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ROYAL RESOURCES CORPORATION
<br />PRO FORMA FINANCIAL STATEMENTS
<br />(Unaudited)
<br />The pro forma balance sheets and pro forma statements of operations on the pages which follow have
<br />been assembled from the historical accounts of Royal Resources Corporation together with such adjustments
<br />necessary to present the financial position and results of operations as if the sale of oil and gas properties (for
<br />$3,747.000) and the acquisition of Montagu Mining Investments Inc. (for $3.6 million and 200,000 shares of
<br />Royal's Common Stock) had occurred on the date of each balance sheet or as of the beginning of the period for
<br />cach statement of operations. Additionally, the balance sheet at December 31, 1986 and statement of
<br />operations for the siz months then ended reflect the sale of the Company's joint venture interest in the
<br />Colosseum mine for $6,886,572. The pro forma statements are not necessarily indicative of the results of
<br />future operations.
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<br />ROYAL RESOURCES CORPORATION
<br />PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<br />Year Ended June 30, 1986 [A[
<br />(Unaudited)
<br />Mining
<br />Property
<br />Sale of Oil & Ges Properties Acquisition (3)
<br />Adjustments
<br />increase
<br />u:...._:__, _______,
<br />Adjustments
<br />Pro Forma Increase
<br />Results (Decrease)
<br />Combined
<br />Prp Forma
<br />Revenues:
<br />Oil & gas sales ......... $ 3,992,055 $ (3,992,055)(1) -
<br />Interestand other....... 310,579 $ 310,579
<br />4,302,634 (3,992,055) 310,579
<br />Cost and expenses:
<br />Leaseoperatingexpenses..
<br />Production, property &
<br />windfall taxes ........
<br />Depreciation, depletion
<br />and amortization......
<br />General and administra-
<br />tive .................
<br />Interest expense .......
<br />Write-down of oil and gas
<br />properties ...........
<br />I,SOR,343 (1,SOR,343)(I) -
<br />442,020 (442,020)(1) -
<br />2,906,455 (2,757,262)(1) 149,193
<br />1, 595,982 1, 595,982
<br />39,021 (39,021)(2) -
<br />19,270,399 (19,270,399)(1) -
<br />25,762,220 (24,017,045 1,745,175
<br />Loss from continuing oper-
<br />ations before income
<br />taxes and nonrecurring
<br />charges and credits .... (21,459,586) (20,024,990)
<br />Income taxes-provision
<br />(credit) ............. (6,436,090) 6,436,090(1)
<br />Loss from continuing oper-
<br />ations before nonrecur-
<br />ring charges and
<br />credits .............. $(15,023,496) $(13,588,900)
<br />Average shares outstand-
<br />ing ................. 6,155,461
<br />Loss per share from contin-
<br />uing operations ....... $ (2.44)
<br />(1,434,596)
<br />e atn coo
<br />149,193
<br />I ,595,982
<br />I , 745, 17 S
<br />(1,434,596)
<br />$(1,434,596) - $(1,434,596)
<br />6,155,461 200.000 6,355.461
<br />$ (.23) $ (.23)
<br />The accompanying notes nre an integral part ujthese financin! statements.
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