FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
August 28, 2008
GETTY COPPER INC.
(Translation of registrant's name into English)
1000 Austin Avenue, Coquitlam, BC V3K 3P1
(Address of principal executive offices)
Attachments:
1.
Unaudited financial statements for the Six Months Ending June 30, 2008
2.
Management Discussion & Analysis for the Six Months Ending June 30, 2008
3.
News Release Dated July 3, 2008
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F __________
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.
| | |
| | GETTY COPPER INC. |
| | (Registrant) |
| | |
Date: August 28, 2008 | | By: /s/“Corby Anderson” |
| | Name |
| | |
| | Its: President, COO |
| | (Title) |
GETTY COPPER INC
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 2008
(UNAUDITED)
(stated in Canadian dollars)
Contact: 1000 Austin Avenue
Coquitlam, British Columbia
Canada V3K 3P1
Tel: 604-931-3231
NOTICE THAT FINANCIAL STATEMENTS HAVE NOT BEEN
REVIEWED BY AN AUDITOR
Getty Copper Inc. (the “Issuer”)
Financial Statements for the period ended June 30, 2008
The Issuer’s auditors have not reviewed or been involved in the preparation of these financial statements.
GETTY COPPER INC.
BALANCE SHEETS
(Unaudited)
(stated in Canadian dollars)
ASSETS | | June 30, 2008 | | | Dec. 31, 2007 | |
Current | | | | | | |
Cash and cash equivalents | $ | 404,603 | | $ | 755,929 | |
Accounts receivable | | 86,662 | | | 5,302 | |
Prepaid expenses | | 10,111 | | | 2,651 | |
| | 501,376 | | | 763,882 | |
Mineral rights (note 5) | | 4,125,554 | | | 3,987,132 | |
Property, building and equipment (note 6) | | 144,150 | | | 147,664 | |
| $ | 4,771,080 | | $ | 4,898,678 | |
LIABILITIES | | | | | | |
Current | | | | | | |
Accounts payable and accrued liabilities | $ | 293,688 | | $ | 701,443 | |
Current portion of mortgage payable (note 7) | | 2,557 | | | 2,465 | |
| | 296,245 | | | 703,908 | |
Mortgage payable (note 7) | | 86,864 | | | 88,166 | |
| | 383,109 | | | 792,074 | |
|
SHAREHOLDERS’ EQUITY | | | | | | |
Share capital (note 9) | | 20,921,497 | | | 19,924,370 | |
Subscriptions received (note 9) | | – | | | 620,000 | |
Contributed surplus | | 982,460 | | | 952,920 | |
Deficit | | (17,515,986 | ) | | (17,390,686 | ) |
Commitments and Contingencies (note 10) | | | | | | |
Subsequent Event (note 13) | | 4,387,971 | | | 4,106,604 | |
| $ | 4,771,080 | | $ | 4,898,678 | |
Approved by the Directors
“Donald R. Willoughby” ,
“Corby Anderson” ,
See accompanying notes to financial statements
GETTY COPPER INC.
STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
(stated in Canadian dollars)
| | Three Months | | | Six Months | | | Three Months | | | Six Months | |
| | Ending | | | Ending | | | Ending | | | Ending | |
Revenue | | June 30, 2008 | | | June 30, 2008 | | | June 30, 2007 | | | June 30, 2008 | |
Rent | $ | – | | $ | – | | $ | 566 | | $ | 2,264 | |
|
Expenses | | | | | | | | | | | | |
Amortization | | 342 | | | 685 | | | 438 | | | 876 | |
Bank charges & interest | | 18 | | | 26 | | | 12 | | | 90 | |
Filing fees | | 5,469 | | | 7,527 | | | 4,611 | | | 6,459 | |
Interest - long term | | 1,659 | | | 3,329 | | | 1,702 | | | 3,414 | |
Insurance | | 644 | | | 1,274 | | | 630 | | | 1,260 | |
Management fees | | 7,500 | | | 15,000 | | | 7,500 | | | 15,000 | |
Marketing & promotion | | 1,598 | | | 1,978 | | | 1,185 | | | 2,136 | |
Office & miscellaneous | | (2,441 | ) | | 3,720 | | | 9,743 | | | 12,997 | |
Professional fees | | 48 | | | 28,282 | | | 570,201 | | | 891,531 | |
Property tax | | 5,401 | | | 5,401 | | | 5,441 | | | 5,441 | |
Rent | | 3,240 | | | 6,480 | | | 1,500 | | | 3,000 | |
Stock option compensation | | 14,770 | | | 29,540 | | | – | | | – | |
Telephone | | 2,011 | | | 4,084 | | | 2,072 | | | 3,764 | |
Transfer fees | | 2,338 | | | 3,324 | | | 2,929 | | | 4,112 | |
Travel | | 2,468 | | | 6,641 | | | 4,917 | | | 9,079 | |
Wages & benefits | | 6,890 | | | 15,520 | | | 8,371 | | | 16,668 | |
|
Interest | | (4,240 | ) | | (7,511 | ) | | (5,231 | ) | | (6,696 | ) |
|
| | 47,715 | | | 125,300 | | | 616,021 | | | 969,131 | |
|
Loss before other item | | (47,715 | ) | | (125,300 | ) | | 615,455 | | | 966,867 | |
Legal fees and disbursements | | – | | | – | | | 896,319 | | | 896,319 | |
| | | | | | | | (1,511,774 | ) | | (1,863,186 | ) |
Deficit, beginning | | (17,390,686 | ) | | (17,390,686 | ) | | (15,173,683 | ) | | (15,173,683 | ) |
|
Deficit, ending | | (17,438,401 | ) | | (17,515,986 | ) | | (16,685,457 | ) | | (17,036,869 | ) |
Loss per share | $ | (0.001 | ) | $ | (0.001 | ) $ | | (0.02 | ) | $ | (0.02 | ) |
Weighted-average number ofcommon shares outstanding | | 77,638,907 | | | 77,638,907 | | | 67,513,907 | | | 67,513,907 | |
|
See accompanying notes to financial statements.
GETTY COPPER INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(stated in Canadian dollars)
| | Three Months | | | Six Months | | | Three Months | | | Six Months | |
| | Ending | | | Ending | | | Ending | | | Ending | |
| | June 30, 2008 | | | June 30, 2008 | | | June 30, 2007 | | | June 30, 2007 | |
Cash flows used in operating activities | | | | | | | | | | | | |
Net loss for the year | $ | (47,715 | ) | $ | (125,300 | ) | $ | (1,511,774 | ) | $ | (1,863,186 | ) |
Add: Items not involving cash | | | | | | | | | | | | |
Amortization – administration | | 342 | | | 685 | | | 438 | | | 876 | |
Stock Compensation | | 14,770 | | | 29,540 | | | – | | | – | |
Share for debt legal settlement | | – | | | – | | | 493,750 | | | 493,750 | |
|
Net change in non-cash working capital balances | | | | | | | | | | | | |
Decrease (increase) in accounts receivable | | (82,363 | ) | | (81,360 | ) | | (1,413 | ) | | (10,907 | ) |
Decrease (increase) in prepaid expenses | | 23,685 | | | (7,460 | ) | | 10,907 | | | (3,135 | ) |
Increase (decrease) in accounts payable | | (23,291 | ) | | (407,755 | ) | | 15,299 | | | 230,482 | |
|
|
| | (114,572 | ) | | (591,650 | ) | | (992,793 | ) | | (1,152,120 | ) |
|
Cash flows from financing activities | | | | | | | | | | | | |
Mortgage principal repayments | | (611 | ) | | (1,210 | ) | | (567 | ) | | (1,124 | ) |
Share issue costs | | (2,873 | ) | | (2,873 | ) | | (20,824 | ) | | (20,824 | ) |
Private placements, net of issue costs | | – | | | 380,000 | | | 1,300,000 | | | 1,300,000 | |
Warrants exercised | | – | | | – | | | 22,163 | | | 22,163 | |
Stock Incentive Options Exercised | | – | | | – | | | 87,500 | | | 87,500 | |
| | | | | | | | | | | | |
|
| | (3,484 | ) | | 375,917 | | | 1,388,272 | | | 1,387,715 | |
|
Cash flows used in investing activities | | | | | | | | | | | | |
Exploration costs | | (58,691 | ) | | (135,593 | ) | | (55,426 | ) | | (76,228 | ) |
|
Net increase (decrease) in cash | | (176,747 | ) | | (351,326 | ) | | 340,053 | | | 159,367 | |
|
Cash and cash equivalents | | | | | | | | | | | | |
Beginning of period | | 581,350 | | | 755,929 | | | 317,369 | | | 498,055 | |
|
Cash and cash equivalents | | | | | | | | | | | | |
End of period | $ | 404,603 | | $ | 404,603 | | $ | 657,422 | | $ | 657,422 | |
Supplemental disclosure: | | | | | | | | | |
| |
Cash used in operating activities includes: | | | | | | | | | |
Interest paid | $ | 1,659 | $ | 3,329 | $ | 1,702 | $ | 3,414 | |
Interest received | $ | 4,240 | $ | 7,511 | $ | 5,231 | $ | 6,696 | |
See accompanying notes to financial statements.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
1. | Nature of Business |
|
| Getty Copper Inc. is a public company incorporated under the Canada Business Corporations Act in September 1987. Subsequent to incorporation, the Company has gone through a number of name changes until in March 2003, when the name was changed to Getty Copper Inc. The Company is in the business of mineral exploration and mine development in the Highland Valley area of British Columbia. |
|
2. | General information and continuing operations |
|
| These financial statements have been prepared on the assumption that the Company will continue to realize its assets and meet its liabilities in the normal course of business as a ‘going concern’. The Company has incurred losses since inception, has no source of operating revenue and at June 30, 2008 has a working capital of $205,131. The statements contain no provisions for adjustments which may become necessary if the Company becomes unable to continue on a ‘going concern’ basis. |
|
| The Company has not yet determined whether its mineral rights contain ore reserves that are economically recoverable. In addition, the Company is dependent upon external sources of financing in order to fund the exploration of its mineral rights. The recoverability of amounts shown for mineral rights and the ability of the Company to meet its obligations is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration and development of the mineral rights and future profitable production or proceeds from the disposition thereof. |
|
3. | Significant accounting policies |
|
| These financial statements are prepared in accordance with accounting principles generally accepted in Canada applicable to a going-concern. The financial statements do not give effect to adjustments that would be necessary should the Company be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business. |
|
| a) | Cash and cash equivalents |
|
| | Cash and cash equivalents consist of temporary investments in commercial paper and money market deposits that are highly liquid and readily convertible to known amounts of cash. |
|
| b) | Mineral rights |
|
| | Costs of acquisition and exploration expenditures are allocated to specific groups of mineral rights as work is performed on or for the benefit of those rights and are capitalized until such time as the extent of mineralization has been determined and mineral rights are either developed, sold, or abandoned. If there is an indication of impairment the mineral rights are written-down to the estimated net recoverable amount. The Company does not accrue the estimated future cost of maintaining, in good standing, its mineral rights. |
|
| | Capitalized costs are amortized over the useful life of the rights upon commencement of commercial production, or written-off if the rights are sold or abandoned. |
|
| c) | Administrative costs |
|
| | Administrative costs are expensed as incurred. |
|
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
3. | Significant accounting policies -continued |
|
| d) | Property, building and equipment |
|
| | Property, building and equipment are recorded at cost. Amortization is provided on the declining balance basis at the following annual rates: |
|
Automotive equipment | 30 | % |
Building | 4 | % |
Computer equipment | 45 | % |
Computer software | 100 | % |
Office equipment | 20 | % |
Portable buildings | 30 | % |
| When the net carrying amount of the property, building or equipment exceeds estimated net recoverable amounts, the asset is written down to its estimated fair value and a change is recorded in the statement of operations. |
|
e) | Stock option plan |
|
| The Company records compensation expense when stock or stock options are issued to employees in accordance with any vesting terms. |
|
f) | Future income taxes |
|
| The Company follows the asset and liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current period. Future income tax assets and liabilities are recognized for temporary differences between tax and accounting bases of assets and liabilities and for unused tax losses. Future income tax assets are recorded in the financial statements if their realization is considered to be more likely than not. |
|
g) | Exploration tax credits |
|
| Exploration tax credits are recorded as a reduction in exploration costs as those costs are incurred. |
|
h) | Flow-through financing |
|
| Under the CanadianIncome Tax Acta company may issue securities referred to as flow-through shares, whereby the investor may claim the tax deductions arising from the qualifying expenditure of the proceeds by the company. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, future income tax liabilities are recognized (renounced expenditures multiplied by the effective corporate tax rate), thereby reducing share capital. Previously unrecognized tax assets may then offset or eliminate the liability recorded. |
|
i) | Use of estimates |
|
| The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts |
|
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
3. | Significant accounting policies - continued |
|
| of revenues and expenses during the reporting period. Actual results could differ from those estimates. Specific areas involving management estimates include the variables used to derive stock-based compensation, the valuation of mineral rights and the determination of useful lives of property, building and equipment for purposes of calculating amortization. |
|
| j) | Loss per share |
|
| | Loss per share has been calculated using the weighted-average number of common shares outstanding during each fiscal year. Diluted loss per share has not been calculated as it is anti-dilutive when the numerator used in the calculation is a net loss. For purposes of the calculation of the weighted-average number of common shares outstanding, share consolidations are considered to have occurred on the first day of the earliest fiscal year presented. |
|
| k) | Financial instruments |
|
| | The Company's financial instruments consist of cash and cash equivalents, accounts payable, and accrued liabilities and mortgage payable. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values, unless otherwise noted. |
|
4. | Adoption of new accounting policies: |
|
| Financial Instruments: |
|
| Effective January 1, 2007, the Company adopted the new Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3855, “Financial Instruments – Recognition and Measurement” and Section 1530 “Comprehensive Income”. These changes have been applied on a prospective basis with no restatement of prior period financial statements. |
|
| CICA Handbook Section 3855 Financial Instruments – Recognition and Measurement, requires all financial assets, financial liabilities and non-financial derivatives to be recognized on the balance sheet at the appropriate measurement based on specific categories. The new standard requires that all financial assets and liabilities be classified as either: held-to-maturity, held-for-trading, loans and receivables, available for sale or other financial liabilities. |
|
| The following is a summary of the Company’s classification of financial assets and liabilities: |
|
| Cash | Held-for-trading |
| Accounts receivable | Loans and receivables |
| Accounts payable and accrued liabilities | Other liabilities |
| Subscriptions received | Other liabilities |
| Mortgage payable | Other liabilities |
Financial assets classified as held-for-trading are measured at fair value with changes in those fair values recognized in net earnings. Loans, receivables and other liabilities are carried at amortized cost.
Section 3861, Financial Instruments: Disclosure and Presentation, identifies and details information to be disclosed in the financial statements.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
5. | Mineral rights |
|
| The adoption of new accounting policies for financial instruments has not resulted in any significant changes to the Company’s financial statements. |
|
| The Getty mineral claims are contiguous and are located within the Kamloops Mining District of Highland Valley, British Columbia, covering an area of approximately 200 square kilometres. Building and equipment amortization included in exploration costs during the six months ending June 30, 2008 amounted to $2,829 (2007 - $3,119). |
|
| During the six months ending June 30, 2008, the Company spent $138,422 on deferred costs as follows: |
|
| | | Getty | | Getty | | Getty | | Getty South | | Getty | Total Exploration | |
| | | Northwest | | Central | | North | | 50% interest | | Southwest | & Development | |
| |
| Assay | $ | | $ | | $ | | $ | 548 | $ | | $ | 548 | |
| Feasibility study | | | | | | 40,203 | | 38,169 | | | | 78,372 | |
| Geology | | | | | | 8,884 | | 23,627 | | | | 32,511 | |
| Other | | 2,386 | | 17 | | 9,985 | | 14,323 | | 280 | | 26,991 | |
| Total exploration & | | | | | | | | | | | | | |
| development costs | $ | 2,386 | $ | 17 | $ | 59,072 | $ | 76,667 | $ | 280 | $ | 138,422 | |
As at June 30, 2008, the Company’s historical deferred costs and the current carrying aggregate amount are derived as follows:
| | | Getty | | Getty | | Getty | | Getty South | | Getty | | Total | |
| | | Northwest | | Central | | North | | 50% interest | | Southwest | | Exploration & | |
| | | | | | | | | | | | | Development | |
| Assay | $ | 35,746 | $ | 1,143 | $ | 507,075 | $ | 66,707 | $ | 13,971 | $ | 624,642 | |
| Drilling | | 13,770 | | 625 | | 4,181,817 | | 453,304 | | 65,810 | | 4,715,326 | |
| Environmental | | 173,676 | | 1,282 | | 54,290 | | 4,059 | | 21,149 | | 254,456 | |
| Feasibility study | | - | | - | | 231,772 | | 73,028 | | - | | 304,800 | |
| Geology | | 791,243 | | 37,303 | | 1,793,761 | | 326,693 | | 157,304 | | 3,106,304 | |
| Metallurgy | | 525 | | - | | 972,074 | | 14,514 | | - | | 987,113 | |
| Other | | 750,524 | | 17,169 | | 909,254 | | 156,865 | | 133,474 | | 1,967,286 | |
| Total exploration & | | | | | | | | | | | | | |
| development costs | $ | 1,765,484 | $ | 57,522 | $ | 8,650,043 | $ | 1,095,170 | $ | 391,708 | $ | 11,959,927 | |
| Mineral rights | | | | | | | | | | | | | |
| acquisition costs | | 33,210 | | 111,846 | | 352,397 | | 1,069,134 | | 113,883 | | 1,680,470 | |
| | $ | 1,798,694 | $ | 169,368 | $ | 9,002,440 | $ | 2,164,304 | $ | 505,591 | $ | 13,640,397 | |
| Less: Provision for impairment of deferred costs | | | | | | | | (9,514,843 | ) |
| | | | | | | | | | | | $ | 4,125,554 | |
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
5. | Mineral rights - continued |
|
| As at December 31, 2007, the Company’s historical deferred costs and the current aggregate carrying amount are derived as follows: |
|
| | | Getty | | Getty | | Getty | | Getty South | | Getty | | Total | |
| | | Northwest | | Central | | North | | 50% interest | | Southwest | | Exploration & | |
| | | | | | | | | | | | | Development | |
| Assay | $ | 35,746 | $ | 1,143 | $ | 507,075 | $ | 66,159 | $ | 13,971 | $ | 624,094 | |
| Drilling | | 13,770 | | 625 | | 4,181,817 | | 453,304 | | 65,810 | | 4,715,326 | |
| Environmental | | 173,676 | | 1,282 | | 54,290 | | 4,059 | | 21,149 | | 254,456 | |
| Feasibility study | | - | | - | | 191,569 | | 34,859 | | - | | 226,428 | |
| Geology | | 791,243 | | 37,303 | | 1,784,877 | | 303,066 | | 157,304 | | 3,073,793 | |
| Metallurgy | | 525 | | - | | 972,074 | | 14,514 | | - | | 987,113 | |
| Other | | 748,138 | | 17,152 | | 899,269 | | 142,542 | | 133,194 | | 1,940,295 | |
| Total exploration & | | | | | | | | | | | | | |
| development costs | $ | 1,763,098 | $ | 57,505 | $ | 8,590,971 | $ | 1,018,503 | $ | 391,428 | $ | 11,821,505 | |
| Mineral rights | | | | | | | | | | | | | |
| acquisition costs | | 33,210 | | 111,846 | | 352,397 | | 1,069,134 | | 113,883 | | 1,680,470 | |
| | $ | 1,796,308 | $ | 169,351 | $ | 8,943,368 | $ | 2,087,637 | $ | 505,311 | $ | 13,501,975 | |
| Less: Provision for impairment of deferred costs | | | | | | | | (9,514,843 | ) |
| | | | | | | | | | | | $ | 3,987,132 | |
The Company originally entered into an agreement to acquire a 50% interest in the Getty Central, Getty South and Getty Southwest mineral rights from Robak Industries Ltd. (“Robak”), a private company controlled by the then Company’s president, under certain terms which were not met. On November 8, 2002 the Company and Robak terminated the original agreement and entered into an agreement for the Company to acquire a 100% interest in the Getty Central and Getty Southwest and a 50% interest in the Getty South mineral rights from Robak in exchange for 6,000,000 common shares of the Company at a deemed value of $1,200,000. The Company also agreed, at its sole discretion, to pay 100% of the costs to place the Getty South mineral rights into production, and granted a 1-1/2% net smelter royalty in favour of Robak.
In 2004, the Board of Directors considered acquiring the remaining 50% of Getty South from Robak. The board commissioned a valuation of the Robak interest from the same party that carried out the 2002 valuation. The valuator presented information about his 2002 report that caused the board to re-examine the 2002 transaction. An independent committee comprised of all directors, except the then Company’s president, has initiated a thorough review of the historical geological data for the Getty South Property. To date the board has received nothing that would suggest that the Getty South acquisition should be rescinded. Refer to note 10.
The Company is pursuing approaches to further develop its mineral rights. Although it is uncertain whether the Company will determine that it has economically recoverable reserves and whether it will be able to obtain the necessary financing to complete the exploration and development of the mineral rights, the Company believes that it may be able to economically develop the mineral rights. However, Canadian generally accepted accounting principles require that exploration costs related to mineral rights be written-down for impairment unless there is persuasive evidence that impairment has not occurred. Accordingly, at December 31, 2003 the Company had recorded provisions for impairment of exploration costs in the amount of $9,500,933 and of rights acquisition costs of $13,910. The Company has elected to resume deferring costs incurred from January 2004 until such time as it determines if it has economic ally recoverable reserves, or until exploration ceases and the mineral rights are abandoned.
All Getty mineral claims are subject to a 1-1/2% net smelter return royalty in favour of Robak.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
6. | Property, building and equipment |
|
| | | | | June 30, 2008 | | | | December 31, 2007 |
| | | | | Accumulated | | | | |
| | | Cost | | Amortization | | Net | | Net |
| |
| Automotive equipment | $ | 29,318 | $ | 28,859 | $ | 459 | $ | 540 |
| Computer equipment | | 97,654 | | 96,270 | | 1,384 | | 1,786 |
| Computer software | | 74,359 | | 74,359 | | - | | - |
| Office equipment | | 54,407 | | 48,189 | | 6,218 | | 6,909 |
| Portable buildings | | 12,112 | | 11,991 | | 121 | | 142 |
| Building | | 178,124 | | 64,478 | | 113,646 | | 115,965 |
| Land | | 22,322 | | - | | 22,322 | | 22,322 |
| | $ | 468,296 | $ | 324,146 | $ | 144,150 | $ | 147,664 |
7. | Mortgage payable |
|
| The mortgage payable is secured by a first mortgage on land and building and requires monthly payments of $756 including interest at 7.5% per annum, and is repayable on October 1, 2012. |
|
| Principal repayments required are as follows: |
|
| 2008 | $ | 2,557 |
| 2009 | | 2,752 |
| 2010 | | 2,963 |
| 2011 | | 3,189 |
| 2012 | | 77,960 |
8. | Income taxes |
|
| Significant components of the Company's future income tax assets are as follows: |
|
| | | June 30, 2008 | | | June 30, 2007 | |
| Tax value of mineral rights in excess of book value | $ | 786,000 | | $ | 852,000 | |
| Tax value of capital assets in excess of book value | | 111,000 | | | 111,000 | |
| Net operating loss carryforwards | | 1,629,000 | | | 1,700,000 | |
| | | 2,526,000 | | | 2,663,000 | |
| Valuation allowance | | (2,526,000 | ) | | (2,663,000 | ) |
| Net future income tax assets | $ | - | | $ | - | |
The Company has determined that realization is not more likely than not and therefore a valuation allowance against all future income tax assets has been recorded.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
A reconciliation between the Company's statutory and effective tax rates is as follows:
| | June 30, 2008 | | June 30, 2007 | |
| |
| Statutory rate | 31.5 | % | 34.1 | % |
| Unrecognized benefit of current year's losses | (31.5 | ) | (34.1 | )% |
| Effective rate of tax recovery | - | | - | |
At June 30, 2008, the Company has approximately $5,171,000 of loss carryforwards which may be available to reduce taxable income in future years. These losses expire as follows:
| 2008 | | 94,000 |
| 2009 | | 228,000 |
| 2010 | | 289,000 |
| 2014 | | 562,000 |
| 2025 | | 621,000 |
| 2026 | | 1,132,000 |
| 2027 | | 2,120,800 |
| 2028 | | 125,200 |
| | $ | 5,172,000 |
9. | Share capital. |
|
| a) | Authorized: Unlimited number of common shares |
|
| b) | Issued: | Shares | | | Amount | |
| | Balance, December 31, 2006 | 49,078,657 | | $ | 18,014,384 | |
| | Shares issued for cash | 13,000,000 | | | 1,300,000 | |
| | Shares for debt | 4,937,500 | | | 493,750 | |
| | Warrants exercised | 147,750 | | | 22,163 | |
| | Stock incentive options exercised | 475,000 | | | 118,750 | |
| | Fair value of options exercised | – | | | 3,262 | |
| | Shares issue costs | – | | | (27,939 | ) |
| | Balance, December 31, 2007 | 67,638,907 | | $ | 19,924,370 | |
| | Shares issued for cash | 10,000,000 | | | 1,000,000 | |
| | Share issue costs | | | | (2,873 | ) |
| | Balance June 30, 2008 | 77,638,907 | | $ | 20,921,497 | |
Subsequent to the six months ending June 30, 2008, 3,253,630 warrants were exercised at $0.15 each for 3,253,630 common shares raising $488,044.50. These warrants were from a June 2006 private placement, the balance of the warrants expired July 8, 2008. As of July 31, 2008, 80,892,537 shares were outstanding.
In January 2008, the Company closed a non-brokered private placement for 10,000,000 shares at $0.10 per share, for proceeds of $1,000,000. The TSX Venture Exchange accepted this private placement on January 10, 2008 and these shares were issued, subject to a four-month hold period expiring on May 11, 2008.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
9. | Share capital – continued |
|
| On May 7, 2007 the TSX Venture Exchange accepted the Company’s non-brokered private placement of 13,000,000 units for gross proceeds of $1,300,000. Each unit, priced at $0.10, is comprised of one common share and one-half of one purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at a price of $0.15 for a period of 12 months. These warrants expired May 7, 2008 and remained unexercised. |
|
| On May 1, 2007, the Company issued 4,937,500 shares at a value of $0.10 per share to settle outstanding debt for $493,750. The subject debt, with a private holding company controlled by a director of the Company, arose when the Company agreed to acquire 175,000 common shares of Genco Resources Ltd., a Canadian public company, from the holding company to be applied as consideration for a negotiated settlement in litigation involving a former director. Refer also to notes 10 and 11. |
|
| On July 7, 2006, the Company issued 10,000,000 units at $0.11 for gross proceeds of $1,100,000. Each unit is comprised of one common share and one half of one share purchase warrant, with each whole warrant entitling the holder to purchase an additional common share of the Company for a period of 6 months (expiry date – extended to July 7, 2008 from January 7, 2007) at a price of $0.15. On the expiry date 1,723,620 whole warrants remained unexercised. |
|
| Share purchase warrants - continuity |
| |
| | | Number of | | | | Number of |
| Expiry Date | Exercise | Warrants | Issued | Exercised | Expired | Warrants |
| | Price | Dec. 31, 2007 | | | | June 30, 2008 |
| January 16, 2008 | 0.15 | 2,375,000 | | | 2,375,000 | – |
| July 7, 2008 | 0.15 | 4,977,250 | | 3,253,630 | | 1,723,620 |
| *May 7, 2008 | 0.15 | 6,500,000 | | | 6,500,000 | – |
| | | 13,852,250 | | 3,253,630 | 8,875,000 | 1,723,620 |
| Share purchase options – continuity |
| | | Number of | | | | Number of |
| Expiry Date | Exercise | Options | Issued | Exercised | Expired | Options |
| | Price | Dec 31, 2007 | | | | June 30, 2008 |
| April 14, 2008* | 0.25 | 2,675,000 | | | 2,675,000 | – |
| July 20, 2010 | 0.25 | 1,000,000 | | | | 1,000,000 |
| August 15, 2010 | 0.25 | 200,000 | | | | 200,000 |
| |
| May 16, 2008 | 0.20 | | 1,475,000 | | | 1,475,000 |
| | | 3,875,000 | 1,475,000 | | 2,675,000 | 2,675,000 |
At the Company’s 2007 Annual General Meeting, the shareholders approved an amendment to the Incentive Stock Option Plan to allow the issuance to a maximum 6,700,000 stock incentive options. As of July 31, 2008 3,550,000 Incentive Stock Options available for issuance. During the period ending June 30, 2008, the Company’s board of directors approved the issuance of an additional 400,000 Incentive Stock Options to be distributed evenly to the Company’s directors and comptroller, once the pre-feasibility study is completed and the results are made public. The exercised price will be determined at that time.
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
9. | Share capital – continued |
|
| On August 9, 2007, the Company announced that 1,500,000 incentive stock options were granted to a director and an investor relations manager. Subsequently the 500,000 incentive stock options issued to the investor relations manager were cancelled. These options vest over the three years ended December 31, 2009. Based upon Black-Scholes option valuation model, a risk free market rate of 4.15% and a volatility of 98%, the estimated compensation cost related to the options granted is approximately $272,696 of which $29,540 was recognized during this period. The one million options remaining are exercisable at a price of $0.25 per share until July 20, 2010. |
|
| Option pricing models require the input of highly subjective assumptions, particularly as to the expected price volatility of the stock and expected life of the option. Changes in these assumptions can materially affect the fair value estimate and therefore it is management’s view that the existing models do not necessarily provide a single reliable measure of the fair value of the Company’s stock option grants and warrant issuances. |
|
10. | Commitments and contingencies |
|
| In 2007 the Company incurred significant legal fees as a result of events related to the review of the 2002 Mineral Property Interest Sales Agreement and the various lawsuits to which it is a party, as described below: |
|
| - On April 25, 2006 the Company initiated a lawsuit in the Supreme Court of British Columbia against the lawfirm of Blake Cassels & Graydon LLP. The lawsuit claims inter alia, damages for breach of duty owed to theCompany. The outcome of this claim is presently undeterminable and the financial statements reflect noprovisions in respect to it. At July 31, 2008 only the Blakes Cassel Graydon action remain unresolved.
- The Company initiated a lawsuit on November 10, 2005 in the Supreme Court of British Columbiaagainst former directors Robert Gardner and Vittorio Preto for the recovery of $120,000 USD which theCompany claims was inappropriately, without board approval, and contrary to the Company’s bankingresolution removed from the Company’s bank account during 2004. The amount claimed was expensed asDevelopment fees in the Company’s 2004 financial statements and no provision has been recorded for itsfuture recovery.
- In the first quarter of 2005, former directors Robert Gardner and Vittorio Preto filed a Third Party actionagainst the Company claiming an indemnity in respect of all costs, charges and expenses reasonably incurredby them in defence of a lawsuit brought November 24, 2004 against them by Robak. The Company filed aDefence to the claim and Counterclaim alleging that Gardner and Preto are not entitled to indemnification,asserting that these former directors did not act with a view to the best interests of the Company and otherwisedid not discharge the fiduciary and other duties they owed to the Company as directors. The Company alsofiled an action against Ross Glanville and Ross Glanville & Associates claiming damages for negligence.
|
|
During 2007 all actions directly involving Mssrs. Gardner, Preto and Glanville were settled by the Company paying an aggregate of $440,000 in cash and issuing 4,937,500 common shares as more fully described at note 9. The aggregate expense currently recognized was net of $37,431 in amounts previously recorded as owing to these parties.
On July 7, 2006, the Company was named in a lawsuit initiated in the Supreme Court of BC by a number of plaintiffs alleging, inter alia, that the business or affairs of the Company is oppressive or unfairly prejudicial to or
GETTY COPPER INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(stated in Canadian dollars)
10. | Commitments and contingencies - continued |
|
| has unfairly disregarded the interests of the plaintiffs and those similarly situated. In May 2008, the Aarvold et. al. plaintiffs and Getty Copper Inc. concluded a settlement of the action in which both the plaintiffs' claims and the defendants' counterclaim have been dismissed without costs to any party. No settlement payments were transferred or received by either party. This settlement serves to vindicate the Company’s steadfast position that the allegations raised in these and previously settled proceedings against the Company and its directors were completely unfounded. |
|
11. | Related party transactions |
|
| In addition to transactions described elsewhere in these financial statements, the Company had the following transactions and balances with officers and directors of the Company and companies or professional firms with which officers or directors are associated. |
|
| | | June 30, 2008 | | June 30, 2007 |
| |
| Accounts payable | $ | 4,214 | $ | 51,615 |
| |
| Exploration and development costs incurred | $ | 15,486 | | – |
| |
| Expenses: | | | | |
| Management fees | $ | 15,000 | $ | 15,000 |
| Professional fees | $ | 7,968 | $ | 151,165 |
| Rent | $ | 3,000 | $ | 3,000 |
These transactions are in the normal course of operations and are measured at fair value as determined by management.
As further described in note 10, during 2007 the Company acquired common shares from a private company controlled by a director and subsequently distributed these shares in settlement of certain legal actions. As the acquisition of these shares was based upon and occurred concurrent with their disposal, the Company has recorded no gain or loss in respect to this disposition.
The company has received a request for indemnity for legal expenses incurred by a director in various litigation matters involving the company and the director. The company is in the process of setting up an independent committee of the board of directors to review the various accounts related to the litigation matters with a view to making a recommendation to the board of directors for a decision on the request for reimbursement.
12. | Differences between Canadian and United States accounting principles |
|
| The quarterly financial statements do not reflect the difference between Canadian Generally Accepted Accounting Principles (“GAAP”) and those principles that would be applied if the financial statements were prepared in accordance with GAAP in the United States. See December 31, 2007 financial statements. |
|
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
The following discussion and analysis of the results of operations and financial position of the Company for the six months ending June 30, 2008 should be read in conjunction with the June 30, 2008 financial statements and the related notes which have been prepared in accordance with or reconciled to Canadian Generally Accepted Accounting Principles. All dollar amounts in this Management Discussion and Analysis (“MD&A”) are stated in Canadian dollars. The effective date of this report is July 31, 2008.
Forward Looking Statements
Except for historical information, this MD&A may contain forward-looking statements. These statements involve known risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievement expressed or implied by these forward looking statements. The reader is cautioned not to place undue reliance on this forward-looking information.
Overall Performance
The Company is engaged in the acquisition and exploration of natural resource properties. Since 1993, the Company has been conducting exploration for copper on approximately 200 km2 in Highland Valley, British Columbia. These properties adjoin the large porphyry copper mining and milling operations of Highland Valley Copper.
West Coast Environmental and Engineering (WCE) of Ventura and Nevada City, California, continues to work on a Preliminary Feasibility Study which was started in 2007. The focus is on a potential cathode copper production from the Getty North and Getty South oxide and sulphide resource zones. The new engineering study is intended to update the past work referred to above and includes possible development of both the copper and molybdenum oxide and sulphide resources. The oxide and sulphide resources of the Getty North Deposit would potentially be open-pit mined in conjunction with the Getty South oxide and sulphide resources.
An update on the Preliminary Feasibility Study engineering report being carried out by WCE under the direction of Mr. Craig Parkinson P.Geo, the Qualified Person responsible for this study was announced in May 2008. As the Getty North NI 43-101 compliant resource has been updated with molybdenum values, WCE reports that the processing plan is proposed to be altered to effectively accommodate the molybdenum resource. To facilitate effective recovery of the molybdenum resource, the option of dump and heap leaching of oxide ores has now been replaced by a flotation tailings leach system. This methodology is anticipated to allow maximum potential utilization of the updated Getty resources, and is analogous to other recent and successfully operating global hydrometallurgical production facilities. Further, given the current global crisis in molybdenum roasting capacity, WCE is now investigating incremental added ca pacity in the hydrometallurgical pressure oxidation and metal recovery circuits for potential on-site custom processing of outside copper and molybdenum concentrates from other entities with available materials. In particular, the hydrometallurgical process plant now proposed for the Getty Project should allow treatment of much lower grade combined bulk copper and molybdenum concentrates, which could be a significant advantage over current molybdenum concentrate production and roasting practices. However, at this time there can be no assurance that the proposed Preliminary Feasibility Study will indicate that the quality of the present resources will be upgraded to the status of reserves, or that the planned processes will be able to produce cathode copper material as proposed. The above plans for producing copper concentrates and cathode copper may not be economically achievable even though the testing and planning to date indicate that the copper cathode could potentially be produced using the planned processes.
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
The Company primarily has been exploring the Getty North and Getty South deposits. These deposits have copper mineral resource estimates that were received by the Company in August and June of 2007 respectively. In addition, the Getty North deposit has both copper and molybdenum mineral resource estimates that were received by the Company in February 2008. These 2007 and 2008 technical reports meet the requirements of the CIM classifications referenced in National Instrument 43-101.
The Getty South technical report discloses an Inferred Resource of 28.16 million tonnes, having a grade of 0.47% copper at a cut off grade of 0.2% copper.
The 2007 Getty North technical report discloses indicated and inferred copper resources of oxide and sulphide zones at cut off grades of 0.2% and 0.3% copper. At a cut off grade of 0.2% copper, the Indicated Resource calculated was 32.106 million tonnes at a grade of 0.454% copper, and an Inferred Resource of 8.250 million tonnes at a grade of 0.355% copper. At a cut off grade of 0.3% copper, the Indicated Resource calculated was 30.730 million tonnes at a grade of 0.462% copper, and the Inferred Resource calculated was 3.983 million tonnes at a grade of 0.452% copper. The 2008 Getty North technical report discloses the same indicated and inferred copper resources as the 2007 technical report. In addition to the copper resources, the 2008 Getty North technical report discloses indicated molybdenum resources based on a cut-off grade of 0.2% copper. At a cut off grade of 0.2% copper, the molybdenum Indicated Resource calculated w as 32.10 million tonnes at a grade of 0.015% molybdenum. A 2008 technical report on the Getty South deposit is under preparation and will disclose indicated copper and molybdenum resources.
The Company’s other identified potential mineral zones, known as North Valley, Glossie, Getty West, Northwest, Southwest, and Central are all in the early stage of exploration and there is insufficient data to establish whether any resources may exist. The Company continues to seek additional properties worthy of exploration and development.
The price of copper has risen in 2008 as a result of increasing worldwide consumption and decreasing world copper inventory. Recent widely-read business journals predict that metal prices in 2008 should continue at current levels due to supply and demand dynamics, but there can be no assurance that the current prices will be sustained over the timeframe that would be required to place any mineral deposit that may be located on the Property into commercial production. The Company continues its efforts to move the properties into the development stage to take advantage of the current strong demand for copper.
The Company became involved in a series of lawsuits arising out of its acquisition of its 50% interest in Getty South. Legal expenses resulted in higher general and administrative expenses during 2006. The 2007 fiscal year also faced significant legal expenses due to the outstanding litigation. One lawsuit, considered the most complex of the three, was resolved in the second quarter of 2007 and is reflected in the increased legal costs of the fiscal year.
Notwithstanding the distractions of the referred to litigation, the Company believes that the receipt of the three NI 43-101 compliant technical reports and the commissioning of the Preliminary-Feasibility Study has significantly moved the Company forward toward its stated corporate mission of placing the Getty North and South Deposits into production. In May 2008, the Aarvold et. al. plaintiffs and Getty Copper Inc. have concluded a settlement of the action in which both the plaintiffs' claims and the defendants' counterclaim have been dismissed without costs to any party. No settlement payments were transferred or received by either party. This settlement serves to vindicate the Company’s steadfast position that the allegations raised in these and previously settled proceedings against the Company and its directors were completely unfounded.
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
Result of Operations
Due to reduced commodity prices and a lack of working capital, nominal exploration work was carried out by the Company between 1998 and 2003. Consequently at the years ended December 31, 2001 to December 31, 2003 the financial statements were adjusted to reflect a provision for impairment of mineral properties.
Between January 1, 2007, and July 31, 2008 the Company has raised $2,300,000 by way of private placement financing.
On January 10, 2008, the Company completed a non-broker private placement for 10,000,000 shares at $0.10 per share for gross proceeds of $1,000,000.
During the first week of July 2008, 3,253,630 warrants were exercised at $0.15 each for 3,253,630 common shares raising $488,044.50. These warrants were from a June 2006 private placement, the balance of the warrants expired July 8, 2008. As of July 31, 2008, 80,892,537 shares were outstanding.
The Company’s working capital increased to $205,131 for the six months ending June 30, 2008 from ($296,145) at June 30, 2007, the increase of $501,276 is a result of funds raised through the issuance of stock, through private placement, exercising of warrants and Incentive Stock Options.
The Company’s total assets decreased during the six months ending June 30, 2008 to $4,771,080 a decrease of $50,364 from June 30, 2007, due to funds being used to reduce liabilities. The Company’s liabilities decreased by $717,505. The decrease in liabilities is a result of a decrease in legal expenses, as many of these issues have been settled. Exploration expenditures on the property are deferred, thus increasing the balance sheet value of the mineral rights. The Company has no significant source of working capital other than funds raised through private placement, exercising of warrants and Incentive Stock Options.
The loss from operations for the six months ending June 30, 2008 decreased by $1,737,886 over the loss reported at June 30, 2007. General and administrative expenditures for the six months ending June 30, 2008 decreased to $125,300 compared to $969,131 at June 30, 2007. The comparative decrease of $843,831 in administrative expenses between the six months ending June 30, 2008 and 2007 can be attributed to a decrease in professional fees. The predominant administration expense being the legal costs associated with the lawsuits outlined under Additional Disclosure. The Company recognized $29,540 in stock option compensation during the six months ending June 30, 2008. See note 9 of the financial statements. Also in June 2007, the Company incurred $896,319 in a legal settlement which includes $493,750 recognized in a share for debt settlement. This debt arose by the Compa ny acquiring marketable securities from a related party utilized in resolution of a lawsuit involving the claim of former directors indemnification and related matters. The Company has no source of income other than interest earned on funds held in term deposits.
Professional fees for the six months ending June 30, 2008 $28,282 (2007 - $891,531) which include $17,807 (2007 - $877,569) for legal fees, $10,475 (2007 - $13,962) in accounting fees.
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
Selected Quarterly Information:
| | | |
| June 30, 2008 | June 30, 2007 | December 31, 2007 |
Loss for the quarter | ($47,715) | ($1,511,774) | - |
Loss for the six months | ($125,300) | ($1,863,186) | - |
Loss for the year ending | | | ($2,217,003) |
Loss per share: | ($0.001) | ($0.02) | ($0.04) |
Assets | $4,771,080 | $4,821,444 | $4,898,678 |
Summary of Quarterly Results
| | | | | | | | |
| June 30 2008 | March 31 2008 | Dec. 31 2007 | Sept. 30 2007 | June 30 2007 | March 31 2007 | Dec. 31 2006 | Sept. 30 2006 |
Revenue | ─ | ─ | $ 2,264 | $ 2,264 | $ 2,264 | $ 1,698 | $ 3,957 | $ 2,259 |
Loss before Other items |
$125,300 |
77,585 |
1,320,684 |
1,138,959 |
969,131 |
351,412 |
1,136,910 |
792,933 |
Net loss | $125,300 | 77,585 | 2,217,003 | 2,035,278 | 1,863,186 | 351,412 | 1,136,910 | 792,933 |
Loss per share | $0.001 | $ 0.001 | $ 0.04 | $ 0.04 | $0.028 | $0.007 | $0.03 | $0.016 |
Loss per share diluted |
$0.001 |
$0.001 |
$0.03 |
$0..03 |
$0.022 |
$0.0058 |
$0.017 |
$0.121 |
During the six months ending June 30, 2008, the Company spent $138,422 on deferred costs as follows:
| | | | | | |
| Getty Northwest | Getty Central | Getty North | Getty South 50% interest | Getty Southwest | Total Exploration & Development |
Assay | $ | $ | $ | $ 548 | $ | $ 548 |
Feasibility study | | | 40,203 | 38,169 | | 78,372 |
Geology | | | 8,884 | 23,627 | | 32,511 |
Other,general & admin | 2,386 | 17 | 9,985 | 14,323 | 280 | 26,991 |
Total exploration & development costs |
$2,386 |
$ 17 |
$59,072 |
$ 76,667 |
$ 280 |
$138,422 |
During the six months ending June 30, 2007, the Company spent $79,347 on deferred costs as follows:
| | | | | | |
| Getty Northwest | Getty Central | Getty North | Getty South 50% interest | Getty Southwest | Total Exploration & Development |
Assay | $ | $ | $ | $ | $ | $ |
Geology | | | 8,698 | 47,252 | | 55,950 |
Metallurgy | | | 3,100 | | | 3,100 |
Other,general & admin | 6,470 | 45 | 2,473 | 9,400 | 1,909 | 20,297 |
Total exploration & development costs |
$6,470 |
$ 45 |
$14,271 |
$ 56,652 |
$ 1,909 |
$79,347 |
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
Liquidity
The Company has no mineral producing properties at this time and receives no revenues from production. All of the Company’s properties are exploration projects, and there is no assurance that a commercially viable ore deposit exists in any such properties until further exploration work and a comprehensive evaluation based upon unit cost, grade, tonnage, recoveries, and other factors conclude economic feasibility.
As of August 12, 2008, 2,675,000 stock incentive options remain issued and 3,550,000 remain reserved for issuance under the Company’s stock option plan.
Financing Activities
On January 10, 2008, the Company completed a private placement for 10,000,000 common shares at $0.10 per share, for gross proceeds of $1,000,000. Proceeds from the private placement will be used for continuing exploration on the Company’s mineral properties and for general working capital purposes. All securities issued will be subject to a four-month hold period from the date of closing.
During the first week of July 2008, 3,253,630 warrants were exercised at $0.15 each for 3,253,630 common shares raising $488,044.50. These warrants were from a June 2006 private placement, the balance of the warrants expired July 8, 2008. As of July 31, 2008, 80,892,537 shares were outstanding.
As of July 31, 2008, if all the share purchase warrants and issued incentive stock options were exercised the number of shares outstanding would be 83,567,537.
Outlook
The Company continues its efforts to further develop its mineral properties. Although it is uncertain whether the Company will determine that it has economically recoverable reserves and whether it will be able to obtain the necessary financing to complete the exploration and development of the mineral properties, the Company believes that it may be able to economically develop the mineral properties. However, Canadian generally accepted accounting principles require that development costs related to mineral properties be written down for impairment unless there is persuasive evidence that impairment has not occurred. During the year ending December 31, 2007, funding was available to continue the exploration of the mineral properties, so future exploration development costs will not be written off until such time as the Company determines if it has economical recoverable resources or until exploration and development ceases an d/or the mineral claims are abandoned.
The Company advises that the previous litigation it was involved in no longer impacts the levels of performance or achievements. . The Company also appreciates that other potential indemnification claims may arise from ongoing litigation.
The Company’s management remains committed to the development of the Company’s Highland Valley mineral claims, subject to a positive feasibility study, production permitting and financing.
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
Related Party Transactions
During the six months ending June 30, 2008, Cinnamon Jang Willoughby, a professional accounting firm to which director and CEO Donald Willoughby is associated, billed the Company $7,968 (2007- $8,211) in accounting fees related to tax filings, quarterly report review and other professional accounting related matters, The Company reimbursed the professional accounting firm $Nil (2007– $52,954) for the director’s legal fees, time and disbursements for representing the Company in examinations of discovery and other matters related to law suits. John Parks, Solicitor and former director and Corporate Secretary of the Company, billed the Company $Nil (2007- $90,000) for legal fees as general counsel. For the six months ending June 30, 2008, the Company paid $3,000 office rent to Deborah Resources Ltd. and $15,000 management fees to Freeway Properties Inc., and both companies are control led by the Managing Director,John Lepinski. The Company paid $15,486 to Allihies Engineering Inc. for technical services, which is a company held by director and president Corby Anderson.
Outstanding share data
As of July 31, 2008, there were 80,892,537 common shares outstanding.
Additional Disclosure
On April 25, 2006, the Company initiated a lawsuit in the Supreme Court of British Columbia against the law firm of Blake Cassels & Graydon LLP. The lawsuit claims inter alia, damages for breach of duty owed to the Company.
On July 7, 2006, the Company was named in a lawsuit initiated in the Supreme Court of BC by a number of plaintiffs including Robert Gardner and Gordon Blankstein. The action alleges, inter alia, that the business or affairs of the Company is oppressive or unfairly prejudicial to or has unfairly disregarded the interests of the plaintiffs and those similarly situated. In May 2008, the Company and the Plaintiffs concluded a settlement of the action in which both the plaintiffs' claims and the defendants' counterclaim have been dismissed without costs to any party. No settlement payments were transferred or received by either party. This settlement serves to vindicate the Company’s steadfast position that the allegations raised in these and previously settled proceedings against the Company and its directors were completely unfounded.
On July 19 2007, the Company announced the results of a NI 43-101 compliant technical report on the Getty South Deposit.
On August 23, 2007 the Company announced the results of a NI 43-101 compliant technical report of the Getty North Deposit.
On August 24, 2007 the Company announced it has commissioned a preliminary-feasibility engineering study from West Coast Environmental and Engineering on potential cathode copper production from the Getty North and Getty South oxide and sulphide copper resources. The Company is awaiting a Preliminary Feasibility Study.
On January 7, 2008 the Company announced that it received an updated resource calculation on the Getty North Deposit which reflects the current estimate of the molybdenum indicated resources contained in the oxide and sulphide portions of the Getty North Deposit. On February 19, 2008 the Company received a NI 43-101 Technical Report which disclosed the current estimate of the molybdenum Indicated Resources contained within the Getty North Deposit.
The company has received a request for indemnity for legal expenses incurred by a director in various litigation matters involving the company and the director. The company is in the process of setting up an independent committee of the board of directors to review the various accounts related to the litigation matters with a view to making a recommendation to the board of directors for a decision on the request for reimbursement.
GETTY COPPER INC.
MANAGEMENT DISCUSSION & ANALYSIS
JUNE 30, 2008
Summary and Outlook
The Company is a British Columbia company engaged in the business of mineral exploration in the Highland Valley of British Columbia. The Company does not have any properties that are in production or that contain a reserve.
Notwithstanding the distraction of the referred to litigation, the Company’s main focus is to concentrate on the Getty North and Getty South deposits.
Additional Information
Additional information relating to the company, its activities and operations is available on SEDAR atwww.sedar.com.
APPENDIX B
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, Corby G. Anderson, Chief Executive Officer, of Getty Copper Inc., certify the following:
1.
Review:I have reviewed the interim financial statements and interim MD&A (together the interim filings) of Getty Copper Inc. (the issuer) for the interim period ending June 30, 2008.
2.
No misrepresentations:Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the interim filings.
3.
Fair presentation:Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Date:August 27, 2008
“Corby Anderson”
_______________________
Corby G. Anderson Chief Executive Officer
|
NOTE TO READER |
|
In contrast to the certificate required under Multilateral Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings(MI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in MI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of: |
|
i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
|
ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
|
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. |
|
Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in MI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation. |
|
APPENDIX B
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, Donald Willoughby, Chief Financial Officer, of Getty Copper Inc., certify the following:
1.
Review:I have reviewed the interim financial statements and interim MD&A (together the interim filings) of Getty Copper Inc. (the issuer) for the interim period ending June 30, 2008.
2.
No misrepresentations:Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the interim filings.
3.
Fair presentation:Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Date:
August 27, 2008
“Donald Willoughby”
_______________________
Donald Willoughby, Chief Financial Officer,
|
NOTE TO READER |
|
In contrast to the certificate required under Multilateral Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings(MI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in MI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of: |
|
i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
|
ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
|
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. |
|
Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in MI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation. |
|
![[gettycopper6kq2aug27002.gif]](https://capedge.com/proxy/6-K/0001176256-08-000996/gettycopper6kq2aug27002.jpg)
GETTY COPPER INC.
| |
| Trading Symbol TSX V: GTC |
| |
| July 3, 2008 |
GETTY COPPER SULFURIC ACID USE AND RECOVERY UPDATE
NEWS RELEASE
The Company wishes to announce that it has engaged Eco-Tec Inc.of Pickering, Ontario, Canada (www.eco-tec.com)as a vendor for the provision of hydrometallurgical acid recovery technology via their globally commercialized Acid Purification Unit (APU®). This technology as proposed, would be a benefit to the Company as it allows effective recovery, recycle and usage of sulfuric acid, a key component in global hydrometallurgical copper processing facilities.Eco-Tec will also be engaged in technical support services for optimization and confirmation of the proposed hydrometallurgical design in support of the currently on-going pre feasibility engineering study by West Coast Environmental and Engineering. For reference, the industrially proven APU® acid recovery system offered by Eco-Tec was awarded the Falconbridge Innovation Award in 2005 for their APU applications in hydrometallurgy. Eco-Tec was also awarded the Ontario Global Trader’s Award for Innovation in 2005 and 2007. For reference, the Company is proposing to utilize acidic concentrate pressure oxidation and tailings vat leaching hydrometallurgical technology in its possible anticipated treatment of the Getty copper and molybdenum resources located in the Highland Valley of British Columbia.
ON BEHALF OF THE BOARD OF DIRECTORS
|
|
Dr. Corby G. Anderson, President and COO |
For further information please contact:
Dr. Corby G. Anderson, CEng FIChemE
GETTY COPPER INC.
1000 Austin Avenue
Coquitlam, BC, V3K 3P1
Phone: 604-931-3231 Fax: 604-931-2814
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, especially those that address estimated resource quantities, grades and contained metals, are forward-looking statements because they are generally made on the basis of estimation and extrapolation from a limited number of drill holes and metallurgical studies. Although diamond drill hole core provides valuable information about the size, shape and geology of an exploration project, there will always remain a significant degree of uncertainty in connection with these valuation factors until a deposit has been extensively drilled on closely spaced centers which has occurred only in specific areas on the Getty Project. Although the Company believes the expectations expressed in its forward-looking statements are based on reasonable assumptions, such statemen ts should not be in any way construed as guarantees of the ultimate size, quality or commercial feasibility of the Getty Project or of the Company's future performance. Subsequent results and developments may differ materially from those postulated in the estimates and forward-looking statements. Other factors that could cause the Company's actual results and performance to differ materially from those in forward-looking statements include adverse market prices for metals, the conclusions of detailed feasibility and technical analyses, lower than expected grades and quantities of resources, mining rates and metal recovery rates and the fact that necessary capital may not be available to the Company on terms acceptable to it or at all. The need for compliance with extensive environmental and socio-economic rules and practices and the requirement for the Company to obtain government permitting can cause a delay or even abandonment of a mineral project. The Company is subject to the specific risks inheren t in the mining business as well as general economic and business conditions. For more information on the Company, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission and its home jurisdiction filings that are available atwww.sedar.com.