Comaplex Minerals Corp.
TSX : CMF

Comaplex Minerals Corp.

March 24, 2009 23:59 ET

Comaplex Minerals Corp. Announces Fourth Quarter and Annual 2008 Results

CALGARY, ALBERTA--(Marketwire - March 24, 2009) - Comaplex Minerals Corp. (TSX:CMF) is pleased to announce its financial and operational results for the three months and year ended December 31, 2008.



Annual Financial and Operational Highlights
Financial
2008 2007
-------------------------------------------------------------------------
Financial ($000, except $ per share)
Revenue
Mineral Division 808 1,066
Oil and Gas Division 3,468 3,029
Cash Flow from Operations 2,252 2,105
Per Share Basic 0.04 0.05
Per Share Diluted 0.04 0.05
Net Earnings 2,122 2,373
Per Share Basic 0.04 0.05
Per Share Diluted 0.04 0.05
Capital Expenditures and Acquisitions
Mineral Division 35,049 20,199
Oil and Gas Division 427 232
Total Assets
Mineral Division 126,553 89,930
Oil and Gas Division 5,812 7,269
-------------------------------------------------------------------------
Oil and Gas Operations
Barrels of Oil Equivalent (BOE) per day(1) 181 206
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) BOEs 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

2008 2007
--------------------------- ---------------------------
4th 3rd 2nd 1st 4th 3rd 2nd 1st
Financial ($000,
except $ per
share)
Revenue
Mineral Division 152 328 136 192 282 288 407 89
Oil and Gas
Division 817 948 914 789 818 671 759 781
Cash Flow from
Operations 336 774 421 721 (76) 645 851 685
Per Share Basic 0.01 0.01 0.01 0.02 (0.00) 0.01 0.02 0.01
Per Share
Diluted 0.01 0.01 0.01 0.02 (0.00) 0.01 0.02 0.01
Net Earnings (Loss) 328 95 1,601 98 2,854 (40) 270 (711)
Per Share Basic 0.01 0.00 0.03 0.00 0.06 (0.00) 0.01 (0.02)
Per Share
Diluted 0.01 0.00 0.03 0.00 0.06 (0.00) 0.01 (0.02)
Capital
Expenditures and
Acquisitions
Mineral
Division 8,292 9,559 8,749 8,449 3,686 9,344 4,468 2,701
Oil and Gas
Division 253 115 41 18 38 71 81 42
-------------------------------------------------------------------------
Oil and Gas
Operations
Barrels of Oil
Equivalent (BOE)
per day 195 179 162 186 207 195 196 227
-------------------------------------------------------------------------


FORWARD-LOOKING INFORMATION

Certain statements contained in this report 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 report 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.

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.



Revenues
--------

Three months ended Year ended
December September December December December
(Cdn $000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Revenue:
Mineral Division
Interest 152 266 222 723 836
Mineral
production
royalty - 62 19 123 88
Gain (loss)
on sale of
investments - - 41 (38) 142
Oil and Gas Sales 854 1,002 846 3,798 3,267
Investment income 160 196 180 606 540
-------------------------------------------------------------------------
Gross Revenue 1,166 1,526 1,308 5,212 4,873
-------------------------------------------------------------------------
Average Realized
Prices (Cdn $):
Natural gas
(per MCF) 7.15 9.11 6.19 8.60 6.48
Natural gas liquids
(per barrel) 62.98 82.20 73.55 78.56 62.21
-------------------------------------------------------------------------


Interest income decreased by $113,000 for the year 2008 compared to 2007. The decrease was due primarily to decreased cash balances as the Company continued its capital funding of the Meliadine West and East projects. Please refer to Liquidity and Capital Resources for further details. Interest income decreased in Q4 2008 compared to Q3 2008 as the cash balance was lower due to the on going capital program and because of lower interest rates on the deposited funds.

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 2008. In January 2009, the operator of the mill went into CCAA protection, so no royalty was accrued for Q4 2008 and the outstanding receivable of $84,000 related to past mineral production royalties has been written off as a bad debt.

The gains and losses in 2008 and 2007 resulted from the sale of shares that the Company held in various public minerals companies. The remaining investments are described in the related party section below.

Revenue from the Company's petroleum and natural gas properties before royalties increased to $3,798,000 in 2008 from $3,267,000 in 2007. The increase was primarily due to increased natural gas prices, offset partially by decreased volumes mainly due to operational problems which have now been rectified. Fourth quarter production revenue decreased over the third quarter of 2008 due to a 22 percent decrease in the price for natural gas, which was offset by a nine percent increase in production.

Investment income from Bonterra Oil & Gas Ltd. ("Bonterra O&G") (dividend for the last two months of 2008), and distribution for the first nine months of 2008 increased for 2008 over 2007. The increase of $66,000 is due primarily to an average increase to $0.27 per share/trust unit in 2008 compared to $0.22 in 2007, which was offset by only eleven dividends/distributions in 2008 compared to twelve in 2007 as Bonterra Trust declared its January 2008 distribution on December 31, 2007, resulting in four distributions being recorded in the fourth quarter whereas the January 2009 dividend was not declared until January 2009. This prior year process is consistent with previous years' fourth quarters for income trusts.

Fourth quarter investment income totalled $160,000 compared to $196,000 in the third quarter as Bonterra O&G lowered its dividends declared per share in November and December.



Production
----------
Three months ended Year ended
December September December December December
31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Natural gas
(MCF per day) 904 846 995 850 996
Natural gas liquids
(barrels per day) 44 38 41 39 40
Total BOE per day 195 179 207 181 206
-------------------------------------------------------------------------
The Company had a 12 percent annual decline rate for 2008.

Royalties
---------

Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Crown royalties 148 199 152 714 554
Gross overriding
royalties 49 51 56 222 224
-------------------------------------------------------------------------
Total royalty expense 197 250 208 936 778
-------------------------------------------------------------------------


The increases in Crown royalties for the year ended 2008 over 2007 are due to higher commodity prices which more than offset lower production volumes on the wells subject to crown royalties. The slight decrease in gross overriding royalties in 2008 over 2007 year, is due to lower production volumes on wells subject to gross overriding royalties, which was partially offset by higher commodity prices in 2008. The decrease in royalties' quarter over quarter are mainly due to a decrease in commodity prices, which was partially offset by higher production volumes.



Production Costs
----------------

Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Production costs
- natural gas/NGLs 151 400 205 830 319
$ per BOE 8.37 24.25 10.75 12.55 4.24
-------------------------------------------------------------------------


The increase in production costs in the fiscal year of 2008 over 2007 and the decrease of production costs from Q4 2008 to Q3 2008 was primarily due to a one time processing charge adjustment. In the third quarter of 2008, a processing charge adjustment of approximately $290,000 was charged on prior period volumes from the operator of a gas plant used for processing for one of the Company's major properties. The processing charge, as well as its amount, had been contested by the Company. A settlement was reached during the third quarter. Removing the one time adjustment relating to prior periods reduces production costs for the year of 2008 to $540,000 or $8.16 per BOE. The remaining difference in production costs between the 2008 and 2007 annual periods is due to fewer third party production charge recoveries in 2008. Removing the one time adjustment relating to prior periods reduces the production costs for Q3 2008 to $110,000 or $6.69 per BOE, which is a slight decrease from Q4 2008.



General and Administrative (G&A) Costs
--------------------------------------
Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
G&A costs -
Minerals Division 326 294 273 1,323 943
G&A costs -
Oil and Gas Division 36 29 14 155 138
-------------------------------------------------------------------------
Total G&A 362 323 287 1,478 1,081
-------------------------------------------------------------------------


The increase in G&A in the year of 2008 compared with the fiscal year of 2007 was primarily due to an increase in the number of employees required to complete the increased workload and an increased allowance for bad debts on the mineral production royalty. On a quarter over quarter basis, general and administrative costs increased in the fourth quarter of 2008 compared with the third quarter of 2008. The increase from the 2008 Q3 amount was primarily due to an increase in the allowance for doubtful accounts relating to the $84,000 mineral production royalty recorded in Q4 2008, which was partially offset by lower employee compensation expenditures as the Company completed its underground exploration and bulk sampling programs on the Meliadine West project in Q3.

Foreign Exchange Gain (Loss)
----------------------------

The foreign exchange gain increased to $174,000 for the 2008 year end from a foreign exchange loss of $240,000 in the same period of 2007. The gain and loss of foreign exchange results from an average balance of $1,077,000 U.S. funds over the 2008 year held in an interest bearing cash account. As the Canadian dollar depreciated against the U.S. dollar in the fiscal year of 2008, it created a foreign exchange gain, compared to the loss resulting from the appreciation of the Canadian dollar in 2007. In Q4 2008, the average U.S. fund balance was $320,000 (Q3 2008 - $1,323,000) and a foreign exchange gain of $77,000 was recorded over $58,000 in Q3 2008 as the Canadian dollar depreciated 16.7 percent over Q4 2008 versus Q3 2008.

Stock-Based Compensation
------------------------

Stock-based compensation is a statistically calculated value representing the estimated expense of issuing employee stock options. The Company records a compensation expense over the vesting period based on the fair value of options granted to employees, directors and consultants. Stock based compensation decreased to $973,000 in 2008 from $1,280,000 for 2007. The decrease was due primarily to the granting of 1,818,000 stock options in October, 2006, with the majority of the stock based compensation being recognized in the first year after issuance.

During 2008, the Company issued 812,000 (2007 - 278,000) stock options with an estimated fair value of $1,460,000 (2007 - $510,000) ($1.80 per option (2007 - $1.84 per option)) using the Black-Scholes option pricing model with the following key assumptions:



2008 2007
---- ----
Weighted-average risk free interest rate (%) 2.8 4.1
Dividend yield (%) 0.0 0.0
Expected life (years) 2.7 3.5
Weighted-average volatility (%) 44.0 45.6

The remaining estimated fair value of these stock options will be expensed
into income as follows: $650,000 in 2009, $400,000 in 2010 and $137,000 in 2011.

Depletion, Depreciation and Accretion Expense
---------------------------------------------
Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Depletion,
depreciation and
accretion expense 152 111 106 461 579
Abandonment of
mineral properties 117 - - 117 -
-------------------------------------------------------------------------


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.

For oil and gas 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, 2008, the estimated total (mineral and oil and gas) undiscounted amount required to settle the asset retirement obligations was $943,000 (2007 - $1,050,000). 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 five 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 $568,000 (2007 - $541,000) related to its Meliadine project and $172,000 (2007 - $134,000) in respect of its oil and gas operations.

Depletion, depreciation and accretion expenses related to oil and gas assets were $280,000 in 2008 compared to $434,000 in 2007. 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.

In December of 2008, the Company purchased tangible mining equipment of $2,298,000 with an estimated life span of five to ten years to be depreciated at one-fifth to one-tenth of original cost per year. In the fourth quarter of 2008, $34,000 was depreciated.

The Company also recorded a depletion provision of $111,000 (2007 - $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. This amount has been fully depleted.

One of the minor mineral properties was abandoned in the fourth quarter of 2008 and all relating costs were written off. The Company reviews the carrying value of its mineral properties on an ongoing basis and reduces the cost of properties if it is determined that the property values are lower than the property cost.

Income Tax Expense
------------------

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 2008, the future income tax recovery was $1,531,000 compared to a future income tax recovery of $1,777,000 in 2007. The large 2008 and 2007 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 2008 totalled $123,612,000 and consist of the following pool balances.



Rate of Amount
Utilization % ($000)
-------------------------------------------------------------------------
Undepreciated capital costs 10-100 2,875
Foreign exploration expenditures 10 785
Share issue costs 20 3,149
Earned depletion expenses (successored) 25 2,299
Canadian development expenditures 30 19,839
Non-capital loss carryforward (expires 2010) 100 3,944
Canadian exploration expenditures (successored) 100 33,368
Canadian exploration expenditures 100 57,353
-------------------------------------------------------------------------
123,612
-------------------------------------------------------------------------


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).

On June 6, 2008, the Company completed a private placement for 1,832,061 flow through common shares for gross proceeds of $12,000,000. The Company has renounced $12,000,000 of its Canadian exploration expenditure tax pool in Q1 2009. For further details of the flow through common share issuance please refer to the liquidity section.



Net Earnings
------------
Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Net earnings 328 95 2,854 2,122 2,373
-------------------------------------------------------------------------


Net earnings for the fiscal year of 2008 decreased by approximately $251,000 compared to the corresponding 2007 period, mainly due to a lower future income tax benefit, a loss on investments and increased operating and general administration costs. The decrease in net earnings was partially offset by an increase in oil and gas revenues due to higher commodity prices for natural gas and a foreign exchange gain due to the Canadian dollar depreciating against the U.S. dollar over the 2008 year. The $233,000 increase in net earnings in Q4 2008 compared to Q3 2008 is primarily due to the $290,000 one time processing charge adjustment in Q3 2008 on prior period volumes from the operator of a gas plant that is used to process one of the Company's major oil and gas properties.



Cash Flow from Operations
-------------------------
Three months ended Year ended
December September December December December
($ 000s) 31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Cash flow from
operations 336 774 (76) 2,252 2,105
-------------------------------------------------------------------------


Cash flow from operations increased seven percent for the 2008 year end compared to the 2007 year end. The increase was primarily due to higher commodity prices for natural gas, offset partially by increased administrative costs as staffing needs increased with the mining operations, an allowance for doubtful accounts on the mineral production royalty of $84,000 and increased oil and gas production costs due to the one time processing charges related to prior period production. Quarter over quarter saw a 57 percent decrease. The decrease from the third quarter of 2008 was primarily due to the Company receiving lower cash flow from its investments, lower interest from decreased cash balances and lower oil and gas revenue due to decreased commodity prices for natural gas, which was partially offset by the one time processing charges related to prior production in Q3 2008.

Liquidity and Capital Resources
-------------------------------

At December 31, 2008, the Company had a working capital position of $21,929,000 (December 31, 2007 - $23,703,000). These numbers include the value of liquid investments of $3,621,000 at December 31, 2008 (December 31, 2007 - $5,257,000).

The Company currently has a projected capital expenditure budget of $12,500,000 for the Meliadine West and East projects for the 2009 year. Included in this amount is an annual option payment of $1,580,000 and expenditures of $10,920,000 on the development of the Meliadine West and East projects. Anticipated costs for the first quarter of 2009 are expected to be minimal (other than the $1,580,000 option payment) compared to the previous 2008 year as the underground bulk sample and 2008 drilling programs were completed in the third quarter of 2008. Existing working capital, anticipated cash flow from oil and gas operations and investment income are expected to cover all planned expenditures for 2009. The Company attempts to maintain at least a six month cash balance for the estimated required capital expenditures.

Related Party Transactions
--------------------------

The Company holds 204,633 (2007 - 204,633) shares in Bonterra O&G which have a fair market value as of December 31, 2008 of $3,534,000 (2007 - $4,909,000). Bonterra O&G is a publically traded oil and gas corporation on the Toronto Stock Exchange. The Company's ownership in Bonterra O&G represents approximately 1.2 percent of the issued and outstanding shares of Bonterra O&G. Bonterra O&G has common directors and management with Comaplex.

The Company paid a management fee to Bonterra Energy Corp. (Bonterra Corp), a wholly owned subsidiary of Bonterra O&G, of $330,000 (2007 - $300,000). 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 costs of the Company. In addition, Bonterra Corp owns 689,682 (December 31, 2007 - 689,682) common shares in the Company. Services provided by Bonterra Corp include executive services (president and vice president, finance duties), accounting services, oil and gas administration and office administration. All services performed are charged at estimated fair value. As at December 31, 2008, the Company had an account payable to Bonterra Corp of $56,000 (December 31, 2007 - $63,000).

The Company at December 31, 2008 owns 346,000 (December 31, 2007 - 346,000) common shares in Pine Cliff Energy Ltd. (Pine Cliff). Pine Cliff has common directors and management with the Company. Pine Cliff trades on the TSX Venture Exchange. As of December 31, 2008 the common shares have a fair value of $87,000 (December 31, 2007 - $260,000). 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. There were no intercompany transactions between Pine Cliff and the Company.

The following consolidated financial statements and notes to the consolidated financial statements have been provided for further details.



COMAPLEX MINERALS CORP.
CONSOLIDATED BALANCE SHEETS
As at December 31
($000) 2008 2007
-------------------------------------------------------------------------

ASSETS
Current
Cash 21,870 20,987
Accounts receivable 817 708
Prepaid expenses 187 214
Investments (Note 3) 3,621 5,257
-------------------------------------------------------------------------
26,495 27,166

Future income tax asset (Note 4) 7,056 6,181
-------------------------------------------------------------------------
Property and equipment (Note 5)
Property and equipment 106,813 71,423
Accumulated depletion, depreciation
and amortization (7,999) (7,571)
-------------------------------------------------------------------------
98,814 63,852
-------------------------------------------------------------------------
132,365 97,199
-------------------------------------------------------------------------

LIABILITIES
Current
Accounts payable and accrued liabilities (Note 3) 4,566 3,463
Asset retirement obligations (Note 9) 740 675
-------------------------------------------------------------------------
5,306 4,138
-------------------------------------------------------------------------

Commitments and Contingencies (Note 12)

SHAREHOLDERS' EQUITY (Note 6)

Share capital 108,502 76,173
Contributed surplus 3,508 2,620
-------------------------------------------------------------------------
112,010 78,793
-------------------------------------------------------------------------
Retained earnings 14,118 11,996
Accumulated other comprehensive income (Note 7) 931 2,272
-------------------------------------------------------------------------
15,049 14,268
-------------------------------------------------------------------------
Total shareholders' equity 127,059 93,061
-------------------------------------------------------------------------
132,365 97,199
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Years Ended December 31
($000, except $ per share) 2008 2007
-------------------------------------------------------------------------
REVENUE
Minerals division
Interest 723 836
Mineral production royalty 123 88
Gain (loss) on sale of investments (38) 142
-------------------------------------------------------------------------
808 1,066
-------------------------------------------------------------------------
Oil and gas division
Oil and gas sales 3,798 3,267
Royalties (936) (778)
Investment income (Note 3) 606 540
-------------------------------------------------------------------------
3,468 3,029
-------------------------------------------------------------------------
4,276 4,095
-------------------------------------------------------------------------

EXPENSES
Oil and gas production costs 830 319
General and administrative
Minerals division 1,323 943
Oil and gas division 155 138
Foreign exchange loss (gain) (174) 240
Stock-based compensation 973 1,280
Depletion, depreciation and accretion 461 579
Abandonment of mineral properties 117 -
-------------------------------------------------------------------------
3,685 3,499
-------------------------------------------------------------------------

Earnings before taxes 591 596
-------------------------------------------------------------------------
Income taxes (recovery) (Note 4)
Current - -
Future (1,531) (1,777)
-------------------------------------------------------------------------
(1,531) (1,777)
-------------------------------------------------------------------------
Net earnings for the year 2,122 2,373
Retained earnings, beginning of year 11,996 9,623
-------------------------------------------------------------------------
Retained earnings, end of year 14,118 11,996
-------------------------------------------------------------------------
Net earnings per share - basic and diluted 0.04 0.05
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31
($000, except $ per share) 2008 2007
-------------------------------------------------------------------------
Net earnings for the year 2,122 2,373
-------------------------------------------------------------------------
Other Comprehensive loss, net of income tax
Loss on investments (1,553) (243)
Future taxes on loss on investments 207 35
Realized losses (gains) on investments
transferred to net income 6 (135)
Future taxes on realized (losses) gains
on investments transferred to net income (1) 20
-------------------------------------------------------------------------
Other Comprehensive loss (1,341) (323)
-------------------------------------------------------------------------
Comprehensive income 781 2,050
-------------------------------------------------------------------------
Comprehensive income per share - basic and diluted 0.02 0.05
-------------------------------------------------------------------------

COMAPLEX MINERALS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW

Years Ended December 31
($000) 2008 2007
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings 2,122 2,373
Items not affecting cash
Gain (loss) on sale of investments 38 (142)
Stock based compensation 973 1,280
Depletion, depreciation and accretion 461 579
Foreign exchange loss (gain) (174) 240
Abandonment of mineral properties 117 -
Future income taxes (1,531) (1,777)
-------------------------------------------------------------------------
2,006 2,553
-------------------------------------------------------------------------
Change in non-cash working capital
Accounts receivable (109) (346)
Prepaid expenses 27 (63)
Accounts payable and accrued liabilities 332 (25)
Asset retirement obligations settled (4) (14)
-------------------------------------------------------------------------
246 (448)
-------------------------------------------------------------------------
2,252 2,105
-------------------------------------------------------------------------

FINANCING ACTIVITIES
Issue of shares pursuant to private placement 35,310 31,737
Share issue costs (2,376) (2,069)
Issue of shares under employee stock option plan 171 638
-------------------------------------------------------------------------
33,105 30,306
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Mineral exploration property and
equipment expenditures (35,049) (20,199)
Mineral exploration property and
equipment disposals - 1,463
Oil & gas property and equipment expenditures (427) (232)
Investments purchased - (76)
Investments sold 57 215
Change in non-cash working capital
Accounts payable and accrued liabilities 771 2,886
-------------------------------------------------------------------------
(34,648) (15,943)
-------------------------------------------------------------------------
Foreign exchange gain (loss) on cash held
in foreign currency 174 (240)
-------------------------------------------------------------------------
Net cash inflow 883 16,228
Cash, beginning of year 20,987 4,759
-------------------------------------------------------------------------
Cash, end of year 21,870 20,987
-------------------------------------------------------------------------
Cash interest paid - -
Cash taxes paid - -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2008 and 2007

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These 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
(GAAP) 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 financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as at the date of the balance
sheets as well as the reported amounts of revenues, expenses, and
cash flows during the periods presented. Such estimates relate
primarily to unsettled transactions and events as of the date of the
financial statements. Actual results could differ materially from
estimated amounts.

Amounts recorded for depletion, depreciation and accretion costs and
amounts used for ceiling test calculations are based on estimates of
crude oil and natural gas reserves and future costs required to
develop those reserves. Stock based compensation is based upon
expected volatility and option life estimates. Asset retirement
obligations are based on estimates of abandonment costs, timing of
abandonment, inflation and interest rates. The provision for income
taxes is based on judgements in applying income tax law and estimates
on the timing, likelihood and reversal of temporary differences
between the accounting and tax basis of assets and liabilities. These
estimates are subject to measurement uncertainty and changes in these
estimates could materially impact the financial statements of future
periods.

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 investment income are recorded when
earned.

Foreign Currency Translation

Monetary assets and liabilities denominated in a foreign currency are
translated at the rate of exchange in effect at the Consolidated
Balance Sheet date. Revenues and expenses are translated at the
period average rates of exchange. Translation gains and losses are
included in earnings in the period in which they arise.

Joint Interest Operations

Significant portions of the Company's oil and gas operations are
conducted jointly with other parties and accordingly the financial
statements reflect only the Company's proportionate interest in such
activities.

Investments

Investments are carried at fair value. Fair value is determined by
multiplying the year end trading price of the investments by the
number of common shares held as of December 31, 2008.

Property and equipment

Undeveloped Mineral Properties

All costs related to acquisition and exploration of mineral
properties and related equipment 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. Depreciation of mining
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 between five to ten years.

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.

Income taxes

The Company accounts for income taxes using the liability method.
Under this method, the Company records a future income tax asset or
liability to reflect any difference between the accounting and tax
basis of assets and liabilities, using substantively enacted income
tax rates. The effect on future tax assets and liabilities of a
change in tax rates is recognized in net earnings in the period in
which the change occurs. Future income tax assets are only recognized
to the extent it is more likely than not that sufficient future
taxable income will be available to allow the future income tax asset
to be realized.

Asset retirement obligations

The Company recognizes an Asset Retirement Obligation (ARO) in the
period in which it is incurred when a reasonable estimate of the fair
value can be made. On a periodic basis, management will review these
estimates and changes, if any, will be applied prospectively. The
fair value of the estimated ARO is recorded as a long-term liability,
with a corresponding increase in the carrying amount of the related
asset. The capitalized amount is depleted on a unit-of-production
basis over the life of the reserves. The liability amount is
increased each reporting period due to the passage of time and the
amount of accretion is charged to earnings in the period. Revisions
to the estimated timing of cash flows or to the original estimated
undiscounted cost would also result in an increase or decrease to the
ARO. Actual costs incurred upon settlement of the obligations are
charged against the ARO to the extent of the liability recorded.

Stock-based compensation

The Company accounts for stock-based compensation using the fair-
value method of accounting for stock options granted to directors,
officers, employees and other service providers using the Black-
Scholes option pricing model. Stock-based compensation expense is
recorded over the vesting period with a corresponding amount
reflected in contributed surplus. Stock-based compensation expense is
calculated as the estimated fair value of the options at the time of
grant, amortized over their vesting period. When stock options are
exercised, the associated amounts previously recorded as contributed
surplus are reclassified to common share capital. The Company has not
incorporated an estimated forfeiture rate for stock options that will
not vest, rather, the Company accounts for actual forfeitures as they
occur.

Financial Instruments

Financial instruments are measured at fair value on initial
recognition of the instrument, into one of the following five
categories: held-for trading, loans and receivables, held-to-maturity
investments, available-for-sale financial assets or other financial
liabilities.

Subsequent measurement of financial instruments is based on their
initial classification. Held-for-trading financial assets are
measured at fair value and changes in fair value are recognized in
net earnings. Available-for-sale financial instruments are measured
at fair value with changes in fair value recorded in other
comprehensive income until the instrument is derecognized or
impaired. The remaining categories of financial instruments are
recognized at amortized cost using the effective interest rate
method.

Cash is classified as held-for-trading and is measured at fair value
which equals the carrying value. Accounts receivable are classified
as loans and receivables which are measured at amortized costs.
Investments in related party are classified as available-for-sale
which are measured at fair value. Accounts payable and accrued
liabilities are classified as other financial liabilities, which are
measured at amortized cost.

Basic and Diluted per Share Calculations

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

2. NEW ACCOUNTING POLICIES

Capital Disclosures

Effective January 1, 2008, the Company prospectively adopted the
Canadian Institute of Chartered Accountants (CICA) Section 1535,
"Capital Disclosures" which establishes standards for disclosing
information about the Company's capital and how it is managed. It
requires disclosures of the Company's objectives, policies and
processes for managing capital, the quantitative data about what the
company regards as capital, whether the Company has complied with any
capital requirements and if it has not complied, the consequences of
such non-compliance. The only effect of adopting this standard are
disclosures about the Company's capital and how it is managed (See
Note 11).

Financial Instruments Disclosures and Presentation

Effective January 1, 2008, the Company prospectively adopted Section
3862, "Financial Instruments - Disclosures" and Section 3863,
"Financial Instruments - Presentation." These new accounting
standards replaced Section 3861, "Financial Instruments - Disclosure
and Presentation." Section 3862 requires additional information
regarding 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. The additional disclosures required under these
standards are included in Note 11.

Recent Accounting Pronouncements

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. The Company adopted these standards for its
fiscal year beginning January 1, 2009 with no impact on its
consolidated financial statements.

In January 2009, the CICA issued Section 1582, "Business
Combinations", which replaces former guidance on business
combinations. Section 1582 establishes principles and requirements of
the acquisition method for business combinations and related
disclosures. This statement applies prospectively to business
combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after
January 2011 with earlier adoption permitted. The Company plans to
adopt this standard prospectively effective January 1, 2009 and does
not expect the adoption of this statement to have a material impact
on the Company's results of operations or financial position.
In January 2009, the CICA issued Sections 1601, "Consolidated
Financial Statements", and 1602, "Non-controlling Interests", which
replaces existing guidance. Section 1601 establishes standards for
the preparation of consolidated financial statements. Section 1602
provides guidance on accounting for a non-controlling interest in a
subsidiary in consolidated financial statements subsequent to a
business combination. These standards are effective on or after the
beginning of the first annual reporting period beginning on or after
January 2011 with earlier application permitted. The Company plans to
adopt these standards effective January 1, 2009 and does not expect
the adoption will have a material impact on the results of operations
or financial position.

The Accounting Standards Board has confirmed the convergence of
Canadian GAAP with International Financial Reporting Standards (IFRS)
will be effective January 1, 2011. The Company has performed an
initial scoping process in order to ensure successful implementation
within the required timeframe. The impact on the Company's
consolidated financial statements is not reasonably determinable at
this time. Key information will be disclosed as it becomes available
during the transition period.

3. RELATED PARTIES

The Company paid a management fee of $330,000 (2007 - $300,000) to
Bonterra Energy Corp. (Bonterra Corp) (a wholly owned subsidiary of
Bonterra Oil & Gas Ltd. (Bonterra O&G) a publicly traded oil and gas
corporation on the Toronto Stock Exchange, formerly Bonterra Energy
Income Trust) 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, 2007 - 689,682) common
shares in the Company. Bonterra Corp is the administrator for
Bonterra O&G. Services provided by Bonterra Corp include executive
services (president and vice president, finance duties), accounting
services, oil and gas administration and office administration.
As at December 31, 2008, the Company had an account payable to
Bonterra Corp of $56,000 (December 31, 2007 - $63,000).
The Company at December 31, 2008 owns 204,633 (December 31, 2007 -
204,633) shares in Bonterra O&G representing just over one percent of
the outstanding shares of Bonterra O&G. The shares have a fair value
of $3,534,000 (December 31, 2007 - $4,909,000). In 2008, the Company
received investment income of $606,000 (2007 - $540,000).

The Company at December 31, 2008 owns 346,000 (December 31, 2007 -
346,000) 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,
2008 the common shares have a fair value of $87,000 (December 31,
2007 - $260,000). 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.

4. INCOME TAXES

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



2008 2007
($000) Amount Amount
---------------------------------------------------------------------
Future income tax assets:
Capital assets 5,090 6,354
Asset retirement obligations 190 173
Share issue costs 807 427
Loss carry-forward (expires 2010) 1,104 1,729
Other (135) (322)
Valuation adjustment on capital assets - (2,180)
---------------------------------------------------------------------
7,056 6,181
---------------------------------------------------------------------

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

($000) 2008 2007
---------------------------------------------------------------------
Earnings before income taxes 591 596
Combined federal and provincial income
tax rates 29.5% 32.1%
---------------------------------------------------------------------
Income tax provision calculated using
statutory tax rates 174 191
Increase (decrease) in taxes resulting from:
Stock-based compensation 287 411
Effect of change in valuation allowance (2,180) (2,323)
Effect of change in tax rate 130 117
Other 58 (173)
---------------------------------------------------------------------
Income tax recovery (1,531) (1,777)
---------------------------------------------------------------------

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 2,875
Foreign exploration expenditures 10 785
Share issue costs 20 3,149
Earned depletion expenses (successored) 25 2,299
Canadian development expenditures 30 19,839
Non-capital loss carried forward (expires 2010) 100 3,944
Canadian exploration expenditures (successored) 100 33,368
Canadian exploration expenditures 100 57,353
---------------------------------------------------------------------
123,612
---------------------------------------------------------------------


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 12).

On June 6, 2008, the Company completed a private placement for
1,832,061 flow through common shares for aggregate gross proceeds of
$12,000,000 (See Note 6).

The Company renounced the $12,000,000 of Canadian exploration
expenditures in January 2009.



5. PROPERTY AND EQUIPMENT

2008 2007
---------------------------------------------------------------------
Accumulated Accumulated
Depletion, Depletion,
Depreciation Depreciation
and and
Amorti- Amorti-
($000) Cost zation Cost zation
---------------------------------------------------------------------
Mineral properties
and related
equipment 97,444 442 62,546 332
Petroleum and
natural gas
properties and
related equipment 9,100 7,298 8,636 7,024
Furniture, equipment
and other 269 225 241 215
---------------------------------------------------------------------
106,813 7,999 71,423 7,571
---------------------------------------------------------------------


During the year, $385,000 (2007 - $299,000) 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.

The Company has incurred costs to date of $94,703,000 (2007 -
$61,918,000) for deferred development costs for its most significant
exploration and development property (Meliadine) that have all been
capitalized. 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 12 and 13 regarding contractual obligations and
commitments as well as contingent items regarding the Meliadine
project.

6. SHARE CAPITAL

Authorized

Unlimited number of common shares without nominal or par value

Unlimited number of first preferred shares



Issued

2008 2007
---------------------------------------------------------------------
Amount Amount
Number ($000) Number ($000)
---------------------------------------------------------------------
Common Shares
Balance, beginning
of year 46,611,970 76,173 39,451,771 44,922
Issued pursuant to
private placements 6,032,061 35,310 6,649,999 31,737
Issue costs for
private placements (2,376) (2,069)
Issued on exercise
of stock options 62,500 171 510,200 638
Transfer of contributed
surplus to
share capital 84 345
Future tax effect
of share issue costs 656 600
Future tax adjustment
on renouncement
of tax (1,516) -
---------------------------------------------------------------------
Balance, end of year 52,706,631 108,502 46,611,970 76,173
---------------------------------------------------------------------


On June 6, 2008, the Company completed a private placement for
4,200,000 common shares at a price of $5.55 per common share for
gross proceeds of $23,310,000. On June 6, 2008, the Company completed
a private placement for 1,832,061 flow through common shares at a
price of $6.55 per common share for gross proceeds of $12,000,000.
The Company paid a total commission on both placements of 5.75
percent ($2,030,000) of the gross proceeds plus additional share
issue costs of approximately $346,000.

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 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 50,724,880 (2007 - 45,327,965) shares used to calculate diluted
earnings per share for the year ended December 31, 2008 included the
basic weighted average number of shares outstanding of 50,093,618
(2007 - 44,612,284) plus 631,262 (2007 - 715,681) shares related to
the dilutive effect of stock options.



A summary of the changes of the Company's contributed surplus is
presented below:

Contributed surplus
($000) 2008 2007
---------------------------------------------------------------------
Balance, beginning of year $2,620 $1,684
Stock-based compensation expensed (non-cash) 973 1,280
Stock-based options exercised (non-cash) (84) (345)
---------------------------------------------------------------------
Balance, end of year $3,508 $2,620
---------------------------------------------------------------------
---------------------------------------------------------------------


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, 2008 was 5,270,663 (2007 - 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, 2008 and 2007, and changes during the years ended on
those dates is presented below:



2008 2007
---------------------------------------------------------------------
Weighted- Weighted-
Average Average
Exercise Exercise
Options Shares Price Shares Price
---------------------------------------------------------------------
Outstanding at
beginning of year 2,141,000 $3.40 2,397,200 $2.77
Options granted 812,000 5.85 278,000 4.86
Options exercised (62,500) 2.74 (510,200) 1.25
Options cancelled - - (24,000) 3.20
---------------------------------------------------------------------
Outstanding at end
of year 2,890,500 $4.11 2,141,000 $3.40
---------------------------------------------------------------------
---------------------------------------------------------------------
Options exercisable
at end of year 1,290,000 $3.32 639,500 $3.17
---------------------------------------------------------------------
---------------------------------------------------------------------

The following table summarizes information about stock options
outstanding at December 31, 2008:

Options Outstanding Options Exercisable
-------------------------------------------------------------------------
Weighted-
Number Average Weighted- Number Weighted-
Range of Outstanding Remaining Average Exercisable Average
Exercise At Contractual Exercise At Exercise
Prices 12/31/08 Life Price 12/31/08 Price
-------------------------------------------------------------------------
$3.20 to $3.60 1,830,500 0.9 years $3.20 1,206,500 $3.20
4.70 to 5.30 243,000 1.9 years 5.03 81,000 5.03
5.40 to 5.90 767,000 2.7 years 5.84 - -
6.00 to 6.30 50,000 1.9 years 6.03 2,500 6.28
-------------------------------------------------------------------------
$3.20 to $6.30 2,890,500 1.5 years $4.11 1,290,000 $3.32
-------------------------------------------------------------------------
-------------------------------------------------------------------------


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 812,000 (2007 - 278,000) stock
options with an estimated fair value of $1,460,171 (2007 - $510,549)
($1.80 per option (2007 - $1.84 per option)) using the Black-Scholes
option pricing model with the following key assumptions:



2008 2007
---- ----
Weighted-average risk free interest rate (%) 2.8 4.1
Dividend yield (%) 0.0 0.0
Expected life (years) 2.7 3.5
Weighted-average volatility (%) 44.0 45.6

7. ACCUMULATED OTHER COMPREHENSIVE INCOME

Other
Compreh-
January 1, ensive December 31,
($000) 2008 Loss 2008
---------------------------------------------------------------------
Losses on available-for-sale
investments 2,272 (1,341) 931
---------------------------------------------------------------------

Other
Compreh-
January 1, ensive December 31,
2007 Loss 2007
---------------------------------------------------------------------
Losses on available-for-sale
investments 2,595 (323) 2,272
---------------------------------------------------------------------


8. 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, 2007 - $3,200,000) 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.

9. ASSET RETIREMENT OBLIGATIONS

At December 31, 2008, the estimated total undiscounted amount
required to settle the asset retirement obligations was $943,000
(2007 - $1,050,000). Costs for asset retirement have been calculated
assuming a two percent inflation rate for 2009 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 (2007 - 5) percent.



Changes to asset retirement obligations were as follows:

($000) 2008 2007
---------------------------------------------------------------------
Asset retirement obligations, January 1 675 588
Adjustment to asset retirement obligations 35 72
Liabilities settled during the year (4) (14)
Accretion 34 29
---------------------------------------------------------------------
Asset retirement obligations, December 31 740 675
---------------------------------------------------------------------

10. BUSINESS SEGMENT INFORMATION

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

($000) 2008 2007
---------------------------------------------------------------------
Gross revenue
Mineral exploration 808 1,066
Oil and gas 4,404 3,807
---------------------------------------------------------------------
5,212 4,873
---------------------------------------------------------------------
Depletion, depreciation, accretion, and
abandonment
Mineral exploration 298 145
Oil and gas 280 434
---------------------------------------------------------------------
578 579
---------------------------------------------------------------------
Net earnings for the year
Mineral exploration 569 235
Oil and gas 1,553 2,138
---------------------------------------------------------------------
2,122 2,373
---------------------------------------------------------------------
Property and equipment expenditures for the year
Mineral exploration 35,049 20,199
Oil and gas 427 232
---------------------------------------------------------------------
35,476 20,431
---------------------------------------------------------------------
Total assets
Mineral exploration 126,553 89,930
Oil and gas 5,812 7,269
---------------------------------------------------------------------
132,365 97,199
---------------------------------------------------------------------


11. FINANCIAL AND CAPITAL RISK MANAGEMENT

Financial Risk Factors
----------------------

The Company undertakes transactions in a range of financial
instruments including:

- Cash deposits;
- Receivables;
- Common share investments;
- Payables;

The Company's activities result in exposure to a number of financial
risks including market risk (commodity price risk, interest rate
risk, foreign exchange risk, credit risk, and liquidity risk).
Financial risk management is carried out by senior management under
the direction of the Directors.

The Company does not enter into risk management contracts to sell its
oil and gas commodities. Commodities are sold at market prices at the
date of sale in accordance with the Board directive.

Capital Risk Management
-----------------------

The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern, so that it can
continue to provide returns to its Shareholders and benefits for
other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the
capital structure, the Company may issue new shares.

The Company monitors capital on the basis of the ratio of budgeted
exploration capital requirements to current working capital. This
ratio is calculated using the projected cash requirements for nine
months to 18 months in advance and maintaining a working capital
balance of at least six months to satisfy this requirement on a
continuous basis.

The Company believes that maintaining at least a six month current
working capital balance to the exploration capital budget requirement
is an appropriate basis to allow it to continue its future
development of the Company's biggest asset; the "Meliadine West
Project."

The following section (a) of this note provides a summary of the
underlying economic positions as represented by the carrying values,
fair values and contractual face values of the financial assets and
financial liabilities. The Company's working capital to capital
expenditure requirement ratio is also provided.

The following section (b) addresses in more detail the key financial
risk factors that arise from the Company's activities including its
policies for managing these risks.

a) Financial assets, financial liabilities

The carrying amounts, fair value and face values of the Company's
financial assets and liabilities other than cash are shown in
Table 1.



Table 1

As at December 31, 2008 As at December 31, 2007
Carrying Fair Face Carrying Fair Face
($000) Value Value Value Value Value Value
---------------------------------------------------------------------
Financial assets
Accounts receivable 817 817 906 708 708 711
Investments 3,621 3,621 - 5,257 5,257 -
Financial liabilities
Accounts payable and
accrued liabilities 4,566 4,566 4,566 3,463 3,463 3,463
---------------------------------------------------------------------

The budgeted capital expenditure to working capital base figures for
December 31, 2008 and December 31, 2007 are presented below:

December 31, December 31,
($000) 2008 2007
---------------------------------------------------------------------
Budgeted capital expenditure(1) 12,500 25,985
---------------------------------------------------------------------
Number of months budgeted 12 12
---------------------------------------------------------------------
Current assets 26,495 27,166
Current liabilities (4,566) (3,463)
---------------------------------------------------------------------
Working capital 21,929 23,703
---------------------------------------------------------------------
Budgeted capital expenditure to working capital
base 0.6 1.1
---------------------------------------------------------------------
Working capital to budgeted capital
expenditure (in months) 21.1 11.0
---------------------------------------------------------------------
(1) Budgeted capital expenditure represents the Company's estimated
future twelve month capital expenditures and may materially
change between quarters. Actual capital expenditure from quarter
to quarter can be materially different from the budgeted capital
expenditure.


b) Risks and mitigations

Market risk is the risk that the fair value or future cash flow of
the Company's financial instruments will fluctuate because of changes
in market prices. Components of market risk to which Comaplex is
exposed are discussed below.

Commodity price risk
--------------------

The Company's principal operation is the development of its Meliadine
gold properties. The Company also engages to a much lesser extent in
the production and sale of oil and natural gas. Fluctuations in
prices of these commodities may directly impact the Company's
performance and ability to continue with its operations.
The Company's management, at the direction of the Board of Directors,
currently does not use risk management contracts to set price
parameters for its production.

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 U.S. 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/U.S. exchange rate would have no significant impact on the
cash flow of the Company.

Interest rate risk
------------------

Interest rate risk refers to the risk that the value of a financial
instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. Interest rate risk
arises from interest bearing financial assets and liabilities that
Comaplex uses. The principal exposure to the Company is on its cash
balances which have a variable interest rate which gives rise to a
cash flow interest rate risk.

Comaplex's cash consists of Canadian and U.S. investment chequing
accounts. Since these funds need to be accessible for the development
of the Company's capital projects, management does not reduce its
exposure to interest rate risk through entering into term contracts
of various lengths. As discussed above, the Company generally manages
its capital such that its budgeted capital requirements to current
working capital ratio are at least six months.

Foreign exchange risk
---------------------

The Company has no foreign operations and currently sells all of its
product sales in Canadian currency. The Company has a U.S. cash
balance and earns an insignificant amount of interest on its U.S.
bank account. Comaplex does not mitigate CAD/USD exchange rate risk
by using risk management contracts.

Credit risk
-----------

Credit risk is the risk that a contracting party will not complete
its obligations under a financial instrument and cause the Company to
incur a financial loss. Comaplex is exposed to credit risk on all
financial assets included on the balance sheet. To help mitigate this
risk:

- The Company only maintains its cash balances with low risk
exposure which frequently results in receiving lower interest
rates on investments.

- The majority of investments are only with entities that have
common management with the Company.

Of the accounts receivable balance at December 31, 2008 ($817,000)
and December 31, 2007 ($708,000) over 90 percent relates to product
sales with major oil and gas marketing companies all of which have
always paid within 30 days, amounts due from the government of Canada
for goods and services tax credits and interest from a major Canadian
Bank.

The Company assesses quarterly if there has been any impairment of
the financial assets of the Company. During the year ended December
31, 2008, there was a full impairment provision required on an
outstanding receivable for the mineral production royalty of $84,000
as the operator of the mill went into CCAA protection. No impairment
provision was required on the oil and gas financial assets of the
Company due to historical success of collecting receivables. The
Company does not have any significant credit risk exposure to any
single counterparty or any group of counterparties having similar
characteristics.

The carrying value of accounts receivable approximates their fair
value due to the relatively short periods to maturity on this
instrument. The maximum exposure to credit risk is represented by the
carrying amount on the balance sheet. There are no material financial
assets that the Company considers past due.

Liquidity risk
--------------

Liquidity risk includes the risk that, as a result of Comaplex's
operational liquidity requirements:

- The Company will not have sufficient funds to settle a transaction
on the due date;
- Comaplex will not have sufficient funds to continue with its
financing of its major exploration project;
- The Company will be forced to sell assets at a value which is less
than what they are worth; or
- Comaplex may be unable to settle or recover a financial asset at
all.

To help reduce these risks, the Company:

- Has a general capital policy of maintaining at least six months of
annual budgeted capital requirements as its working capital base;
- Holds current investments that are readily tradable should the
need arise; and
- Maintains a continuous evaluation approach as to the financing
requirements for its largest exploration program; the "Meliadine
West Project."

12. 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
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, 2009 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


13. CONTINGENT RECEIVABLE

As specified in Note 12, 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 70 percent of RCF's share of cashflow from
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 $69,603,000
(December 31, 2007 - $38,585,000) of exploration expenditures were
incurred by the Company.

As of December 31, 2008, the Company has a contingent receivable from
RCF in the amount of $35,003,000 (December 31, 2007 - $26,340,000)
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.

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

For further information: Additional information relating to the Company may be found on www.sedar.com and by visiting our website at www.comaplex.com.

Contact Information

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

    Comaplex Minerals Corp.
    Mark J. Balog
    Chief Operating Officer
    (403) 265-2846

    Comaplex Minerals Corp.
    Kirsten Kulyk
    Manager - Investor Relations
    (403) 265-2846
    info@comaplex.com