FORM 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Issuer


Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of August 2008

Commission File Number 001-32412

CENTRAL SUN MINING INC.

(Translation of registrant’s name into English)

500 – 6 Adelaide St. East Toronto, Ontario, Canada   M5C 1H6

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F

o

Form 40-F

x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):                

Note:  Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):                

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes

o

No

x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) 82 —          

EXHIBIT  NO.          DESCRIPTION

99.1                           Financial Statements for Period Ended June 30, 2008
99.2                           Management's Discussion & Analysis for the Period Ended June 30, 2008
99.3                           Certification of Chief Executive Officer Dated August 13, 2008
99.4                           Certification of Chief Financial Officer Dated August 13, 2008

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CENTRAL SUN MINING INC.

Date:   August 14, 2008

By:  /s/ Denis C. Arsenault                                           Denis C. Arsenault, Chief Financial Officer

EXHIBIT 99.1

 

 

 

 

Interim Report

 

Q2

 

Financial Statements

 

 

 

June 30, 2008

Central Sun Mining Inc.

Consolidated Balance Sheets

(Unaudited)

(US Dollars in thousands)

 

Nature of operations, basis of presentation

 

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

 

1

Central Sun Mining Inc.

Consolidated Statements of Operations

Period ended June 30

(Unaudited)

(US Dollars and shares in thousands, except per share amounts)

 

 

 

 

 

Nature of operations, basis of presentation

 

*Formerly Libertad Mine

 

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

 

2

Central Sun Mining Inc.

Period ended June 30

(unaudited)

(US Dollars in thousands)

 

Consolidated Statements of Comprehensive Income (Loss)

 

 

 

Consolidated Statements of Deficit

 

 

Central Sun Mining Inc.

Consolidated Statements of Cash Flows

Period ended June 30

(Unaudited)

(US Dollars in thousands)

 

Central Sun Mining Inc.

 

At a special meeting of shareholders held on November 29, 2007, Glencairn Gold Corporation’s name was changed to Central Sun Mining Inc. (“Central Sun” or the “Company”). The Company also changed the name of the Libertad Mine in Nicaragua to the Orosi Mine.

 

Central Sun’s business is gold mining which includes exploration, development, extraction, processing and reclamation. The Company’s business also includes the acquisition of gold properties in operation or in the exploration or development stage. The Company operates the Limon and Orosi Mines in Nicaragua and is reclaiming the Bellavista Mine in Costa Rica. The Company also has an option to acquire the Mestiza exploration property in Nicaragua.

 

On March 31, 2007, the Company suspended mining activities at the Orosi Mine. During 2007, the Company made payments towards the acquisition and construction of a conventional milling circuit. On May 1, 2008, a positive feasibility study on the Orosi Mill Project was completed. Subsequent to this date all development expenditures related to the project are being capitalized until such time as commercial production is reached. The mine continues to incur care and maintenance charges during the development period.

 

On July 25, 2007, the Company suspended all mining activities at the Bellavista Mine due to concerns over ground movements in the heap leach pad. Management concluded that the mine will not resume operations. The Bellavista Mine has been on care and maintenance since this date and revenues from residual leaching of the pads ceased at the end of September 2007. Remediation of the site commenced October 1, 2007 and management expects the remediation project to last for four years.

 

These consolidated financial statements have been prepared on the basis of Canadian generally accepted accounting principles (“Canadian GAAP”) applicable to a "going concern", which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. As at June 30, 2008, the Company had used $10,136,000 in operating cash flows, reported a net loss of $10,955,000 and had an accumulated deficit of $93,434,000.  The Company does not have sufficient cash to fully fund ongoing 2008 capital expenditures, exploration activities and complete the development of the Orosi Mine - mill project and therefore will require additional funding which, if not raised, would result in the curtailment of activities and project delays.  Although the Company obtained an $8,000,000 loan facility (see Note 20) subsequent to the period ended June 30, 2008, this is not sufficient to fund ongoing operations. Management expects that additional financing will be available, and may be sourced in time to allow the Company to continue the normal course of planned activities. However, there can be no assurances that the Company’s activities will be successful and as a result there is substantial doubt regarding the “going concern” assumption.  These consolidated financial statements do not reflect adjustments that would be necessary if the “going concern” assumption were not appropriate.  If the “going concern” assumption were not appropriate for these consolidated financial statements, then adjustments to the carrying values of assets and liabilities, reported expenses and balance sheet classifications, which could be material, may be necessary.

 

Central Sun Mining Inc.

The unaudited consolidated financial statements of the Company, which are expressed in U.S. dollars, have been prepared in accordance with Canadian generally accepted accounting principles for interim financial information and they follow the same accounting policies and methods of application as the audited consolidated financial statements for the year ended December 31, 2007 except for those changes disclosed in Note 2. These unaudited interim consolidated financial statements do not include all the information and note disclosures required by generally accepted accounting principles for annual financial statements and therefore should be read in conjunction with the most recent annual consolidated financial statements and notes thereto.

 

In the opinion of management, all adjustments considered necessary for fair and consistent presentation of interim financial statements have been included.

 

2. ACCOUNTING POLICIES

 

 

Central Sun adopted new accounting standards effective January 1, 2008 on a prospective basis.

 

 

This section prescribes the accounting treatment for inventories and provides guidance on the determination of costs and its subsequent recognition as an expense, including any write-down to net realizable value. It also provides guidance on the cost formulas that are used to assign costs to inventories. This section also requires additional disclosure regarding the expensing of inventory.

 

Central Sun has adopted this new standard on a prospective basis. The adoption of the new standard will have no impact on the results of operations. The additional disclosures required under this section have been presented in Note 6.

 

 

This section establishes standards for disclosing information about a company’s capital and how it is managed.

Under this standard the Company is required to disclose the following, based on the information provided

internally to the Company’s key management personnel:

 

 

The disclosures required under this new accounting standard have been presented in Note 18.

 

6

Central Sun Mining Inc.

(iii) Section 3862 – Financial Instruments – disclosures

 

This section requires entities to provide disclosure of quantitative and qualitative information in their financial statements that enable users to evaluate (a) the significance of financial instruments for the entity’s financial position and performance; and (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and management’s objectives, policies and procedures for managing such risks. The Company is required to disclose the measurement basis or bases used, and the criteria used to determine classification for different types of instruments.

 

The section requires specific disclosures, including the criteria for:

 

 

The disclosures required under this new accounting standard have been presented in Note 18.

 

 

This section establishes standards for presentation of financial instruments and non-financial derivatives and provides additional guidance for the classification of financial instruments, from the perspective of the issuer, between liabilities and equity, and the classification of related interest, dividends, losses and gains.

 

The requirements under this section have been complied with.

 

 

(i) Section 3064 – Goodwill and intangible assets

 

Effective January 1, 2009, the Company will adopt Section 3064 “Goodwill and intangible assets” which establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets.

 

Concurrent with the introduction of this standard, the CICA withdrew EIC 27 “Revenues and expenses during the pre-operating period”. As a result of the withdrawal of EIC 27, the Company will no longer be able to defer costs and revenues incurred prior to commercial production at new mine operations.

The Company continues to evaluate the impact of this standard on future transactions.

7

Central Sun Mining Inc.

 

 

The Company held the following marketable securities:

 

 

These securities have been valued at closing prices on the relevant stock exchange, at June 30, 2008 and December 31, 2007.

 

At June 30, 2008, 1,450,000 shares of Independent Nickel Corp. were subject to a contractual escrow agreement. The release schedule is as follows:

 

 

At June 30, 2008, 2,000,000 shares of Carlisle Goldfields Limited were subject to a regulatory escrow agreement which was released on July 31, 2008.

 

8

Central Sun Mining Inc.

 

Included in accounts receivable and prepaids at June 30, 2008 are: $2,906,000 (2007 - $2,768,000) in receivables relating to the disposition of the Cerro Quema property (see Note 10); $1,419,000 (2007 - $1,300,000) in deposits to a third-party contractor with respect to the construction of a grinding mill at the Orosi Mine;$1,092,000 (2007 - $654,000) in value-added tax receivables from the Nicaraguan tax authorities; diesel tax rebates of $821,000 (2007 – $514,000); and, supplier advances of $1,724,000 (2007 - $671,000).

 

 

 

 

The Company has placed $250,000 (2007 - $250,000) in a deposit with a bank to secure letters of guarantee issued by the banks to Costa Rican government authorities, to ensure the Company’s future reclamation obligations are completed.

 

On March 7, 2008, the courts in Costa Rica ordered the previously garnished bank account balances, in the amount of $243,000, at the Bellavista Mine be distributed as partial payment of amounts due stemming from Central Sun’s loss in an arbitration case with holders of the Dobles royalties (“Dobles”). On May 29, 2008, the courts in Costa Rica garnished a further $22,000 in the cash account balances at the Bellavista Mine relating to Dobles. These Bellavista Mine accounts are currently unavailable for operations and have been classified as restricted cash.

 

9

Central Sun Mining Inc.

 

On July 25, 2007, Central Sun announced that mining operations at the Bellavista Mine in Costa Rica were suspended due to ground movements in the heap leach pad. The Company has no plans to reopen the mine. At June 30, 2008 the property is shown at its estimated recoverable amount of $3,350,000 (2007 - $3,400,000).

 

On March 7, 2008, the courts in Costa Rica placed a lien on land at the Bellavista Mine site as security for the payment of amounts due stemming from the Company’s loss in an arbitration case with Dobles. As a result of the distribution of the restricted cash (see Note 7), Central Sun’s liability at June 30, 2008 is $738,000 (2007 - $984,000). The placement of the lien will have no effect on the Company’s reclamation process currently underway.

 

The Costa Rican government has also indicated it will not permit the selling or transferring of assets from the Bellavista Mine site. The Company is currently negotiating with the government to reach an amicable solution. Should the government be successful in preventing any future asset sales or transfers from the site, the carrying value of the Bellavista Mine assets would required to be written-down. No such adjustment has been reflected in the financial statements at this time as the likely outcome of this situation cannot yet be determined.

 

10

 

*Formerly Libertad Mine

 

(a) Orosi Mine, Nicaragua

 

 

On March 31, 2007, activities at the Orosi Mine were suspended. The Company is constructing a conventional milling facility at the site. The Orosi Mine will continue to incur care and maintenance costs until the mill conversion has been commissioned.

 

During the third quarter of 2007, the Company changed the mine name to the Orosi Mine from its former name of Libertad Mine.

 

 

At June 30, 2008, the Company has made payments of $11,370,000 to third parties as part of the acquisition and construction of a used mill facility at the Orosi Mine. On May 1, 2008, a positive feasibility on the project was obtained. Subsequent to this date all development expenditures related to this project are being capitalized. Prior to this date, consulting, engineering and other project support costs related to this used mill facility were expensed. On May 9, 2008, the Company disposed of non-essential components of the mill for proceeds of $900,000 which equates to the historic cost of the assets disposed.

 

Central Sun Mining Inc.

On September 6, 2006, Central Sun signed an option agreement to acquire the Mestiza property in Nicaragua. The Company has since made payments totalling $530,000. The Company can complete the acquisition by making further cash installments totalling $1,603,000. The installments are due as follows:

 

 

If management chooses at any time to not make any further installments, the property rights revert to the vendors and all payments made-to-date will be written-off.

 

The Company is current in its payments.

 

The property is subject to a 3% net smelter return royalty and a 3% production tax based on revenues.

 

 

On October 31, 2007, Central Sun completed the sale of the Cerro Quema property for aggregate consideration of $6,000,000. At June 30, 2008, $3,000,000 had been paid to Central Sun. The remaining payments are contractually scheduled as follows: $1,000,000 on June 30, 2008 and $2,000,000 on December 31, 2008. The payment due on June 30, 2008 was received on July 9, 2008. The discounted value of $2,906,000 (2007 - $2,768,000) recorded as accounts receivable and prepaids represents the only remaining asset related to the Company’s investment in Cerro Quema.

 

As a result of the timing of cash to be received, the Company has recognized $69,000 (2007 - $nil) of imputed interest income for the three months ended June 30, 2008, and $137,000 (2007 - $nil) for the six month period. The statement of operations has separately presented the results from discontinued operations. The net income from discontinued operations for the three months ended June 30, 2008 was $nil (2007 - $96,000) and $nil (2007 - $124,000) for the six month period.

 

The cash flows from discontinued operations are as follows:

 

Central Sun Mining Inc.

 

 

 

 

 

Central Sun Mining Inc.

 

*Formerly Libertad Mine

 

Keystone mine, Canada

 

On May 8, 2008 the Company signed an agreement with the Province of Manitoba (the “Province”) to settle on a release from all of the Company’s residual environmental responsibilities at the Lynn Lake site at the Keystone Property in return for the payment to the Province of a sum of Cdn$2,000,000. The amount is payable in four annual installments of Cdn$500,000 each, with the first installment paid on July 6, 2008. The remaining asset retirement obligation for the Keystone Property relates to ongoing reclamation activity at the Burnt Timber Mine and the Farley Lake Mine.

 

 

A summary of the transactions in the warrant account in 2008 are as follows:

 

The following table summarizes further information about the warrants outstanding at June 30, 2008:

 

 

 

A summary of the transactions in the agent’s options account in 2008 are as follows:

 

14

Central Sun Mining Inc.

 

 

 

A summary of the changes in the contributed surplus account in 2008 was as follows:

 

 

 

Central Sun is authorized to issue an unlimited number of common shares without nominal or par value.

 

A summary of the changes in the common share account in 2008 are as follows:

 

 

Central Sun Mining Inc.

On November 29, 2007, the shareholders of the Company authorized the consolidation of one common share for every seven pre-consolidation common shares of the issued and outstanding common shares of the Company. The consolidation was made effective December 5, 2007. All comparative share capital, common share option data (with the exception of agent’s options), and earnings per share amounts in the accompanying consolidated financial statements and notes have been retroactively revised to reflect this share consolidation.

 

 

Central Sun has a stock option plan whereby Central Sun’s directors may from time to time grant options to directors, officers, employees and consultants. The maximum term of any option may be ten years, but generally options are granted for five years or less. The exercise price of an option is the volume weighted average price on the Toronto Stock Exchange of the five days preceding the grant date.

 

Stock option grants vest at 25% on each of the date of grant and six, twelve and eighteen months from the date of grant. As such, the estimated fair value of these options will be expensed over the options’ vesting period of 18 months and recorded as contributed surplus within shareholders’ equity.

 

The Company recognized stock-based compensation expense of $590,000 for the three months ended June 30, 2008 (2007 - $297,000) and $1,222,000 for the six month period (2007 - $663,000) related to options that vested under the Company’s stock-based compensation plan. The fair value of each option grant was estimated on the date of grant using the Black-Scholes pricing model.

 

The fair value of each option grant was estimated on the date of grant using the Black-Scholes pricing model with the following weighted-average assumptions:

 

Grant on February 4, 2008:

 

 

 

Grant on June 25, 2008:

 

Central Sun Mining Inc.

A summary of the stock option transactions in 2008 was as follows:

 

 

The following table summarizes information about the stock options outstanding as at June 30, 2008:

 

 

 

At the special meeting of shareholders held on November 29, 2007, shareholders approved amendments to a share bonus plan approved earlier in the year. The Company had established the share bonus plan for the purpose of advancing the interests of the Company through the motivation, attraction and retention of directors, officers, employees and consultants. The plan was amended to increase the number of common shares reserved for issuance to 2,500,000 post-consolidation common shares. Participants must continue to be employed with the Company until the shares are released from escrow otherwise the shares will be cancelled. There are no voting rights on the shares until release of the shares from escrow to the participant.

 

Effective December 18, 2007, 1,665,000 common shares were issued and placed into escrow under the plan. The shares were held subject to an escrow arrangement and to be released and delivered to the participant at 25% on each of June 30, 2008, December 31, 2008, June 30, 2009, and December 31, 2009. The total value of the grant was determined to be $2,053,000 and will be recognized in stock-based compensation as they vest. For the three months ended June 30, 2008, an amount of $489,000 and $989,000 for the six month period, had been recorded as stock-based compensation in respect of shares issued under this plan.

 

Central Sun Mining Inc.

 

Change in non-cash working capital:

 

Operating activities included the following cash payments:

 

17. RELATED PARTY TRANSACTIONS

 

During the three months ended June 30, 2008, the Company incurred management fees of $30,000 (2007 - $nil) and fees of $60,000 (2007 - $nil) for the six month period, with a company controlled by a director of Central Sun. These transactions occurred during the normal course of operations and were measured at the exchange amount established and accepted by the transacting parties. There were $10,000 in unpaid balances at June 30, 2008 (2007 - $nil).

 

 

 

18

Central Sun Mining Inc.

Central Sun’s objectives when managing its capital is to ensure it will be able to continue as a going concern while maximizing the return to shareholders. The price of gold, minimizing costs of production of gold and a successful exploration environment are the key factors in helping the Company reach its capital risk management objectives. The capital structure of the Company includes shareholders’ equity, except for accumulated other comprehensive income, and debt incurred. At June 30, 2008 and December 31, 2007, the Company had no debt outstanding (see note 20).

 

 

Central Sun monitors and manages the financial risks relating to operations through analysis of exposures by degree and magnitude of risk. These risks include credit risk, market risk and liquidity risk.

 

The carrying amount of the Company’s financial instruments, which include cash and cash equivalents, accounts receivable, restricted cash, and accounts payable and accrued liabilities, approximate their fair value due to the short-term maturities of these financial instruments.

 

Credit risk

 

Credit risk refers to the risk that another entity will default on its contractual obligations which will result in a loss for the Company. A significant portion of the Company’s accounts receivables relates to the remaining proceeds from the sale of a development property to the former minority interest holder.

 

Market risk

 

Market risk includes currency risk and price risk.

 

The Company’s operations expose it to changes in the price of gold. Currently, the Company does not engage in any activities that would mitigate this risk.

 

The Company operates internationally and is exposed to foreign exchange risk arising from recognized assets and liabilities denominated in a currency that is not the Company’s functional currency. A 5% change in the Canadian to U.S. dollar exchange rate would result in a change in net loss of $64,000 and a change in comprehensive loss of $4,000. A 5% change in the Nicaraguan Cordoba to the U.S. dollar would change net loss and comprehensive loss by $134,000.

 

Central Sun is also exposed to the changes in the market price of its marketable securities. As it is the intent of the Company to hold these securities, these securities have been designated as available-for-sale and not trading. A 5% change in the market value of the securities would not affect net loss but would change comprehensive loss by $63,000.

 

19

Central Sun Mining Inc.

Liquidity risk

 

Liquidity risk refers to the risk that Central Sun will not be able to meet its financial obligations when they become due or can only do so at excessive costs. As discussed in Note 1, the Company believes it will have sufficient access to financial markets to continue to meet its obligations as they become due.

 

 

The Company is organized into four segments: Limon Mine (Nicaragua), Bellavista Mine (Costa Rica), Orosi Mine* (Nicaragua) and “Corporate and Other”. The Corporate and Other segment includes: Cerro Quema property (see Note 10), Mestiza property, Keystone Mine (ceased operations in April 2000), and corporate operations. The Company evaluates performance based on net earnings or loss. The Company's segments are summarized in the following table:

 

 

*Formerly Libertad Mine

 

20

Central Sun Mining Inc.

 

*Formerly Libertad Mine

 

 

*Formerly Libertad Mine

 

21

Central Sun Mining Inc.

*Formerly Libertad Mine

 

*Formerly Libertad Mine

 

22

Central Sun Mining Inc.

The Company’s gold production is currently refined in Canada. Gold is sold to customers in the United States, but due to the liquidity of the gold market and the large number of potential customers worldwide, future sales may not be limited to these customers.

 

 

 

 

 

*Formerly Libertad Mine

 

23

Central Sun Mining Inc.

 

During June 2008, Central Sun secured an $8,000,000 short-term loan facility. The loan can be drawn-down in two equal tranches. On July 2 and August 8, 2008 the Company was advanced a total of $8,000,000 less transaction fees of $370,000 on this facility. In addition, the Company issued two separate sets of 150,000 warrants to the lender upon each draw-down, with each warrant exercisable at $1.99. Both warrants have expiry dates of one year from their respective issue date. The lender has the right to redeem outstanding warrants, from both issues, not exercised at their expiration date, for a price of $175,000 per issue (pro-rated in the event of a partial redemption).

 

The Company has the right to repay the loan facility in whole or in part, in minimum increments of $1,000,000 at any time on 10 days prior notice without a penalty or premium. Each tranche must be repaid 120 days following draw-down. Interest is applied at a fixed interest rate of 12.5% per annum. The Company also granted the lender a first priority pledge over the shares of holding companies for the Limon and Orosi Mines.

 

24

 

Head Office

 

500-6 Adelaide Street East

Toronto, ON

M5C 1H6

Tel: 416-860-0919

Fax: 416-367-0182

E-mail: ir@centralsun.ca

 

 

        

 

 

Listing

Toronto Stock Exchange (TSX)

Stock Symbol: CSM

Warrant Symbol: CSM.WT

 

American Stock Exchange (AMEX)

Stock Symbol: CSM

 

Transfer Agent

Equity Transfer and Trust Company

200 University Avenue, Suite 400

Toronto, Ontario

M5H 4H1

Tel: 416-361-0930

Fax: 416-361-0470

 

 

 

EXHIBIT 99.2

 

 

 

Interim Report

 

Q2

 

Management’s Discussion and Analysis

 

 

 

June 30, 2008

 

Central Sun Mining Inc.

(Formerly Glencairn Gold Corporation)

Management’s Discussion and Analysis

For the three and six months ended June 30, 2008

 

The following discussion and analysis should be read in conjunction with Central Sun Mining Inc.’s (“Central Sun” or the “Company”) unaudited interim consolidated financial statements and related notes thereto for the three and six month period ended June 30, 2008, which have been prepared in United States dollars and in accordance with Canadian generally accepted accounting principles for interim financial statements. The reader should also refer to the Annual Information Form, audited consolidated financial statements and Management’s Discussion and Analysis for the years ended December 31, 2007 and 2006 which have been posted on SEDAR. This Management’s Discussion and Analysis has been prepared as of August 12, 2008. All dollar amounts are US dollars unless otherwise indicated.

 

Highlights

 

 

Overview

 

Central Sun is a gold producer with mining and exploration activities focused in Nicaragua. The Company operates the Limon Mine and is in the process of converting the Orosi Mine (formerly the Libertad Mine) to a conventional milling operation. Both properties are located in Nicaragua. The Company also has an option to acquire the Mestiza exploration property in Nicaragua. Central Sun’s growth strategy is focused on optimizing current operations, expanding mineral resources and reserves at existing mines, and looking for merger and acquisition opportunities in the Americas.

 

In early 2007, the Company commenced a major project to convert the heap-leach process at the Orosi Mine to a conventional milling operation (“Mill Project”). Since the beginning of the project, a total of $20,002,000 has been spent up to June 30, 2008. The Company’s technical report on the Orosi Mine was posted on SEDAR on July 2, 2008.

 

Mining activities at the Company’s Bellavista Mine ceased during the third quarter of 2007. Since that time, reclamation activities have begun and it is not expected that mining activities will resume.

 

 

        

 

* These gold ounces were produced and sold in the pre-commercial production period from the Santa Pancha deposit of the Limon Mine and are not included in sales figures as disclosed in this Management’s Discussion and Analysis and in the Consolidated Financial Statements.

 

 

Limon Mine

 

 

 

 

* These gold ounces were produced and sold in the pre-commercial production period from the Santa Pancha deposit of the Limon Mine and are not included in sales figures as disclosed in this Management’s Discussion and Analysis and in the Consolidated Financial Statements.

 

In the first half of 2008 the Limon Mine sold 21,875 ounces of gold at a cash operating cost of $538 per ounce and 8,351 ounces of gold at a cash operating cost of $595 per ounce in the second quarter of 2008. This compares to 19,471 ounces of gold at a cash operating cost of $458 per ounce in the first half 2007 and 10,958 ounces of gold at a cash operating cost of $463 per ounce in the second quarter of 2007.

 

The main reasons for the decrease of 2,607 ounces sold in the second quarter of 2008 compared to the second quarter of 2007 were:

 

 

In the first half of 2008 dollar sales from the Limon Mine were $19,692,000 and $7,382,000 in the second quarter of 2008. This compares to sales of $12,855,000 in the first half of 2007 and $7,286,000 in the second quarter of 2007. Sales in the first half of 2008 increased $6,837,000 or 53% as a result of an increase of 2,404 ounces of gold being sold and an increase of $240 per ounce in the average realized gold price. In the second quarter of 2008 dollar sales were essentially flat compared to the second quarter of 2007 as the lower amount of ounces sold (2,607 ounces) was offset by an increase of $219 in the average realized price per ounce sold.

 

During the first half of 2008 gold recovery was 83.0% and 85.9% in the second quarter of 2008. This compares to 81.9% in the first half of 2007 and 80.8% in the second quarter of 2007. The improvement in recoveries was a result of improvements to the chemical and physical processes in the operations.

 

In the first half of 2008 cost of sales at the Limon Mine were $11,758,000 and $4,972,000 in the second quarter of 2008. This compares to $8,925,000 in the first half of 2007 and $5,072,000 in the second quarter of 2007. On a year to date basis, 2008 compared to 2007, cost of sales have increased by $2,833,000 or 32%. The Company has experienced escalating costs related to haulage, fuel, labour, ball mills and electricity. To combat the escalating costs, the Company has begun to undertake cost reduction initiatives.

 

During the first half of 2008, both royalties and production taxes increased $349,000 or 43% which is consistent with the increase in sales. During the second quarter of 2008 dollar sales were flat compared to the second quarter of 2007 as were royalties and production taxes which are a percentage of sales.

 

In the first half of 2008 depreciation and depletion increased by $175,000 or 23% to $931,000 compared to the first half of 2007 due to a combination of more ounces produced and increased capital expenditures. In addition, during the first quarter of 2007, the Company’s Santa Pancha deposit at the Limon Mine reached commercial production and all previously capitalized costs of the deposit started to be depreciated over ounces produced thereby increasing depreciation and depletion expenses.

 

In the first half of 2008 income from mining operations at the Limon Mine was $5,794,000 and $1,576,000 in the second quarter of 2008. This compares to $2,326,000 in the first half of 2007 and $1,336,000 in the second quarter of 2007. Income from mining operations in the second quarter of 2008 was mostly affected by the lost production days noted above.

 

 

Orosi Mine

 

Central Sun acquired the Orosi Mine in July of 2006. Operational improvements immediately followed the acquisition which included accelerated stripping, upgrades to the crushing and screening circuit, construction of permanent heap leach pads and a significant reduction in costs. Extensive metallurgical test work aimed at understanding and improving recoveries was also completed. Despite the improvements that were made, overall recoveries were insufficient to operate the mine profitably as a heap leach operation and in March of 2007 mining operations were suspended.

 

During 2008 there were no sales, cost of sales, or royalties and production taxes at the site.

 

In October of 2006, the Company commissioned a scoping study to evaluate the feasibility of upgrading the Orosi open pit mining operation from a heap leach operation to a standard mill operation.  The positive scoping study had a capital cost estimate of $35,400,000 which excluded the capital costs of additional mining equipment and construction of the tailings facility. A definitive feasibility study was completed and the estimated cost of the entire project was $47,000,000. The increase is largely attributed to the inclusion of the tailings facility, increased costs to purchase the land for the project, the right of way for the power transmission line, increased labor costs, increased costs in equipment and supplies such as steel, cement, transmission line cable, towers and petroleum.

 

Effective May 1, 2008, after the results of a positive feasibility study on the project were known, all eligible expenditures on this project are being capitalized until such time as commercial production, expected in Q1 of 2009, is reached. Total project costs (in 000’s) to June 30, 2008 and estimated future costs are as follows:

 

 

 

Bellavista Mine

 

On July 25, 2007, Central Sun suspended all mining activities at the Bellavista Mine due to ground movements. Residual gold ounces were recovered from the heap leach until the end of August 2007. The decline in gold produced and the resulting reduction in sales and expenses in 2008 compared to 2007 are directly related to mining activities ceasing on July 25, 2007.

 

Central Sun began the required reclamation work in 2007. Reclamation expenditures in the amount of $1,529,000 have been incurred during the first half of 2008 with $638,000 being incurred during the second quarter. The reclamation work is continuing as planned and expenditures of $2,864,000 have been made since mining activities ceased in 2007. Toward the end of the second quarter of 2008, all of the upgrades to the site drainage system have been completed. Reclamation activities are expected to continue until the end of 2011 at an estimated undiscounted cost of $4,488,000. Care and maintenance expenditures in the amount of $120,000 have been incurred during the first half of 2008.

 

In 2003, the holder of the Dobles royalty (“Dobles”) commenced an arbitration hearing related to an agreement with the Company. The arbitration panel determined that the royalty agreement, which contained an option to buy out the royalty, should be interpreted as a purchase agreement and ordered the Company to pay $850,000, which was the exercise price of the option, plus costs of $94,000. The Company appealed the arbitration award to the Supreme Court of Costa Rica. In January 2006, the Company was advised that the Supreme Court had declined to overturn the arbitration award. As a result of these events, the courts in Costa Rica garnished cash bank account balances of $243,000 and on March 7, 2008, the courts in Costa Rica ordered the Company to disburse the restricted cash held as part of the arbitration settlement to Dobles. On May 29, 2008, an additional $22,000 was garnished but not yet disbursed to Dobles. At June 30, 2008, the Company had a remaining accrual of $738,000 related to the arbitration. Additionally, the courts placed a lien on a parcel of land at the Bellavista Mine site. The lien does not affect the Company’s reclamation efforts.

 

With the cessation of mining activities the Company began, in the first quarter of 2008, dismantling a rod mill which was to be sold or transferred. While the assets were being transported in Costa Rica, the Costa Rican government ordered that these assets be returned to the mine site. The Company has complied with this order and is currently negotiating with the Costa Rican government to resolve this situation to the satisfaction of all parties. The Company believes it is within its rights to transfer or sell the assets at the Bellavista Mine site. At June 30, 2008, the Company has estimated a residual value of $3,350,000 on all remaining assets at the Bellavista Mine site. If the government is successful in preventing the Company from selling or transferring assets from our Bellavista Mine site the carrying value of $3,350,000 would need to be reviewed and could possibly be written down, in a worst case scenario, to nil. The Company had been relying on the funds from the sale of this equipment to fund future remediation at the mine site.

 

Expenses and Other Income

 

 

 

 

General and administrative expenses for the three and six month period ended June 30, 2008 remained fairly consistent compared with the previous fiscal year. In 2008, the Company incurred incremental costs of $287,000 related to the assessment of an insurance claim on the Bellavista Mine property and various miscellaneous consulting and management fees. These increases were partially offset by decreases in legal and Sarbanes-Oxley preparation program expenses. The Company is now performing an ongoing Sarbanes-Oxley compliance program and expenditures in this area are not expected to be significant in 2008.

 

The Orosi Mine – Mill Project incurred expenditures of $6,789,000 for the six month period ended June 30, 2008, of which, $2,573,000 was incurred for the three month period then ended. These costs were incurred as part of the Company’s project to erect a conventional milling facility at the Orosi Mine site. The majority of the costs were related to consulting, engineering and project support expenditures. Non-recoverable intangible costs relating to this project were expensed until May 1, 2008, when a feasibility study with a positive outcome was completed. From this point forward, all eligible costs relating to this project will be capitalized until such point the mill has reached rated commercial production.

 

Care and maintenance costs of $2,332,000 were incurred at the Company’s two non-operating mine sites for the six month period ended June 30, 2008. Of this balance, the Orosi Mine site incurred $2,212,000 to maintain a proper state of upkeep while mining operations were suspended during the mill construction period. These costs primarily relate to the maintenance of a basic administrative function as well as expenditures on electricity, property holding costs, and caretaking activities. In the first half of 2008, care and maintenance included costs of $120,000 not directly related to ongoing reclamation activities at the Bellavista Mine site.

 

Stock-based compensation expense increased by $782,000 or 263% and $1,548,000 or 233% over the three and six months ended June 30, 2008, respectively, when compared to the previous fiscal year. During the first half of 2008, 410,000 options were granted. In the first half of 2008, total stock option expenses amounted to $1,222,000 as a result of the vesting of options. On December 18, 2007, 1,665,000

 

common shares were issued and placed into escrow under the terms of a new share bonus plan. The shares were held subject to an escrow arrangement and to be released and delivered to the participant at 25% on each of June 30, 2008, December 31, 2008, June 30, 2009, and December 31, 2009. The total value of the grant was determined to be $2,053,000 and will be recognized as stock-based compensation expense in the period the shares are released from escrow. For the period ending June 30, 2008, an amount of $989,000 had been recorded in stock-based compensation expense in respect of shares issued under this plan. On June 30, 2008, 411,000 eligible shares were released from escrow with a corresponding cost of $489,000 transferred to common shares.

 

In the first half of 2008, exploration expenses increased by $1,440,000 or 151% over the same period in the previous fiscal year. The increase was evenly distributed over both quarters of 2008. Costs incurred in 2008 relate to exploration drilling being performed at the Limon and Orosi Mines and field-work at the Mestiza property and are part of the Company’s planned exploration work.

 

Other income decreased by $6,958,000 or 99% in the first half of 2008 over the same period in the previous fiscal year. In 2008, major components of this balance included $325,000 in foreign exchange losses and $110,000 in legal fee accruals. These balances were offset by interest and other miscellaneous income of $314,000 and $193,000 in net recoveries from Nicaraguan taxation authorities. In 2007, the components included a $131,000 gain from sale of marketable securities, foreign exchange gains of $202,000, and $479,000 in interest and other miscellaneous income, and most notably a gain of $6,548,000 from the one-time sale of royalties on the Company’s holdings in Manitoba. These balances were reduced by $330,000 in interest and finance fees.

 

 

 

Operating

 

In the first half of 2008, the Company sold 21,875 ounces from the Limon Mine compared to 52,624 ounces of gold from its three operating mines in the same period in 2007. Of this balance, an unusually high amount of 13,524 ounces were sold during the first quarter of 2008 as a result of higher than normal gold inventory at year-end. Operating activities used cash of $6,792,000 and $10,136,000 in the three and six month period ended June 30, 2008, respectively. Operating cash outflows increased compared to the previous fiscal year as the Company was no longer mining at the Orosi and Bellavista Mines in 2008. The Orosi Mine was also incurring expenditures related to consulting and engineering for the Mill Project and care and maintenance costs since suspending mining activities. The Company’s Bellavista Mine also commenced reclamation activities in the fourth quarter of 2007. Amounts totalling $638,000 and $1,529,000 were expended on reclamation activities at the Bellavista Mine site during the three and six month period ended June 30, 2008, respectively. The Company is progressing quicker than originally planned on its targets towards reclaiming the Bellavista Mine site. As a result, future expenditures have been pulled-forward into the first two quarters of 2008.

 

On May 8, 2008, the Central Sun signed an agreement with the Province of Manitoba to settle on a final release from all of the Company’s residual environmental responsibilities at the Lynn Lake site at the Keystone Property for Cdn$2,000,000. The amount is payable in four annual installments of Cdn$500,000 each, with the first installment payable on July 6, 2008 which has been paid. The balance of $1,473,000 represents the long-term payable and has been included as part of changes in non-cash working capital.

 

Financing

 

In the second quarter of 2008, the Company issued common shares totaling $184,000 from the exercise of warrants and agent’s options. In the first half of 2007, financing activities used $2,185,000 and consisted of repayments of $2,500,000 on long-term debt and $315,000 in cash generated from the issue of common shares.

 

Investing

 

Investing activities used $3,344,000 in the first half of 2008 compared to $1,065,000 in the same period last year. During the first quarter of 2008, the courts in Costa Rica remitted a previously garnished amount of $243,000 as partial payment of an outstanding balance owing. During the second quarter of 2008, an additional amount of $22,000 was garnished as part of the same situation and was therefore classified as restricted cash. On May 9, 2008, the Company disposed of a non-essential component of the Orosi Mine – Mill Project for net proceeds of $900,000. Capital expenditures requiring cash outlays of $2,992,000 and $4,465,000 for the three and six month period ended June 30, 2008, respectively, were activities relating to Orosi Mine – Mill Project. Limon Mine capital expenditures of $633,000 during the second quarter of 2008 were focused towards tailings dam improvements.

 

 

 

The Company had cash of $3,466,000 (December 31, 2007 - $16,762,000) and working capital of $8,386,000 at June 30, 2008 (December 31, 2007 - $19,676,000).

 

In the first quarter of 2007, following a positive scoping study the Company announced its intention to proceed with the Mill Project at the Orosi Mine. The Company’s final feasibility study has been completed and has confirmed the economics of this project. At June 30, 2008, the Company capitalized payments totalling $11,370,000 on the acquisition, dismantling, shipping and refurbishing of a used mill which is being re-assembled at the Orosi Mine site. Consulting, engineering and project support costs for the period ended June 30, 2008 have totalled $6,789,000 for this project and have been expensed. As a result of the receipt of a final feasibility study with a positive outcome, all development expenditures after May 1, 2008 will be capitalized as per the Company’s capitalization policy. The Orosi Mine incurred care and maintenance expenses of $1,121,000 and $2,212,000 for the three and six month period ended June 30, 2008, respectively.

 

On July 25, 2007, Central Sun suspended mining operations at the Bellavista Mine in Costa Rica due to ground movements in the heap leach pad. Reclamation activities for the site began in 2007 and were estimated to take four years. At June 30, 2008 total remaining undiscounted expenditures are expected to be approximately $4,488,000 over the next four years. The Company has spent $2,864,000 on reclamation activities to-date at the site, with $638,000 being spent during the second quarter of 2008.

 

As a result of the ongoing Mill Project and the cessation of mining activities at the Bellavista Mine, there has been a significant decline in gold production for the Company. In response, the Company has undertaken a program to reduce the number of employees, reduced capital expenditure programs, eliminated discretionary expenditures, and disposed of the Cerro Quema development property in Panama. During June 2008, the Company was successful in securing an $8,000,000 loan facility. The facility was drawn down in two equal tranches on July 2 and August 8, 2008, less applicable transaction fees. As part of the loan agreement, the Company issued two equal sets of 150,000 warrants totalling 300,000 warrants with an expiry from one-year of issuance and exercisable at $1.99 per warrant. The lender also retains the right to redeem any outstanding warrants, from both issues, not exercised at their expiration date, for a price of $175,000 per issue (pro-rated in the event of a partial redemption). Interest is applied at a fixed interest rate of 12.5% per annum. Each tranche must be repaid 120 days following draw-down. Cash on hand at June 30, 2008 and cash flows expected from operations, the collection of the final proceeds from the sale of its Cerro Quema gold property, the potential sale of marketable securities, and draw-down of the $8,000,000 loan facility will not be sufficient to fund the Company’s ongoing and future expansion requirements.

 

Management’s internal cash flow estimates indicate that to fund ongoing 2008 capital expenditures at the Limon Mine, exploration activities, and to complete the Orosi Mine - Mill Project by the first quarter of 2009 will require additional funding of at least $20 - $25 million. Management continues to review various options to fund this shortfall which, if not raised, would result in the curtailment of activities and result in project delays. Management expects that additional financing will be available, and will be sourced in time to allow the Company to continue the normal course of planned activities. However, there can be no assurances that the Company’s activities will be successful and as a result there is substantial doubt regarding the “going concern” assumption.  The Company’s consolidated financial statements and management’s discussion and analysis of financial position and operating results do not reflect adjustments that would be necessary if the “going concern” assumption were not appropriate.  If the “going concern” assumption were not appropriate, then adjustments to the carrying values of assets and liabilities, reported expenses and balance sheet classifications, which could be material, may be necessary.

 

The company does not have any off balance sheet arrangements.

 

Related Party Transactions

 

During the three months ended June 30, 2008, the Company incurred management fees of $30,000 (2007 - $nil) and fees of $60,000 (2007 - $nil) for the six month period, with a company controlled by a director of Central Sun. These transactions occurred during the normal course of operations and were measured at the exchange amount established and accepted by the transacting parties. There were $10,000 in unpaid balances at June 30, 2008 (2007 - $nil).

 

Outlook

 

Consistent with earlier guidance gold sales for fiscal 2008 are expected to be 45,000 ounces. As a result of ongoing increases in production input costs, Central Sun estimates a revised year-end cash operating cost of approximately $525 - $550 per ounce. Many production inputs, such as fuel, hydro and consumables have been increasing over the past few years and are expected to do so in the near future. Inflationary pressures are expected to continue into the future. The Company is solely dependant on the Limon Mine at this time as it is the only mine in operation and generating operating cash flow.

 

The Orosi Mine’s operations are expected to recommence in the first quarter of 2009. Completion of the Orosi Mine’s Mill Project is contingent on the Company obtaining sufficient financing.

 

In 2008, exploration drilling commenced at the Limon and Orosi Mine sites. Results of these ongoing activities can be found on news releases available at the Company’s website. Geological work including data compilation is in progress at the Mestiza property and some of the other regional targets. The exploration program continues and is expected to further expand the resources at the Limon Mine, Orosi Mine and the Mestiza project.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant Accounting Policies

 

Central Sun adopted new accounting standards effective January 1, 2008. The adoption of these new accounting standards had no effect on the results of operations in the period.

 

 

This section prescribes the accounting treatment for inventories and provides guidance on the determination of costs and its subsequent recognition as an expense, including any write-down to net realizable value. It also provides guidance on the cost formulas that are used to assign costs to inventories. This section also requires additional disclosure regarding the expensing of inventory.

 

Central Sun has adopted this new standard which had no impact on the results of operations.

 

 

This section establishes standards for disclosing information about a company’s capital and how it is managed. Under this standard the Company will be required to disclose the following, based on the information provided internally to the Company’s key management personnel:

 

 

 

This section requires entities to provide disclosure of quantitative and qualitative information in their financial statements that enable users to evaluate (a) the significance of financial instruments for the entity’s financial position and performance; and (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and management’s objectives, policies and procedures for managing such risks. Entities will be required to disclose the measurement basis or bases used, and the criteria used to determine classification for different types of instruments.

 

The section requires specific disclosures to be made, including the criteria for:

 

 

 

This section establishes standards for presentation of financial instruments and non-financial derivatives and provides additional guidance for the classification of financial instruments, from the perspective of the issuer, between liabilities and equity, and the classification of related interest, dividends, losses and gains.

 

 

 

Recent Canadian Accounting Pronouncements

 

(i) Section 3064 – Goodwill and intangible assets

 

Effective January 1, 2009, the Company will adopt Section 3064 “Goodwill and intangible assets” which establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets.

 

Concurrent with the introduction of this standard, the CICA will withdraw EIC 27 “Revenues and expenses during the pre-operating period”. As a result of the withdrawal of EIC 27, the Company will no longer be able to defer costs and revenues incurred prior to commercial production at new mine operations.

 

The Company continues to evaluate the impact of this standard on future transactions.

 

Internal Controls Over Financial Reporting

 

There were no changes in the Company’s internal controls over financial reporting that occurred during the three and six months ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Summary of Quarterly Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Performance Measures

 

“Total cash cost” figures and “cash operating cost” figures are calculated in accordance with standards developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is the accepted standard of reporting cash costs of production in North America. Adoption of the standard is voluntary and the cost measures presented below may not be comparable to other similarly titled measures of other companies. Cash operating costs include mine site operating costs such as mining, processing and administration, but are exclusive of amortization, reclamation, capital, development and exploration costs. These costs are then divided by ounces sold to arrive at the cash operating cost per ounce. Total cash costs include cash operating costs, royalties and production taxes. Total cash costs are then divided by ounces sold to arrive at the total cash costs per ounce. These measures are considered to be a key indicator of a company’s ability to generate operating earnings and cash flow from its mining operations. These data are furnished to provide additional information and is a non-GAAP measure. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP.

 

 

 

 

 

 

 

 

 

 

Outstanding Share Data

 

The following common shares and convertible securities were outstanding at August 12, 2008:

 

 

Note 1: The agents’ warrants are convertible into one-seventh of one common share and one half-share common share purchase warrant, entitling the holder to purchase one-seventh of a common share.

 

Note 2: These common shares were issued pursuant to the Company’s share bonus plan and placed into escrow under the plan. Participants under the plan must continue with the Company until the vesting dates, otherwise the shares will be cancelled. There are no voting rights on the shares until issuance to the participants.

 

 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Management’s Discussion and Analysis of Financial Position and Operating Results contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the completion of the Company's new strategic plan, the future financial or operating performance of the Company, its subsidiaries and its projects, the future price of gold, estimated recoveries under the milling plan, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital for the mill project, operating and exploration expenditures, costs and timing of the development of new deposits, outcome, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

 

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, insurrection or war; delays in obtaining governmental approvals or required financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "General Development of the Business -- Risks of the Business" in the Company's annual information form for the year ended December 31, 2007 on file with the securities regulatory authorities in Canada and the Company's Form 40-F on file with the Securities and Exchange Commission in Washington, D.C. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities law.

 

Additional information on the Company, including its annual information form is available on SEDAR at www.sedar.com.

 

August 12, 2008

 

EXHIBIT 99.3

EXHIBIT 99.4