Comaplex Minerals Corp.
TSX : CMF

Comaplex Minerals Corp.

March 20, 2008 23:59 ET

Comaplex Minerals Corp. Announces Fourth Quarter and Annual 2007 Results

CALGARY, ALBERTA--(Marketwire - March 20, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

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, 2007.

FORWARD-LOOKING INFORMATION

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this MD&A includes, but is not limited to: expected cash provided by continuing operations; future capital expenditures, including the amount and nature thereof; gold, oil and natural gas prices and demand; expansion and other development trends of the precious metal industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: the risks of foreign operations; foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of mineral companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of precious metals and oil and natural gas prices; precious metal and oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive and are further discussed herein under the heading Business Prospects, Risks and Outlooks as well as in the Company's Annual Information Form filed on SEDAR at www.sedar.com.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived there from. Except as required by law, Comaplex disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The forward-looking information contained herein is expressly qualified by this cautionary statement.



ANNUAL FINANCIAL AND OPERATIONAL HIGHLIGHTS

2007 2006 2005
--------------------------------
Financial ($000, except $ per share)

Net Revenue
Mineral Division $ 1,066 $ 1,287 $ 486
Oil and Gas Division 3,029 3,511 4,191

Funds Flow from Operations(1) 2,313 2,457 2,935
Per Share Basic 0.05 0.06 0.08
Per Share Diluted 0.05 0.06 0.08

Net Earnings 2,373 2,084 3,589
Per Share Basic 0.05 0.05 0.09
Per Share Diluted 0.05 0.05 0.09

Capital Expenditures and Acquisitions
Mineral Division 20,199 9,022 6,982
Oil and Gas Division 232 168 52

Total Assets
Mineral Division 89,930 52,475 49,022
Oil and Gas Division 7,269 4,943 5,134
-------------------------------------------------------------------------
Oil and Gas Operations
Barrel of Oil Equivalent (BOE) per day(2) 206 293 227
-------------------------------------------------------------------------
(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 foreign exchange, 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

2007 2006
--------------------------- ---------------------------
4th 3rd 2nd 1st 4th 3rd 2nd 1st

Financial ($000,
except $ per
share)
Net Revenue
Mineral
Division $ 282 $ 288 $ 407 $ 89 $ 61 $ 618 $ 528 $ 80
Oil and Gas
Division 818 671 759 781 893 701 949 968

Funds Flow from
Operations 567 632 687 427 676 549 625 607
Per Share Basic 0.01 0.01 0.02 0.01 0.02 0.01 0.02 0.01
Per Share
Diluted 0.01 0.01 0.02 0.01 0.02 0.01 0.02 0.01

Net Earnings 2,854 (40) 270 (711) 614 650 623 197
Per Share
Basic 0.06 (0.00) 0.01 (0.02) 0.01 0.02 0.02 0.00
Per Share
Diluted 0.06 (0.00) 0.01 (0.02) 0.01 0.02 0.02 0.00

Capital
Expenditures and
Acquisitions
Mineral
Division 3,686 9,344 4,468 2,701 1,010 3,250 2,468 2,294
Oil and Gas
Division 38 71 81 42 30 9 71 58
-------------------------------------------------------------------------

Oil and Gas
Operations
Barrel of Oil
Equivalent (BOE)
per day 207 195 196 227 274 249 342 308
-------------------------------------------------------------------------


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.

Revenue

Mineral Properties

Gross revenue from the Company's mineral division totalled $1,066,000 in 2007 compared to $1,287,000 in 2006. The decrease resulted primarily from a decrease on the sale of investments to $142,000 in 2007 from $977,000 in 2006, which was offset by $585,000 more interest income on funds held in cash. The gains in 2007 and 2006 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, 2007 of $88,000 (2006 - $225,000).

Interest income of $836,000 (2006 - $251,000) resulted from interest earned from cash balances. The increase was due primarily to increased cash balances resulting from share issuance funding for the Company's Meliadine West project. Please refer to Liquidity and Capital Resources for further details.

The mineral production royalty, which is a flat fee for each tonne of ore produced through a mill in Quebec increased due to increased through put in 2007.

Petroleum and Natural Gas

Revenue from the Company's petroleum and natural gas properties before royalties decreased to $3,267,000 in 2007 from $3,654,000 in 2006. The decrease was primarily due to reduced natural gas volumes mainly due to operational problems which have now been rectified, offset partially by increased natural gas prices.

Natural gas prices increased to $6.48 in 2007 from $4.83 in 2006. The Company did not have any commodity hedges in place during 2007 or 2006 and as such incurred no hedging gains or losses.

Fourth quarter production revenue was $846,000, an overall increase of approximately $122,000 over the third quarter. The increase was from increased Q4 production due to less maintenance down time than Q3 and increased natural gas prices to $6.19 per MCF from $5.94 per MCF in the third quarter.

Royalties consist of Crown royalties of $553,000 (2006 - $651,000) paid to the Province of Alberta and gross overriding royalties of $224,000 (2006 - $232,000). The decrease in Crown royalties in 2007 is due to smaller volumes than 2006. Royalties for Q4 consist of $152,000 Crown royalties (Q3 - $130,000) and $56,000 gross overriding royalties (Q3 - $58,000). The increase in Crown royalties in Q4 is due to increased production after completion of the maintenance program.

Based on information currently available to management, the Alberta royalty review will increase future Crown royalties to approximately 20% (2007 - 16.9%) of production revenue, which under current volumes could increase Crown royalties by approximately $100,000.

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. Effective January 1, 2007 the Alberta government discontinued this program.

Trust distribution income from Bonterra Energy Income Trust ("Bonterra Trust") for 2007 amounted to $540,000 compared to $577,000 in 2006. The decrease of $37,000 is due primarily to a decrease of $0.18 per unit pay out by Bonterra Trust in 2007 compared to 2006. Fourth quarter distributions totalled $180,000 compared to $135,000 in the third quarter as Bonterra Trust declared its January distribution on December 31, 2007, resulting in four distributions being recorded in the fourth quarter. This process is consistent with previous years' fourth quarters.

Expenses

Mineral Properties - General and Administrative

General and administrative expenses related to mineral exploration increased to $943,000 in 2007 from $914,000 in 2006. Total minerals division general and administrative expenses prior to capitalization were $1,242,000 compared to $1,167,000 in 2006. The Company capitalized $299,000 (2006 - $255,000) of general and administrative expenses directly related to the Company's mineral exploration activities. Increases in salary compensation ($85,000) and an increase in continuous disclosure costs ($40,000 which is a 123% increase) were the primary reasons for the increase. This was offset by a reduction in the provision for doubtful accounts ($51,000). The increase in salaries represents a 16.9 percent increase in overall employee compensation which was partially due to additional staffing requirements with the development of the Meliadine West project. The provision in doubtful accounts for 2006 related to disputed items with regards to the Company's Mexican property (which was disposed of in 2007).

Fourth quarter general and administration expenses increased to $273,000 from $187,000 in the third quarter. The increase was due primarily to increased salary compensation expense relating to the Company's bonus plan in the fourth quarter ($73,000).

Petroleum and Natural Gas Properties - Production Costs

Comaplex incurred $319,000 in petroleum and natural gas production costs in 2007 compared to $316,000 in 2006. 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 $4.24 in 2007 compared to $2.95 in 2006. The increase in the operating costs per BOE in 2007 versus 2006 is due to reduced production volumes caused by the maintenance workover expenditures in 2007, which offset the decrease of operator fees. Fourth quarter production costs ($205,000) increased over Q3 (-$2,000) due primarily to processing fee adjustments of $128,000 related to previous quarters.

Petroleum and Natural Gas Properties - General and Administrative Costs

General and administrative costs increased marginally from $120,000 in 2006 to $138,000 in 2007, due to an increase in oil and gas engineering costs of $18,000.

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.

Foreign Exchange Loss

Foreign exchange loss increased to $240,000 in 2007 from $15,000 in 2006. The Company had a foreign exchange loss due to a greater amount of US funds held in 2007 due to the sale of the Caballo Blanco property and the increased appreciation of the Canadian dollar over the US dollar.

Stock Based Compensation

Stock based compensation increased to $1,280,000 in 2007 from $364,000 for 2006. The increase was due to the issuance of 1,818,000 stock options on October 10, 2006 to employees and other service providers. The fourth quarter compensation charge related to the issuance of these options was $247,000. The total stock based compensation expense related to all outstanding options as of December 31, 2007 is $3,671,000 of which $2,664,000 has been expensed to the end of 2007.

The total of 278,000 stock options that were issued in 2007 had an estimated weighted average fair value of $1.84 per option at the date they were granted using the Black-Scholes option pricing model with the following key assumptions:

Weighted-average risk free interest rate (%) 4.1
Dividend yield (%) 0.0
Expected life (years) 3.5
Weighted-average volatility (%) 45.6

The result of applying the above, a total stock based compensation of $1,007,000, based on currently issued and outstanding options, is required to be recorded over the years 2008 to 2010.

Depletion, Depreciation, Accretion and Abandonment

Mineral Exploration - Abandonment of Claims

Abandonment of mineral properties in 2007 was $Nil (2006 - $1,123,000). The 2006 write offs related to two projects. Exploration costs ($448,000) associated with the Company's Southampton Island (diamonds), Nunavut, properties were written off as results were not satisfactory. 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 (2006 - $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.

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.

In 2007 the future income tax recovery was $1,777,000 compared to a future income tax recovery of $848,000 in 2006. The large 2007 and 2006 future income tax recoveries are due to the ability to record a future tax asset from 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 2007 totalled $88,318,000 and consist of the following pool balances.



Rate of
Utilization
% Amount
-------------------------------------------------------------------------
Undepreciated capital costs 10-100 $ 529,000
Foreign exploration expenditures 10 873,000
Share issue costs 20 1,668,000
Earned depletion expenses (successored) 25 2,299,000
Canadian development expenditures 30 16,207,000
Non-capital losses carried forward 100 6,750,000
Canadian exploration expenditures (successored) 100 33,368,000
Canadian exploration expenditures 100 26,624,000
-------------------------------------------------------------------------
$88,318,000
-------------------------------------------------------------------------


The ability to claim the above successored amounts is restricted to income from 56 percent of the Meliadine property (71.8 percent of the Company's interest).

Net Earnings

The Company earned $2,373,000 in 2007 compared to $2,084,000 in 2006. The increase in net earnings was due to increases in future income tax recovery, increased interest income on cash acquired by share issuance and a decrease in abandonment costs offset by an increase in stock based compensation expense, a decrease on gain on sale of investments and a decrease in oil and gas sales.

Comprehensive Income

On January 1, 2007 the Company adopted the new accounting standards regarding the accounting for financial instruments. As a result of the adoption the Company's figure for its investments increased by $3,105,000 for the fair value of these investments. This adjustment resulted in a further increase in the future income tax liability and accumulated other comprehensive income of $510,000 and $2,595,000 respectively. Other comprehensive income for the 2007 year end included an increase in the unrealized gain on investment of $208,000 net of $35,000 in income tax and a transfer of a realized gain on investment to net income of $115,000 net of $20,000 in income tax.

Funds Flow from Operations

Funds flow from operations decreased to $2,313,000 in 2007 from $2,457,000 in 2006. Funds flow from operations is not a recognized measure under Canadian generally accepted accounting principles ("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 foreign exchange, 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 an advanced exploration 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 GAAP:



2007 2006
Cash flow from operating activities $ 2,105,000 $ 2,386,000
Items not affecting funds flow
Accounts receivable 346,000 (324,000)
Prepaid expenses 63,000 -
Accounts payable and accrued liabilities 25,000 400,000
Asset retirement obligations settled 14,000 10,000
Foreign exchange loss (240,000) (15,000)
-------------------------------------------------------------------------
Funds flow for the period 2,313,000 2,457,000
-------------------------------------------------------------------------


Liquidity and Capital Resources

Management of Comaplex is pleased with the current financial position of the Company. At December 31, 2007, the Company had a working capital position of $23,703,000 (2006 - $10,308,000).

The initial underground exploration ramp on the Meliadine West property will be completed in the summer of 2008. Overlapping this program will be a surface drill program. Detailed planning of the drill program is ongoing, but it is anticipated that over 25,000 meters of drilling will be completed mainly on the Western Deeps portion of the deposit at depths of 375-450 meters below surface. The intent of the program is to increase resources and move some of the Inferred resources in this zone into the Indicated category. The drilling is expected to commence in mid March and continue into October.

The Company currently has a projected capital expenditure budget for 2008 of approximately $25,000,000 for the above mentioned projects. A further $1,000,000 is planned to be spent on the Company's miscellaneous other exploration plays and oil and gas development in 2008. The planned expenditures will be partially funded with the Company's working capital, anticipated funds flow from oil and gas operations as well as future equity issuances.

The Company engaged the services of Sproule Associates Limited to prepare a reserve evaluation with an effective date of December 31, 2007. The reserves are located in the Province of Alberta. 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, 2007
(FORECAST PRICES AND COSTS)
RESERVES
Natural Natural Gas
Gas Liquids
Gross Net Gross Net
RESERVE CATEGORY (MMcf) (MMcf) (Mbbl) (Mbbl)
-------------------------------------------------------------------------
PROVED DEVELOPED PRODUCING 2,652 2,073 121 81
PROBABLE 696 553 30 19
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 3,348 2,626 151 100
-------------------------------------------------------------------------
-------------------------------------------------------------------------

SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2007 (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 14,308 10,853 8,718 7,298 6,295
PROBABLE 4,699 2,177 1,266 847 619
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 19,007 13,030 9,984 8,145 6,914
-------------------------------------------------------------------------

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

Commodity prices used in the above calculations of reserves are as follows:
Alberta Gas
Reference
Edmonton Price
Par Price Plantgate Propane Butane Pentane
(Cdn $ (Cdn $ (Cdn $ (Cdn $ (Cdn $
Year per barrel) per MCF) per barrel) per barrel) per barrel)
-----------------------------------------------------------------
2008 88.17 6.19 52.29 65.72 90.30
2009 84.54 6.94 50.14 63.01 86.58
2010 83.16 7.46 49.32 61.98 85.17
2011 81.26 7.50 48.20 60.57 83.23
2012 80.73 7.41 47.88 60.17 82.68
2013 81.25 7.58 48.19 60.56 83.21
2014 82.88 7.76 49.16 61.78 84.88
2015 84.55 7.94 50.14 63.02 86.59
2016 86.25 8.12 51.15 64.28 88.33
2017 87.98 8.31 52.18 65.58 90.10


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 2007 were as follows:



Property Amount
-------------------------------------------------------------------------
Meliadine $20,118,000
Other 81,000
-------------------------------------------------------------------------
Total $20,199,000
-------------------------------------------------------------------------


On March 23, 2007, the Company completed a private placement for 6,000,000 common shares at a price of $4.45 per common share for aggregate gross proceeds of $26,700,000. The Company paid a commission of $1,535,000 plus legal, accounting and commission costs of approximately $210,000. On December 14, 2007, the Company completed a private placement for 649,999 common (flow through shares) at a price of $7.75 per common share for aggregate gross proceeds of $5,037,000. The Company paid approximately $324,000 in commissions, legal, and accounting costs. The proceeds of the placement will be used for further exploration and development of the Meliadine properties.

The Company provides a stock option plan for its directors, officers, employees and consultants. Under the plan, the Company may grant options for up to 10 percent of the outstanding common shares. The options available as of December 31, 2007 were 4,661,197. The exercise price of each option granted equals the market price of the Company's stock on the date of grant and the option's maximum term is five years.

Commitments

The Company has no contractual obligations that last more than one year other than its requirement to make option payments to retain its rights to the Meliadine property as follows:




Date Amount
---- ------
Jan 1, 2008 and each year thereafter $1,500,000 plus a CPI adjustment
until the commencement of production (from December 31, 2005
or Comaplex elects to revert to a to date of payment)
50/50 ownership with RCF in the
Meliadine West property

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) 2007 2006
-------------------------------------------------------------------------
ASSETS
Current
Cash 20,987 4,759
Accounts receivable 708 362
Prepaid expenses 214 151
Investments (Note 2) 5,257 2,532
-------------------------------------------------------------------------
27,166 7,804

Future income tax asset (Note 3) 6,181 4,261
-------------------------------------------------------------------------

Property and equipment (Note 4)
Property and equipment 71,423 52,374
Accumulated depletion, depreciation and amortization (7,571) (7,021)
-------------------------------------------------------------------------
63,852 45,353
-------------------------------------------------------------------------
97,199 57,418
-------------------------------------------------------------------------

LIABILITIES

Current
Accounts payable and accrued liabilities (Note 2) 3,463 601
Asset retirement obligations (Note 8) 675 588
-------------------------------------------------------------------------
4,138 1,189
-------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Share capital (Note 5) 76,173 44,922
Contributed surplus 2,620 1,684
-------------------------------------------------------------------------
78,793 46,606
-------------------------------------------------------------------------
Retained earnings 11,996 9,623
Accumulated other comprehensive income (Note 6) 2,272 -
-------------------------------------------------------------------------
14,268 9,623
-------------------------------------------------------------------------
Total shareholders' equity 93,061 56,229
-------------------------------------------------------------------------
97,199 57,418
-------------------------------------------------------------------------
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Years Ended December 31
($000, except $ per share) 2007 2006
-------------------------------------------------------------------------
REVENUE
Minerals division
Interest 836 251
Mineral production royalty 88 59
Gain on sale of investments 142 977
-------------------------------------------------------------------------
1,066 1,287
-------------------------------------------------------------------------
Oil and gas division
Oil and gas sales 3,267 3,654
Royalties (778) (883)
Alberta royalty tax credits - 163
Trust distributions (Note 2) 540 577
-------------------------------------------------------------------------
3,029 3,511
-------------------------------------------------------------------------
4,095 4,798
-------------------------------------------------------------------------

EXPENSES
Oil and gas production costs 319 315
General and administrative
Minerals division 943 914
Oil and gas division 138 120
Foreign exchange loss 240 15
Stock based compensation 1,280 364
Depletion, depreciation and accretion 579 711
Abandonment of mineral properties (Note 4) - 1,123
-------------------------------------------------------------------------
3,499 3,562
-------------------------------------------------------------------------
Earnings before income taxes 596 1,236
-------------------------------------------------------------------------
Income taxes (recovery) (Note 3)
Current - -
Future (1,777) (848)
-------------------------------------------------------------------------
(1,777) (848)
-------------------------------------------------------------------------
Net earnings for the year 2,373 2,084
Retained earnings, beginning of year 9,623 7,539
-------------------------------------------------------------------------
Retained earnings, end of year 11,996 9,623
-------------------------------------------------------------------------
Net earnings per share - basic and diluted 0.05 0.05
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year Ended December 31
($000, except $ per share) 2007
-------------------------------------------------------------------------
Net income for the year 2,373
-------------------------------------------------------------------------
Other comprehensive income, net of income tax
Loss on investments (net of tax of $35) (208)
Realized gains on investments transferred to net income
(net of tax of $20) (115)
-------------------------------------------------------------------------
Other comprehensive loss (323)
-------------------------------------------------------------------------
Comprehensive income 2,050
-------------------------------------------------------------------------
Comprehensive income per share - basic and diluted 0.05
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW
Years Ended December 31
($000) 2007 2006
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings 2,373 2,084
Items not affecting cash
Gain on sale of investments (142) (977)
Stock based compensation 1,280 364
Depletion, depreciation and accretion 579 711
Abandonment of mineral properties - 1,123
Foreign exchange loss 240 15
Future income taxes (1,777) (848)
-------------------------------------------------------------------------
2,553 2,472
-------------------------------------------------------------------------
Change in non-cash working capital
Accounts receivable (346) 324
Prepaid expenses (63) -
Accounts payable and accrued liabilities (25) (400)
Asset retirement obligations settled (14) (10)
-------------------------------------------------------------------------
(448) (86)
-------------------------------------------------------------------------

2,105 2,386

-------------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of shares pursuant to private placement 31,737 -
Share issue costs (2,069) -
Issue of shares under employee stock option plan 638 1,104
-------------------------------------------------------------------------
30,306 1,104
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Mineral exploration property and equipment
expenditures (20,199) (9,022)
Mineral exploration property and equipment disposals 1,463 -
Oil & gas property and equipment expenditures (232) (168)
Investments purchased (76) -
Investments sold 215 1,008
Change in non-cash working capital
Accounts payable and accrued liabilities 2,886 36
-------------------------------------------------------------------------
(15,943) (8,146)
-------------------------------------------------------------------------
Foreign exchange loss on cash held in foreign currency (240) (15)
-------------------------------------------------------------------------
Net cash inflow (outflow) 16,228 (4,671)
Cash, beginning of year 4,759 9,430
-------------------------------------------------------------------------
Cash, end of year 20,987 4,759
-------------------------------------------------------------------------
Cash interest paid - -
Cash taxes paid - -



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2007 and 2006

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the
Company 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
Company 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 Company'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 Company'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.

Financial instruments - recognition and measurement

On January 1, 2007, the Company adopted Section 3855 of the Canadian
Institute of Chartered Accountants' ("CICA") Handbook, "Financial
Instruments - Recognition and Measurement" and Section 3861 Financial
Instruments - Disclosure and Presentation. These set out the
standards for recognizing and measuring financial instruments in the
balance sheet and the standards for reporting gains and losses in the
financial statements. Financial assets available for sale, assets and
liabilities held for trading and derivative financial instruments,
whether part of a hedging relationship or not, have to be measured as
fair value.

The Company has made the following classifications:

- Investments are classified as available for sale, and recorded at
fair value which is marked-to-market through comprehensive income.

- Accounts receivable are classified as loans and receivables and
are recorded at amortized cost using the effective interest
method. Gains and losses are recognized in net earnings when the
asset is no longer recognized.

- Accounts payable and accrued liabilities are classified as other
liabilities and are recorded at amortized cost. Gains and losses
are recognized in net earnings when the liability is no longer
recognized.

The adoption of the Sections is done retrospectively without
restatement of the consolidated financial statements of prior
periods. As at January 1, 2007, the impact on the consolidated
balance sheet of measuring the investments at fair value was an
increase of $3,105,000 to investments, a decrease in future tax asset
of $510,000 and an increase in accumulated other comprehensive income
of $2,595,000.

The Company selected January 1, 2003 as its transition date for
embedded derivatives. An embedded derivative is a component of a
financial instrument or another contract the characteristics of which
are similar to a derivative. This had no impact on the consolidated
financial statements.

Comprehensive income

On January 1, 2007, the Company adopted Section 1530 of the CICA
Handbook, "Comprehensive Income". This section describes reporting
and disclosure recommendations with respect to comprehensive income
and its components. Comprehensive income is the change in
shareholders' equity, which results from transactions and events from
sources other than the Company's shareholders and consists of net
income and other comprehensive income (OCI). OCI comprises revenues,
expenses, gains and losses that are recognized in comprehensive
income but excluded from net income. Such items include unrealized
gains and losses from changes in fair value of certain financial
instruments.

The adoption of this Section results in the Company now presenting a
consolidated statement of comprehensive income as a part of the
consolidated financial statements.

Equity

On January 1, 2007, the Company adopted Section 3251 of the CICA
Handbook "Equity" replacing Section 3250 "Surplus". This section
describes standards for the presentation of equity and changes in
equity for reporting periods as a result of the application of
Section 1530 "Comprehensive Income".

Accounting changes

The Company also adopted Section 1506, "Accounting Changes," the only
impact of which is to provide disclosure of when an entity has not
applied a new source of GAAP that has been issued but is not yet
effective. This is the case with Section 1535, "Capital Disclosures",
Section 3862, "Financial Instruments - Disclosures" and Section 3863,
"Financial Instruments - Presentation" which are required to be
adopted for fiscal years beginning on or after October 1, 2007. The
Company will adopt these standards on January 1, 2008 and it is
expected the only effect on the Company will be incremental
disclosures regarding the Company's objectives, policies and
processes for managing capital and the significance of financial
instruments for the entity's financial position and performance; and
the nature, extent and management of risks arising from financial
instruments to which the entity is exposed.

In February 2008, the CICA issued Section 3064, "Goodwill and
Intangible Assets," replacing Section 3062, "Goodwill and Other
Intangible Assets" and Section 3450, "Research and Development
Costs." Various changes have been made to other sections of the CICA
Handbook for consistency purposes. The new Section will be applicable
to financial statements relating to fiscal years beginning on or
after October 1, 2008. Accordingly, the Company will adopt the new
standards for its fiscal year beginning January 1, 2009. These
establish standards for the recognition, measurement, presentation
and disclosure of goodwill subsequent to its initial recognition and
of intangible assets by profit-oriented enterprises. Standards
concerning goodwill are unchanged from the standards included in the
previous Section 3062. The Company is currently evaluating the impact
of the adoption of this new Section on its consolidated financial
statements. The Company does not expect that the adoption of this new
Section will have a material impact on its consolidated financial
statements.

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 Company 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 life of
the related assets which are 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 fair value. At December 31, 2006,
investments were carried at the lower of cost and market value.

Income taxes

The Company 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 Company 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 Company 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 Company's exploration, development and production
activities are conducted jointly with others. These consolidated
financial statements reflect only the Company'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 Company paid a management fee of $300,000 (2006 - $300,000) to
Bonterra Energy Corp. (Bonterra Corp) (a wholly owned subsidiary of
Bonterra Energy Income Trust (Bonterra Trust) a publicly traded oil
and gas income trust on the Toronto Stock Exchange) a company that
has common directors and management with the Company. The Company
also shares office rental costs and reimburses Bonterra Corp for
costs related to employee benefits and office materials. These costs
have been included in general and administrative expenses.
Bonterra Corp owns 689,682 (December 31, 2006 - 689,682) common
shares in the Company. Bonterra Corp is the administrator for
Bonterra Trust. Services provided by Bonterrra Corp include executive
services (president and vice president, finance duties), accounting
services, oil and gas administration and office administration.
As at December 31, 2007 the Company had an account payable to
Bonterra Corp of $63,000 (December 31, 2006 - $38,000).

The Company at December 31, 2007 owns 204,633 (December 31, 2006 -
204,633) units in Bonterra Trust representing just over one percent
of the outstanding units of Bonterra Trust. The units have a carrying
amount of $4,909,000 (at fair value) (December 31, 2006 - $2,321,000,
at cost) and a quoted market value of $4,909,000 (December 31, 2006 -
$5,233,000). In 2007 the Company received distributable income of
$540,000 (2006 - $577,000).

The Company at December 31, 2007 owns 346,000 (December 31, 2006 -
277,000) common shares in Pine Cliff Energy Ltd. (Pine Cliff). Pine
Cliff has common directors and management with the Company. Pine
Cliff shares trade on the TSX Venture Exchange. As of December 31,
2007 the common shares have a carrying amount of $260,000 (at fair
value) (December 31, 2006 - $42,000, at cost) and a quoted market
value of $260,000 (December 31, 2006 - $180,000). The Company's
ownership of 346,000 common shares represents less than one percent
of the total issued and outstanding common shares of Pine Cliff.

3. INCOME TAXES

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




2007 2006
($000) Amount Amount
---------------------------------------------------------------------
Future income tax assets:
Capital assets 6,354 6,552
Asset retirement obligations 173 170
Share issue costs 427 23
Loss carry-forward (expires 2010) 1,729 1,957
Other (322) 62
Valuation adjustment on capital assets (2,180) (4,503)
---------------------------------------------------------------------
6,181 4,261
---------------------------------------------------------------------

Income tax expense varies from the amounts that would be computed by
applying Canadian federal and provincial income tax rates as follows:

($000) 2007 2006
---------------------------------------------------------------------
Earnings before income taxes 596 1,236
Combined federal and provincial income tax rates 32.1% 34.5%
---------------------------------------------------------------------
Income tax provision calculated using statutory
tax rates 191 426
Increase (decrease) in taxes resulting from:
Stock based compensation 411 125
Non-deductible Crown royalties - 86
Non-taxable portion of capital gains (22) (169)
Resource allowance - (71)
Alberta royalty tax credit - (38)
Effect of change in valuation allowance (2,323) (2,875)
Depletion of consolidated asset adjustment 35 38
Effect of change in tax rate 117 1,543
Other (186) 87
---------------------------------------------------------------------
Income tax recovery (1,777) (848)
---------------------------------------------------------------------

The Company 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 10-100 529
Foreign exploration expenditures 10 873
Share issue costs 20 1,668
Earned depletion expenses (successored) 25 2,299
Canadian development expenditures 30 16,207
Non-capital loss carried forward
(expires 2010) 100 6,750
Canadian exploration expenditures
(successored) 100 33,368
Canadian exploration expenditures 100 26,624
---------------------------------------------------------------------
88,318
---------------------------------------------------------------------



The ability to claim the above successored amounts is restricted to
income from 56 percent of the Meliadine property (71.8 percent of the
Company's interest) (see Note 11).

On December 14, 2007, the Company completed a private placement for
649,999 flow through common shares for aggregate gross proceeds of
$5,037,000 (See Note 5). The future income tax liability will be
recorded on the renouncement of the tax pools in 2008.




4. PROPERTY AND EQUIPMENT

2007 2006
---------------------------------------------------------------------
Accumulated Accumulated
Depletion, Depletion,
Depreciation Depreciation
and and
($000) Cost Amortization Cost Amortization
---------------------------------------------------------------------
Mineral properties 62,546 332 43,668 221
Petroleum and natural
gas properties and
related equipment 8,636 7,024 8,485 6,601
Furniture, equipment
and other 241 215 221 199
---------------------------------------------------------------------
71,423 7,571 52,374 7,021
---------------------------------------------------------------------


During the year, $299,000 (2006 - $255,000) 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 2007 the Company did not abandon any mineral properties
(2006 - $1,123,000). Of the 2006 amount, $675,000 relates to a write
down of the Caballo Blanco Mexican property. The balance of the 2006
amount 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. Current property holdings on
the Meliadine property total approximately 65,657 hectares. The
property is presently under two separate options: the Meliadine West
property in which Comaplex has a 78% interest with an option to
increase to 80%, and Meliadine Resources Ltd. (a private company
wholly owned by Resource Capital Fund III (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
45,829 hectares. Of this amount, 42,569 hectares are under Federal
jurisdiction (7,700 hectares are claims, 34,869 hectares are leases)
and 3,260 hectares are Nunavut Tunngavik Inc. (NTI) subsurface
concessions. The Meliadine East property consists of 19,828 hectares.
Of these lands, 17,053 hectares come under the jurisdiction of the
Federal Canadian Mining Regulations (leases) and 2,775 hectares come
under NTI subsurface concessions.

The Company has capitalized costs to date of $61,918,000 (2006 -
$41,264,000) 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.

Prior to December 31, 2003, the Company had received cumulative
mineral property option payments in excess of the carrying value of a
mineral property totalling $2,850,000. These payments were reported
as income when received.

Please refer to Notes 11 and 12 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

2007 2006
---------------------------------------------------------------------
Amount Amount
Number ($000) Number ($000)
---------------------------------------------------------------------
Common Shares
Balance, beginning
of year 39,451,771 44,922 38,568,971 43,222
Issued pursuant to
private placements 6,649,999 31,737 - -
Issue costs for
private placements (2,069) -
Issued on exercise
of stock options 510,200 638 882,800 1,104
Transfer of
contributed surplus
to share capital 345 596
Future tax benefit
of share issue costs 600 -
---------------------------------------------------------------------
Balance, end of year 46,611,970 76,173 39,451,771 44,922
---------------------------------------------------------------------


The 45,327,965 (2006 - 39,587,967) 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 44,612,284
(2006 - 38,816,779) plus 715,681 (2006 - 771,188) shares related to
the dilutive effect of stock options.

On March 23, 2007, the Company completed a private placement for
6,000,000 common shares at a price of $4.45 per common share for
aggregate gross proceeds of $26,700,000. The Company paid a
commission of 5.75 percent of the gross proceeds ($1,535,000) plus
additional share issue costs of approximately $210,000. On
December 14, 2007, the Company completed a private placement for
649,999 flow through common shares at a price of $7.75 per common
share for aggregate gross proceeds of $5,037,000. The Company paid
approximately $324,000 in commissions and other share issue costs.
The proceeds of the placement were used for the further exploration
and development of the Meliadine properties.

The Company provides a stock option plan for its directors, officers,
employees and consultants. Under the plan, the Company may grant
options for up to 10 percent of the outstanding common shares which
as of December 31, 2007 was 4,661,197. The exercise price of each
option granted equals the market price of the Company'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 Company's stock option plan as of
December 31, 2007 and 2006, and changes during the years ended on
those dates is presented below:



2007 2006
---------------------------------------------------------------------
Weighted- Weighted-
Average Average
Exercise Exercise
Options Shares Price Shares Price
---------------------------------------------------------------------
Outstanding at
beginning of year 2,397,200 $2.77 1,468,000 $1.34
Options granted 278,000 4.86 1,827,000 3.20
Options exercised (510,200) 1.25 (882,800) 1.25
Options cancelled (24,000) 3.20 (15,000) 4.00
---------------------------------------------------------------------
Outstanding at
end of year 2,141,000 $3.40 2,397,200 $2.77
---------------------------------------------------------------------
---------------------------------------------------------------------

Options exercisable
at end of year 639,500 $3.17 530,200 $1.30
---------------------------------------------------------------------
---------------------------------------------------------------------

The following table summarizes information about stock options
outstanding at December 31, 2007:

Options Outstanding Options Exercisable
-------------------------------------------------------------------------
Weighted-
Number Average Weighted- Number Weighted-
Range of Outstanding Remaining Average Exercisable Average
Exercise At Contractual Exercise At Exercise
Prices 12/31/07 Life Price 12/31/07 Price
-------------------------------------------------------------------------
$2.70 60,000 2.1 years 2.70 40,000 2.70
3.20 to 3.60 1,833,000 2.0 years 3.20 599,500 3.20
4.70 to 5.20 243,000 3.1 years 5.03 - -
6.28 5,000 3.0 years 6.28 - -
-------------------------------------------------------------------------
$2.70 to 6.28 2,141,000 2.1 years $3.40 639,500 $3.17
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The Company records compensation expense over the vesting period
based on the fair value of options granted to employees, directors
and consultants. The Company granted 278,000 (2006 - 1,827,000) stock
options with an estimated fair value of $510,549 (2006 - $2,077,000)
($1.84 per option (2006 - $1.14 per option)) using the Black-Scholes
option pricing model with the following key assumptions:


2007 2006
---- ----
Weighted-average risk free interest rate (%) 4.1 4.0
Dividend yield (%) 0.0 0.0
Expected life (years) 3.5 3.0
Weighted-average volatility (%) 45.6 47.0

6. ACCUMULATED OTHER COMPREHENSIVE INCOME

January 1, Other
2007 Comprehensive December 31,
(Note 1) Loss 2007
Gains (losses) on
available-for-sale
investments $2,595,000 ($323,000) $2,272,000
--------------------------------------------


7. FINANCING AGREEMENT

The Company has entered into a financing agreement with the Company's
principal banker which grants to the Company a $3,200,000
(December 31, 2006 - $3,400,000) extendible revolving credit
facility. Amounts borrowed under the credit facility carry 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 Company 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 Company 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 Company and a first priority security interest in all present and
after-acquired property of the Company.

8. ASSET RETIREMENT OBLIGATIONS

At December 31, 2007, the estimated total undiscounted amount
required to settle the asset retirement obligations was $1,050,000
(2006 - $800,000). Costs for asset retirement have been calculated
assuming a 2 percent inflation rate for 2007 and thereafter. These
obligations will be settled based on the useful lives of the
underlying assets, which extend up to 21 years into the future. This
amount has been discounted using a credit-adjusted risk-free interest
rate of 5 (2006 - 5) percent.

Changes to asset retirement obligations were as follows:



($000) 2007 2006
---------------------------------------------------------------------
Asset retirement obligations, January 1 588 513
Adjustment to asset retirement obligations 72 59
Liabilities settled during the year (14) (10)
Accretion 29 26
---------------------------------------------------------------------
Asset retirement obligations, December 31 675 588
---------------------------------------------------------------------

9. BUSINESS SEGMENT INFORMATION

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

($000) 2007 2006
---------------------------------------------------------------------
Gross revenue
Mineral exploration 1,066 1,287
Oil and Gas 3,807 4,231
---------------------------------------------------------------------
4,873 5,518
---------------------------------------------------------------------

Depletion, depreciation, accretion, and abandonment
Mineral exploration 145 1,263
Oil and Gas 434 571
---------------------------------------------------------------------
579 1,834
---------------------------------------------------------------------

Net earnings for the year
Mineral exploration 235 358
Oil and Gas 2,138 1,726
---------------------------------------------------------------------
2,373 2,084
---------------------------------------------------------------------

Property and equipment expenditures for the year
Mineral exploration 20,199 9,022
Oil and gas 232 168
---------------------------------------------------------------------
20,431 9,190
---------------------------------------------------------------------

Total assets
Mineral exploration 89,930 52,475
Oil and gas 7,269 4,943
---------------------------------------------------------------------
97,199 57,418
---------------------------------------------------------------------


10. FINANCIAL INSTRUMENTS

Fair Values

The Company's financial instruments include 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. The fair value of
investments is disclosed in Note 2.

Credit Risk

Substantially all of the Company'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 Company's operations results in exposure to
fluctuations in commodity prices and exchange rates.

Currency Risk

The Company is exposed to fluctuations in foreign currency as it
maintains a foreign currency denominated bank account. The Company
has not entered into any foreign currency derivatives with respect to
this exposure.

11. CONTRACTUAL OBLIGATION AND COMMITMENTS

Under the terms of the 1995 option agreement entered into between the
Company, 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 Company 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 Company'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 Company, through its acquisition of WMC in 2003. In
late 2006, Cumberland's interest in Meliadine was acquired by
Resource Capital Fund (RCF). The Company is required to make option
payments to RCF on the dates and in the amounts as follows:

Date Amount
----------- -----------
Jan 1, 2008 and each year $1,500,000 plus a CPI adjustment
thereafter until the (from December 31, 2005 to
commencement of production date of payment)
or Comaplex elects to
revert to a 50/50
ownership with RCF in the
Meliadine West property

12. CONTINGENT RECEIVABLE

As specified in Note 11, the Company 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 Company of WMC,
WMC incurred expenditures of $49,108,000. Subsequent to the
acquisition a further $38,585,000 (December 31, 2006 - $18,232,000)
of exploration expenditures were incurred by the Company.

As of December 31, 2007 the Company has a contingent receivable from
RCF in the amount of $26,340,000 (December 31, 2006 - $20,211,000)
including interest. Due to the contingent nature of the amount
receivable, no amount has been recorded in the financial statements
of the Company. When the amount receivable is no longer considered
contingent, the Company 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 Company for the benefit of
RCF, subsequent to the WMC acquisition, will be allocated between
capital costs and interest income.



Contact Information

  • Comaplex Minerals Corp.
    George F. Fink
    President, and CEO

    Comaplex Minerals Corp.
    Garth E. Schultz
    Vice President - Finance, and CFO

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