprehensive income. The unrealized gains or losses will be transferred to net earnings when the investments are disposed of.

The Company also plans to use hedge accounting to the extent possible should it decide to enter into any future commodity price contracts. The impact would be to record assets or liabilities pertaining to the hedges on the Company's balance sheet and record fair value adjustments in these contracts through comprehensive income until the contracts expire.

Business Prospects, Risks, and Outlooks

There are a number of risks associated with the natural resource business. These risks, among others, include the effects of changing market conditions including price fluctuations for commodities, the uncertainty of finding sufficient reserves for economic production, competition amongst mineral companies for viable projects, the risks inherent in drilling operations, and increasing environmental requirements.

While the Company cannot control the effects of market fluctuations, risks can be minimized or reduced in some areas. The Company reduces risks by high grading prospects through extensive geological analysis prior to drilling programs, by maintaining stringent safety standards and appropriate liability coverage during drilling, by ensuring the Company is properly financed and has adequate working capital, by marketing its gas through both long term gas sales contracts and spot price market sales, and by entering into future price agreements for a portion of its gas production for future periods. For the years ended December 31, 2006 and 2005, the Company had no future price agreements in place.

Sensitivity Analysis

The Company is still in the exploration stage of development of its mineral exploration properties and as such generates nominal cash flow or earnings from these properties. In addition the Company's petroleum and natural gas operations provide only moderate cash flow and as such changes of $1.00 US per barrel in the price of crude oil, $0.10 per MCF in the price of natural gas and $0.01 change in the Cdn/US exchange rate would have no significant impact on the cash flow per share amounts of the Company.

The TSX does not accept responsibility for the adequacy or accuracy of

this release.

Additional information relating to the Company may be found on WWW.SEDAR.COM and by visiting our website at www.comaplex.com.

COMAPLEX MINERALS CORP.

CONSOLIDATED BALANCE SHEETS




As at December 31
($000) 2006 2005
-------------------------------------------------------------------------
ASSETS
Current
Cash 4,759 9,430
Accounts receivable 362 686
Prepaid expenses 151 404
Investments (at cost; quoted market value at
December 31, 2006 -$5,637,000
December 31, 2005 - $5,673,000) (Note 2) 2,532 2,564
-------------------------------------------------------------------------
7,804 13,084
Future income tax asset (Note 3) 4,261 3,413
Property and equipment (Note 4)
Property and equipment 52,374 43,996
Accumulated depletion, depreciation and amortization (7,021) (6,337)
-------------------------------------------------------------------------
45,353 37,659
-------------------------------------------------------------------------
57,418 54,156
-------------------------------------------------------------------------

LIABILITIES

Current

Accounts payable and accrued liabilities (Note 2) 601 965
Asset retirement obligations (Note 7) 588 513
-------------------------------------------------------------------------
1,189 1,478
-------------------------------------------------------------------------
-------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Share capital (Note 5) 44,922 43,222
Contributed surplus 1,684 1,917
Retained earnings 9,623 7,539
-------------------------------------------------------------------------
56,229 52,678
-------------------------------------------------------------------------
57,418 54,156
-------------------------------------------------------------------------
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.

CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Years Ended December 31

($000, except $ per share) 2006 2005
-------------------------------------------------------------------------
REVENUE
Minerals division
Mineral property options - 42
Interest 251 258
Mineral production royalty 59 50
Gain on sale of investments 977 136
-------------------------------------------------------------------------
1,287 486

-------------------------------------------------------------------------

Oil and gas division

Oil and gas sales 3,654 4,402
Royalties (883) (1,029)
Alberta royalty tax credits 163 179
Gain on sale of investments - 210
Trust distributions (Note 2) 577 429
-------------------------------------------------------------------------
3,511 4,191
-------------------------------------------------------------------------
4,798 4,677
-------------------------------------------------------------------------

EXPENSES

Oil and gas production costs 315 504
General and administrative
Minerals division 914 759
Oil and gas division 120 118
Foreign exchange loss 15 15
Stock based compensation 364 164
Depletion, depreciation and accretion 711 674
Abandonment of mineral properties (Note 5) 1,123 317
-------------------------------------------------------------------------
3,562 2,551
-------------------------------------------------------------------------
Earnings before income taxes 1,236 2,126
-------------------------------------------------------------------------
Income taxes (recovery) (Note 3)
Current - -
Future (848) (1,463)
-------------------------------------------------------------------------
(848) (1,463)
-------------------------------------------------------------------------
Net earnings for the year 2,084 3,589
Retained earnings, beginning of year 7,539 3,950
-------------------------------------------------------------------------
Retained earnings, end of year 9,623 7,539
-------------------------------------------------------------------------
Net earnings per share - basic and diluted 0.05 0.09
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOW

Years Ended December 31

($000) 2006 2005
-------------------------------------------------------------------------
OPERATING ACTIVITIES

Net earnings 2,084 3,589
Items not affecting cash
Gain on sale of investments (977) (346)
Stock based compensation 364 164
Depletion, depreciation and accretion 711 674
Abandonment of mineral properties 1,123 317
Future income taxes (848) (1,463)
-------------------------------------------------------------------------
2,457 2,935
-------------------------------------------------------------------------

Change in non-cash working capital
Accounts receivable 324 (175)
Prepaid expenses - (143)
Accounts payable and accrued liabilities (400) 194
Asset retirement obligations settled (10) (134)
-------------------------------------------------------------------------
(86) (258)
-------------------------------------------------------------------------
2,371 2,677
-------------------------------------------------------------------------

FINANCING ACTIVITIES

Issue of shares pursuant to private placement - 8,500
Share issue costs - (30)
Issue of shares under employee stock option plan 1,104 26
-------------------------------------------------------------------------
1,104 8,496
-------------------------------------------------------------------------

INVESTING ACTIVITIES

Mineral exploration property and equipment
expenditures (9,022) (6,982)
Oil & gas property and equipment expenditures (168) (52)
Investments purchased - (1,157)
Investments sold 1,008 405
-------------------------------------------------------------------------
(8,182) (7,786)
Change in non-cash working capital

Accounts payable and accrued liabilities 36 (201)
-------------------------------------------------------------------------
(8,146) (7,987)
-------------------------------------------------------------------------
Net cash inflow (outflow) (4,671) 3,186
Cash, beginning of year 9,430 6,244
-------------------------------------------------------------------------
Cash, end of year 4,759 9,430
-------------------------------------------------------------------------
Cash interest paid - -
Cash taxes paid (received)

- -

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the
Corporation and its subsidiaries and have been prepared by management
in accordance with Canadian generally accepted accounting principles
as described below.

Consolidated entities

These consolidated financial statements include the accounts of the
Corporation and its wholly owned subsidiaries WMC International
Limited and Comaplex U.S. Inc. Inter-company transactions and
balances are eliminated upon consolidation.

Measurement uncertainty

The preparation of the consolidated financial statements requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements
and revenues and expenses during the reporting period. Actual results
can differ from those estimates.

In particular, amounts recorded for depreciation and depletion and
amounts used in ceiling test calculations are based on estimates of
petroleum and natural gas reserves and future costs required to
develop those reserves. The Corporation's reserve estimates are
evaluated annually by an independent engineering firm. By their
nature, these estimates of reserves and the related future cash flows
are subject to measurement uncertainty, and the impact on the
consolidated financial statements of future periods could be
material.

The amounts recorded for asset retirement obligations were estimated
based on the Corporation's net ownership interest in all wells,
facilities and mineral property, estimated costs to abandon and
reclaim the wells, facility and mineral camp site, and the estimated
time period during which these costs will be incurred in the future.

Any changes to these estimates could change the amount recorded for
asset retirement obligations and may materially impact the
consolidated financial statements of future periods.

Property and equipment

Undeveloped Mineral Properties

All costs related to acquisition and exploration of mineral
properties are capitalized. These costs are assessed on an annual
basis or more frequently when events or changes in circumstances
indicate that the carrying amounts of related assets might not be
recoverable. In assessing the impairment of exploration properties,
management reviews its intended plans, results of current exploration
activities and the market value of recent transactions involving
sales or optioning of similar properties. The costs of abandoned
properties are charged to operations. When proved reserves are found,
and production commences, the related costs will be depleted on the
unit-of-production basis.

Petroleum and Natural Gas Properties and Related Equipment

The Corporation follows the successful efforts method of accounting
for petroleum and natural gas properties and related equipment. Costs
of exploratory wells are initially capitalized pending determination
of proved reserves. Costs of wells which are assigned proved reserves
remain capitalized, while costs of unsuccessful wells are charged to
earnings. All other exploration costs including geological and
geophysical costs are charged to earnings as incurred. Development
costs, including the cost of all wells, are capitalized.

Producing properties and significant unproved properties are assessed
annually or as economic events dictate, for potential impairment.

Impairment is assessed by comparing the estimated net undiscounted
future cash flows to the carrying value of the asset. If required,
the impairment recorded is the amount by which the carrying value of
the asset exceeds its fair value.

Depreciation and depletion of capitalized costs of oil and gas
producing properties are calculated using the unit of production
method. Development and exploration drilling and equipment costs are
depleted over the remaining proved developed reserves. Depreciation
of other plant and equipment is provided on the straight line method.

Straight line depreciation is based on the estimated service lives of
the related assets with is estimated to be ten years.
Furniture, Equipment and Other

These assets are recorded at cost and are depreciated on a straight
line basis over three to ten years.

Investments

The investments are carried at the lower of cost and market value.

Income taxes

The Corporation follows the liability method of accounting for income
taxes under which the income tax provision is based on the temporary
differences between the amounts reported by the Corporation and their
respective tax bases calculated using income tax rates expected to
apply in the year in which the temporary differences will reverse.

Asset retirement obligations

The fair value of obligations associated with the retirement of
tangible long-life assets are recorded in the period the asset is put
into use, with a corresponding increase to the carrying amount of the
related asset. The obligations recognized are statutory, contractual
or legal obligations. The liability is adjusted over time for changes
in the value of the liability through accretion charges which are
included in depletion, depreciation and accretion expense. The costs
capitalized to the related assets are amortized to earnings in a
manner consistent with the depletion and depreciation of the
underlying asset.

Stock-based compensation

The Corporation has a stock-based compensation plan, which is
described in Note 5. The Company records a compensation expense over
the vesting period based on the fair value of options granted to
employees, directors and consultants. These amounts are recorded as
contributed surplus. Any consideration paid by employees, directors
or consultants on the exercise of these options is recorded as share
capital together with the related contributed surplus associated with
the exercised options.

Joint Interests

A portion of the Corporation's exploration, development and
production activities are conducted jointly with others. These
consolidated financial statements reflect only the Corporation's
proportionate interest in such activities.

Revenue recognition

Revenues associated with sales of petroleum, natural gas and all
other items are recorded when title passes to the customer. Interest,
mineral production royalty and trust distribution income are recorded
when earned.

Earnings per common share

Basic earnings per share are computed by dividing earnings by the
weighted average number of common shares outstanding during the year.
Diluted per share amounts reflect the potential dilution that could
occur if options to purchase common shares were exercised. The
treasury stock method is used to determine the dilutive effect of
stock options, whereby proceeds from the exercise of stock options or
other dilutive instruments are assumed to be used to purchase common
shares at the average market price during the year.

2. RELATED PARTIES

The Corporation paid a management fee of $300,000 (2005 - $240,000)
to Comstate Resources Ltd. (Comstate) (a wholly owned subsidiary of
Bonterra Energy Income Trust (Bonterra) a publicly traded oil and gas
income trust on the Toronto Stock Exchange) a company that has common
directors and management with the Corporation. The Corporation also
shares office rental costs and reimburses Comstate for costs related
to employee benefits and office materials. These costs have been
included in general and administrative expenses.
Comstate owns 689,682 (December 31, 2005 - 689,682) common shares in
the Corporation. Comstate is the administrator for Bonterra. Services
provided by Comstate include executive services (president and vice
president, finance duties), accounting services, oil and gas
administration and office administration.

As at December 31, 2006 the Corporation had an account payable to
Comstate of $38,000 (December 31, 2005 - $29,000).
The Corporation at December 31, 2006 owns 204,633 (December 31, 2005
- 204,633) units in Bonterra representing just over one percent of
the outstanding units of Bonterra. The units have an accounting cost
of $2,321,000 (December 31, 2005 - $2,321,000) and a quoted market
value of $5,233,000 (December 31, 2005 - $4,829,000). The Corporation
received distributable income of $577,000 (2005 - $429,000) for the
twelve month periods.

The Corporation at December 31, 2006 owns 277,000 (December 31, 2005
- 277,000) common shares in Pine Cliff Energy Ltd. (Pine Cliff). Pine
Cliff has common directors and management with the Corporation. Pine
Cliff shares trade on the TSX Venture Exchange. As of December 31,
2006 the common shares have an accounting cost of $42,000
(December 31, 2005 - $42,000) and a quoted market value of $180,000
(December 31, 2005 - $152,000). The Corporation's ownership of
277,000 common shares represents less than one percent of the total
issued and outstanding common shares of Pine Cliff.

3. INCOME TAXES

The Corporation has recorded a future income tax asset. The asset
relates to the following temporary differences:




2006 2005
($000) Amount Amount
---------------------------------------------------------------------
Future income tax assets:
Capital assets 2,049 837
Asset retirement obligation 170 174
Share issue costs 23 49
Loss carry-forward (expires 2010) 1,957 2,282
Other 62 71
---------------------------------------------------------------------
4,261 3,413
---------------------------------------------------------------------
Income tax expense varies from the amounts that would be computed by
applying Canadian federal and provincial income tax rates as follows:
($000) 2006 2005
---------------------------------------------------------------------
Earnings before income taxes 1,236 2,216
Combined federal and provincial income tax rates 34.5% 37.5%
---------------------------------------------------------------------
Income tax provision calculated using statutory
tax rates 426 797
Increase (decrease) in taxes resulting from:
Stock based compensation 125 62
Non-deductible Crown royalties 86 190
Non-taxable portion of capital gains (169) (65)
Resource allowance (71) (189)
Alberta royalty tax credit (38) (55)
Effect of change in valuation allowance (2,031) (2,235)
Depletion of consolidated asset adjustment 38 41
Effect of change in tax rate 772 -
Other 14 (9)
---------------------------------------------------------------------
Income tax expense (recovery) (848) (1,463)
---------------------------------------------------------------------
The Corporation has the following tax pools which may be used to
reduce taxable income in future years, limited to the applicable
rates of utilization:

Rate of
Utilization Amount
% ($000)
---------------------------------------------------------------------
Undepreciated capital costs 10-100 483
Foreign exploration expenditures 10 2,433
Share issue costs 20 79
Earned depletion expenses (successored) 25 2,299
Canadian development expenditures 30 16,200
Non-capital loss carried forward 100 6,750
Canadian exploration expenditures (successored) 100 33,368
Canadian exploration expenditures 100 12,751
---------------------------------------------------------------------
74,363
---------------------------------------------------------------------
The ability to claim the above successored amounts is restricted to
income from 56 percent of the Meliadine property (see Note 10).

4. PROPERTY AND EQUIPMENT

2006 2005
---------------------------------------------------------------------
Accumulated Accumulated
Depletion, Depletion,
Depreciation Depreciation
and and
($000) Cost Amortization Cost Amortization
---------------------------------------------------------------------
Mineral properties 43,668 221 35,542 111
Petroleum and natural
gas properties and
related equipment 8,485 6,601 8,257 6,039
Furniture, equipment
and other 221 199 197 187
---------------------------------------------------------------------
52,374 7,021 43,996 6,337
---------------------------------------------------------------------



During the year, $255,000 (2005 - $258,000) of general and
administrative expenses related to mineral exploration were
capitalized. No general and administrative expenses related to oil
and gas operations have been capitalized.

In 2006 the Corporation provided for $1,123,000 (2005 - $317,000) in
abandonment of mineral properties. Of this amount, $675,000 relates a
write down of the Caballo Blanco Mexican property. The write-down
represents the excess of the carrying value of the property over the
proceeds of its disposition in 2007. Please refer to note 12. The
balance of $448,000 relates to impairment of miscellaneous mineral
properties.

The Corporation's most significant project is the Meliadine project
located in Nunavut Territory, Canada near the north western shore of
Hudson Bay. The center of the property is approximately 24 km north
of Rankin Inlet in the Kivalliq District. Current property holdings
on the Meliadine property total approximately 65,104 hectares. The
property is presently under two separate agreements: the Meliadine
West property in which Comaplex has a 78% interest and Resource
Capital Fund (RCF) a 22% interest; and the Meliadine East property in
which Comaplex and RCF each own a 50 percent working interest. The
Meliadine West property consists of 45,275 hectares. Of this amount,
42,180 hectares are under Federal jurisdiction (20,594 hectares are
claims, 21,586 hectares are leases) and 3,095 hectares are Nunavut
Tunngavik Inc. (NTI) subsurface concessions. The Meliadine East
property consists of 19,829 hectares. Of these lands, 17,054 hectares
in 18 claims come under the jurisdiction of the Federal Canadian
Mining Regulations (leases) and 2,775 hectares come under NTI
subsurface concessions.

The Corporation has capitalized costs of $41,264,000 (2005 -
$33,148,000) for deferred development costs for Meliadine. No costs
have been attributable to capital assets or deferred pre-operating
costs. In addition no costs have been expensed on the project to
date. The ultimate success of the Meliadine project and the
recoverability of the capitalized costs related thereto are dependent
upon the development of a successful mine. Specifically, this will
require additional financing in amounts sufficient to continue the
on-going development of the Meliadine project and to meet the related
obligations as they become due.

The Corporation has received option payments to date totalling
$2,850,000 (December 31, 2005 - $2,850,000). These payments have been
reported as income when received.

Please refer to Notes 10 and 11 regarding contractual obligations and
commitments as well as contingent items regarding the Meliadine
project.

5. SHARE CAPITAL

Authorized

Unlimited number of common shares without nominal or par value
Unlimited number of first preferred shares




Issued
($000) 2006 2005
---------------------------------------------------------------------
Number Amount ($) Number Amount ($)
---------------------------------------------------------------------
Common Shares
Balance, beginning
of year 38,568,971 43,222 36,119,400 34,702
Issued pursuant to
private placement - - 2,428,571 8,500
Issue costs for
private placement - - - (30)
Issued on exercise
of stock options 882,800 1,104 21,000 26
Transfer of
contributed surplus
to share capital - 596 - 14
Future tax benefit
of share issue costs - - - 10
---------------------------------------------------------------------
Balance, end of year 39,451,771 44,922 38,568,971 43,222
---------------------------------------------------------------------


The 39,587,967 (2005 - 38,920,948) shares used to calculate diluted
earnings per share for the year ended December 31, 2006 included the
basic weighted average number of shares outstanding of 38,816,779
(2005 - 38,120,097) plus 771,188 (2005 - 800,851) shares related to
the dilutive effect of stock options.

On March 7, 2005, the Corporation completed a private placement with
an indirect wholly-owned subsidiary of Gold Fields Limited (Gold
Fields) for 2,428,571 common shares at a price of $3.50 per common
share for aggregate gross proceeds of $8,500,000. The proceeds of the
placement were used for the further exploration and development of
the Meliadine properties. In connection with the private placement,
the Corporation and Gold Fields entered into a Technical Assistance
Agreement under which Gold Fields provided technical assistance in
the planning and execution of the 2005 advanced exploration program
on the Meliadine West and other properties. The Technical Assistance
Agreement was terminated in 2006.

The Corporation provides a stock option plan for its directors,
officers, employees and consultants. Under the plan, the Corporation
may grant options for up to 3,856,897 (December 31, 2005 - 2,700,000)
shares of common stock. The exercise price of each option granted
equals the market price of the Corporation's stock on the date of
grant and the option's maximum term is five years. Options vest one-
third each year for the first three years of the option term.

A summary of the status of the Corporation's stock option plan as of
December 31, 2006 and 2005, and changes during the years ending on
those dates is presented below:




2006 2005
---------------------------------------------------------------------
Weighted- Weighted-
Average Average
Exercise Exercise
Options Shares Price Shares Price
---------------------------------------------------------------------
Outstanding at
beginning of year 1,468,000 $1.34 1,531,000 $1.28
Options granted 1,827,000 3.20 60,000 2.70
Options exercised (882,800) 1.25 (21,000) 1.25
Options cancelled (15,000) 4.00 (102,000) 1.25
---------------------------------------------------------------------
Outstanding at end
of year 2,397,200 $2.77 1,468,000 $1.34
---------------------------------------------------------------------
---------------------------------------------------------------------
Options exercisable
at end of year 530,200 $1.30 933,666 $1.28
---------------------------------------------------------------------
---------------------------------------------------------------------
The following table summarizes information about stock options
outstanding at December 31, 2006:
Options Outstanding Options Exercisable
-------------------------------------------------------------------------
Weighted-
Number Average Weighted- Number Weighted-
Range of Outstanding Remaining Average Exercisable Average
Exercise At Contractual Exercise At Exercise
Prices 12/31/06 Life Price 12/31/06 Price
-------------------------------------------------------------------------
$1.25 510,200 0.2 years $1.25 510,200 $1.25
2.70 60,000 3.3 years 2.70 20,000 2.70
3.20 to 3.60 1,827,000 3.2 years 3.20 - -
-------------------------------------------------------------------------
$1.25 to 3.60 2,397,200 2.6 years $2.77 530,200 $1.30
-------------------------------------------------------------------------
-------------------------------------------------------------------------



The Corporation records compensation expense over the vesting period
based on the fair value of options granted to employees, directors
and consultants. The Corporation granted 1,827,000 stock options with
an estimated fair value of $2,077,000 ($1.14 per option) using the
Black-Scholes option pricing model with the following key
assumptions:

Weighted-average risk free interest rate (%) 4.0
Dividend yield (%) 0.0
Expected life (years) 3.0
Weighted-average volatility (%) 47.0

6. FINANCING COMMITMENT

On December 8, 2006, the Corporation entered into a financing
commitment with the Corporation's principal banker. The financing
commitment allows for a $3,400,000 extendible revolving credit
facility. The credit facility carries an interest rate of Canadian
chartered bank prime plus .25 percent. The credit facility has no
fixed repayment terms. The amount available for borrowing under the
credit facility is reduced by outstanding letters of credit. The
Corporation has issued an irrevocable standby letter of credit (LC)
in the amount of $950,000 to the Kivalliq Inuit Association (KIA).
The LC was provided to KIA as security for potential reclamation
costs associated with the Meliadine West camp as well as certain
other specified lands held on the Meliadine lease.

The Corporation has provided as security for the credit facility a
demand debenture in the amount of $6,800,000 conveying a first
priority floating charge over all the present and after-acquired
property of the Corporation and a first priority security interest in
all present and after-acquired property of the Corporation.

7. ASSET RETIREMENT OBLIGATIONS

At December 31, 2006, the estimated total undiscounted amount
required to settle the asset retirement obligations was $800,000
(2005 - $704,000). Costs for asset retirement have been calculated
assuming a 5 percent inflation rate for 2007, 4 percent for 2008,
3 percent for 2009 and 2 percent thereafter. These obligations will
be settled based on the useful lives of the underlying assets, which
extend up to 18 years into the future. This amount has been
discounted using a credit-adjusted risk-free interest rate of 5
(2005 - 5) percent.




Changes to asset retirement obligations were as follows:
($000) 2006 2005
---------------------------------------------------------------------
Asset retirement obligations, January 1 513 539
Adjustment to asset retirement obligations 59 78
Liabilities settled during the year (10) (134)
Accretion 26 30
---------------------------------------------------------------------
Asset retirement obligations, December 31 588 513
---------------------------------------------------------------------


8. BUSINESS SEGMENT INFORMATION

The Corporation's activities are represented by two segments
comprised of mineral exploration activities and oil and gas
production.

($000) 2006 2005
---------------------------------------------------------------------
Gross revenue
Mineral exploration 1,287 486
Oil and Gas 4,231 5,041
---------------------------------------------------------------------
5,518 5,527
---------------------------------------------------------------------

Depletion, depreciation, accretion, and abandonment
Mineral exploration 1,263 433
Oil and Gas 571 558
---------------------------------------------------------------------
1,834 991
---------------------------------------------------------------------

Net earnings (loss) for the year

Mineral exploration 358 (553)
Oil and Gas 1,726 4,142
---------------------------------------------------------------------
2,084 3,589
---------------------------------------------------------------------

Property and equipment expenditures for the year

Mineral exploration 9,022 6,982
Oil and gas 168 52
---------------------------------------------------------------------
9,190 7,034
---------------------------------------------------------------------

Total assets

Mineral exploration 52,475 49,022
Oil and gas 4,943 5,134
---------------------------------------------------------------------
57,418 54,156
---------------------------------------------------------------------



9. FINANCIAL INSTRUMENTS

Fair Values

The Corporation's financial instruments included in the balance
sheets are comprised of cash, accounts receivable and accounts
payable and accrued liabilities. The fair values of these financial
instruments approximate their carrying value due to the short-term
maturity of those instruments.

Credit Risk

Substantially all of the Corporation's accounts receivable are due
from customers in the oil and gas and mineral industries and are
subject to normal industry credit risks. The carrying value of
accounts receivable reflects management's assessment of associated
credit risks.

Commodity Price Risk

The nature of the Corporation's operations results in exposure to
fluctuations in commodity prices and exchange rates.

10. CONTRACTUAL OBLIGATION AND COMMITMENTS

Under the terms of the 1995 option agreement entered into between the
Corporation, Cumberland Resources Ltd. (Cumberland) and WMC
International Limited (WMC), WMC had the option to earn a 56 percent
working interest in the western portion of the Meliadine gold
property by incurring $12,500,000 in exploration expenditures and
making certain annual option payments to both the Corporation and
Cumberland. WMC would also provide all future financing requirements
relating to exploration and development expenditures incurred on the
property in excess of this amount. The portion of the exploration and
development expenditures related to the Corporation's and
Cumberland's ownership percentage would only be recoverable from net
operating cash flow of Meliadine. This 56 percent working interest
was earned by WMC and was assumed by the Corporation, through its
acquisition of WMC in 2003. In late 2006, Cumberland's interest in
Meliadine was acquired by Resource Capital Fund (RCF). The
Corporation is required to make option payments to RCF on the dates
and in the amounts as follows:




Date Amount
----------- ----------
Jan 1, 2007 $1,500,000 plus a CPI adjustment
Jan 1, 2008 and each year $1,500,000 plus a CPI adjustment
thereafter until the
commencement of production or
Comaplex elects to revert to
a 50/50 ownership with RCF in
the Meliadine West property



11. CONTINGENT RECEIVABLE

As specified in Note 10, the Corporation is required to provide all
future financing requirements relating to the exploration and
development of the Meliadine property. However it will be able to
recover the portion, including interest thereon, of the exploration
and development costs that pertain to RCF's ownership interest in the
Meliadine property from RCF's share of future production from the
Meliadine property. Prior to the acquisition by the Corporation of
WMC, WMC incurred expenditures of $49,108,000. Subsequent to the
acquisition a further $18,232,000 (December 31, 2005 - $9,993,000) of
exploration expenditures were incurred by the Corporation.
As of December 31, 2006 the Corporation has a contingent receivable
from RCF in the amount of $20,211,000 (December 31, 2005 -
$17,217,000) including interest. Due to the contingent nature of the
amount receivable, no amount has been recorded in the financial
statements of the Corporation. When the amount receivable is no
longer considered contingent, the Corporation will record a
receivable. At that time $13,517,000, the contingent amount at the
date of the WMC acquisition, will be considered to be income and the
additional amounts related to costs incurred by the Corporation for
the benefit of RCF, subsequent to the WMC acquisition, will offset

capital costs.

12. SUBSEQUENT EVENT - SALE OF CABALLO BLANCO (MEXICO)

In February, 2007, the Corporation disposed of its interests in the
Caballo Blanco (Mexican) property for cash proceeds of $1,250,000 US.

%SEDAR: 00001166E

Contact Information

  • Comaplex Minerals Corp.
    George F. Fink
    President, and CEO
    (403) 265-2846
    Fax: (403) 265-7488

    Comaplex Minerals Corp.
    Garth E. Schultz
    Vice President - Finance, and CFO
    (403) 265-2846
    Fax: (403) 265-7488


    Comaplex Minerals Corp.
    Mark J. Balog
    Vice President - Exploration
    (403) 265-2846
    Fax: (403) 265-7488