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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDEDSEPTEMBER 30, 2002 |
OR | |
[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the transition period from to |
COMMISSION FILE NUMBER 333-53894
OBAN MINING INC.
(Exact name of registrant as specified in its charter)
NEVADA | 88-0474903 |
(State of other jurisdiction of incorporation | (IRS Employer Identification Number) |
OBAN MINING INC.
11960 Hammersmith Way, Suite 155
Richmond, British Columbia
Canada V7A 5C9
(Address of principal executive offices)
(604) 275-8994
(Registrant's telephone number, including area code)
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. Yes [ x ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as ofSeptember 30, 2002: 7,000,000.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEPENDENT ACCOUNTANTS' REPORT
To the Director
Oban Mining Inc.
We have reviewed the accompanying balance sheet as at September 30, 2002, the statements of operations for the three month and nine month periods ended September 30, 2002 and 2001 and from inception on September 20, 2000 through September 30, 2002, the statement of stockholders' equity for the nine month period ended September 30, 2002 and the statements of cash flows for the nine month periods ended September 30, 2002 and 2001 and from inception on September 20, 2000 through September 30, 2002 of Oban Mining Inc. These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of financial statements consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles.
As described in Note 1, the accompanying financial statements have been prepared in accordance with the instructions to SEC Form 10-QSB, accordingly the comparative balance sheet presented is for the preceding fiscal year ended December 31, 2001. The full financial statements for the year ended December 31, 2001, which includes the balance sheet as at that date, were audited by us and we expressed an unqualified opinion on them in our report dated March 11, 2002 but we have not performed any auditing procedures since that date.
Vancouver, Canada | /s/ Hoogendoorn & Company |
October 29, 2002 | Chartered Accountants |
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OBAN MINING INC. (An Exploration Stage Company) BALANCE SHEETS (Unaudited) |
| December 31, 2001 |
ASSETS
$ | $ | |
Current | 85,550 | 337 |
85,550 | 337 |
LIABILITIES
Current | 13,641 | 16,471 |
Advances from related party | 15,927 | 15,927 |
29,568 | 32,398 |
STOCKHOLDER'S EQUITY
Common Stock | ||
Authorized: 100,000,000 shares, $0.00001 par value | 70 | 50 |
ADDITIONAL PAID IN CAPITAL | 99,980 | - |
DEFICIT ACCUMULATED DURING THE | (44,068) | (32,111) |
55,982 | (32,061) | |
85,550 | 337 |
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OBAN MINING INC. (An Exploration Stage Company) STATEMENTS OF OPERATION (Unaudited) |
For the Three Months Ended September | For the Nine Months Ended September | Cumulative from September 20, 2000 | |||
2002 | 2001 | 2002 | 2001 | 2002 | |
| $ | $ | $ | $ | $ |
REVENUES | - | - | - | - | - |
MINERAL PROPERTY COSTS | 706 | - | 706 | - | 2,292 |
GENERAL AND ADMINISTRATIVE EXPENSES | |||||
Legal fees | 796 | - | 4,146 | - | 29,496 |
Audit fees | 130 | - | 1,143 | - | 5,143 |
Filing fees | 210 | 200 | 365 | 200 | 1,050 |
Bank charges | - | 24 | 67 | 69 | 181 |
Office and sundry | - | 350 | 386 | 350 | 762 |
Transfer agent fees | 150 | - | 994 | - | 994 |
Accounting and administration | 1,150 | - | 4,150 | - | 4,150 |
(3,142) | (574) | (11,957) | (619) | (44,068) | |
NET LOSS | (3,142) | (574) | (11,957) | (619) | (44,068) |
BASIC AND DILUTED | (0.00) | (0.00) | (0.00) | (0.00) | |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 7,000,000 | 5,000,000 | 6,415,638 | 5,000,000 | |
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OBAN MINING INC. (An Exploration Stage Company) STATEMENT OF STOCKHOLDER'S EQUITY (Unaudited) |
From Inception (September 20, 2000) to September 30, 2002
Deficit | |||||
Accumulated | |||||
Additional | During the | Total |
Common Stock | Paid-In | Exploration | Stockholder's |
Shares | Amount | Capital | Stage | Equity | |
$ | $ | $ | $ | ||
Balance, September 20, 2000 | - | - | - | - | - |
Common stock issued for cash | 5,000,000 | 50 | - | - | 50 |
Net loss for the period | - | - | (19,334) | (19,334) | |
Balance, December 31, 2000 | 5,000,000 | 50 | - | (19,334) | (19,284) |
Net loss for the year | - | - | - | (12,777) | (12,777) |
Balance, December 31, 2001 | 5,000,000 | 50 | - | (32,111) | (32,061) |
Shares issued for cash at | 2,000,000 | 20 | 99,980 | - | 100,000 |
Net loss for the period | - | - | - | (11,957) | (11,957) |
Balance, September 30, 2002 | 7,000,000 | 70 | 99,980 | (44,068) | 55,982 |
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OBAN MINING INC. (An Exploration Stage Company) STATEMENT OF CASH FLOWS (Unaudited) |
For the | Cumulative | ||
2002 | 2001 | 2002 | |
| $ | $ | $ |
Cash Flows From Operating Activities | |||
Loss from operations | (11,957) | (619) | (44,068) |
Cash provided by changes in operating assets and | |||
Increase in accounts payable | (2,830) | 850 | 13,641 |
Advances from related party | - | - | 15,927 |
Net cash (used in) provided by operating activities | (14,787) | 231 | (14,500) |
Cash Flows From Financing Activities | |||
Issuance of common stock for cash | 100,000 | - | 100,050 |
Net cash provided by financing activities | 100,000 | - | 100,050 |
Increase in cash | 85,213 | 231 | 85,550 |
Cash at beginning of period | 337 | 128 | - |
Cash at end of period | 85,550 | 359 | 85,550 |
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OBAN MINING INC. (An Exploration State Company) Notes to the Financial Statements (Unaudited) |
September 30, 2002
NOTE 1 - BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with the instructions to SEC Form 10-QSB. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such instructions. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto as at December 31, 2001.
In the opinion of the Company's management, all adjustments considered necessary for a fair presentation of these unaudited financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the nine month period ended September 30, 2002 are not necessarily indicative of the results that can be expected for the year ended December 31, 2002.
NOTE 2 - GOING CONCERN
The Company was incorporated in the State of Nevada on September 20, 2000. Since inception, the Company has acquired 2 mineral claims in the Slocan Mining Division, Province of British Columbia, Canada. To date, the Company has not conducted any exploration on the claims. Management has raised funds for a preliminary exploration program to assess the mineral potential of the claims, and to finance the cost of general and administrative expenses, and projected further losses from operations in the exploratory stage.
The ability of the Company to maintain its existence and further exploration of its mineral claims is dependent upon its raising sufficient new equity financing. The commencement of principal operations is dependent upon the discovery of economically recoverable ore reserves, confirmation of the Company's interest in the mineral claims, the ability of the Company to obtain necessary financing to complete development, and future profitable production or proceeds from the sale of all or an interest in the mineral claims. The likely outcome of these future events is indeterminable. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
This section of this report includes a number of forward- looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our prospectus. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Our company is engaged in exploration of our property. Our company's principal resources have been acquired through issuance of common stock and from shareholder loans.
We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.
Our auditors have issued a going concern opinion. This means that our auditors believe there is doubt that we can continue as an on-going business unless we obtain additional capital to finance our operations. 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 property. On March 12, 2002, we completed our public offering by raising $100,000. We sold 2,000,000 shares of our common stock at an offering price of five cents per share.
The Company had cash resources of $85,550 as at September 30, 2002, however, we do not know how long the money will last. We do believe it will last twelve months. It depends upon the amount of exploration we conduct and the cost thereof. We will not know that information until we begin exploring our property.
Some of the funds raised will be applied to exploration. If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we need additional cash and cannot raise it we will either have to suspend operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph, we have no other financing plans.
We will be conducting research in the form of exploration of our property. 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 ore and we have determined it is economical to extract the ore from the land.
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Plan of Operations
Our success depends upon finding mineralized material. Mineralized material is a mineralized body that has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we do not find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease operations and you will lose your investment.
In addition, we may not have enough money to complete our exploration of our property. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and cannot raise it, we will have to suspend or cease operations.
We must conduct exploration to determine what amount of minerals, if any, exist on our properties and if any minerals which are found can be economically extracted and profitably processed.
Our property is undeveloped raw land. Now that our offering is concluded, we have started exploration operations. To our knowledge, the property has never been mined. The only event that has occurred was the staking of the property by Locke Goldsmith and a physical examination of the property and research of available geological literature. The cost of staking the claims was included in the $826.00 we paid to Mr. Goldsmith. Before gold retrieval can begin, we must explore for and find mineralized material. After that has occurred we have to determine if it is economically feasible to remove the mineralized material. Economically feasible means that the costs associated with the removal of the mineralized material will not exceed the price at which we can sell the mineralized material. We cannot predict what that will be until we find mineralized material.
We do not know if we will find gold. We believe that activities occurring on adjoining properties are not material to our activities. The reason is that whatever is located under adjoining property may or may not be located under our property.
Our exploration program is designed to economically explore and evaluate our properties.
We do not claim to have any minerals or reserves whatsoever at this time on any of our properties.
We intend to implement an exploration program and intend to proceed in the following three phases:
Phase 1 has begun with research of the available geologic literature. We also intend to conduct personal interviews with geologists, mining engineers and others familiar with the prospect sites. We have recently begun this phase of the exploration process on our properties.
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When the research is completed, our initial work will be augmented with geologic mapping, geophysical testing and geochemical testing of our claims. When available, existing workings, like trenches, prospect pits, shafts or tunnels will be examined. If an apparent mineralized zone is identified and narrowed down to a specific area by the studies, we will to begin trenching the area.
Trenches are generally approximately 150 ft. in length and 10-20 ft. wide. These dimensions allow for a thorough examination of the surface of the vein structure types generally encountered in the area. They also allow easier restoration of the land to its pre-exploration condition when we conclude our operations. Once excavation of a trench is completed, samples are taken and then analyzed for economically potential minerals that are known to have occurred in the area. Careful interpretation of this available data collected from the various tests aid in determining whether or not the prospect has current economic potential and whether further exploration is warranted.
Phase 1 should be done in March 2003 and cost up to $20,000. We have begun the research of the available geologic literature. We have had several discussions with Locke Goldsmith regarding the property. During the period just ended, the only other significant activity relating to the mineral properties was the payment of $706 in assessment fees to keep the mineral claims current. Subsequent to the end of the period we have asked Locke Goldsmith to initiate an orientation program consisting of geological mapping and collection of soil samples for geochemical analysis on the Alta claims. The program is expected to commence in early November. The work will be completed in a portion of the Alta 2 claim. Soil samples will be analyzed for silver, lead and zinc; anomalously high values may indicate the presence of concealed metal deposits in the nearby bedrock.
Phase 2 involves an initial examination of the underground characteristics of the vein structure that was identified by Phase 1 of exploration. Phase 2 is aimed at identifying any mineral deposits of potential economic importance. The methods employed are
* | more extensive trenching | |
* | more advanced geophysical work | |
* | drift driving |
Drift driving is the process of constructing a tunnel to take samples of minerals for testing. Later, the tunnel can be used for mining minerals. The geophysical work gives a general understanding of the location and extent of mineralization at depths that are unreachable by surface excavations and provides a target for more extensive trenching and core drilling. Trenching identifies the continuity and extent of mineralization, if any, below the surface. After a thorough analysis of the data collected in Phase 2, we will decide if the property warrants a Phase 3 study.
Phase 2 will take about 3 months and cost up to $40,000.
Phase 3 is aimed at precisely defining the depth, the width, the length, the tonnage and the value per ton of any mineral body. This is accomplished through extensive drift driving. Phase 3 will take about 6 months and cost up to $80,000.
The breakdown of estimated times and dollars for each phase was made by the board of directors.
We do not intend to interest other companies in the property if we find mineralized materials. We intend to try to develop the reserves ourselves.
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If we are unable to complete a phase of exploration because we do not have enough money, we will cease operations until we raise more money. If we cannot or do not raise additional money, we will cease operations.
We cannot provide you with a more detailed discussion of how our exploration program will work and what we expect will be our likelihood of success. That is because we have a piece of raw land and we intend to look for gold. We may or may not find any mineralized material. It is impossible to predict the likelihood of such an event.
We will not move onto a subsequent phase until the phase we are working on is completed.
We do not have any plan to take the Company from phase 3 exploration to revenue generation until we have determined its economic feasibility.
We do not intend to hire additional employees at this time. All of the work on the property will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.
Limited Operating History; Need for Additional Capital
There is no historical financial information about Oban Mining upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
To become profitable and competitive, we will have to conduct research and exploration of our properties before we start production of any minerals we may find. We have raised $100,000 by way of an equity financing from our public offering to provide for the capital required to implement our research and exploration phases. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.
Results of Operations
From Inception on September 20, 2000
We acquire our first property, have staked the property and have begun Phase 1 of our exploration plan now that our public offering has concluded.
Since inception, we have used our common stock to raise money for the property acquisition, for corporate expenses and to repay outstanding indebtedness. Net cash provided by the sale of shares from inception on September 20, 2000 to September 30, 2002 was $100,050. In addition a related party advanced a total of $15,927 to us which must be repaid.
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Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our business operations. We issued 5,000,000 shares of common stock through a Section 4(2) offering in September 2000 to Richard A. Achron, our sole officer and director. This was accounted for as a cash shares purchase of $50. We issued 2,000,000 shares of common stock through our public offering that closed on March 12, 2002 that raised $100,000.
In addition, Mr. Achron, has advanced the total sum of $15,927, which was $15,000 was used by us to pay for legal fees relating to organizational and start-up costs, $826 was used to pay Locke Goldsmith for the initial claims and $101 was used for general operating capital. The loan does not bear interest and have not been paid as of the date hereof. There are no documents reflecting the loan and they are not due on a specific date. Mr. Achron will accept repayment from us when money is available. There is no plan to repay Mr. Achron from the proceeds of this offering.
As of September 30, 2002, the Company had total assets of $85,550 and accounts payable and accrued liabilities of $29,567 including the $15,927 owing to Mr. Achron. The remaining accounts payable of $13,640 is primarily comprised of $11,596 in legal fees, $500 in audit fees, $1,544 in filing fees and office expenses. These costs were incurred mainly relating to the public offering and will be paid now that this round of financing has completed.
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PART II.
ITEM 5. OTHER MATTERS
On November 8, 2001 the SEC declared our Form SB-2 registration statements effective (SEC file no. 333-53894) which registered 4,000,000 shares of common stock.
Our offering terminated on March 12, 2002 after we sold 2,000,000 of the 4,000,000 shares registered of common stock at an offering price of $0.05 per share. We raised an aggregate of $100,000 from the offering.
There was no underwriter for our shares of common stock. Since the effective date of the offering, from the $100,000 raised, we have incurred $9,851 in the offering expenses; $706 for the cost of exploring our property; and $3,943 for administration of our office and bank charges for a total of $14,500.
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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 by the undersigned thereunto duly authorized on this 7th day of November 2002.
| OBAN MINING INC. | |
| BY: | /s/ Richard Achron |
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CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of OBAN MINING INC. (the "Company") on Form 10-QSB for the period ended September 30, 2002 as filed with the Securities and Exchange Commission on the date here of (the "Report"), I, Richard Achron, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Richard Achron November 7, 2002 |
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CERTIFICATION
I, Richard A. Achron, certify that:
1. I have reviewed this interim report on Form 10-QSB of Oban Mining, Inc.;
2. Based on my knowledge, this interim report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and
3. Based on my knowledge, the financial statements, and other financial information included in this interim report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this interim report.
Date: | November 7, 2002 | /s/ Richard Achron | ||
Richard A. Achron |
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