1UNITED STATES
--------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F/A
ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended November 30, 1999
-------------------------------------------
Commission File No. 0-29986
TRIBAND RESOURCE CORPORATION
(Exact name of Registrant as specified in its charter)
Alberta, Canada
(Jurisdiction of incorporation or organization)
Suite 1370, 885 West Georgia Street, Vancouver, British Columbia, V6E 3E8
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Common Shares, without par value
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None
Indicate the number of outstanding shares of each of the Issuer's classes of
capital or common stock as of November 30, 1999: 12,893,007.
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 No X
---- ----
Indicate by check mark which financial statement item the registrant has elected
to follow.
Item 17 X Item 18
---- ----
The Index to Exhibits is
Page 1 of 55
Found at page 55
CURRENCY AND EXCHANGE RATES
---------------------------
All dollar amounts set forth in this report are in Canadian dollars, except
where otherwise indicated. The following table sets forth (i) the rates of
exchange for the Canadian dollar, expressed in the U.S. dollars, in effect at
the end of each of the periods indicated; (ii) the average exchange rates in
effect on the last day of each month during such periods; (iii) the high and
low exchange rate during such periods, in each case based on the noon buying
rate in New York City for cable transfers in Canadian dollars as certified for
customs purposes by the Federal Reserve Bank of New York. Prices based on the
Corporation's fiscal year end (November 30), and quoted in U.S. Dollars.
1999 1998 1997 1996 1995 1994
Rate at end of Period $0.6862 $0.65 $0.70 $0.74 $0.74 $0.73
Average Rate During Period $0.6718 $0.68 $0.72 $0.73 $0.73 $0.73
High Rate $0.6535 $0.63 $0.70 $0.72 $0.70 $0.72
Low Rate $0.6890 $0.71 $0.75 $0.75 $0.75 $0.76
On September 30, 2000, the noon buying rate in New York City for cable transfer
in Canadian dollars as certified for customs purposes by the Federal Reserve
Bank of New York was $0.6862 USD = $1.00 CDN.
FORWARD LOOKING STATEMENTS
- ----------------------------
Forward-Looking Information is Subject to Risk and Uncertainty. When used in
this Annual Report, the words "estimate," "project," "intend," "expect,"
"anticipate" and similar expressions are intended to identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Annual
Report. These statements are subject to risks and uncertainties that could cause
actual results to differ materially from those contemplated in such
forward-looking statements. Such risks and uncertainties include, but are not
limited to, those identified under the heading "Certain Risks of Operation" in
Item 1 hereof.
Page 2 of 55
GLOSSARY OF TERMS
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AG chemical symbol for silver
AMPHIBOLITE a type of metamorphic rock formed by high temperature and pressure from an
original iron magnesium rich igneous rock
ANTIMONY a chemical element, chemical symbol Sb
ARABLE LAND land which is suitable for the cultivation of crops (farm land)
ARGILLIC CLAY FORMATION clay minerals formed by alteration of original rock
ARGILLITE a sedimentary rock comprised of siltstone, claystone or shale that has been
compacted
ARSENIC a chemical element, chemical symbol As
ARSENOPYRITE a mineral composed of iron, arsenic and sulfur (FeAsS)
AS chemical symbol for arsenic
AU chemical symbol for gold
BA Chemical symbol for barium
BARITE a mineral composed of barium, sulfur and oxygen (BaSO4)
BI Chemical symbol for bismuth
BIOTITE GRANITE a granitic igneous rock containing large amounts of biotite
BISMUTH a chemical element, chemical symbol Bi
CADMIUM a chemical element, chemical symbol Cd
CALCARENITE clastic sedimentary rock containing calcium carbonite
CALC-SILICATE MINERALS a term referring to a group of minerals containing calcium and silica formed in a
carbonate rock
CARBONATE-MUSCOVITE a mixture of calcium carbonate and illite-muscovite clays in altered rocks
CHALCOPYRITE a mineral composed of copper, iron and sulfur (CuFeS2)
CHLORITE a greenish, platy, mica-like mineral containing iron, magnesium, aluminum and
silica.
CU chemical symbol for copper
EPIDOTE a calcium, aluminum silica mineral, common in metamorphic rocks
FEOX general chemical term for group of minerals containing iron and oxygen and/or
water
FLUORITE a mineral composed of calcium and fluorine (CaF2)
GRANITE an igneous rock consisting of quartz and orthoclase with ornblende or biotite
as mafic constituents.
GRANODIORITE a plutonic igneous rock consisting of quartz, calcic feldspar, and orthoclase with
biotite, hornblende or pyroxene as mafic constituents
Page 3 of 55
GREENSTONE iron and magnesium rich igneous rock whose composition has been changed in a
sequence of sedimentary rocks.
HEMATITE a mineral composed of iron and oxygen (Fe2O3)
HG chemical symbol for mercury
HYDROTHERMAL a term applied to heated water or fluid
JAROSITE a mineral composed of potassium iron, sulfur and oxygen (K, Fe3 (SO4)(OH)6
LIMONITE a generic term for brown hydrous iron oxide, not specifically identified
LOWER TERTIARY AGE the early part of the Tertiary geological time period spanning 66 to 44 million
years before the present
MESOTHERMAL conditions of ore deposition of intermediate temperatures and depths
MESOZOIC Era of geologic time spanning 245 to 66 million years before the present
METASOMATISM introduction of a fluid into a rock which totally changes the composition of the
rock
MICROCRYSTALLINE QUARTZ small crystals of the mineral quartz
MINERALS means a homogeneous naturally occurring chemical substance
ORE means a mineral or aggregate of minerals which can be mined at a profit
MO chemical symbol for molybdenum
PALAEOZOIC Era of geologic time spanning 570 to 245 million years before the present
PB chemical symbol for lead
PLUTONIC ROCKS igneous rocks formed below the earth's surface
PPB an abbreviation for units of measure in parts per billion
PPM abbreviation for units of measure in parts per million
PRE-TERTIARY a term applied to rocks of geological events older than Tertiary Age (more than
66 million years before the present.
PRODUCT means a metallic or non-metallic substance extracted from ore.
PYRITE a mineral composed of iron and sulfur (FeS2)
PYRITIZATION formation of the mineral pyrite in rocks
PYRRHOTITE a mineral composed of iron and sulfur (FeS)
QUARTZ DIORITE a plutonic igneous rock similar to granodiorite but with larger amounts of mafic
constituents.
QUARTZ-ANKERITE a mixture of quartz (SiO2) and ankerite (Ca, Fe, Mg) CO3 in altered rocks
QUATERNARY AGE a period of geologic time from 1.6 million years ago to the present
SB chemical symbol for antimony
SELENIUM a chemical element, chemical symbol Se
SILICIFICATION the introduction of or replacement by silica
THALLIUM a chemical element, chemical symbol Tl
Page 4 of 55
ULTRAMAFICS group of igneous rocks containing very small amounts of silica and large
amounts of magnesium and iron
VESICULAR BASALT FLOWS a surface flow of dark gray volcanic rocks of mafic composition with open voids
from gas bubbles
ZN chemical symbol for zinc
Page 5 of 55
TABLE OF CONTENTS
PART I
PAGE
ITEM 1 Description of Business . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 2 Description of Properties . . . . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ITEM 4 Control of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ITEM 5 Nature of Trading Market. . . . . . . . . . . . . . . . . . . . . . . . . . 37
ITEM 6 Exchange Controls and Other Limitations Affecting Security-Holders. . . . . 38
ITEM 7 Taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ITEM 8 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ITEM 9 Management's Discussion and Analysis of Financial Condition and Results . . 42
ITEM 9A Quantitative and Qualitative Disclosure About Market Risk. . . . . . . . . . 47
ITEM 10 Directors and Officers of Registrant. . . . . . . . . . . . . . . . . . . . 47
ITEM 11 Compensation of Directors and Officers. . . . . . . . . . . . . . . . . . . 48
ITEM 12 Options to Purchase Securities from Registrant or Subsidiaries. . . . . . . 51
ITEM 13 Interest of Management in Certain Transactions . . . . . . . . . . . . . . . 51
PART II
ITEM 14 Description of Securities to be Registered . . . . . . . . . . . . . . . . . 53
PART III
ITEM 15 Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . . . . . . . 53
ITEM 16 Changes in Securities and Changes in Security for Registered Securities. . . 53
PART IV
ITEM 17 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ITEM 18 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Page 6 of 55
PART I
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ITEM 1 DESCRIPTION OF BUSINESS
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NAME AND INCORPORATION
Triband Resource Corporation (the "Corporation") was incorporated under the laws
of the Province of Alberta on October 7, 1994 under the name of 627743 Alberta
Ltd. On February 10, 1995, 627743 Alberta Ltd. changed its name to Triband
Capital Corp. On July 18, 1996 Triband Capital Corp. changed its name to
Triband Resource Corporation. The authorized capital of the Corporation
consists of an unlimited number of common shares ("Common Shares") and an
unlimited number of preferred shares, without par value. As of November 30,
1999, its fiscal year end there were 12,893,007 Common Shares issued and
outstanding and no preferred shares issued and outstanding; there are
13,791,457 Common Shares issued and outstanding as of September 30, 2000.
The registered office of the Corporation is located at 1600 Canada Place, 407 -
2nd Street S.W., Calgary, Alberta, T2P 2Y3 and the head office of the
Corporation is located at Suite 1370, 885 West Georgia Street, Vancouver,
British Columbia, V6C 3E8. The Corporation has two wholly owned, direct
subsidiaries: Triband Resource US Inc., a corporation incorporated under the
laws of the State of Nevada on November 5, 1997, and Triband de M xico S.A. de
C.V., a corporation incorporated under the laws of the Hermosillo, Sonoro,
Mexico on August 5, 1997. The registered office of Triband Resource US Inc. is
located at 1 East Liberty Street, Suite #424, Reno, Nevada, , , 89504 and the
registered office of Triband de M xico S.A. de C.V is located at Blvd. Hidalgo
No. 64, Col. Centenario, Hermosillo, Sonora, 83260, MexicoINTERCORPORATE
RELATIONSHIPS
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TRIBAND RESOURCE CORPORATION
(ALBERTA)
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| |
| 100% 100% |
| |
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TRIBAND DE MEXICO TRIBAND RESOURCE US INC.
(MEXICO) (NEVADA)
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BUSINESS OF THE CORPORATION
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DESCRIPTION AND GENERAL DEVELOPMENT
- --------------------------------------
The Corporation is a natural resource corporation currently engaged in the
acquisition and exploration of mineral properties. It presently has no
producing properties, and there can be no assurance that a commercially viable
body of ore (a reserve) exists in any of the Corporation's properties until
appropriate drilling and/or underground testing is done and a comprehensive
evaluation based upon unit cost, grade recoveries and other factors determines
economic feasibility.
The Corporation was incorporated on October 7, 1994. The Common Shares of the
Corporation were listed and posted for trading on the junior capital pool board
of the Alberta Stock Exchange on September 22, 1995 and are currently trading
on the Canadian Venture Exchange under the trading symbol "TBD" trades on the
NASD's OTC Electronic Bulletin Board under the symbol TRBPF. On August 22,
1996, the Corporation acquired the Standard Creek Property in British Columbia
(the "Major Transaction"). Upon completion of the Corporation's Major
Page 7 of 55
Transaction, the Corporation was no longer considered a junior capital pool
corporation pursuant to the Alberta Stock Exchange Junior Capital Pool Policies,
so its Common Shares thereafter traded on the Alberta Stock Exchange, now the
Canadian Venture Exchange, as a normal course issuer. Prior to August 22, 1996,
the Corporation conducted no business operations of any kind other than those
acts consistent with the Corporation's attempts to acquire commercially viable
business interests in the natural resource industry.
During the three preceding fiscal years the Corporation has pursued its
operations through the acquisition and exploration of mineral properties in
Canada, Vietnam and the United States. Presently, the Corporation's principal
mineral properties, all of which are in the exploration stage, are located in
British Columbia, and Nevada.
On November 28, 1997, the Corporation acquired three exploration licenses in the
Bac Giang Province in Vietnam. The Corporation satisfied the minimum
exploration expenditures required on the Bac Giang Project during the first year
of the licenses (See page 35); however, because of the unsatisfactory results of
the Corporation's exploration program, as well as the uncertainties regarding
renewal of its exploration licenses by the Vietnamese government, the
Corporation decided not to expend any further amounts on the project. As of
February 28, 1999, the Corporation wrote off $154,129 and abandoned the Bac
Giang Project. The Corporation is conducting no further activities in Vietnam at
this time.
Triband Resource US Inc. was incorporated to carry on the Corporation's mineral
exploration and property acquisition activities in the State of Nevada,.
Triband de Mexico S.A. de C.V. was established to carry out similar activities
on behalf of the Corporation in Mexico. Currently the Corporation does not have
any properties in Mexico but is seeking new properties through its Mexican
subsidiary.
The table below illustrates the Corporation's expenditures on exploration
activities for the last three fiscal years. The figures below have been
prepared in accordance with generally accepted accounting principles ("GAAP") in
Canada. A major difference under Canadian generally accepted accounting
principals is that the costs of acquiring and exploring mineral properties are
capitalized prior to commercial feasibility and written down if the properties
are abandoned, sold or if management decides not to pursue the properties.
Under United States generally accepted accounting principles, exploration and
prospecting costs are charged to expense as incurred, as are exploration costs
for projects not yet determined by management to be commercially feasible.
Except as stated above and explained in Note 10 of the Corporation's financial
statements, the figures below are consistent with U.S. GAAP.
1999 1998 1997 1996 1995
General Exploration 50,062 76,246 - 50,059 -
Mineral Properties 97,106 166,902 50,433 31,746 -
Deferred Exploration Costs 224,791 454,547 779,045 - -
The Corporation has not prepared a budget for all its properties due to
depressed gold prices. The cost of developing gold and other mineral properties
is affected by the cost of operations, variations in ore grade, fluctuations in
metal markets and the cost of processing equipment. Government regulations
regarding prices, taxes, royalties, allowable production, importing and
exporting of minerals, land use, land tenure and environmental protection also
affect economic viability.
The Corporation's properties and plan of operations for the foreseeable future
are described in Item 2, below.
Page 8 of 55
CHANGE OF BUSINESS
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In April 2000, the Company decided to change its business focus to internet or
high tech ventures and completed a filing with the Canadian Venture Exchange
regarding the Company's intention to change its business.
On May 2, 2000, the Company entered into a letter of intent with eFinancial
Training.com Inc. ("eFinancial") and the sole shareholder of eFinancial,
pursuant to which the Company has agreed to acquire all of the issued and
outstanding shares of eFinancial for a purchase price of $1,575,000 to be
payable by 3,500,000 common shares of the Company at the deemed price of $0.45
per share. The 3,500,000 common shares will be subject to a contractual
performance escrow agreement, pursuant to which the common shares will be
released upon the achievement by eFinancial of certain performance criteria to
be determined.
Concurrent with the acquisition, the Company announced its intention to proceed
with a private placement of 1,800,000 units at the price of $0.45 per unit.
Each unit consists of one common share and one share purchase warrant which
entitles the warrant holder to purchase one common share at the price of $0.55
per share for the first year and $0.80 per share for the second year.
In August 2000, the Company determined not to proceed with the acquisition of
eFinancial and the private placement due to certain difficulties. All costs
relating to this acquisition totaling $40,163 were written off during the
period.
The Company intends to continue to review potential businesses.
INVESTMENTS
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In July 1999, the Company acquired 240,000 shares in Puresource, Inc., a company
which owns a "SteriSure Process", at the cost of $146,450. SteriSure Process is
a proprietary technology, which uses a combination of patented, and trade secret
technologies, including application of gamma irradiation, to safely and
completely sterilize biologics without destroying their integrity and without
using toxic chemicals. Puresource is currently in the process of completing a
transaction with SteriSure, Inc. a California company that has the marketing
skills and financial resources to accelerate the commercialization of the
technology.
WHISKY CANYON
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The Company is also actively seeking a joint venture partner for this property.
In order to make the property more attractive, the Company has acquired an
option to purchase a group of patented mining claims for a total purchase price
of US$2,000,000, adjustable by consumer price index, in 15 years plus 2.5% net
smelter royalty. In accordance with the agreement, the Company is required to
pay advance royalty payments U$5,000 on signing, US$15,000 in the first year,
US$15,000 in the second year, US$20,000 in the third year, US$25,000 in the
fourth year, US$50,000 in the fifth year and US$50,000 each year thereafter. In
addition, the Company is required to spend amounts equivalent to the advance
royalty payments, except the first US$5,000, each year as work commitments to
the maximum of US$250,000. The claims acquired by the Company are as follows:
Page 9 of 55
Lot or Mineral
Claim Name Patent Date Patent No. Survey No.
- ------------------ ----------- ---------- --------------
Betty O'Neal 4/23/1892 20955 Lot 51
Betty O'Neal South 4/23/1892 20956 Lot 52
Chloride 4/23/1892 20954 Lot 50
Chloride 6/25/1884 9448 Lot 45
Defiance 11/15/1877 2557 Lot 37
Defiance No. 2 6/25/1884 9449 Lot 42
Dusang 12/28/1895 26390 Lot 43
Eagle 11/15/1877 2558 Lot 38
Grove 6/25/1884 9447 Lot 44
Henry Logan 12/28/1895 26389 Lot 40
Highland Chief 2/6/1892 19601 Lot 41A
Monitor 11/14/1877 2553 Lot 39
Record 2/6/1895 25252 Lot 55
Ruby Silver 7/30/1924 942249 4570
Ruth 7/30/1924 942249 4570
Valley View 7/30/1924 942249 4570
Yankee 2/14/1895 25277 Lot 54
During the period, the Company abandoned the Iowa claims in Nevada due to
economic reasons.
MANAGEMENT
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At the annual general meeting on March 24, 2000, Gary Freeman and William R.
Green were elected as directors of the Company. On the same date, Gary Freeman
was appointed as President replacing Jerry Pogue who retired and Sam Szajman
appointed as Corporate Secretary.
RESULTS OF OPERATION
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The net loss for the nine months ended August 31, 2000 was $193,408 or $0.01 per
share in comparison with $461,002 or $0.04 per share for the same period last
year. The huge reduction in loss was mainly due to reduced expenses relating to
abandonment of mineral properties and the gain of $171,032 generated by sale of
418,700 shares of Indico Technologies Corporation. However, the expenses
relating to shareholder and investor communications were increased by $47,578 in
comparison with last year due to significantly increased activities during the
period.
INVESTOR RELATIONS
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In March 2000, the Company entered into an agreement with Barry Kaplan
Associates of New Jersey to provide investor relations services to a period of
one year at a fee of US$5,000 per month plus expenses. Barry Kaplan Associates
will assist the Company in:
Page 10 of 55
The Company terminated the above agreement in August 2000.
CERTAIN RISKS OF OPERATION
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The Corporation's business is subject to a number of material risks which may
affect its future financial performance, including risks customarily encountered
by exploration stage companies.
GENERAL EXPLORATION AND MINING RISKS
- ----------------------------------------
Operating Risks
The exploration and, if warranted, development of mining properties is a
high-risk industry. Presently, none of the Corporation's properties have a
known body of commercial ore. Unusual or unexpected formations, formation
pressures, fires, power outages, labor disruptions, flooding, explorations,
cave-ins, landslides, and the inability to obtain adequate machinery, equipment
or labor are all risks involved in the operation of mines and the conduct of
exploration programs. The Corporation relies significantly on independent
consultants and other professionals for exploration and development expertise.
Exploration for economically feasible mineral deposits or reserves includes a
high degree of risk which even a combination of careful evaluation, experience
and factual knowledge may not find a mineral deposit that would become a
profitable mining operation.
Capital Expenditures
The Corporation will require substantial resources to establish ore reserves,
develop metallurgical processes to extract metal from the ore, and develop
mining and processing facilities at a given site. Although substantial benefits
may be derived from the discovery of a major mineralized deposit, there can be
no assurances that sufficient quantities of minerals with a sufficient average
grade to justify, if warranted, commercial development of any such site.
Volatility in Mineral Prices
The cost of developing gold and other mineral properties is affected by the cost
of operations, variations in ore grade, fluctuations in metal markets and the
cost of processing equipment. Government regulations regarding prices, taxes,
royalties, allowable production, importing and exporting of minerals, land use,
land tenure and environmental protection also affect economic viability.
CLASSIFICATION OF THE COMMON STOCK AS PENNY STOCK
- --------------------------------------------------------
In October 1990, Congress enacted the "Penny Stock Reform Act of 1990." "Penny
Stock" is generally any equity security other than a security (a) that is
registered or approved for registration and traded on a national securities
exchange or an equity security for which quotation information is disseminated
by The National Association of Securities Dealers Automated Quotation ("NASDAQ")
System on a real-time basis pursuant to an effective transaction reporting plan,
or which has been authorized or approved for authorization upon notice of
issuance for quotation in the NASDAQ System, (b) that is issued by an investment
company registered under the Investment Company Act of 1940, (c) that is a put
or call option issued by Options Clearing Corporation, (d) that has a price of
five dollars or more, or (e) whose issuer has net tangible assets in excess of
$2,000,000, if the issuer has been in continuous operation for at least three
years, or $5,000,000 if the issuer has been in continuous operation for less
than three years, or average revenue of at least $6,000,000 for the last three
years.
The Company's Common Shares are presently considered "penny stock" under these
criteria. Therefore, the Common Shares are subject to Rules 15g-2 through 15g-9
(the "Penny Stock Rules") under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Penny Stock Rules impose additional reporting,
Page 11 of 55
disclosure and sales practice requirements on brokers and dealers before they
can recommend the Common Shares for purchase by their customers, and require
that such brokers and dealers must make a special suitability determination of
each purchaser and must have received the purchaser's written consent to the
transaction prior to the sale. Consequently, the Penny Stock Rules may affect
the ability of brokers and dealers to sell the Common Shares and may affect the
ability of purchasers to sell any of the Shares acquired hereby in the secondary
markets.
So long as the Common Shares are within the definition of "Penny Stock" as
defined in Rule 3a51-1 of the Exchange Act, the Penny Stock Rules will continue
to be applicable to the Common Shares. Unless and until the price per share of
Common Shares is equal to or greater than $5.00, the Common Shares will be
subject to substantial additional risk disclosures and document and information
delivery requirements on the part of brokers and dealers effecting transactions
in the Common Shares. Such additional risk disclosures and document and
information delivery requirements on the part of such brokers and dealers may
have an adverse effect on the market for and/or valuation of the Common Shares.
STAGE OF DEVELOPMENT
- ----------------------
The Corporation has no production revenue. It does not have an operating
history upon which investors may rely. Moreover, the Corporation has no
commercially viable properties at this time.
The Corporation has limited financial resources, with no assurance that
sufficient funding will be available to it for future exploration or to fulfill
its obligations under current agreements. There is no assurance that the
Corporation will be able to obtain adequate financing in the future or that the
terms of such financing will be favorable. Failure to obtain such additional
financing could result in delay or indefinite postponement of further
exploration of its projects. The Corporation's accumulated deficit as at
November 30, 1999 was $1,418,297.
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METAL PRICES
- -------------
The Corporation cannot control the marketability of the minerals it discovers.
Metal prices have fluctuated widely in recent years, and are affected by
numerous factors beyond the Corporation's control. International economic and
political trends, expectations of inflation, currency exchange fluctuations,
interest rates, global or regional consumption patterns, speculative activities
and worldwide production levels all may affect metal prices.
COMPETITION
- -----------
The mineral industry is very competitive. The Corporation must compete with
other companies possessing superior financial resources and technical
facilities. This competition is not only for the acquisition of mining
interests, but also for retention of the services of qualified employees.
NO ASSURANCE OF TITLES
- -------------------------
The Corporation's mineral property interests may be subject to prior
unregistered agreements, transfers or native land claims and title may be
affected by undetected defects. Substance and continuity of title may also be
affected by political instability and the vagaries of law as they exist and are
applied in foreign jurisdictions. Surveys have not been carried out on all of
the Corporation's mineral properties and therefore, in accordance with the laws
of the jurisdiction in which such properties are situated, their existence and
area could be in doubt.
GENERAL OPERATING HAZARDS
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Page 12 of 55
PERMITS AND LICENSES
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The operations of the Corporation require licenses and permits from various
governmental authorities. There can be no assurance that the Corporation will
be able to obtain all necessary licenses and permits that may be required to
carry out exploration, operations at its projects.
The Corporation's properties in the State of Nevada consist of the Whisky Canyon
Property, the PW Property and the ICP Property. The Whisky Canyon Property
includes 83 lode mining claims optioned from St. George Metals Inc. and 23 Bet
claims located by the Corporation. The Corporation currently has licenses,
issued by the Nevada Department of Mining, to conduct geological, geochemical
and geophysical investigations and sample drilling at the Whisky Canyon Property
for a period of one year. The license may be renewed on a yearly basis by
submitting the yearly filing fees to the appropriate Land Claims Offices in the
state. The yearly filing fees for the Corporation's properties are as follows:
$3,800 USD for the PW Property, $11,100 USD for the Whisky Canyon Property, and
$4,200 USD for the ICP Property.
The ICP Property consists of 42 lode mining claims. Under the license granted
thereto, the Corporation may undertake similar exploration activities on the ICP
Property as undertaken at the Whisky Canyon and PW Properties. The Corporation
renewed all three licenses on October 27, 1998, and, because it has paid all
required filing fees, is currently in good standing with the Nevada Department
of Mining. Additional licenses will be required to extract minerals, if found.
The PW Property consists of 28 lode mining claims registered in the name of the
Corporation's subsidiary Triband Resource US Inc. Under the license for this
property, the Corporation may conduct geological, geochemical and geophysical
investigations and sample drilling, and may engage in any other exploration the
Corporation deems advisable.
PRICE FLUCTUATIONS, SHARE PRICE VOLATILITY
- ----------------------------------------------
Securities markets in Canada have experienced a high level of price and volume
volatility in recent years, with many resource companies experiencing wide price
fluctuations not necessarily related to operating performance or underlying
asset values of such companies. The Corporation's Common Shares traded between
$0.17 and $1.48 in 1996, between $0.56 and $1.60 in 1997, and between $0.23 and
$0.64 in 1998 and between $0.19 and $1.09 in 1999. No assurances can be made
that the Corporation's share price and volume will not continue to fluctuate
materially.
ENVIRONMENTAL REGULATIONS
- --------------------------
All phases of the Corporation's operations are subject to environmental
regulations promulgated by government agencies from time to time. Environmental
legislation is evolving in a manner which means stricter standards, and
enforcement, fines and penalties for non-compliance are more stringent.
Environmental assessments of proposed projects carry a heightened degree of
responsibility for companies and directors, officers and employees. There is no
assurance that future charges in environmental regulation, if any, will not
adversely affect the Corporation's operations.
The Corporation is in compliance with all applicable environmental laws and
regulations in Nevada, USA, and British Columbia, Canada
ITEM 2 DESCRIPTION OF PROPERTIES
---------------------------
The Corporation is in the exploration stage and its properties are presently
without a known body of commercial ore. Its principal mineral properties are
the following.
Page 13 of 55
The Whisky Canyon Property, located along the northwest flank of the Shoshone
Range, approximately 12 miles southeast of Battle Mountain, Lander County,
Nevada, USA.
The PW Property, located approximately 28 miles east-southeast of Lovelock,
Pershing County, Nevada, USA.
The ICP Property, located approximately 56 miles south of Battle Mountain,
Lander County, Nevada, USA.
The Standard Creek Project, located 160 km. north of Vancouver, British
Columbia, Canada and 17 km. southeast of Bralorne, British Columbia, Canada.
WHISKY CANYON PROPERTY - LANDER COUNTY, NEVADA, USA
- ----------------------------------------------------------
Location and Introduction
The Whisky Canyon Property ("Whisky Canyon Property") is located along the
northwest flank of the Shoshone Range approximately 12 miles southeast of Battle
Mountain, Lander County, Nevada, USA. The Whisky Canyon Property includes
Whisky Canyon proper, upper Rocky Canyon to the south and Betty O'Neal silver
mine area to the north. Much of the property occurs in steep topography between
6000 feet and 8000 feet in elevation. Access is relatively difficult and is
limited to a few steep, narrow and poorly preserved drill roads.
Page 14 of 55
Insert first map
Page 15 of 55
The Corporation's land package includes 83 lode mining claims optioned from St.
George Metals Inc. ("St. George") and the 23 Bet claims located by the
Corporation in 1997 bordering the Betty O'Neal patented claims. The St. George
land package includes the Whisky Canyon and the upper Rocky Canyon area. The
Whisky Canyon Property is located in T.30N, R.45E., sections 22,26,27,34 and 35.
Mining and Exploration History
Prospecting for and limited mining of high grade veins in the district began in
the late 1870's. The Betty O'Neal mine was worked extensively for silver
beginning in about 1880. It was reportedly mined intermittently until about
1936 and was the only major producing mine in the vicinity of the Whisky Canyon
Property. Recorded production for the period of 1902-1936 from the Betty O'Neal
totals about 4.2 million ounces of silver from ores with grades averaging
between 25 to 30 ounces per ton. No production records exist for the period
between 1880-1902. On the Whisky Canyon , the Celestine O'Neal workings were
explored and mined intermittently beginning prior to 1900 and continuing to
1923. Production was reportedly small. Numerous other showings small high
grade mines of limited production occur in adjoining Rocky Canyon and in the
surrounding area,
Porphyry copper-molybdenum exploration was focused in Rocky Canyon and nearby
Pipe Canyon in an active way during the early to mid -1970's. Several deep
(greater than 2000 foot) core holes encountered deep, low grade, Cu-Mo
mineralization beneath the breccia pipes and magmatic centers in both Rocky and
Pipe Canyons. No further copper exploration has been done in the district.
Recent gold exploration began in the district during 1979 and continued
intermittently through the early 1900's. Noranda Exploration ("Noranda")
conducted the first phase of modern exploration beginning in late 1979 and
continued through early 1981. Their work included geologic mapping, geochemical
sampling, and exploration drilling (4 diamond core and 15 rotary holes).
Noranda elected to terminate the project even though their drilling intersected
gold-mineralization in the Whisky Canyon vicinity.
Following Noranda, Draco Minerals Ltd. ("Draco Minerals") explored the Rocky
Canyon area for precious metals but drilled only 14 shallow reverse circulation
holes. St. George acquired both the Whisky Canyon Property and the Rocky Canyon
property from the underlying owners and Draco Minerals, respectively, along with
other ground in the district. St. George and their subsequent partners drilled
at least 16 reverse circulation holes in the Whisky-Rocky Canyon area and
numerous holes to the west along the range front zone. Cameco Gold U.S. acquired
ground along the range front near the mouth of Rocky Canyon and the Lucky Rocks
area by claim location and an option agreement with St. George. The Cameco
program which began in 1996, included core drilling, and continues at present.
Property Acquisition
The Whisky Canyon Property is currently owed by St. George Metals, Inc. ("St.
George Metals"), a Nevada corporation. On June 29, 1998 the Corporation's
subsidiary Triband Resource US Inc. entered into a Mining Lease and Option
Agreement, ("Mining and Lease Option Agreement"). Under the agreement the
Corporation may explore, conduct geological, geochemical and geophysical
investigations, sample, drill or otherwise explore for, in the manner and to the
extent that the Corporation in its sole discretion, deems advisable.
Under the agreement St. George Metals agreed to lease exclusively to the
Corporation the property and all minerals. Under the agreement the Corporation
agreed to make an initial payment for the property of $15,000 USD to St. George
Page 16 of 55
and also an additional payment of $1,200 USD to a consultant as direct payment
for or reimbursement of costs for geological, geochemical and other data
relating to the property.
Under the Mining Lease and Option Agreement, the Corporation paid and has agreed
to pay to St. George Metals the following minimum payments which will be advance
payment of a net smelter returns production royalty payable to St. George Metals
("Royalty"):
PAYMENT AMOUNT
(US$)
DATE
July 8, 1999 (paid) $ 65,000
July 8, 2000 (paid) and each following year for a period of $ 25,000
twenty (20) years expiry July 8, 2018
Under the Mining Lease and Option Agreement, St. George Metals agreed to grant
the Corporation the exclusive right to purchase the Whisky Canyon Property
("Option"). The purchase price for the Option is $2,000,000 USD, less the then
outstanding balance of the purchase price under the underlying agreements
("Underlying Agreements") attached to the Mining Lease and Option Agreement.
The Underlying Agreements to the Mineral Lease and Option Agreement are as
follows: (1) the Bida-Belaustegui Agreement, dated March 20, 1986, between
Marion Fisher, Sam Bida, Neva Bida, Leon Belaustegui, and Velma Belaustegui
("Sellers"), and St. George Minerals, Inc. ("St. George Minerals"), the British
Columbia parent of St. George Metals, as buyer; (2) the Boundary Agreement,
dated February 16, 1989, between St. George Metals, Battle Mountain State Bank
Mortgage Corporation ("Battle Mountain"), and Rolac Systems Subsidiary, Inc.
("Rolac"); (3) the Claim Overlap Agreement, dated February 16, 1989, between the
same parties as stated in (2) above; and, (4) the Royalty Agreement, dated
February 16, 1989, between the same parties as stated above in (2).
The Bida-Belaustegui Agreement is the purchase and sale agreement by which St.
George Minerals acquired the Whisky Canyon Property. Under the terms of the
Bida-Belaustegui Agreement, St. George Minerals was to pay Sellers $150,000 USD
over a period of four years, as well as tender to Sellers 50,000 shares of St.
George Minerals common stock in exchange for the Whisky Canyon Property. As of
the date of the Mineral Lease and Option Agreement (July 8, 1998), all but
$15,000 USD of the purchase price under the Bida-Belaustegui Agreement had been
paid. In August 1998, the Corporation paid the remaining $15,000 to Sellers.
Pursuant to Section 6.1 of the Mineral Lease and Option Agreement, this amount
will be credited against the Option's $2,000,000 USD purchase price.
The Boundary Agreement was executed by St. George Metals, Battle Mountain and
Rolac in order to identify the claims at the Whisky Canyon Property that Battle
Mountain and Rolac had a right to explore. There were no payments due under
this agreement that would have reduced the purchase price of the Option.
The Claim Overlap Agreement also related to boundary issues and mining rights
between the parties thereto. There were no payments due under this agreement
that would have reduced the purchase price of the Option. The Royalty Agreement
defined the royalty payments to be paid to St. George Metals by Battle Mountain
and Rolac. Pursuant to this agreement, Rolac and Battle Mountain agreed to pay
St. George Metals 6% of net smelter returns. This agreement expired in 1995.
There were no outstanding payments under this agreement as of the date of the
Mineral Lease and Option Agreement that would have reduced the purchase price of
the Option.
Page 17 of 55
St. George Metals also agreed to grant to the Corporation the exclusive right
to purchase one-half of the Royalty representing two percent (2%) of the net
smelter returns ("Royalty Option"). The purchase price for the Royalty Option
is $1,000,000 USD. The Royalty Option may be exercisable by the Corporation at
any time within six (6) months after the Corporation receives all approvals,
consents, licenses and permits required for the production of Insert 2nd
mminerals from the Whisky Canyon Property and the commencement of development of
a commercial mine on the Whisky Canyon Property.
If the Corporation exercises the Option, its obligation to pay the minimum
payments will terminate. The Royalty percentage will also be reduced. The
Royalty percentage under the Mining Lease and Option Agreement rate is four
percent (4%) of the net smelter returns. However, this amount will be decreased
to two percent (2%) upon the Corporation's exercise of one, but not both, of the
Option or the Royalty Option. Furthermore, the Corporation will be credited and
the Royalty otherwise payable to St. George Metals in any quarter will be
reduced by the amount of any and all production fees, production royalties or
severance taxes assessed against, based on or imposed or levied against the
production of minerals, ore or product from the Whisky Canyon Property which are
paid by the Corporation to any party under the Underlying Agreements relating to
the Mining Lease and Option Agreement during the quarter. The Corporation will
be making no such payments under the Underlying Agreements except as disclosed
above.
The assessment work in accordance with the Mining Lease and Option Agreement was
carried out between September 1, 1998 and September 1, 1999. The Corporation
has a work commitment for exploration, development and reclamation work on the
Whisky Canyon Property as described below:
DATE LEASE YEAR COMMITMENT (US$)
July 9, 2000 (completed) $150,000
July 9, 2001 $200,000
After the third lease year, beginning July 9, 2001, the work commitment
obligation will increase by the amount of fifty thousand dollars ($50,000 US)
for each lease year until the Corporation commences commercial production on the
Whisky Canyon Property.
In addition to the property from St. George Metals, the Company also acquired a
group of patented mining claims in the adjacent area from Battle Mountain State
Bank Mortgage Corporation. In accordance with an agreement dated July 7, 2000,
the Company acquired an option to purchase 17 patented mining claims during a
period of 15 years for a total purchase price of US$2,000,000 plus 2.5% net
smelter royalty. The Company is required to pay the following advance royalty
payments:
Date Payment Amount (US$)
---- --------------------
July 7, 2000 $ 5,000
July 7, 2001 15,000
July 7, 2002 15,000
July 7, 2003 20,000
July 7, 2004 25,000
July 7 each year thereafter 50,000
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Depending on the time the Company exercises the option, the above purchase price
will be increased by applying the Consumer Price Index as published by US
Department of Labor using the fifth anniversary date as the base year; and will
be reduced by all advance royalty payments made by the Company after the sixth
year. In addition, the Company is required to spend the following amounts each
year as work commitments to the maximum of US$250,000.
On or before Work Commitment (US$)
------------ ---------------------
July 7, 2001 $ 15,000
July 7, 2002 15,000
July 7, 2003 20,000
July 7, 2004 25,000
July 7 each year thereafter 50,000
The claims acquired by the Company are as follows:
Lot or Mineral
Claim Name Patent Date Patent No. Survey No.
- ------------------ ----------- ---------- --------------
Betty O'Neal 4/23/1892 20955 Lot 51
Betty O'Neal South 4/23/1892 20956 Lot 52
Chloride 4/23/1892 20954 Lot 50
Chloride 6/25/1884 9448 Lot 45
Defiance 11/15/1877 2557 Lot 37
Defiance No. 2 6/25/1884 9449 Lot 42
Dusang 12/28/1895 26390 Lot 43
Eagle 11/15/1877 2558 Lot 38
Grove 6/25/1884 9447 Lot 44
Henry Logan 12/28/1895 26389 Lot 40
Highland Chief 2/6/1892 19601 Lot 41A
Monitor 11/14/1877 2553 Lot 39
Record 2/6/1895 25252 Lot 55
Ruby Silver 7/30/1924 942249 4570
Ruth 7/30/1924 942249 4570
Valley View 7/30/1924 942249 4570
Yankee 2/14/1895 25277 Lot 54
Geology
The geology of the northwestern portion of the Shoshone Range is very complex.
The Whisky Canyon area is comprised of a complexly thrust faulted stack of
siliceous and lesser carbonate rocks that were subsequently juxtaposed into
complex contact relationships by several prominent sets of high-angle faults.
Thrust faulting occurred during the Antler and Sonoman Orogenies and resulted in
low-angle zones of intense shearing and fracturing developed within the
pre-Tertiary siliceous rocks. Caldera development and subsidence overprints
pre-Oligocene structures and was the focus of more recent high and low-angle
faulting of Tertiary age. High-angle faulting is intense in the district and is
comprised of several distinct sets, including those trending; 1) N10E to N10W,
2) N60-75W, 3) N20-30W, 4) East-West, 5) N60E and 6) N30E. The faults trending
N60-75W seem to be the most favorable focus of gold-bearing quartz and sulfide
mineralization.
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Most of the northern part of the range is made up of chert and siliceous clastic
rocks that comprise the upper plate of the Roberts Mountains allochthon. This
sequence of rocks was emplaced along the major, regional Roberts Mountain Thrust
zone during the Devonian-Mississippian Antler Orogeny. Lower plate carbonate
rocks located below the thrust zone are not exposed in the district. A large
portion of the Whisky Canyon Property is underlain by a thick upper plate
sequence consisting of quartzite, chert, argillite and greenstone of the
Ordovician Valmy Formation. In Rocky Canyon, a thick section consisting to
interbedded calcareous siltstone and fine-grained sandstone, believed to be
upper plate Silurian Elder Formation, is tectonically inter-leaved with the
Valmy Formation. The Pennsylvanian-Permian Antler Sequence consisting of Battle
Formation and Antler Peak Limestone, was deposited directly on upper plate Valmy
rocks and is exposed in Whisky Canyon. Antler Sequence rocks are an important
host for gold mineralization in the Battle Mountain district at the Fortitude,
Tomboy and Minnie deposits and the Lone Tree and Marigold deposits.
During the Permian-Triassic Sonoma Orogeny, the Havallah Sequence rocks were
tectonically emplaced along the Golconda Thrust above the Roberts Mountains
Allochton and Antler Sequence rocks. The Havallah Sequence consists of
fine-to-medium-grained, locally calcareous, siliceous clastic rocks.
These rocks are well exposed at the head of Whisky Canyon. A sequence of debris
flows and limestone-rich conglomerate with silty, sandy, and shaly matrix,
believed to be the Triassic Panther Canyon Formation, was deposited on
pre-Triassic rocks and is also exposed at the head of Whisky Canyon.
The pre-Tertiary sedimentary rocks are intruded and overlain by an Oligocene-age
sequence of volcanic flows, tuffs, tuff breccias, intrusive breccia pipes, dikes
and irregular intrusive masses ranging in composition from rhyolite to latite.
A quartz monzonite porphyry intrudes the slightly older volcanic sequence and
sedimentary rocks along the east margin of the property. The Tertiary magmatic
event is believed to have resulted from a large caldera that occupies the
northwest flank of the range. Within this topographic zone, several large areas
of volcanic rocks, abundant dikes, small intrusions and three breccia pipes are
preserved.
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Alteration
Hydrothermal alteration features of varying types and intensities are widespread
throughout the Whisky Canyon area. The alteration types include: 1)
silicification, 2) quartz veining and stockwork zones, 3) sulfide
mineralization, 4) sericitic and argillic clay alteration, 5) calc-silicate
mineral formation in calcareous rocks, and 6) supergene oxidation of sulfides.
The introduction of quartz as the groundmass of various types of rocks and in
more coarsely crystalline veins is the most important alteration feature
associated with hydrothermal mineralization. Fine-grained quartz replaced
sedimentary rocks along fracture and shear zones. The intensity of
silicification is variable and ranges from complete jasperoidal replacement to
silicification mixed with sericitic and argillic clays and quartz veinlets. The
silicified zones commonly contain sulfide minerals including pyrite, pyrrhotite,
arsenopyrite and the copper-bearing minerals chalcopyrite and tetrahedrite. In
surface outcrops the sulfide minerals are commonly altered to iron oxide
minerals. Calcite, quartz and barite gangue minerals occur with the quartz.
The quartz veins and stockwork veinlet zones contain individual sulfide-rich
veins ranging in width from less than 1 mm to several tens of meters. The
quartz is fine-grained, gray and glassy, and contains ubiquitous
sulfide-sulfosalt minerals. Pyrite, pyrrhotite, and arsenopyrite are most
abundant within the mineralized veined zones. Base metal sulfide and sulfosalt
minerals are less common and include: chalcopyritre, sphalerite, galena. The
vein mineralization is discussed in more detail below in the section of
mineralization.
Sericitic and argillic clay alteration commonly occur with both groundmass and
vein-type hydrothermal silicification. The siliceous clastic host rocks are
commonly bleached and variably altered to secondary clays. Sericitic alteration
is most common closest to the most intense zones of silicification and because
it contains introduced quartz and pyrite, it is very similar to the phyllic
alteration zones related to porphyry-style mineralization. Argillic clays are
intermixed with silica in less strongly altered areas and are commonly crosscut
by quartz microveinlets and contain both disseminated and massive concentrations
of secondary iron oxide minerals.
Calc-siliciate minerals are well developed in the calcareous clastic rocks
exposed in Rocky Canyon and to a lesser degree in Whisky Canyon to the north.
Most of the exposed rocks are calc-silicate hornfels that consist of
recrystallized host rocks containing quartz, diopside, epidote and fine-grained
actinolite (+tremolite) in fractures and in veins in association with calcite
and quartz.
Mineralization
Two main types of mineralization are present on the Whisky Canyon Property: 1)
a silver-base metal type, and 2) a gold-silver-arsenic type with minor base
metals. The two types show an apparent regional zonation. Type 1 is most
common and strongest or best developed from Whisky Canyon northward to the Betty
O'Neal mine. The type 2 is prominent at Whisky Canyon and southward into Rocky
Canyon.
The silver-dominant mineralization was the focus of most of the historic mining
activity and was centered at the Betty O'Neal mine and surrounding area. Silver
mineralization occurs in quartz-calcite-barite-sulfide veins ranging from less
than 1 cm to tens of meters in width. Many of the veins were hundreds to
thousands of feet long and were worked down-dip for many hundreds of feet.
Well-defined, prominent, structurally-controlled veins eventually exhibit a
transition along strike and down-dip into thin, poorly-defined veins that
commonly grade into quartz-calcite stringer or stockwork zones before
disappearing altogether. Most veins exhibit a crude banding, with calcite and
barite in contact with the wallrocks and milky white massive to colorless
crystallized quartz in the center of the veins. The internal quartz zone
commonly is brecciated and contains open spaces lined with crystallized quartz
and sulfide minerals. Almost all of the sulfide minerals are restricted to the
quartz portion of the veins. The sulfide mineralogy includes: pyrite,
tetrahedrite (freibergite), galena, sphalerite, chalcopyrite, stephanite and
stibnite.
Page 21 of 55
Gold mineralization occurs in veins, fault breccia zones, and low-angle shear
zones and is most abundant at the head of Whisky Canyon. Similar mineralization
is also exposed south of Whisky Canyon in the Rocky Canyon drainage and in the
Lucky Rocks area. Most of the early exploration for gold and production from
high grade ore took place between the late 1880's and 1920's. The Celestine
O'Neal mine at the head of Whisky Canyon was the site of intermittent mining
through about 1923.
The gold mineralized zones occur as steeply-dipping high-angle veins and fault
breccias and as low angle-shear-breccia zones. Most mineralized veins and
high-angle breccias zones are relatively narrow (less than 1 to about 20 feet in
width), while the low-angle shear-breccia zones are typically 2 to 50 feet
thick. The vein and steeply-dipping fault breccia mineralization consists of
varying mixtures of quartz and calcite gangue containing abundant sulfide
minerals. The sulfide minerals include pyrite, arsenopyrite, chalcopyrite,
sphalerite and tetrahedite. Secondary copper minerals occur in oxidized zones
with iron oxide minerals and scorodite. Low angle zones contain mineralization
that is generally less distinctive and contains abundant clay minerals. Most of
the shear zone mineralization is more intensely oxidized relative to the vein
mineralization. The silver content of the veins is variable. Values up to
several ounces silver per ton are common.
Exploration drilling has identified several areas of low grade gold
mineralization. The primary focus of gold exploration has been in upper Whisky
Canyon (Noranda, Draco Minerals, St. George), upper Rocky Canyon (Draco
Minerals), the Luck Rocks area (St. George, Reynolds Metals) now owned by
Cameco, and along the range front just south of the mouth of Rocky Canyon
(Cameco). The Corporation controls the Whisky Canyon area, upper Rocky Canyon
and the range front just west of the Lucky Rocks ridge and north of the Cameco
project area.
Several drill holes on the Whisky Canyon Property encountered thick intercepts
of gold mineralization (e.g. 35.3 feet @ 0.140 ounces per ton, 20 feet @ 0.232
ounces per ton, 10 feet @ 0.345 ounces per ton) and many long 20 to 60 foot
intercepts of 0.0X0 ounces per ton. A preliminary review of the Noranda and
Draco Minerals drilling information suggests that the best gold-bearing zones in
Whisky Canyon occur beneath low-angle thrust-shear zones that dip at shallow
angles to the southwest. These zones are 5 to greater than 100 feet thick and
are commonly mineralized. However, the fluids are believed to have moved along
the steeply dipping vein and fault-breccia-vein zones that contain the largest
amounts of gold. Several of these features are exposed at the Celesite O'Neal
mine and throughout Whisky Canyon. The steeply dipping high grade zones and the
shallow dipping lower grade zones are targets for drilling.
Geochemistry
The Whisky Canyon Property is geochemically anomalous with respect to Au, Ag,
As, Cu, Pb, Zn, Sb, Ba and locally Bi and Hg. A non-statistical inspection of
the geochemical results available to date indicates that mineralized areas
commonly contain gold values in the 1-30 ppm or gram per ton range and silver in
the 1 to 1,000 ppm range. Arsenic, lead, zinc and copper commonly range from
500 to greater than 1,000 ppm, bismuth is in the 10 to greater than 100 ppm and
mercury 0.1 to 1.0 ppm. Elemental values are highest in the strongly
mineralized ore zones.
Amounts of gold (greater than 1 gram per ton) occur in both rock and soil
samples east of the drilled area in Whisky Canyon. The anomaly extends east for
at least 2500 feet from the drilled zone. The size of the anomaly is poorly
defined because of limited rock and soil sampling completed in this area to
date. The eastward extension significantly increases the size of the known area
of anomalous gold mineralization.
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Exploration
The Corporation is currently doing surface geologic mapping at a scale of 1 inch
to 400 feet (1:4800) which will cover the entire property. A program of surface
rock and soil sampling is planned to better define areas of anomalous metals.
This will also be done over areas which show rock alteration.
Areas which are found to contain anomalous contents of metals overlapping
altered rocks will then be mapped in greater detail such as at 1 inch to 200
feet (1:2400).
The Corporation is doing several types of geophysical studies including ground
and airborne magnetic surveys, geologic mapping and soil and rock sampling.
Induced polarization ("I.P.") surveys may also be done over select areas to
locate zones that could contain sulfide minerals commonly associated with gold
to better define targets for drilling.
The combined results of geologic mapping, geochemical sampling and geophysical
studies will be used to plan a future drilling program.
PW PROPERTY - PERSHING COUNTY, NEVADA, USA
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Location and Introduction
The PW Property ("PW Property") is in the western foothills of the Stillwater
Range approximately 28 miles east-southeast of Lovelock, Pershing County,
Nevada, USA. The PW Property consists of 28 lode mining claims with
Certificates of Location registered in the name of the Corporation's subsidiary
Triband Resource US Inc
The PW Property is situated at the north end of the Table Mountain district
which includes several small mines and prospects. None of the small mines are
currently in production. The district was originally exploited for mercury,
antimony, gold and fluorite.
Geology
The PW Property is underlain predominantly by sedimentary rocks of the
Jurassic-age Boyer Ranch Formation. Regionally, the Boyer Ranch consists mostly
of quartz sandstone, with lesser limestone and carbonate-pebble conglomerate.
The Boyer Ranch rocks occur adjacent to the northeast edge of a regionally
extensive late Jurassic gabbro complex.
The sedimentary rock lithologies are in general order from the youngest to
oldest:
Page 23 of 55
Quartz sandstone is the youngest sedimentary rock and the predominant lithology
exposed on the property. The unit is a fine grained, well-sorted, quartz
sandstone, locally conglomeratic. This unit is commonly indurated to a
quartzite, especially along the south side of Red Hill ridge. Where this
occurs, primary features such as bedding are obscured as a result of rock
compaction and hydrothermal alteration/silicification. Stratigraphic thickness
of the quartzite approaches 1,000 feet.
Carbonate conglomerate underlies the sandstone/quartzite and is composed of
gray, subangular to subrounded dolomite clasts set in a tan to red calcareous
sandstone matrix. This unit occurs as irregular lenses mostly within the
sandstone unit. Thickness is quitevariable, ranging from several inches to 500
feet.
Calcareous sandstone underlies the carbonate conglomerate. It is a
medium-to-coarse grained quartz sandstone, containing variable amounts of matrix
carbonate. Where hydrothermally altered, matrix carbonate has been removed, and
mobilized into a stockwork of 1-3 mm thick calcite veins. Maximum thickness of
this unit is uncertain, since the base is cut by gabbro.
Limestone is exposed on the northern part of the property as 50 to 100 foot
thick lenses. The unit consists of mostly gray, massive-to-thick bedded
sandy/silty limestone, that is occasionally conglomeratic.
Shale is exposed on the northern portion of the property as lenses ranging in
thickness up to 300 feet. This unit consists of pink, hematitic (less commonly
gray-green) fissile shale., Calcareous siltstone is included in this unit.
The limestone and shale units represent the lower parts of the stratigraphic
section, and previous mapping on the property included them as part of the Late
Triassic/Jurassic Auld Lang Syne Group. The Auld Lang Syne is a very thick and
uniform sequence of formations in northwestern Nevada whose thickness reaches up
to 25,000 feet.
Two types of igneous rocks occur on the southern part of the PW Property. The
gabbro is of a medium-grained, equigranular rock consisting mostly of
chloritized hornblende (~30%) and plagioclase (~70%). This rock is the north
edge of the Humboldt gabbro complex. The contact relationship of the gabbro
with the sedimentary rock units is uncertain but probably the gabbro is
intrusive into the lower part of the sedimentary rock section.
Much less widely exposed than the gabbro is an alaskite body(s), which intrudes
the calcareous sandstone sequence within 200-300 feet of the gabbro contact on
the southern edge of the property. The alaskite is a medium-grained
leucogranite, consisting of sodic plagioclase and quartz.
The pre-Tertiary rocks described above are overlain by Tertiary sedimentary
rocks, unconsolidated fans of Quaternary basalt-bearing rubble and Quaternary
gravels in drainages. Tertiary sedimentary rocks are exposed immediately off
the east edge of the claim block. They are well bedded, buff/tan to
red/hematitic, clay rich, and party tuffaceous. Locally, the Tertiary section
contains lenses of banded calcareous sinter.
Page 24 of 55
Two features dominate the structural geology on the PW Property. In the central
part of the property, a series of generally parallel, northeast striking faults
are exposed over a distance of approximately 2,300 feet. Northeast faults
generally have southeast or northwest dips of 60o and steeper, and contain
slickensided surfaces and brecciated zones up to several feet wide. Offset
along the faults appears to be minor, but in one locality along the northern
bank of Logan Canyon, the offset is measured at approximately 200 feet.
The other prominent structural feature on the PW Property is the occurrence of
an east-west synform in the Boyer Ranch Formation sedimentary rocks. This
feature is best displayed at the crest of Red Hill Ridge, where a carbonate
conglomerate lens occurs along the ridge, with opposing dips on the north and
south sides. The synform is relatively broad and plunges very gently east.
Alteration and Mineralization
Alteration is widespread on the PW Property and includes silicification,
iron-oxide staining and acid leaching.
Silicification generally consists of quartz flooding of the rock matrix that has
indurated the sandstone, producing a "quartzite". This phenomenon generally
occurs in areas of brecciation. Occasionally quartz flooding is accompanied by
fine druse quartz on fractures. Less common forms of silification are
milky-gray chalcedonic quartz (sometimes with calcite) in veins up to 6" wide,
and intense quartz flooding/jasperoid development which accompanies strong
hematization on the eastern side of the PW Property.
Iron oxide staining is commonly developed in strongly fractured and weakly to
moderately silicified sandstones, as limonite-goethite fracture coatings with
lesser amounts of hematite. Areas of strong hematite development in the central
and eastern part of the property are generally associated with silicification.
Hematite, and to a lesser degree limonite, is at least in part developed from
oxidized pyrite. Small amounts of jarosite developed in strongly hematitic
zones, as at the mercury prospects on the west end of Red Hill Ridge.
Acid leaching is best-developed in calcareous sandstone. This alteration has
produced a leached rock, which is vuggy and porous due to carbonate removal.
The affected rock is moderately siliceous, due primarily to the residual,
unleached, clastic quartz component of the original sandstone. Acid leaching is
accompanied by weak-to-moderate hematite-limonite staining.
Page 25 of 55
Insert 3rd map
Page 26 of 55
Copper oxide was observed in one prospect pit in the central portion of the
property on the southeast end of the "Logan Canyon" alteration zone.
The most significant area of alteration occupies a crudely defined, 4,000-foot
by 1,200-foot zone, elongated northwest along the Logan Creek drainage (and
northern tributaries). This will be referred to as the "Logan Canyon"
alteration zone. Alteration here is developed in calcareous sandstones (mostly
acid leaching) and overlying non-calcareous sandstones (silification and iron
oxide staining). This alteration zone extends northwest to the range front,
where it is concealed by pediment cover. Alteration appear to be at least in
part controlled by the sedimentary rock-gabbro contact, as this contact and the
southwest edge of the alteration zone are grossly coincident. Additional
alteration controls appears to be northeast structures and lithology. On the
northeast edge of the alteration zone, silicification does not generally extend
for more than 300-400 feet into the noncalcareous sandstone, except locally
along northeast structures.
Geochemistry
Rock Chip Geochemistry
The current rock chip database consists of a total of 410 samples, collected by
Nassau Ltd. during the 1980's and by the Corporation in April, 1998. The
database includes 123 trench samples collected by Nassau Ltd. in 1989 (5
trenches, 3,500 feet). Samples generally show anomalous mercury, arsenic and
antimony values, along with spotty, weakly anomalous gold and generally low
silver values.
Although the gold values in the rock chip samples are generally low, mildly
anomalous values from a coherent cluster on one of the northern tributaries to
Logan Canyon, in the central portion of the property. This cluster corresponds
with the silicification and iron oxide staining in the sandstones in the Logan
Canyon alteration zone. Other coherent, weak rock chip gold anomalies occur in
the ESE-WNW trending Red Hill ridge, and in a small area to the west of this
ridge toward the pediment cover, about 800 feet south of the old Nassau
trenches. In contrast, anomalous arsenic, mercury and antimony occur coincident
with, and over a much larger area, than the weak rock chip gold anomalies.
Page 27 of 55
Soil Geochemistry
The soil geochemistry database consists of 200 samples, 44 collected by Nassau
Ltd. near the projection of the northwest Logan Canyon alteration zone and the
northeast trending range front, and 156 samples collected in April, 1998 by the
Corporation, in the central portion of the Logan Canyon alteration zone. As
with the rock chip data, soil gold geochemistry is weak but coherent, and
anomalies for mercury, arsenic and antimony are strong. Contoured anomalous
mercury and arsenic values display a good relationship to the northwest trending
Logan Canyon alteration zone, and also appear to be partially influenced by the
northeast structural trends described in the geology section.
Geophysics
38.6 line miles of global positioning system ("GPS") ground magnetics was
completed by Zonge Geosciences in April, 1998 over a 2.5 square mile area.
Lines were oriented east-west and spaced 400 feet apart, except in a partially
covered area in the Logan Canyon drainage, where lines were spaced 200 feet to
provide better definition. Evaluation of the data resulted in the following
observations.
A broad magnetic low occurs coincident with the Logan Canyon alteration zone.
Although it is tempting to ascribe this magnetic low to hydrothermal alteration,
the magnetic signature could at least in part be due to a north-side-low
response expected from the regionally extensive Humboldt gabbro complex. A weak
but persistent magnetic low extends 2,000 feet north-northeast into the covered
pediment, off of the northern edge of the property and the magnetic survey grid.
This feature could possibly be caused by alteration along a structure.
A probable gravel unit is defined on the pediment in the northwest corner of the
property. The survey has apparently defined basalts in the Tertiary sedimentary
rock section that overlaps the Jurassic units just off the southwest edge of the
claim block. The gabbro bodies appear to be defined by intermediate highs, in
contrast to the generally low magnetic values in the Jurassic sedimentary
section. Basalt-bearing alluvial rubble gravel fans appear as magnetic highs.
Exploration Potential
Extensive rock alteration occurs on the PW Property, the nature of which is
consistent with a near-surface, hot springs-type, gold-bearing hydrothermal
system. The obvious host lithologies at Red Hill are Jurassic sedimentary
rocks. The existence of a , gold-bearing hydrothermal system at Red Hill is
further supported by the following:
Anomalous mercury values on the PW Property associated with weak but
nonetheless anomalous gold values;
documented thermal waters on the pediment to the southeast near New York
Canyon; and
high level (hot springs) alteration, and gold values at the New York Canyon
kaolin pit, located along the range front four miles southwest of the PW
claims.
aArsenic, antimony and mercury values are anomalous at Red Hill in both rock
chip and soil samples, within an alteration/geological setting favorable for a
gold mineralization system. Although gold values at the surface are low they do
show a discernable pattern, and occupy a position within the larger anomalous
trace element zones that is consistent with the alteration and structural
setting. The exploration concept at Red Hill is thus fairly classic and
straightforward:
the PW Property represents the upper reaches of a gold-bearing hydrothermal
system, as indicated by silicification and especially acid leach alteration;
and
Page 28 of 55
silicification in the sandstones may have served as a "silica cap" overlying
potential gold mineralization in the more favorable underlying calcareous
lithologies.
Low gold values, along with anomalous values in arsenic, mercury and antimony,
are expected at the levels exposed at Red Hill, with higher gold values
potentially occurring at depth below (or laterally from) the zone of leaching,
along permeable structures and/or within a favorable stratigraphic horizon(s).
There are examples in Nevada of the type of gold deposits sought at Red Hill.
These properties contain extensive areas of high-level, "hot springs" type,
hydrothermal alteration, with high mercury, arsenic, + antimony and + thallium
-- -
values, but very low surface gold values. These deposits include Hollister, in
the Ivanhoe mercury district, Elko County, (2.8 mm ounces gold estimated mineral
inventory), the Buckhorn South/Zeke deposit Eureka County (110,000 ounces gold
reserve/resource) and Goldbanks in the Goldbanks mercury district, Pershing
County (1.62 mm ounces gold reserve)
ICP PROPERTY - IOWA CANYON MINING DISTRICT, LANDER COUNTY, NEVADA, USA
- --------------------------------------------------------------------------------
Location and Introduction
The Iowa Canyon Property ("ICP Property") lies within the Iowa Canyon mining
district along the northwest flank of the Toiyabe Range approximately 56 miles
south of Battle Mountain in Lander County, Nevada. The ICP Property is located
in T.23 N., R. 44 E, sections 22, 23, 26 and 27. In September 1997, the
Corporation located 42 lode mining claims (ICP 1-42) in the northwest portion of
the district. The ICP Property consists of the Corporation's ICP lode claims
and three Chem (3,5 & 7) lode claims optioned from Brancote U.S. Inc. under a
Mining Lease Agreement dated April 21, 1998. The Chem claims cover "Chem Hill"
which was the primary focus of the previous gold exploration activity and host
for a small gold resource (2.5 million tons of 0.013 oz/ton Au). The ICP
claims are located south of Chem Hill and cover a large area of essentially
unexplored pediment and range front that is highly prospective for gold
mineralization.
The ICP Property consists of 42 lode mining claims with Certificates of Location
registered in the name of the Corporation's subsidiary Triband Resource US Inc.
The Certificates are registered with the Bureau of Land Management in Reno,
Nevada, USA and are listed below.
LODE CLAIM LOCATION DATE NMC NUMBER
- ------------ -------------- -------------
ICP 1-8 March 27, 1997 772641-772648
- ------------ -------------- -------------
ICP 9-18 March 26, 1997 772649-772658
- ------------ -------------- -------------
ICP 19-26 March 27, 1997 772659-772666
- ------------ -------------- -------------
ICP 27-34 April 18, 1997 772667-772674
- ------------ -------------- -------------
ICP 35-42 May 15, 1997 772675-772682
- ------------ -------------- -------------
(T.23 N., R.44 E., Sec. 22, 23, 26 & 27)
The Iowa Canyon district has been explored primarily for fluorite
mineralization. The fluorite occurs as numerous small carbonate replacement
deposits that are spatially and genetically related to a Cretaceous igneous
intrusive stock. Sporadic, small scale exploration of these deposits occurred
until about the mid-1970's.
Geology
The ICP Property is underlain principally by Paleozoic sedimentary rocks that
are intruded by a Cretaceous quartz monzonite stock. A large proportion of the
sedimentary rocks exposed in the district are siliceous clastic rocks of the
Ordovician Valmy Formation. The Valmy Formation exposed on the property
includes in order of decreasing abundance; quartzite, siltstone-sandstone, with
lesser amounts of limestone and chert. The Valmy Formation was emplaced along
the Roberts Mountain Thrust Fault during the Antler Orogeny which moved upper
plate western facies siliceous rocks (Valmy Formation) over lower plate eastern
facies carbonate rocks.
Page 29 of 55
Lower plate carbonate rocks are exposed as small windows developed in the upper
plate Valmy Formation. A window exposing lower plate limestone occurs just
north of the intrusive stock and south of Chem Hill. The exposed limestone is
probably the Ordovician Hanson Creek Formation. Carbonate rocks exposed in
tectonic windows indicate that chemically reactive rocks favorable to host gold
mineralization, may occur at reasonably shallow (drillable) depths beneath the
large exposures of the altered upper plate Valmy Formation and Tertiary age
rocks.
During the Cretaceous Period, a quartz monzonite igneous stock was emplaced into
the Paleozoic sedimentary rocks. The exposed portion of the stock is
approximately 0.75 square miles in aerial extent (2000 x 5000 feet). The
abundance of igneous dikes and intensity of thermal metamorphic effects on the
sedimentary rocks, suggests that portions of the intrusive occur at a relatively
shallow depths and at significant distances outward from the surface exposures.
The intrusion is characterized by fine-to-medium-grained textures and is
principally quartz monzonite in composition, although more mafic (granodiorite)
facies occur. Biotite, quartz, feldspar and some muscovite phenocrysts occur in
finer-grained groundmass of the same mineralogical composition. Variations in
mineralogical composition are common within the intrusive mass. The border
zones are commonly bleached and clay altered, resulting in the formation of
light colored rocks that contain varying mixtures of secondary clays, quartz and
iron oxide minerals.
Thermal metamorphic effects are widespread within the Valmy Formation and the
lower plate Paleozoic limestone exposed in the drainage south of Chem Hill. The
thermal aureole extends several thousand feet from the exposed intrusive
contact. The thermal effects include recrystallization and bleaching developed
within the chert and clastic rocks and the removal of fine-grained carbonaceous
material. The degree of recrystallization and bleaching diminishes with
increasing distance from the intrusive contact. Limestones are recrystalllized
to coarser grained marble and weak calcic skarn formation as the result of
thermal and metasomatic effects. Insert 4th map
The skarn zones are typically less than 3 feet wide and contain the minerals
diopside, garnet, calcite, minor actinolite in veinlets and quartz.
The Tertiary section consists of volcanic, volcanoclastic and fluvial-lacustrine
sedimentary rocks. This rock sequence is exposed throughout the Iowa Canyon
district and is mapped as the Oligocene age Hall Creek Tuff by the U.S.
Geological Survey. Several distinctive rocks units have been recognized on the
property and were mapped in detail during Spring 1998. These include, from
oldest to youngest: rhyodacite flow or flow dome, crystal-lithic rhyolite tuff,
conglomerate, siliceous sediments, crystal tuff, rhyolite tuff breccia and a
biotite rhyolite. These Tertiary rocks host the known gold resource identified
on Chem Hill.
Structurally, the district is relatively complex. The oldest structures are
low-angle faults belonging to the regionally extensive Roberts Mountains Thrust,
a major tectonic event that occurred as a result of the Devonian-Mississippian
Antler Orogeny. The Roberts Mountain Thrust, and related structures, moved
western assemblage siliceous, clastic rocks over lower plate carbonate platform
rocks that comprise the eastern assemblage.
Several small areas of lower plate carbonate rocks are exposed in the Iowa
Canyon district as windows through the upper plate assemblage. Low-angle
faulting and subparallel fracture sets are abundant within the Valmy Sequence
rocks exposed on the property and may be related to the regional Roberts
Mountain Thrust.
Page 30 of 55
Numerous sets of steeply-dipping faults occur on the ICP property and throughout
the Iowa Canyon district. Several prominent fault sets have been mapped and
include: 1) N 15-25o W, 2) N60oE, 3) N 10-20oE and 4) N 35-45o W. Faults of
other orientations also occur but are not abundant enough to be defined as major
structural sets. The N 15-25oW set appears to be an important control for
hydrothermal alteration and mineralization. Faults of this set are responsible
for the topographic break that forms the creek drainage south of Chem Hill and
are believed to be the main controlling structure(s) for the strong geochemical
anomalies that occur along this marked topographic feature. This structural set
strikes directly into Chem Hill, occurs in close spatial proximity to the drill
holes with the strongest gold values, and probably is a major controlling
feature for the known gold mineralization in the district.
Alteration
Several distinct types of alteration occur in the Iowa Canyon district and
include: 1) silicification, 2) argillic clay alteration, 3) phyllic
quartz-sericite-pyrite alteration, 4) quartz veining, 5) pyrite sulfide
introduction and 6) supergene alteration. In addition to the main alteration
features listed above, weak contact metasomatism produced narrow zones of
non-sulfidic calcic skarn as discussed in the geology section.
The bulk of the gold mineralization is associated with hydrothermal
silicification. The silicification consists of microcrystalline quartz
replacements of the Tertiary volcanic and sedimentary rocks and to a lesser
degree, replacements of the pre-Tertiary sedimentary rocks. The quartz is
fine-grained, gray and commonly extremely vuggy with drusy quartz-lined open
spaces. Pyrite occurs as disseminations, individual crystals and crystallized
aggregates. Oxidation of the sulfides resulted in the production of abundant
iron oxide minerals and jarosite in the form of disseminations, fracture and
open space infillings, and local gossans. Chalcedonic and opaline silica also
occurs as rock replacements and are most abundant on, and near, Chem Hill where
they are mixed with epithermal microcrystalline quartz. The silicified rocks
are commonly crosscut by later colorless to gray quartz veins ranging from
microveinlets (less than 1 mm.) to narrow veins that locally contain sulfide
minerals.
Argillic clay alteration occurs intermixed with zones of silification and is
best developed within the Tertiary volcanic rocks. Argillic clays are also
developed within the Cretaceous intrusion, in areas of fluorite mineralization,
and to a lesser extent along fault-fracture zones in the Valmy Sequence. The
exact clay composition of these zones in unknown, but are believed to be
mixtures of kaolinite, illite and probably montmorillonite in association with
silicia and iron oxides.
Phyllic alteration is common along the margin of the igneous intrusion and
consists of sericite, quartz and dispersed pyrite (usually oxidized to iron
oxides). Many of the strongest zones of phyllic alteration are associated with
fluorite mineralization. Feldspar minerals are altered to sericite and some
clay minerals while quartz usually occurs as irregular groundmass replacements
and in veins. These veins are white and massive, typical of mesothermal-type
vein deposition. The quartz veins are ubiquitous along the intrusion contact
zone and typically flood the host sedimentary rocks with quartz stockworks.
Most of the veins are limonitic, resulting from the oxidation of pyrite. These
mesothermal quartz-veined phyllic alteration zones are relatively gold-deficient
and contain much lower concentrations of As, Sb, and Hg, suggesting that the
intrusive-related hydrothermal event was primarily fluorine rich.
Page 31 of 55
Mineralization
The types of mineralization occurring in the Iowa Canyon district include: 1)
fluorite mineralization, 2) weak molybdenum mineralization related to igneous
rock and 3) epithermal gold mineralization. As discussed in the introduction,
the fluorite mineralization in the district has been explored and mined
intermittently from the mid-1940's to the mid-1970's. Although numerous cuts,
trenches and small pits exist, the total production is estimated to be about
1500 tons of fluorite, with little potential for additional tonnage of any
significance. Exploration for intrusive-related molybdenum mineralization in
the district during the late 1960's or early 1970's included the drilling of at
least 4 diamond core holes. The results of this program are unknown.
The fluorite and molybdenum mineralization are directly related to the
emplacement of the Cretaceous quartz monzonite igneous stock. The alteration
mineral assemblages are typical of an intrusive-related, lithophile element-rich
system. Textural, mineralogical and geochemical features of the quartz veins,
the phyllic alteration zone, and the fluorite mineralization are characteristic
of those that typify magmatic-hydrothermal mineralization developed during the
later stages of intrusion emplacement.
Gold exploration in the district began in the mid-1980's by Mines Management
Company which drilled the initial shallow rotary holes in the Chem Hill area in
an attempt to discover a shallow, bulk-minerable, open pit gold deposit. It
drilled a total of 15 holes in a surface gold-bearing siliceous zone in the
Tertiary volcanic and sedimentary rock section beneath the surface gold anomaly.
In 1990, Echo Bay Exploration substantiated the presence of anomalous gold and
expanded the area of known mineralization by drilling an additional 12 reverse
circulation holes. The latest exploration in the district was undertaken by
North Mining in 1994 and included drilling 18 reverse circulation holes that
were focused on and near Chem Hill. Their drilling on Chem Hill again
substantiated the subsurface mineralization and further expanded the known
resource area. The North drilling also encountered anomalous gold
mineralization in the pediment-covered area that is located between the main
range front (to the south) and Chem Hill.
The zones containing the most anomalous gold mineralization encountered in the
drill holes to date are typically silicified and argillic altered, are
associated with quartz veining, and contain pyrite. The massively silicified,
and quartz-chalcedonic silica veined zones typically contain small amounts of
gold. However, the exact nature of the drill hole mineralization is not known
because of the relatively incomplete drill logs and the lack of rocks chips to
examine. The drilling completed to date also indicates that the best gold
mineralization occurs within the Tertiary rock sequence. However, very few
holes have penetrated the Tertiary-pre-Tertiary unconformity and none have been
drilled deep enough to reach the lower plate rocks.
Geochemistry
A total of about 210 rock samples have been collected from the surface of the
ICP and Chem Claims and the surrounding area. About 150 of these samples were
collected by the Corporation and the rest previously collected by Cyprus Metals
Exploration and North Mining.
Using these samples as a data base a set of geochemical anomaly maps were
prepared to show the distribution of samples containing gold and the contents
and distribution of the gold associated elements. Anomalous concentrations of
gold (greater than 0.05 ppm), arsenic (greater than 1000 ppm), antimony (greater
than 100 ppm), mercury (greater than 0.1 ppm), silver (greater than 10 ppm) and
molybdenum (greater than 100 ppm) are common on the property. The distribution
of coincident elemental anomalies, as defined by the geochemical anomaly maps
have been plotted. These anomalies are focused primarily in two distinct areas:
1) on and near Chem Hill and 2) in the drainage south of Chem Hill. Both of
these anomalous zones are believed to have resulted from hydrothermal fluids
that were focused along the north-northwest trending fault zone. The large
expanse of pediment that separates these two anomalies is a high-priority
drilling target. In addition to the pediment, the undrilled drainage contains
strongly anomalous gold values and is a priority target area. Additional target
areas are believed to exist just west of the drainage beneath the altered
volcanic rocks.
Page 32 of 55
The Chem Hill anomaly has been extensively drilled by the previous companies
exploring the district and offers less obvious exploration potential. However,
the north-northwest trending structural zone, characterized by intense
The Company has abandoned this property in 2000 due to economic reasons.
THE STANDARD CREEK PROPERTY - BRITISH COLUMBIA
- ----------------------------------------------------
Introduction
The Standard Creek property ("Standard Creek Property") is located 13 kilometers
southeast of Bralorne, British Columbia, Canada in the Gold Bridge area of
British Columbia. The Standard Creek Property comprises of 83 claims (the
"Claims") containing 171 units covering an areas of approximately 25.5 square
kilometers in the Lillooet Mining Division.
The Claims are underlain by rocks of the Fergusson Group, the Pioneer and Noel
Formations of the Cadwallader Group, Bralorne Diorite, President ultrabasics and
Coast Granitic rocks. The property lies along the southeast extension of a gold
bearing structure, the Cadwallader Break of the Bralorne Fault system. This
fault system hosts the Bralorne/Pioneer mining complex, 13 kilometers to the
northwest. The Cadwallader Gold Belt is characterized by the association of
gold bearing quartz veins with a complex northwest trending fault system
occupying the Cadwallader Creek Valley. Variable ultramafics are closely
associated with the fault system and gold mineralization.
Exploration potential exists for the discovery of mineralization to the
southeast of Bralorne along with the Cadwallader Fault System on the Standard
Creek Property. Extensively altered ultramafic rocks are known in the area and
gold and arsenic anomalies in soil samples appear to be closely associated with
serperntinites along the Cadwallader Fault system.
Status of Claims
The Standard Creek Property currently consists of 83 Claims comprising of 171
units in the Lillooet Mining Division, British Columbia. The claim units are
listed in Table below. The claim information is obtained from the system of the
B.C. Ministry of Energy, Mines and Petroleum Resources.
The Claims listed below are covered by the Mines Act (British Columbia) and are
subject to a required assessment or cash in lieu of $200 per year per year after
their expiry date in the case of the 4 post and 2 post claims and revered crown
ants, and payment of annual taxes in the case of the crown grants.
CLAIM NAME UNITS YEAR STAKED EXPIRY DATE
- ----------------- ------------------------ ----------- ------------------
Tom 1-8 2-Post: 8 Units 1984 October 11, 2000
- ----------------- ------------------------ ----------- ------------------
Pat 1-8 2 Post: 8 Units 1979 September 4, 2000
- ----------------- ------------------------ ----------- ------------------
Mac 1-8 2 Post: 8 Units 1986 August 6, 2000
- ----------------- ------------------------ ----------- ------------------
June 1-8 2 Post: 8 Units 1986 August 6, 2000
- ----------------- ------------------------ ----------- ------------------
Peak Modified Grid: 9 Units 1986 September 4, 2000
- ----------------- ------------------------ ----------- ------------------
Butte-X-Cal Modified Grid: 20 Units 1983 February 14, 2000
- ----------------- ------------------------ ----------- ------------------
Lion 1 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Lion 7 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Bulldog 7 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Unicorn 4 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Unicorn 6 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Bralorne Ext Modified Grid: 20 Units 1984 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Standard 1 Modified Grid: 4 Units 1984 September 13, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 3 2 Post: 1 Unit 1985 November 19, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 4 2 Post: 1 Unit 1985 September 17, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 5 2 Post: 1 Unit 1985 September 17, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 6 2 Post: 1 Unit 1985 September 17, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty C Fr. Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Page 33 of 55
Royalty 11 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Standard 2 Modified Grid: 12 Units 1984 November 19, 2000
- ----------------- ------------------------ ----------- ------------------
Goldstream I Modified Grid: 12 Units 1985 February 22, 2000
- ----------------- ------------------------ ----------- ------------------
Goldstream II Modified Grid: 12 Units 1985 February 22, 2000
- ----------------- ------------------------ ----------- ------------------
Goldstream Ext. 1 Modified Grid: 6 Units 1985 May 6, 2000
- ----------------- ------------------------ ----------- ------------------
Goldstream Ext. 2 Modified Grid: 4 Units 1985 May 6, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 1 2 Post: 1 Unit 1985 September 17, 2000
- ----------------- ------------------------ ----------- ------------------
Pie 2 2 Post: 1 Unit 1985 September 17, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 1 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 2 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 3 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 4 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 5 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 6 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 7 Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 8 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 9 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty 10 Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty A Fr. Reverted Crown Grant 1983 June 14, 2000
- ----------------- ------------------------ ----------- ------------------
Royalty B Fr. Reverted Crown Grant 1983 June 13, 2000
- ----------------- ------------------------ ----------- ------------------
Chalco D Fr. Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 5 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 6 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 8 Fr. Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 9 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 10 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 12 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 13 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 35 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 36 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 37 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 38 Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Chalco 39 Fr. A Crown Grant N/A N/A
- ----------------- ------------------------ ----------- ------------------
Due to depressed gold price, the Corporation decided not renewed any claims that
were expired in 1999 and 2000.
Location and Access
The Standard Creek Property is located in the Lillooet Mining Division,
approximately 13 kilometres southeast of Bralorne, British Columbia, Canada.
The Claims cover approximately 25.5 km 2 centering on latitude 50o42'N and
longitude 122o37'W. Access to the property is by 20 kilometres of gravel
logging road exiting southeast along Cadwallader Creek from Gold Bridge, British
Columbia. Approximately 110 kilometres of good gravel road connect Gold Bridge
with Transprovincial Highway 12 at Lillooet, British Columbia.
Physiography
The Standard Creek Property is situated in mountainous terrain between the
Cadwallader and Bendor Ranges of the Coast Mountains. Elevations range from
1,300 metres in Cadwallader Creek at the west end of the property to in excess
of 2,300 metres at the summit of Royalty Peak. The valley flow is generally
snow free for about 8 months of the year. Vegetation varies from thick
coniferous and older growth along the valleys to alpine terrain at higher
elevations. The area has been subjected to alpine glaciation as evidenced by
U-shaped valleys and the development of cirques. Overburden thickness is
variable throughout the property and slides are not uncommon in some of the
steeper areas.
History
The Standard Creek Property is a consolidation of several gold and silver
bearing prospects located near the confluence of Standard Creek with Cadwallader
Creek. Interest in the Cadwallader Creek area dates back to 1897 when load gold
was first discovered. Work on the Standard Creek Property is first reported in
the early 1930's.
Page 34 of 55
The Corporation obtained the entire right, title and interest of 512026 B.C.
Ltd. pursuant to the terms of a Property Agreement, dated February 6, 1996
between the Corporation and 512026 B.C. Ltd. The acquisition the entire right,
title and itnerest of 512026 BC Ltd. pursuant to the Property Agreement dated
February 6, 1996 allowed the Corporation to change from being a Junior Capital
Pool listed company to a fully listed Exchange Issuer on the Alberta Stock
Exchange, now the CDNX.
Geology and Mineralization
Regional Geology
The geology of the Bridge River-Cadwallader Creek area is well documented in the
literature and continues to be the subject of investigations. The principal
strategic assemblages of the area are the Fergusson, Cadwallader and Taylor
Creek Groups. The Fergusson Group, the oldest known unit in the area i s
believed to be Pre-Permian in age. It consists of steeply chert beds, some
marble, schist, gneiss and hornfels. In some places, cataclasis has reduced
bedding laminations to sheared quartz lenses and intensely milled breccias
resembling quartz pebble conglomerate. Locally, the group is invaded by
numerous greenstone dykes and sills which have been reduced to clorite schists
in zones of intense shering, and altered to fine-grained amphibolites in the
thermal aureoles of large granitic stocks.
The Pioneer Formation is apparently the oldest unit in the Cadwallader Group.
It consists of greenstones (chlorite and ipidote bearing basic volcanics) which
appear to be connected to greenstone feeders intruding the underlying Fergusson
Group. The only sedimentary rocks assigned to the Pioneer Formation are a few
small lenses of limestone and thin tephra beds.
The Noel Formation is typically a discontinuous thinly bedded argillite and
siltstone unit with a few thin zones of dark grey limestone. At various
locations in the area the formation rests directly on Fergusson Group rocks. At
other locations it overlies Pioneer greenstones and elsewhere the unit is
missing. The youngest member of the Cadwallader Group is the Hurley Formation,
predominately composed of green, brown and black argillite and cherty argillite.
These beds are locally intercalated with gritty siltstones and sandstones and
some calcarenites. Boulder and pebble conglomerate has been observed at the
base of the formation, resting conformably on the Pioneer Formation. The Taylor
Creek Group, overlying the Cadwallader Group, consists mostly of coarse clastic
sedimentary rocks, the source of which is believed to be the Fergusson Group and
the Hurley Formation.
The main igneous intrusions of the area are the Bralorne Diorite (Paleozoic),
the President ultrabasic rocks and the Coast Plutonic rocks (Mesozoic).The
Bralorne diorite is explored at intervals from Standard Creek through the
Bralorne - Pioneer mineral belt to the town of Gold Bridge. The alignment and
elongated shape of the diorite suggests emplacement in a major fault zone. The
President ultrabasic rocks are lenticular bodies that follow the belt of the
Bralorne Diorite. The ultrabasic rocks are believed to have been emplaced in
fault zones either as faulted slivers of pyroxenite and dunites or as a
crystalline magma. Emplacement was followed by extensive metasomatism.
The ultrabasic intrusions are known to be younger than the Upper Triassic Hurley
rocks which they cut and older than overlying Middle Cretaceous Taylor Creek
rocks. The coast plutonic rocks comprise as assortment of granitic plutons
exposed at various locations including the Bendor Ridge. These rocks are mainly
hornblende granordioite with quartz diorite and biotite granite as local phases.
Numerous Mesozoic and Tertiary dykes and sills occur throughout the area. The
main Tertiary effusives are light brown feldspar porphyries, andesite porphyries
and less commonly fresh basalt dykes.
Local Geology
Exposed on the Standard Creek Property are rocks of the Fergusson Group, the
Pioneer and Noel Formations of the Cadwallader Group, Bralorne Diorite,
President ultrabasics and Coast Granitic rocks. Fergusson Group metamorphic
rocks occur north of Standard and Cadwallader Creeks. Sedimentary and volcanic
Page 35 of 55
rocks of the Pioneer and Noel Formations are found within the Standard Creek
Valley and southwest of the Cadwallader Creek. Bralorne Diorite outcrops near
the junction of Standard and Cadwallader Creeks. President ultrabasics are
found cutting both Fergusson and Cadwallader Group rocks, while Coast granitic
rocks are generally found intruding Fergusson Group rocks along the Bendor Ridge
in the north and northeast parts of the Standard Creek Property.
Mineralization
The Cadwallader Gold Belt is characterized by the association of gold bearing
quartz veins with a complex northwest trending fault system occupying the
Cadwallader Creek Valley. Variably altered ultramafics are closely associated
with the fault systems and gold mineralization. Gold quartz veins at the
Bralorne mesothermal deposit have extensive quartz-ankeritic carbonate-muscovite
hydrothermal alternation envelopes that grade outward to
chlorite-calcite-albite.
Minor pyrite with traces of sphalerite, galena and tetrahedrite are found in the
veins with native gold, more abundant pyrite and arsenophyrite with lesser
phyrrhotite and chalcopyrite occur in altered wall rocks adjacent to the veins.
The gold at Bralorne is principally found as thin smeared flakes of native metal
in black sulphitic septae of the strongly ribboned shear veins. Altered
ultramafic rocks appear to be closely associated with hold deposits around the
world, although they do not necessarily have a direct spatial relationship to
auriferous quartz veins. Characteristic features of their veins are as follows:
(1) they are extremely rich but erratically distributed;
(2) they are surrounded by a zone of carbonate alteration and phyritization
often more than 10 feet wide; and
(3) extensive mariposite - bearing quartz - carbonate rocks (listwanites) occur
along the serpentinite contacts.
Listwanite is presumably developed by metasomatic alternation to form the free
quartz found in the rocks. The alteration process may have also released gold
from ultramafic rocks and remobilized it into quartz veins. Alternation of
ultramafics by carbonation provides a mechanism for release of Au from magnetic
and secondary sulfide where it may have been concentrated during
serpentinization of ultramafic rocks. Thus, the gold may also be reconcentrated
in carbonate-altered ultramafic rocks. Listwanites have been identified.
Listwanites have been identified on the Standard Creek property at the Standard
Zone and on the Butte-X-Cal Claim. Elsewhere on the property arsenic and gold
anomalies in soil samples appear to be closely associated with serpentinites
which in turn lie along the Cadwallader Fault System. The Piebiter Zone
comprises low grade gold mineralization in quartzites and quart-boitite schists
at and near the contact with ultramafic rocks. The zone appears to be in part
structurally controlled within a broad shear zone, a branch of the Bralorne
Fault System. Mineralization in the Piebiter Zone is associated with
disseminated pyrite and phyrrhotite anomalous in arsenic and is open along
strike and to depth.
Gold may also have been derived in the Bralorne area from gold leached and
transported by evolved meteoric and metamorphic fluids during metamorphic
outgassing within the greenschist facies. The well developed fracturing within
the major Bralorne fault system provided excellent channelways or plumbing to
focus solutions from large volumes of rock. In this case, the Bralorne fault
system may be the main reason that gold deposits are found in this area.
Page 36 of 55
ESTIMATED ADMINISTRATIVE EXPENDITURES
- ---------------------------------------
The Corporation's total administrative costs to carry out the exploration and
anomalous programs was approximately $92,000. The estimated average monthly
breakdown was as follows:
ITEM AVERAGE MONTH 12 MONTH PERIOD
- ---------------------------- -------------- ----------------
Management & Consulting Fees $ 5,000 $ 60,000
Office & Miscellaneous 1,000 12,000
Accounting & Audit 1,667 20,000
-------------- ----------------
TOTAL $ 8,167 $ 92,000
============== ================
ITEM 3 LEGAL PROCEEDINGS
------------------
The Corporation is unaware of any legal proceedings, either threatened or
pending, to which the Corporation is or is likely to be a party, or of which any
of its properties or assets is or is likely to be the subject, that are material
to the business and affairs of the Corporation.
ITEM 4 CONTROL OF REGISTRANT
-----------------------
There are no persons or entities known by the Corporation to own more than 10%
of any class of the Corporation's voting securities. Ownership is based on
information furnished to the Corporation by nominees holding securities for such
persons. The directors, officers and other members of management of the
Corporation own as a group, directly or indirectly, 401,280 common shares of the
Corporation, representing 2.9% of the total issued and outstanding securities of
the Corporation.
ITEM 5 NATURE OF TRADING MARKET
---------------------------
The common shares of the Corporation have been listed and posted for trading on
Canadian Venture Exchange (formerly the Alberta Stock Exchange). The following
table sets forth the high and low closing bid prices, in Canadian dollars, and
trading volume of the common shares:
HIGH LOW VOLUME (X1,000)
- -------------- ---------- ----- ---------------
1996
- ----
First Quarter $ 0.17 $0.17 335,000
- -------------- ---------- ----- ---------------
Second Quarter No Trades N/A N/A
- -------------- ---------- ----- ---------------
Third Quarter No Trades N/A N/A
- -------------- ---------- ----- ---------------
Fourth Quarter $ 1.48 $1.39 1,363,600
1997
- ----
First Quarter $ 1.60 $1.45 148,150
- -------------- ---------- ----- ---------------
Second Quarter $ 1.42 $1.33 1,805,475
- -------------- ---------- ----- ---------------
Third Quarter $ 0.96 $0.91 675,450
- -------------- ---------- ----- ---------------
Fourth Quarter $ 0.59 $0.56 634,000
- -------------- ---------- ----- ---------------
1998
- ----
First Quarter $ 0.64 $0.60 802,733
- -------------- ---------- ----- ---------------
Second Quarter $ 0.43 $0.41 339,500
- -------------- ---------- ----- ---------------
Third Quarter $ 0.27 $0.26 417,783
- -------------- ---------- ----- ---------------
Fourth Quarter $ 0.24 $0.23 640,100
- -------------- ---------- ----- ---------------
Page 37 of 55
1999
- ----
First Quarter $ 0.25 $0.10 1,399,599
- -------------- ---------- ----- ---------------
Second Quarter $ 0.26 $0.14 2,028,850
- -------------- ---------- ----- ---------------
Third Quarter $ 0.25 $0.15 874,100
- -------------- ---------- ----- ---------------
Fourth Quarter $ 0.20 $0.10 690,300
- -------------- ---------- ----- ---------------
2000
- ----
First Quarter $ 0.94 $0.10 5,751,927
- -------------- ---------- ----- ---------------
Second Quarter $ 0.70 $0.40 846,925
- -------------- ---------- ----- ---------------
Third Quarter $ 0.48 $0.17 3,713,372
- -------------- ---------- ----- ---------------
On September 30, 2000, the closing bid price of the Common Shares on the
Canadian Venture Exchange was $0.40 per share.
ITEM 6 EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
---------------------------- --------------------------------------
There are no government laws, decrees or regulations in Canada relating to
restrictions on the import/export of capital, or affecting the remittance of
interest, dividends or other payments to non-residential holders of the
Corporation's shares. Any such remittances to United States residents, however,
may be subject to a 15% tax pursuant to Article X of the reciprocal tax treaty
between Canada and the United States. The applicable rate is dependent on the
type of entity receiving the dividends. See Item 7 - Taxation.
Except as provided in the Investment Canada Act (the "Act"), there are no
limitations under the laws of Canada, the Province of British Columbia or in the
charter or any other constituent documents of the Corporation on the right of
foreigners to hold and/or vote the shares of the Corporation.
The Act requires a non-Canadian making an investment to acquire control of a
Canadian business, the gross assets of which exceed certain defined threshold
levels, to file an application for review with Investment Canada, the federal
agency created by the Act.
As a result of the Canada - U.S. Free Trade Agreement, the Act was amended in
January, 1989 to provide distinct threshold levels for Americans who acquire
control of a Canadian business.
A "Canadian business" is defined in the Act as a business carried on in Canada
that has a place of business in Canada, an individual or individuals in Canada
who are employed or self-employed in connection with the business, and assets in
Canada used in carrying on the business.
An "American", as defined in the Act, includes: an individual who is an
American national or a lawful permanent resident of the United States; a
government or government agency of the United States; an American-controlled
entity, corporation or limited partnership; and a corporation, limited
partnership or trust which is not controlled in fact through ownership of its
voting interests in which two-thirds of its board of directors, general partners
or trustees, as the case may be, are any combination of Canadians and Americans.
The following investments by a non-Canadian are subject to review by Investment
Canada:
1. all direct acquisitions of control of Canadian businesses with assets of $5
million or more;
2. all indirect acquisitions of control of Canadian businesses with assets of
$50 million or more, if such assets represent less than 50% of the value of the
assets of the entities, the control of which is being acquired; and
Page 38 of 55
3. all indirect acquisitions of control of Canadian businesses with assets of $5
million or more, if such assets represent more than 50% of the value of the
assets of the entities, the control of which is being acquired.
Review by Investment Canada is required when investments by Americans exceed
$150 million for direct acquisitions of control. For purposes of the Act,
direct acquisition of control means:
(i) a purchase of voting interest in a corporation, partnership, joint
venture or trust carrying on a Canadian business, or any purchase of all of
or substantially all of the assets used in carrying on a Canadian business;
and
(ii) indirect acquisition of control means:
(iii) a pure of the voting interest of a corporation, partnership, joint
venture or trust, whether a Canadian or foreign entity, which controls a
corporation, partnership, joint venture or trust carrying on a Canadian
business in Canada.
The acquisition of certain Canadian businesses is excluded from the higher
threshold set out for Americans. These excluded businesses include oil, gas,
uranium, financial services (except insurance); transportation services and
cultural services (i.e.: the publication, distribution or sale of books,
magazines, periodicals [other than printing or typesetting businesses], music in
print or machine readable form, radio, television, cable and satellite services;
the publications, distributions, sale and exhibitions of film or video
recordings or audio or video music recordings). Direct or indirect acquisitions
of control of these excluded business are reviewable at the $5 million and $50
million thresholds.
A non-Canadian will not implement an investment reviewable under the Act unless
the investment has been reviewed and the Minister responsible for Investment
Canada is satisfied or is deemed to be satisfied that the investment is likely
to be of net benefit to Canada. The factors to be taken into account include:
1. the effect of the investment on the legal and economic activities in
Canada, including the effect on employment and resource processing, on the
utilization of particular components and services produced in Canada, and
on exports from Canada;
2. the degree and significance of participation by Canadians in the Canadian
business:
3. the effect of the investment on productivity, industrial efficiency,
technological development, product innovation and product variety in
Canada;
4. the effect of the investment on competition within an industry or
industries in Canada; and likely to be significantly affected by the
investment; and
5. the compatibility of the investment with national industrial economic or
cultural policies enunciated by the federal government or legislation of
the legislature or government of any Province.
If the Minister is not satisfied that the investment is likely to be a net
benefit to Canada, the non-Canadian will not implement the investment or, if the
investment has been implemented, will divest itself of control of the business
that is the subject of the investment.
A non-Canadian or American making the following investments: (i) an investment
to establish a new Canadian business; or, (ii) an investment to acquire control
of a Canadian business which investment is not subject to review under the Act;
must notify Investment Canada, within prescribed time limits, of such
investments.
ITEM 7 TAXATION
--------
Page 39 of 55
Management of the Corporation considers that the following discussion fairly
describes the principal and material Canadian federal income tax consequences
applicable to shareholders of the Corporation who are residents of the United
States and are not residents of Canada and do not hold, and are deemed not to
hold, shares of the Corporation in connection with carrying on a business in
Canada (a "non-resident").
Except as provided in the Act, there are no limitations under the laws of
Canada, the Province of British Columbia or in the charter or any other
constituent documents of the Corporation on the right of foreigners to hold or
vote the common shares of the Corporation.
The Act, which became effective on June 30, 1985, requires a non-Canadian making
an investment to acquire control, directly or indirectly, of a Canadian
business, to file a notification or an application for review with Investment
Canada.
An application for review must be filed if the investor is not a citizen or
resident of a World Trade Organization member country, and the investment is
over $50,000,000 or, if the investor is a citizen or resident of a World Trade
Organization member country and the investment is over $179,000,000. For all
acquisitions of a Canadian business that does not meet the threshold criteria
for filing an application for review, the Act requires the investor to file a
notification.
For purposes of the Act, direct acquisition of control means a purchase of the
voting interests of a corporation, partnership, joint venture or trust carrying
on a Canadian business, or any purchase of all or substantially all of the
assets used in carrying on a Canadian business. An indirect acquisition of
control means a purchase of the voting interest of a corporation, partnership,
joint venture or trust, whether a Canadian or foreign entity, which controls a
corporation, partnership, joint venture or trust company carrying on a Canadian
business in Canada.
Generally, dividends paid by Canadian corporations to non-resident shareholders
are subject to a withholding tax of 25% of the gross amount of such dividends.
However, Article X of the reciprocal tax treaty between Canada and the United
States reduced to 15% the withholding tax on the gross amount of dividends paid
to residents of the United States. A further 9% reduction, in 1996, and a 10%
reduction in 1997 and thereafter, in the withholding tax rate on the gross
amount of dividends is applicable when a U.S. corporation owns at least 10% of
the voting stock of the Canadian corporation paying the dividends.
A non-resident who holds shares on the Corporation as capital property will not
be subject to tax on capital gains realized on the disposition of such shares
unless such shares are "taxable Canadian Property" within the meaning of the
Income TaxAct (Canada), and no relief is afforded under any applicable tax
treaty.
The shares of the Corporation would be taxable Canadian property of a
non-resident if at any time during the five year period immediately preceding a
disposition by the non-resident of such shares (a) not less than 25% of the
issued shares of any class of the Corporation belonged to the non-resident, (b)
the person with whom the non-resident dealt did not deal at arm's length, or (c)
to the non-resident and any person with whom the non-resident did not deal at
arm's length
PASSIVE FOREIGN INVESTMENT CORPORATION
As a foreign corporation with U.S. shareholders, the corporation could be
treated as a passive foreign investment corporation ("PFIC"), as defined in
Section 1296 of the Internal Revenue Code. This determination is dependent upon
the percentage of the Corporation's passive income, or the percentage of the
Corporation's assets which are producing passive income. U.S. shareholders
owning shares of a PFIC are required to pay tax and an interest charge on the
receipt of certain distributions and dispositions of PFIC stock.
Gain from a disposition of PFIC stock or certain distributions is treated as
income earned ratably over the period during which the shareholder has held the
stock. That portion allocable to the current year and to years when the
corporation was not a PFIC is included in the shareholder's gross income in the
year of distribution as ordinary income, rather than as a capital gain. That
Page 40 of 55
portion of the distribution or disposition which is not allocable to the current
year is subject to deferred U.S. tax (the amount of tax that would have been
owed if the allocated amount had been included in income in the earlier year),
plus interest.
However, if the U.S. shareholder makes a timely election to treat a PFIC as a
qualified electing fund ("QEF") with respect to such shareholder's interest
therein, the above-described rules generally will not apply. Instead, the
electing U.S. shareholder would include annually in his gross income his
pro-rata share of the PFIC's earnings and profits and any net capital gain,
regardless of whether such income or gain was actually distributed. A U.S.
Holder of a QEF can, however, elect to defer the payment of Untied States
Federal Income tax on income not currently received. Special rules apply to
U.S. shareholders who own their interests in a PFIC through intermediate
entities or persons.
The Corporation believes that it has been a PFIC for each fiscal year since its
incorporation, and expects to be characterized as a PFIC this fiscal year. U.S.
taxpayers holding the Corporation's shares may wish to consult with a personal
tax advisor concerning the possible application of the PFIC provisions to their
particular circumstances.
ITEM 8 SELECTED FINANCIAL DATA
-------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
1999 ($) 1998 ($) 1997 ($) 1996 ($) 1995 ($)
Revenues - - - - -
Exploration Expenses 2237,244 76,246 177,476 50,059 -
Depletion, Depreciation and Amortization 212 2,247 6,348 - -
General and Administrative Expenses 283,430 370,236 138,234 43,833 6,202
Other Income 11,818 219,927 120,953 8,043 3,497
Net Income (Loss) (899,836) (228,802) (201,105) (85,849) (2,705)
Per Share (0.07) (0.02) (0.02) (0.02) (0.01)
Working Capital 445,643 771,374 2,361,228 1,923,019 225,743
Deferred Exploration Expenses 2,042,109 1,907,394 1,283,748 631,746 -
Other Assets 147,649 772,219 14,813 - -
Long-Term Liabilities - - - - -
Shareholders Equity 2,635,401 3,450,987 3,659,789 2,554,765 225,743
The Corporation's financial statements have been prepared in accordance with
GAAP in Canada. A major difference under Canadian generally accepted accounting
principals is that the costs of acquiring and exploring mineral properties are
capitalized prior to commercial feasibility and written down if the properties
are abandoned, sold or if management decides not to pursue the properties.
Under United States generally accepted accounting principles, exploration and
Page 41 of 55
prospecting costs are charged to expense as incurred, as are exploration costs
for projects not yet determined by management to be commercially feasible.
Except as noted above and as disclosed in Note 10 of the financial statements,
the financial statements conform in all material respects with U.S. GAAP.
Listed below are the reconciled amounts under U.S. GAAP.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
1999 1998 1997 1996 1995
Revenues - - - -
Exploration Expenses 371,959 697,695 829,478 681,805 -
Depletion, Depreciation and Amortization 212 2,247 6,348 - -
General and Administrative Expenses 403,901 410,236 138,234 43,833 6,202
Other Income 11,818 219,927 120,953 8,043 3,497
Basic Net Income (Loss) (1,155,022) (893,190) (916,536) (721,375) (2,705)
Per Share (0.09) (0.07) (0.09) (0.18) (0.00)
Working Capital 445,643 771,374 2,361,228 547,619 225,743
- - - - -
Other Assets 147,649 728,679 14,813 - -
Long-Term Liabilities - - - - -
Shareholders Equity 593,292 1,500,053 2,376,041 1,923,019 225,743
ITEM 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------
The Corporation is involved in mineral exploration activities in Nevada, USA,
and British Columbia, Canada. To date, it has no revenue from operations.
Expenditures related to mineral exploration are capitalized and corporate
overhead generated items are expensed. Exploration and overhead expenditures
fluctuate depending on the exploration stage of the Corporation's various
projects and on the amount of available working capital. The Corporation is not
restricted in its ability to transfer funds to its subsidiaries.
On November 28, 1997, the Corporation acquired three exploration licenses in the
Bac Giang Province in Vietnam. The Corporation satisfied the minimum
exploration expenditures required on this project during the first year of the
licenses; however, because of the unsatisfactory results of the Corporation's
exploration program, as well as the uncertainties regarding renewal of its
exploration licenses by the Vietnamese government, the Corporation decided not
to expend any further amounts on this project. As of February 28, 1999, the end
of the Corporation's first quarter, the Corporation wrote off $154,129 and
abandoned the Bac Giang Project. The Corporation's abandonment and write-off of
the Bac Giang Project was disclosed to its shareholders, the regulatory
authorities and the public when its first quarter financial statements were
released on April 29, 1999. The Corporation is therefore no further activities
in Vietnam at this time.
The Corporation did not engage, does not currently engage, nor does it expect to
engage, in any hedging transactions to protect against fluctuations between
Canadian currency and the U.S. and Vietnamese currencies. The Corporation's
expenses are denominated in both Canadian and U.S. currencies. All expenses
incurred in Vietnam were paid for in U.S. currency.
The following discussion of the operating results and financial position of the
Corporation should be read in conjunction with the Corporation's consolidated
financial statements (and related notes).
Page 42 of 55
RESULTS OF OPERATIONS
- -----------------------
YEAR ENDED NOVEMBER 30, 1999
- --------------------------------
Net loss for the year ended November 30, 1999 under Canadian GAAP was $899,836
as compared to $228,802 for the year ended November 30, 1998. The increase in
losses was mainly due to write-off of mineral properties for $32,900, deferred
exploration costs for 154,282, and write-down of marketable securities for
$374,526.
Net loss for the year ended November 30, 1999 under US GAAP was $115,022 (1998 -
$893,190; 1997 - $893,190; 1996 - $721,,371). The increase over the loss per
Canadian GAAP was calculated as follows:
1999 1998 1997 1996 1995
Loss for the year per
Canadian GAAP $ 889,836 $228,802 $201,105 $ 85,849 $2,705
Compensation expense on
Granting Stock Options (1)
Acquisition of Mineral
Properties(2) $ 120,471 $ 40,742 $ 63,429 $ 3,780 -
Deferred Exploration
Costs (2) $ 37,609 $456,744 $601,569
---------- -------- -------- -------- ------
Basic Loss for the year
Under US GAAP $1,155,022 $893,190 $916,536 $721,375 $2,705
========== ======== ======== ======== ======
<FN>
(1) Statement of Financial Accounting Standards No 123 ("SFAS No. 123"),
entitled "Accounting for Stock Based Compensation", published by the
U.S. Financial Accounting Standards Board, requires a company to
establish a fair market value based methods of accounting for stock
based compensation plans. Canadian generally accepted accounting
principals do not require the reporting of any stock based
compensation expense in the Company's financial statements.
For compliance with United States generally accepted accounting
principals, the company uses the Black Scholes Option Pricing model to
determine the fair market of all incentive stock options at the grant
date.
(2) Under Canadian generally accepted accounting principals, the costs of
acquiring and exploring mineral properties are capitalized prior to
commercial feasibility and written down if the properties are
abandoned, sold or if management decides not to pursue the properties.
Under United States generally accepted accounting principles,
exploration and prospecting costs are charged to expense as incurred,
as are exploration costs for projects not yet determined by management
to be commercially feasible. This would result in a greater net loss
under U.S. GAAP.
Total assets of the Corporation decreased from $3,531,892 as at November 30,
1998 to $2,657,747 as of November 30, 1999. During the year, the Corporation
received $80,250 from a private placement of 535,000 shares at $0.20 per share
and $4,000 from exercise of stock options. The Corporation also issued 53,500
common shares as finder's fees for the above private placement.
In 1999, the Corporation expanded a total of $224,638 on exploration programs on
the Whisky Canyon, Iowa, and Bet properties in Nevada as compared to $328,276 in
1998. The lower expenditure was due to depressed gold price and the decision by
the Corporation to preserve its funds. The Corporation did not spend any
material amounts on the Standard Creek property and in Vietnam.
Page 43 of 55
Due to the unsatisfactory results of the Corporation's exploration program, as
well as the uncertainties regarding renewal of its exploration licenses by the
Vietnamese government, the Corporation decided to write-off its acquisition
cost of $32,900 and its exploration costs of $154,129 in March 1999.
YEAR ENDED NOVEMBER 30, 1998
- --------------------------------
Net loss for the year ended November 30, 1998 under Canadian GAAP was $228,802
as compared to $201,105 for the year ended November 30, 1997. The increase in
losses was due to an increase in general and administrative expenses.
Total assets of the Corporation decreased from $3,674,665 as at November 30,
1997 to $3,531,892 as of November 30, 1998. The Corporation raised $20,000
through the exercise of stock options. A total of 100,000 Common Shares were
issued for cash by the Corporation during the 12 month period ended November 30,
1998 pursuant to the above-described exercise of stock options.
The Corporation did not expend material sums on exploration of the Standard
Creek Property because the results of the exploration program on the property.
The cost of maintaining the property is minimal at a cost of approximately
$290.00 per year. Therefore, the Corporation maintained its Standard Creek
Property because of the potential for mining the property in the future.
In 1998, the Corporation expended a total of $328,276 on exploration programs on
the PW, Whisky Canyon, and ICP Properties in Nevada. The increase in
expenditures from 1997 was because the majority of the implementation of the
exploration programs conducted on these properties occurred in 1998.
In 1998, the Corporation expended a total of $128,468 on its Bac Giang Project
in Vietnam, compared to $25,661 in 1997. The rise in expenditures was due to
the Corporation's implementation of an exploration program on the project.
YEAR ENDED NOVEMBER 30, 1997
- --------------------------------
Net loss for the year ended November 30, 1997 was $201,105 as compared to
$85,849 for the year ended November 30, 1996. Before the write-down of deferred
exploration costs incurred in Mexico, net loss for fiscal year 1997 was $23,629,
compared to $85,849 for the same period in 1996. The decrease in losses was due
to an increase in interest income and a gain on foreign exchange from a large US
cash balance throughout the year.
Total assets of the Corporation increased from $2,570,125 as at November 30,
1996 to $3,674,665 as of November 30, 1997. The Corporation raised $1,306,129
through private placements and the exercise of stock options.
In 1997, the Corporation expended a total of $422,682 on creation and completion
of an exploration of the Standard Creek Property. This increase from 1996 was
due to the fact that the Corporation acquired the Standard Creek Property in
1996, but did not conduct any exploration activities thereon until 1997.
In 1997, the Corporation expended a total of $153,226 on the Whisky Canyon, PW
and ICP Properties in Nevada. The increase from 1996 was due to the fact that
the Corporation did not own any of the properties in 1996
In 1997, the Corporation expended a total of $25,661 on its exploration program
for the Bac Giang Project in Vietnam. The increase in expenditures on this
project from 1996 was due to the fact that the Corporation purchased the Bac
Giang Project in 1996, but did not begin its exploration program thereon until
1997.
Page 44 of 55
The Corporation has the financial ability to increase its exploration budget if
results justify increased activity on any of its properties.
A total of 3,234,507 Common Shares were issued for cash by the Corporation
during the 12 month period ended November 30, 1997 pursuant to the
above-described private placements and the exercise of stock options.
YEAR ENDED NOVEMBER 30, 1996
- --------------------------------
Net loss for the year ended November 30, 1996 was $85,849 as compared to $2,705
for the year ended November 30, 1995. The increase was due to the Corporation's
investigating various properties for possible acquisitions. During the 1996
fiscal year the Corporation raised $1,814,871 through private placements,
exercise of stock options and subscriptions received in advance. A total of
2,450,000 common shares were issued for cash.
The Corporation obtained the Standard Creek Property in February 1996, and did
not expend any monies on exploration in that year. The Corporation expended no
monies on the Bac Giang Project in 1996. The Corporation expended no monies on
the Nevada Properties in 1996 because it did not own the properties.
YEAR ENDED NOVEMBER 30, 1995
- --------------------------------
There was no activity in the year ended November 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
The Corporation's primary source of funds since incorporation has been from the
sale of its Common Shares through private placements and the exercise of
incentive stock options and share purchase warrants. The Corporation has no
revenue from mining to date and does not anticipate mining revenues in the
foreseeable future. The Corporation believes that it has adequate working
capital to proceed with its planned exploration programs.
The Corporation has no loan agreements or other current financing plans to raise
additional capital. However, the Corporation's Board of Directors may seek to
increase the exploration budget through private placements if the Corporation
receives positive geological results warranting future exploration.
The corporation did not anticipate expending material sums on exploration of the
Standard Creek Property because the results of the exploration program on the
property and the current depressed gold did not warrant further expenditure in
2000. The cost of maintaining the property is minimal at a cost of
approximately $290.00 per year. Therefore, the Corporation maintained its
Standard Creek Property because of the potential for mining the property in the
future. The Corporation feels that if it does not maintain the Standard Creek
Property, the property could be obtained by another mining company and could be
a viable mining property when gold prices rise.
The Corporation has made one commitment for capital expenditures for the
remainder of the fiscal year. The capital expenditure will be made on the
Whisky Canyon Property. Under the terms of the Mining Lease and Option
Agreement, the Corporation agreed to pay St. George Metals at total of $65,000
USD in royalty payments by July 8, 1999. These funds were paid from the
Corporation's general working capital.
The Corporation does not know of any trends, demands, commitments, events or
uncertainties that will result in, or that are reasonably likely to result in,
the Corporation's liquidity either materially increasing or decreasing at
present or in the foreseeable future. Material increases or decreases in the
Corporation's liquidity are substantially determined by the success or failure
of the Corporation's exploration programs or the future acquisition of projects.
Page 45 of 55
Year Ended November 30, 1999
During the year ended November 30, 1999, The corporation used $443,646 of its
cash resources for operating activities and $463,575 in its investing
activities. Included in the investing activities was $97,106 for mineral
properties. $224,791 for exploration costs, and $146,450 for an investment in a
private company incorporated in the State of Washington. These activities were
funded by the initial cash balance on had at beginning of year plus funds raised
during the year. In September 30, 1999, the Corporation completed a private
placement of $80,250 for issuing the 535,000 common shares. During the year,
the Corporation also received $4,000 from the exercise of stock options. As a
result the Corporation had a negative cash flow of $822,971 and a cash balance
of $18,332 as at November 30, 1999.
Year Ended November 30, 1998
During the year ended November 30, 1998, the Corporation used $95,843 of its
cash resources for operating activities, which was included in a net loss for
the year of $228,802, reduced by a recovery of $132,959 in non-cash and working
capital items. Expenditures on investing activities amounted to $1,383,299, an
increase of $532,660 from the previous year. The 1998 expenditures included
mineral properties acquisition and exploration of $621,449 and an investment in
the amount of $761,850 in Indico Technologies Corporation, a corporation listed
on the Alberta Stock. During the year ended November 30, 1998, the Corporation
issued a total of 100,000 shares at the price of $0.20 for exercise of stock
options. As of November 30, 1998, the consolidated cash equivalent amounted to
$841,303, a decrease of $1,459,142 from the beginning of the year.
Year Ended November 30, 1997
During the year ended November 30, 1997, the Corporation used $332,579 of its
cash resources for operating activities, after deducting net loss for the year
of $201,105. Items generated from non-cash operating activities included
amortization of $6,348, write-off of deferred exploration costs of $177,476 and
$349,860 in working capital items. Expenditures on investing activities amounted
to $850,639, an increase of $818,893 over the previous year. The 1997
expenditures included $829,478 for acquisition and exploration of mineral
properties and $21,161 for the purchase of capital assets. During the year
ended November 30, 1997, the Corporation raised a total of $2,681,529 by issuing
2,984,507 shares through private placements (the Corporation received $1,375,000
of the private placement funds prior to November 30, 1996) and 250,000 shares
through exercise of stock options. As a result, there was a net increase of
$788,069 in cash and equivalent for the year. As of November 30, 1997, the
Corporation had a total cash and equivalent of $2,300,445.
Year Ended November 30, 1996
During the year ended November 30, 1996, the Corporation used $497,500 of its
cash resources for operating activities, including a net loss for the year of
$85,849 and $411,651 in non-cash working capital items. Expenditures on mineral
properties amounted to $31,746. During the year, the Corporation raised
$439,471 through private placements and the exercise of stock options. In
addition, the Corporation also received $1,375,400 in share subscriptions from
the private placement completed in 1997. With total cash of $1,814,871 from
financing, the Corporation had a net increase of $1,285,625 in cash resources
for the year. As of November 30, 1996, the Corporation's cash position was
$1,512,376.
SIGNIFICANT UNCERTAINTIES
The Corporation currently does not have any properties in Mexico but is seeking
mineral property prospects. These projects may be subject to substantial
regulatory requirements, financing needs, and economic uncertainties. There is
no assurance that the Corporation can raise the additional funds necessary to
Page 46 of 55
complete the exploration work and, if warranted, bring the property into
production. There is also no assurance that the property will prove to be
profitable if it is brought into production.
ITEM 9A QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
---------------------------------------------------------------
Not Applicable
ITEM 10 DIRECTORS AND OFFICERS OF REGISTRANT
----------------------------------------
The following table sets forth the names and addresses of each of the directors
and officers of the Corporation, their principal occupations and their
respective date of commencement of their term with the Corporation. All
directors and officers hold office until the next annual general meeting of
shareholders of the Corporation or until successor be appointed.
NUMBER OF
COMMON SHARES OF
THE CORPORATION
BENEFICIALLY OWNED
NAME, PRINCIPAL OCCUPATION OR DIRECTLY/ PERCENTAGE OF
MUNICIPALITY OF RESIDENCE DURING THE PAST FIVE INDIRECTLY ISSUED SHARE
AND POSITION WITH CORPORATION YEARS CONTROLLED (2) (3) CAPITAL (3)
- --------------------------------- ---------------------------------------- ------------------- --------------
GARY FREEMAN President and Director of Triband 191,975 1.3%
Vancouver, British Columbia Resource Corporation from March,
Canada 2000 to present. Mr. Freeman has been
President and Director in the investment community for over
18 years and has been responsible for
the financing of many public
companies, such as Lion Lake
Resources, Palmer Resources and
Indico Technologies.He has worked in
the development and the structuring of
projects from early stages. Mr.
Freeman began working with Triband
in 1996 and had worked as project co-
coordinator on a contract basis.
- --------------------------------- ---------------------------------------- ------------------- --------------
JERRY G. POGUE (1) Past President of Triband Resource 209,305 1.5%
Vancouver, British Columbia Corporation. Mr. Pogue is a self-
Canada employed business consultant and has
Director been a financier since 1994. Mr. Pogue
was previously the President, CEO,
Chairman and a Director of Palmer
Resources Ltd. from May, 1996 to
February, 1999; Prior to 1994 was a
Registered Representative with
National Securities Corp., Seattle, WA,
USA from 1981 to 1993
- --------------------------------- ---------------------------------------- ------------------- --------------
SAM SZJMAN Director and Corporate Secretary of the Nil N/A
Vancouver, British Columbia Company since March, 2000.
Canada Independent Corporate Finance
Corporate Secretary and Director Consultant from 1995 to present;
Director and Vice-President, Legal
Affairs of First Continental Bancorp., a
private specialized commercial, asset-
based finance company from 1996 to
1999
- --------------------------------- ---------------------------------------- ------------------- --------------
Page 47 of 55
- --------------------------------- ---------------------------------------- ------------------- --------------
MICHAEL BARTLETT President and Owner of Leisure Capital Nil N/A
Florida, USA & Management Inc., a company which
Director specializes in the pre-development,
start-ups in innovative strategic,
conceptual, economic and financial
solutions from 1989 to present; from
1998 director, chairman and President
of Indico Technologies Corporation, a
public company trading on the
Canadian Venture Exchange; from
1996 to present, President & CEO of
Creative Entertainment &
Technologies, Inc., a public company
trading on the Canadian Venture
Exchange; from January 1996 to 1995
President and CEO of National
Maritime Authority
- --------------------------------- ---------------------------------------- ------------------- --------------
WILLIAM R. GREEN (1) Mr. Green is responsible for the Nil N/A
Company's mineral exploration
projects in Nevada. President,
Chairman and Director from 1996 to
present of Mines Management Inc., a
public company which trades on the
NASD's OTC Electronic Bulletin
Board; President and Director of Maya
Gold Limited, a public company listed
on the Canadian Venture Exchange
from 1998 to present; Vice-President
and Director of Petromin Resources
Ltd., a public company listed on the
Canadian Venture Exchange from 1991
to present; Vice-President and Director
of Yamana Resources, a public
company listed on the Toronto Stock
Exchange from 1994 to 1995
- --------------------------------- ---------------------------------------- ------------------- --------------
<FN>
(1) Member of the Audit Committee of the Corporation
(2) Common shares and options beneficially owned, directly or indirectly, or
over which control or direction is exercised, as at the date hereof, based
upon information furnished to the Corporation by individual directors and
officers. Unless otherwise indicated, such shares or options are held
directly. These figures do not include shares that may be acquired on the
exercise of any share purchase warrants held by the respective directors
and officers. Details of options held by the directors and officers are set
forth under "Options and Other Rights to Purchase Shares - Outstanding
Stock Options".
(3) The directors, officers and other members of management of the Corporation,
as a group beneficially own, directly or indirectly, 401,280 Common Shares
of the Corporation, representing 2.9% of the total issued and outstanding
Common Shares of the Corporation as at September 30, 2000.
ITEM 11 COMPENSATION OF DIRECTORS AND OFFICERS
------------------------------------------
The following tables set forth all annual and long term compensation for
services in all capacities to the Corporation and its subsidiaries for each of
the past three completed fiscal years in respect of each of the individuals who
were, as of November 30, 1999, the Chief Executive Officer and the other four
most highly-compensated executive officers of the Corporation (collectively the
"Named Executive Officers") including any individual who would have qualified as
a Named Executive Officer but for the fact that individual was not serving as
such at the end of the most recently completed financial year.
Page 48 of 55
SUMMARY COMPENSATION TABLE
--------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
Awards Payouts
- --------------------- ------------------------------------------------ ---------------------------------------------------
Common Restricted
Shares Under Shares or All other
Other Options\ Restricted LTIP Compensation
Name and Principal Fiscal Salary Bonus Annual SARs granted Share Units Payout ($)
Position Year End ($) ($) Comp (#) ($) ($)
($)
- --------------------- ------------------- ---------- ------ ------- ------------- ------------ ------- -------------
Jerry G. Pogue Nov 30/99 $ 55,000 N/A N/A 225,000 N/A N/A N/A
Director, Chairman, Nov.30/98 $ 46,000 Nil Nil Nil Nil Nil Nil
Nov.30/97 Nil Nil Nil Nil Nil Nil Nil
CEO, and President Nov.30/96 Nil Nil Nil 100,000 Nil Nil Nil
- --------------------- ------------------- ---------- ------ ------- ------------- ------------ ------- -------------
James T. Martin Nov. 30/99 N/A N/A N/A N/A N/A N/A N/A
Past Director Nov.30/98 Nil Nil Nil Nil Nil Nil Nil
Nov.30/97 Nil Nil Nil Nil Nil Nil Nil
Nov.30/96 Nil Nil Nil 292,500 Nil Nil Nil
------------------- ---------- ------ ------- ------------- ------------ ------- -------------
Larry W. Reaugh Nov. 30/99 N/A N/A N/A N/A N/A N/A N/A
Former Director Nov.30/98 Nil Nil Nil Nil Nil Nil Nil
Nov.30/97 Nil Nil Nil Nil Nil Nil Nil
Nov.30/96 Nil Nil Nil Nil Nil Nil Nil
------------------- ---------- ------ ------- ------------- ------------ ------- -------------
Arthur S. Radtke Nov. 30/99 N/A N/A N/A N/A N/A N/A N/A
Past Vice-President. Nov.30/98 66,590(1) Nil Nil 50,000 Nil Nil Nil
Exploration & Nov.30/97 63,994(1) Nil Nil Nil Nil Nil Nil
Former Secretary Nov.30/96 Nil Nil Nil 100,000 Nil Nil Nil
- --------------------- ------------------- ---------- ------ ------- ------------- ------------ ------- -------------
Timothy J. Percival Nov. 30/99 N/A N/A N/A N/A N/A N/A N/A
Former Director of a Nov.30/98 151,973 Nil Nil 25,000 Nil Nil Nil
Nov.30/97 116,668 Nil Nil 25,000 Nil Nil Nil
Subsidiary (4) Nov.30/96 Nil Nil Nil Nil Nil Nil Nil
- --------------------- ------------------- ---------- ------ ------- ------------- ------------ ------- -------------
David L. Seymour Nov.30/978Nov.30/97 309 Nil Nil 95,000 Nil Nil Nil
Former Director Nov.30/96 Nil Nil Nil Nil Nil Nil Nil
(2)(3) Nil Nil Nil 100,000 Nil Nil Nil
- ---------------------
<FN>
(1) Paid to Cougar Metals International, Inc., of which Mr. Radtke is the
primary owner and provides geology consulting services to the Corporation.
(2) The Corporation provided a $60,000.00 interest free loan to David L.
Seymour in June, 1997 which was fully repaid in February, 1998.
(3) Mr. Seymour was a Director of the Corporation from August 22, 1996 to
November 24, 1998.
(4) Is a Director of the Corporation's subsidiary Triband Resource US Inc. and
provides geology consulting services.
No other executive officer received direct or indirect compensation from any
source for services provided to the Corporation during the most recently
completed financial year.
Mr. Gary Freeman became a director and President as of March 24, 2000.
Page 49 of 55
AGGREGATE OPTION EXERCISES IN LAST FINANCIAL YEAR AND OPTION VALUES
- ----------------------------------------------------------------------------
There were no stock options exercised by Named Executive Officers during the
Corporation's most recently completed financial year.:
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
- -------------------------------------------------
The Corporation has no defined benefit or actuarial plans.
TERMINATION OF EMPLOYMENT, CHANGES IN RESPONSIBILITY AND EMPLOYMENT CONTRACTS
- --------------------------------------------------------------------------------
The Corporation does not presently have any outstanding employment contracts.
MANAGEMENT AND CONSULTING CONTRACTS
- --------------------------------------
The Corporation currently utilizes the services of Mr. William R. Green, a
director of the Corporation to provided geological and consulting services to
the Corporation with respect to its existing properties and in identifying other
properties of potential interest.
Pursuant to a Letter of Engagement dated February 18, 1997 ("Letter of
Engagement") the Corporation engaged the geological services of Mr. Timothy J.
Percival. Under the Letter of Engagement the Corporation compensates Mr.
Percival at a rate of $350.00 USD/day which is billed on a monthly basis. The
Corporation has also agreed to reimburse Mr. Percival for all reasonable out of
pocket expenses which is also billed on a monthly basis. In addition to this
above, the Corporation has also agreed to reimburse Mr. Percival a total of
$395.00 USD/month towards office expenses. In accordance with the Letter of
Engagement the Corporation has agreed to pay a Finder's Fee if the Corporation
acquires, either by location or by negotiated agreement, a property recommended
by Mr. Percival as a result of data or general information supplied by Mr.
Percival.
COMPENSATION OF DIRECTORS
- ---------------------------
The Corporation has no arrangements, standard or otherwise, pursuant to which
directors are compensated by the Corporation for their services in their
capacity as directors, or for committee participation, involvement in special
assignments or for services as consultant or expert during the most recently
completed financial year or subsequently.
None of the Corporation's directors have received any manner of compensation for
services provided in their capacity as directors during the Corporation's most
recently completed financial year with the exception of stock options granted to
directors of the Corporation. See Item 12 below.
PROPOSED COMPENSATION
- ----------------------
The Corporation has determined the amount of compensation to be granted to
directors and Named Executive Officers for the 12 months beginning December 1,
1999 as follows:
MONTHLY YEARLY
CDN. CDN.
-----------------------------------------------------------
Gary Freeman $ 5,000 $60,000
Except as disclosed above, the Corporation has no standard arrangement pursuant
to which Named Executive Officers or directors of the Corporation are
compensated by the Corporation for their services, except for the granting from
time to time of incentive stock options in accordance with policies of the
Canadian Venture Exchange.
Page 50 of 55
ITEM 12 OPTIONS TO PURCHASE SECURITIES
FROM REGISTRANT OR SUBSIDIARIES
- ------------------------------------------------
As at September 30, 2000, the Corporation has granted rights to purchase or
acquire an aggregate of 1,760,000 Common Shares pursuant to stock options and
other outstanding rights to purchase securities, including the warrants listed
below. The closing market price of the Common Shares on September 30, 2000 as
traded on the Canadian Venture Exchange was $0.40.
OUTSTANDING EMPLOYEE AND DIRECTOR STOCK OPTIONS AS AT SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
NO. OF
COMMON EXERCISE MARKET VALUE
SHARES SUBJECT DATE OF GRANT/ PRICE ON DATE OF
NAME OF OPTIONEES TO OPTION (#) REPRICED $ EXPIRY DATE GRANT/REPRICED
- -------------------- --------------- -------------- --------- -------------- ---------------
Arthur S. Radtke (1) 35,000 June 10, 1998 $ 0.45 June 10, 2003 $ 4,900
- -------------------- --------------- -------------- --------- -------------- ---------------
Jerry Pogue 100,000 June 1,1999 $ 0.15 Sept. 11, 2001 $ 2,000
- -------------------- --------------- -------------- --------- -------------- ---------------
Jerry Pogue 125,000 April 4, 2000 $ 0.52 April 4, 2005 $ 1,875
- -------------------- --------------- -------------- --------- -------------- ---------------
Timothy Percival (1) 25,000 June 1, 1999 $ 0.15 May 8, 2002 $ 500
- -------------------- --------------- -------------- --------- -------------- ---------------
Timothy Percival (1) 25,000 June 10, 1998 $ 0.15 June 10, 2003 $ 1,000
- -------------------- --------------- -------------- --------- -------------- ---------------
Gary Freeman 100,000 June 1, 1999 $ 0.15 June 10, 2003 $ 3,000
- -------------------- --------------- -------------- --------- -------------- ---------------
Gary Freeman 350,000 April 4, 2000 $ 0.52 April 4, 2005 $ 59,500
- -------------------- --------------- -------------- --------- -------------- ---------------
Albert Wu 25,000 Feb. 18, 2000 $ 0.24 June 10, 2003 $ 1,000
- -------------------- --------------- -------------- --------- -------------- ---------------
Michael Bartlett 100,000 Feb. 10, 2000 $ 0.24 Feb. 10, 2005 $ 6,000
- -------------------- --------------- -------------- --------- -------------- ---------------
Sam Szajman 100,000 Feb. 10, 2000 $ 0.24 Feb. 10, 2005 $ 6,000
- -------------------- --------------- -------------- --------- -------------- ---------------
William R. Green 100,000 Feb. 22, 2000 $ 0.31 Feb. 22, 2005 $ 8,000
- -------------------- --------------- -------------- --------- -------------- ---------------
David Tenaglia 60,000 Feb. 22, 2000 $ 0.31 Feb. 22, 2005 $ 4,800
- -------------------- --------------- -------------- --------- -------------- ---------------
Shelley Morgan 40,000 Feb. 22, 2000 $ 0.31 Feb. 22, 2005 $ 3,200
- -------------------- --------------- -------------- --------- -------------- ---------------
Shelley Morgan 40,000 April 4, 2000 $ 0.52 April 4, 2005 $ 6,800
- -------------------- --------------- -------------- --------- -------------- ---------------
TOTAL 1,225,000 $ 125,450
- -------------------- --------------- -------------- --------- -------------- ---------------
<FN>
(1) Is a resident in the United States and is engaged by the Corporation as a Geologist.
OUTSTANDING WARRANTS FROM PREVIOUS PRIVATE PLACEMENTS
As of September 30, 2000, there were warrant outstanding for the right to
purchase 435,000 common shares, exercisable at the price of $0.17 per share
until September, 2001. These options are owned by Carrera Investments of
Shirley House, 50 shirley Street, P.O. Box N-8426 Nassau, Bahamas.
ESCROW SECURITIES
- ------------------
As of November 30 1999, the Corporation had no common shares held in escrow.
ITEM 13 INTEREST OF MANAGEMENT IN
----------------------------
CERTAIN TRANSACTIONS
---------------------
The Corporation participated in a private placement dated March 23, 1998, with
Indico Technologies Corporation ("Indico"), a corporation listed on the Canadian
Venture Exchange (formerly the Alberta Stock Exchange). The Corporation
purchased 704,225 Units of Indico at a price of $0.71 US per Unit in September,
Page 51 of 55
1998. Each Unit consists of one common share of Indico and one share purchase
warrant exercisable for one common share on or before September 11, 2000 at a
price of $2.00 CND. per common share. Indico Technologies Corporation and the
Corporation do not have any common directors or officers.
The Corporation currently utilizes the services of Mr. Arthur Radtke, its
Vice-President Exploration and Secretary, as a geologist for the Corporation.
Mr. Radtke has provided geological and consulting services to the Corporation
regarding its existing properties and in helping to identify other properties of
potential interest. The Corporation currently compensates Mr. Radtke by payment
to Cougar Metals International, Inc., a company owned by Mr. Radtke. Mr. Radtke
was hired as a consulting geologist and was appointed an officer of the
Corporation at that time. The compensation paid to Mr. Radtke is comparable to
that which would have been paid for services rendered by unaffiliated parties.
There is also a Stock Option Agreement between the Corporation and Mr. Radtke
dated June 10, 1998 whereby Mr. Radtke was granted options for the right to
purchase 50,000 common shares, exercisable at a price of $0.45 per share.
Pursuant to a Letter of Engagement dated February 18, 1997 ("Letter of
Engagement") the Corporation engaged the geological services of Mr. Timothy J.
Percival. Under the Letter of Engagement, the Corporation compensates Mr.
Percival at a rate of $350.00 USD/day, billable on a monthly basis. The
Corporation has also agreed to reimburse Mr. Percival for all reasonable out of
pocket expenses. In addition to the above, the Corporation has also agreed to
reimburse Mr. Percival a total of $395.00 USD/month towards office expenses. In
accordance with the Letter of Engagement, the Corporation has agreed to pay a
finder's fee to Mr. Percival if the Corporation acquires a property based upon
general information and data supplied by Mr. Percival. The Corporation paid a
total of $151,973 during its last fiscal period to Mr. Percival. Mr. Percival
was hired as a consulting geologist for the Corporation. The compensation paid
to Mr. Percival is comparable to that which would have been paid for services
rendered by unaffiliated parties.
The Corporation also executed two Stock Option Agreements with Mr. Percival.
The first agreement is dated May 8, 1997, and grants Mr. Percival 25,000 options
exercisable at a price of $0.45 per share. The second Stock Option Agreement,
dated June 10, 1998, grants 25,000 options to Timothy J. Percival exercisable at
a price of $0.45 per share
The Corporation paid a total of $ 55,000 during its last fiscal period to Mr.
Jerry G. Pogue in consulting fees. Mr. Jerry G. Pogue also has two separate
Stock Option Agreements with the Corporation, one dated September 11, 1996 for
the right to purchase 100,000 common shares at the exercise price of $0.15 and
the other dated April 4, 2000 for the right to purchase 125,000 common shares at
the exercise price of $0.52 per share.
The Corporation paid a total of $ 18,750 during its last fiscal period to Mr.
Gary Freeman in consulting fees. Mr. Gary Freeman also has two separate Stock
Option Agreements with the Corporation, one dated June 10, 1998 for the right to
purchase 100,000 common shares at the exercise price of $0.15 per share and the
other dated April 4, 2000 for the right to purchase 350,000 common shares at the
price of $0.52 per share.
As of February 28, 1999, the end of the Corporation's first quarter, the
Corporation wrote off $154,129 and abandoned the Bac Giang Project in Vietnam
due to the unsatisfactory results of the Corporation's exploration program, as
well as the uncertainties regarding renewal of its exploration licenses by the
Vietnamese government. The Corporation is conducting no further activities in
Vietnam at this time. The Corporation's Bac Giang Project was located adjacent
to the Bac Giang Copper Project, a property formerly owned by Palmer Resources
Ltd. ("Palmer"). Palmer is now a subsidiary of Lyon Lake Mines Ltd. ("Lyon
Lake") pursuant to a share exchange, dated February 11, 1999. In that share
exchange, Lyon Lake acquired all issued and outstanding shares of Palmer by
granting each Palmer shareholder one share of Lyon Lake for each share of Palmer
owned as of the record date. Lyon Lake is a publicly-traded company listed on
the Montreal and Vancouver Stock Exchanges. Jerry G. Pogue and David L. Seymour
were directors and officers of both the Corporation and Palmer. The Corporation
paid a total of $69,548 during its last fiscal period to Palmer for
administrative costs incurred in renting office space from Palmer.
Page 52 of 55
PART II
ITEM 14 DESCRIPTION OF SECURITIES TO BE REGISTERED
-----------------------------------------------
Not Applicable
PART III
ITEM 15 DEFAULTS UPON SENIOR SECURITIES
----------------------------------
Not Applicable
ITEM 16 CHANGES IN SECURITIES AND
CHANGES IN SECURITY FOR REGISTERED SECURITIES
--------------------------------------------------
Not Applicable
ITEM 17 FINANCIAL STATEMENTS
---------------------
The following financial statements are attached and incorporated herein:
DESCRIPTION OF STATEMENT
- --------------------------
Consolidated Balance Sheets, Statements of Loss and Deficit
Statement of Resource Properties, Statement of Changes in Financial
Position and Notes to Consolidated Financial Statements, all for years ended
November 30, 1999 and 1998
ITEM 18 FINANCIAL STATEMENTS
---------------------
See Item 17
Page 53 of 55
ITEM 19 FINANCIAL STATEMENTS AND EXHIBITS
------------------------------------
EXHIBIT NUMBER
- ---------------
PAGE
----
1.1 Certificates of Name Change dated July 18, 1996 and October 17, 1996. *
1.2 Certificate of Incorporation dated October 7, 1994. *
1.3 Articles (Bylaws) of the Corporation *
1.4 Amendments to Articles of the Corporation, dated July 18, 1996 and October 16, 1996 *
2.1 Option Agreements between the Corporation and Management, Employees and Director. *
3.1 Mining Lease and Option Agreement between St. George Metals, Inc. and Triband Resource US *
Inc. dated June 29,1998
3.2 Mining Lease Agreement between Brancote U.S. Inc., and Triband Resource US Inc. dated April *
21, 1998.
3.3 Letter of Engagement dated February 18, 1997 between the Corporation and Timothy J. Percival. *
3.4 Property Agreement dated February 9, 1996 between the Corporation and 512026 B.C. Ltd. *
3.5 License Agreement dated November 28, 1997 between the Corporation and The Minister of *
Industries, Socialist Republic of Vietnam, Licenses No. 2203/QD-DCKS.
3.6 License Agreement dated November 28, 1997 between the Corporation and The Minister of *
Industries, Socialist Republic of Vietnam, Licenses No. 2204/QD-DCKS.
3.7 License Agreement dated November 28, 1997 between the Corporation and The Minister of *
Industries, Socialist Republic of Vietnam, Licenses No. 2208/QD-DCKS.
<FN>
* The exhibits included in the Registrant's original Form 20-F are hereby incorporated by reference.
Page 54 of 55
SIGNATURES
----------
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this amendment to this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
TRIBAND RESOURCE CORPORATION
By:
---------------------------
Gary R. Freeman,
President
Date:
-------------------------
Page 55 of 55
TRIBAND RESOURCE CORPORATION
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN CANADIAN DOLLARS)
NOVEMBER 30, 1999
DAVIDSON & COMPANY A Partnership of Incorporated Professionals
- --------------------------------------------------------------------------------
- --------------------------- Chartered Accountants------------------------------
AUDITORS' REPORT
To the Shareholders of
Triband Resource Corporation
(An Exploration Stage Company)
We have audited the consolidated balance sheets of Triband Resource Corporation
as at November 30, 1999 and 1998 and the consolidated statements of operations
and deficit, changes in shareholders' equity and cash flows for the years ended
November 30, 1999, 1998 and 1997, as well as the cumulative amounts from the
date of incorporation on October 7, 1994 to November 30, 1999. These financial
statements, expressed in Canadian dollars, are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at November 30, 1999
and 1998 and the results of its operations and the changes in shareholders'
equity and cash flows for the years ended November 30, 1999, 1998 and 1997, as
well as the cumulative amounts from the date of incorporation on October 7, 1994
to November 30, 1999 in accordance with Canadian generally accepted accounting
principles. As required by the Company Act of British Columbia, we report that,
in our opinion, these principles have been applied on a consistent basis.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
February 10, 2000
A Member of SC INTERNATIONAL
============================
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372, Pacific
Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
AS AT NOVEMBER 30
===========================================================================================
1999 1998
- -------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash and cash equivalents $ 18,332 $ 841,303
Marketable securities (Note 6) 387,324 -
Accounts receivable 1,314 4,873
Due from affiliated companies 29,327 -
Prepaid expenses 31,692 6,103
------------ -----------
467,989 852,279
CAPITAL ASSETS (Note 3) 1,199 10,369
MINERAL PROPERTIES (Note 4) 913,287 849,081
DEFERRED EXPLORATION COSTS (Note 5) 1,128,822 1,058,313
INVESTMENTS (Note 6) 146,450 761,850
------------ -----------
$ 2,657,747 $3,531,892
===========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 22,346 $ 11,357
Due to affiliated company - 69,548
------------ -----------
22,346 80,905
------------ -----------
SHAREHOLDERS' EQUITY
Capital stock (Note 7)
Authorized
Unlimited number of common shares without par value
Unlimited number of preferred shares issuable in series
Issued
12,893,007 common shares (1998 - 12,284,507 common shares) 4,053,698 3,969,448
Deficit accumulated during the exploration stage (1,418,297) (518,461)
------------ -----------
2,635,401 3,450,987
------------ -----------
$ 2,657,747 $3,531,892
===========================================================================================
NATURE AND CONTINUANCE OF OPERATIONS (Note 1)
CONTINGENCY (Note 11)
SUBSEQUENT EVENTS (Note 13)
ON BEHALF OF THE BOARD:
_____________________________ Director _____________________________ Director
The accompanying notes are an integral part of these consolidated financial
statements.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Expressed in Canadian Dollars)
======================================================================================================
Cumulative
Amounts
From
October 7,
1994 to Year Ended November 30,
November 30, ------------------------------------
1999 1999 1998 1997
- ------------------------------------------------------------------------------------------------------
GENERAL AND ADMINISTRATIVE EXPENSES
Amortization $ 8,807 $ 212 $ 2,247 $ 6,348
Consulting fees 107,717 29,520 78,197 -
Listing and transfer agent fees 84,497 44,419 9,133 21,072
Office 114,121 48,098 38,047 15,855
Professional fees 74,443 8,720 23,390 18,301
Property investigation 176,367 50,062 76,246 -
Rent 64,409 19,084 44,125 1,200
Salaries and benefits 80,308 5,085 75,223 -
Shareholder communications 316,440 128,504 102,121 81,806
-------------- ------------ ---------- ----------
(1,027,109) (333,704) (448,729) (144,582)
INTEREST INCOME 186,785 11,818 90,122 73,305
GAIN (LOSS) ON FOREIGN EXCHANGE 165,397 (12,056) 129,805 47,648
LOSS ON DISPOSAL OF CAPITAL ASSETS (4,186) (4,186) - -
WRITE-OFF OF MINERAL PROPERTIES (Note 4) (32,900) (32,900) - -
WRITE-OFF OF DEFERRED EXPLORATION COSTS (Note 5) (331,758) (154,282) - (177,476)
WRITE-DOWN OF MARKETABLE SECURITIES (Note 6) (374,526) (374,526) - -
-------------- ------------ ---------- ----------
LOSS FOR THE PERIOD (1,418,297) (899,836) (228,802) (201,105)
DEFICIT, BEGINNING OF PERIOD - (518,461) (289,659) (88,554)
-------------- ------------ ---------- ----------
DEFICIT, END OF PERIOD $ (1,418,297) $(1,418,297) $(518,461) $(289,659)
======================================================================================================
LOSS PER SHARE (Note 2) $ (0.07) $ (0.02) $ (0.02)
======================================================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
================================================================================================================
Cumulative
Amounts
From
October 7,
1994 to Year Ended November 30,
November 30, --------------------------------------
1999 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (1,418,297) $(899,836) $ (228,802) $ (201,105)
Items not affecting cash
Amortization 8,807 212 2,247 6,348
Write-down of marketable securities 374,526 374,526 - -
Loss on disposal of capital assets 4,186 4,186 - -
Write-off of mineral properties 32,900 32,900 - -
Write-off of deferred exploration costs 331,758 154,282 - 177,476
Changes in non-cash working capital items
(Increase) decrease in accounts receivable (1,314) 3,559 66,899 (70,660)
(Increase) decrease in prepaid expenses (31,692) (25,589) (2,216) (3,887)
(Increase) decrease in due from affiliated companies (29,327) (29,327) - 424,891
Increase (decrease) in accounts payable and
accrued liabilities 22,346 10,989 (3,519) (484)
Increase (decrease) in due to affiliated company - (69,548) 69,548 -
-------------- ---------- ------------ ------------
Net cash provided by (used in) operating activities (706,107) (443,646) (95,843) 332,579
-------------- ---------- ------------ ------------
CASH FLOWS FORM INVESTING ACTIVITIES
Capital assets acquired (22,572) (1,411) - (21,161)
Proceeds on disposal of capital assets 6,183 6,183 - -
Mineral properties (346,187) (97,106) (166,902) (50,433)
Deferred exploration costs (1,458,383) (224,791) (454,547) (779,045)
Investment (908,300) (146,450) (761,850) -
-------------- ---------- ------------ ------------
Net cash used in investing activities (2,729,259) (463,575) (1,383,299) (850,639)
-------------- ---------- ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock, net of issuance costs 3,453,698 84,250 20,000 2,681,529
Share subscriptions received in advance - - - (1,375,400)
-------------- ---------- ------------ ------------
Net cash provided by financing activities 3,453,698 84,250 20,000 1,306,129
-------------- ---------- ------------ ------------
CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 18,332 (822,971) (1,459,142) 788,069
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 841,303 2,300,445 1,512,376
-------------- ---------- ------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 18,332 $ 18,332 $ 841,303 $ 2,300,445
================================================================================================================
SUPPLEMENTAL DISCLOSURES WITH RESPECT TO THE STATEMENTS OF CASH FLOWS (Note 12)
The accompanying notes are an integral part of these consolidated financial
statements.
========================================================================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian Dollars)
Deficit
Common Accumulated
Shares During the
Issued and Exploration
Shares Price Fully Paid Stage Total
- --------------------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 7, 1994 - $ - $ - $ -
Issuance of shares for cash
Private placement 2,000,000 $ 0.10 200,000 - 200,000
Escrow 1,500,000 0.05 75,000 - 75,000
Share issuance costs - (46,552) - (46,552)
Loss for the year - - (2,705) (2,705)
---------- ------------ ------------- ------------
BALANCE AT NOVEMBER 30, 1995 3,500,000 228,448 (2,705) 225,743
Issuance of shares for cash
Private placement 2,000,000 0.20 400,000 - 400,000
Exercise of options 450,000 0.10 45,000 - 45,000
Shares issuance costs - (5,529) - (5,529)
Issuance of shares for mineral property 3,000,000 0.20 600,000 - 600,000
Subscriptions received in advance - 1,375,400 - 1,375,400
Loss for the year - - (85,849) (85,849)
---------- ------------ ------------- ------------
BALANCE AT NOVEMBER 30, 1996 8,950,000 2,643,319 (88,554) 2,554,765
Issuance of shares for cash
Private placement 450,000 0.65 292,500 - 292,500
Private placement 1,550,000 0.76 1,178,000 - 1,178,000
Private placement 100,000 1.22 122,000 - 122,000
Private placement 884,507 1.42 1,256,000 - 1,256,000
Exercise of options 150,000 0.20 30,000 - 30,000
Exercise of broker's options 100,000 0.10 10,000 - 10,000
Subscriptions received in advance - (1,375,400) - (1,375,400)
Share issuance costs - (206,971) - (206,971)
Loss for the year - - (201,105) (201,105)
---------- ------------ ------------- ------------
BALANCE AT NOVEMBER 30, 1997 12,184,507 3,949,448 (289,659) 3,659,789
Issuance of shares for cash
Exercise of options 100,000 0.20 20,000 - 20,000
Loss for the year - - (228,802) (228,802)
---------- ------------ ------------- ------------
BALANCE AT NOVEMBER 30, 1998 12,284,507 3,969,448 (518,461) 3,450,987
Issuance of shares for cash
Private placement 535,000 0.15 80,250 - 80,250
Exercise of options 20,000 0.20 4,000 - 4,000
Issuance of shares for finder's fee 53,500 - - -
Loss for the year - - (899,836) (899,836)
---------- ------------ ------------- ------------
BALANCE AT NOVEMBER 30, 1999 12,893,007 $ 4,053,698 $ (1,418,297) $ 2,635,401
========================================================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
1. NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated under the laws of the Province of Alberta on
October 7, 1994 under the name of 627743 Alberta Ltd. On February 10, 1995,
627743 Alberta Ltd. changed its name to Triband Capital Corp. On July 18,
1996, Triband Capital Corp. changed its name to Triband Resource
Corporation.
The Company is in the process of exploring its mineral properties and has
not yet determined whether these properties contain ore reserves that are
economically recoverable. The recoverability of the amounts shown for
mineral properties and related deferred exploration costs is dependent upon
the existence of economically recoverable reserves, the ability of the
Company to obtain necessary financing to complete their development and
upon future profitable production.
2. SIGNIFICANT ACCOUNTING POLICIES
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 amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the period. Actual results could differ from these estimates.
PRINCIPLES OF CONSOLIDATION
These consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, Triband de Mexico S.A. de C.V.
(incorporated in Mexico) and Triband Resource US Inc. (incorporated in
Nevada, U.S.A.).
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with original
maturities of three months or less.
MARKETABLE SECURITIES
Marketable securities are carried at the lower of cost or quoted market
value. As at November 30, 1999, the Company's marketable securities had a
quoted market value of $387,324 (1998 - $Nil).
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
marketable securities, accounts receivable, accounts payable and accrued
liabilities. 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 value of these financial
instruments approximate their carrying values, unless otherwise noted.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd . . . )
MINERAL PROPERTIES
The Company records its interests in mineral properties and areas of
geological interest at cost. All direct and indirect costs relating to the
acquisition of these interests are capitalized on the basis of specific
claim blocks or areas of geological interest until the properties to which
they relate are placed into production, sold or abandoned. These costs will
be amortized over the estimated useful life of the related property
following commencement of production, using the units of production method
based on proven and probable reserves, or written off if the mineral
properties are sold or abandoned.
DEFERRED EXPLORATION COSTS
The Company defers expenditures directly attributable to the exploration of
mineral properties, pending a decision as to the commercial viability of a
property. If reserves are developed, the deferred costs will be amortized
to operations when production is commenced on the property. Such
amortization will be computed using the units of production method based on
proven and probable reserves. All deferred costs relating to the project
will be expensed in the year of abandonment or sale.
VALUES
The amounts shown for mineral properties and for deferred exploration costs
represent costs to date, and do not necessarily represent present or future
values, as they are entirely dependent upon the economic recovery of future
reserves.
COST OF MAINTAINING MINERAL PROPERTIES
The Company does not accrue the estimated future costs of maintaining its
mineral properties in good standing.
ENVIRONMENTAL PROTECTION AND RECLAMATION COSTS
The operations of the Company have been, and may in the future be affected
from time to time in varying degrees by changes in environmental
regulations, including those for future removal and site restoration costs.
Both the likelihood of new regulations and their overall effect upon the
Company may vary from region to region and are not predictable.
The Company's policy is to meet or, if possible, surpass standards set by
relevant legislation, by application of technically proven and economically
feasible measures.
Environmental expenditures that relate to ongoing environmental and
reclamation programs are charged against earnings as incurred or
capitalized and amortized depending upon their future economic benefits.
The Company does not anticipate any material capital expenditures for
environmental control facilities because it is at an early stage of
exploration. Estimated future removal and site restoration costs are
considered minimal.
CAPITAL ASSETS AND AMORTIZATION
Capital assets, being office equipment, are recorded at cost and are being
amortized over their estimated useful life on the declining balance method
at a rate of 20% per annum.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd . . . )
INVESTMENTS
The Company's long-term investments are accounted for on the cost basis.
The investments will be written-down to their estimated net realizable
value when there is evidence of a decline in value below carried value that
is other than temporary.
CAPITAL STOCK
The proceeds from the exercise of stock options, warrants and escrow shares
are credited to capital stock in the amount for which the option, warrant
or escrow share enabled the holder to purchase a share in the Company.
FOREIGN EXCHANGE
The Company's foreign subsidiaries are corporations used for holding title
to mineral properties. Therefore, the functional currency of these
consolidated financial statements is the Canadian dollar.
Transaction amounts denominated in foreign currencies are translated into
their Canadian dollar equivalents at exchange rates prevailing at the
transaction date. Carrying values of monetary assets and liabilities are
adjusted at each balance sheet date to reflect exchange rates prevailing at
that date. Gains and losses arising from restatement of foreign currency
monetary assets and liabilities at each year end are included in earnings.
LOSS PER SHARE
Loss per share is based on the weighted average number of common shares
outstanding during the year. For the years ended November 30, 1999, 1998
and 1997, the weighted average number of shares outstanding were,
12,445,244, 12,217,840 and 10,490,724, respectively.
Fully diluted earnings per share consider the dilutive impact of the
conversion of outstanding stock options and warrants as if the events had
occurred at the beginning of the year. For all the years presented, this
calculation proved to be anti-dilutive.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS No. 109"). SFAS No. 109 requires a company to recognize deferred tax
assets and liabilities for the expected future tax consequences of events
that have been recognized in a company's financial statements. Under this
method, deferred tax assets and liabilities are determined based on
temporary differences between the tax rates in effect in the years when the
temporary differences are expected to reverse.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
3. CAPITAL ASSETS
========================================================
Net Book Value
---------------
Accumulated
Cost Amortization 1999 1998
- --------------------------------------------------------
Office equipment $1,411 $ 212 $1,199 $ 262
Vehicle - - - 10,107
------ ------------- ------ -------
$1,411 $ 212 $1,199 $10,369
========================================================
4. MINERAL PROPERTIES
The Company has entered into the following agreements to acquire interests
in various mineral claims:
==========================================================================================================
1999 1998
- ----------------------------------------------------------------------------------------------------------
STANDARD CREEK PROPERTY, BRITISH COLUMBIA
A 100% interest by issuing 3,000,000 common shares, at a deemed value of
$600,000 (the deemed value of the shares was their quoted market price on the
Alberta Stock Exchange on the date of acquisition), and incurring various
acquisition related costs. The claims are subject to a 3 % net smelter returns
royalty and a 10% net proceeds of production royalty. $632,326 $632,036
STAKED CLAIMS, NEVADA, U.S.A.
A 100% interest in certain claims by staking and by entering into an option
agreement. 280,961 184,145
EXPLORATION LICENCES, VIETNAM
A 100% interest in three exploration licences. During the current year, the
licenses were abandoned and all related costs were written-off. - 32,900
-------- --------
$913,287 $849,081
==========================================================================================================
FUTURE MINERAL PROPERTY PAYMENTS
a) The Company is required to pay annual filing fees totalling US$19,100
to renew the licenses on its Nevada properties.
b) On certain of its Nevada claims, the Company is required to pay or
incur the following to earn its 100% interest:
i) Pay a purchase price of US$2,000,000;
ii) Make advance net smelter returns royalty payments of US$25,000 on
July 8, 2000 and on July 8 of each of the following nineteen
years;
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
4. MINERAL PROPERTIES (cont'd )
iii) Incur expenditures totalling US$150,000 by July 9, 2000.
Subsequently, the work commitment obligation will increase by
$50,000 each year until the Company commences commercial
production; and
iv) Make advance net smelter returns royalty payments of US$3,000 on
May 14, 2000, $5,000 on May 14, 2001, 2002 and 2003 and $10,000
on May 14 of each of the following fifteen years.
TITLE TO MINERAL PROPERTIES
Title to mineral properties involves certain inherent risks due to the
difficulties of determining the validity of certain claims as well as the
potential for problems arising from the frequently ambiguous conveyancing
history characteristic of may mineral properties. The Company has
investigated title to all of its mineral properties and, to the best of its
knowledge, title to all of its properties are in good standing.
5. DEFERRED EXPLORATION COSTS
===============================================================================================
British
Columbia Nevada Vietnam 1999 1998
- -----------------------------------------------------------------------------------------------
Balance, beginning of year $ 422,682 $481,502 $ 154,129 $1,058,313 $ 601,569
--------- -------- ---------- ----------- ----------
Assaying and sample preparation - 17,064 - 17,064 24,736
Field expenditures - 4,702 126 4,828 22,287
Field labour costs - 22,864 - 22,864 59,268
Geological consulting - 152,694 - 152,694 293,931
Report preparation and mapping - 11,554 - 11,554 5,289
Travel - 15,760 27 15,787 51,233
--------- -------- ---------- ----------- ----------
Expenditures incurred during the year - 224,638 153 224,791 456,744
Written-off during the year - - (154,282) (154,282) -
--------- -------- ---------- ----------- ----------
- 224,638 (154,129) 70,509 456,744
--------- -------- ---------- ----------- ----------
Balance, end of year $ 422,682 $706,140 $ - $1,128,822 $1,058,313
===============================================================================================
During fiscal year 1997, the Company incurred exploration expenditures in
advance of entering into an option agreement to acquire a property in
Mexico. Management of the Company made a decision that this property would
not be economically viable and consequently, all related costs totaling
$177,476, were written-off.
6. INVESTMENTS
In September 1998, the Company acquired 704,225 units in Indico
Technologies Corporation, a company listed on the Alberta Stock Exchange,
for $761,850. Each unit consisted of one common share and one share
purchase warrant to acquire an additional share for US$1.42 expiring on
September 11, 2000. During the year, the Company reclassified this
investment as marketable securities in current assets. The Company wrote
down its investment in Indico Technologies Corporation by $374,526 to its
market value of $387,324.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
6. INVESTMENTS
During the current year, the Company acquired 240,000 common shares of
Puresource, Inc., a private company incorporated in the State of
Washington, United States for $146,450.
7. CAPITAL STOCK
====================================================================================
Number
of Shares Amount
- ------------------------------------------------------------------------------------
Authorized
Unlimited number of common shares without par value
Unlimited number of preferred shares, issuable in series
Common shares issued
As at November 30, 1996 8,950,000 $ 2,643,319
Subscriptions received in prior year - (1,375,400)
For cash - private placements, net of issuance costs 2,984,507 2,641,529
For cash - exercise of options 150,000 30,000
For cash - exercise of broker's options 100,000 10,000
---------- ------------
As at November 30, 1997 12,184,507 3,949,448
For cash - exercise of options 100,000 20,000
---------- ------------
As at November 30, 1998 12,284,507 3,969,448
For cash - private placement 535,000 80,250
For cash - exercise of options 20,000 4,000
For finder's fee 53,500 -
---------- ------------
As at November 30, 1999 12,893,007 $ 4,053,698
====================================================================================
The following incentive stock options and share purchase warrants were
outstanding at November 30, 1999:
===================================================
Number Exercise
of Shares Price Expiry Date
- ---------------------------------------------------
Options: 100,000 $ 0.15 September 11, 2001
192,500 0.20 September 11, 2001
10,000 0.15 February 27, 2002
25,000 0.15 May 8, 2002
30,000 0.15 May 12, 2002
75,000 0.45 June 10, 2003
210,000 0.15 June 10, 2003
565,950 0.17 June 1, 2004
Warrants: 535,000 0.179 September 29, 2001
===================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
8. RELATED PARTY TRANSACTIONS
These consolidated financial statements include transactions with related
parties as follows:
a) The Company paid $123,954 (1998 - $218,563; 1997 - $180,662) to
directors or companies controlled by directors for geological services
which have been capitalized to mineral properties or expensed as
property investigation costs.
b) The Company paid $55,000 (1998 - $26,000; 1997 - $Nil) in consulting
fees included in shareholder communications to a director of the
Company.
Amounts due to or from affiliated companies are non-interest bearing, with
no fixed terms of repayment.
9. INCOME TAXES
The Company has not recorded potential future income tax benefits for
$690,513 of Canadian operating losses which expire as follows:
2002 $ 10,976
2003 96,154
2004 68,591
2005 180,596
2006 334,196
----------
$ 690,513
==========
Subject to certain restrictions, the Company has further exploration
expenditures available to reduce Canadian taxable income of future years.
Future tax benefits which may arise as a result of these losses and
resource deductions have not been recognized in these consolidated
financial statements.
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
These financial statements have been prepared in accordance with generally
accepted accounting principles in Canada. Except as set out below, these
financial statements also comply, in all material respects, with accounting
principles generally accepted in the United States and the rules and
regulations of the Securities and Exchange Commission.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
i) Stock Based Compensation
The United States Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"),
"Accounting for Stock Based Compensation", which became effective for
fiscal years beginning after December 15, 1995. This statement
requires the Company to establish a fair market value based method of
accounting for stock based compensation plans. Canadian generally
accepted accounting principles do not require the reporting of any
stock based compensation expense in the Company's financial
statements.
For compliance with United States generally accepted accounting
principles, the company uses the Black Scholes Option Pricing Model to
determine the fair value of incentive stock options at the grant date.
As at November 30, 1999, compensation expense totalling $228,422 has
been incurred. In determining the fair value of these incentive stock
options, the following assumptions were used:
=====================================================
1999 1998 1997
- -----------------------------------------------------
Risk free interest rate 5.50% 5.94% 6.62%
Expected life 5 years 5 years 5 years
Expected volatility 147% 87.21% 91.05%
Expected dividends - - -
=====================================================
The following is a summary of the status of stock options outstanding at
November 30, 1999:
========================================================================
Outstanding Options Exercisable Options
-------------------- --------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Contractual Exercise Exercise
Exercise Prices Number Life (Years) Price Number Price
- ------------------------------------------------------------------------
0.15 - 0.20 1,133,450 3.48 $ 0.17 1,133,450 $ 0.17
0.45 75,000 3.50 0.45 75,000 0.45
========================================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
Following is a summary of the stock based compensation plan during 1999,
1998 and 1997:
==================================================================================
Weighted
Average
Number Exercise
of Shares Price
- ----------------------------------------------------------------------------------
Outstanding and exercisable at December 1, 1996 892,500 $ 0.31
Granted 435,000 0.82
Exercised (150,000) 0.20
Forfeited (100,000)
-----------
Outstanding and exercisable at November 30, 1997 1,077,500 $ 0.55
----------- ---------
Weighted average fair value of options granted during 1997 $ 0.68
-----------
Outstanding and exercisable at December 1, 1997 1,077,500 $ 0.55
Granted 600,000 0.45
Exercised (100,000) 0.20
Forfeited (370,000) 0.80
-----------
Outstanding and exercisable at November 30, 1998 1,207,500 $ 0.36
----------- ---------
Weighted average fair value of options granted during 1998 $ 0.49
-----------
Outstanding and exercisable at December 1, 1998 1,207,500 $ 0.36
Granted 565,950 0.17
Exercised (20,000) 0.20
Forfeited (545,000) 0.39
-----------
Outstanding and exercisable at November 30, 1999 1,208,450 $ 0.19
----------- ---------
Weighted average fair value of options granted during 1999 $ 0.38
==================================================================================
ii) Loss per share
Under Canadian generally accepted accounting principles the
calculation of basic loss per share is calculated using the weighted
average number of common shares outstanding during the year.
Under U.S. generally accepted accounting principles basic earnings per
share is calculated using the weighted average number of shares
outstanding during the year, as well as including any common stock
equivalents which may be outstanding. This weighted average number of
common shares outstanding includes any shares that remain in escrow,
but may be earned out based on the company incurring a certain amount
of exploration and development expenditures. Basic loss per share is
calculated using only the weighted average number of common shares
outstanding because to include common stock equivalents would be
anti-dilutive.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
iii) Income taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS No. 109"). SFAS No. 109 requires a company to recognize
deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in a company's
financial statements. Under this method, deferred tax assets and
liabilities are determined based on temporary differences between the
tax rates in effect in the years when the temporary differences are
expected to reverse.
iv) Mineral properties
Under Canadian generally accepted accounting principles, the mineral
properties, including prospecting and acquisition costs, are carried
at cost and written down if the properties are abandoned, sold or if
management decides not to pursue the properties. Under United States
generally accepted accounting principles, exploration and prospecting
costs are charged to expense as incurred, as are development costs for
projects not yet determined by management to be commercially feasible.
Expenditures for mine development are capitalized when the properties
are determined to have commercially mineable deposits but are not yet
producing at a commercial level. Prior to commencing commercial
production, revenue relating to development ore, net of mining costs
associated with its production, is offset against mine development
costs. Mine development costs incurred to access reserves on producing
mines are also capitalized. Capitalisation of all exploration,
development and acquisition costs commences once the Company
identifies commercially mineable deposits that relate to specific
properties.
Under Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" ("SFAS 121"), management of a company is required to
review the net carrying value of each property on a regular basis.
Estimated future net cash flows from each property are calculated
using estimates of commercially mineable deposits. Reductions in the
carrying value of each property would be recorded to the extent that
the Company's carrying value in each property exceeds its estimate of
future discounted net cash flows. Currently, SFAS 121 is not
applicable as the Company has no commercially mineable deposits.
v) Trading securities and available-for-sale securities
Under Canadian generally accepted accounting principles, marketable
securities are recorded at the lower of cost or quoted market value.
Long-term investments are recorded at cost and only written down when
there is evidence of a decline in value below carried value that is
other than temporary. Holding gains are never recognized.
Under Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" ("SFAS No.
115"), unrealized holding gains and losses for marketable securities
are included in earnings. Unrealized holding gains and losses for
long-term investments are excluded from earnings and reported as a net
amount in a separate component of shareholders' equity until realized.
The fair value of the Company's investment in Indico Technologies
Corporation ("Indico") (Note 6) at November 30, 1998 was $718,310,
resulting in a $43,540 unrealized holding loss. Under SFAS No. 115,
this loss is reported as a separate component of shareholders' equity
at November 30, 1998. During the current year, this investment was
reclassified as marketable securities. At November 30, 1999 the fair
value was $387,324, resulting in a $374,526 unrealized holding loss,
which, under both SFAS No. 115 and Canadian generally accepted
accounting principles, is included in earnings.
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
vi) Recent accounting pronouncements
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" and SFAS
No. 131, "Disclosure about Segments of an Enterprise and Related
Information" were issued. SFAS No. 130 addresses standards for
reporting and display of comprehensive income and its components and
SFAS No. 131 requires disclosure of reportable operations segments.
Both statements were effective for the Company's 1998 fiscal year.
These pronouncements have not materially affected the Company's
financial statements.
In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" was issued. SFAS No. 133 establishes accounting
and reporting standards for derivative instruments and for hedging
activities. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The Company does not
anticipate that the adoption of the statement will have a significant
impact on its financial statements.
In April 1998, the American Institute of Certified Public Accountant's
issued Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-up activities and organization costs to be expensed as
incurred. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998 with initial adoption reported as the cumulative
effect of a change in accounting principle. The Company does not
anticipate that the adoption of this statement will have a significant
effect on its financial statements.
In March 2000, the Canadian Institute of Chartered Accountants issued
accounting guideline AcG-11 "Enterprises in the Development Stage"
which provides guidance for recognition, measurement, presentation and
disclosure by enterprises in the development stage. AcG-11 is
effective for all fiscal periods beginning on or after April 1, 2000.
The Company has not determined what effect AcG-11 will have on it
financial statements in relation to the accounting treatment of
mineral properties and deferred exploration costs.
The impact of the above differences between Canadian and United States
generally accepted accounting principles on loss for the period would
be as follows:
====================================================================================================================
Cumulative
Amounts from
October 7,
1994 to Year Ended November 30,
November 30, ------------------------------------
1999 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------
Loss for the period as reported $ (1,418,297) $ (899,836) $(228,802) $(201,105)
Less: Compensation expense on granting of stock options (228,422) (120,471) (40,742) (63,429)
Acquisition of mineral properties (946,187) (97,106) (166,902) (50,433)
Deferred exploration costs (1,460,580) (224,791) (456,744) (779,045)
Add: Write-off of mineral properties and deferred costs under
Canadian generally accepted accounting principles 364,658 187,182 - 177,476
-------------- ------------ ---------- ----------
Loss for the period in accordance with United States generally
accepted accounting principles $ (3,688,828) $(1,155,022) $(893,190) $(916,536)
====================================================================================================================
Basic loss per share for the period in accordance with
United States generally accepted accounting principles $ (0.09) $ (0.07) $ (0.09)
====================================================================================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
The impact of the above difference between Canadian and United States
generally accepted accounting principles on the deficit, as reported, is as
follows:
==================================================================================================
1999 1998 1997
- --------------------------------------------------------------------------------------------------
Deficit, as reported $(1,418,297) $ (518,461) $ (289,659)
------------ ------------ ------------
Cumulative compensation expense (228,422) (107,951) (67,209)
Mineral property acquisition costs expensed under
United States generally accepted accounting principles (913,287) (849,081) (682,179)
Deferred exploration costs expensed under United States
generally accepted accounting principles (1,128,822) (1,058,313) (601,569)
------------ ------------ ------------
(2,270,531) (2,015,345) (1,350,957)
------------ ------------ ------------
Deficit in accordance with United States generally
accepted accounting principles $(3,688,828) $(2,533,806) $(1,640,616)
==================================================================================================
The impact of the above difference between Canadian and United States
generally accepted accounting principles on the statement of changes in
shareholders' equity, as reported, is as follows:
==========================================================================================================
Deficit
Share Capital Unrealized Accumulated
---------------------- Loss on Exploration
Number Holding During the
of Shares Amount Investment Stage Total
- ----------------------------------------------------------------------------------------------------------
Shareholders' equity as reported
November 30, 1997 12,184,507 $3,949,448 $ - $ (289,659) $ 3,659,789
Mineral property acquisition costs
expensed under United States
generally accepted accounting
principles - - - (682,179) (682,179)
Deferred exploration costs expensed
under United States generally
accepted accounting principles - - - (601,569) (601,569)
Compensation expense on granting of
stock options - 67,209 - (67,209) -
---------- ---------- ------------ ------------- ------------
Shareholders' equity in accordance with
United States generally accepted
accounting principles at
November 30, 1997 12,184,507 $4,016,657 $ - $ (1,640,616) $ 2,376,041
==========================================================================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
10. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont'd )
==========================================================================================================
Deficit
Share Capital Unrealized Accumulated
---------------------- Loss on Exploration
Number Holding During the
of Shares Amount Investment Stage Total
- ----------------------------------------------------------------------------------------------------------
Continued . . .
Shareholders' equity as reported
November 30, 1998 12,284,507 $3,969,448 $ - $ (518,461) $ 3,450,987
Mineral property acquisition costs
expensed under United States
generally accepted accounting
principles - - - (849,081) (849,081)
Deferred exploration costs expensed
under United States generally
accepted accounting principles - - - (1,058,313) (1,058,313)
Unrealized holding loss on investment - - (43,540) - (43,540)
Compensation expense on granting of
stock options - 107,951 - (107,951) -
---------- ---------- ------------ ------------- ------------
Shareholders' equity in accordance with
United States generally accepted
accounting principles at
November 30, 1998 12,284,507 $4,077,399 $ (43,540) $ (2,533,806) $ 1,500,053
=================================================================
Shareholders' equity as reported
November 30, 1999 12,893,007 $4,053,698 $ - $ (1,418,297) $ 2,635,401
Mineral property acquisition costs
expensed under United States
generally accepted accounting
principles - - - (913,287) (913,287)
Deferred exploration costs expensed
under United States generally
accepted accounting principles - - - (1,128,822) (1,128,822)
Compensation expense on granting of
stock options - 228,422 - (228,422) -
---------- ---------- ------------ ------------- ------------
Shareholders' equity in accordance with
United States generally accepted
accounting principles at
November 30, 1999 12,893,007 $4,282,120 $ - $ (3,688,828) $ 593,292
==========================================================================================================
TRIBAND RESOURCE CORPORATION
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
NOVEMBER 30, 1999
================================================================================
11. CONTINGENCY
ENVIRONMENTAL REGULATIONS
All phases of the Company's operations are subject to environmental
regulations. Environmental legislation, in the countries in which the
Company is currently performing exploration work, is evolving in a manner
which will require stricter standards and enforcement, increased fines and
penalties for non-compliance, more stringent environmental assessments of
proposed projects and heightened degree of responsibilities for companies
and their officers, directors, and employees. Although presently,
compliance with such laws is not a significant factor in the Company's
operations, there is no assurance that future changes in environmental
regulations, if any, will not adversely affect the Company's operations.
12. SUPPLEMENTAL DISCLOSURES WITH RESPECT TO THE STATEMENTS OF CASH FLOWS
===========================================================================================
Cumulative
Amounts
From
October 7,
1994 to Year Ended November 30,
November 30, ------------------------------------------
1999 1999 1998 1997
------------- ------------- ------------
CASH PAID DURING THE PERIOD FOR:
Interest $ - $ - $ - $ -
Income taxes - - - -
Since inception of the exploration stage, the Company has issued a total of
3,053,500 common shares for non-cash consideration as follows:
================================================================================
Number
Year of Shares Amount Consideration
- --------------------------------------------------------------------------------
1999 53,500 $ - Finder's fee
1996 3,000,000 600,000 Acquisition of mineral property
================================================================================
13. SUBSEQUENT EVENTS
Subsequent to November 30, 1999:
a) The Company granted incentive stock options enabling the holders to
acquire up to 200,000 common shares at $0.24 per share to February 10,
2005.
b) The Company re-priced 25,000 incentive stock options, outstanding at
year end, from $0.45 per shares to $0.24 per share.
c) The Company issued 292,500 common shares for total proceeds of $55,500
pursuant to the exercise of incentive stock options.