================================================================================
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
For the month of May, 2003
SEC File #0-24570
----------------------------------------------------------------------
CENTRAL MINERA CORP.
Ste. 1040 - 885 West Georgia St.
Vancouver, BC
V6C 3E8
CANADA
(Address of principal executive offices)
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-
================================================================================
THIS FORM 6-K CONSISTS OF:
BRITISH COLUMBIA SECURITIES COMMISSION FORM 51-901F
QUARTER ENDED MARCH 31, 2003 FINANCIAL STATEMENT (SCHEDULE "A")
BRITISH COLUMBIA SECURITIES COMMISSION FORM 51-901F
NOTES TO FINANCIAL STATEMENT (SCHEDULE "B")
MANAGEMENT DISCUSSION AND ANALYSIS (SCHEDULE "C")
SIGNATURE
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.
CENTRAL MINERA CORPORATION
By: "Michael Cytrynbaum"
Name: Michael Cytrynbaum
Title: President
Date: May 27, 2003
BRITISH COLUMBIA QUARTERLY REPORT
SECURITIES COMMISSION BC FORM 51-901F
(previously Form 61)
================================================================================
CENTRAL MINERA CORP.
Period ending March 31, 2003
================================================================================
ISSUER DETAILS FOR QUARTER ENDED DATE OF REPORT
NAME OF ISSUER (YY/MM/DD)
Central Minera Corp. March 31, 2003 2003/05/16
- --------------------------------------------------------------------------------
ISSUER ADDRESS
1040 - 885 West Georgia Street
- --------------------------------------------------------------------------------
CITY/PROVINCE/POSTAL CODE ISSUER FAX NO. ISSUER TELEPHONE NO.
Vancouver, British Columbia, V6C 3E8 (604) 669-0131 (604) 687-6191
- --------------------------------------------------------------------------------
CONTACT NAME CONTACT'S POSITION CONTACT PHONE NO.
Barbara West (604) 687-6191
- --------------------------------------------------------------------------------
CONTACT E-MAIL ADDRESS WEB SITE ADDRESS
barbwest@look.ca N/A
================================================================================
CERTIFICATE
The Schedule "A" required to complete this Report is attached and the disclosure
contained therein has been approved by the Board of Directors. A copy of this
Report will be provided to any shareholder who requests it.
================================================================================
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
(YY/MM/DD)
"MICHAEL CYTRYNBAUM" Michael Cytrynbaum 2003/05/21
================================================================================
1
SCHEDULE "A"
CENTRAL MINERA CORP.
(a Development Stage Company)
Balance Sheet
(in United States dollars)
March 31, 2003 June 30, 2002
-------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 81,353 $ 6,021
Funds held in trust -- 175,000
Accounts receivable and prepaid expenses 10,249 8,929
Marketable securities (Market value March 31, 2003 - $10000) 9,617 6,418
----------- -----------
101,219 196,368
Capital assets 2,202 --
Investment in private company 1 1
Mineral properties 1 1
----------- -----------
$ 103,423 $ 196,370
=========== ===========
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable and accrued liabilities $ 58,119 $ 75,290
Loan payable (note 5) 20,439 19,749
----------- -----------
78,558 95,039
----------- -----------
Shareholders' equity:
Convertible debentures (note 7) 300,000 250,000
Share capital (note 4) 41,441,857 41,441,857
Authorized -- unlimited
Issued and outstanding
(March 31, 2003 -- 21,197,568 shares;
June 30, 2002 -- 21,760,068 shares)
Deficit (41,716,992) (41,590,526)
----------- -----------
24,865 101,331
----------- -----------
$ 103,423 $ 196,370
=========== ===========
See accompanying notes to financial statements
On behalf of the Board:
/s/ Murray Kosick Director
- --------------------------
/s/ Michael Cytrynbaum Director
- --------------------------
2
CENTRAL MINERA CORP.
(A Development Stage Company)
Statement of Operations and Deficit
(in United States dollars)
Three months ended Nine months ended
----------------------------- ----------------------------
March 31 March 31 March 31 March 31
Cumulative 2003 2002 2003 2002
------------ ------------ ------------ ------------ ------------
Administration expenses:
Accounting and audit $ 688,300 $ 1,477 $ 10,880 $ 3,086 $ 18,943
Consulting fees 1,774,839 24,838 23,758 81,021 38,553
Amortization 282,218 93 608 279 912
Legal 1,831,853 399 16,905 117,961 16,905
Office 926,772 1,358 9,254 5,309 11,426
Rent 726,565 70 52,913 293 68,447
Salaries and benefits 287,132 4,289 -- 7,734 --
Transfer agent and filing fees 159,951 1,918 6,142 14,533 6,347
Travel and promotion 1,205,064 28 795 10,535 951
------------ ------------ ------------ ------------ ------------
7,882,694 34,470 121,255 240,751 162,484
------------ ------------ ------------ ------------ ------------
Other items:
Interest and other income (1,511,317) (339) (14,731) (730) (27,822)
Loss (gain) on foreign exchange 47,765 (4,140) 1,499 (7,732) 2,116
Investment write-down 1,000,799 -- --
Loss (gain) on marketable securities (16,040) -- --
Mineral property write-down 24,724,034 -- --
Option payment (note 8) (6,397) -- (6,397) --
Loss on sale of fixed assets 11,307 -- --
Termination costs paid to court 118,209 -- --
Allowance (recoveries) lawsuits 610,826 46,364 -- (99,427) --
Loss on sale of subsidiary 8,855,112 -- --
------------ ------------ ------------ ------------ ------------
33,834,298 41,885 (13,232) (114,286) (25,706)
------------ ------------ ------------ ------------ ------------
Net loss for the period (41,716,992) (76,355) (108,023) (126,465) (136,778)
Deficit, beginning of period -- (41,640,637) (41,416,659) (41,590,526) (41,387,904)
------------ ------------ ------------ ------------ ------------
Deficit, end of period $(41,716,992) $(41,716,992) $(41,524,682) $(41,716,991) $(41,524,682)
------------ ------------ ------------ ------------ ------------
Net loss per common share $ (0.004) $ (0.005) $ (0.006) $ (0.006)
============ ============ ============ ============
Weighted average number of common shares 21,197,568 21,760,068 21,197,568 21,760,068
See accompanying notes to financial statements
3
CENTRAL MINERA CORP.
(A Development Stage Company)
Statements of Cash Flow
(in United States dollars)
Three months ended Nine months ended
----------------------- ------------------------
March 31 March 31 March 31 March 31
Cumulative 2003 2002 2003 2002
------------ -------- --------- --------- ---------
Cash and cash equivalents provided by (used in):
Operating activities:
Net loss for the period $(41,716,992) $(76,355) $(108,023) $(126,465) $(136,778)
Items not involving cash:
Amortization 282,217 93 608 278 912
Loss on sale of subsidiary 8,855,112 -- -- -- --
Loss on sale of fixed assets 11,307 -- -- -- --
Investment write-down 1,000,799 -- -- -- --
Mineral property write-down 24,724,036 -- -- -- --
Stipulation of settlement agreement 375,000 -- -- -- --
------------ -------- --------- --------- ---------
(6,468,521) (76,262) (107,415) (126,187) (135,866)
Net change in non-cash working capital items:
Accounts receivable and prepaid expenses (10,249) 6,054 (10,266) (1,320) 14,486
Rent deposits -- -- 17,307 -- --
Marketable securities (9,617) -- -- (3,199) --
Accounts payable and accrued liabilities 58,119 25,635 102,407 (17,171) 99,420
------------ -------- --------- --------- ---------
(6,430,268) (44,573) 2,033 (147,877) (21,960)
------------ -------- --------- --------- ---------
Financing activities:
Loans and debentures payable 320,439 1,423 -- 50,690 --
Funds held in trust -- -- -- 175,000 --
Shares issued for cash 25,316,857 -- -- -- --
------------ -------- --------- --------- ---------
25,637,296 1,423 -- 225,690 --
------------ -------- --------- --------- ---------
Investing activities:
Mineral property expenditures (17,310,637) -- -- -- --
Investments (1,000,799) -- -- -- --
Purchase of fixed assets (814,239) -- -- (2,481) --
------------ -------- --------- --------- ---------
(19,125,675) -- -- (2,481) --
------------ -------- --------- --------- ---------
Increase (decrease) in cash & cash equivalent 81,353 (43,150) 2,033 75,332 (21,960)
Cash and cash equivalents, beginning of period 124,503 6,812 6,021 30,805
------------ -------- --------- --------- ---------
Cash and cash equivalents, end of period $ 81,353 $ 81,353 $ 8,845 $ 81,353 $ 8,845
============ ======== ========= ========= =========
See accompanying notes to financial statements
4
CENTRAL MINERA CORP.
(a Development Stage Company)
Notes to Financial Statements
(in United States dollars)
March 31, 2003
- --------------------------------------------------------------------------------
1. GOING CONCERN CONSIDERATIONS:
These financial statements have been prepared on the assumption that the
Company will continue as a going concern, meaning it will continue in
operation for the foreseeable future and will be able to realize assets and
discharge liabilities in the normal course of operations. Different basis
of measurement may be appropriate when a company is not expected to
continue operations for the foreseeable future. As at May 16, 2003, the
Company had not reached a level of operations, which would finance
day-to-day activities. The Company's continuation as a going concern is
dependent upon its ability to attain profitable operations and generate
funds therefrom and/or raise equity capital or borrowings from third
parties and related parties sufficient to meet current and future
obligations.
2. CONTINUING OPERATIONS AND LAWSUITS:
The Company is engaged in the acquisition, exploration and development of
mineral properties. On February 1, 1999, the Company registered as a Yukon
company, and changed its name from Delgratia Mining Corporation to Central
Minera Corp. At the Company's annual general meeting in December 2000, the
shareholders approved a change of domicile and the consolidation of shares
to a maximum ratio of 1:20. The directors have not implemented these
changes.
The Company had commenced an action to recover $264,000 claimed by certain
former officers as remuneration for services rendered and termination
payments. A settlement was reached in December 2002 and this amount is
recorded as a reduction in the previously recorded allowance for this
lawsuit. A lawsuit was filed against the Company by a former director of
the Company seeking compensation for legal expenses incurred for
representation during the class action lawsuit in 1997. The board approved
a settlement offer of Cdn$70,000 on March 31st, 2003. This amount was
accrued at March 31, 2003 and one-half of the amount was paid on April 14,
2003 with the balance due on June 10, 2003.
3. BASIS OF PRESENTATION
These financial statements have been prepared under Canadian generally
accepted accounting principles applicable to interim financial statements
and therefore do not include all the disclosures required for annual
financial statements. Accordingly, these interim financial statements
should be read in conjunction with the audited annual financial statements
for the year ended June 30, 2002 and included with the Company's annual
report. In the opinion of management, these financial statements contain
all adjustments necessary to present fairly the financial position, results
of operations and cash flow for the three and nine-month periods ended
March 31, 2003 and 2002. Interim results are not indicative of the results
of operations for the full year.
5
CENTRAL MINERA CORP.
(a Development Stage Company)
Notes to Financial Statements
(in United States dollars)
March 31, 2003
- --------------------------------------------------------------------------------
4. SHARE CAPITAL:
(a) Authorized share capital:
Unlimited number of subordinate voting shares without par value and
3,000,000 variable multiple voting shares without par value.
(b) Issued share capital:
Price
per share Shares Consideration
--------- ---------- -------------
Balance June 30, 2002 21,760,068
Escrow shares cancelled (562,500)
---------- -------------
Balance, March 31, 2003 21,197,568 $41,441,857
========== =============
(c) Escrow shares:
As at March 31, 2003, no common shares of the Company (2002 and 2001 -
2,562,500) are subject to escrow agreements. On November 21, 2002,
562,500 escrowed common shares were returned to the treasury with the
expiration of escrow agreements. On December 24, 2002, 2,000,000
common shares were released from escrow under the terms of the escrow
agreement.
(d) Share purchase options:
Details of director, employee and consultants' share purchase options
are as follows:
June 30, 2002 Granted Expired March 31, 2003 Price Expiry Date
------------- ------- --------- -------------- ------ ------------------
1,065,000 1,065,000 -- $0.20 September 14, 2002
1,100,000 875,000 900,000 1,075,000 $0.20 December 31, 2005
Subsequent to the end of the third quarter, 850,000 additional share
purchase options were granted with an exercise price of $0.20. 600,000 of
these options expire on December 31, 2003 and the remaining 250,000 expire
on December 31, 2005.
e) Share purchase warrants:
Details of share purchase warrants are as follows:
June 30, 2002 Cancelled Exercised March 31, 2003 Price Expiry Date
------------- --------- --------- -------------- ---------- -----------------
3,000,000 -- -- 3,000,000 $0.15/2 wt November 30, 2003
3,003,340 -- -- 3,003,340 $0.30/2 wt November 30, 2003
6
CENTRAL MINERA CORP.
(a Development Stage Company)
Notes to Financial Statements
(in United States dollars)
March 31, 2003
- --------------------------------------------------------------------------------
5. RELATED PARTY TRANSACTIONS:
The loan payable is from a shareholder and is unsecured, non-interest
bearing, and payable on demand.
Related party transactions not separately disclosed elsewhere in these
financial statements were as follows:
2003 2002
------- -------
Consulting or other fees paid to directors/officers
or to companies controlled by directors/officers $81,021 $35,118
6. RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED
STATES ("US GAAP"):
These financial statements have been prepared in accordance with accounting
principles generally accepted in Canada. A description of accounting
principles that differ in certain respects from United States generally
accepted accounting principles follows:
a) Income taxes:
For the purposes of U.S. GAAP, the Company adopted Financial
Accounting Standards Board Statement No. 109 "Accounting for Income
Taxes". Statement 109 changed the method companies use to account for
income taxes from the deferral method to an asset and liability
method. As indicated, the Company has unrecognized losses being
carried forward for income tax purposes. As there is no certainty as
to utilization of the losses, the benefit attributable thereto would
be fully offset by a valuation allowance. Accordingly, the application
of Statement 109 does not result in a material difference for U.S.
GAAP accounting purposes.
b) Stock-based compensation:
For purposes of U.S. GAAP, the Company has chosen to apply the
intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25 ("APB No. 25") "Accounting for Stock
Issued to Employees" for measuring the value of stock-based
compensation. The intrinsic value-based method requires that
compensation expense be recorded at the time of granting for the
excess of the quoted market price over the exercise price granted to
employees and directors under stock option plans. If a stock option is
not exercised, the compensation expense recorded in the previous
period is reversed by decreasing the compensation expense in the
period of forfeiture.
For U.S. GAAP purposes, escrowed shares would be considered to be a
compensatory arrangement between the Company and the holder of the
shares. Accordingly, the difference between the fair value of shares
at the time the shares are eligible for release from escrow and the
issue price of the shares is recognized as a charge to income in the
period they are eligible for release from escrow.
c) New accounting standards
i. The Company has adopted the Statement of Financial Accounting
Standards No. 130 ("SFAS 130") "Reporting Comprehensive Income"
with no impact on U.S. GAAP differences.
ii. The Company does not have any derivative or hedging instruments
and, therefore, Statement of Financial Accounting Standards No.
133 ("SFAS 133") "Accounting for Derivative Instruments and
Hedging Activity" has no impact on U.S. GAAP differences
7
CENTRAL MINERA CORP.
(a Development Stage Company)
Notes to Financial Statements
(in United States dollars)
March 31, 2003
- --------------------------------------------------------------------------------
6. RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED
STATES ("US GAAP") (CONTINUED):
The effect of the differences between Canadian GAAP and U.S. GAAP on the
balance sheets and statements of operations and deficit is summarized
below:
MARCH 31
-----------------------------
2003 2002
----------- -----------
Share capital, under Canadian GAAP $41,441,857 $41,441,857
Adjustment for APB No. 25 21,563 21,563
----------- -----------
Share capital under U.S. GAAP $41,463,420 $41,463,420
=========== ===========
Deficit, under Canadian GAAP $41,716,992 $41,524,628
Adjustment for APB No. 25 21,563 21,563
----------- -----------
Deficit under U.S. GAAP $41,738,555 $41,546,191
=========== ===========
There is no effect on the statements of cash flow for the difference
between Canadian GAAP and U.S. GAAP.
7. CONVERTIBLE DEBENTURES
The Company has completed a convertible debenture issue of U.S.$300,000, of
which U.S.$175,000 was held in trust by the Company's lawyers at June 30,
2002. All funds have been received by the Company. The debentures are
unsecured, bear interest at 2% per annum, and have a maturity date of July
31, 2004. The debentures will be deemed to have been converted into units
of the Company on July 31, 2003 in the ratio of one unit for each U.S.
$0.10 (3,000,000 units). Each unit will consist of one variable multiple
voting common share and one non-transferable share purchase warrant to
acquire one subordinate voting common share at U.S.$0.30 per share before
July 31, 2004. Related parties have subscribed for U.S.$125,000 of the
debentures.
8. OPTION TO PURCHASE AND ROYALTY AGREEMENT
The Company granted an Option to acquire its 100% interest in the
California Mine Crown Grants. The Company received the first payment in the
amount of U.S.$3,199 plus 100,00 shares of Island Arc Exploration Inc. at a
deemed value of U.S.$3,199. Island Arc Exploration has advised the Company
that the option will not be exercised. This property has previously been
written down to a nominal value in the Company's books.
8
BRITISH COLUMBIA QUARTERLY REPORT
SECURITIES COMMISSION BC FORM 51-901F
(previously Form 61)
- --------------------------------------------------------------------------------
CENTRAL MINERA CORP.
Period ending March 31, 2003
================================================================================
ISSUER DETAILS FOR QUARTER DATE OF REPORT
NAME OF ISSUER ENDED (YY/MM/DD)
Central Minera Corp. March 31, 2003 2003/05/16
- --------------------------------------------------------------------------------
ISSUER ADDRESS
1040 - 885 West Georgia Street
- --------------------------------------------------------------------------------
CITY/PROVINCE/POSTAL CODE ISSUER FAX NO. ISSUER TELEPHONE NO.
Vancouver, British Columbia, V6C 3E8 (604) 669-0131 (604) 687-6191
- --------------------------------------------------------------------------------
CONTACT NAME CONTACT'S POSITION CONTACT PHONE NO.
Barbara West (604) 687-6191
- --------------------------------------------------------------------------------
CONTACT E-MAIL ADDRESS WEB SITE ADDRESS
barbwest@look.ca N/A
================================================================================
CERTIFICATE
The Schedules "B" and "C" required to complete this Report are attached and the
disclosure contained therein has been approved by the Board of Directors. A copy
of this Report will be provided to any shareholder who requests it.
================================================================================
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
(YY/MM/DD)
"MICHAEL CYTRYNBAUM" Michael Cytrynbaum 2003/05/21
================================================================================
9
SCHEDULE "B"
CENTRAL MINERA CORP.
(a Development Stage Company)
Notes to Financial Statements
(in United States dollars)
March 31, 2003
- --------------------------------------------------------------------------------
1. ANALYSIS OF EXPENSES AND DEFERRED COSTS:
NINE MONTH PERIOD ENDED MARCH 31, 2003 ("Q3-02") COMPARED TO THE THREE MONTH
PERIOD ENDED MARCH 31, 2002 ("Q3-01")
During the YTD-03 the company incurred a loss of $126,000, as compared
to a loss of $136,000 for the YTD-02. An explanation of significant
variances is as follows:
Account Variance Explanation
--------------------------------------------------------------------------------
Consulting (42,000) New management agreement
--------------------------------------------------------------------------------
Legal fees (101,000) Settlement of lawsuits
--------------------------------------------------------------------------------
Rental & office expense 74,000 Lease terminated/relocation
--------------------------------------------------------------------------------
Interest & other income (27,000)
--------------------------------------------------------------------------------
Option payment 6,000 California Mine
--------------------------------------------------------------------------------
Other expenses (55,000) Furlong lawsuit/travel
--------------------------------------------------------------------------------
Other income 155,000 Settlement of lawsuit/exchange
--------------------------------------------------------------------------------
(Increase) decrease in loss
for the period 10,000
2. TRANSACTIONS WITH RELATED PARTIES:
Refer to Note 5 of the Interim Financial Statements (Schedule "A").
3. SUMMARY OF SECURITIES ISSUED AND OPTIONS GRANTED DURING THE PERIOD:
Convertible debentures - Refer to Note 7 of the Interim Financial Statements
(Schedule "A")
Authorized Share Capital - Refer to Note 4 (a) of the Interim Financial
Statements (Schedule "A")
Issued Share Capital - Refer to Note 4 (b) of the Interim Financial
Statements (Schedule "A")
Options & Warrants - Refer to Note 4 (d) and (e) of the Interim Financial
Statements (Schedule "A")
4. SUMMARY OF SECURITIES AS AT THE END OF THE REPORTING PERIOD:
Refer to Note 4 of the Interim Financial Statements (Schedule "A")
5. DIRECTORS AND OFFICERS:
Michael Cytrynbaum President and Director
Murray Kosick Director
Reinhard Siegrist Director
Joan Jamieson Corporate Secretary
Barbara West Assistant Corporate Secretary
10
SCHEDULE "C"
CENTRAL MINERA CORP.
March 31, 2003
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS
CURRENT OPERATIONS
Central Minera Corp. (the "Company") was largely inactive during the nine months
ended March 31, 2003. During the 2nd quarter, a settlement regarding litigation
commenced by the Company in the Supreme Court of British Columbia to recover
approximately US$264,000 paid out to former management was reached. The net
proceeds have been applied to working capital. During the 3rd quarter, a lawsuit
was filed against the Company by a former director of the Company seeking
compensation for legal expenses incurred for representation during the class
action lawsuit in 1997. The board of directors of the Company approved a
settlement offer on March 31, 2003 and payment of one-half of the settlement
amount was made on April 14, 2003 with the balance due on June 10th, 2003.
At a board of directors meeting held on March 31st, 2003, the directors approved
entering into Consultant Services Agreements with Mr. Gordon Ellis and Ms. Anne
Eilers, both of whom are past presidents of the Company. Their expertise and
familiarity with the assets of the Company will be of benefit to the board. Mr.
Carlo Civelli was appointed to the position of Vice President Finance, Europe
recognizing his substantial involvement on behalf of the Company, particularly
in the area of investor awareness in Europe.
During the quarter ended September 30, 2002, the Company completed a convertible
debenture issue of US$300,000. Under the terms of the debenture, a class of
multiple variable voting shares were to be created. At the Annual General
Meeting, a Special Resolution to create such shares was presented to the
shareholders. The Resolution was approved by 99.8 per cent of the votes cast.
The Articles of the Company were amended to reflect this new class of shares and
a Certificate of Amendment was issued by Yukon Registrar of Corporations on
January 6, 2003.
11
GENERAL
The Company has a limited history of operations and has not generated any
operating revenues. The Company's assets currently consist of:
o a 25% interest in five mineral claims in the Mackenzie Mining District in
the Northwest Territories;
o a 100% interest in the California Mine Crown Grants situated in the
Kootenay Land District of British Columbia. An unrelated third party held
an option to acquire all of the Company's interest in these claims and has
advised that it will not be exercised. As a result, all payments made under
the option agreement have been forfeited and all rights and interest in the
property revert to the Company.
o a 15.72% interest in Cactus Gold Corp. ("Cactus"), a private Nevada
corporation which owns certain mining properties including the Josh Claim.
DISCUSSION OF OPERATIONS
During the YTD-03 the company incurred a loss of $126,000, as compared to a loss
of $136,000 for the YTD-02. An explanation of significant variances is as
follows:
Account Variance Explanation
--------------------------------------------------------------------------------
Consulting (42,000) New management agreement
--------------------------------------------------------------------------------
Legal fees (101,000) Settlement of lawsuits
--------------------------------------------------------------------------------
Rental & office expense 74,000 Lease terminated/relocation
--------------------------------------------------------------------------------
Interest & other income (27,000)
--------------------------------------------------------------------------------
Option payment 6,000 California Mine
--------------------------------------------------------------------------------
Other expenses (55,000) Furlong lawsuit/travel
--------------------------------------------------------------------------------
Other income 155,000 Settlement of lawsuit/exchange
--------------------------------------------------------------------------------
(Increase) decrease in loss
for the period 10,000
FINANCING
The Company completed a convertible debenture issue for gross proceeds of US
$300,000, $250,000 of which was paid in cash and the balance by discharge of a
demand liability of $50,000. The debentures are unsecured, bear interest at 2%
per annum and have a maturity date of July 31, 2004. The debentures will be
deemed to have been converted into units of the Company on July 31, 2003 in the
ratio of one unit for each US $0.10 (3,000,000 units). Each unit will consist of
one variable multiple voting common share and one non-transferable share
purchase warrant to acquire one subordinate voting common share at US $0.30 per
share before July 31, 2004.
LIQUIDITY AND CAPITAL RESOURCES
On March 31, 2003 the Company had working capital of $22,661 as compared to a
working capital deficiency of $95,000 at March 31, 2002. As none of the
Company's mineral properties have advanced to the commercial production
12
stage and it has no history of earnings or cash flow from operations, the
Company relies on the sale of its equity shares for its source of funds. During
YTD-03 the Company received the proceeds of a $300,000 issue of convertible
debentures. Cumulatively from the Company's inception, it has raised $25,317,000
through the sale of its shares.
The company's major use of funds has been operations and mineral property
expenditures. During YTD-03 the Company spent $241,000 on operations ($162,000
in YTD-02). In order to reduce operational and mineral property expenditures,
the Company has reduced staff, and sold its major properties. The Company
anticipates that it will continue to have losses from operations until it can
advance its properties to the commercial production stage. In YTD-03, the
Company spent nothing on mineral properties.
FORWARD LOOKING STATEMENTS
This report includes "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions of future events or performance (often, but
not always, using words or phrases such as "expects" or "does not expect", "is
expected", "anticipates", or "does not anticipate", "plans", "estimates", or
"intends", or stating that certain actions, events or results "may", "could",
"would", "might", or "will" be taken, occur or be achieved) are not statements
of historical facts and may be "forward-looking statements". Forward-looking
statements are based on expectations, estimates and projections at the time the
statements are made and include, but are not limited to, the statements under
Management's Discussion and Analysis of Financial Condition and Results of
Operations and located elsewhere herein regarding industry prospects and the
Company's financial position. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
Company's expectations are more fully disclosed in the Company's Form 20-F.
Important risks include the company's lack of cash flow and resultant need for
additional funding, the risks associated with resource exploration and
development, the fact that there are no proven reserves, risks associated with
the property title, currency fluctuation, metal prices, environment and
political situations. All subsequent written and oral forward-looking statements
attributed to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Cautionary Statements.
13