1.6 Liquidity
As at September 30, 2007, the Company had $2,638,924 in cash and cash equivalents compared to $12,210,678 on December 31, 2006. As at September 30, 2007, the Company had a working capital surplus of $1,129,093 compared to a working capital surplus of $12,309,769 on December 31, 2006. Debentures which were issued in February of 2006 and are due in February 2008 and are convertible into common shares at $0.80 per share represent $7,750,608 of current liabilities. In addition, current liabilities include the current portion of a royalty obligation that will be satisfied by the interest on a promissory note in the amount of $3,183,251. Without consideration of these two items, the Company would be in a working capital surplus position of $12,062,952. This number does not have a defined meaning according to GAAP but management believes it provides useful information to the users of financial information.
The Company continues to meet its obligations and discharge its liabilities as they become due, a necessary condition to maintain its assets and to carry the Rice Lake Mine and San Gold #1 Mine into full production. The Company is dependent on the continued improvements in operations and/or the success of future financings, like the one noted above, towards achieving its plan.

1.7 Capital Resources
During, the quarter, the Company continued to work towards its mine and mill development plans and to carry out its planned exploration programs. The above noted financing is expected to permit continued execution of the business plan towards increasing production and development of the properties. The Company has capitalized $2,542,324 in mineral properties and plant and equipment for the quarter ($11,026,061 YTD) compared to $1,566,977 in the same quarter last year ($2,248,544 prior YTD).