LEXAM EXPLORATIONS INC.
NEX BOARD : LEX.H

LEXAM EXPLORATIONS INC.

August 26, 2005 13:24 ET

Lexam Explorations Inc.: 2005 Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 26, 2005) - Lexam Explorations Inc. (NEX:LEX.H) -

(All amounts in this news release are expressed in Canadian dollars.)

MANAGEMENT'S DISCUSSION AND ANALYSIS

Financial Results

Lexam recorded a loss of $43,620 during the three months ended June 30, 2005, compared to a loss of $48,322 during the corresponding period in 2004. During the six months ended June 30, 2005, Lexam recorded a loss of $64,313 compared to a loss of $71,593 during the first half of 2004. The loss during the second quarter and first half of 2005 can be attributed to expenditures for administrative costs of $43,638 and $63,361 for those periods, reduced from $47,879 and $71,979 during the same periods in 2004 respectively.



Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
---------- ---------- ---------- -----------

Loss $ (43,620) $ (48,322) $ (64,313) $ (71,593)
Loss per share nil nil nil nil


Financial Condition

Lexam is currently not able to continue its exploration efforts and discharge its liabilities in the normal course of business, and may not be able to ultimately realize the carrying value of its assets, subject to, among other things, being able to raise sufficient additional financing to fund its exploration programs including the review and evaluation of the technical data received from Petro-Hunt relating to the Baca Oil & Gas property. The Company is evaluating alternatives to address these issues, including joint venturing certain properties and seeking additional sources of debt or equity.

On February 18, 2005, the Company's listing on the TSX Venture Exchange ("TSX-V") was transferred to the NEX board of the TSX-V due primarily to the Company's lack of sufficient operating capital. The NEX board allows Lexam's shares to continue trading while it seeks alternative financing or other joint venture partners to resume exploration activities. Without such alternative funds or joint venture partners, Lexam is not expected to be able to conduct any exploration or development work.

Corporate Developments

On August 26, 2005, it was announced that Goldcorp Inc. will be selling its 49.8% interest (18,990,641 shares) in Lexam to a company wholly-owned by Robert R. McEwen, the Chairman and CEO of the Company and the Chairman of Goldcorp for aggregate total consideration of $400,000. As part of the sale, Lexam's debt owed to Goldcorp of $402,720 will be extinguished. The transaction is expected to be completed on September 1, 2005.

Financial Information and Notice to Reader

Attached are the Consolidated Financial Statements of Lexam Explorations Inc. for the three and six months ended June 30, 2005. These interim financial statements have not been subject to auditor review.



Corporate Office: Transfer Agent and Registrar:

145 King Street West Computershare Trust Company of Canada
Suite 2700 100 University Avenue, 9th Floor
Toronto, Ontario Toronto, Ontario
Canada M5H 1J8 Canada M5J 2Y1
Telephone: (416) 865-0326 Telephone: (800) 564-6253
Facsimile: (416) 361-5741 Facsimile: (416) 981-9800
General enquires: Shareholder Enquiries: (800) 564-6253
(800) 813-1412 Email: caregistryinfo@computershare.com
(Canada and United States)

Stock Symbol: TSX Venture Exchange NEX Board ("LEX.H")



LEXAM EXPLORATIONS INC.
CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets
(in Canadian dollars)

As at As at
June, 30 December 31,
2005 2004
----------- --------------
(unaudited)

Assets

Current assets
Cash $ 6,966 $ 11,932
Accounts receivable 686 1,198
Prepaid expenses 1,022 2,554
----------- --------------
8,674 15,684
----------- --------------
----------- --------------

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable and
accrued liabilities $ 516,589 $ 459,286
----------- --------------

Shareholders' equity
Capital stock (note 2) 16,402,075 16,402,075
Deficit (16,909,990) (16,845,677)
----------- --------------
(507,915) (443,602)
----------- --------------

$ 8,674 $ 15,684
----------- --------------
----------- --------------

Contingencies (note 1)
Subsequent Event (note 3)

The accompanying notes are an integral part of these consolidated
financial statements.


Consolidated Statements of Operations and Deficit (unaudited)
(in Canadian dollars)


Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
------------ ----------- ------------ -----------
Revenues
Interest
and other
income $ 18 $ 304 $ 60 $ 967

Expenses
Administrative 43,638 48,045 63,361 71,979
Exploration - 581 1,012 581
------------ ----------- ------------ -----------
43,638 48,626 64,373 72,560
------------ ----------- ------------ -----------

Loss for
the
period (43,620) (48,322) (64,313) (71,593)
------------ ----------- ------------ -----------

Deficit
at
beginning
of period (16,866,370) (14,250,615) (16,845,677) (14,227,344)
------------ ----------- ------------ -----------

Deficit
at end of
period $ (16,909,990) $(14,298,937) $ (16,909,990)$(14,298,937)
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------

Loss per
share
(basic
and
diluted) $ - $ - $ - $ -
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Weighted
average
number of
shares
outstanding
(000's) 38,107 38,107 38,107 38,107
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------


The accompanying notes are an integral part of these consolidated
financial statements.



Consolidated Statements of Cash Flows (unaudited)
(in Canadian dollars)


Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
------------ ----------- ------------ -----------
Cash provided
by (used in)
Operating
activities
Loss for the
Period $ (43,620) $ (48,322) $ (64,313) $ (71,593)
Items not
affecting
cash
Change in
non-cash
operating
working
capital 38,693 (10,579) 59,347 (3,212)
------------ ----------- ------------ -----------
(4,927) (58,901) (4,966) (74,805)
------------ ----------- ------------ -----------

Decrease in cash (4,927) (58,901) (4,966) (74,805)
Cash at beginning
of period 11,893 108,156 11,932 124,060
------------ ----------- ------------ -----------

Cash at end of
period $ 6,966 $ 49,255 $ 6,966 $ 49,255
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------

The accompanying notes are an integral part of these consolidated
financial statements.


Lexam Explorations Inc.

Notes to Consolidated Financial Statements (unaudited)

1. Basis of Presentation and Going Concern

The consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles and on the assumption that Lexam Explorations Inc. (the "Company" or "Lexam") will be able to realize the carrying value of its assets and discharge its liabilities in the normal course of business.

The accompanying unaudited consolidated financial statements should be read in conjunction with the notes to the Company's audited consolidated financial statements for the year ended December 31, 2004. These interim financial statements have not been subject to auditor review. These unaudited interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the respective interim periods presented.

The Company has a significant working capital deficiency and is not currently able to continue its exploration programs and discharge its liabilities in the normal course of business, and may not be able to ultimately realize the carrying value of its assets, subject to, among other things, being able to raise sufficient additional financing to fund its exploration programs. There can be no assurance that the Company will be able to raise sufficient additional financing to continue its exploration programs.

The Company is evaluating alternatives to address these issues, including joint venturing certain properties and seeking additional sources of debt or equity financing.

The financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis was not appropriate for these financial statements, adjustments may be necessary to the carrying value of assets, such as accounts receivable and prepaid expenses, the accounts payable and accrued liabilities balance, and the reported expenses.

2. Capital Stock

At June 30, 2005, the Company had 38,107,436 common shares outstanding. A total of 39,757,436 shares would have been outstanding had all options been exercised

3. Subsequent Event

On August 26, 2005, it was announced that Goldcorp Inc. will be selling its 49.8% interest (18,990,641 shares) in Lexam to a company wholly-owned by Robert R. McEwen, the Chairman and CEO of the Company and the Chairman of Goldcorp for aggregate total consideration of $400,000. As part of the sale, Lexam's debt owed to Goldcorp of $402,720 will be extinguished. The transaction is expected to be completed on September 1, 2005.

Contact Information