UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
Amendment No. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TUSCANY MINERALS, LTD.
(Name of small business issuer in its charter)
NEVADA 98-0335259
- ------ ----------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
J. Stephen Barley, President
2060 Gisby Street, West Vancouver,
British Columbia, Canada V7V 4N3 SEC File No.: 333-55856
- ----------------------------------------
(Name and address of principal executive
offices, principal place of business)
Registrant's telephone number, including area code: (604) 926-4300
Approximate date of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. |__|
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT (1) PRICE (2) FEE (2)
- ---------------------------------------------------------------------
Common Stock 6,038,000 shares $0.25 $1,509,500 $398.51
- ---------------------------------------------------------------------
(1) Based on last sales price on December 31, 2000
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
2300 W. Sahara Blvd., Suite 500
Las Vegas, NV 89102
(702) 312-6255
Agent for Service of Process
SUBJECT TO COMPLETION, Dated April 18, 2001
PROSPECTUS
TUSCANY MINERALS, LTD.
6,038,000 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all
of our shares of common stock offered through this prospectus. The
shares were acquired by the selling shareholders directly from us
in two private offerings that were exempt from registration under
the US securities laws.
Our common stock is presently not traded on any market or
securities exchange.
----------------
The purchase of the securities offered through this prospectus
involves a high degree of risk. See section entitled "Risk
Factors" on pages 5 - 8.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
----------------
The Date Of This Prospectus Is: April 18, 2001
TABLE OF CONTENTS
PAGE
----
Summary ........................................................... 4
Risk Factors ...................................................... 5
If We Do Not Obtain Additional Financing,
Our Business Will Fail ....................................... 5
If We Do Not Complete the Payment and Expenditure Requirements
Mandated in Our Option, We Will Lose Our Interest In the
Holy Cross Mineral Property and Our Business May Fail ........ 5
Because There Is No Assurance That We Will Generate Revenues,
We Face A High Risk of Business Failure ...................... 6
Because of the Speculative Nature of Exploration of Mining
Properties, There is Substantial Risk that This Business
Will Fail .................................................... 6
Even if We Discover Commercial Reserves Of Precious Metals
On Our Optioned Mineral Properties, We May Not Be Able to
Successfully Obtain Commercial Production .................... 6
If We Are Unable to Hire And Retain Key Personnel, We May
Not Be Able To Implement Our Business Plan And Our Business
Will Fail .................................................... 7
If We Receive Positive Results From Our Exploration Program
And We Determine To Pursue Commercial Production, Then We
May Be Subject To An Environmental Review Process That May
Delay Or Prohibit Our Proceeding To Commercial Production .... 7
Because Our Sole Executive Officer Does Not Have Formal
Training Specific To The Technicalities Of Mineral
Exploration, There Is A Higher Risk Our Business Will Fail ... 7
Because Our Sole Executive Officer Has Other Business
Interests, He May Not Be Able Or Willing To Devote A
Sufficient Amount Of Time To Our Business Operations, Causing
Our Business To Fail ......................................... 7
If A Market For Our Common Stock Does Not Develop, Our
Investors Will Be Unable To Sell their Shares ................ 8
Because Our Stock Is Penny Stock, Shareholders Will Be
Limited In Their Ability To Sell The Stock ................... 8
Use of Proceeds ................................................... 9
Determination of Offering Price ................................... 9
Dilution .......................................................... 9
Selling Shareholders .............................................. 9
Plan of Distribution .............................................. 15
Legal Proceedings ................................................. 16
Directors, Executive Officers, Promoters and Control Persons ...... 17
Security Ownership of Certain Beneficial Owners and Management .... 19
Description of Securities ......................................... 19
2
Interest of Named Experts and Counsel ............................. 20
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ..................................... 20
Organization Within Last Five Years ............................... 21
Description of Business ........................................... 21
Plan of Operations ................................................ 28
Description of Property ........................................... 29
Certain Relationships and Related Transactions .................... 29
Market for Common Equity and Related Stockholder Matters .......... 30
Executive Compensation ............................................ 32
Financial Statements .............................................. 34
Changes in and Disagreements with Accountants ..................... 34
Available Information ............................................. 34
Until ______, all dealers that effect transactions in these
securities whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the
dealer' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
3
SUMMARY
Tuscany Minerals, Ltd.
We are in the business of mineral exploration; although, to date,
we have relied upon the mineral exploration of others and have not
yet conducted such exploration ourselves. We have acquired an
option to acquire a 60% interest in a 500-hectare mineral claim
located in the Province of British Columbia, Canada. This mineral
property is referred to as the Holy Cross mineral property. Mr.
Geoffrey Goodall, one of our directors, has granted the option to
us. The option is exercisable by us completing further cash
payments to Mr. Goodall and by completing minimum required
exploration expenditures on the Holy Cross mineral property.
Our objective is to conduct mineral exploration activities on the
Holy Cross mineral property in order to assess whether the claim
possesses commercially exploitable reserves of gold. We have not,
nor has any predecessor, identified any commercially exploitable
reserves on this property. Our proposed exploration program is
designed to explore for commercially exploitable deposits. We are
an exploration stage company and there is no assurance that a
commercially viable mineral deposit exists on our mineral claim.
We were incorporated on October 5, 2000 under the laws of the state of
Nevada. Our principal offices are located at 2060 Gisby Street, West
Vancouver, British Columbia, Canada. The telephone number of our
principal executive office is (604) 926-4300.
The Offering
Securities Being Offered Up to 6,038,000 shares of common stock.
The offering price will be determined by
market factors and the independent decisions
of the selling shareholders.
Minimum Number of Shares None.
To Be Sold in This Offering
Securities Issued
And to be Issued 12,538,000 shares of our common stock are
issued and outstanding as of the date of
this prospectus. All of the common stock to
be sold under this prospectus will be sold
by existing shareholders.
Use of Proceeds We will not receive any proceeds from the
sale of the common stock by the selling
shareholders.
4
RISK FACTORS
An investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and the
other information in this prospectus before investing in our common
stock. If any of the following risks occur, our business, operating
results and financial condition could be seriously harmed. The
trading price of our common stock could decline due to any of these
risks, and you may lose all or part of your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
If We Do Not Obtain Additional Financing, Our Business Will Fail
We had cash in the amount of $67,660 as of December 31, 2000. We
currently do not have any operations and we have no income. Our
business plan calls for significant expenses in connection with the
exploration of our optioned mineral property and the development of
this property if our exploration indicates that our mineral claim
possesses commercially exploitable mineral reserves. While we have
sufficient funds to carry out phase one of the recommended
exploration program on the Holy Cross Mineral Property, we will
require additional financing in order to complete the full-
recommended exploration program. We will also require additional
financing if the costs of the exploration and development of our
optioned mineral property are greater than anticipated. We will
require additional financing to sustain our business operations if
we are not successful in earning revenues once exploration and
development is complete. We do not currently have any arrangements
for financing and we can provide no assurance to investors that we
will be able to find such financing if required. Obtaining
additional financing would be subject to a number of factors,
including market prices for gold, investor acceptance of our
property, and investor sentiment. These factors may make the
timing, amount, terms or conditions of additional financing
unavailable to us.
The most likely source of future funds presently available to us is
through the sale of equity capital. Any sale of share capital will
result in dilution to existing shareholders. The only other
anticipated alternative for the financing of further exploration
would be the offering by us of an interest in our properties to be
earned by another party or parties carrying out further exploration
or development thereof, which is not presently contemplated.
If We Do Not Complete the Payment and Expenditure Requirements
Mandated In Our Option, We Will Lose Our Interest in the Holy Cross
Mineral Property and Our Business May Fail
We are obligated to make additional option payments and incur
exploration expenditures on our optioned mineral property in order
to exercise the option and obtain a 60% interest in the Holy Cross
mineral property. We must make additional option payments in the
amount of $120,000 and incur exploration expenditures in the amount
of $558,500 in order to exercise this option. While our existing
cash reserves are sufficient to enable us to complete phase one of
the geological exploration program recommended on our optioned
mineral property, we will require substantial additional capital to
fund the continued exploration of our optioned mineral property in
order to exercise the option. In addition, we will require
substantial additional capital in order to exercise the option. If
we do not make the additional option payments or meet the
exploration expenditures required by the option agreement, we will
forfeit our interest in the optioned mineral property and will have no
5
interest in the optioned mineral property. We have no
agreements for additional financing and we can provide no assurance
to investors that additional funding will be available to us on
acceptable terms, or at all, to continue operations, to fund new
business opportunities or to execute our business plan. If we
lose our interest in the optioned mineral property, there is a
substantial risk that our business will fail.
Because There Is No Assurance That We Will Generate Revenues, We
Face A High Risk of Business Failure
We have not even begun the initial stages of exploration of our
optioned mineral claim, and thus have no way to evaluate the
likelihood that we will be able to operate the business
successfully. We were incorporated in October 2000 and to date
have been involved primarily in organizational activities and the
acquisition of the optioned mineral property. We have not earned
any revenues as of the date of this prospectus and have never been
profitable. Prior to completion of our exploration stage, we
anticipate that we will incur increased operating expenses without
realizing any revenues. We therefore expect to incur significant
losses into the foreseeable future. We recognize that if we are
unable to generate significant revenues from the exploration and
future development of our optioned mineral property, we will not be
able to earn profits or continue operations. There is no history
upon which to base any assumption as to the likelihood that we will
prove successful, and we can provide investors with no assurance
that we will generate any operating revenues or ever achieve
profitable operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.
Because of the Speculative Nature of Exploration of Mining
Properties, There is Substantial Risk that This Business Will Fail
We can provide investors with no assurance that the Holy Cross
mineral property contains commercially exploitable reserves of
gold. Exploration for minerals is a speculative venture
necessarily involving substantial risk. The expenditures to be
made by us in the exploration of the optioned mineral properties
may not result in the discovery of commercial quantities of ore.
Hazards such as unusual or unexpected formations and other
conditions are involved in mineral exploration and development and
often result in unsuccessful exploration efforts. We may also
become subject to liability for pollution, cave-ins or hazards
against which we cannot insure or against which we may elect not to
insure. The payment of such liabilities may have a material
adverse effect on our financial position.
Even If We Discover Commercial Reserves Of Precious Metals On Our
Optioned Mineral Properties, We May Not Be Able to Successfully
Obtain Commercial Production
The optioned mineral properties do not contain any known bodies of
ore. If our exploration programs are successful in establishing
ore of commercial tonnage and grade, we will require additional
funds in order to place the Holy Cross mineral property into
commercial production. At this time, we can provide no assurance
to investors that we will be able to do so.
6
RISKS RELATED TO OUR MARKET AND STRATEGY
If We Are Unable To Hire And Retain Key Personnel, We May Not Be
Able To Implement Our Business Plan And Our Business Will Fail
Our success will be largely dependent on our ability to hire highly
qualified personnel. This is particularly true in highly technical
businesses such as mineral exploration. These individuals may be in
high demand and we may not be able to attract the staff we need.
In addition, we may not be able to afford the high salaries and
fees demanded by qualified personnel, or may lose such employees
after they are hired. Currently, we have not hired any key
personnel. Our failure to hire key personnel when needed would
have a significant negative effect on our business.
RISKS RELATED TO LEGAL UNCERTAINTY
If We Receive Positive Results From Our Exploration Program And We
Determine To Pursue Commercial Production, Then We May Be Subject
To An Environmental Review Process That May Delay Or Prohibit Our
Proceeding To Commercial Production
If the results of our geological exploration program indicate
commercially exploitable reserves, of which there is no assurance,
and we determine to pursue commercial production of our mineral
claim, we may be subject to an environmental review process under
environmental assessment legislation. Compliance with an
environmental review process may be costly and may delay commercial
production. Furthermore, there is the possibility that we would
not be able to proceed with commercial production upon completion
of the environmental review process if government authorities did
not approve our mine or if the costs of compliance with government
regulation adversely affected the commercial viability of the
proposed mine.
RISKS RELATED TO THIS OFFERING
Because Our Sole Executive Officer Does Not Have Formal Training
Specific To The Technicalities Of Mineral Exploration, There Is A
Higher Risk Our Business Will Fail
While Mr. Stephen Barley, our sole executive officer and a
director, has experience managing a mineral exploration
company, he does not have formal training as a geologist or in
the technical aspects of management of a mineral exploration
company. Accordingly, we will have to rely on the technical
services of others trained in appropriate areas. If we are
unable to contract for the services of such individuals, it
will make it difficult and maybe impossible to pursue our
business plan. There is thus a higher risk of business
failure.
Because Our Sole Executive Officer Has Other Business Interests, He
May Not Be Able Or Willing To Devote A Sufficient Amount Of Time To
Our Business Operations, Causing Our Business To Fail
Mr. Barley presently spends approximately 15% of his business time
on business management services for our company. While Mr. Barley
presently possesses adequate time to attend to our interests, it is
possible that the demands on Mr. Barley from his other obligations
could increase with the result that he would no longer be able to
devote sufficient time to the management of our
7
business. In addition, Mr. Barley may not possess sufficient time
for our business if the demands of managing our business increased
substantially beyond current levels. Competing demands on Mr.
Barley's business time may cause Mr. Barley to have differing
interests in approving significant corporate transactions than
other stockholders.
If A Market For Our Common Stock Does Not Develop, Our Investors Will
Be Unable To Sell their Shares
There is currently no market for our common stock and we can
provide no assurance to investors that a market will develop. We
currently plan to apply for trading of our common stock on the NASD
over the counter bulletin board upon the effectiveness of the
registration statement of which this prospectus forms a part.
However, we cannot provide investors with any assurance that our
common stock will be traded on the bulletin board or, if traded,
that a public market will materialize. If our common stock is not
traded on the bulletin board or if a public market for our common
stock does not develop, then investors may not be able to re-sell
the shares of our common stock that they have purchased and may
lose all of their investment.
Because Our Stock Is Penny Stock, Shareholders Will Be Limited
In Their Ability To Sell The Stock
The shares offered by this prospectus constitute penny stock
under the Securities and Exchange Act. The shares will remain
penny stock for the foreseeable future. The classification of
penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, which makes it more
difficult for a purchaser to liquidate his or her investment.
Any broker-dealer engaged by the purchaser for the purpose of
selling his or her shares in Tuscany Minerals will be subject
to rules 15g-1 through 15g-10 of the Securities and Exchange
Act. Rather than complying with those rules, some broker-
dealers will refuse to attempt to sell penny stock.
8
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
risks and uncertainties. We use words such as anticipate, believe,
plan, expect, future, intend and similar expressions to identify
such forward-looking statements. You should not place too much
reliance on these forward-looking statements. Our actual results
are most likely to differ materially from those anticipated in
these forward-looking statements for many reasons, including the
risks faced by us described in the this Risk Factors section and
elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The
offering price will be determined by market factors and the
independent decisions of the selling shareholders.
DILUTION
The common stock to be sold by the selling shareholders is common
stock that is currently issued and outstanding. Accordingly, there
will be no dilution to our existing shareholders.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all
of the 6,038,000 shares of common stock offered through this
prospectus. The shares include the following:
1. 6,000,000 shares of our common stock that the selling
shareholders acquired from us in an offering that was exempt
from registration under Regulation S of the Securities Act of
1933 and completed on November 20, 2000;
2. 38,000 shares of our common stock that the selling
shareholders acquired from us in an offering that was exempt
from registration under Regulation S of the Securities Act of
1933 and completed on December 31, 2000;
The following table provides as of April 18, 2001, information
regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon
completion of the offering;
4. the percentage owned by each; and
5. the identity of the beneficial holder of any entity that owns
the shares.
9
Total Total
Number Of Shares
Shares To To Be Percent
Be Offered Owned Upon Owned Upon
Shares Owned For Selling Completion Completion
Name Of Selling Prior To This Shareholders Of This Of This
Stockholder Offering Account Offering Offering
- ----------------------------------------------------------------------------
Glenn Bailey 1,000 1,000 NIL NIL
Suite 304,
1110 Hamilton Street
Vancouver, BC V6B 2S2
Nicola Bailey 1,000 1,000 NIL NIL
Suite 304
1110 Hamilton Street
Vancouver, BC V6B 2S2
James W. Barley 1,000 1,000 NIL NIL
RR# 1,
Debert, NS B0M 1G0
Mary E. Barley 1,000 1,000 NIL NIL
70 Masstown Road
RR# 1 Debert, NS
B0M 1G0
Steve Bastable 1,000 1,000 NIL NIL
3012 West 12th Avenue
Vancouver, BC V6K 2K5
James Bordian 600,000 600,000 NIL NIL
12750 54th Avenue
Surrey, BC V3X 3C2
Kurt Bordian 1,000 1,000 NIL NIL
347 - 101-1001 West
Broadway
Vancouver, BC V6A 4E4
Anita Bowes 1,000 1,000 NIL NIL
3076 West 37th Avenue
Vancouver, BC V6N 2V2
Edward Bowes 1,000 1,000 NIL NIL
3076 West 37th Avenue
Vancouver, BC V6N 2V2
10
TABLE IS CONTINUED FROM PAGE 10
Total Total
Number Of Shares
Shares To To Be Percent
Be Offered Owned Upon Owned Upon
Shares Owned For Selling Completion Completion
Name Of Selling Prior To This Shareholders Of This Of This
Stockholder Offering Account Offering Offering
- ----------------------------------------------------------------------------
Joseph Bowes 1,000 1,000 NIL NIL
3639 Garibaldi Drive
North Vancouver, BC
V7H 2W2
Decay Holdings Ltd. 2,000 2,000 NIL NIL
3772 West 23rd Avenue
Vancouver, BC V6S 1K7
(Beneficial Owner:
David Kapusianyk)
James DeMarco 600,000 600,000 NIL NIL
P.O. Box 1187
Whistler, BC V0N 1B0
Kenneth Dong 600,000 600,000 NIL NIL
402 - 2125 West 2nd Avenue
Vancouver, BC V6K 1H7
Donna Durning 600,000 600,000 NIL NIL
RR#1
Great Village, NS
B0M 1L0
Geoffrey N. Goodall 1,000 1,000 NIL NIL
1315 Arborlynn Drive
North Vancouver, BC
V7J 2V6
Susan Hand 600,000 600,000 NIL NIL
414 - 1859 Spyglass
Place
Vancouver, BC V5Z 4K6
Deidre Hopkins 1,000 1,000 NIL NIL
G/10 Hilltop Crescent
Fairlight, NSW
2094, Australia
11
TABLE IS CONTINUED FROM PAGE 11
Total Total
Number Of Shares
Shares To To Be Percent
Be Offered Owned Upon Owned Upon
Shares Owned For Selling Completion Completion
Name Of Selling Prior To This Shareholders Of This Of This
Stockholder Offering Account Offering Offering
- ----------------------------------------------------------------------------
International European
Realty Limited 600,000 600,000 NIL NIL
St. Andrews Court
Fredrick Street
PO Box N- 4805
Nassau, Bahamas
(Beneficial Owner:
Hermann Josef-Hermanns)
Leslie Kapusianyk 2,000 2,000 NIL NIL
3772 West 23rd Avenue
Vancouver, BC V6S 1K7
Francine Legault 1,000 1,000 NIL NIL
3639 Garibaldi Drive
North Vancouver, BC V7H 2W2
Joseph W. Lewis 600,000 600,000 NIL NIL
601- 655 Moberly Road
Vancouver, BC V5Z 4B2
Debra Mol 1,000 1,000 NIL NIL
9035 162A Street
Surrey, BC V4N 3L6
Lauren Mol 1,000 1,000 NIL NIL
9035 162A Street
Surrey, BC V4N 3L6
Raymond Mol 600,000 600,000 NIL NIL
9035 162A Street
Surrey, BC V4N 3L6
Tara Mol 1,000 1,000 NIL NIL
9035 162A Street
Surrey, BC V4N 3L6
12
TABLE IS CONTINUED FROM PAGE 12
Total Total
Number Of Shares
Shares To To Be Percent
Be Offered Owned Upon Owned Upon
Shares Owned For Selling Completion Completion
Name Of Selling Prior To This Shareholders Of This Of This
Stockholder Offering Account Offering Offering
- ----------------------------------------------------------------------------
Tessa Mol 1,000 1,000 NIL NIL
9035 162A Street
Surrey, BC V4N 3L6
Angela D. O'Neill 1,000 1,000 NIL NIL
126 - 1185 Pacific Street
Coquitlam, BC V3B 7Z2
Michelle O'Neill 2,000 2,000 NIL NIL
833 Sprice Avenue
Coquitlam, BC V3J 2P2
Stephen F.X. O'Neill 2,000 2,000 NIL NIL
833 Sprice Avenue
Coquitlam, BC V3J 2P2
Michael Proctor 1,000 1,000 NIL NIL
552 Tempe Crescent
North Vancouver, BC
V7N 1E8
Elizabeth K. Provenzano 1,000 1,000 NIL NIL
5467 Monte Bre Crescent
West Vancouver, BC V7W 3A7
Michael F. Provenzano 1,000 1,000 NIL NIL
5467 Monte Bre Crescent
West Vancouver, BC V7W 3A7
Mark Reynolds 1,000 1,000 NIL NIL
203 - 4323 Gallant Avenue
North Vancouver, BC V7G 2C1
Patricia Smith 1,000 1,000 NIL NIL
Suite 202,
470 Granville Street
Vancouver, BC V6C 1V5
13
TABLE IS CONTINUED FROM PAGE 13
Total Total
Number Of Shares
Shares To To Be Percent
Be Offered Owned Upon Owned Upon
Shares Owned For Selling Completion Completion
Name Of Selling Prior To This Shareholders Of This Of This
Stockholder Offering Account Offering Offering
- ----------------------------------------------------------------------------
Roy C. Smith 1,000 1,000 NIL NIL
Suite 202,
470 Granville Street
Vancouver, BC V6C 1V5
Clive Stevens 600,000 600,000 NIL NIL
2125 West 2nd Avenue
Vancouver, BC V6K 1H7
Donald Sutherland 1,000 1,000 NIL NIL
3011 West 15th Avenue
Vancouver, BC V6K 3A5
Gerda Taylor 1,000 1,000 NIL NIL
609 - 1267 Marinaside
Crescent
Vancouver, BC V6Z 2X5
Jennifer Taylor 2,000 2,000 NIL NIL
5488 Monte Bre
Crescent
West Vancouver, BC
V7W 3B1
Kristie Taylor 600,000 600,000 NIL NIL
552 Tempe Crescent
North Vancouver, BC
V7N 1E8
Michael Taylor 2,000 2,000 NIL NIL
5488 Monte Bre
Crescent
West Vancouver, BC
V7W 3B1
Paul Woodward 1,000 1,000 NIL NIL
5386 Westhaven Wynd
West Vancouver, BC V7W 3E8
- ---------------------------------------------------------------------
Except as otherwise noted in the above list, the named party
beneficially owns and has sole voting and investment power over all
shares or rights to these shares. The numbers in this table assume
that none of the selling shareholders sells shares of common stock
not being offered in this prospectus or purchases additional shares
of common stock, and assumes that all shares offered are sold. The
percentages are based on 12,538,000 shares of common stock
outstanding on April 18, 2001.
14
Other than Mr. Geoffrey N. Goodall, none of the selling
shareholders or their beneficial owners:
* has had a material relationship with the company other than
as a shareholder at any time within the past three years;
or
* has ever been an officer or directors of the company or any
of its predecessors or affiliates.
Mr. Goodall is one of our directors and has granted to us the
option to acquire a 60% interest in the Holy Cross mineral
property. We have also engaged Mr. Goodall to complete phase one
of our planned geological work program. Mr. Goodall is the owner
of 1,000 shares of our common stock.
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock
in one or more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may
from time to time be trading;
2. In privately negotiated transactions;
3. Through the writing of options on the common stock;
4. In short sales; or
5. In any combination of these methods of distribution.
The sales price to the public may be:
1. The market price prevailing at the time of sale;
2. A price related to such prevailing market price; or
3. Such other price as the selling shareholders determine from
time to time.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
In the event of the transfer by any selling shareholder of their
shares to any pledgee, donee or other transferee not involving a
transfer of the selling shareholder's beneficial ownership
interest, we will amend this prospectus and the registration
statement of which this prospectus forms a part by the filing of a
post-effective registration statement in order to name the pledgee,
donee or other transferee in place of the selling shareholder who
has transferred their shares.
The selling shareholders may also sell their shares directly to
market makers acting as principals or brokers or dealers, who may
act as agent or acquire the common stock as a principal. Any broker
or dealer participating in such transactions as agent may receive a
commission from the selling shareholders, or, if they act as agent
for the purchaser of such common stock, from such purchaser. The
selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with
the selling shareholders to sell a specified number of shares at a
stipulated price per share and, to the extent such broker or dealer
is unable to do so acting as agent for the selling shareholders, to
purchase, as principal, any unsold shares at the price required to
fulfill
15
the respective broker's or dealer's commitment to the
selling shareholders. Brokers or dealers who acquire shares as
principals may thereafter resell such shares from time to time in
transactions in a market or on an exchange, in negotiated
transactions or otherwise, at market prices prevailing at the time
of sale or at negotiated prices, and in connection with such re-
sales may pay or receive commissions to or from the purchasers of
such shares. These transactions may involve cross and block
transactions that may involve sales to and through other brokers or
dealers. If applicable, the selling shareholders may distribute
shares to one or more of their partners who are unaffiliated with
us. Such partners may, in turn, distribute such shares as
described above. We can provide no assurance that all or any of the
common stock offered will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common
stock. The selling shareholders, however, will pay any commissions
or other fees payable to brokers or dealers in connection with any
sale of the common stock.
The selling shareholders must comply with the requirements of the
Securities Act and the Securities Exchange Act in the offer and
sale of the common stock. In particular, during such times as the
selling shareholders may be deemed to be engaged in a distribution
of the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among
other things:
1. Not engage in any stabilization activities in connection with
our common stock;
2. Furnish each broker or dealer through which common stock may
be offered, such copies of this prospectus, as amended from
time to time, as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other than
as permitted under the Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings. Tuscany
Minerals' agent for service of process in Nevada is Michael A.
Cane, 2300 West Sahara Avenue, Suite 500, Box 18, Las Vegas, Nevada
89102.
16
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as
of April 18, 2001 are as follows:
DIRECTORS:
Name of Director Age
- -------------------- ---
J. Stephen Barley 44
Geoffrey N. Goodall 40
EXECUTIVE OFFICERS:
Name of Director Age Office
- -------------------- --- ------
J. Stephen Barley 44 President, Secretary, Treasurer
and Chief Executive Officer
Set forth below is a brief description of the background and
business experience of each of our executive officers and directors
for the past five years.
Mr. J. Stephen Barley is our president, secretary, treasurer and chief
executive officer and is a member of our board of directors. Mr.
Barley was appointed to our board of directors on October 5, 2000.
Mr. Barley was appointed as our president on October 5, 2000. Mr.
Barley received his Bachelor of Commerce degree from the Mount Allison
University in New Brunswick, Canada in 1979. He received his law
degree from Dalhousie University in Nova Scotia, Canada in 1982. Mr.
Barley practiced as a lawyer with Casey & O'Neill and successor firms
from 1984 to 1991. Mr. Barley practiced as a lawyer with J. Stephen
Barley Personal Law Corporation from 1992 to 1997. Mr. Barley specialized
in the areas of corporate and securities law during the time of his
private practice as a lawyer with Casey & O'Neill and J. Stephen
Barley Law Corporation. Mr. Barley's clients included a number of
publicly traded companies involved in the business of mineral
exploration. Mr. Barley has been involved as a corporate finance
consultant and as a director and investor in several private business
ventures since 1997. Mr. Barley is a member in good standing of the
Law Society of British Columbia and the Law Society of Alberta. Mr.
Barley is the president, secretary and treasurer and is a director of
Copper Valley Minerals Ltd., a company engaged in mineral exploration.
Mr. Barley has been the president, secretary, treasurer and a director
of Copper Valley Minerals Ltd. since February 16, 1999. Copper Valley
Minerals Ltd. is a reporting company under the Securities Exchange Act
of 1934 and is a company whose shares are traded on the OTC Bulletin
Board. Mr. Barley was appointed a director of New Century Equity
Holdings, Corp, a Nasdaq National Market company, in December 2000.
Mr. Barley also became a director of NetDriven Solutions Inc.
on March 30, 2001, a Canadian data storage services company.
Mr. Geoffrey N. Goodall is one of our directors. He was appointed to
our board of directors on January 5, 2001. Mr. Goodall received his
Bachelor of Science, Geology, from the University of British Columbia
in 1984. Mr. Goodall is a member of the Association of Professional
Engineers and Geoscientists of British Columbia and is a fellow of the
Geological Association of Canada. Mr. Goodall worked as a geologist
with Fox Geological Services Inc. of Vancouver, British Columbia,
Canada from May, 1984 to May, 1997. Mr. Goodall's responsibilities as
a geologist with Fox Geological Services
17
Inc. increased throughout
this period from conducting geological field surveys to senior
geologist in charge of project management. Mr. Goodall's experience
covers all aspects of mineral exploration from concept design and
implementation of reconnaissance exploration to detailed drilling and
preliminary ore reserve calculations. Mr. Goodall was Vice-President,
Exploration of Upland Resources Ltd. of Vancouver, British Columbia,
Canada from June, 1997 to September, 1998. Upland Resources Ltd. is a
public company, the shares of which are traded on the Vancouver Stock
Exchange. Mr. Goodall was responsible for the design, implementation,
and supervision of mineral exploration projects for Upland Resources.
Mr. Goodall worked with Homestake Mining Inc. of San Francisco,
California from September to December, 1998. Mr. Goodall's work with
Homestake was as a contract geologist whose duties included reviewing
the exploration programs and operations of Homestake Mining in
Bulgaria. Mr. Goodall is also a director of Copper Valley Minerals
Ltd., a reporting company under the Securities Exchange Act of 1934
and a company whose shares are traded on the OTC Bulletin Board. Mr.
Goodall has been a director of Copper Valley Minerals Ltd. since
August 12, 1999.
Each of Mr. Barley and Mr. Goodall are involved with Copper Valley
Minerals Ltd. Mr. Barley is the president, secretary and treasurer of
Copper Valley Minerals Ltd. and a director. Mr. Goodall is a
director. Copper Valley Minerals Ltd. is involved in the mineral
exploration of a mineral property in the State of Nevada for potential
copper reserves. Copper Valley Minerals Ltd. has obtained a
geological report on its mineral property and has determined to
proceed with the first phase of a geological exploration program on
its property. The objective of the geological exploration program is
to determine whether the mineral property has potentially commercial
exploitable reserves of copper. Mr. Barley and Mr. Goodall devote
only a portion of their business time to the management of Copper
Valley Minerals Ltd. The activities of Copper Valley Minerals are
similar to our activities in that both companies are engaged in the
business of mineral exploration of properties with unproven reserves,
have obtained geological reports on their properties and have
determined to proceed with the first phase of a recommended geological
exploration program on their properties. Mr. Barley and Mr. Goodall
each devote only a portion of their business time to the activities of
each company. Mr. Barley and Mr. Goodall presently do not have any
plans to be involved together in any future entities, however they may
evaluate new opportunities if they are presented and may determine to
proceed with a future business opportunity that does not involve
either us or Copper Valley Minerals.
Term of Office
Our Directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until
removed from office in accordance with our bylaws. Our officers
are appointed by our board of directors and hold office until
removed by the board.
Significant Employees
We have no significant employees other than the officers and
directors described above.
18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as
of April 18, 2001, and by the officers and directors, individually
and as a group. Except as otherwise indicated, all shares are
owned directly.
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
- -------------- ------------------- -------------------- --------
Common Stock J. Stephen Barley 6,500,000 shares 51.8%
Director, President & CEO
2060 Gisby Street
West Vancouver,
British Columbia
Canada V7V 4N3
Common Stock Geoffrey N. Goodall 1,000 shares 0.007%
Director
1315 Arborlynn Drive,
North Vancouver,
British Columbia
Canada V7J 2V6
Common Stock All Officers and Directors 6,501,000 shares 51.8%
as a Group that consists of two persons
- ----------------------------------------------------------------------------
The percent of class is based on 12,538,000 shares of common stock
issued and outstanding as of April 18, 2001.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 100,000,000 shares of
common stock at a par value of $0.001 per share.
Common Stock
As of April 18, 2001, there were 12,538,000 shares of our common
stock issued and outstanding that were held by approximately forty-
three (43) stockholders of record.
Holders of our common stock are entitled to one vote for each share
on all matters submitted to a stockholder vote. Holders of common
stock do not have cumulative voting rights. Therefore, holders of
a majority of the shares of common stock voting for the election of
directors can elect all of the directors. Holders of our common
stock representing a majority of the voting power of our capital
stock issued, outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of our stockholders. A vote by the holders of a
19
majority of our outstanding shares is required to effectuate certain
fundamental corporate changes such as liquidation, merger or an
amendment to our Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that
the board of directors, in its discretion, declares from legally
available funds. In the event of a liquidation, dissolution or
winding up, each outstanding share entitles its holder to
participate pro rata in all assets that remain after payment of
liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common
stock have no pre-emptive rights, no conversion rights and there
are no redemption provisions applicable to our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion
upon the validity of the securities being registered or upon other
legal matters in connection with the registration or offering of
the common stock was employed on a contingency basis, or had, or is
to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its
parents or subsidiaries. Nor was any such person connected with
the registrant or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director,
officer, or employee.
Michael A. Cane of Cane & Company, LLC, our independent legal
counsel, has provided an opinion on the validity of our common
stock.
Morgan & Company, independent chartered accountants, of Vancouver,
British Columbia, audited our financial statements and presented
their report with respect to the audited financial statements. The
report of Morgan & Company was given upon their authority as
experts in accounting and auditing.
Craig Payne of Crest Geological Consultants Ltd. has provided a
geological report as an exhibit to the registration statement.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the
Nevada Revised Statutes and our Bylaws. We have been advised that
in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our
legal counsel the matter has been settled by controlling precedent,
submit the question of whether such indemnification is against
public policy to a court of appropriate jurisdiction. We will then
be governed by the court's decision.
20
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on October 5, 2000 under the laws of the state
of Nevada.
We acquired our option to acquire an interest in the Holy Cross
mineral claim situated in the Province of British Columbia, Canada
on December 8, 2000.
Mr. J. Stephen Barley, our president and a director, has been our
sole promoter since our inception. Other than the purchase of his
stock and a management agreement, Mr. Barley has not entered into
any agreement with us in which he is to receive from us or provide
to us any thing of value. Mr. Barley has acquired 6,500,000 shares
of our common stock at a price of $0.001 US per share. Mr. Barley
paid a total purchase price of $6,500 for these shares. Mr. Barley
purchased these shares on November 1, 2000.
DESCRIPTION OF BUSINESS
In General
We are an exploration stage company engaged in the acquisition and
exploration of mineral properties. We own an option to acquire an
interest in the mineral claim described below under the heading
Holy Cross Mineral Property Option Agreement. There is no
assurance that a commercially viable mineral deposit exists on our
mineral claim. Further exploration will be required before a final
evaluation as to the economic and legal feasibility of any mineral
reserves that we may discover on our mineral claim can be
determined. Our plan of operations is to carry out exploration
work on the Holy Cross mineral claim in order to ascertain whether
this claim possesses commercially exploitable quantities of gold.
We can provide no assurance to investors that a commercially
exploitable mineral deposit, or reserve, exists in the Holy Cross
mineral claim until appropriate exploratory work is done and an
economic evaluation based on such work concludes economic
feasibility.
Holy Cross Mineral Property Option Agreement
We have obtained an option to acquire a 60% interest in a twenty-
unit mineral claim situated in the Province of British Columbia,
Canada. Mineral claims in British Columbia consist of units, with
each unit being a square in shape covering 25 hectares and
measuring 500 meters on each side. We refer to this mineral claim
as the Holy Cross mineral property. We obtained our interest in
the Holy Cross mineral property pursuant to an option agreement
dated December 8, 2000 between Mr. Geoffrey N. Goodall and
ourselves. Mr. Goodall is the owner of the Holy Cross mineral
property and has been one of our directors since January 5, 2001.
We paid cash consideration to Mr. Goodall for the grant of the
option in the amount of $1,500 on December 8, 2000 upon execution
of the option agreement.
We are entitled to exercise the option to acquire the 60% interest
in the Holy Cross mineral property by completing the following
payments to Mr. Goodall and incurring the following required
exploration expenditures on the Holy Cross mineral property:
21
(A) paying to Mr. Goodall an additional aggregate amount of
$120,000 in accordance with the following schedule:
(1) $10,000 on or before December 8, 2001;
(2) $20,000 on or before December 8, 2002;
(3) $40,000 on or before December 8, 2003;
(4) $50,000 on or before December 8, 2004; and
(B) incurring an aggregate of $558,500 of property exploration
expenditures on the Holy Cross mineral property within the
following periods:
(1) $8,500 on or before December 31, 2001;
(2) a further $50,000.00 on or before December 31, 2002;
(3) a further $100,000.00 on or before December 31, 2003;
(4) a further $150,000.00 on or before December 31, 2004;
and
(5) a further $250,000.00 on or before December 31, 2005.
We have advanced $4,250 towards a geological work program that we
plan to complete on the Holy Cross mineral property. These funds
have been advanced to Mr. Goodall, one of our directors, who we
have engaged to complete phase one of our planned geological work
program. Accordingly, we are required to incur an additional
$4,250 in exploration expenditures by December 31, 2001 in order to
preserve our option.
In the event that we spend, in any of the above periods, less than
the required sum on exploration expenditures, we may, at our
option, pay to Mr. Goodall the difference between the amount
actually spent and the amount of required exploration expenditures
in full satisfaction of the exploration expenditures to be
incurred. We would consider paying Mr. Goodall the difference
between the amount actually spent and the amount of the required
exploration expenditures in the event that (1) we had not incurred
the required exploration expenditures, and (2) we did not want our
option to terminate. This circumstance could occur where the
results of a completed exploration program were positive and
warranted further exploration in the opinion of management but the
costs incurred in completing the exploration program were less than
the amount required to maintain the option. In the event that we
spend, in any period, more than the required sum, then the excess
will be carried forward and applied to the required exploration
expenditures to be incurred in subsequent periods. If we fail to
make any required payment or incur any required exploration
expenditure, our option will terminate and we will have no further
rights to the Holy Cross mineral property. Property exploration
expenditures include all costs of acquisition and maintenance of
the property, all expenditures on the exploration and development
of the property and all other costs and expenses of whatsoever kind
or nature, including those of a capital nature, incurred or
chargeable with respect to the exploration of the property.
During the term of our option, Mr. Goodall will be obligated to
maintain in good standing the Holy Cross mineral property by the
doing and filing of assessment work or making of payments in lieu
thereof, by the payment of taxes and rentals, and the performance
of all other actions which may be necessary in order to keep the
Holy Cross mineral property free and clear of all liens and other
charges.
22
Upon acquiring a 60% interest in the Holy Cross mineral property by
exercise of our option, we will enter into a joint venture
agreement with Mr. Goodall for the purpose of further exploring and
developing and, if economically and politically feasible,
constructing and operating a mine on the Holy Cross mineral
property.
Location of the Holy Cross Mineral Property
The Holy Cross mineral property consists of a twenty-unit mineral
claim block located in the Omineca Mining Division of north central
British Columbia. Our mineral claim is comprised of a total of 500
hectares, measuring 2,500 metres by 2,000 metres. It is located
approximately 145km west of Prince George and 33km south of the
village of Fraser Lake. The Holy Cross mineral property is readily
accessible by a network of forest service and secondary logging
roads from the village of Fraser Lake, 33km to the north.
The Holy Cross mineral property is located within the interior
plateau region of central British Columbia. The claim covers an
area of forested and logged hillsides ranging in elevation from
1150m to 1400m, with small ponds and streams draining the hills.
Approximately 40% of the property has been logged by clear-cut
methods. Where not logged, vegetation consists of pine, spruce and
some fir.
Geological Report
We have obtained a geological evaluation report on the Holy Cross
mineral property. Craig W. Payne M.Sc., P.Geo. of Crest Geological
Consultants Limited, Coquitlam, British Columbia prepared this
geological report. The geological report summarizes the results of
the prior exploration of the Holy Cross claims and the geological
formations on the property that were identified as a result of this
prior exploration. The geological report also recommends a further
geological exploration program on the Holy Cross claims.
Exploration History of the Holy Cross Mineral Property
The history of the exploration of the Holy Cross Mineral Property
is summarized in the geological report that we obtained from Mr.
Payne of Crest Geological Consultants Ltd. The following summary
of the exploration history of the Holy Cross mineral property is
based on Mr. Payne's summary of this exploration history.
Noranda Exploration Company discovered the Holy Cross prospect in
1987 during a reconnaissance exploration program. The original
claims were staked after rock samples collected from the property
returned anomalous concentrations of gold. The process of staking
a mineral claim is the physical process of having the perimeter
boundary of a mineral claim marked in accordance with the
requirements of the British Columbia Mineral Tenure Act. Anomalous
concentrations of gold refer to concentrations of gold present in
mineral ore that are above normal concentrations. Noranda explored
the property during 1988-89 with geological mapping, wide spaced
soil sampling, trenching and geophysical surveys. They identified
several areas of mineralization with anomalous gold concentrations.
23
The area was simultaneously staked in 1994 by Kennecott Canada and
Cogema Resources, resulting in a claim dispute. Prior to conceding
the ground, Kennecott conducted geological mapping and geochemical
surveys. During October 1994, Cogema Resources conducted
reconnaissance rock and soil sampling. The property was optioned to
Phelps Dodge Corporation of Canada in 1995 who conducted additional
geological mapping and geochemical surveys.
The claims covering the key showings at the Holy Cross property
lapsed in 1999 with the result that title reverted to the Province
of British Columbia. Key showings are the main or prominent areas
of mineralization identified on the property. The lapse of a
mineral claim means that mineral title to the property reverts to
the Province of British Columbia. In British Columbia, mineral
claims will lapse when minimum amounts of exploration work on the
claim have not been completed or minimum payments in lieu of work
have not been made within the required time periods imposed by
legislation.
The Holy Cross claim was staked in February, 2000 by Mr. Geoffrey
Goodall to cover the main area of potential gold mineralization.
Mr. Goodall is the legal owner of title to the mineral claim and no
other person has any interest in the mineral claim, other than our
interest as a result of the option. The Province of British
Columbia owns the land covered by the mineral claim in fee simple.
In order to maintain this claim in good standing, we must complete
exploration work on the mineral claim or make payments to the
Province of British Columbia to maintain the mineral claim in lieu
of completing exploration work. Currently, a work value of $100
CDN is required during each of the first two years after a claim is
staked and a work value of $200 CDN is required in subsequent
years. Accordingly, exploration work on the Holy Cross mineral
claim must be completed in the amount of $2,000 CDN in the year
ending February 24, 2002 or this amount must be paid to the
Province of British Columbia by February 24, 2002. The Holy Cross
claim is presently in good standing until February 24, 2002 based
on payments made by Mr. Goodall for maintenance of the claims. In
subsequent years, exploration work must be completed in the amount
of $4,000 CDN or this amount paid to the Province of British
Columbia in order to maintain the claim in good standing. A
maximum of nine years of work credit may be filed on a claim. If
the required exploration work is not completed in any year or if a
payment is not made to the Province of British Columbia in lieu of
the required work within this year, then the mineral claim will
lapse and title with revert to the Province of British Columbia.
We are not aware of the reason why the companies that previously
explored the mineral claims, including Noranda Exploration Company,
Kennecot Canada, Cogema Resources and Phelps Dodge Corporation,
terminated their exploration efforts. Reasons for termination
could include: (a) a determination that the mineral claims did not
host commercial exploitable resources; (b) the failure of each
company to recognize the potential of the mineral claims; (c) a
determination to pursue more attractive exploration properties
elsewhere; and (d) internal company factors, such as lack of
financing or corporate changes.
Geology of the Mineral Claim
The Holy Cross claim covers three types of rocks - volcanic,
sedimentary and intrusive. Gold mineralization is associated with
the volcanic package of rocks present on the claim. Intrusive
rocks have locally permeated the volcanic rocks resulting in
altered characteristics to the host volcanic rock. The alteration
style and pattern are indicative of potential gold deposits.
24
Recommendations of Geological Report
In his geological report, Mr. Payne recommends that an initial
geological work program comprised of data acquisition, compilation
and review of existing information be undertaken to fully assess
the potential mineralization of the Holy Cross mineral property. A
site visit to the Holy Cross mineral property and confirmation of
sampling was recommended as part of this initial ongoing
investigation. It is estimated that this initial geological work
program will require a budget of $8,500. The components of the
budget for this initial geological work program are as follows:
Data Acquisition $2,000
Geological review - 10 days @ $325/day 3,250
Geochemical analyses - 50 samples @ $18 each 900
Travel Expenses - accommodation, board 950
Vehicle Rental - 4 days @ $100/day 400
Airfare - Vancouver to Prince George, return 500
Miscellaneous 500
------------- ------
Total $8,500
Current State of Exploration
The Holy Cross mineral claim presently does not have any proven
mineral reserves. The property that is the subject to the mineral
claim is undeveloped and does not contain any open-pit or
underground mines. There is no mining plant or equipment located
on the property that is the subject of the mineral claim.
Currently, there is no power supply to the mineral claim.
We have only recently commenced exploration of the mineral claim
and exploration is currently in the preliminary stages. The status
of our planned exploration program is discussed in detail below.
Our planned exploration program is exploratory in nature and there
is no assurance that mineral reserves will be proven.
Geological Exploration Program
We have accepted the recommendations of the geological report and
we are proceeding with the initial phase of the recommended
geological work program. We have engaged Mr. Goodall, one of our
directors, through an oral agreement to undertake this initial work
program and we have advanced $4,250 to Mr. Goodall to begin the
work program. Mr. Goodall has commenced work on this initial work
program. Mr. Goodall will not be able to complete this work
program until he has visited the site of the mineral claim. Access
to the mineral claim is currently not possible due to snow pack.
We anticipate that Mr. Goodall will be able to access the mineral
claim in June 2001 when the snow pack has melted. We anticipate
that Mr. Goodall will complete phase one of this current geological
work program by the end of summer 2001.
To date, Mr. Goodall has completed the acquisition of geological
data from previous geological exploration and the review and
synthesis of this geological data. This data acquisition has
involved the research and investigation of historic files to locate
and retrieve data information acquired by pervious exploration
companies in the area of the Holy Cross mineral claim. The work
involved in
25
this data acquisition includes map and report
reproduction, drafting and production of base maps, and compilation
of preexisting information into a common database and map.
Geological review entails the geological study of an area to
determine the geological characteristics, identification of rock
types and any obvious indications of mineralization. A significant
component of this review will occur on site. Geochemical analysis
is the analytical procedure conducted by a credited laboratory to
determine the specific elemental concentrations of minerals
contained within samples. Such samples may be from a variety of
medium, including rock, soil and stream sediment. The purpose of
undertaking the geological review and geochemical analysis is to
determine if there is sufficient indication for the area to host
mineralization to warrant additional exploration. Positive
results of this phase one exploration program are required to
justify continuing with additional exploration. Such positive
results would include the identification of zones of
mineralization. The current geological review of Mr. Goodall will
be focused on determining whether these positive results are
present. We will make a determination whether to proceed with an
additional staged exploration program upon completion of this
initial geological work program by Mr. Goodall and review of the
results of this first phase. In completing this determination, we
will make an assessment as to whether the results of phase one are
sufficiently positive to enable us to achieve the financing
necessary for use to proceed with phase two of the exploration
program. This assessment will include an assessment of the market
for financing of mineral exploration projects at the time of our
assessment.
The geological report recommended that any subsequent exploration
program include a geophysical survey of the Holy Cross mineral
property followed by diamond drilling of the key targets identified
through the analysis of the results of the geophysical survey. The
geological report estimates that this second geological work
program would cost approximately $200,000.
Compliance with Government Regulation
We will commence conducting business in British Columbia when
we commence the first phase of its exploration program.
Tuscany Minerals will be required to register as an extra-
provincial company under the British Columbia Company Act
prior to conducting business in British Columbia. The
anticipated cost of the extra-provincial registration is
approximately $500 US.
We will be required to conduct all mineral exploration
activities in accordance with the Mining Act of British
Columbia. We will be required to obtain a mineral exploration
permit from the British Columbia Ministry of Energy and Mines
in order to proceed with phase on of the recommended work
program. There is no charge to obtain the mineral exploration
permit and we do not anticipate any delay in obtaining this
permit. We will be required to obtain additional work permits
from the British Columbia Ministry of Energy and Mines for any
exploration work that results in a physical disturbance to the
land. Accordingly, we will be required to obtain a work
permit if it proceeds with the second phase of its exploration
program. There is no charge to obtain a work permit under the
Mining Act. The time to obtain a work period is approximately
four weeks. We will incur the expense of our consultant
geologist to prepare the required submissions to the Ministry
of Energy and Mines. We will be required by the Mining Act to
undertake remediation work on any work that results in
physical disturbance to the land. The cost of remediation
work will vary according
26
to the degree of physical disturbance. No remediation work is
anticipated as a result of completion of phase one of the
exploration program.
We have budgeted for regulatory compliance costs in the
proposed exploration program recommended by the geological
report. As mentioned above, we will have to sustain the cost
of reclamation and environmental remediation for all
exploration and other work undertaken. The amount of
reclamation and environmental remediation costs are not known
at this time as we do not know the extent of the exploration
program that will be undertaken beyond completion of the
recommended exploration program. Because there is presently no
information on the size, tenor, or quality of any resource or
reserve at this time, it is impossible to assess the impact of
any capital expenditures on earnings, our competitive position
or us in the event a potentially economic deposit is
discovered.
If we enter into production, the cost of complying with permit
and regulatory environment laws will be greater than in phase one
because the impact on the project area is greater. Permits and
regulations will control all aspects of any production program if
the project continues to that stage because of the potential
impact on the environment. We may be subject to an environmental
review process under the British Columbia Environmental
Assessment Act if we determine to proceed with a producing mine.
An environmental review process would be required if we planned
to construct a producing mine facility with production capacity
of 75,000 tonnes (82,500 tons) of mineral ore per year. If we
planned to proceed with a producing mine, we would be required to
apply under the Environmental Assessment Act for a determination
as to whether an environmental review was required. An
environmental review is not required under the Environmental
Assessment Act to proceed with the recommended exploration
program on our Holy Cross mineral claim.
Employees
We have no employees, other than Mr. J. Stephen Barley, our sole
officer, as of the date of this prospectus.
The services of Mr. Barley are provided to us pursuant to a
management agreement with C.H.M. Consulting Inc., a company
controlled by Mr. Barley. We pay C.H.M. Consulting Inc. a
management fee of $750 per month in consideration for C.H.M.
Consulting Inc. providing management and administration services
for us. These services include the services of Mr. Barley. The
management agreement is for a term commencing December 1, 2000 and
expiring on December 31, 2001.
We do not pay any compensation to Mr. Barley solely for serving as
a director on our board of directors.
We conduct our business largely through agreements with consultants
and arms-length third parties.
Research and Development Expenditures
We have advanced $4,250 on account of exploration expenditures to
date. We have not incurred any other research or development
expenditures since our incorporation.
27
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or
trademark.
PLAN OF OPERATIONS
Plan of Operations
Our business plan is to proceed with the exploration of the Holy
Cross mineral property to determine whether there are commercially
exploitable reserves of gold. We have decided to proceed with phase
one of the exploration program recommended by the geological
report. We anticipate that phase one of the recommended
geological exploration program will cost approximately $8,500. We
had $67,660 in cash reserves as of December 31, 2000. Accordingly,
we are able to proceed with phase one of the exploration program
without additional financing. Completion of these exploration
expenditures will also enable us to meet the exploration
expenditure requirement under the option agreement for the period
through December 31, 2001.
We will assess whether to proceed to phase two of the recommended
geological exploration program upon completion of an assessment of
the results of phase one of the geological exploration program. We
will require additional funding in the event that we decide to
proceed with phase two of the exploration program. The anticipated
cost of the phase two exploration program is $200,000 which is in
excess of our projected cash reserves remaining upon completion of
phase one of the exploration program. We anticipate that
additional funding will be in the form of equity financing from the
sale of our common stock. However, we cannot provide investors
with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund phase two of the
exploration program. We believe that debt financing will not be an
alternative for funding phase two of the exploration program. We
do not have any arrangements in place for any future equity
financing.
We believe that our cash reserves are also sufficient to meet our
obligations for the next twelve month period to C.H.M. Consulting
Inc. under our management agreement with C.H.M. Consulting and to
pay for the legal and accounting expense of complying with our
obligations as a reporting issuer under the Securities Exchange Act
of 1934. These expenses will be in addition to the cost of
completing phase one of the exploration program.
If we do not complete the cash payments or the exploration
expenditures required under the option agreement for the Holy Cross
mineral property, then our option will terminate and we will lose
all our rights and interest in the Holy Cross mineral property. If
we do not secure additional financing to incur the required
exploration expenditures, we may consider bringing in a joint
venture partner to provide the required funding. We have not
undertaken any efforts to locate a joint venture partner.
28
In addition, we cannot provide investors with any assurance that we
will be able to locate a joint venture partner who will assist us
in funding the exploration of the Holy Cross mineral property. We
may also pursue acquiring interests in alternate mineral properties
in the future.
Results Of Operations for Period Ending December 31, 2000
We did not earn any revenues during the period ending December 31,
2000. We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties.
We are presently in the exploration stage of our business and we
can provide no assurance that we will discover commercially
exploitable levels of mineral resources on our properties, or if
such resources are discovered, that we will enter into commercial
production of our mineral properties.
We incurred operating expenses in the amount of $5,810 for the
period ended December 31, 2000. These operating expenses were
comprised entirely of professional fees that were primarily
attributable our corporate organization and the acquisition of our
option to acquire an interest in the Holy Cross mineral property.
We also advanced $4,250 for the initial geological work program
during the period ended December 31, 2000.
We incurred a loss of $5,150 for the period ending December 31,
2000.
We had cash of $67,660 as of December 31, 2000, and had working
capital of $69,350 as of December 31, 2000.
DESCRIPTION OF PROPERTY
We do not own or lease any property other than this option to
acquire an interest in the Holy Cross mineral property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None of the following parties has, since our date of incorporation,
had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will
materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached to
our outstanding shares of common stock;
* Any of our promoters;
* Any relative or spouse of any of the foregoing persons who has
the same house as such person.
We have entered into a management agreement with C.H.M. Consulting
Inc., a company controlled by Mr. J. Stephen Barley, our President
and a director. We pay C.H.M. Consulting Inc. a
29
management fee of $750 per month for a thirteen-month term in
consideration for C.H.M. Consulting Inc. providing management and
administration services for us. These services include the management
services provided by Mr. Barley as our president.
Our option to acquire a 60% interest in the Holy Cross mineral
property was granted to us by one of our directors, Mr. Geoffrey N.
Goodall. This agreement is a critical part of our business plan.
The option agreement was entered into on December 8, 2000 prior to
Mr. Goodall being appointed to our board of directors on January 5,
2001. We have retained Mr. Goodall to conduct the first phase of
our planned geological work program. We have advanced $4,250 to
Mr. Goodall to conduct the initial phase of our planned geological
exploration program.
Shares were sold in private offerings to the following relatives of Mr.
Barley:
Name of Relative Number of Shares Relationship to Director
- ---------------- ---------------- ------------------------
Ms. Mary E. Barley 1,000 Mother of J. Stephen Barley
Mr. James W. Barley 1,000 Brother of J. Stephen Barley
Ms. Donna Durning 600,000 Sister of J. Stephen Barley
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our common stock. We
anticipate applying for trading of our common stock on the over the
counter bulletin board upon the effectiveness of the registration
statement of which this prospectus forms a part. However, we can
provide no assurance that our shares will be traded on the bulletin
board or, if traded, that a public market will materialize.
The Securities Exchange Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are generally equity securities with a price
of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the Nasdaq system,
provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules,
deliver a standardized risk disclosure document prepared by the
Commission, which: (a) contains a description of the nature and
level of risk in the market for penny stocks in both public
offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and
remedies available to the customer with respect to a violation to
such duties or other requirements of Securities' laws; (c) contains
a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices for penny stocks and significance of the
spread between the "bid" and "ask" price; (d) contains a toll-free
telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of
trading in penny stocks; and (f) contains such other information
and is in such form (including language, type, size and format),
as the Commission shall require by rule or regulation. The broker-
dealer also must provide, prior to effecting any transaction in a
penny stock, the customer (a) with bid and offer quotations for the
penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which
such bid and ask prices apply, or other comparable information
30
relating to the depth and liquidity of the market for such stock;
and (d) monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny
stock rules require that prior to a transaction in a penny stock
not otherwise exempt from those rules; the broker-dealer must make
a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written
acknowledgment of the receipt of a risk disclosure statement, a
written agreement to transactions involving penny stocks, and a
signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock if it becomes
subject to these penny stock rules. Therefore, if our common stock
becomes subject to the penny stock rules, stockholders may have
difficulty selling those securities.
Holders of Our Common Stock
As of the date of this registration statement, we had forty-three
(43) registered shareholders.
Rule 144 Shares
A total of 6,500,000 shares of our common stock will be available
for resale to the public after November 1, 2001 in accordance with
the volume and trading limitations of Rule 144 of the Act. An
additional 6,000,000 shares of our common stock will be available
for resale to the public after November 20, 2001 in accordance with
the volume and trading limitations of Rule 144 of the Act. An
additional 38,000 shares of our common stock will be available for
resale to the public after December 31, 2001 in accordance with the
volume and trading limitations of Rule 144 of the Act. After this
date, all of our outstanding shares will be available for resale
under this rule.
In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of a company's common stock for at least
one year is entitled to sell within any three month period a number
of shares that does not exceed the greater of:
1. 1% of the number of shares of the company's common stock then
outstanding which, in our case, equals approximately 125,380
shares as of the date of this prospectus; or
2. the average weekly trading volume of the company's common
stock during the four calendar weeks preceding the filing of a
notice on form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public
information about the company.
Under Rule 144(k), a person who is not one of the company's
affiliates at any time during the three months preceding a sale,
and who has beneficially owned the shares proposed to be sold for
at least two years, is entitled to sell shares without complying
with the manner of sale, public information, volume limitation or
notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates
hold all of the 6,500,000 shares that may be sold pursuant to Rule
144 after November 1, 2001.
31
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders
or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada
Revised Statutes, however, do prohibit us from declaring dividends
where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in
the usual course of business; or
2. our total assets would be less than the sum of our total
liabilities plus the amount that would be needed to satisfy
the rights of shareholders who have preferential rights
superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare
any dividends in the foreseeable future.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by,
or paid to our executive officers for all services rendered in all
capacities to us for the fiscal period ended December 31, 2000.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Restricted All
Annual Stock Options/* LTIP Other
Name Title Year Salary Bonus Compen- Awarded SARs (#) pay- Compen-
sation outs($) sation
- ---- --------- ---- ------ ----- ------ ---------- ------- ------- -------
J. President,2000 $750 0 0 0 0 0 0
Stephen CEO and
Barley Director
Stock Option Grants
We did not grant any stock options to the executive officers during
our most recent fiscal year ended December 31, 2000. We have also
not granted any stock options to the executive officers since
December 31, 2000.
32
Management Agreement
The services of Mr. J. Stephen Barley, our President and a
director, are provided to us pursuant to a management agreement
with C.H.M. Consulting Inc., a company controlled by Mr. J. Stephen
Barley. We pay C.H.M. Consulting Inc. a management fee of $750 per
month for a thirteen-month term in consideration for C.H.M.
Consulting Inc. providing management and administration services to
us. These services include the services of Mr. Barley. The
management agreement provides that the fee payable to C.H.M.
Consulting Inc. will be increased in the event that Mr. Barley is
required to spend more than 15% of his business time on the
business of the Company.
We do not have any employment or consultant agreement with Mr.
Goodall and we do not pay Mr. Goodall any amount for acting as a
director of the Company. We have engaged Mr. Goodall to complete
phase one of our planned geological exploration program on our
optioned mineral property. The anticipated cost of this work
program is $8,500.
33
FINANCIAL STATEMENTS
Index to Financial Statements:
1. Auditors' Report;
2. Audited Financial Statements for the period ending December 31,
2000, including:
a. Balance Sheet
b. Statement of Loss and Deficit
c. Statement of Cash Flows
d. Statement of Stockholders' Equity
e. Notes to Financial Statements
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants.
AVAILABLE INFORMATION
We have filed a registration statement on form SB-2 under the
Securities Act of 1933 with the Securities and Exchange Commission
with respect to the shares of our common stock offered through this
prospectus. This prospectus is filed as a part of that
registration statement and does not contain all of the information
contained in the registration statement and exhibits. Statements
made in the registration statement are summaries of the material
terms of the referenced contracts, agreements or documents of the
company and are not necessarily complete. We refer you to our
registration statement and each exhibit attached to it for a more
complete description of matters involving the company, and the
statements we have made in this prospectus are qualified in their
entirety by reference to these additional materials. You may
inspect the registration statement, exhibits and schedules filed
with the Securities and Exchange Commission at the Commission's
principal office in Washington, D.C. Copies of all or any part of
the registration statement may be obtained from the Public
Reference Section of the Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the
Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. The Securities and
Exchange Commission also maintains a web site at http://www.sec.gov
that contains reports, proxy statements and information regarding
registrants that file electronically with the Commission. Our
registration statement and the referenced exhibits can also be
found on this site.
34
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
DECEMBER 31, 2000
(Stated in U.S. Dollars)
------------------------------------
Morgan & Company
------------------------------------
Chartered Accountants
------------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
------------------------------------
AUDITORS' REPORT
To the Directors of
Tuscany Minerals, Ltd.
We have audited the balance sheet of Tuscany Minerals, Ltd. (an
exploration stage company) as at December 31, 2000 and the
statements of loss and deficit accumulated during the exploration
stage, cash flows, and stockholders' equity for the period from
the date of organization, October 5, 2000 to December 31, 2000.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with United States and
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.
We believe that our audit provides 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
December 31, 2000 and the results of its operations and cash flows
for the period from the date of organization, October 5, 2000 to
December 31, 2000 in accordance with United States generally
accepted accounting principles.
Vancouver, B.C.
/s/ Morgan & Company
January 22, 2001 Chartered Accountants
COMMENTS BY INDEPENDENT AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT
In the United States, reporting standards for auditors require
the expression of an explanatory paragraph when the financial
statements are affected by significant uncertainties that raise a
substantial doubt on the continuance of the Company as a going
concern as described in Note 1 of the financial statements. The
opinion in our report, dated January 22, 2001, does not contain
an explanatory paragraph as such opinion would not be in
accordance with Canadian reporting standards for auditors when
the significant uncertainties are adequately disclosed in the
financial statements.
Vancouver, B.C.
/s/ Morgan & Company
January 22, 2001 Chartered Accountants
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
BALANCE SHEET
DECEMBER 31, 2000
(Stated in U.S. Dollars)
- ---------------------------------------------------------------------
ASSETS
Current
Cash $ 67,660
Prepaid exploration advances 4,250
------------
71,910
Mineral Property (Note 3) 1,500
------------
$ 73,410
=====================================================================
LIABILITIES
Current
Accounts payable $ 2,560
------------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares,
par value $0.001 per share
Issued and outstanding:
12,538,000 Common shares 12,538
Additional paid in capital 63,462
Deficit Accumulated During The Exploration Stage (5,810)
Cumulative Translation Adjustment 660
------------
70,850
------------
$ 73,410
=====================================================================
Approved by the Directors:
_____________________________ _____________________________
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
PERIOD FROM DATE OF ORGANIZATION, OCTOBER 5, 2000
TO DECEMBER 31, 2000
(Stated in U.S. Dollars)
- ---------------------------------------------------------------------
Expenses
Office and sundry $ 938
Professional fees 4,872
Net Loss For The Period 5,810
Deficit Accumulated During The Exploration Stage,
Beginning Of Period -
Deficit Accumulated During The Exploration Stage,
End Of Period $ 5,810
=====================================================================
Net Loss Per Share $ 0.01
=====================================================================
Weighted Average Number Of Shares Outstanding 8,350,574
=====================================================================
Comprehensive Income
Net loss for the period $ (5,810)
Foreign currency translation adjustment 660
------------
Total Comprehensive Loss $ (5,150)
=====================================================================
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM DATE OF ORGANIZATION, OCTOBER 5, 2000
TO DECEMBER 31, 2000
(Stated in U.S. Dollars)
- ---------------------------------------------------------------------
Cash Flow From Operating Activity
Net loss for the period $ (5,810)
Adjustments To Reconcile Net Loss To Net Cash
Used By Operating Activity
Prepaid exploration advances (4,250)
Accounts payable 2,560
------------
(7,500)
------------
Cash Flow From Investing Activity
Mineral property (1,500)
------------
Cash Flow From Financing Activity
Share subscriptions 76,000
Effect Of Exchange Rate Changes On Cash 660
------------
Increase In Cash 67,660
Cash, Beginning Of Period -
------------
Cash, End Of Period $ 67,660
=====================================================================
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
DECEMBER 31, 2000
(Stated in U.S. Dollars)
Common Stock
----------------------------
Addi-
tional Cumulative
Paid-In Translation
Shares Amount Capital Deficit Adjustment Total
----------------------------------------------------------
November - Shares
Issued For Cash At
$0.001 6,500,000 $ 6,500 $ - $ - $ - $ 6,500
November - Shares
Issued For Cash At
$0.01 6,000,000 6,000 54,000 - - 60,000
December - Shares
Issued For Cash At
$0.25 38,000 38 9,462 - - 9,500
Translation
adjustment - - - - 660 660
Net Loss For
The Period - - - (5,810) - (5,810)
----------------------------------------------------------
Balance,
December 31, 2000 12,538,000 $ 12,538 $63,462 $(5,810) $ 660 $70,850
==========================================================
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.,
on October 5, 2000.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral
property and has not yet determined whether the property
contains ore reserves that are economically recoverable.
The recoverability of amounts shown as mineral property
costs is dependent upon the discovery of economically
recoverable reserves, confirmation of the Company's interest
in the underlying mineral claims and the ability of the
Company to obtain profitable production or proceeds from the
disposition thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property Costs
The Company capitalizes the acquisition costs of mineral
properties in which it has a continuing interest to be
amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable acquisition costs will be written off.
To date, the Company has not established the commercial
feasibility of its mineral property, therefore, all
exploration expenditures are being expensed.
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues
and expenses for the reporting period. Actual results could
differ from these estimates.
c) Foreign Currency Translation
The Company's functional currency is the U.S. dollar.
Transactions in foreign currency are translated into U.S.
dollars as follows:
i) monetary items at the rate prevailing at the balance sheet date;
ii) non-monetary items at the historical exchange rate;
iii) revenue and expense at the average rate in effect
during the applicable accounting period.
d) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting for Income taxes" (SFAS
109). This standard requires the use of an asset and
liability approach for financial accounting, and reporting
on income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
e) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
TUSCANY MINERALS, LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(Stated in U.S. Dollars)
3. MINERAL PROPERTY
The Company has entered into an option agreement, dated
December 8, 2000, to acquire a 60% interest in a mineral claim
block located in the Omineca Mining Division of British
Columbia.
In order to earn its interest, the Company must make cash
payments and incur exploration expenditures as follows:
Cash payments:
- - $1,500 on execution of the agreement
- - $10,000 by December 8, 2001
- - $20,000 by December 8, 2002
- - $40,000 by December 8, 2003
- - $50,000 by December 8, 2004
Exploration expenditures:
- - $8,500 by December 31, 2001
- - A further $50,000 by December 31, 2002
- - A further $100,000 by December 31, 2003
- - A further $150,000 by December 31, 2004
- - A further $250,000 by December 31, 2005
Balance, December 31, 2000 $ 1,500
-----------
4. CONTINGENCY
Mineral Property
The Company's mineral property interest has been acquired
pursuant to an option agreement. In order to retain its
interest, the Company must satisfy the terms of the option
agreement described in Note 3.
5. COMMITMENT
The Company has entered into a management agreement with a
company controlled by a director. The agreement is for
management services at $750 per month and expires on December
31, 2001.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the
Nevada Revised Statutes and our bylaws.
Under the Nevada Revised Statutes, director immunity from liability
to a company or its shareholders for monetary liabilities applies
automatically unless it is specifically limited by a company's
Articles of Incorporation. Our Articles of Incorporation do not
specifically limit our directors' immunity. Excepted from that
immunity are: (a) a willful failure to deal fairly with the company
or its shareholders in connection with a matter in which the
director has a material conflict of interest; (b) a violation of
criminal law, unless the director had reasonable cause to believe
that his or her conduct was lawful or no reasonable cause to
believe that his or her conduct was unlawful; (c) a transaction
from which the director derived an improper personal profit; and
(d) willful misconduct.
Our bylaws provide that we will indemnify our directors and
officers to the fullest extent not prohibited by Nevada law;
provided, however, that we may modify the extent of such
indemnification by individual contracts with our directors and
officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any
proceeding, or part thereof, initiated by such person unless such
indemnification: (a) is expressly required to be made by law, (b)
the proceeding was authorized by our board of directors, (c) is
provided by us, in our sole discretion, pursuant to the powers
vested us under Nevada law or (d) is required to be made pursuant
to the bylaws.
Our bylaws provide that we will advance to any person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer, of the company, or is or
was serving at the request of the company as a director or
executive officer of another company, partnership, joint venture,
trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefore, all expenses
incurred by any director or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such
person to repay said amounts if it should be determined ultimately
that such person is not entitled to be indemnified under our bylaws
or otherwise.
Our bylaws provide that no advance shall be made by us to an
officer of the company, except by reason of the fact that such
officer is or was a director of the company in which event this
paragraph shall not apply, in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, if a
determination is reasonably and promptly made: (a) by the board of
directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding, or (b) if such quorum is
not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the
time such determination is made demonstrate clearly and
convincingly that such person acted
35
in bad faith or in a manner that such person did not believe to be
in or not opposed to the best interests of the company.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 398.51
Federal Taxes $ NIL
State Taxes and Fees $ NIL
Transfer Agent Fees $ 1,000
Accounting fees and expenses $ 2,000
Legal fees and expenses $ 20,000
Blue Sky fees and expenses $ 2,000
Miscellaneous $ NIL
-----------
Total $ 25,398.51
===========
- -------------------------------------------------------------------------
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No
portion of these expenses will be borne by the selling
shareholders. The selling shareholders, however, will pay any
other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We issued 6,500,000 shares of common stock on November 1, 2000 to
Mr. J. Stephen Barley. Mr. Barley is one of our directors and is
our president and chief executive officer. These shares were
issued pursuant to Section 4(2) of the Securities Act of 1933 (the
"Securities Act") at a price of $0.001 per share, for total
proceeds of $6,500. The 6,500,000 shares of common stock are
restricted shares as defined in the Securities Act.
We completed an offering of 6,000,000 shares of our common stock at
a price of $0.01 per share to a total of ten purchasers on November
20, 2000. The total amount received from this offering was
$60,000. We completed the offering pursuant to Regulation S of the
Securities Act. Each purchaser was a relative, friend or business
associate of one of our officers or directors. All sales were made
in reliance of Category 3 of Rule 903 of Regulation S on the basis
that: (a) each sale was an offshore transaction; (b) no directed
selling efforts were made by us in completing any sales; and (c)
offering restrictions were implement. These offering restrictions
included endorsing all stock certificates representing the
purchased shares with the legend required by Rule 905 of Regulation
S. Each purchaser: (a) certified to us that purchaser is not a
U.S. person as defined in Regulation S; (b) agreed to resell the
purchased shares only in accordance with the provisions of
Regulation S, pursuant to registration under the Act, or pursuant
to an available exemption from registration; (c) agreed not to
engage in hedging transactions with regard to the shares unless in
compliance with the Act; and (d) agreed that we were required to
refuse to register any transfer of the shares not in
36
compliance with the provisions of Regulation S, pursuant to registration
under the Act or pursuant to an available exemption from registration.
We did not engage in a distribution of this offering in the United
States. Each purchaser represented his intention to acquire the
securities for investment only and not with a view toward
distribution. Each investor was given adequate access to
sufficient information about us to make an informed investment
decision. None of the securities were sold through an underwriter
and accordingly, there were no underwriting discounts or
commissions involved. No registration rights were granted to any
of the purchasers.
We completed an offering of 38,000 common shares at a price of
$0.25 per share to a total of thirty-two purchasers pursuant to
Regulation S of the Securities Act on December 31, 2000. The total
proceeds realized from this offering were $9,500. Each purchaser
was a relative, friend or business associate of one of our officers
or directors. All sales were made in reliance of Category 3 of
Rule 903 of Regulation S on the basis that: (a) each sale was an
offshore transaction; (b) no directed selling efforts were made by
us in completing any sales; and (c) offering restrictions were
implement. These offering restrictions included endorsing all
stock certificates representing the purchased shares with the
legend required by Rule 905 of Regulation S. Each purchaser: (a)
certified to us that purchaser is not a U.S. person as defined in
Regulation S; (b) agreed to resell the purchased shares only in
accordance with the provisions of Regulation S, pursuant to
registration under the Act, or pursuant to an available exemption
from registration; (c) agreed not to engage in hedging transactions
with regard to the shares unless in compliance with the Act; and
(d) agreed that we were required to refuse to register any transfer
of the shares not in compliance with the provisions of Regulation
S, pursuant to registration under the Act or pursuant to an
available exemption from registration. We did not engage in a
distribution of this offering in the United States. Each purchaser
represented their intention to acquire the securities for
investment only and not with a view toward distribution. All
purchasers were given adequate access to sufficient information
about us to make an informed investment decision. None of the
securities were sold through an underwriter and accordingly, there
were no underwriting discounts or commissions involved. No
registration rights were granted to any of the purchasers.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- -------- --------------------
3.1 Articles of Incorporation
3.2 By-Laws
4.1 Share Certificate
5.1 Opinion of Cane & Company, LLC, with consent to use
10.1 Option Agreement with Geoffrey Goodall dated
December 8, 2000
10.2 Management Agreement with C.H.M. Consulting Inc.
dated December 1, 2000
10.3 Amendment to Option Agreement with Geoffrey
Goodall dated April 4, 2001
23.1 Consent of Morgan & Company, Chartered Accountants
23.2 Consent of Crest Geological Consultants Ltd.
37
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement,
or most recent post-effective amendment, which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement; and
(c) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which
remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the provisions above, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore,
unenforceable.
In the event that a claim for indemnification against such
liabilities, other than the payment by us of expenses incurred or
paid by one of our directors, officers, or controlling persons in
the successful defense of any action, suit or proceeding, is
asserted by one of our directors, officers, or controlling person
sin connection with the securities being registered, we will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against
public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
38
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and
authorized this registration statement to be signed on its behalf
by the undersigned, in the City of Vancouver, Province of British
Columbia on April 18, 2001.
TUSCANY MINERALS, LTD.
/s/ J. Stephen Barley
By: _________________________
J. Stephen Barley, President
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints J. Stephen Barley, his true and
lawful attorney-in-fact and agent, with full power of substitution
and re-substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all pre- or post-effective
amendments to this registration statement, and to file the same
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any one of them, or their or his substitutes,
may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this registration statement was signed by the following persons in
the capacities and on the dates stated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ J. Stephen Barley President and Chief Executive April 18, 2001
- ----------------------- Officer, Secretary, Treasurer
J. Stephen Barley and Director
/s/ Geoffrey N. Goodall Director April 18, 2001
- -----------------------
Geoffrey N. Goodall
39