U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F/A
(Mark One)
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 0-29616
BELMONT RESOURCES INC.
----------------------
(Exact name of registrant as specified in its charter)
British Columbia, Canada
- ------------------------------- -------------------------------
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
600 -625 Howe Street, Vancouver, British Columbia V6C 2T6
-------------------------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (604) 683-6648
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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) been subject to such filing requirements
for the past 90 days. Yes X No.
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 20-F or any amendment to this
Form 20-F [ ].
Indicate by check mark which financials statement item the Company has elected
to follow.
Item 17 X Item 18
--------- ---------
This Form 20-F/A consists of 2 pages.
TABLE OF CONTENTS
PAGE
PART IV
ITEM 17. AMENDED FINANCIAL STATEMENTS AND EXHIBITS 27
SIGNATURE 27
Exhibit
Number Title of Document Location
- ------ ----------------- --------
6.25 Amended Annual Report and Consolidated Report with Form 20-F/A
Audited Financial Statements for the and incorporated herein
year ended January 31, 2001 by reference.
SIGNATURE
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/A and has duly caused this Annual Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BELMONT RESOURCES INC.
Dated: December 12, 2001 By: /s/ Gary Musil
---------------------------
Gary Musil, Secretary/Director
Chief Financial Officer
BELMONT RESOURCES INC.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
AUDITORS' REPORT - FORM 20-F
To the Directors of
Belmont Resources Inc.
We have audited the consolidated balance sheets of Belmont Resources Inc. as at
January 31, 2001 and 2000 and the consolidated statements of operations,
deficit, and cash flows for each of the years ended January 31, 2001, 2000 and
1999. These consolidated financial statements 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 and United States generally
accepted auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance about 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. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at January 31, 2001 and 2000
and the results of its operations and cash flows for each of the years ended
January 31, 2001, 2000 and 1999 in accordance with Canadian generally accepted
accounting principle (Note 17), consistently applied.
/s/ DALE, MATHESON, CARR-HILTON
Vancouver, Canada Chartered Accountants
May 15, 2001
BELMONT RESOURCES INC.
CONSOLIDATED BALANCE SHEETS - JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2001 2000
$ $
ASSETS
CURRENT ASSETS
Cash 89,040 906,785
Term deposit - 370,296
Marketable securities (Note 3) 48,500 2,100,149
Accounts receivable (Note 10) 40,030 11,266
Advances and deposits (Note 4) 371,990 100,001
Prepaid expenses 11,085 6,129
----------- -----------
560,645 3,494,626
CAPITAL ASSETS (Note 6) 10,299 5,451
RESOURCE INTERESTS (Note 7) 2,904,189 650,197
- --------------------------------------------------------------------------------
3,475,133 4,150,274
APPROVED ON BEHALF OF THE BOARD
/s/ Kenneth B. Liebscher Director
- --------------------------
/s/ Gary Musil Director
- --------------------------
- See Accompanying Notes -
BELMONT RESOURCES INC.
CONSOLIDATED BALANCE SHEETS - JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2001 2000
$ $
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 234,676 28,772
Short term loans (Note 8) 50,000 -
----------- -----------
284,676 28,772
NON-CONTROLLING INTEREST IN SUBSIDIARY (Note 2(a)) 118,915 -
----------- -----------
403,591 28,772
SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 9) 13,902,565 13,605,585
DEFICIT (10,831,023) (9,484,083)
----------- -----------
3,071,542 4,121,502
3,475,133 4,150,274
COMMITMENTS (Note 11)
- See Accompanying Notes -
BELMONT RESOURCES INC.
CONSOLIDATED STATEMENTS OF DEFICIT
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2001 2000 1999
$ $ $
DEFICIT, beginning of year (9,484,083) (3,087,763) (7,201,139)
NET LOSS FOR THE YEAR (1,346,940) (6,396,320) 4,113,376
- --------------------------------------------------------------------------------
DEFICIT, end of year (10,831,023) (9,484,083) (3,087,763)
================================================================================
- See Accompanying Notes -
BELMONT RESOURCES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2001 2000 1999
$ $ $
REVENUE
Interest income 12,692 7,753 14,282
---------- ---------- ----------
EXPENSES
Amortization 33,251 14,626 916
Consulting 5,000 - -
Foreign exchange (gain) loss (93) 10,346 2,419
Legal and accounting 25,703 13,824 30,899
Office and sundry 28,977 25,469 10,975
Project investigation 4,573 31,755 1,077
Regulatory and filing fees 8,877 6,877 5,811
Rent 37,244 18,000 18,000
Salaries and administration services 134,581 120,715 111,995
Shareholder relations 20,785 14,040 12,411
Telephone and facsimile 2,766 5,555 6,909
Transfer agent fees 12,719 12,458 12,154
Travel and promotion 22,701 25,539 22,650
---------- ---------- ----------
337,084 299,204 236,216
---------- ---------- ----------
LOSS BEFORE OTHER ITEMS (324,392) (291,451) (221,934)
---------- ---------- ----------
OTHER ITEMS
Gain on sale of oil and gas property - - 5,443,750
Write-down of resource interests (479,157) (5,008,766) -
Accounts payable written off 12,100 - -
Loss on marketable securities
(Note 3) - disposals (536,261) (1,502,354) -
- write-downs (32,500) (647,407) -
Write-down of advances - (54,999) -
Gain on disposal of capital assets - 217 -
---------- ---------- ----------
(1,035,818) (7,213,309) 5,443,750
---------- ---------- ----------
PROFIT (LOSS) BEFORE INCOME TAXES (1,360,210) (7,504,760) 5,221,816
RECOVERY OF NON-CONTROLLING
INTEREST IN LOSS OF SUBSIDIARY 13,270 (7,504,760) -
- - -
---------- ---------- ----------
(1,346,940) (7,504,760) 5,221,816
FUTURE INCOME TAX PROVISION (RECOVERY) - (1,108,440) 1,108,440
================================================================================
NET INCOME (LOSS) FOR THE YEAR (1,346,940) (6,396,320) 4,113,376
================================================================================
EARNINGS (LOSS) PER SHARE
(Note 2(f)) - basic (0.06) (0.32) 0.21
- fully diluted - - 0.20
================================================================================
- See Accompanying Notes -
BELMONT RESOURCES INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
- --------------------------------------------------------------------------------
2001 2000 1999
$ $ $
CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Net loss for the year (1,346,940) (6,396,320) 4,113,376
Add non-cash items:
Amortization 33,251 14,626 916
Gain on sale of oil and gas property - - (5,443,750)
Gain on disposal of capital assets - (217) 1,108,440
Future income tax recovery - (1,108,440) -
Loss on marketable securities 536,261 1,502,354 -
Write-down of marketable securities 32,500 647,407 -
Write-down of resource interests 479,157 5,008,766 -
Recovery of accounts payable (12,100) - -
Recovery of non-controlling interest (13,270) - -
Write-down of advances - 54,999 -
---------- ---------- ----------
(291,141) (276,825) (221,018)
Net changes in non-cash working
capital items
Accounts receivable (24,150) 6,170 (6,883)
Refundable deposits (271,990) (100,000) -
Prepaid expenses 604 (2,643) 5,250
Accounts payable and accrued
liabilities 47,026 (16,972) (7,302)
---------- ---------- ----------
(539,651) (390,270) (229,953)
---------- ---------- ----------
INVESTING ACTIVITIES
Advances - - (55,000)
Mineral property expenditures (2,409,260) (84,201) (333,801)
Proceeds on sale of marketable
securities 1,482,887 1,470,050 -
Proceeds on sale of capital assets - 24,474 -
Acquisition of capital assets (6,497) (2,801) -
---------- ---------- ----------
(932,870) 1,407,522 (388,801)
---------- ---------- ----------
FINANCING ACTIVITIES
Issuance of share capital 284,480 30,240 211,040
Due to shareholders - (220) -
---------- ---------- ----------
284,480 30,020 211,040
---------- ---------- ----------
DECREASE IN CASH (1,188,041) 1,047,272 (407,714)
CASH, beginning of year 1,277,081 229,809 637,523
- --------------------------------------------------------------------------------
CASH, end of year 89,040 1,277,081 229,809
================================================================================
CASH REPRESENTED BY
Cash 89,040 906,785 29,809
Term deposit - 370,296 200,000
- --------------------------------------------------------------------------------
89,040 1,277,081 229,809
- See Accompanying Notes -
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
1. OPERATIONS
The Company's primary business is acquisition exploration and development
of resource interests. Funding for operations is raised through public and
private share offerings and sale of resource interests.
Future operations are dependant on the Company's ability to raise
sufficient funding through share offerings, sale of investments, debt or
profitable operations to support current and future expenditures.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Consolidation
These financial statements include the accounts and operations of
Slovgold Slovakia s.r.o. (SSSRO) and Rozmin s.r.o. (Rozmin). Both
companies are registered Slovakian companies. The accounts of these
companies have been consolidated on the following bases:
SSSRO
The Company owns 51% interest pursuant to a share acquisition
agreement. (Note 7(a)). All significant intercompany transactions and
balances have been eliminated. As a result of the write-down of the
resource interests a shareholder deficiency exists within the
subsidiary. Under Canadian Generally Accepted Accounting Principles a
non-controlling interest in shareholders' deficiency is not recognized
upon consolidation if such deficit is not likely to be funded by the
non-controlling interest. Accordingly no amount has been recorded for
non-controlling interest in the subsidiary.
SSSRO has a fiscal year end of December 31 for government filing
requirements.
The accounts and operations of SSSRO have been consolidated for the
periods January 1 to December 31, 2000 and 1999.
Rozmin
The Company owns 57% interest pursuant to a share purchase agreement
(Note 7(d)). The acquisition has been accounted for using the purchase
method. Allocation of the purchase consideration at April 15, 2000
relating to the acquisition was as follows:
$
-----------
Tangible assets acquired:
Cash 160,415
Other current assets 9,570
Mineral interests, at book value 133,543
-----------
303,528
-----------
Direct liabilities acquired:
Accounts payable 25,912
Non-controlling interest 119,376
-----------
145,288
-----------
Net assets acquired 158,240
Purchase consideration 2,181,066
-----------
Excess consideration allocated to mineral interests 2,022,826
===========
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D
Rozmin has a fiscal year end of December 31 for government filing
requirements.
The accounts and operations of Rozmin have been consolidated for the
period April 15, 2000 to December 31, 2000. All significant
intercompany transactions and balances have been eliminated.
b) Capital assets
Capital assets not directly associated with resource interests are
recorded at cost. Amortization is provided at 20% per annum on a
declining balance basis. Amortization of capital assets directly
related to resource interests is capitalized in mineral interests
where such capital assets relate to direct exploration expenditures.
c) Resource interests
Costs incurred in respect of resource interests during the exploration
and development stage are capitalized together with the cost of
acquisition until such time as a property is in commercial production,
sold or abandoned.
The recoverable value of resource interests, as reported on the
balance sheet, is dependant upon future commercial success or proceeds
from disposition.
The Company reviews its resource interests whenever events or changes
in circumstances indicate that the carrying amount of the asset may
not be recoverable in relation to expected future cash flows. Should
an impairment in carrying amount be indicated, a write-down to
estimated recoverable value would be recorded at that time. (Note 7(a)
and (e))
Proceeds on dispositions of partial resource interests on properties
are credited as a reduction of carrying costs. No profit or loss is
realized until all the related costs have been offset by disposition
proceeds. If a property is placed into commercial production,
accumulated costs to production will be amortized based on units of
production or depletion.
d) Administrative costs
Administrative costs not directly associated with resource interests
are recognized as period costs and are expensed in the period
incurred.
e) Translation of foreign currencies
The Company's functional currency is Canadian dollars. Monetary assets
and liabilities are translated at the exchange rate in effect at the
balance sheet date, and non-monetary assets and liabilities are
translated at exchange rates at acquisition date. Revenues and
expenses are translated at rates approximating exchange rates in
effect at the time of the transactions. Exchange gains or losses
arising on translation of current monetary items are included in
operations for the year.
f) Earnings (loss) per share
Basic earnings (loss) per share is calculated using the weighted
average number of common shares outstanding.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D
The weighted average number of shares outstanding is as follows:
2001 2000
---- ----
20,636,831 19,729,722
========== ==========
g) Income taxes
The Company has adopted CICA Handbook Section 3465 "Future Income
Taxes" which replaces "deferred income taxes". Under this accounting
guideline the company records, subject to specified criteria, the
effects of future income taxes using the expected rate of tax payable
or recoverable on temporary differences between the accounting and tax
basis of assets.
As the criteria for recording future income tax benefits resulting
from available unutilized tax losses carried forward have not been
met, no future income tax benefit has been recorded for the current
year.
h) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the period.
Significant areas requiring the use of management estimates relate to
the carrying value of the investment in securities, the determination
of impairment of assets and their useful lives for amortization and
income taxes. Financial results as determined by actual events could
differ from those estimates.
The recorded cost of the Slovakian property was based on the estimated
value of the share consideration paid. The Slovakian property was
written-down to estimated recoverable value in a prior year. This
value represents an estimate only. Actual recoverable value may be
materially different than the carrying amount. (Note 7(a) and (e)).
i) Financial instruments
Financial instruments include cash, marketable securities (Note 3),
accounts receivable, refundable advances, accounts payable and loans
which are short-term in nature. The instruments are valued at market
value at the balance sheet date.
j) Risk management
The Company's primary assets at the balance sheet date are the
resource interests in Slovakia held by Slovakian subsidiaries (Notes
7(a) and (d)). The Company could accordingly, be at risk for foreign
currency fluctuations, developing legal and political environments and
price fluctuations in resource sector markets.
The Company does not maintain significant cash or other monetary
assets or liabilities in Slovakia. The Company relies on local
consultants for the management of its Slovakian interests and for
legal and accounting matters.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
3. MARKETABLE SECURITIES
Marketable securities are recorded at the lower of cost or market value.
2001 2000
$ $
---- ----
Cost 81,000 2,747,556
Less: write-down to market value 32,500 647,407
---------- ----------
48,500 2,100,149
========== ==========
4. ADVANCES AND DEPOSITS
a) During the prior year, the Company entered into an initial option
agreement to acquire a 25% interest in EnviGeo Trade s.r.o., a private
Slovakian company that owns an oil and gas exploration license in
north-eastern Slovakia. Terms of the agreement included payment by
Belmont of a refundable deposit of $100,000 (paid) and an additional
$400,000 payable within 90 days, subject to Belmont completing a due
diligence assessment of the exploration license.
After completing its due diligence, the Company decided not to
exercise its option under this agreement and requested return of the
deposit.
On April 15, 2001, the debt was assigned to Sierra International Group
Inc. and 300,000 common shares of EuroGas Inc. were deposited as
collateral for the repayment of this advance.
Interest of $10,000 Cdn. due on May 15, 2001 is still outstanding. If
the advance is not repaid by May 31, 2001 the Company has authority to
begin liquidating the EuroGas Inc. common shares to recover the debt.
The Company subsequently agreed to a 30 day extension to June 30, 2001
in consideration of an additional $2,500 in interest.
b) During the year, the Company advanced a $150,000 U.S. refundable
deposit as a right of first refusal to acquire a 25% interest in an
oil and gas concession in the Sakha Republic. After due diligence, the
Company decided not to proceed with this transaction and requested a
return of the funds.
On March 20, 2001, as the funds had not been received, the debt was
assigned to Wolfgang Rauball and 700,000 common shares of Eurogas Inc.
was delivered to the Company as collateral against the debt.
Interest on the debt is payable quarterly at a rate of 15% per annum
calculated from June 30, 2000. As at May 15, 2001, interest of $16,000
Cdn. has been received. If the principal sum is not repaid by June 30,
2001, the Company has authorization to begin liquidating the Eurogas
Inc. common shares to recover the debt.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
4. ADVANCES AND DEPOSITS - CONT'D
c) The Company advanced funds totalling $56,740 on behalf of a related
company to fund that company's participation requirements in the
Ungava mineral interests. (Note 10(d)).
5. RECOVERY OF WRITTEN-OFF ADVANCE
On May 1, 1998, the Company entered into a Memorandum of Understanding with
Vista Developments Ltd., a company incorporated in the Turks and Caicos
Islands, British West Indies. Vista was in the process of obtaining certain
rights in Eastern Europe for acquisitions of oil and gas concessions.
The Company advanced $55,000 to Vista in respect of the memorandum.
No acquisitions or business ventures have resulted from the arrangement.
Due to uncertainty over the ability of the company to recover the advance,
the amount was written down to a nominal value in the prior year
In the current year, the Company accepted 750,000 common shares of E.T.C.
Industries Ltd. as payment against the original advance of $55,000. No
amount has been recorded as a recovery in these financial statements. Upon
disposition of the shares the Company will record a recovery for the net
proceeds.
6. CAPITAL ASSETS
2001 2000
$ $
--------------------------------- --------
Accumulated
Cost Amortization Net Net
----- ------------ --- ---
Office furniture
and equipment 15,885 5,586 10,299 5,451
====== ===== ====== =====
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
7. RESOURCE INTERESTS
Incurred during
2000 the year 2001
$ $ $
---- --------------- ----
a) Pezinok II
Acquisition costs 4,918,817 - 4,918,817
Plant and equipment 173,268 - 173,268
Deferred costs 425,354 - 425,354
---------- ---------- ----------
5,517,439 - 5,517,439
Less: write-down (5,017,439) (400,000) (5,417,439)
---------- ---------- ----------
500,000 (400,000) 100,000
---------- ---------- ----------
b) Maseva - 42,500 42,500
---------- ---------- ----------
c) Ungava
Acquisition costs - cash 55,000 - 55,000
- shares - 12,500 12,500
---------- ---------- ----------
55,000 12,500 67,500
---------- ---------- ----------
Deferred costs
Administration - 14,568 14,568
Assay and sampling - 387 387
Equipment rental - 2,290 2,290
Geographical - 1,733 1,733
Mapping and draughting - 4,246 4,246
Miscellaneous - 861 861
Permits - 2,500 2,500
Travel and accommodation - 24,175 24,175
---------- ---------- ----------
- 50,760 50,760
---------- ---------- ----------
55,000 63,260 118,260
---------- ---------- ----------
d) Rozmin
Acquisition costs 16,040 2,140,329 2,156,369
---------- ---------- ----------
Mine development
Tunnel construction and
miscellaneous - 90,933 90,933
Waste disposal - 79,072 79,072
Woodland clearing - 39,536 39,536
Consulting - 185,821 185,821
---------- ---------- ----------
- 395,362 395,362
---------- ---------- ----------
Plant and equipment - 42,849 42,849
---------- ---------- ----------
16,040 2,578,540 2,594,580
---------- ---------- ----------
Deferred costs
Consulting - 15,271 15,271
Miscellaneous - 776 776
Travel and accommodation - 32,802 32,802
---------- ---------- ----------
- 48,849 48,849
---------- ---------- ----------
16,040 2,627,389 2,643,429
---------- ---------- ----------
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
7. RESOURCE INTERESTS - CONT'D
e) Lac Rocher
Acquisition costs - cash 60,500 - 60,500
- shares 55,000 - 55,000
Less recoveries (37,500) - (37,500)
---------- ---------- ----------
78,000 - 78,000
Exploration costs 1,157 - 1,157
---------- ---------- ----------
79,157 - 79,157
Less: write-down - (79,157) 79,157
---------- ---------- ----------
79,157 (79,157) -
---------- ---------- ----------
650,197 2,253,992 2,904,189
========== ========== ==========
a) Pezinok II
By agreement dated May 1, 1996 with Rudne Bane, s.p., a Slovakia State
owned mining corporation, the company's 51% subsidiary acquired 100%
interest in the Pezinok II mining concession, a former producing gold/
antimony mine and mill, located in Pezinok, Slovak Republic.
The Company is maintaining its interest in the Pezinok II mining
concessions and is seeking a joint venture partner to continue
development plans.
As a result of depressed gold prices and weak resource sectors world-
wide, the Company has been unable, to date, to find a joint venture
partner or commit its own resources to fund the reopening of the
Pezinok mine as planned.
Management feels that based on current gold prices the project is not
currently viable. The mining and environmental permits for reopening
the project expired at the end of 1999. The Company continues to hold
the rights to the concessions, however to reopen the mining operation
new permits will be required. The Company has not abandoned its
interests in the concessions, however due to uncertainty over the
viability of the mining operation at current gold prices management
determined that a write-down of the carrying value of the concessions
was appropriate.
A write-down of the value of the combined concessions and dedicated
capital assets to $500,000 Cdn. was recorded in the prior year.
Management has determined, based on current market conditions and
company plans, that a further write-down was warranted at the year end
to estimated recoverable value of $100,000.
b) Maseva Property
In a prior year, the Company entered into an agreement with EuroGas,
Inc. whereby it sold its 90% ownership in Maseva Gas s.r.o.
("Maseva").
In October, 2000, the Company reacquired the 90% ownership in Maseva
for cash consideration of $42,500 (paid).
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
7. RESOURCE INTERESTS - CONT'D
c) Ungava
On January 4, 2000, the Company entered into an option assignment
agreement with Montoro Resources Inc. to acquire a 50% interest in an
exploration permit in the Ungava region of Quebec.
Consideration for the acquisition was as follows:
i) cash payments of $55,000 (paid)
ii) issuance of 50,000 common shares of the Company to Montoro
(issued) at a deemed price $0.25 per share.
iii) completion of a Phase I exploration program in the amount of
$30,000 by September 30, 2000 (completed).
d) Rozmin
The Company signed an agreement on February 26, 2000 to acquire a 57%
interest in Rozmin s.r.o., a private Slovakian mining company that
controls a talc deposit in the eastern Slovak Republic. The total cash
consideration for the transaction was 2,850,000 German marks ($2.061
million Cdn.).
A finder's fee of 150,000 German marks ($104,240 Cdn.) was paid.
Regulatory approval was received April 3, 2000 and the acquisition
completed in two stages in mid April, 2000. (See Note 13)
e) Lac Rocher
The Company entered into an agreement dated March 5, 1999 for the
right to acquire a 100% interest in 67 mineral claims located in the
Lac Rocher area, Quebec ("property"). The agreement provided the
Company the right to acquire a 100% interest in the property by
payment of $55,000 (paid) and issuance of 100,000 common shares
(issued) at a deemed price of $0.50 per share.
On March 16, 1999, the Company entered into an agreement with Montoro
Resources Inc. ("Montoro") whereby Montoro was granted an option to
acquire 50% of Belmont's 100% interest in the claims. Montoro paid
Belmont $30,000 and issued 50,000 common shares. In addition, Montoro
was required to expend $35,000 on exploration on the property by
September 30, 2000.
During the year, the Company determined that further expenditures were
not warranted and has abandoned its interests in the Lac Rocher
claims. Accordingly, all costs have been written off.
8. SHORT TERM LOANS
The loans are repayable on demand and bear interest at the rate of 18% per
annum until the loans are repaid in full (Note 10(g)).
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
9. SHARE CAPITAL
a) Authorized
50,000,000 common shares at no par value
b) Issued 2001 2000
--------------------------- ---------------------------
$ $
Number Amount Number Amount
------ ------ ------ ------
Balance, beginning of year 19,764,012 13,605,585 19,600,012 13,520,345
Issued during the year for:
Property acquisitions i) 50,000 12,500 110,000 55,000
Stock options exercised ii) 889,000 284,480 54,000 30,240
---------- ---------- ---------- ----------
Balance, end of year 20,703,012 13,902,565 19,764,012 13,605,585
========== ========== ========== ==========
i) During the year, 50,000 common shares at a price of $0.25 per
share were issued for the acquisition of mineral interests.
ii) During the year, 889,000 stock options were exercised at a
price of $0.32 per share.
c) Stock Options
At the year end, the Company had share purchase options outstanding to
directors and employees as follows:
Number of Exercise Expiry
Shares Price Date
--------- -------- ------
850,000 0.32 September 17, 2001
230,000 0.32 January 13, 2002
75,000 0.50 February 18, 2002
900,000 0.32 August 17, 2002
----------
2,055,000
==========
d) Escrow and pooled shares
There are no shares held in escrow or subject to pooling agreements as
at the year end.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
10. RELATED PARTY TRANSACTIONS
a) During the year the Company incurred:
i) $NIL (2000 - $58,420) for salaries and administrative services
charged by a company controlled by a director, and $18,000 (2000
- $18,000) for rent to another company controlled by a director.
ii) $NIL (2000 - $54,000) in management and consulting fees were
charged by a director of the Company
b) Included in marketable securities are amounts totalling $17,000 (2000
- $7,500) in two publicly traded companies with common directors.
c) Included in accounts receivable are:
i) amounts totalling $14,629 (2000 - $2,367) owing by corporations
with common directors.
ii) an amount of $8,112 (2000 - $NIL) owing by a former director of
the Company.
d) Included in advances is an amount of $56,740 (2000 - $NIL) due from a
company with common directors (Note 4(c)).
e) Included in mineral interests is a concession acquired at a cost of
$67,500 (2000 - $55,000) from a company with common directors.
f) Included in accounts payable is an amount of $189 (2000 - $4,745) due
to a director.
g) Included in short term loans is an amount of $25,000 (2000 - $NIL)
owing to an individual related to a director (Note 8).
h) During the year the Company received and repaid short term loans
totalling $100,000 from a director and a company controlled by an
individual related to a director.
Related party transactions have been recorded at their dollar exchange
amount.
11. COMMITMENTS
The Company has entered into a lease agreement for rental of office
premises commencing January 1, 2001 and expiring November 30, 2003 at a
basic rent of $2,203 per month.
The basic rent commitment to the expiry date is as follows:
$
-----
2002 26,432
2003 26,432
2004 (to November 30, 2003) 22,027
The Company is also committed to paying its proportionate share of all
taxes, operating costs and other charges as outlined in the lease
agreement. In the first year of the lease agreement these costs are
estimated to total $1,800 per month.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
12. SEGMENTED INFORMATION
Identifiable assets by geographic location: 2001 2000
$ $
---- ----
Canada 490,104 3,504,538
Slovakia 2,985,029 645,736
--------- ---------
3,475,133 4,150,274
========= =========
13. SUBSEQUENT EVENTS
Subsequent to the year end, the following transaction occurred:
On March 27, 2001, the Company entered into an agreement whereby it will
sell subject to regulatory and shareholder approvals, to EuroGas Inc.
("EuroGas") a company incorporated in Utah, USA, its 57% equity interest in
the capital stock of Rozmin s.r.o.
Consideration for this transaction is as follows:
i. 12,000,000 common shares in the capital stock of EuroGas (less than
10% interest)
ii. Granting by Rozmin of a 2% royalty to the Company on the gross revenue
of talc sold
iii. The payment by EuroGas of a $100,000 U.S. non-refundable advance
royalty. ($25,000 Cdn. received to date).
iv. The repricing of outstanding 2,500,000 EuroGas warrants held by the
Company from the current price of $0.82 U.S. per warrant to $0.40 U.S.
per warrant for the balance of the term of the warrants (completed).
The warrants expire on June 14, 2002.
As at May 15, 2001 regulatory approval had been conditionally granted.
Final acceptance requires shareholder approval.
(See also Note 4 (a) and (b)).
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
14. NON-CASH TRANSACTIONS
During the year the Company had the following non-cash transactions not
reflected in the statement of cash flows:
2001 2000
$ $
---- ----
Issuance of share capital for resource interest
acquisition. 12,500 55,000
======= =========
15. LOSS CARRY FORWARD
The Company has available non capital losses of approximately $1,361,000
which may be carried forward to apply against future income for tax
purposes as follows:
Amount
Available to $
------------ -------
2002 64,000
2003 38,000
2004 246,000
2005 255,000
2006 218,000
2007 260,000
2008 280,000
----------
1,361,000
==========
The future potential income tax benefits of these losses has not been
recorded in these financial statements.
16. COMPARATIVE FIGURES
Certain of the 2000 comparative figures have been reclassified to conform
with current presentation.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
17. RECONCILIATION OF CANADIAN TO UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
These financial statements are prepared using Canadian Generally Accepted
Accounting Principles (GAAP) which do not differ materially from United
States Generally Accepted Accounting Principles with respect to the
accounting policies and disclosures in these financial statements except as
set out below:
a) Under U.S. GAAP exploration costs which have been deferred in the
accounts under Canadian GAAP would be recorded as period expenses.
b) Where full unrestricted exploitation or extraction rights are not
established or have been relinquished any capitalized acquisition or
development costs must also be expensed under U.S. GAAP.
i) If accounting principles generally accepted in the United States
were followed, the effect on the consolidated statement of
operations, shareholders' equity, balance sheet and cash flows
would be:
2001 2000 1999
$ $ $
---- ---- ----
Consolidated Statement
of Operations
Net income (loss) -
Canadian GAAP (1,346,940) (6,396,320) 4,113,376
Adjustment for deferred
exploration expenditures (580,320) (360,000) -
Adjustment for
acquisitions costs (67,500) (16,040) -
--------------------------------------
(1,994,760) (6,772,360) 4,113,376
======================================
Weighted average number
of shares outstanding:
Canadian GAAP and
U.S. GAAP 20,636,831 19,729,722 20,345,920
======================================
Earnings (loss) per
share - U.S. GAAP (0.10) (0.34) 0.20
======================================
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
17. RECONCILIATION OF CANADIAN TO UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES - CONT'D
i) Cont'd
2001 2000 1999
$ $ $
---- ---- ----
Balance sheet items
Assets:
Acquisitions costs -
Canadian GAAP 2,223,869 16,040 -
Less adjustment - U.S. GAAP (67,500) (16,040) -
--------------------------------------
2,156,369 - -
======================================
Resource interests -
Canadian GAAP 680,320 634,157 5,557,846
Less adjustment - U.S. GAAP (580,320) (360,000) -
--------------------------------------
Resource interests - U.S. GAAP 100,000 274,157 5,557,846
======================================
Shareholders' equity -
Canadian GAAP 3,071,542 4,121,502 10,432,662
Less adjustment for
acquisitions costs and
resource interests (647,820) (376,040) -
--------------------------------------
Shareholders' equity -
U.S. GAAP 2,423,722 3,745,462 10,432,662
======================================
Total assets - Canadian GAAP 3,475,133 4,150,274 11,595,739
Less adjustment for
acquisitions costs and
resource interests (647,820) (376,040) -
--------------------------------------
Total assets - U.S. GAAP 2,827,313 3,774,234 11,595,739
======================================
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
17. RECONCILIATION OF CANADIAN TO UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES - CONT'D
ii) Consolidated Statement of Cash Flows:
2001 2000 1999
$ $ $
---- ---- ----
Operating and investing
activities under U.S. GAAP
would be restated as
follows:
Operating activities -
Canadian GAAP (539,651) (390,270) (299,953)
Adjustment for acquisitions costs (67,500) (16,040) -
--------------------------------------
Operating activities - U.S. GAAP (607,151) (406,310) (299,953)
======================================
Investing activities -
Canadian GAAP (932,870) 1,407,522 (388,801)
Adjustment for acquisitions costs 67,500 16,040 -
--------------------------------------
Investing activities - U.S. GAAP 865,370 1,423,562 (388,801)
======================================
iii) Accounts receivable
U.S. GAAP requires disclosure of the amount of any allowance for
doubtful accounts receivable.
The Company's allowance is not material, accordingly no disclosure is
provided.
iv) Stock based compensation
The Company has elected to follow Accounting Principles Board Opinion
No. 25 "Accounting for Stock issued to Employees" (APB 25) in
accounting for its employee stock options. Under APB 25, because the
exercise price of the Company's options for common shares granted to
employees is not less than the fair market value of the underlying
stock on the date of the grant, no compensation expense has been
recognized.
BELMONT RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
(IN CANADIAN DOLLARS)
17. RECONCILIATION OF CANADIAN TO UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES - CONT'D
v) Earnings per share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share (SFAS 128), which established
new standards for computing and presenting earnings per share
effective for fiscal years ending after December 15, 1997. With SFAS
128, Primary earnings per share is replaced by Basic earnings per
share which is computed by dividing income available to common
shareholders by the weighted average number of shares outstanding for
the period. In addition, SFAS 128 requires the presentation of Diluted
earnings per share which includes the potential dilution that could
occur if common stock equivalents or other potentially dilutive
securities were exercised or converted into common stock.
Common stock equivalent shares are excluded from the computation if
their effect is anti-dilutive, except that pursuant to the Securities
and Exchange Staff Accounting Bulletins, common and common equivalent
shares issued at prices below the public offering price during twelve
months immediately preceding the initial filing date are included in
the computation as if they were outstanding for all periods presented
(using the treasury stock method and the initial offering price).
vi) Reporting comprehensive income
In June 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS 130), Reporting Comprehensive Income, which is
required to be adopted for fiscal years beginning on or after December
15, 1997. SFAS 130 establishes standards for the reporting and display
of comprehensive income and its components in a full set of general
purpose financial statements. Reclassification of financial statements
for earlier periods presented is required. As the Company's operations
do not generate any comprehensive items, the adoption of this standard
has no effect on the Company's financial statements.
vii) Derivative instruments and hedging activities.
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133 (SFAS 133), Accounting for Derivative Instruments
and Hedging Activities, which standardises the accounting for
derivative instruments. SFAS 133 is effective for all fiscal quarters
of all fiscal years beginning after June 15, 1999. As the Company's
operations do not generate derivative instruments and hedging
activities, the adoption of this standard has no effect on the
Company's financial statements.
viii)Other pronouncements
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standard No. 131 ("Disclosures about Segments of
an Enterprise and Related Information") ("SFAS 131") and No. 132
("Employers' Disclosures About Pensions and Other Post Retirement
Benefits ("SFAS 132). The pronouncements for these financial
statements, do not differ materially from Canadian GAAP reporting.