From Stockwatch
PLEXMAR RESOURCES INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the six month period ended June 30, 2006
Scope of management’s financial analysis
This report represents a complimentary addition to the financial statements by providing
contextual and prospective information that is not found in the latter. This analysis was
prepared in accordance with Canadian generally accepted accounting principles (GAAP).
Corporate profile and mission
Plexmar Resources Inc. («the Company») is a mining exploration company with
properties in Northern Peru. On the Bolsa del Diablo project, the company owns 100% of
the mining rights in over 220km2 of prospective land and has the right to acquire 100%
of the mining rights in two projects in return for cash payments according to the
agreements. The Company also owns the Marilia and Cascajal projects, both located in
Northern Peru in the la Libertad department.
The Company has no revenues.
The current exploration program is funded by privates placements of $663,500 and
$1,250,000 closed in December 2005 and January 2006.
Forward-Looking information
During the second quarter of 2006, exploration activities were concentrated on the Bolsa
del Diablo project. Prospection, sampling and mapping was carried out mostly on the
Angolos and adjacent concessions. Geologists have uncovered a large scale gold
alteration system, with alteration and mineral compositions reminiscent of a high
sulphidation epithermal system covering an area of at least 2,5km x 1,5km. More work is
necessary to support these affirmations. Mapping, trenching and soil sampling will be ongoing
for another month or two. Ground geophysics, (Induced Polarization) will be
carried out in the next quarter. The interpretation from the geophysics and near the end of
the second quarter, ground geophysics were started. Ground magnetic and topographic
surveys are presently being carried out. Also, an airborne magnetic survey covering the
whole project will be done. These surface works will generate multiple targets to be
drilled starting near the end of the third quarter. Exploration activities on Bolsa del
Diablo consisted of Exploration expenses totalling $166,467.
June 21,2006, The Company, signed a letter of intent to acquire more then 900 km2 of
exploration concessions in the south eastern part of Ecuador in the vicinity of Aurelian
Resources (ARU-TSX) high grade gold discovery. The Company has the right to
evaluate the property for a period of 60 days in return for a cash payment of $125,000
US. A team of geologists is on the ground and our Peruvian attorney is verifying the legal
titles. The Company will inform its shareholders of the due diligence in a timely manner.
No work was performed on the properties Lucma, Oro Del Norte I, II & III et Grand
Chimu I & II
With $2,158,385 in cash for exploration, total current assets of $2,377,743 and current
liabilities of $618,518 the company is in good financial situation.
Selected financial information
The table below presents selected financial data for the company's three most recently
completed fiscal years ended December 31:
2005
$
2004
$
2003
$
Loss for period* 1,010,150 2,605,455 1,840,931
Loss per share (Basic and Diluted) 0.02 0.06 0.07
Total Assets 2,056,202 1,906,551 664,388
Total Liabilities 581,886 310,925 97,392
* The loss for 2005 included of the cost of mining properties abandoned in the amount of $ 32,980
* The loss for 2004 included of the cost of mining properties abandoned in the amount of $ 957,620
* The loss for 2003 included of the cost of mining properties abandoned in the amount of $ 852,290
Results of Operations
The operating expenses for the quarter ended June 30, 2006 include the charges from the
foreign subsidiary. This amount breaks down as follows: $,22,022 for professional fees,
$1,1194 for traveling fees, $ 7,404 for office expenses and financing fees, $490 for
depreciation of property, plant and equipment and 1,208$ for banking charges.
The company spent in exploration costs a total of $162,467 during the period on the
Bolsa del Diablo property (Peru). Total spent in exploration costs for the period of six
months ended June 30, 2006 stands at $431,876.
Summary of Quarterly Results
Quarter ended Total Net loss Loss per
Revenues share
$ $ $
June 30, 2004 6 652 374 168 0,01
September 30, 2004 4 764 166 970 0,00
December 31, 2004 3 764 1 760 755 0,04
March 31, 2005 2 121 139 251 0,01
June 30, 2005 197 261 196 0,01
September 30, 2005 - 249 560 0,01
December 31, 2005 2 091 360 143 0,01
March 31, 2006 70 885 440 381 0,01
June 30, 2006 - 283 987 0,01
