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Entourage Mining Ltd – ‘20-F’ for 12/31/13

On:  Thursday, 6/5/14, at 12:17pm ET   ·   For:  12/31/13   ·   Accession #:  1557240-14-309   ·   File #:  0-50305

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/05/14  Entourage Mining Ltd              20-F       12/31/13    4:1.5M                                   PubCo Reporting … Inc/FA

Annual Report of a Foreign Private Issuer   —   Form 20-F
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 20-F        Annual Report of a Foreign Private Issuer           HTML    676K 
 2: EX-12.1     Statement re: Computation of Ratios                 HTML     13K 
 3: EX-12.2     Statement re: Computation of Ratios                 HTML     13K 
 4: EX-13.1     Annual or Quarterly Report to Security Holders      HTML     10K 


20-F   —   Annual Report of a Foreign Private Issuer
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Item 16.G
"Corporate Governance
"Part I
"Item 1
"Identity of Directors, Senior Management and Advisers
"Item 2
"Offer Statistics and Expected Timetable
"Item 3
"Key Information
"Item 4
"Information on the Company
"Item 4A
"Unresolved Staff Comments
"Item 5
"Operating and Financial Review and Prospects
"Item 6
"Directors, Senior Management and Employees
"Item 7
"Major Shareholders and Related Party Transactions
"Item 8
"Financial Information
"Item 9
"The Offer and Listing
"Item 10
"Additional Information
"Item 11
"Quantitative and Qualitative Disclosure About Market Risk
"Item 12
"Description of Securities Other Than Equity Securities
"Part Ii
"Item 13
"Defaults, Dividend Arrearages and Delinquencies
"Item 14
"Material Modifications to the Rights of Security Holders and Use of Proceeds
"Item 15
"Controls and Procedures
"Item 16.A
"Audit Committee Financial Expert
"Item 16.B
"Code of Ethics
"Item 16.C
"Principal Accountant Fees and Services
"Item 16.D
"Exemptions From the Listing Standards for Audit Committees
"Item 16.E
"Purchases of Equity Securities by the Issuer and Affiliated Purchasers
"Item 16.F
"Change in Registrant's Certifying Accountant
"Item 16.H
"Mine Safety Disclosure
"Part Iii
"Item 17
"Financial Statements

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report: _______________
 
For the transition period from _______________ to _______________
 
Commission file number  000-50305
 
ENTOURAGE MINING LTD.
(Exact name of Registrant as specified in its charter)
Province of British Columbia, Canada
(Jurisdiction of incorporation or organization)
 (Address of principal executive offices)
1390A William Road
Montreal, Quebec H3C 1R5
Danielle Beauchamp, President and Director
(T) 514 419-5221
beaucd24@hotmail.com
Address:  Same as above

Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Name of each exchange on which registered
N/A
N/A
Securities registered or to be registered pursuant to Section 12(g) of the Act.
Common Shares Without Par Value
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 13,742,223 common shares issued and outstanding as of December 31, 2013 and 13,742,233 common shares issued and outstanding as of May 31, 2014, the date of this report. 

Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act
[  ] Yes                                        [x] No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
[ ] Yes                                        [x] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 [x ] Yes                                             [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[   ] Yes                               [   ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer and large accelerated filer" in Rule 12-b of the Exchange Act (Check One):

Large Accelerated Filer [ ]                                                                                                  Accelerated Filer [ ]                                                                      Non-accelerated Filer [x]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP [x]                                                      International Financial Reporting Standards as Issued  Other [ ]
By the International Accounting Standards Board [ ]

If this is an Annual Report, indicate by a check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  [ ] Yes  [x] No


 
3

FORWARD-LOOKING STATEMENTS
We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F Annual Report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "except," "believe," "anticipate," "intend," "could," estimate," or "continue," or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.
PART I
ITEM 1                          IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable to Annual Reports on Form 20F.
ITEM 2.                          OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable to Annual Reports on Form 20F.
ITEM 3.                          KEY INFORMATION
3.A      Selected Financial Data
The following tables set forth our financial data for the last five years ended December 31. We derived all figures from our financial statements, which were examined by our independent auditors. This information should be read in conjunction with our financial statements included in this annual report.
Our financial statements included in this annual report and the table set forth below, have been prepared in accordance U.S. GAAP. All amounts are expressed in Canadian dollars.
Selected Financial Data
(CDN$, except per share data)
 
 
 
Year
Ended
12/31/13
Year
Ended
12/31/12
Year
Ended
12/31/11
Year
Ended
12/31/10
Year
Ended
12/31/09
Revenue
Nil
Nil
Nil
Nil
Nil
Net Income (Loss)
28,169
(51,039)
(189,503)
263,194
(1,092,043)
Earnings(Loss) Per Share (1)
0.00
(0.00)
(0.02)
0.03
(0.17)
Dividends Per Share (1)
Nil
Nil
Nil
Nil
Nil
Weighted Avg. No. Shares (1)
13,742,223
12,791,921
10,282,624
9,766,206
6,378,834
 
 
 
 
 
 
Working Capital (Deficiency)
(169,900)
(240,569)
(404,119)
(229,900)
(883,300)
Mineral Properties
Nil
Nil
Nil
Nil
Nil
Long Term Debt
Nil
Nil
Nil
Nil
Nil
Shareholder's Equity (Deficit)
(169,900)
(240,569)
(403,236)
(228,733)
(881,751)
Total Assets
18,244
5,815
3,910
22,711
14,427
(1) These line items take into consideration the Company's 10 for 1 reverse stock split, effective on March 6, 2009.  Unless otherwise specified herein, all share information presented herein takes into consideration such reverse stock split.
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

4

Since June 1, 1970, the government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar.  On May 30, 2014, the exchange rate in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys) was $0.9202. This exchange rate is based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Bank of Canada. For the past five years ended December 31 and for the last six month ends from October 1, 2013 to March 31, 2014, the following exchange rates were in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys), calculated in the same manner as above:
Annual Period
 
Average
 
 
 
 
Year ended Dec 31, 2013
 
$
0.9093
 
Year ended Dec 31, 2012
 
$
1.0004
 
Year ended Dec 31, 2011
 
$
1.0110
 
Year ended Dec 31, 2010
 
$
0.9709
 
Year ended Dec 31, 2009
 
$
0.8757
 
 
       
 
       
Monthly Period
 
Closing
 
 
       
Month ended Oct 31, 2013
 
$
0.9649
 
Month ended Nov 30, 2013
 
$
0.9531
 
Month ended Dec 31, 2013
 
$
0.9399
 
Month ended Jan 31, 2014
 
$
0.9139
 
Month ended Feb 29, 2014
 
$
0.9046
 
Month ended Mar 31, 2014
 
$
0.9003
 
The above information was obtained from the Bank of Canada.
3.B Capitalization and indebtedness
Not Applicable to Annual Reports on Form 20F.
3.C Reasons for the offer and use of proceeds
Not Applicable to Annual Reports on Form 20F.
3.D Risk factors
Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares. In particular, you should consider carefully the following risk factors:
We have a history of losses.
We have incurred losses in our business operations since inception, and we expect that we will continue to lose money for the foreseeable future. From our incorporation to December 31, 2013, we have incurred net losses totaling $17,011,779. Very few junior resource companies ever become profitable and typically incur large losses until they enter production or are able to sell a mineral property to a major resource company. Failure to achieve and maintain profitability may adversely affect the market price of our common shares.
Very few mineral properties are ultimately developed into producing mines.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.
Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.
5

If we do not obtain additional financing, our business will fail.
Our current operating funds are less than necessary to acquire an interest in, and to conduct exploration on, a mineral property, and therefore we will need to obtain additional financing in order to complete our business plan. As at December 31, 2013, we had cash on hand of $12,948 and a working capital deficiency of $169,900.  Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims. We will require additional financing in order to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral property we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.
We believe the only realistic source of future funds presently available to us is through the sale of equity capital and loans from related parties. Any sale of share capital will result in dilution to existing shareholders.
Because management has only limited formal training in resource exploration, the business has a higher risk of failure.
One of our directors has significant technical training or experience in resource exploration or mining. We rely on the opinions of consulting geologists that we retain from time to time for specific exploration projects or property reviews. As a result of our management's lack of formal training in resource exploration, there may be a higher risk of our being unable to complete our business plan.
Mineral exploration involves a high degree of risk against which we are not currently insured.
Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs. We have relied on and will continue to rely upon consultants and others for exploration expertise.
It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.
We may require permits and licenses that we may not be able to obtain.
Our operations may require licenses and permits from various governmental authorities. There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire. Furthermore, as mineral projects near completion proper permitting and environmental review may be required.
Metal prices fluctuate widely.
Factors beyond our control may affect the marketability of any resource we discover. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot accurately be predicted.
The resource industry is very competitive.
The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
Our operations may be adversely affected by environmental regulations.
Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations.

We do not maintain environmental liability insurance.
 
6


The trading market for our shares is not always liquid.

Although our shares trade on the OTC Bulletin Board of the Financial Industry Regulatory Authority, Inc. (FINRA), the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares. We also cannot assure you that any other market will be established in the future.  The price of our common stock may be highly volatile and your liquidity may be adversely affected in the future.

Our common stock is thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares. 

There is limited market activity in our stock and we are too small to attract the interest of many brokerage firms and analysts. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained. While we are trading on the Over-The-Counter Bulletin Board ("OTC"), our trading volume may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTC stocks and certain major brokerage firms restrict their brokers from recommending OTC stocks because they are considered speculative, volatile, thinly traded and the market price of the common stock may not accurately reflect our underlying value. The market price of our common stock could be subject to wide fluctuations in response to quarterly variations in our revenues and operating expenses, announcements of new products or services by us, significant sales of our common stock, the operating and stock price performance of other companies that investors may deem comparable to us, and news reports relating to trends in our markets or general economic conditions.
Our securities may be subject to penny stock regulation.
Our stock is subject to "penny stock" rules as defined in 1934 Securities and Exchange Act rule 3151-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.
ITEM 4.                          INFORMATION ON THE COMPANY

4.A History and development of the Company

Our Registered Office is located at 1055 West Georgia St., Suite 1500, PO Box 11117, Vancouver, BC Canada, V6E 4N7 and its principal office is located 1390A William Road, Montreal, Quebec H3C 1R5.  The Company is in the business of mineral exploration.  The Company is reviewing and evaluating several new projects unrelated to the mining industry it had previously focused on.  The Company is currently in negotiations to acquire Phoenix Media, a graphic design, web development, communication and marketing agency (http://phoenix-m.com/).
 
7

We were originally incorporated under the name "Entourage Holdings Ltd." pursuant to the Business Corporations Act (British Columbia) on June 16, 1995.  On June 25, 1996, we changed our name to Entourage Mining Ltd.
On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia, Canada.
Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF.  On March 6, 2009, we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF.   Unless otherwise specified herein, all share information presented herein takes into consideration such reverse stock split.

On January 24, 2014, at the Company's special and annual general meeting the following resolutions were approved by shareholders by ordinary resolution were:

1.
Authorizing an unlimited number of Class A Preferred shares without par value and to approve special rights and restrictions for the existing Common shares and the new Preferred shares;

2.
The Notice of Articles of the Company to be amended to reflect the amendment to the authorized share structure approved above.

It was also resolved by Special Resolution that the company will apply to the British Columbia Registrar of Companies pursuant to section 308 of the Business Corporations Act for authorization to continue out of British Columbia and into the jurisdiction of the State of Nevada in accordance with this section. This resolution was approved.

The second special resolution that was approved was to change the authorized share structure post conversion to an unlimited number of Class A Preferred Shares with par value to 500,000,000 Common Shares with a par value of $0.001 and 500,000,000 Preferred shares with a par value of $0.001.
We do not have any subsidiaries.
We are a reporting issuer in the United States and our Annual Report and 6K filings can be found on the SEC's EDGAR system at www.sec.gov.  We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.
4.B Business overview
We are a natural resource company engaged in the acquisition and exploration of natural resource properties.  We commenced operations in 1996 and currently have mineral property option agreement to acquire:
·
an unencumbered 65% interest in certain mineral claims totaling approximately 165 hectares located in Costebelle Township known as the Doran property in eastern Quebec.
A description of the properties underlying this interest is set forth below under Item 4.D "Property, plants and equipment."
We also intend to seek and acquire other business enterprises worthy of development.  The Company is reviewing and evaluating several new projects unrelated to the mining industry it had previously focused on.  The Company is currently in negotiations to acquire Phoenix Media, a graphic design, web development, communication and marketing agency (http://phoenix-m.com/).
Competition
The mineral property exploration business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a profitable market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an adequate return on investment.
We will compete with many companies possessing greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
The Company is prospecting for uranium in Quebec. It is anticipated that uranium generated power will become more popular in the decades to come as rising oil prices and political strife in the world's oil producing regions continue.  The price of U3O8 (yellow cake) had risen from $7US/lb in 2005 to $135US/lb. in early 2007.  The weekly spot price for U3O8 as of May 26, 2014 was US$28.25.
8


Regulations
We are subject to the various environmental and business regulations of the jurisdictions in which we conduct mineral exploration.
These regulations can be onerous and, in some cases, expensive to comply with. In particular, we may be required to expend funds to reclaim or restore land disturbed by mineral exploration.
It is possible that we may not be able to afford to comply with various environmental and business regulations in the jurisdictions in which we conduct mineral exploration and would, as a result, have to curtail or cease operations and exploration.
The jurisdictions in which we are presently operating are, in our view, known as jurisdictions that are friendly to mining activity and we believe that we can meet applicable regulatory requirements.
Management & Employees
We do not have any employees other than our directors and officers.
Our President and Chief Executive Officer, Danielle Beauchamp, devotes approximately 50% of her business time to our affairs. Ms. Beauchamp is paid $2,500 per month on a month-to-month basis to attend to the affairs of the Company effective January 1, 2014.
Where necessary, we contract consultants, who in turn employ labourers, to further exploration on our mineral resource properties.
Office Space
We utilize approximately 700 square feet of office space in Montreal, Canada.  Our rent is approximately $800 per month effective January 1, 2014.
4.C Organizational structure
Not applicable.
4.D Property, plant and equipment
As our properties are not at an advanced stage of exploration, no reserve estimates are made nor are we, as of yet, certain what if any reserves will be on the properties.

The Doran Uranium Property (Canada)

Option Agreement and Claim Information

By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties prospective for uranium situated in Costebelle Township in eastern Quebec (the "Doran Property") in exchange for cash payments of $220,000, the issuance of 75,000 common shares and expenditures of $1,000,000 on the Doran Property over three years, as follows:

a. $35,000 and 12,500 common shares within ten business days of the date of approval of the agreement (paid and issued);
b. $35,000 and 12,500 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);
c. $75,000 and 25,000 common shares on or before March 15, 2007 (paid and issued); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. ("Abbastar") – see below); and
d. $75,000 (paid in 2008 by Abbastar – see below) and 25,000 common shares on or before March 15, 2008 (issued); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar – see below).

9

All the above terms have been met and the Company earned 100% interest of the property subject to Abbastar's interest (see below).

The property interest is subject to a 2.5% Net Smelter Return (NSR).  The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.

On February 13, 2007, the Company entered into an option agreement (the "Option") with Abbastar Holdings Inc. ("Abbastar"), a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a onetime cash payment of $100,000 CDN (received) to the Company and spending $5,000,000 on the Doran Property over 4 years (the Company retains the right to purchase the NSR on the Doran Property).  The TSX Venture Exchange approved this transaction on May 30, 2007.  The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:

- 20% interest by spending $500,000 on or before February 13, 2008 (incurred);
- 15% additional interest by expending an additional $1,000,000 on or before February 13, 2009 (incurred);
- 15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
- 20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.

As of December 31, 2013, Abbastar had earned a 35% interest in the Doran property but, has allowed the balance of their option to expire.

The Doran Uranium property originally consisted of 47-contiguous mineral claims (polygons) covering approximately 2473.3 hectares in the Baie Johan Beetz area of Costebelle Township, Quebec. The claim block is centered at GPS 548009 E and 5572265 N.  The Company allowed certain claims to lapse and at December 31, 2012 held a total of 18 claims.  During the year ended December 31, 2013, a further 15 claims have lapsed to leave 3 claims totaling 165 hectares in good standing.

Location and Accessibility
The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometres west of Aguanish, approximately 109 kilometres east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometres to the north.  Locally this area is known as "Moyenne Cote Nord" or middle coast north of the St. Lawrence Seaway.
The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.
The topography of the property for the most part is rolling hills having a maximum relief of 100 metres with elevation ranging from sea level to 100 metres. All mineralized areas of interest are located comfortably above sea and river levels.
The climate around the property area is characterized by long winters, generally extending from late October until mid-April.

Exploration
Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled (1978) 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton uranium (U3 O8).
The Company made a down payment of $35,000 to acquire the option and agreed to a work commitment of $200,000 of exploration in the first year of the Doran Uranium Property agreement.
We expended $245,591 in exploration work on the property in fiscal year 2005 and a National Instrument 43-101 compliant report by Eric Ostensoe (P.Geo.) was commissioned.  In late February 2006, Mr. Ostensoe completed his report and the Company posted the report on SEDAR and EDGAR (March 9, 2006) as well as on our website.  In April 2007 an updated NI 43-101 Technical Report was prepared by Michel Proulx, M.Sc., P. Geo and Michel Boilly, Ph.D., P.Geo, both Qualified Persons as that term is described in National Instrument 43-101, and this report was filed on SEDAR by Abbastar Holdings Ltd. on May 2, 2007.
10

In May 2006, we advanced to On Track Explorations, the Doran project operator, $150,000 to commence drilling and ground exploration work as outlined in Mr. Ostensoe's report.  Drilling commenced thereafter on the "Main Zone" of the Doran property. Our option agreement on the Doran property required that we expend $300,000 in year two of the agreement.   We spent $346,166 on drilling and exploration in fiscal 2006 and reported drill results on July 20, 2006.  As well, in July 2006, the Government of Quebec reimbursed our company $57,745 as part of the Province's mining exploration incentive program. This rebate was based upon our 2005 drilling exploration expenses.
In early February 2007, we contracted the services of Forages La Virole to commence drilling on the "L" anomaly situated in the north of the Doran property but four to six foot snow drifts prevented the drilling contractor from reaching the "L" anomaly so the work program was cancelled.  On February 13, 2007, we entered into a Mineral Property Option agreement with Abbastar Holdings Ltd. ("Abbastar"), a Vancouver based TSX Venture listed company, whereby Abbastar could earn up to 70% interest in the Doran property by paying us a one time $100,000 CDN payment (paid) and expending $5,000,000 over four years.  The TSX Venture Exchange approved this transaction on May 30, 2007.
On May 11, 2007, our Company and Abbastar announced that drilling had commenced on the "L" anomaly of the Doran project and in all 32 holes were drilled for a total of 3,273.26 metres of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear metres or 75% of the drill hole length.  The results of our Phase II drilling campaign were reported August 23, 2007.  A sample of the results are as follows:
·
Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
·
Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
·
Hole H18A (L Anomaly):  7.25m of 0.023% U3O8 (.46lb/t),
·
Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
·
Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
·
Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
·
Hole H31 (N Anomaly): 0.66 metres of .29% U3O8 (5.8lb/t at surface).
The holes were divided into four zones with particular emphasis on the "L" zone where 18 drill holes were spotted to evaluate the lateral and depth extensions of this zone.  The first four drill holes (17, 17A, 18, 18A) drilled at different azimuths and plunge angles and set up to test the L19 anomaly, recorded encouraging near surface results including 16.99 metres (55 feet) of 0 .87lb/short ton U3O8 and 24.1 metres (79 feet) of .66lb/ton U3O8, as well, holes 27 and 27A, intersected three and four pegmatites respectively.  The first pegmatite, H27, returned .66lb/ton U3O8 over 5.8 metres.  The L zone remains open in all directions while lateral extension and depth extension are unknown.   Best interval drill results are posted on our website.
The 2007 drilling program confirmed the existence of uranium mineralization in the northeast grid (L, N, X and Y).  Findings corroborated the channel sample results of 2006 that showed mineralization to be non-uniformly distributed among the pegmatites and even within each pegmatite.  Drill holes revealed that the thickness of the radioactive pegmatites range from one meter to roughly 20 metres along holes and are presented as sub-parallel multiple slabs slightly dipping to the west and separated from each other by sterile rocks.  All pegmatites have been intersected at a maximum of 90 vertical metres from surface.
To date, the Doran Showing, located at the south of Doran (drilled in 2006 & Fall 2007) and the North East grid have both been successfully drilled in confirming the presence of a series of sub-parallel uranium bearing pegmatites.
Senior Project Geologist, Michel Proulx M. Sc. (P.Geo. and a qualified person, as that term is defined in Canadian Mining National Instrument 43-101 policy) recommended follow up drilling on the Doran Showing (Phase III) as well as an additional 4,000 metres of drilling on the L zone to gain a better understanding of the behavior of the uranium-bearing pegmatite bodies, the structural geology context and of uranium phase minerals.
The fall 2007 drilling campaign was completed in early November of that year.  The program comprised 1,691 metres of drilling in 15 drill holes and was designed to test the area between the North End zone and the Hot Spot zone, the lateral extent of the Hot Spot zone, and to determine the south extension and thickness of the Hill Top pegmatite, all of which are part of the Doran showing.  This campaign was designed to further delineate the Doran Showing where we drilled in the summer of 2006.  The Doran Showing consists of four distinct pegmatite-bearing structures: The Main Zone, the North End Zone, Dyke Zone and Hot Spot.
11

Results from this drill campaign were announced on February 4, 2008.  The fall 2007 drill campaign achieved similar results to the 2006 campaign and all 15 drill holes encountered uranium mineralization.
In total over 6000 metres have been completed on the Doran property by our company and Abbastar and the companies are encouraged that the goal of delineating a Rossing type (Namibia) uranium deposit may be realized.
Abbastar completed a fall 2008 program in September-October.  This program completed the second phase of the Mineral Option Agreement between Entourage and Abbastar dated February 14, 2007 and Abbastar has now earned a 35% interest in the Doran property.
The fall 2008 exploration campaign consisted of channel sampling of previously unexplored anomalies (F, G, H, I, K and LL) situated WSW of the L anomaly that was drilled in the spring of 2007.  Additionally, anomalies E, Q, BB, S and RR, located due south of the L anomaly were also tested. On February 24, 2009, Abbastar Uranium released the following information on the Fall 2008 exploration program:

North section of the Doran property:
Results of the 2008 ground-based radiometric survey demonstrated a good spatial correlation between the highest-count rates and the localization of the previously determined airborne anomalies BB, P, Q, R and S.
The G zone represents the most interesting uranium site with an average value of 0.56 lb/ton U3O8 from 22 samples collected with a range of 0.06 to 0.88 U3O8 lb/t, with a high value at 3.11 lb/t U3O8.
Nearby anomalies F and H also display relatively high uranium values (F at 0.63 lb/t U3O8 from six samples with a range of 0.27 to 1.20 U3O8 lb/t and H at 0.5 lb/t U3O8 from four samples with a range of 0.21 to 1.06 lb/t U3O8).

South section of Doran property:
The large extent of the radioactive pegmatite outcrops, the encouraging assay obtained and the proximity of the west zone to the main Doran showing make the former a prime target for future drilling.
The completion of the Fall 2008 exploration program earned Abbastar an additional 15% interest in the property and Abbastar has now earned a 35% interest in the Doran property.  As of December 31, 2010, Abbastar had earned a 35% interest in the Doran property but, has allowed the balance of their option to expire.

Future Exploration and Development

On March 28, 2013, Québec Environment minister Yves-François Blanchet announced that the Bureau d'audiences publiques sur l'environnement (BAPE) will hold public hearings on the uranium sector in Québec. These hearings were scheduled for the Fall of 2013 and focused on the environmental and social impacts of exploration and mining of uranium in Québec. The Minister also indicated that no authorization certificates for uranium exploration or mining projects in Québec will be issued until the BAPE's independent study is completed and its report is issued.  The Minister of the Environment of Québec plans to ask the Bureau d'audiences publiques sur l'environnement  (BAPE - Office of Public Inquiries on the Environment) to assess the impacts of uranium exploration and exploitation in the province.  On Mar. 3, 2014, Québec Environment Minister Yves-François Blanchet announced he granted a mandate to the BAPE to conduct province-wide public hearings regarding the exploration and mining of uranium in Québec.  The inquiry commission's mandate will begin on May 20, 2014, and is for a term of no more than one year. The BAPE's report must be delivered to the Minister by May 20, 2015, and the Minister will then have 60 days to make it public.

The Company is not currently contemplating future exploration and development on its Doran Property due to the aforementioned moratorium.  Once the moratorium is lifted, the Company will reconsider its position for further exploration and development subject to acceptable financing.  As the Company has fulfilled the terms of the original sub-agreement with the vendor, there is no further required work to maintain this exploration property. 

ITEM 4A.                          UNRESOLVED STAFF COMMENTS
Not applicable.
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ITEM 5.                          OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A Operating results
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the properties. That cash must be raised from other sources. Our only other source for cash at this time is investments by others in our Company.  We must raise cash to implement our project and stay in business. Even if we raise money, we do not know how long the money will last. It depends upon the amount of exploration we conduct and the cost thereof.
We will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not raise all of the money we need, we will have to find alternative sources of funding, like a public offering, a private placement of securities, or loans from our officers or others.
Our exploration program is explained in as much detail as possible in the business section of this annual report. We are not going to buy or sell any plant or significant equipment during the next twelve months. We will not buy any equipment until we have located a body of minerals and we have determined they are economical to extract from the land.
Year ended December 31, 2013 compared to year ended December 31, 2012
Our net income for the year ended December 31, 2013, ("Annual 2013") totaled $28,169 or $0.00 per share, as compared to a net loss of $51,039 or $0.00 per share for the year ended December 31, 2012 ("Annual 2012").  Net income in Annual 2013 compared to a net loss in Annual 2012 was mainly due to:

·
Consulting fees of $11,750 were incurred during Annual 2013 compared to no consulting fees incurred during the year ended Annual 2012.  The increase in consulting fees was due to the use of consultants to assist with the settlement of the Company's debt during the year which culminated in a gain on settlement of debt of $168,417.
·
Mineral property recovery of $70,169 for Annual 2012 compared to no exploration costs or recoveries during Annual 2013.  This change was due to the sale of its interest of the Pires Gold Project in Brazil completed during the previous year.
·
Recorded a gain on forgiveness of debt in the amount of $168,417 for Annual 2013 compared to no gain on forgiveness of debt during Annual 2012.
Year ended December 31, 2012 compared to year ended December 31, 2011

Our net loss for the year ended December 31, 2012 ("Annual 2012") totaled $51,039 or $0.00 loss per share compared to a net loss of $189,503 or $0.02 per share for the year ended December 31, 2011 ("Annual 2011").  Net income in Annual 2012 compared to a net loss in Annual 2011 was mainly due to:

·
Financing fees – stock based compensation decreased from $63,708 for Annual 2011 to $nil for Annual 2012.  During the year ended December 31, 2011, the expiry date of the warrants was extended one year to January 25, 2012 with no other changes to the terms of the warrants. The fair value of the term extension was calculated using the Black-Scholes option pricing model with the following assumptions:  (1) dividend yield of 0%, (2) expected volatility of 164%, (3) risk free interest rate of 1.32% and, (4) expected life of 1 years. Total expenses of $63,708 was recorded as stock-based compensation in 2011, was related to financing fee.  This was a non-cash expense.
·
Mineral property costs decreased from $44,422 for Annual 2011 to a recovery of $70,169 for Annual 2012.  This recovery was due to the sale of its interest in the Pires Gold Property during the year ended December 31, 2012.
5.B Liquidity and capital resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business.  The Company has accumulated a net loss of $17,011,779 since its inception.  The Company has no sources of revenue.  The continuance of the Company is dependent upon its ability to obtain additional financing as needed to pursue new business opportunities and ultimately upon generating profitable operations from its mineral property exploration and development activities.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management has plans to seek additional capital through private placements of its common stock and loans from related parties to fund expenditures for the next year.  Although there are no assurances that management's plans will be realized, management believes that the Company will be able to continue operations in the future.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.
13

As of the date of this report, we have yet to generate any revenues from our business operations.
On December 31, 2013, the Company had $12,948 in cash compared to $1,764 on December 31, 2012. On December 31, 2013 the Company had a working capital deficiency of $169,900 compared to a working capital deficiency of $240,569 on December 31, 2012.

The Company anticipates it will require additional capital in the future to finance ongoing exploration of its properties and general and administrative expenses, such capital to be derived from the exercise of outstanding stock options and warrants and/or the completion of private placement financings.  The Company may also seek short-term loans from directors of the Company.  There can be no assurance the Company will be able to obtain required financing in the future on acceptable terms to the Company.
We do not need any funds in the near future for the exploration work on our Doran property since the Company is the 65% unencumbered owner of the Doran property. However, we need to raise funds soon to fund our ongoing general and administrative costs (which are estimated at approximately $10,000 per month) although there is no guarantee that we will be able to do so.

As at  December 31, 2013,  $1,179 (2012 - $6,126) was owing to a former director and a company controlled by a former director of the Company.   The loan is unsecured, non-interest bearing and due on demand.

As at December 31, 2013, $129,772 (2012 - $nil) was owing to a company controlled by a director of the Company.   The loan is unsecured, bears interest at 0.5% per annum compounded annually and is due on demand within 15 days written notice.  As at December 31, 2013, accrued interest of $177 was included in loans payable.

Subsequent to December 31, 2013, a further $20,600 was advanced to the Company with the same terms as the prior loans.
The Company anticipates it will require additional capital in the future to finance ongoing exploration of its properties and general and administrative expenses, such capital to be derived from the exercise of outstanding stock options and warrants and/or the completion of private placements.  The Company may also seek short-term loans from directors and shareholders of the Company.  There can be no assurance the Company will be able to obtain required financing in the future on acceptable terms to the Company.
5.C Research and development, patents and licenses, etc.

Our methods of exploration, development and extraction are not unique to our company but are common in our industry.

We do not rely on patents, technological licenses or intellectual property licenses in our operations.

We did not have any research and development expenditures in the year ended December 31, 2013 or any past years.
5.D Trend information
Our Doran mineral property is prospective for uranium.  There are few producers of uranium in the world in a market that is dominated by senior producers Cameco (Canada), Areva (formerly Cogema, France) Energy Resources (Australia), Denison (Canada) and SXR (South Africa). The market for uranium is a homogeneous, integrated commodities market.
The market is not one that is particularly susceptible to the influence of one or more large suppliers or buyers. The world average grade from producing uranium mines is 0.15 per cent U3O8, with spot uranium prices having risen from a cyclical low of US$7.10 (U.S.) per pound in late 2000 to US$135/lb. on June 11, 2007.  The weekly spot price for U3O8 as at May 26, 2014 was US$28.25/lb.
14

5.E Off-balance sheet arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
5.F Tabular disclosure of contractual obligations
None
ITEM 6.                          DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A Directors and senior management
The following is a list of the current directors and senior officers of the Company, their municipalities of residence, their current position with the Company and their principal occupations:
Name of Director
Age
Principal Occupation
 
Danielle Beauchamp
62
President and Director
President, Director
 
 
Quebec
 
 
 
 
 
Fouad Mallouk
35
Director and Secretary
Director and Secretary
 
 
Quebec, Canada
 
 
 
 
 
James A. Turner
66
Director
Director
 
 
Surrey, BC
 
 
 
 
 
Name of Officer
Age
Office
 
 
 
Danielle Beauchamp
62
President, Chief Executive Officer
Fouad Mallouk
35
Secretary and Chairman
Fred Schiemann, CPA
55
Chief Financial Officer
Our directors hold office until our next annual meeting of shareholders and until their successors have been elected and qualified. Our officers are elected by our board of directors at our annual meeting after each of our annual meetings of shareholders and hold office until their death, or until they resign or have been removed from office.
The following describes the business experience of our directors and executive officers, including other directorships held in reporting companies:
Danielle Beauchamp – Director, President and Chief Executive Office

At our annual general meeting in January 2014, Mrs. Beauchamp was appointed as President of our company. Mrs. Danielle Beauchamp is the financial director for JAMIL Investment Inc. since May 2012 and acted as Division Director from 1998 to 2012 and as financial security advisor for Investors Group Financial Services Inc. Mrs. Beauchamp served for 19 years as a Managing Director and a Deputy Director consumer credit in the Corporate and Investment Banking group with the National Bank of Canada from 1979 to 1998. She started in the banking business in January 1974 to April 1977 with the Scotia Bank of Canada in the accounting department and from May 1977 to June 1979 with the Provincial Bank as Credit Manager. During these years, Mrs. Beauchamp was responsible for investment banking coverage for clients in the building products and services areas either for banks or for group financial services.
Fouad Mallouk – Director and Secretary

At our annual general meeting in January 2014, Mr. Mallouk was appointed Director and Secretary. Mr. Mallouk is the president and founder of Phoenix Media 9218-8457 Quebec Inc., a communication, marketing, web design and printing agency from 2001 to current date. At a very young age, Mr. Mallouk was passionate about making a difference. Only one path was clear to him, Entrepreneurship. He started in 1997 in the media and printing industries with VN graphics and printing. Fouad learned quickly the art of the game. Armed with determination and perception, at 19 years of age, Mr. Mallouk started his own marketing and design firm, Phoenix Media. He has been responsible this entire time of management, client recruitment and served as director of creation. His keen ability to bring together an award winning team while juggling major portfolios has lead Mr. Mallouk not only to position his company on a global market, but to be one of the few Canadian marketing and design agencies to go public.
15

 James A. Turner - Director
Mr. Turner holds a B.Sc. degree from the University of British Columbia. He has been a practicing geologist since 1976. Mr. Turner is a member of the Association of Professional Engineers and Geoscientists of British Columbia and a former fellow of the Geological Association of Canada. He has been involved in mineral explorations with major mining companies such as Teck Cominco Limited, Noranda Inc. and Newmont Explorations of Canada Limited. During his career Mr. Turner has worked in British Columbia, the Northwest Territories, Baffin Island, Yukon Territory, Mali, Ghana, Panama, U.S.A and Brazil. Mr. Turner has extensive experience in exploration for base metals, precious metals, and diamonds.
Fred Schiemann, Chief Financial Officer
Mr. Schiemann is a Certified Public Accountant in Nevada. He has been involved with many public registrations and structuring of mergers and acquisitions.  Mr. Schiemann received his BS from the University of Illinois, Chicago Circle Campus in 1973 with honors and with a distinction in Accounting. Additionally, he obtained his MBA in Taxation from Golden Gate University, Sacramento campus in 1982.
6.B Compensation
We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors. The following fairly reflects all material information regarding compensation paid to our directors in our fiscal year ended December 31, 2013
Summary Compensation Table

NAME AND
PRINCIPAL
POSITION


YEAR
ANNUAL COMPENSATION
LONG-TERM COMPENSATION


Salary
($)


Bonus
($)

Other Annual
Compensation
($)
Awards


LTIP
payouts
($)

All Other
Compensation
($)

Restricted
Stock
Awards
($)
Securities
Underlying
Options/
SAR's
(#)
James A. Turner,
Director
2013
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Mrs. Beauchamp, Mr. Mallouk and Mr. Schimann were not paid any compensation during the year ended December 31, 2013 and became directors or officers of the Company on January 24, 2014.
6.C Board practices
The directors hold office until the next annual general meeting of the shareholders at which time they may stand for re-election. We are required to hold an annual general meeting once in every calendar year and not longer than thirteen months from the last annual general meeting.
No director currently has service contracts with us, nor are they entitled to any termination benefits.
We do not have an executive committee.
Our audit committee is comprised of Danielle Beauchamp and Fouad Mallouk,. Members of the audit committee oversee our accounting and financial reporting process and the audits of our financial statements. The audit committee also receives and addresses complaints regarding accounting, internal controls, and auditing issues. No complaints have been received by us as of the date hereof. Further, the audit committee provides protection for whistle blowers. Again, no whistle blowing issues have presented themselves to us as of the date hereof. The audit committee functions in a collective manner with respect to all issues that come before it.
16

6.D Employees
We have no employees other than our officers and directors. When we engage in exploration of our resource properties, we use geological consultants and contract labor to support them.
6.E Share ownership
Our directors and officers own beneficially the following shares as of the date of this annual report:
Name
Number of Shares Owned
Percentage of Outstanding
Common Shares1
Danielle Beauchamp
Nil
0.0%
Fouad Mallouk
Nil
0.0%
James A. Turner
Nil
0.0%
Fred Schimann
Nil
0.0%
 
1.
Based on 13,742,223 issued and outstanding shares as of the date of this Report.
The Company Stock Option Plan provides for equity participation in the Company by its directors, officers, employees and consultants through the acquisition of common shares pursuant to the grant of options to purchase common shares. The exercise price for options granted under the Stock Option Plan is determined by the closing trading price on the day immediately preceding the date of grant or such other price as the Directors, in their discretion, may determine. The Company has reserved and authorized 720,000 shares under the Stock Option Plan.  As at December 31, 2013 and the date of this report there are no stock options outstanding.
Options can be exercisable for a term of up to five years, subject to earlier termination in the event of death or the optionee's cessation of services to the Company; and options granted under the stock option plan are non-assignable, except by will or the laws of descent and distribution.
ITEM 7.                          MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A Major shareholders
As used in this section, the term "beneficial ownership" with respect to a security is defined by Regulation 228.403 under the Securities Exchange Act of 1934, as amended, as consisting of: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership.
As of the date of this annual report, there are 13,742,223 common shares issued and outstanding in our capital stock. We were authorized to issue 100,000,000 common shares at December 31, 2009; on April 22, 2010, the Company changed its authorized capital to unlimited.
As of the date of this annual report, the following persons known to us were the beneficial owner of more than five percent of our outstanding common shares:
Name
Number of Shares Owned
Percentage of Outstanding
Common Shares1
Danielle Beauchamp
Nil
0.0%
Fouad Mallouk
Nil
0.0%
James A. Turner
Nil
0.0%
1.
Based on 13,742,223 issued and outstanding shares as of the date of this Report.

Of our 106 registered shareholders, 26 shareholders are Canadian residents (who hold approximately 66% of our issued and outstanding shares), 78 shareholders are United States residents (who hold approximately 31% of our issued and outstanding shares) and 2 shareholders are foreign residents (who hold approximately 3% of our issued and outstanding shares).
Each of our issued common shares entitles the holder to one vote in general meeting. There are no disproportionate or weighted voting privileges.
17

We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.
There are no arrangements the operation of which at a subsequent date may result in a change in our control.
Our trust and transfer agent is Computershare Trust Company of Canada, which is located at 3rd Floor – 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.
7.B Related party transactions
During the Fiscal Year Ended December 31, 2013

As at December 31, 2013, $1,179 (2012 - $6,126) was owing to a former director and a company controlled by a former director of the Company.   The loan is unsecured, non-interest bearing and due on demand.

As at December 31, 2013, $129,772 (2012 - $nil) was owing to a company controlled by a director of the Company.   The loan is unsecured, bears interest at 0.5% per annum compounded annually and is due on demand within 15 days written notice.  As at December 31, 2013, accrued interest of $177 was included in loans payable.

During the year ended December 31, 2013, the Company incurred $45,000 (2012 - $60,000) in management fees to its directors and officers.  Effective April 1, 2012, the directors of the Company agreed to waive their management fees until the Company has the financial resources to extinguish their debt.  In accordance with U.S. GAAP, the Company recorded $42,500 (2012 - $45,000) in management fees as an increase to additional paid-in capital and $2,500 was paid in cash.  The Company also paid $250 to a director which has been included in consulting fees.

During the year ended December 31, 2013, the Company advanced $nil (2012 - $1,001) to a director of the Company for expenses to be incurred.  As at December 31, 2012, this amount was included in prepaid expenses.

The above transactions have been recorded at their exchange amount being the amount of consideration established and agreed to by the related parties.
7.C.  Interests of experts and counsel
Not Applicable
ITEM 8.                          FINANCIAL INFORMATION
8.A Financial Statements and other Financial Information
The following financial statements for the year ended December 31, 2013 with comparatives for December 31, 2012 and December 31, 2011 (except for the balance sheet, which does not include comparative for December 31, 2011), have been audited by an independent auditor, are accompanied by an audit report and are attached and incorporated herein:
(a)
balance sheets;
(b)
statements of operations;
(c)
statements of stockholders' deficit;
(d)
statements of cash flow;
(e)
related notes and schedules required by the comprehensive body of accounting standards pursuant to which the financial statements are prepared; and
(f)
a note analyzing the changes in each caption of shareholders' equity presented in the balance sheet.
Incorporated herewith are the comparative financial statements covering the latest three financial years, audited in accordance with a comprehensive body of auditing standards.
Export Sales
We have not had any export sales in our latest financial year ended December 31, 2013 and, as a result, the percentage of export sales for the Company was zero.
18

Legal Proceedings
Management is not aware of any material proceedings in which any director, any member of management or any of the Company's affiliates are a party adverse to, or have a material interest adverse to, our company.
Dividend Policy
We have not paid dividends on the common shares in any of its last five fiscal years. The directors of our company will determine if and when dividends should be declared and paid in the future based on the Company's financial position at the relevant time. All of the common shares of our company are entitled to an equal share in any dividends declared and paid.
8.B Significant Changes
There have been no significant changes, as that term is defined in the rules and policies governing the use of the Form 20F, since the date of the audited financial statements included herein.
ITEM 9.                          THE OFFER AND LISTING
9.A.  Offer and listing details
Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF.  On March 6, 2009, we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF.
The following table sets forth the high and low closing prices in US funds of our common shares traded, taking into account our 10 for 1 reverse split effective March 6, 2009.
9.B  Plan of distribution
Not Applicable to Annual Reports on Form 20F.
9.C  Markets
Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF, however, a lack of liquidity may make it difficult to resell shares.
On March 6, 2009 we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF.
There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of our securities.
9.D   Selling shareholders
Not Applicable to Annual Reports on Form 20F.
9.E  Dilution
Not Applicable to Annual Reports on Form 20F.
9.F  Expenses of the issue
Not Applicable to Annual Reports on Form 20F.
ITEM 10.                          ADDITIONAL INFORMATION
10.A  Share Capital
Not Applicable to Annual Reports on Form 20F.
19

10.B  Memorandum and articles of association
We have no bylaws under British Columbia law.  We have Articles of Incorporation.  A summary of certain provisions of our Articles of Incorporation is provided below.
1. Our Memorandum and Articles of Incorporation do not limit in any manner our business purpose. As such, no provision relating to the same is contained in the Memorandum or Articles of Incorporation.
2. Directors
a. A director shall disclose the nature and extent of his interest in a contract or transaction. A director shall not vote on any contract or transaction in which he is interested. The foregoing shall not apply to: (1) a loan to us which the director is guaranteeing repayment; (2) any contract or transaction for the benefit of a holding company or a subsidiary corporation of which the a director is a director; (3) any contract by a director to subscribe for or underwrite securities in which a director is interested if all the other directors are interested; (4) determining the remuneration of the directors: (5) purchasing and maintaining insurance to cover directors against liability incurred by them as directors; or, (6) indemnification of any director.
b. Directors are empowered to vote compensation to them even in the absence of an independent quorum.
c. Our board of directors may from time to time on our behalf borrow money. We have no prohibition against loaning money to a director.
d. There are no provisions for retirement or non-retirement of directors under an age limit requirement.
e. There is no number of shares that must be owned for director's qualification.
3. Shares
a. The board of directors may from time-to-time declare and authorize payment of dividends. No dividend will be paid otherwise than out of funds and/or assets properly available therefore. There is no time limit after which dividend entitlement lapses.
b. Each shareholder shall have one vote for each share of common stock owned by him. At each annual meeting the entire board of directors retire and shareholders shall elect an new board of directors. There are no staggered intervals and cumulative voting is not provided for.
c. Shareholders do not have the right to share in our profits.
d. Shareholders are entitled to share in any surplus upon liquidation, after the payment of all creditors and superior equity securities.
e. We may redeem any of our shares at the price and on the terms as determined by our board of directors.
f. There are no sinking fund provisions.
g. Shareholders are not liable for further capital calls.
h. There are no provisions discriminating against any existing or prospective holder of common stock as a result of a shareholder owning a substantial number of shares of common stock.

i.
On January 24, 2014 at the Company's Annual General and Special Meeting, the Company received shareholder approval to create an unlimited number of Class A Convertible Preferred shares without par value and to approve special rights and restrictions for the existing Common shares and the new preferred shares.
4. No alteration shall be valid as to any outstanding shares unless the holders of the shares consent thereto or by a resolution passed by 3/4s of the outstanding shares.
5. The annual general meeting of shareholders is called by written notice mailed by the board of directors to each shareholder of record. A quorum shall be a least two persons represented at the meeting either in person or by proxy. Extraordinary (special) general meetings are called by written notice mailed by the board of directors to each shareholder of record. The quorum remains the same for Extraordinary Meetings. There are no conditions of admission to the meetings.
6. There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities, imposed by the laws of British Columbia, or our articles or other constituent document.
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7. There are no provisions in our articles that would have an effect of delaying, deferring or preventing a change in our control and that would operate only with respect to any merger, acquisition or corporate restructuring involving us.
8. There are no provisions in our articles that require the disclosure of shareholder ownership.
9. The law applicable to us is not significantly different from that in the host country.
10. The conditions imposed by the articles governing changes in the capital are not more stringent than is required by law.
There are no material contracts except as discussed in this Annual Report and except as entered into in the ordinary course of business. The following material contracts referred to in this Annual Report may be inspected at our offices during normal business hours.

 
 
1.
Agreement dated March 15, 2005 between Fayz Yacoub and the Company, and amended March 6, 2007 whereby the Company can acquire a 100% interest in the Doran Uranium Property (referenced by way of the Company's 20-F filed with the SEC on July 1, 2005);
 
 
 
 
2.
Agreement dated April 21, 2005 between the Company and CMKM Diamonds, Inc. whereby CMKM may acquire up to a 10% interest in the Company's Black Warrior Project (referenced by way of the Company's 20-F filed with the SEC on July 1, 2005);
 
 
 
 
3.
Assignment Agreement dated October 20, 2005 between the Company and CMKM Diamonds Inc., whereby the Company assumed all of the rights of CMKM, if any, in the Hatchet Lake Property (referenced by way of the Company's 6-K filed with the SEC on November 23, 2005);
 
 
 
 
4.
Agreement dated October 20, 2005 between the Company and 101047025 Saskatchewan Ltd., whereby the Company may acquire up to 80% interest in the Smeaton/Forte a la Corne properties (referenced by way of the Company's 6-K filed with the SEC on November 25, 2005); and

 
5.
Agreement dated February 13, 2007 between the Company and Abbastar Uranium Corp. (formerly Abbastar Holding Ltd.) whereby Abbastar may earn up to 70% interest in the Doran uranium prospect in Costebelle Township, Quebec. (referenced by way of the Company's 6-K filed February 14, 2007).
 
 
 
 
6.
Agreement dated June 17, 2009 between the Company and Infogeo Servicos e Locacoes Ltda,, whereby the Company can earn a 100% interest in the Pires gold project in south central Brazil.
 
 
 
 
7.
Letter of Intent ("LOI") signed February 18, 2010 with Ansell Capital Corp., ("Ansell") a TSX Venture listed company, pursuant to which Ansell proposes to acquire all of the outstanding and issued shares of the Company through a plan of arrangement (the "Arrangement") under the British Columbia Corporations Act.  On July 14, 2010, the Company was notified by Ansell that it would not be proceeding with the LOI.
 
 
 
 
8.
Property Purchase Agreement dated March 15, 2012 between the Company and with SAL Resources Holding Limited ("SAL") whereby SAL agrees to purchase the Company's interest in the Pires Gold Project.
 
 
 
 
9.
Property Purchase Agreement dated March 30, 2012 between the Company and with Ansell Capital Corp. ("Ansell") whereby Ansell agrees to sell its interest in the Pires Gold Project.
 
 
 
 
10.
Loan Agreements dated throughout 2013 between the Company and with JAMIL Investment Corp. ("JAMIL") whereby JAMIL loaned the Company funds totaling of $129,595 for a term of one year bearing interest at 0.5% per annum compounded annually and due on  demand within 15 days written notice.  The loan is unsecured.
 
21

10.D   Exchange Controls
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. See "Item 10.E Taxation".
There is no limitation imposed by Canadian law or by our constituent documents on the right of a non-resident to hold or vote common shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the principal features of the Investment Canada Act (Canada).
The Investment Canada Act (Canada) requires certain "non-Canadian" individuals, governments, corporation or other entities who wish to acquire a "Canadian business" (as defined in the Investment Canada Act), or establish a "new Canadian business" (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The Investment Canada Act requires that certain acquisition of control of Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investment Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition, which has been completed, the acquired Canadian business must be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, amongst other things, an injunction or a court order directing disposition of assets of shares.
10.E  Taxation
The following summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the applicable Canadian, U.S. or other tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.
Certain US Federal Income Tax Consequences
The following is a general discussion of the material United States Federal income tax law for U.S. holders that hold such common shares as a capital asset, as defined under United States Federal income tax law and is limited to discussion of U.S. Holders that own less than 10% of the common stock. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences.
The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), Treasury Regulations, published Internal Revenue Service ("IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any future legislation that, if enacted, could be applied, possibly on a retroactive basis, at any time. The following discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company should consult their own tax advisors about the Federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.
U.S. Holders
As used herein, a "U.S. Holder" is a holder of common shares of the Company who or which is a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for federal income tax purposes, a corporation or partnership created or organized (or treated as created or organized for federal income tax purposes) in the United States, including only the States and District of Columbia, or under the law of the United States or any State or Territory or any political subdivision thereof, or a trust or estate the income of which is includable in its gross income for federal income tax purposes without regard to its source, if, (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more United States trustees have the authority to control all substantial decisions of the trust.
22

For purposes of this discussion, a U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers and Holders who acquired their stock through the exercise of employee stock options or otherwise as compensation.
Distributions on common shares of the Company
U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder's United States Federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder's United States Federal taxable income by those who itemize deductions. (See more detailed discussion at "Foreign Tax Credit" below). To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder's adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder that is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation.
Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations, which are beyond the scope of this discussion.
Foreign Tax Credit
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations, which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate shares of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its world-wide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. There are further limitations on the foreign tax credit for certain types of income such as "passive income," "high withholding tax interest," "financial services income," "shipping income" and certain other classifications of income. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.
Disposition of common shares of the Company
A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between the amount of cash plus the fair market value of any property received, and the Holder's tax basis in the common shares of the Company. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder. Any capital gain will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders that are individuals, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.
23

Certain Canadian Federal Income Tax Consequences
The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the Company (the "Shareholder"), and who at all material times for the purposes of the Income Tax Act (Canada) (the "Canadian Act") deals at arm's length with the Company, holds all common shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada. It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.
This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the "Treaty") as amended. This summary takes into account all specific proposals to amend the Canadian Act and the regulations thereunder publicly announced by the government of Canada to the date hereof and the Company's understanding of the current published administrative and assessing practices of Canada Customs and Revenue Agency. It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any provincial, territorial or foreign income tax law or treaty.
This summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.
A Shareholder generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the Common share constitutes "taxable Canadian property" to the Shareholder for purposes of the Canadian Act and the Shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty. A Common share that is disposed of by a Shareholder will not constitute taxable Canadian property of the Shareholder provided that the Common share is listed on a stock exchange that is prescribed for the purposes of the Canadian Act (the Toronto Stock Exchange is so prescribed), and that neither the Shareholder, nor one or more persons with whom the Shareholder did not deal at arm's length, alone or together at any time in the five years immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Company. In addition, the Treaty generally will exempt a Shareholder who is a resident of the United States for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not derived principally from real property (including resource property) situated in Canada or that the Shareholder does not have, and has not had within the 12-month period preceding the disposition, a "permanent establishment" or "fixed base," as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada. The Treaty may not be available to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S. Any dividend on a Common share, including a stock dividend, paid or credited, or deemed to be paid or credited, by the Company to a Shareholder will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty. Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross amount of the dividend. It is Canada Customs and Revenue Agency's position that the Treaty reductions are not available to a Shareholder that is a "limited liability company" resident in the United States. The Company will be required to withhold any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.
ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.
10.F  Dividends and paying agents
Not Applicable to Annual Reports on Form 20F.
10.G   Statement by experts
Not Applicable to Annual Reports on Form 20F.
24

10.H   Documents on Display
The documents concerning the Company which are referred to in this Report on Form 20F are located at its principal executive offices at the address on the face page of this Report.
10.I  Subsidiary information
We had one subsidiary, Entourage USA Inc.  The charter of Entourage USA was not renewed in December 2008.
ITEM 11.                          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We do not have market portfolios and do not engage in trading risk sensitive instruments or financial instruments. We are an extractive enterprise.
ITEM 12.                          DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
PART II
ITEM 13.                          DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
We have had no material defaults in payment of principal, interest or sinking or purchase fund installments.  We are an extractive enterprise.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15.                          CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2013, pursuant to Rule 13a-15(b) of the Exchange Act.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2013.
Management's Annual Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
As of December 31, 2013, management assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that the Company's management considered to be material weaknesses under COSO and SEC rules were: (1) lack of a functioning audit committee and lack of a majority of independent directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the preparation of our financial statements as of December 31, 2013 and communicated the matters to our management and board of directors.
25

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of independent directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures, could impact the Company's financial statements for the future years.
We are committed to improving our financial organization. As part of this commitment, we hope to create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more independent directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.
Any effort to increase the size of the Board of Directors, appoint independent directors or personnel is conditional upon the Company to raise additional capital.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Our management's report was not subject to attestation by the Company's registered public accounting firm because our Company is not an accelerated filer or large accelerated filer.
Changes in Internal Control over financial reporting
During the year ended December 31, 2013, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16.          
ITEM 16.A                          AUDIT COMMITTEE FINANCIAL EXPERT
We do not have an audit committee financial expert serving on our audit committee. Given the Company's small size and limited operations, to date we have been unable to attract a financial expert to serve on our board of directors.
ITEM 16.B                          CODE OF ETHICS
We have a written Code of Ethics, which was filed as an exhibit to our Annual Report on Form 20-F for our fiscal year ended December 31, 2007, and which is incorporated by reference as an exhibit hereto.
26

ITEM 16.C                          PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a)           Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the Company's principal accountant(s) for the audit of the Company's annual financial statements, together with services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $10,000 for the year ended December 31, 2013 and $12,000 for the year ended December 31, 2012.
(b)           Audit-Related Fees
The aggregate fees billed for each of the last two fiscal years for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of the Company's financial statements but are not reported under paragraph (a) of this Item were $Nil for the year ended December 31, 2013 and $Nil for year December 31, 2012.
 (c)           Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning and tax return preparation were $Nil for the year ended December 31, 2013 and $Nil for the year ended December 31, 2012.
(d)            All Other Fees
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant other than services disclosed in paragraphs (a) through (c) of this Item were $Nil for the year ended December 31, 2013 and $Nil for the year ended December 31, 2012.
ITEM 16.D                          EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
The disclosure required under Exchange Act Rule 10A-3(d) is not applicable to our company.
ITEM 16.E                          PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
No purchase was made by or on behalf of our Company or any "affiliated purchaser" of any of our equity securities within the past two years.
ITEM 16.F                          CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 16.G                          CORPORATE GOVERNANCE
Not Applicable.
ITEM 16.H                          MINE SAFETY DISCLOSURE
Not applicable because we were not the operator of any mines during our fiscal year ended December 31, 2013.
PART III
ITEM 17.                          FINANCIAL STATEMENTS
Our financial statements are attached hereto immediately before the signatures section.

ITEM 18.                          FINANCIAL STATEMENTS
See Item 17.
27

ITEM 19.                          EXHIBITS

Exhibit
No.
Exhibit
1.1
Memorandum and Articles of Incorporation and Amendments thereto (1)
4.1
Agreement dated March 17, 2003, between the Company and the YK Group (1)
4.2
Agreement dated June 1, 2004 between the Company and Goodsprings Development Corp. whereby the Company can acquire up to a 100% interest in and to the Black Warrior Project (2)
4.3
Agreement dated March 15, 2005 between Fayz Yacoub and the Company whereby the Company can acquire a 100% interest in the Doran Uranium Property (2)
4.4
Agreement dated April 7, 2005 between Star Uranium Corp. (formerly known as United Carina Resources Corp.) and the Company whereby the Company can acquire a 20% right in the Hatchet Lake Property (2)
4.5
Agreement dated April 21, 2005 between the Company and Star Uranium Corp. (formerly known as United Carina Resources Corp.) whereby Star may acquire up to a 10% interest in the Company's Black Warrior Project (2)
4.6
Agreement dated April 21, 2005 between the Company and CMKM Diamonds, Inc. whereby CMKM may acquire up to a 10% interest in the Company's Black Warrior Project (2)
4.7
Agreement between the Company and Star Uranium dated October 21, 2005 whereby the Company may acquire a 50% interest in the Hatchet Lake (3)
4.8
Assignment Agreement between the Company and CMKM Diamonds Inc. whereby the Company may acquire any and all interest of CMKM Diamonds Inc.'s interest in the Hatchet Lake Property (3)
4.9
Agreement between the Company and 101047025 Saskatchewan Ltd. whereby the Company may acquire an 80% interest in the Smeaton Property (4)
4.10
Agreement between the Company and Goodsprings Development Corp. whereby Goodsprings extended the terms of the Company's June 1, 2006 property payment as four quarterly payments (5)
4.11
Entourage-101047025 Saskatchewan Ltd. claim file for the Smeaton Property (5)
4.12
Smeaton Property location map with legend (5)
4.13
Hatchet Lake Property map with legend (5)
4.14
Revised Smeaton claim file (6)
4.15
Entourage-Abbastar Uranium Option Agreement Dated February 13, 2007 (7)
4.16
Mineral Option Agreement with Infogeo Locaçeos Ltda. (8)
11.1
Entourage Mining Company Ethics Policy (7)
*Included as an exhibit hereto.
(1)
Incorporated by reference from our Registration Statement on Form 20-F filed with the SEC on June 6, 2003.
(2)
Incorporated by reference from our 20-F filed with the SEC on July 1, 2005.
(3)
Incorporated by reference from the Company's 6-K filed with the SEC on November 23, 2005.
(4)
Incorporated by reference from the Company's 6-K filed with the SEC on November 25, 2005.
(5)
Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on July 3, 2006.
(6)
Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on June 29, 2007.
(7)
Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on June 30, 2008.
(8)
Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on May 3, 2010.
 
 
 
 
 
 
 
 
 
 
 
 
 

 
28

ENTOURAGE MINING LTD.
(An Exploration Stage Company)

FINANCIAL STATEMENTS


(Stated in Canadian Dollars)








29


INDEPENDENT AUDITOR'S REPORT

To the Stockholders and Board of Directors of Entourage Mining Ltd.

We have audited the balance sheets of Entourage Mining Ltd. (an exploration stage company) as at December 31, 2013 and 2012 and the related statements of operations, stockholders' deficit and cash flows for the years ended December 31, 2013 and 2012 and the period from June 16, 1995 (inception) through December 31, 2013.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material respects, the financial position of Entourage Mining Ltd. at December 31, 2013 and 2012 and the results of its operations and its cash flows for the years ended December 31, 2013 and 2012 and the period from June 16, 1995 (inception) through December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated.  The Company requires additional funds to meet its obligations and the costs of its operations.  These factors raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans in this regard are described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED ACCOUNTANTS
 

Vancouver, Canada
 
 
 
 

30

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
BALANCE SHEETS
(Stated in Canadian Dollars)

 
   
 
     
2012
 
 
 
$
     
$
   
ASSETS
               
 
               
Current
               
Cash
   
12,948
     
1,764
 
Prepaid expenses
   
4,935
     
2,085
 
Other  receivable
   
361
     
1,295
 
 
   
18,244
     
5,144
 
Equipment, net of depreciation (Note 3)
   
-
     
671
 
 
               
 
   
18,244
     
5,815
 
 
               
LIABILITIES
               
 
               
Current
               
Accounts payable
   
34,752
     
178,158
 
Accrued liabilities
   
22,441
     
18,500
 
Loans payable (Note 5)
   
-
     
43,600
 
Due to related parties (Note 7)
   
130,951
     
6,126
 
 
   
188,144
     
246,384
 
 
               
STOCKHOLDERS' DEFICIT
               
 
               
Capital Stock (Note 6)
               
Authorized:
               
Unlimited common voting shares without par value
               
Issued:
               
13,742,223 common shares (2012 – 13,742,223)
   
13,490,513
     
13,490,513
 
Additional paid in capital
   
3,351,366
     
3,308,866
 
Deficit accumulated during the exploration stage
   
(17,011,779
)
   
(17,039,948
)
 
   
(169,900
)
   
(240,569
)
 
               
 
   
18,244
     
5,815
 

 
 
 
CONTINGENCIES AND COMMITMENTS (Notes 1 and 4)
 
 
SUBSEQUENT EVENTS (Note 11)
 
Approved by the Board of Directors:
 
 
 
"Danielle Beauchamp"
 
"Fouad Mallouk"






The accompanying notes are an integral part of these financial statements.
31

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Stated in Canadian Dollars)

 
 
YEARS ENDED DECEMBER 31,
   
June 16, 1995 (inception) to
 
 
 
2013
   
2012
     
 
 
$
     
$
     
$
   
Expenses
                       
  Depreciation
   
79
     
212
     
7,252
 
  Consulting (Note 7)
   
11,750
     
-
     
284,700
 
  Consulting – stock based compensation
   
-
     
-
     
2,926,980
 
  Financing fee – stock based compensation
   
-
     
-
     
90,096
 
  Interest and bank charges
   
4,207
     
3,514
     
32,564
 
  Management fees (Note 7)
   
45,000
     
60,000
     
1,260,654
 
  Mineral property costs (recovery) (Note 4)
   
-
     
(70,169
)
   
11,324,777
 
  Office and sundry
   
40,302
     
33,474
     
666,156
 
  Professional fees
   
37,606
     
41,872
     
696,789
 
  Travel and promotion
   
712
     
3,251
     
310,763
 
 
                       
Loss Before Other Items
   
(139,656
)
   
(72,154
)
   
(17,600,731
)
 
                       
  Fair value adjustment of derivative liabilities
   
-
     
1,115
     
333,965
 
  Gain on debt settlement
   
168,417
     
20,000
     
188,417
 
  Loss on disposal of assets (Note 3)
   
(592
)
   
-
     
(592
)
 
                       
Net Income (Loss) Before Income Taxes
   
28,169
     
(51,039
)
   
(17,078,941
)
 
                       
  Deferred income tax recovery
   
-
     
-
     
67,162
 
 
                       
Net Income (Loss) and Comprehensive Income (Loss)
   
28,169
     
(51,039
)
   
(17,011,779
)
 
                       
Net Income (Loss) Per Share
                       
Basic and Diluted
 
$
0.00
   
$
(0.00
)
       
 
                       
Weighted Average Common Shares Outstanding
                       
Basic
   
13,742,223
     
12,791,921
         














The accompanying notes are an integral part of these financial statements.
32

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)

 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
Share issued for cash
   
1
     
1
     
-
     
-
     
-
     
1
 
Loss for the period
   
-
     
-
     
-
     
-
     
(38,624
)
   
(38,624
)
   
1
     
1
     
-
     
-
     
(38,624
)
   
(38,623
)
Shares issued for cash
   
913,000
     
276,500
     
-
     
-
     
-
     
276,500
 
Loss for the year
   
-
     
-
     
-
     
-
     
(210,592
)
   
(210,592
)
Balance, December 31,1996
   
913,001
     
276,501
     
-
     
-
     
(249,216
)
   
27,285
 
Loss for the year
   
-
     
-
     
-
     
-
     
(74,529
)
   
(74,529
)
   
913,001
     
276,501
     
-
     
-
     
(323,745
)
   
(47,244
)
Loss for the year
   
-
     
-
     
-
     
-
     
(60,148
)
   
(60,148
)
   
913,001
     
276,501
     
-
     
-
     
(383,893
)
   
(107,392
)
Loss for the year
   
-
     
-
     
-
     
-
     
(70,046
)
   
(70,046
)
   
913,001
     
276,501
     
-
     
-
     
(453,939
)
   
(177,438
)
Loss for the year
   
-
     
-
     
-
     
-
     
(66,855
)
   
(66,855
)
   
913,001
     
276,501
     
-
     
-
     
(520,794
)
   
(244,293
)
Loss for the year
   
-
     
-
     
-
     
-
     
(58,749
)
   
(58,749
)
   
913,001
     
276,501
     
-
     
-
     
(579,543
)
   
(303,042
)
Forgiveness of amounts due to related party
   
-
     
-
     
-
     
200,671
     
-
     
200,671
 
Loss for the year
   
-
     
-
     
-
     
-
     
(59,428
)
   
(59,428
)
   
913,001
     
276,501
     
-
     
200,671
     
(638,971
)
   
(161,799
)
April 25, 2003 – shares issued for mineral property
   
600,000
     
60,000
     
-
     
-
     
-
     
60,000
 
Loss for the year
   
-
     
-
     
-
     
-
     
(319,515
)
   
(319,515
)
   
1,513,001
     
336,501
     
-
     
200,671
     
(958,486
)
   
(421,314
)
February 5, 2004 – shares issued for cash at $2.20 per share
   
99,750
     
219,450
     
-
     
-
     
-
     
219,450
 
February 5, 2004 – deferred tax recovery on 10,800 flow-through shares
   
-
     
(2,376
)
   
-
     
-
     
-
     
(2,376
)
June 8, 2004 – shares issued for cash at $4.04 per share
   
69,800
     
282,331
     
-
     
-
     
-
     
282,331
 
August 24, 2004 – stock options exercised at $3.30 per share
   
10,000
     
32,983
     
-
     
-
     
-
     
32,983
 


The accompanying notes are an integral part of these financial statements.
33

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)

 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
December 31, 2004 – shares issued for cash at $1.80 per share inclusive of 13,250 shares as finders' fees
   
294,800
     
510,876
     
-
     
-
     
-
     
510,876
 
August 24, 2004 – shares issued for mineral property database at $3.90 per share
   
15,000
     
58,788
     
-
     
-
     
-
     
58,788
 
September 24, 2004 – shares returned on cancellation of escrow
   
(375,000
)
   
(7,500
)
   
-
     
7,500
     
-
     
-
 
Stock based compensation
   
-
     
-
     
-
     
421,000
     
-
     
421,000
 
Loss for the year
   
-
     
-
     
-
     
-
     
(956,446
)
   
(956,466
)
   
1,627,351
     
1,431,053
     
-
     
629,171
     
(1,914,932
)
   
145,292
 
January 6, 2005, refund for
     overpayment in 2004 private
     placement
   
-
     
(3,000
)
   
-
     
-
     
-
     
(3,000
)
March 21, 2005, shares issued for
     property acquisition a US $3.00 per share
   
12,500
     
45,604
     
-
     
-
     
-
     
45,604
 
September  22, 2005,  flow-through shares  Issued at $2.00 per share
   
29,500
     
59,000
     
-
     
-
     
-
     
59,000
 
September, 2005, deferred tax
     recovery on 29,500 flow-through
     shares
   
-
     
(20,119
)
           
-
     
-
     
(20,119
)
September 22, 2005, units issued at
     US $1.50 per unit
   
55,000
     
97,152
     
-
     
-
     
-
     
97,152
 
October 7, 2005, units issued at
     US $1.10 per unit
   
127,500
     
165,154
     
-
     
-
     
-
     
165,154
 
October-December 2005,  shares issued on exercise of stock options at US $1.50 per share
   
25,000
     
44,147
     
-
     
-
     
-
     
44,147
 
October 2005, shares issued on    exercise of warrants at $3.00 per share
   
5,000
     
15,000
     
-
     
-
     
-
     
15,000
 

 
 
 
 
 

 
The accompanying notes are an integral part of these financial statements.
34

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)

 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
November 17, 2005, units issued at
     US $1.50 per share inclusive of
     20,000 shares finders' fees
   
553,334
     
944,800
     
-
     
-
     
-
     
944,800
 
Stock based compensation
   
-
     
-
     
-
     
163,400
     
-
     
163,400
 
Forgiveness of amounts due to
     related party
   
-
     
-
     
-
     
102,327
     
-
     
102,327
 
Obligation to issue shares
   
-
     
-
     
8,638,667
             
-
     
8,638,667
 
Loss for the year
           
-
     
-
     
-
     
(10,068,841
)
   
(10,068,841
)
   
2,435,185
     
2,778,791
     
8,638,667
     
894,898
     
(11,983,773
)
   
328,583
 
January 3, 2006, shares issued for
     property acquisition at a market
     price of US $1.50 per share
   
4,888,889
     
8,638,667
     
(8,638,667
)
   
-
     
-
     
-
 
January - August 2006, shares issued on exercise of stock options at
     US $1.50 per share
   
41,000
     
69,317
     
-
     
-
     
-
     
69,317
 
February 2006, shares issued on
     exercise of warrants at $3.00
     per share
   
74,450
     
223,350
     
-
     
-
     
-
     
223,350
 
March 7, 2006, shares issued for
     property acquisition at
     US $3.60 per share
   
12,500
     
51,772
     
-
     
-
     
-
     
51,772
 
May 24, 2006, shares issued for
     flow-through private placement
     at US $2.50 per share
   
34,000
     
93,585
     
-
     
-
     
-
     
93,585
 
August - November 2006, shares issued on exercise of warrants at US $2.50 per share
   
95,500
     
269,149
     
-
     
-
     
-
     
269,149
 
December 2006, shares issued for flow- through private placement at  $2.30 per share
   
20,000
     
46,000
     
-
     
-
     
-
     
46,000
 
Stock based compensation
   
-
     
-
     
-
     
2,027,384
     
-
     
2,027,384
 
Deferred tax  recovery on 54,000
     flow-through shares
   
-
     
(44,667
)
           
-
     
-
     
(44,667
)
Loss for the year
   
-
     
-
     
-
     
-
     
(2,973,161
)
   
(2,973,161
)
   
7,601,524
     
12,125,964
     
-
     
2,922,282
     
(14,956,934
)
   
91,312
 

The accompanying notes are an integral part of these financial statements.
35


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)

 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
     carried forward
   
7,601,524
     
12,125,964
     
-
     
2,922,282
     
(14,956,934
)
   
91,312
 
March 12, 2007, shares issued for  property option payment at   market price of  US$3.00 per share
   
50,000
     
175,530
     
-
     
-
     
-
     
175,530
 
March 27, 2007, shares issued for
     options exercise at US$1.50 per    share
   
5,000
     
8,760
     
-
     
-
     
-
     
8,760
 
March 31, 2007, shares issued for
private placement at US$1.50 per share net of finder's fee of $4,537
   
26,669
     
41,647
     
-
     
-
     
-
     
41,647
 
Stock based compensation
   
-
     
-
     
-
     
113,074
     
-
     
113,074
 
April 3, 2007, shares issued for
    options exercise at US$1.50 per share
   
5,000
     
8,507
     
-
     
-
     
-
     
8,507
 
June 18, 2007, shares issued for debt
       at US$2.00 per share
   
10,000
     
23,306
     
-
     
-
     
-
     
23,306
 
Loss for the year
   
-
     
-
     
-
     
-
     
(598,783
)
   
(598,783
)
   
7,698,193
     
12,383,714
     
-
     
3,035,356
     
(15,555,717
)
   
(136,647
)
Loss for the year
   
-
     
-
     
-
     
-
     
(414,840
)
   
(414,840
)
   
7,698,193
     
12,383,714
     
-
     
3,035,356
     
(15,970,557
)
   
(551,487
)
Subscriptions received
   
-
     
-
     
26,375
     
-
     
-
     
26,375
 
June 22, 2009, shares issued for private placement at US$0.15 per share
   
4,037,500
     
683,057
     
-
     
-
     
-
     
683,057
 
Transfer derivative liability for warrants granted in the year
   
-
     
(339,311
)
   
-
     
-
     
-
     
(339,311
)
Warrants exercise at US$0.20 per share  during the year
   
353,000
     
74,692
     
-
     
-
     
-
     
74,692
 
Transfer derivative liability for warrants exercised in the year
   
-
     
59,689
     
-
     
-
     
-
     
59,689
 
July 24, 2009,  shares returned to treasury in exchange for US$85,000 cash payment
   
(4,500,000
)
   
(95,753
)
   
-
     
-
     
-
     
(95,753
)


The accompanying notes are an integral part of these financial statements.
36


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)


 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
December 16, 2009, shares issued
       for amendment to property option
       agreement  at a market price of
       US$0.395 per share
   
150,000
     
62,260
     
62,260
     
-
     
-
     
124,520
 
Stock based compensation
           
-
     
-
     
228,510
     
-
     
228,510
 
Loss for the year
   
-
     
-
     
-
     
-
     
(1,092,043
)
   
(1,092,043
)
   
7,738,693
     
12,828,348
     
88,635
     
3,263,866
     
(17,062,600
)
   
(881,751
)
February 3, 2010, shares issued
       for amendment to property option
       agreement  at a  market  price of
       US$0.395 per share
   
150,000
     
62,260
     
(62,260
)
   
-
     
-
     
-
 
February 18, 2010, shares issued for
     private placement at US$0.15 per  share, net of finance fee
   
1,613,162
     
247,214
     
(26,375
)
   
-
     
-
     
220,839
 
Transfer derivative liability for warrants granted in the year
   
-
     
(125,435
)
   
-
     
-
     
-
     
(125,435
)
Warrants exercise at US$0.20 per share  during the year
   
766,248
     
159,620
     
-
     
-
     
-
     
159,620
 
Transfer derivative liability for warrants exercised in the year
   
-
     
134,800
     
-
     
-
     
-
     
134,800
 
Income for the year
   
-
     
-
     
-
     
-
     
263,194
     
263,194
 
   
10,268,103
     
13,306,807
     
-
     
3,263,866
     
(16,799,406
)
   
(228,733
)
February 22, 2011, shares issued for  property option payment at           US$0.15 per share market price
   
100,000
     
15,000
     
-
     
-
     
-
     
15,000
 
Loss for the year
   
-
     
-
     
-
     
-
     
(189,503
)
   
(189,503
)
   
10,368,103
     
13,321,807
     
-
     
3,263,866
     
(16,988,909
)
   
(403,236
)








The accompanying notes are an integral part of these financial statements.
37


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Stated in Canadian Dollars)


 
 
   
   
   
   
DEFICIT
   
 
 
 
   
   
   
   
ACCUMULATED
   
 
 
 
NUMBER
   
   
OBLIGATION
   
ADDITIONAL
   
DURING
   
 
 
 
OF
   
   
TO ISSUE
   
PAID-IN
   
EXPLORATION
   
 
 
 
SHARES
   
AMOUNT
   
SHARES
   
CAPITAL
   
STAGE
   
TOTAL
 
 
 
   
$
     
$
     
$
     
$
     
$
   
 
 
                                         
Balance, December 31, 2011, carried forward
   
10,368,103
     
13,321,807
     
-
     
3,263,866
     
(16,988,909
)
   
(403,236
)
April 13, 2012, units issued for  private placement at $0.05 per share
   
3,074,120
     
153,706
     
-
     
-
     
-
     
153,706
 
April 20, 2012, shares issued for property at $0.05 per share
   
300,000
     
15,000
     
-
     
-
     
-
     
15,000
 
Recognition of  9 months management fees $5,000/month
   
-
     
-
     
-
     
45,000
     
-
     
45,000
 
Loss for the year
   
-
     
-
     
-
     
-
     
(51,039
)
   
(51,039
)
   
13,742,223
     
13,490,513
     
-
     
3,308,866
     
(17,039,948
)
   
(240,569
)
Recognition of  6 months management fees $5,000/month
   
-
     
-
     
-
     
30,000
     
-
     
30,000
 
Recognition of  5 months management fees $2,500/month
   
-
     
-
     
-
     
12,500
     
-
     
12,500
 
Net income for the year
   
-
     
-
     
-
     
-
     
28,169
     
28,169
 
   
13,742,223
     
13,490,513
     
-
     
3,351,366
     
(17,011,779
)
   
(169,900
)















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

38


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS
(Stated in Canadian Dollars)

 
 
YEARS ENDED DECEMBER 31, 2013
   
June 16, 1995 (inception)
to
 
 
 
2013
   
2012
     
 
 
$
     
$
     
$
   
CASH FLOWS FROM OPERATING ACTIVITIES
                       
Net Income (Loss)
   
28,169
     
(51,039
)
   
(17,011,779
)
Adjustments to reconcile net loss to net cash from
     operating activities:
                       
          Depreciation
   
79
     
212
     
7,252
 
          Stock based compensation
   
-
     
-
     
3,017,076
 
          Shares issued for mineral property acquisition
   
-
     
15,000
     
9,184,881
 
          Shares issued for debt
   
-
     
-
     
23,306
 
          Non-cash management fees
   
42,500
     
45,000
     
87,500
 
          Deferred tax recovery
   
-
     
-
     
(67,162
)
          Fair value adjustment of derivative liabilities
   
-
     
(1,115
)
   
(333,965
)
          Gain on debt settlement
   
(168,417
)
   
(20,000
)
   
(186,917
)
          Loss on disposal of assets
   
592
     
-
     
592
 
Changes in non-cash operating working capital items:
                       
          Prepaid expenses
   
(2,850
)
   
(1,001
)
   
(4,935
)
          Other receivable
   
934
     
(630
)
   
(361
)
          Accounts payable and accrued liabilities
   
(14,649
)
   
21,463
     
203,188
 
          Due to related parties
   
177
     
-
     
177
 
NET CASH FLOWS USED IN OPERATING ACTIVITIES
   
(113,465
)
   
7,890
     
(5,083,826
)
 
                       
CASH FLOWS USED IN INVESTING ACTIVITIES
                       
       Legal settlement
   
-
     
-
     
(95,753
)
Equipment
   
-
     
-
     
(7,845
)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
   
-
     
-
     
(103,598
)
 
                       
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Loan payable
   
-
     
(38,465
)
   
43,600
 
       Due to related parties
   
124,649
     
(122,645
)
   
433,773
 
Net proceeds on sale of common stock
   
-
     
153,706
     
4,722,999
 
NET CASH FLOWS FROM FINANCING ACTIVITIES
   
124,649
     
(7,404
)
   
5,200,372
 
 
                       
INCREASE IN CASH
   
11,184
     
486
     
12,948
 
CASH, BEGINNING OF YEAR
   
1,764
     
1,278
     
-
 
 
                       
CASH, END OF YEAR
   
12,948
     
1,764
     
12,948
 
SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING
AND FINANCING ACTIVITIES (Note 9)

The accompanying notes are an integral part of these financial statements.
39

ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
(Stated in Canadian Dollars)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization
The Company was incorporated in the Province of British Columbia, Canada on June 16, 1995The Company is in the business of mineral exploration. The address of the Company's corporate office and principal place of business is Suite 614 – 475 Howe Street, Vancouver, British Columbia, V6C 2B3.  The Company's shares are publicly traded on the Over-The-Counter Bulletin Board in the United States. The Company is a reporting issuer in both the United States and in British Columbia.

Exploration Stage Activities
The Company has not produced any revenues from its principal business or commenced significant commercial operations and is considered an exploration stage company as defined by SEC Guide 7 with reference to Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) topic 915.  In the exploration stage, management devotes most of its activities to conducting exploratory programs and developing business plans.    

Going Concern Uncertainty
The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business.  The Company has accumulated a net loss of $17,011,779 since its inception. There is a working capital deficiency of $169,900 and the Company has no sources of operating revenue.  The continuance of the Company is dependent upon its ability to obtain additional financing as needed to pursue new business opportunities and ultimately upon generating profitable operations from its mineral property exploration and development activities.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management has plans to seek additional capital through private placements of its common stock and loans from related parties to fund expenditures for the next year.  Although there are no assurances that management's plans will be realized, management believes that the Company will be able to continue operations in the future.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company's functional and reporting currency is the Canadian dollar.  The significant accounting policies are summarized below:

a) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.  As at December 31, 2013 and 2012 the Company has only cash on deposit.

b) Mineral Claim Payments and Exploration Expenditures

The Company is engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Acquisition costs are initially capitalized when incurred.  The Company assesses the carrying amount of mineral property assets for impairment under the FASB ASC topic 360 at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs subsequently incurred to develop such properties are capitalized. Upon commercial production the carrying value will be amortized using the units-of-production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any non-recoverable amount will be charged to operations.

40


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
(Stated in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

c) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions of future events that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period.   Significant areas requiring the use of management estimates relate to allocations of expenditures to resource property interests, deferred tax disclosures, asset impairment tests, and determination of fair value transactions involving common stock, warrants, options, derivative liabilities, deferred tax balances and valuation allowances. Financial results as determined by actual events could differ from those estimates.

d) Equipment

Equipment is stated at cost less accumulated depreciation.  Depreciation is calculated using the declining balance method as follows:
 
Office furniture
20% on declining balance basis
Computer equipment
30% on declining balance basis
 
f) Foreign Currency Translation

The functional currency of the Company is the Canadian dollar and these financial statements are presented in Canadian dollars unless otherwise noted.  Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates in effect at the balance sheet date.  Non-monetary items are translated at historical exchange rates, except for items carried at market value, which are translated at the rate of exchange in effect at the balance sheet date.  Revenues and expenses are translated at average rates of exchange during the year.  Exchange gains and losses arising on foreign currency translation are included in the determination of operating results for the year.

g) Risk Management

Foreign Exchange Risk
The Company is subject to foreign exchange risk for purchases denominated in foreign currencies.  The Company operates primarily in Canada and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates and the United States Dollar.  Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar.  

Credit risk
The risk in cash accounts is managed through the use of a major financial institution which has high credit quality as determined by the rating agencies.  As at December 31, 2013, the Company does not have significant concentrations of credit exposure.
41


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
(Stated in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

g) Financial Instruments and Risk Management (continued)

Interest rate risk
The Company has no significant exposure to interest rate fluctuation risk.

h)    Income Taxes

Income taxes are accounted for under the asset and liability method as stipulated by ASC 740.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis together with information on operating loss and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be reversed or settled.  Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date.  Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance.  A valuation allowance is applied when, in management's view, it is more likely than not that such deferred tax will not be utilized.

In the event that an uncertain tax position exists in which the Company could incur income taxes, penalties or interest, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities.  Reserves for uncertain tax positions would then be recorded if the Company determined it is probable that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable.  As of December 31, 2013, the Company does not believe it has any uncertain tax positions that would result in the Company incurring a liability to tax authorities.

i)    Stock Based Compensation

The Company has a stock-based compensation plan which is described more fully in Note 6. The Company measures the compensation cost of stock options and other stock-based awards to officers, directors and consultants at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest.

Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments, are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, the Company has determined that the dates used to value the transaction are either:
(1)  The date at which a commitment for performance by the counter party to earn the equity instruments is         established; or
(2)  The date at which the counter party's performance is complete.

j)    Comprehensive Income (Loss)

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive income or loss and its components in the financial statements. As at December 31, 2013 and 2012, the Company has no items that represent a comprehensive loss and has not included a schedule of comprehensive loss in these financial statements.




42



2. SIGNIFICANT ACCOUNTING POLICIES (continued)

k)    Basic and Diluted Income (Loss) per Share

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the reporting period.  Diluted net income per common share includes the dilution that could occur upon the exercise of options and warrants to acquire common stock, computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares that the Company could have repurchased with the proceeds from the exercise of options and warrants (which are assumed to have been made at the average market price of the common shares during the reporting period).

Common stock equivalents from stock options and warrants were excluded from the calculation of net loss per share for December 31, 2012 as their effect is anti-dilutive.

l)    Recently Adopted Accounting Policies

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.


3. EQUIPMENT

 
       
 
 
Cost
   
Accumulated depreciation
   
Net Book Value
   
Cost
   
Accumulated
depreciation
   
Net Book Value
 
 
 
$
     
$
     
$
     
$
     
$
     
$
   
Office furniture
   
-
     
-
     
-
     
2,812
     
2,388
     
424
 
Computer equipment
   
-
     
-
     
-
     
5,033
     
4,786
     
247
 
 
   
-
     
-
     
-
     
7,845
     
7,174
     
671
 

During the year ended December 31, 2013, the Company disposed of its office furniture and computer equipment for a loss of $592.

4. MINERAL EXPLORATION PROPERTIES

(a) The Pires Gold Project, Brazil

On June 17, 2009, and as amended on November 13, 2009, the Company signed a definitive Mineral Property Option agreement with Infogeo Servicos E Locacoes ("Infogeo"), a private arms length Brazilian company, whereby the Company received an option to acquire up to a 100% interest in the Pires Gold Project ("Pires" or the "Pires Property"), pursuant to the following terms:

To earn a 40% interest in the property (First Milestone), in year one:

(i) pay to the optionor (or its nominee) US $50,000 as follows:
(A) US $25,000 within seven days of the execution of this agreement (paid), and
(B) US $25,000 within 45 days of the execution of this agreement (paid); and
(ii) expend not less than US $300,000 (the "First Target") in exploration  expenditures onthe property on or before May 31, 2010 (incurred).


43


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
(Stated in Canadian Dollars)

4.    MINERAL PROPERTY INTERESTS (continued)

(a) The Pires Gold Project, Brazil (continued)

To earn an additional 20% (60 % total) interest in the property (Second Milestone), in year two:

(i) paying US $100,000 to the optionor (or its nominee) on or before January 16, 2010 (paid), and
(ii) expend not less than US $300,000 (less the amount by whichany exploration expenditures pursuant to item (ii) of the First Milestoneexceeded the First Target) (the "Second Target") in exploration expenditures on the property before January 16, 2011.

To earn an additional 15% (75% Total) interest in the property option (Third Milestone), in year three:

(i) issue to the Optionor 100,000 common shares of the Company on or before January 16, 2011(issued), and
(ii) expend up to US $1,000,000 to complete and submit a final report by January 16, 2012.

Option to Purchase 25% (100% total) (Upon completion of the Third Milestone)

Purchase up to 20% of the interest in the property, by paying the Optionor US $1,000,000 for each 5% incremental interest in the Property, and US $2,000,000 for the remaining 5% interest.

Pursuant to an amendment on November 13, 2009, the Company agreed to issue a total of 300,000 common shares (150,000 issued prior to December 31, 2009 and 150,000 issued prior to December 31, 2010) common shares of the Company in return for extension of the Year 1 exploration expenditures requirement.  The Company recorded $62,260 for 150,000 shares issued during the year ended December 31, 2009 in capital stock and $62,260 for the remaining 150,000 shares as an obligation to issue shares as at December 31, 2009, and the shares were issued during the year ended December 31, 2010.

The Company incurred the expenditures required and as a result, as of December 31, 2010, had earned a 40% interest in the Pires Property.

On February 18, 2010, the Company signed a Letter of Intent ("LOI") with Ansell Capital Corp., ("Ansell") a TSX Venture listed company, pursuant to which Ansell proposed to acquire all of the outstanding and issued shares of the Company through a plan of arrangement (the "Plan of Arrangement") under the British Columbia Corporations Act.  The terms of the Arrangement will provide for a one to one common share, option and warrant swap between Ansell and the Company's shareholders.

Pursuant to the terms of the LOI, Ansell agreed to: (a) incur no less than US $200,000 (incurred) to be jointly administered by Ansell and the Company, which funds to be spent on qualifying expenditures to satisfy the Company's work commitments in respect of the Pires Property work commitment; and (b) advance the Company $75,000 (received) to pay certain agreed payables prior to the execution of the definitive agreement for a 25% interest in Entourage's First Milestone of the Pires Gold project.   The Company recorded the $75,000 payment received in 2010 as a reduction of mineral property costs.  The Company has the right to re-purchase the 25% interest by paying back all advances by Ansell for a period of 12 months after termination of the LOI.   On July 14, 2010 the Company was notified by Ansell that it would not be proceeding with the Plan of Arrangement.

On March 14, 2012, the Company agreed to sell the Company's interest in the Pires Gold Project to a third party for $100,480 (US $100,000) payable in two tranches, the first on signing (received) and the second no later than June 30, 2012 (received).  On March 30, 2012, the Company agreed to purchase the 10% interest earned by Ansell Capital in the Pires Gold Project for $10,000 (US $10,000) cash (payable) and the issuance of 300,000 shares from treasury (issued) at a fair value of $0.05 per common share.  As a result, the Company recorded a net recovery of $70,169, net of other costs of $5,311 during the year ended December 31, 2012.
44


ENTOURAGE MINING LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
(Stated in Canadian Dollars)

4.    MINERAL PROPERTY INTERESTS (continued)

 (b)                          Doran Property, Quebec

       i) By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties in south-central Quebec (the "Doran Property") in exchange for cash payments of $220,000, the issuance of 75,000 common shares and the expenditure of $1,000,000 on the Doran Property over three years, as follows:

a.
$35,000 and 12,500 common shares within ten business days of the date of approval of the agreement (paid and issued);
b.
$35,000 and 12,500 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);
c.
$75,000 (paid) and 25,000 common shares on or before March 15, 2007 (issued); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. ("Abbastar") – Note 4b iii); and
d.
$75,000 (paid by Abbastar – Note 4b iii) and 25,000 common shares on or before March 15, 2008 (issued); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar – Note 4b iii).

All the above terms have been met and the Company earned 100% interest in the property subject to Abbastar's interest (Note 4b iii).  The Company has allowed certain claims to lapse, and at December 31, 2013 holds a total of 3 claims totaling approximately 165 hectares.

ii) The property interest is subject to a 2.5% Net Smelter Return (NSR).  The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.

iii) On February 13, 2007 the Company entered into an option agreement (the "Option") with Abbastar, a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a one time cash payment of $100,000 (received) Abbastat incurring exploration expenditures of $5,000,000 on the Doran Property over 4 years (The Company retains the right to purchase the NSR on the Doran Property).  The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:

a.
20% interest by spending $500,000 in exploration costs on or before February 13, 2008 (incurred);
b.
15% additional interest by expending an additional $1,000,000 on or before February 13, 2009 (incurred);
c.
15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
d.
20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.

As of December 31, 2013, Abbastar had earned a 35% interest in the Doran property but has allowed the balance of their option to expire.



45

 
5. LOANS PAYABLE

During the year ended December 31, 2013, the Company settled arm's length third party loans of $47,448 for $17,000 in cash.  The loans settled included $3,685 in accrued interest.  The loan balance at December 31, 2012 was $43,600.

6. CAPITAL STOCK

a) Issued Shares

There were no shares issuances during the year ended December 31, 2013.

Pursuant to a non-brokered private placement, the Company issued at total of 3,074,120 Units on April 13, 2012 for total proceeds of $153,706 at $0.05 per unit.  Each unit consisted of one common share of the Company and one half share purchase warrant. Each whole warrant is exercisable at a price of $0.15 per share for a period of two years.

On March 30, 2012, the Company agreed to purchase the 10% interest earned by Ansell Capital in the Pires Gold Project for $10,000 cash and the issuance of 300,000 shares from treasury.  The shares have been issued at a fair value of $0.05 per common share (Note 4).

b) Stock Options

In February 2004, the Company implemented a Stock Option Plan ("SOP") for its officers, directors and consultants to allow for up to 160,000 share purchase options to be granted at US $2.50 per share, for a period not to exceed five years.  In November 2004, the SOP was amended to provide for the issuance of up to 220,000 incentive stock options to directors, officers, employees and non-investor relations consultants. During January 2006, the Company increased the stock option plan from 220,000 shares to 720,000 shares.

There were no options issued and outstanding during the years ended December 31, 2013 and 2012.

c)
Warrants

On April 13, 2012, pursuant to a private placement, 1,537,060 warrants at an exercise price of $0.15 with a term of two years were issued.

Activity in warrants is summarized as follows:

 
 
Warrants Outstanding
   
Weighted Average Exercise Price
   
Weighted
Average
Life
 
   
1,613,162
   
US $0.25
     
0.07
 
Issued
   
1,537,060
   
$
0.15
     
2.00
 
Exercised
   
-
     
-
     
-
 
Expired
   
(1,613,162)
 
 
US $0.25
     
-
 
Balance, December 31, 2012 and 2013
   
1,537,060
   
$
0.15
     
0.28
 



46

7.    RELATED PARTY TRANSACTIONS

As at  December 31, 2013,  $1,179 (2012 - $6,126) was owing to a former director and a company controlled by a former director of the Company.   The loan is unsecured, non-interest bearing and due on demand.

As at December 31, 2013, $129,772 (2012 - $nil) was owing to a company controlled by a director of the Company.   The loan is unsecured, bears interest at 0.5% per annum compounded annually and is due on demand within 15 days written notice.  As at December 31, 2013, accrued interest of $177 was included in loans payable.

During the year ended December 31, 2013, the Company incurred $45,000 (2012 - $60,000) in management fees to its directors and officers.  Effective April 1, 2012, the directors of the Company agreed to waive their management fees until the Company has the financial resources to extinguish their debt.  In accordance with U.S. GAAP, the Company recorded $42,500 (2012 - $45,000) in management fees as an increase to additional paid-in capital and $2,500 was paid in cash.  The Company also paid $250 to a director which has been included in consulting fees.

During the year ended December 31, 2013, the Company advanced $nil (2012 - $1,001) to a director of the Company for expenses to be incurred.  As at December 31, 2012, this amount was included in prepaid expenses.

The above transactions have been recorded at their exchange amount being the amount of consideration established and agreed to by the related parties.

8.    INCOME TAXES

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company's loss before income taxes. The components of these differences are as follows:
 
 
2013
   
2012
 
  
 
$
     
$
   
Income (loss) before income tax
   
28,169
     
(51,039
)
Combined statutory rate
   
25
%
   
25
%
Expected income tax expense (recovery)
   
7,000
     
(12,500
)
 
               
Increase (decrease) resulting from:
               
Temporary difference
   
2,000
         
Permanent differences and other
   
9,000
     
11,000
 
Change in valuation allowance
   
(18,000
)
   
1,500
 
Future income tax provision (recovery)
   
-
     
-
 

The Company's tax-effected deferred income tax assets are estimated as follows:

 
 
2013
   
2012
 
 
 
$
     
$
   
Mineral properties tax basis in excess of carrying value
   
2,631,000
     
2,631,000
 
Non-capital losses available
   
498,000
     
513,000
 
Other
   
-
     
2,000
 
Potential deferred income tax assets
   
3,129,000
     
3,147,000
 
Less: valuation allowance
   
(3,129,000
)
   
(3,147,000
)
Net Deferred Income Tax Asset
   
-
     
-
 



47

8.    INCOME TAXES (continued)

As the criteria for recognizing deferred income tax assets have not been met due to the uncertainty of realization, a valuation allowance of 100% has been recorded for the current and prior year.

The Company has approximately $1,990,000 (2012 - $2,037,000) of non-capital losses which can be applied to reduce future taxable income, expiring as follows:

Year of Expiry
 
Amount
 
 
 
$
   
2014
   
150,000
 
2015
   
212,000
 
2026
   
336,000
 
2027
   
429,000
 
2028
   
422,000
 
2029
   
-
 
2030
   
217,000
 
2031
   
146,000
 
2032
   
78,000
 
 
   
1,990,000
 

The Company has certain resource related deductions and other losses of approximately $10,524,000 (2012 - $10,524,000) which may be available to be offset future taxable income in Canada.  The realization of these tax balances in future years if available will be recorded as an adjustment to the valuation allowance and corporate tax provision in the period realized.

9. SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES

 
       
Cash paid during the year for:
 
$
     
$
   
Interest
   
12,883
     
500
 

During the year ended December 31, 2013, there were no non-cash transactions,

During the year ended December 31, 2012, the Company issued 300,000 shares with a fair value of $15,000 pursuant to the Mineral Property acquisition agreement on the Pires Gold Project for the 10% interest earned by Ansell Capital (Note 4).
48



10.                                                                                                                    FINANCIAL INSTRUMENTS

The FASB ASC topic 820 on fair value measurement and disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

The carrying values and fair values of the Company's financial instruments are as follows:
 
 
 
         
 
 
LEVEL
   
CARRYING VALUE
   
FAIR
VALUE
   
CARRYING VALUE
   
FAIR VALUE
 
Financial assets
 
   
   
   
   
 
Cash
   
1
   
$
12,948
   
$
12,948
   
$
1,764
   
$
1,764
 
Other receivable
   
3
     
361
     
361
     
1,295
     
1,295
 
 
         
$
13,309
   
$
13,309
   
$
3,056
   
$
3,056
 
Financial liabilities
                                       
Accounts payable
   
3
   
$
34,752
   
$
34,752
   
$
178,158
   
$
178,158
 
Loans payable
   
3
     
-
             
43,600
     
43,600
 
Due to related parties
   
3
     
130,951
     
130,951
     
6,126
     
6,126
 
 
         
$
165,703--
   
$
165,703--
   
$
227,884--
   
$
227,884--
 


11.                                                                                                                    SUBSEQUENT EVENTS

Subsequent to year end all of the outstanding warrants expired unexercised.

Subsequent events were reviewed to the date the financial statements were issued.
 
49

ENTOURAGE MINING LTD.
(An Exploration Stage Company)

MANAGEMENT DISCUSSION AND ANALYSIS

For The Year Ended December 31, 2013

(Stated in Canadian Dollars)































This Management Discussion and Analysis of Entourage Mining Ltd. (the "Company") provides analysis of the Company's financial results for the year ended December 31, 2013.  The following information should be read in conjunction with the accompanying audited financial statements and related notes.
50

1.1 Date of Report

The following Management Discussion and Analysis ("MD&A") for Entourage Mining Ltd. ("Entourage" or the "Company") is prepared as of May 30, 2014 and should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2013.  Except as noted, all dollar amounts contained in this management discussion and analysis and in the audited financial statements are in Canadian dollars.

Forward-Looking Statements

This MD&A contains certain information that may be deemed "forward-looking information". All information in this MD&A, other than information of historical fact, that address exploration drilling, exploitation activities and events or developments that the Company expects to occur, are forward looking information. Forward looking information is information that is not historical fact and is generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward looking information, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. The Company believes the expectations expressed in such forward-looking information are based on reasonable assumptions, limited to a period for which the information can be reasonably estimated and pursuant to the accounting policies.  Such information is not a guarantee of future performance and actual results may differ materially from those in the forward-looking information.  Forward-looking information is based upon current metal prices, availability of financing and general market conditions.  Factors that could cause the actual results to differ materially from those in forward-looking information include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such information is not a guarantee of future performance and actual results or developments may differ materially from those projected in the forward-looking information.

Management's Responsibility for Financial Statements

The information provided in this MD&A, including the audited financial statements, is the responsibility of management.  In the preparation of these statements, estimates are sometimes necessary to make a determination of the future values for certain assets or liabilities.  Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements.

Management maintains a system of internal controls to provide reasonable assurance that the Company's assets are safeguarded and to facilitate the preparation of relevant and timely information.

1.2            Nature of Business and Overall Performance

Entourage Mining Ltd. was originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995.  On June 25, 1996, we changed our name to Entourage Mining Ltd.  On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.

The Company's shares have been publicly traded since February 2nd, 2004 when the Company was called for trading on the Over-The-Counter Bulletin Board in the United States.  The Company is a reporting issuer in both the United States and in British Columbia.
We are a natural resource company engaged in the acquisition and exploration of natural resource properties.  We commenced operations in 1996 and acquired:

·
An unencumbered 65% interest in 47 prospective uranium claim blocks in Costebelle Township known as the Doran property in eastern Quebec, the Company has allowed certain claims to lapse and at December 31, 2012 held a total of 18 claims.  During the year ended December 31, 2013, a further 15 claims have lapsed to leave 3 claims totaling approximately 165 hectares in good standing.

51

We also intend to seek and acquire additional properties worthy of exploration and development.   The Company is reviewing and evaluating several new projects unrelated to the mining industry it had previously focused on.  The Company is currently in negotiations to acquire Phoenix Media, a graphic design, web development, communication and marketing agency (http://phoenix-m.com/).

Entourage is an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of the properties, and further exploration will be required before a final evaluation as to the economic and legal feasibility of all of our claims is determined.

Effective March 6, 2009 the Company's completed a reverse split of its shares of common shares at a ratio of one new share for every ten old shares held. The capitalization of 100,000,000 common shares with no par value remains the same after the reverse stock split; during the year ended December 31, 2010, shareholders of the Company approved the change of its authorized share capital to unlimited.  The Company trades on the Over-The-Counter Bulletin Board under the symbol ENMGF.

On January 24, 2014, at the Company's special and annual general meeting the following resolutions were approved by shareholders by ordinary resolution were:

1.
Authorizing an unlimited number of Class A Preferred shares without par value and to approve special rights and restrictions for the existing Common shares and the new Preferred shares;

2.
The Notice of Articles of the Company to be amended to reflect the amendment to the authorized share structure approved above;

It was also resolved by Special Resolution that the company will apply to the British Columbia Registrar of Companies pursuant to section 308 of the Business Corporations Act for authorization to continue out of British Columbia and into the jurisdiction of the State of Nevada in accordance with this section. This resolution was approved.

The second special resolution that was approved was to change the authorized share Structure post conversion to an unlimited number of Class A Preferred Shares with par value to 500,000,000 Common Shares with a par value of $.001 and 500,000,000 Preferred shares with a par value of $.001.
Highlights:

During the year ended December 31, 2013, the Company:

-
received $124,649 from a related party to settle outstanding debts and for working capital purposes.
-
recorded a gain on settlement of debt in the amount of $168,417 for the year ended December 31, 2013.

Subsequent to December 31, 2013, at the Company's special and annual general meeting held January 24, 2014, the following resolutions were approved by shareholders by ordinary resolution:

1. Authorizing an unlimited number of Class A Preferred shares without par value and to approve special rights and restrictions for the existing Common shares and the new Preferred shares;

2. The Notice of Articles of the Company to be amended to reflect the amendment to the authorized share structure approved above.

It was also resolved by Special Resolution that the company will apply to the British Columbia Registrar of Companies pursuant to section 308 of the Business Corporations Act for authorization to continue out of British Columbia and into the jurisdiction of the State of Nevada in accordance with this section. This resolution was approved.
We also announced that it intends to seek and acquire other business enterprises worthy of development.  The Company is reviewing and evaluating several new projects unrelated to the mining industry it had previously focused on.  The Company is currently in negotiations to acquire Phoenix Media, a graphic design, web development, communication and marketing agency (http://phoenix-m.com/).
52

 
The audited financial statements have been prepared assuming the Company will continue on a going-concern basis.  The ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and to develop profitable operations to continue.  Management is actively targeting sources of additional financing through alliances with financial, exploration and mining entities, and other business and financial transactions which would assure continuation of the Company's operations and exploration programs.  The Company will periodically have to raise funds to continue operations and, although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future.

There can be no assurance that the Company will be able to continue to raise funds in which case the Company may be unable to meet its obligations.  Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the audited financial statements.

Mineral Projects

The Doran Uranium Prospect (Quebec)
Doran Uranium Property Description
The Doran Uranium property consisted of 47-contiguous mineral claims (polygons) covering approximately 2,473 hectares in the Baie Johan Beetz area of Costebelle Township, Quebec. During the year ended December 31, 2012, the Company has allowed certain claims to lapse and at year end held a total of 18 claims.  During the year ended December 31, 2013, a further 15 claims have lapsed to leave 3 claims totaling approximately 165 hectares in good standing.
The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometres west of Aguanish, approximately 109 kilometres east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometres to the north.  Locally this area is known as "Moyenne Cote Nord" or middle coast north of the St. Lawrence Seaway.
The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.
The topography of the property for the most part is rolling hills having a maximum relief of 100 metres with elevation ranging from sea level to 100 metres. All mineralized areas of interest are located comfortably above sea and river levels.
The climate of the property area is characterized by long winters, generally extending from late October until mid-April.
Doran Uranium Property Agreements
By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in 44 claim blocks prospective for uranium situated in Costebelle Township in eastern Quebec (the "Doran Property") in exchange for cash payments of $220,000, the issuance of 75,000 common shares and expenditures of $1,000,000 on the Doran Property over three years, as follows:

a.
$35,000 and 12,500 common shares within ten business days of the date of approval of the agreement (paid and issued);
b.
$35,000 and 12,500 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);
c.
$75,000 and 25,000 common shares on or before March 15, 2007 (paid and issued); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. ("Abbastar") – see below); and
d.
$75,000 (paid in 2008 by Abbastar – see below) and 25,000 common shares on or before March 15, 2008 (issued); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar – see below).

53

All the above terms have been met and the Company earned 100% interest of the property.

The property interest is subject to a 2.5% Net Smelter Return (NSR).  The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.

On February 13, 2007, the Company entered into an option agreement (the "Option") with Abbastar Holdings Inc. ("Abbastar"), a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a one time cash payment of $100,000 (received) to the Company and spending $5,000,000 on the Doran Property over 4 years (the Company retains the right to purchase the NSR on the Doran Property).  The TSX Venture Exchange approved this transaction on May 30, 2007.  The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:

- 20% interest by spending $500,000 on or before February 13, 2008 (incurred);
- 15% additional interest by expending an additional $1,000,000 on or before February 13,  2009 (incurred);
- 15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
- 20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.

As of December 31, 2013, Abbastar had earned a 35% interest in the Doran property, but has allowed the balance of their option to expire.

Competitive factors in the market for mineral resources

The Company is prospecting for uranium in Quebec.  It is anticipated that uranium generated power will become more popular in the decades to come as rising oil prices and political strife in the world's oil producing regions continue.  In 2010, the annual sales volume of U3O8 reached 42.8 million pounds and production of uranium, if any, by the Company would have no significant effect on the price of uranium.

Applicable Regulations and Permits

On March 28th, 2012, Québec Environment minister Yves-François Blanchet announced that the Bureau d'audiences publiques sur l'environnement (BAPE) will hold public hearings on the uranium sector in Québec. These hearings are scheduled for the Fall of 2013 and will focus on the environmental and social impacts of exploration and mining of uranium in Québec. The Minister also indicated that no authorization certificates for uranium exploration or mining projects in Québec will be issued until the BAPE's independent study is completed and its report is issued.  On Mar. 3, 2014, Québec Environment Minister Yves-François Blanchet announced he granted a mandate to the Bureau d'audiences publiques sur l'environnement (BAPE) to conduct province-wide public hearings regarding the exploration and mining of uranium in Québec.  The inquiry commission's mandate will begin on May 20, 2014, and is for a term of no more than one year. The BAPE's report must be delivered to the Minister by May 20, 2015, and the Minister will then have 60 days to make it public.

Claim Status

All the option terms for the Doran Property have been met and the Company has earned 100% interest in the property subject to Abbastar's interest.  During the year ended December 31, 2012, the Company has allowed certain claims to lapse and at year end held a total of 18 claims.  During the year ended December 31, 2013, a further 15 claims have lapsed to leave 3 claims totaling 165 hectares in good standing.

Doran Uranium Project Exploration Activities
Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled (1978) 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton uranium (U3O8).
54

We expended $245,591 in exploration work on the property in fiscal year 2005 and a National Instrument 43-101 compliant report by Eric Ostensoe (P.Geo.) was commissioned.  In late February 2006, Mr. Ostensoe completed his report and the Company posted the report on SEDAR and EDGAR (March 9, 2006) as well as on our website.  We spent $346,166 on drilling and exploration in fiscal 2006 and reported drill results on July 20, 2006.  As well, in July 2006, the Government of Quebec reimbursed our company $57,745 as part of the Province's mining exploration incentive program. This rebate was based upon our 2005 drilling exploration expenses.   In April 2007, an updated NI 43-101 Technical Report was prepared by Michel Proulx, M.Sc., P. Geo and Michel Boilly, Ph.D., P.Geo, both Qualified Persons as that term is described in National Instrument 43-101, and this report was filed on SEDAR by Abbastar Holdings Ltd. on May 2, 2007.
To date, the Doran Showing, located at the south of Doran (drilled in 2006 and the fall of 2007) and the North East grid have both been successfully drilled in confirming the presence of a series of sub-parallel uranium bearing pegmatites.
In total, over 6,000 metres have been drilled on the Doran property by our company and Abbastar and we are encouraged that the goal of delineating a Rossing type (Namibia) uranium deposit may be realized.
The completion of the fall 2008 exploration program earned Abbastar an additional 15% interest in the property and has now earned a 35% interest in the Doran property but has allowed the balance of their option to expire.
For further information on the Doran Property, please refer to the 43-101 Technical Report dated October 10, 2010 located on our website at www.entouragemining.com.

Future Exploration and Development

The Company has deferred exploration activities on the Doran Property until the moratorium for uranium exploration or mining projects in Québec is removed.

1.3            Selected Annual Information

 
Fiscal year ended
2013
($)
2012
($)
2011
($)
Income/(Loss) before income taxes
28,169
(51,039)
(189,503)
Net Income/(Loss)
28,169
(51,039)
(189,503)
Basic and diluted earning (loss) per share
0.00
(0.00)
(0.02)
Total assets
18,244
5,815
3,910
Long term financial liabilities
Nil
Nil
Nil
Cash dividends declared
N/A
N/A
N/A

1.4            Results of Operations for the Year Ended December 31, 2013

During the year ended December 31, 2013, the Company reported a net income of $28,169 or $0.00 per share, as compared to a net loss of $51,039 or $0.00 per share for the year ended December 31, 2012.  Expenses increased from $72,154 in 2012 to $139,656 in the current year, an increase of $67,502.  This increase was mainly attributable to:
-
consulting fees of $11,750 were incurred during the year ended December 31, 2013 compared to no consulting fees incurred during the year ended December 31, 2012.  The increase in consulting fees was due to the use of consultants to assist with the settlement of the Company's debt during the year which culminated in a gain on settlement of debt of $168,656.
-
received $124,649 from an unrelated party to settle outstanding debts and for working capital purposes.
-
recorded a gain on settlement of debt in the amount of $168,417 for the year ended December 31, 2013.
-
mineral property recovery of $70,169 for the year ended December 31, 2012 compared to no exploration costs during the year ended December 31, 2013.  This change was due to the sale of its interest of the Pires Gold Project in Brazil completed during the previous year.

55

Overall, the Company's operating expenses increased substantially as compared to the prior year due to the sale of its interest of the Pires Gold Project.  There can be no assurance that the Company will be able to continue to raise funds in which case the Company may be unable to meet its obligations.  Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the financial statements.

1.5            Summary of Quarterly Results

In Canadian dollars
 
 
2013
   
2013
   
2013
   
2013
   
2012
   
2012
   
2012
   
2012
 
 
   
Q4
     
Q3
     
Q2
     
Q1
     
Q4
     
Q3
     
Q2
     
Q1
 
Net sales
 
$Nil
   
$Nil
   
$Nil
   
$Nil
   
$Nil
   
$Nil
   
$Nil
   
$Nil
 
Loss/(Income) before other items
 
$
66,247
   
$
19,966
   
$
26,117
   
$
27,326
   
$
43,211
   
$
21,829
   
$
26,388
   
$
(19,274
)
Net (Income)/Loss
 
$
(102,170
)
 
$
20,558
   
$
26,117
   
$
27,326
   
$
23,211
   
$
21,829
   
$
26,388
   
$
(20,389
)
Net (Income)/Loss  per share
 
(0. 01
)
 
$
0.00
   
$
0.00
   
$
0.00
   
$
0.00
   
$
0.00
   
$
0.00
   
$
(0.00
)

The Company's financial statements are expressed in Canadian dollars and have been prepared in accordance with U.S. generally accepted accounting principles.

1.6            Liquidity
As of the date of this report, we have yet to generate any revenues from our business operations.
On December 31, 2013, the Company had $12,948 in cash compared to $1,764 on December 31, 2012. On December 31, 2013, the Company had a working capital deficiency of $169,900 compared to a working capital deficiency of $241,240 on December 31, 2012.

During the year ended December 31, 2013, the Company entered in to loan agreements with a related party for approximately $129,772 which is unsecured, bears interest at 0.5% per annum compounded annually and is due on demand within 15 days written notice.

The Company anticipates it will require additional capital in the future to finance ongoing exploration of its properties and general and administrative expenses, such capital to be derived from the exercise of outstanding stock options and warrants and/or the completion of private placement financings.  The Company may also seek short-term loans from directors of the Company.  There can be no assurance the Company will be able to obtain required financing in the future on acceptable terms to the Company.

1.7
Capital Resources

Our auditors have issued a going concern opinion on our audited financial statements for the year ended December 31, 2013.  This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin extracting, processing and selling minerals.  Accordingly, we must raise cash continuously from sources other than the sale of minerals found on the properties.  That cash must be raised from other sources.  Our only other source for cash at this time is investments by others in Entourage Mining Ltd.  We must raise cash to implement our projects and stay in business.  Even if we raise money, we do not know how long the money will last.  The Company requires financial resources to fund its ongoing costs of operations.

Entourage has historically relied upon equity financings to satisfy its capital requirements and will continue to depend heavily upon equity capital to finance its activities.  The Company has also received additional funds pursuant to property option receipts.  There can be no assurance the Company will be able to obtain required financing in the future on acceptable terms to the Company.

56

The Company anticipates it will need additional capital in the future to finance ongoing exploration of its properties, such capital to be derived from the exercise of outstanding stock options and warrants and/or the completion of private placements.  The Company may also seek short-term loans from directors of the Company.

1.8
Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

1.9
Transactions with Related Parties

As at December 31, 2013, $1,179 (2012 - $6,126) was owing to a former director and a company controlled by a former director of the Company.   The loan is unsecured, non-interest bearing and due on demand.

As at December 31, 2013, $129,772 (2012 - $nil) was owing to a company controlled by a director of the Company.   The loan is unsecured, bears interest at 0.5% per annum compounded annually and is due on demand within 15 days written notice.  As at December 31, 2013, accrued interest of $177 was included in loans payable.

During the year ended December 31, 2013, the Company incurred $45,000 (2012 - $60,000) in management fees to its directors and officers.  Effective April 1, 2012, the directors of the Company agreed to waive their management fees until the Company has the financial resources to extinguish their debt.  In accordance with U.S. GAAP, the Company recorded $42,500 (2012 - $45,000) in management fees as an increase to additional paid-in capital and $2,500 was paid in cash.  The Company also paid $250 to a director which has been included in consulting fees.

During the year ended December 31, 2013, the Company advanced $nil (2012 - $1,001) to a director of the Company for expenses to be incurred.  As at December 31, 2012, this amount was included in prepaid expenses.

The above transactions have been recorded at their exchange amount being the amount of consideration established and agreed to by the related parties.

1.10
Fourth Quarter

Fourth quarter results differ significantly from other quarters due to the gain on forgiveness of debt of $168,417.

1.11            Proposed Transactions

Company is currently in negotiations to acquire Phoenix Media, a graphic design, web development, communication and marketing agency (http://phoenix-m.com/).

1.12
 Critical Accounting Estimates

This section is not applicable, as the Company has no material accounting estimates.  Material accounting estimates usually disclosed by resource issuers such as assumptions regarding depletion, resource and production values and capital write downs are not applicable to the Company as it is still at an exploration and development stage.

1.13
Changes in Accounting Policies including Initial Adoption

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.
57

Mineral Claim Payments and Exploration Expenditures

The Company is engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Acquisition costs are initially capitalized when incurred.  The Company assesses the carrying cost for impairment under the FASB ASC topic 360 at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs subsequently incurred to develop such properties are capitalized. Carrying value will be amortized using the units-of-production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any non-recoverable amount will be charged to operations.

Income Taxes:

Income taxes are accounted for under the asset and liability method as stipulated by ASC 740.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis together with information on operating loss and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be reversed or settled.  Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date.  Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance.  A valuation allowance is applied when, in management's view, it is more likely than not that such deferred tax will not be utilized.

In the event that an uncertain tax position exists in which the Company could incur income taxes, penalties or interest, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities.  Reserves for uncertain tax positions would then be recorded if the Company determined it is probable that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable.  As of December 31, 2013, the Company does not believe it has any uncertain tax positions that would result in the Company incurring a liability to a taxing authorities.

Stock Based Compensation:

The Company has a stock-based compensation plan which is described more fully in Note 7. The Company measures the compensation cost of stock options and other stock-based awards to employees and directors at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest.

Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments, are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, the Company has determined that the dates used to value the transaction are either:

(1)  The date at which a commitment for performance by the counter party to earn the equity instruments is established; or
(2)  The date at which the counter party's performance is complete.

Basic and Diluted Loss Per Share:

Basic net loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the reporting period.  Diluted net income per common share includes the dilution that could occur upon the exercise of options and warrants to acquire common stock, computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares that the Company could have repurchased with the proceeds from the exercise of options and warrants (which are assumed to have been made at the average market price of the common shares during the reporting period).
58

Common stock equivalents from stock options and warrants were excluded from the calculation of net loss per share for December 31, 2013, 2012 and 2011 as their effect is anti-dilutive.

Exploration Stage Company:

The Company has not produced any revenues from its principal business or commenced significant commercial operations and is considered an exploration stage company as defined by SEC Guide 7 with reference to Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) topic 915.  In the exploration stage, management devotes most of its activities to conducting exploratory programs and developing business plans.    

1.14            Financial Instruments and Risk Management

The Company's financial instruments consist of cash, other receivable, accounts payable, loan payable and amounts due to related parties. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.  The fair value of the Company's current assets and current liabilities are estimated by management to approximate their carrying values based on the immediate or short-term maturity of these instruments.

Foreign Exchange Risk
The Company is subject to foreign exchange risk for purchases denominated in foreign currencies.  The Company operates primarily in Canada and Brazil and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates and the United States Dollar.  Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar.  

Credit risk
The risk in cash accounts is managed through the use of a major financial institution which has high credit quality as determined by the rating agencies.  As at December 31, 2013, the Company does not have significant concentrations of credit exposure.

Interest rate risk
The Company has no significant exposure to interest rate fluctuation risk.

1.15            Other MD & A Requirements

Disclosure of Outstanding Share Capital

 
 
Number
of Shares
   
Amount
   
Additional Paid In
Capital
 
 
 
   
   
 
Authorized
 
   
   
 
Unlimited common shares, without par value
 
   
   
 
 
 
   
   
 
Issued
 
   
   
 
   
10,368,103
   
$
13,321,807
   
$
3,263,866
 
Issued for mineral properties                                                              
   
300,000
     
15,000
     
-
 
Recognition of management fees waived
   
3,074,120
     
153,706
     
-
 
   
-
     
-
     
45,000
 
   
13,742,223
   
$
13,490,513
   
$
3,308,866
 
Recognition of management fees waived
   
-
     
-
     
42,500
 
 
                       
   
13,742,223
   
$
13,490,513
   
$
3,351,366
 

On March 30, 2012 the Company agreed to purchase the 10% interest earned by Ansell Capital in the Pires Gold Project for $10,000 cash (accrued) and the issuance of 300,000 shares from treasury (issued) with a fair value of $15,000.
59

On April 13, 2012, the Company announced that it closed a private placement of 3,074,120 units at a price of $0.05 per Unit for gross proceeds of $153,706.  Each Unit consists of one common share of the Company (a "Share") and one-half share purchase warrant exercisable on or before April 13, 2013 at a price of $0.10 per Share and on or before April 13, 2014 at a price of $0.15.

During the year ended December 31, 2012, the Company recorded $45,000 for management fees waived as an increase to contributed surplus.

During the year ended December 31, 2013, the Company recorded $42,500 for management fees waived as an increase to contributed surplus.

Warrants

 
 
Warrants Outstanding
   
Weighted Average Exercise Price
   
Weighted
Average
Life
 
   
1,613,162
   
US $0.25
     
0.07
 
Issued during the year
   
1,537,060
   
$
0.15
     
2.00
 
Expired during the year
   
(1,613,162
)
 
$
0.25
     
-
 
Balance, December 31, 2012 and 2013
   
1,537,060
   
$
0.15
     
0.28
 
Subsequent to year end all of the outstanding warrants expired unexercised.

Stock Options

There has been no activity in number of options outstanding during the year ended December 31, 2012, 2013 or to the date of this MD&A.

The current directors and officers of the Company are:

Ms. Danielle Beauchamp, President, CEO and Director
Mr. Fouad Mallouk, Director
Mr. James A. Turner, Director
Mr. Fred Schiemann, CPA, Chief Financial Officer


Entourage Mining Ltd.

"Danielle Beauchamp"

Danielle Beauchamp
President and Director

 
60


SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
ENTOURAGE MINING LTD.
"Danielle Beauchamp"
Danielle Beauchamp
CEO, President and Director
 
 

 
61

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘20-F’ Filing    Date    Other Filings
5/20/15
Filed on:6/5/14
5/31/14
5/30/14
5/26/14
5/20/14
4/13/14
3/31/146-K
3/3/14
1/24/14
1/1/14
For Period End:12/31/1320-F/A
4/13/13
3/28/13
12/31/1220-F,  NT 20-F
6/30/126-K
4/20/12
4/13/126-K
4/1/12
3/30/12
3/15/12
3/14/12
1/25/12
1/16/12
12/31/1120-F,  NT 20-F
2/22/11
2/13/11
1/16/11
12/31/1020-F
10/10/10
7/14/106-K
5/31/10
5/3/1020-F
4/22/10
2/18/106-K
2/13/10
2/3/106-K
1/16/10
12/31/0920-F
12/16/09
11/13/09
7/24/09
6/22/09
6/17/09
3/6/096-K
2/24/09
2/13/09
12/31/0820-F,  6-K
6/30/0820-F,  6-K
3/15/08
2/13/08
2/4/086-K
12/31/0720-F,  20-F/A,  6-K
8/23/076-K
6/29/0720-F
6/28/07
6/18/07
6/11/07S-8
5/30/076-K
5/11/076-K
5/2/07
4/3/07
3/31/07
3/27/07
3/15/07
3/12/07
3/6/07
2/14/076-K
2/13/07
12/31/0620-F,  20-F/A
7/20/066-K
7/3/0620-F
6/1/066-K
5/24/06
3/15/06
3/9/066-K
3/7/06
1/3/064,  6-K
12/31/0520-F,  20-F/A
11/25/056-K
11/23/056-K
11/17/05
10/21/05
10/20/056-K
10/7/054
9/22/05
7/1/0520-F
4/21/05
4/7/056-K
3/21/05
3/15/056-K
1/6/05
12/31/0420-F,  20-F/A
9/24/04
8/24/04
6/8/046-K
6/1/046-K
2/5/04
2/2/04
12/31/0320-F
6/6/0320FR12G,  4
4/25/03
3/17/03
12/31/02
12/31/01
12/31/00
12/31/99
12/31/98
2/18/98
12/31/97
6/25/96
12/31/95
6/16/95
 List all Filings


3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

12/30/14  SEC                               UPLOAD10/11/17    1:36K  Entourage Mining Ltd.
12/09/14  SEC                               UPLOAD10/11/17    1:130K Entourage Mining Ltd.
10/15/14  SEC                               UPLOAD10/11/17    1:165K Entourage Mining Ltd.
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