Portage Resources Inc. - Quarter Report: 2009 August (Form 10-Q)

(X )	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE ACT OF 1934

For the quarter period ended August 31, 2009

(  )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

	For the transition period form                                                       to
	Commission File number       333-144585

PORTAGE RESOURCES INC.

Nevada	75-3244927
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

990 Richard Street, Saint Wenceslas, Quebec, Canada, G0Z 1J0

(Address of principal executive offices)

1-819-740-0810

(Issuer’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

		Page Number
PART 1.	FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)	3
	Balance Sheet as at August 31, 2009 and May 31, 2009	4
	Statement of Operations For the three months ended August 31, 2009 and, 2008 and for the period June 20, 2006 (Date of Inception) to August 31, 2009	5
	Statement of Cash Flows For the three months ended August 31, 2009 and 2008 and for the period June 20, 2006 (Date of  Inception) to August 31, 2009	6
	Notes to the Financial Statements.	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	17
ITEM 4.	Controls and Procedures	18
ITEM 4T.	Controls and Procedures	18
PART 11.	OTHER INFORMATION	18
ITEM 1.	Legal Proceedings	18
ITEM 1A.	Risk Factors	18
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
ITEM 3.	Defaults Upon Senior Securities	23
ITEM 4.	Submission of Matters to a Vote of Security Holders	23
ITEM 5.	Other Information	24
ITEM 6.	Exhibits	24
	SIGNATURES.	25

 

 

 

	August 31, 2009	May 31, 2009
ASSETS
CURRENT ASSETS
Cash	$    1,392	$    6,125
Total Current Assets	$     1,392	$    6,125
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
CURRENT LIABILITIES
Accounts payable	$   18,223	$   19,173
Accounts payable – related parties	88,348	86,098
Total Current Liabilities	106,571	105,271
STOCKHOLDERS’ DEFICIENCY
Common stock
500,000,000 shares authorized, at $0.001 par value;
63,720,000 shares issued and outstanding	63,720	63,720
Capital in excess of par value	(42,870)	(42,870)
Deficit accumulated during the pre-exploration stage	(126,029)	(119,996)
Total Stockholders’ Deficiency	(105,179)	(99,146)
	$     1,392	$    6,125

 

	Three months ended Aug. 31, 2009	Three months ended Aug. 31,  2008	From July 20, 2006 (date of inception) to  Aug. 31, 2009
REVENUES	$            -	$             -	$              -
EXPENSES
Accounting and auditing	1,628	1,550	25,429
Bank charges and interest	5	2	103
Consulting	-	-	25,000
Exploration and staking	-	-	7,272
Filing fees	350	-	3,587
Geological report	-	-	4,240
Incorporation costs	-	-	650
Legal	-	-	6,500
Management fees	3,000	3,000	31,000
Office	50	166	2,523
Rent	900	900	9,300
Travel and entertainment	-	-	3,508
Transfer agent’s fees	100	1,387	6,917
NET LOSS FROM OPERATIONS	$   (6,033)	$  (7,005)	$  (126,029)
NET LOSS PER COMMON SHARE
Basic and diluted	$     (0.00)	$     (0.00)
AVERAGE OUTSTANDING SHARES
Basic	63,720,000	63,720,000

 

 

 

	Three months ended Aug. 31, 2009	Three months ended Aug. 31, 2008	From July 20, 2006 (date of inception) to Aug.31, 2009
CASH FLOWS FROM OPERATING  ACTIVITIES:
Net loss	$   (6,033)	$(7,005)	$   (126,029)
Adjustments to reconcile net loss to net cash provided by operating activities:
Changes in accounts payable	(950)	(2,305)	18,223
Net Cash  Provided (Used) in Operations	(6,983)	(9,310)	(107,806)
CASH FLOWS FROM INVESTING ACTIVITIES:	-	-	-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan from related party	2,250	10,108	88,348
Proceeds from issuance of common stock	-	-	20,850
	2,250	10,108	109,198
Net Increase (Decrease) in Cash	(4,733)	798	1,392
Cash at Beginning of Period	6,125	4,757	-
CASH AT END OF PERIOD	$   1,392	$     5,555	$     1,392

Basic and Diluted Net Income (loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidulutive and then only the basic per share amounts are shown in the report.

 

The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

 

PORTAGE RESOURCES INC.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Environmental Requirements

At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

In late 2006, the Company had the ROK 1-20 claims staked and ownership put into its own name.   The claims are located 15 miles east of Dawson City, Yukon.  The expiry dates of the claims are December 13, 2009.  In accordance with the Yukon Quartz Mining Act, yearly extensions to the expiry dates of quartz claims are dependent upon conducting $100 (Cdn) for work per claim or paying the equivalent cash in lieu of work for a total consideration of $2,000 (Cdn.).   On the date of this report the Company had not established the existence of a commercially minable ore deposit on the claims.

PORTAGE RESOURCES INC.

 

Funds required	Estimated Amount
Accounting and audit – quarter and annual financial statements	$ 7,600
Bank charges	60
Edgar filing costs – for quarter and annual financial statements	1,250
Exploration costs – as estimated for completion of Phase I	9,200
Filing fees – Nevada; Sec of State	200
Management fees – paid at $1,000 per month to the Portage’s president	12,000
Office and general expenses	500
Rent – use of the President’s residence at $300 per month	3,600
Transfer agent fees	2,000
Estimated expenses for the next  twelve months	36,410
Account payable – unrelated parties at August 31, 2009	18,223
Total requirements for cash before consideration of money in bank	54,633
Bank balance as at August 31, 2009	1,392
Estimated funds required over the next twelve months	$53,241

 

 

 

 

 

 

 

 

 

Claim Name	Grant Numbers	Expiry Date	Mining District	Owner
ROK 1 to 20	YC45186 to YC4502  incl.	Dec. 13, 2009	MO82L	Portage Resources Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

			Cdn.	U.S.
1		Senior Geologist and Assistant, 2 days @ $800/day	$    1,600	$    1,472
2		Transportation and accommodation	800	736
3		Soil sampling, 100 x 20 m GSP grid (200 soil samples)6 man days @ $300/man/day	1,800	1,656
4		Analyses, 200 @ $25 each plus shipping	5,000	4,600
5		Report costs	800	736
		Subtotal	$ 10,000	$   9,200

 

 

 

 

 

 

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

●	our variations in our operations results, either quarterly or annually;
●	trading patterns and share prices in other exploration companies which our shareholders consider similar to ours;
●	the exploration results on the ROK 1-20 claim, and
●	other events which we have no control over.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.    Our liquidity, and thus our ability to continue to operate, depends upon our ability to raise additional capital.

 

 

2.   Because our auditors have issued a going concern opinion and because our officers and directors may not loan any additional money to us, we may not be able to achieve our objectives and may have to suspend or cease exploration activity.

 

 

3.    Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not contain any reserves, and any funds spent on exploration will be lost.

 

 

4.     We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activity or cease operations.

 

 

 

 

 

	*	our ability to locate a profitable mineral property
	*	our ability to locate an economic ore reserve
	*	our ability to generate revenues
	*	our ability to reduce exploration costs.

 

 

5.         Because our officers and directors do not have technical training or experience in starting, and operating an exploration company nor in managing a public company, we will have to hire qualified personnel to fulfill these functions. If we lack funds to retain such personnel, or cannot locate qualified personnel, we may have to suspend or cease exploration activity or cease operations that will result in the loss of your investment.

 

 

6.        We have no known ore reserves. Without ore reserves we cannot generate income and if we cannot generate income we will have to cease exploration activity which will result in the loss your investment.

 

 

7.         If we don't raise enough money for exploration, we will have to delay exploration or go out of business, which will result in the loss of your investment.

 

 

 

 

 

8.   Because we are small and do not have much capital, we must limit our exploration and as a result may not find an ore body. Without an ore body, we cannot generate revenues and you will lose your investment.

 

 

●	Costs of bringing the property into production including exploration
	preparation of production feasibility studies, and construction of
	production facilities;
●	Availability and cost of financing;
●	Ongoing costs of production;
●	Market prices for the minerals to be produced;
●	Environmental compliance regulations and restraints; and
●	Political climate and/or governmental regulations and controls.

 

 

9.    We may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend exploration activity.

 

 

10.  Because our officers and directors have other outside business activities and may not be in a position to devote a majority of their time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions of exploration.

 

 

 

 

 

11. Because we may be unable to meet property maintenance requirements or acquire necessary mining licenses, we may lose our interest in the Portage Claims.

 

 

12. Because mineral exploration and development activities are inherently risky, we may be exposed to environmental liabilities. If such an event were to occur it may result in a loss of your investment.

 

 

13. No matter how much money is spent on the Portage Claims, the risk is that we might never identify a commercially viable ore reserve.

14. Even with positive results during exploration, the Portage Claims might never be put into commercial production due to inadequate tonnage, low metal prices or high extraction costs.

 

15. Because we have not put a mineral deposit into production before, we will have to acquire outside expertise. If we are unable to acquire such expertise we may be unable to put our property into production and you may lose your investment.

 

 

 

 

 

16. Our directors and officers control a substantial number of our outstanding shares and will be able to effect corporate transactions without further shareholder approval.

17. We anticipate the need to sell additional treasury shares  in the future meaning that there will be a dilution to our existing shareholders resulting in their percentage ownership in the Company being reduced accordingly.

 

18.  Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.

 

3.1		Certificate of Incorporation (incorporated by reference from Portage’s Registration Statement on Form SB-2 filed on July 16, 2007, Registration No. 333-144585)
3.2		Articles of Incorporation (incorporated by reference from Portage’s Registration Statement on Form SB-2 filed on July 16, 2007, Registration No.333-144585)
3.3		By-laws (incorporated by reference from Portage’s Registration Statement on Form SB-2 filed on July 16, 2007, Registration No. 333-144585)
4		Stock Specimen (incorporated by reference from Portage’s Registration Statement on Form SB-2 filed on July 16, 2007, Registration No. 333-144585)
10.1		Transfer Agent and Registrar Agreement (incorporated by reference from Portage’s Registration Statement on Form SB-2 filed on July16, 2007 Registration No. 333-144585)

 

	PORTAGE RESOURCES INC.
	(Registrant)
Date: September 28, 2009	MARTINE CARON
	Chief Executive Officer, President and Director
Date: September 28, 2009	RUSSELL LESLIE JAMES
	Chief Financial Officer, Chief Accounting Officer, Secretary and Director