FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the month of November, 2002
SEC File #0-24570
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CENTRAL MINERA CORP.
Ste. 1040 - 885 West Georgia St.
Vancouver, BC
V6C 3E8
CANADA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b) : 82-
THIS FORM 6-K CONSISTS OF:
BRITISH COLUMBIA SECURITIES COMMISSION FORM 51-901F
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PROXY CIRCULAR
PROXY FORM
FINANCIAL STATEMENTS AS OF JUNE 30, 2002
MANAGEMENT DISCUSSION AND ANALYSIS
NOTICE OF MAILING
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CENTRAL MINERA CORPORATION
By: "Michael Cytrynbaum"
Name: Michael Cytrynbaum
Title: President
Date: November 13, 2002
BRITISH COLUMBIA QUARTERLY AND YEAR END REPORT
SECURITIES COMMISSION BC FORM 51-901F
(previously Form 61)
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CENTRAL MINERA CORP.
PERIOD ENDING JUNE 30, 2002
ISSUER DETAILS FOR YEAR ENDED DATE OF REPORT
NAME OF ISSUER (YY/MM/DD)
- -------------- -------------- --------------
Central Minera Corp. June 30, 2002 2002/11/14
ISSUER ADDRESS
1040 - 885 West Georgia Street
CITY/PROVINCE/POSTAL CODE ISSUER FAX NO. ISSUER TELEPHONE NO.
Vancouver, British Columbia, V6C 3E8 (604) 669-0131 (604) 687-6191
CONTACT NAME CONTACT'S POSITION CONTACT PHONE NO.
Barbara West (604) 687-6191
CONTACT E-MAIL ADDRESS WEB SITE ADDRESS
barbwest@look.ca N/A
CERTIFICATE
The two schedules required to complete this Report are attached and the
disclosure contained therein has been approved by the Board of Directors. A copy
of this Report will be provided to any shareholder who requests it.
DATE SIGNED
DIRECTOR'S SIGNATURE PRINT FULL NAME (YY/MM/DD)
- -------------------- --------------- -----------
(SIGNED) "MICHAEL CYTRYNBAUM" Michael Cytrynbaum 2002/11/14
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
(YY/MM/DD)
(SIGNED) "MURRAY KOSICK" Murray Kosick 2002/11/14
CENTRAL MINERA CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
We will hold the Annual Meeting of our Shareholders on Tuesday, December
17, 2002 in the boardroom at 1810-1111 West Georgia Street, Vancouver, B.C. V6E
4M3. The meeting will start at 11:00 a.m. (Vancouver time). We cordially invite
you to attend and encourage you to do so.
At the meeting we will:
1. present the report of the directors;
2. present our financial statements for the year ended June 30, 2002 and
the report of our auditor on those statements;
3. elect directors;
4. appoint the auditor;
5. ask you to consider and, if you think it appropriate to do so, to
adopt certain amendments to our Articles to authorize us to issue up
to 3,000,000 Variable Multiple Voting Shares and to re-designate our
existing Common shares as Subordinate Voting Shares; and
6. consider any other proper business.
The full text of the proposed amendment to our Articles referred to above
is included as Schedule A to the proxy circular included with this notice.
SECTION 193 OF THE YUKON BUSINESS CORPORATIONS ACT, GIVES YOU THE RIGHT TO
DISSENT FROM THE PROPOSED SPECIAL RESOLUTION AND, SUBJECT TO THE PROVISIONS OF
THE ACT, TO BE PAID THE FAIR VALUE OF YOUR COMMON SHARES. THIS RIGHT IS FULLY
DESCRIBED IN THE PROXY CIRCULAR. WE URGE YOU TO READ THE DESCRIPTION CAREFULLY.
By order of the Board of Directors
(signed) "Joan Jamieson"
Joan Jamieson
November 14, 2002 Corporate Secretary.
If you cannot attend, we encourage you to complete and return the enclosed Form
of Proxy indicating your voting instructions. Please complete, date and sign
your Form of Proxy and return it by mail or fax to our transfer agent, Pacific
Corporate Trust Company, 10th Floor, 625 Howe Street, Vancouver, British
Columbia, V6C 3B8, Canada (fax: (604) 689-8144). To be valid, a completed Form
of Proxy must be received by our transfer agent by no later than 5:00 p.m. on
Friday, December 13, 2002 or, if the meeting is adjourned, by no later than 48
hours prior to the time of the adjourned meeting.
If you are not a registered shareholder, please refer to page 3 of the
accompanying Management Proxy Circular for information on how to vote your
shares.
CENTRAL MINERA CORP.
PROXY CIRCULAR
The information contained in this Proxy Circular, unless otherwise
indicated, is as of November 14, 2002.
THIS PROXY CIRCULAR IS BEING MAILED BY THE MANAGEMENT OF CENTRAL MINERA
CORP. TO EVERYONE WHO WAS A SHAREHOLDER OF RECORD OF OUR COMPANY ON NOVEMBER 8,
2002, WHICH IS THE DATE THAT HAS BEEN FIXED BY THE DIRECTORS OF THE CORPORATION
AS THE RECORD DATE TO DETERMINE THE SHAREHOLDERS WHO ARE ENTITLED TO RECEIVE
NOTICE OF THE MEETING. We are mailing this Proxy Circular in connection with the
solicitation of proxies by and on behalf of our management for use at the annual
meeting of the company that is to be held on Tuesday, December 17, 2002. The
solicitation of proxies will be primarily by mail. Certain employees of Central
Minera may also solicit proxies by telephone or in person. The cost of
solicitation will be borne by Central Minera.
Details of the time and place of that meeting are contained in the notice
of meeting that accompanies this Proxy Circular.
Under our bylaws at least two shareholders must be present, in person or by
proxy, before any action may validly be taken at the meeting. If two
shareholders are not present in person or by proxy, we will reschedule the
meeting.
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PART ONE - VOTING
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WHO CAN VOTE?
Each shareholder is entitled to one vote for each Common share registered
in his or her name at the close of business on November 8, 2002, the date fixed
by our directors as the record date for determining who is entitled to receive
notice of the meeting. If a shareholder transfers Common shares after this date
to someone else, and that person becomes a registered shareholder, the new
shareholder may cast the votes attached to the shares transferred provided that
he or she has asked our transfer agent, Pacific Corporate Trust Company, to
include his or her name in the list of shareholders. This request must be made
at least 10 days before the meeting.
At the close of business on November 8, 2002, 21,760,068 of our Common
shares were outstanding and there were 639 registered holders of our Common
shares. To the knowledge of our directors and officers, the only persons or
companies who or which beneficially owned, directly or indirectly, or exercised
control or direction over 10% or more of our Common shares on that date were:
NAME NUMBER OF SHARES
---- ----------------
Cede & Co. 8,487,524
Canadian Depositary for Securities Ltd. 6,766,793
VOTING IN PERSON
If you are a registered shareholder and attend the meeting you can cast one
vote for each share registered in your name on all resolutions put before the
meeting.
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VOTING BY PROXY
If you do not come to the meeting, you can still make your votes count by
appointing someone who will be there to act as your proxy holder. You can either
tell that person how you want to vote or you can let him or her decide for you.
You can do this by completing a form of proxy.
What is a form of proxy?
A proxy is a document that authorizes someone to attend the meeting and
cast your votes for you. We have enclosed a form of proxy with this Proxy
Circular. You should use it to appoint a proxy holder, although you can also use
any other legal form of proxy.
Appointing a proxy holder
YOU CAN CHOOSE ANY INDIVIDUAL TO BE YOUR PROXYHOLDER. It is not necessary
for the person whom you choose to be a shareholder. To make such an appointment,
simply fill in the person's name in the blank space provided in the enclosed
form of proxy. To vote your shares, your proxy holder must attend the meeting.
If you do not fill a name in the blank space in the enclosed form of proxy,
the persons named in the form of proxy are appointed to act as your proxy
holder. Those persons are officers of Central Minera.
Your proxy vote
You may indicate on your form of proxy how you wish your proxy holder to
vote your shares. To do this, simply mark the appropriate boxes on the form of
proxy. If you do this, your proxy holder must vote your shares in accordance
with the instructions you have given.
IF YOU DO NOT GIVE ANY INSTRUCTIONS AS TO HOW TO VOTE ON A PARTICULAR ISSUE
TO BE DECIDED AT THE MEETING, YOUR PROXY HOLDER CAN VOTE YOUR SHARES AS HE OR
SHE THINKS FIT. IF YOU HAVE APPOINTED THE PERSONS DESIGNATED IN THE FORM OF
PROXY AS YOUR PROXY HOLDER THEY WILL, UNLESS YOU GIVE CONTRARY INSTRUCTIONS,
VOTE YOUR SHARES AT THE MEETING AS FOLLOWS:
[X] FOR THE ELECTION OF THE PROPOSED NOMINEES AS DIRECTORS;
[X] FOR THE APPOINTMENT OF STEELE & CO. AS THE AUDITORS OF CENTRAL MINERA;
[X] FOR THE SPECIAL RESOLUTION TO AMEND THE ARTICLES OF CENTRAL MINERA;
For more information about these matters, see Part II - "Business of the
Meeting". The enclosed form of proxy gives the persons named on it the authority
to use their discretion in voting on amendments or variations to matters
identified on the Notice of Meeting. At the time of printing this Proxy
Circular, the management of Central Minera is not aware of any other matter to
be presented for action at the Meeting. If, however, other matters do properly
come before the meeting, the persons named on the enclosed form of proxy will
vote on them in accordance with their best judgment, pursuant to the
discretionary authority conferred by the form of proxy with respect to such
matters.
In order to be valid, you must return the completed form of proxy by 5:00
p.m. (Vancouver time) on Friday, December 13, 2002, to our Transfer Agent,
Pacific Corporate Trust Company, at:
10th Floor
625 Howe Street
Vancouver, B.C.
V6C 3B8
Telecopier: (604) 689-8144
3
Changing your mind
If you want to revoke your proxy after you have delivered it, you can do so
at any time before it is used. You may do this by stating clearly, in writing,
that you want to revoke your proxy and by delivering this signed written
statement to Pacific Corporate Trust Company at the address indicated above.
Your proxy will only be revoked (A) if a revocation is (i) received by 5:00
p.m. in the afternoon (Vancouver time) on the last business day before the day
of the meeting, or any adjournment thereof, or (ii) to the person presiding at
the Meeting before it (or any adjournment) commences, or (B) in any other manner
permitted by law. If you revoke your proxy and do not replace it with another
that is deposited with our Transfer Agent, Pacific Corporate Trust Company,
before the deadline, you can still vote your shares must to do so you must
attend the Meeting in person.
Non-registered shareholders
If your shares are not registered in your own name, they will be held in
the name of a "nominee", usually a bank, trust company, securities dealer or
other financial institution. Your nominee must seek your instructions as to how
to vote your shares.
Accordingly, unless you have previously informed your nominee that you do
not wish to receive material relating to shareholders' meetings, you will have
received this Proxy Circular from your nominee, together with a form of proxy or
voting instruction form. If that is the case, it is most important that you
comply strictly with the voting instructions that have been given to you. If you
have voted and wish to change your voting instructions, you should contact your
nominee to discuss whether this is possible and what procedures you must follow.
If your shares are not registered in your own name, the Corporation's
Transfer Agent will not have a record of your name and, as a result, unless your
nominee has appointed you as a proxy holder, it will have no knowledge of your
entitlement to vote. If you wish to vote in person at the meeting, therefore,
please insert your own name in the space provided on the form of proxy or voting
instruction form that you have received from your nominee. If you do this, you
will be instructing your nominee to appoint you as proxy holder. Please adhere
strictly to the signing and returning instructions provided by your nominee. It
is not necessary to complete the form in any other respect, since you will be
voting at the meeting in person.
HOW A VOTE IS PASSED
All of the matters that will come to a vote at the Meeting, as described in
the attached Notice of Meeting, other than the proposed amendment to the
Articles of Central Minera, are ordinary resolutions and can be passed by a
simple majority - that is, if more than half of the votes that are cast are in
favour, then the resolution is approved. In the case of the proposed amendment
to the Articles of Central Minera, a special resolution is necessary - that is,
if at least two thirds of the votes cast are in favour, then the resolution is
approved.
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PART TWO - THE BUSINESS OF THE MEETING
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REPORT OF THE DIRECTORS
The Annual Report of the Company for the year ended June 30, 2002
accompanies this Proxy Circular.
4
FINANCIAL STATEMENTS
The financial statements of Central Minera for the year ended June 30, 2002
will be placed before you at the Meeting. They have been mailed to shareholders
together with the Notice of Meeting and this Proxy Circular.
ELECTION OF DIRECTORS
Directors of Central Minera are elected for a term of one year. The term of
office of each of the nominees proposed for election as a Director will expire
at the Meeting, and each of them, if elected, will serve until the close of the
next annual meeting, unless he or she resigns or otherwise vacates office before
that time. Under our Articles, the number of directors may not be fewer than
three nor more than ten. We currently have three directors.
The Nominees
The following are the nominees proposed for election as Directors of
Central Minera. All of them are currently Directors. UNLESS YOU GIVE OTHER
INSTRUCTIONS, THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY INTEND TO VOTE FOR
THOSE NOMINEES. Each of the nominees has agreed to stand for re-election and we
are not aware of any intention of any of them not to do so. If, however, one or
more of them should become unable to stand for re-election, it is likely that
one or more other persons would be nominated at the meeting for election, and in
that event the persons designated in the form of proxy will vote in their
discretion for a substitute nominee.
Shares
beneficially
owned,
controlled or
Name and place of residence Principal occupation Director since directed(1)
- --------------------------- -------------------- -------------- -----------
Michael Cytrynbaum(2) Since August 1983, President, July 2002 1,059,090 (3,4)
West Vancouver, B.C. First Fiscal Management Ltd. (a
private consulting firm); from
May 1996 to date, Chairman, Look
Communications Inc; from May 1997 to
March 15, 2001, President & Chief
Executive Officer, TeleLink
Communications Corporation.
Murray F. Kosick(2) Dentist May 5, 1999 559,0005
Victoria, B.C
Reinhard Siegrist(2) Independent investor and December 16, 750,0006
Wettswill, Switzerland financial advisor 1997
1. Information as to ownership or control of shares has been provided by the
nominees.
2. Member of the Audit Committee.
3. Mr. Cytrynbaum exercises voting control or direction over these shares
pursuant to an agreement dated as of July 18, 2002. but disclaims any
beneficial interest in them. 562,500 of these shares are held in escrow by
Pacific Corporate Trust Company pursuant to an agreement entered into in
1991 in connection with the Company's initial public offering. The escrow
agreement provides that any shares remaining in escrow ten years after the
date of the Company's prospectus for its initial public offering (the "IPO
Prospectus") must be surrendered for cancellation. The IPO Prospectus was
dated December 18, 1991. The Company has accordingly initiated steps to
procure the surrender for cancellation of the 562,500 shares. Mr.
Cytrynbaum has advised the Company that he will not cast the votes attached
to the 562,500 shares.
4. Does not include 500,000 options to acquire Common shares (see Part Three -
Compensation and Other Information - Stock Option Plan) held by Mr.
Cytrynbaum.
5. Does not include 250,000 options to acquire Common shares (see Part Three -
Compensation and Other Information - Stock Option Plan) held by Dr. Kosick.
Does not include 300,000 warrants to purchase 150,000 Common shares
exercisable at US$0.15 and 100,000 warrants to purchase 50,000 Common
Shares, exercisable at US$0.30 all expiring on
5
November 30, 2003 and all held by Anna Kosick, the wife of Murray Kosick.
Dr. Kosick disclaims any beneficial interest in these warrants or the
underlying Common Shares.
6. Does not include 250,000 options to acquire Common shares (see Part Three -
Compensation and Other Information - Stock Option Plan), or 300,000
warrants to acquire 150,000 Common shares at US$0.15 per share, expiring on
November 30, 2003, held by Mr. Siegrist.
APPOINTMENT OF THE AUDITOR
During the financial year ended June 30, 2002, Steele & Company served as
Central Minera's auditor, having originally been appointed in August 2000. In
the financial year ended June 30, 2002 Steel & Company were paid US$4,600 for
audit and audit related services.
Central Minera's management proposes that Steele & Company be re-appointed
as the Corporation's auditor. UNLESS THEY ARE INSTRUCTED OTHERWISE, THE PERSONS
NAMED IN THE FORM OF PROXY INTEND TO VOTE FOR THE APPOINTMENT OF STEELE &
COMPANY TO ACT AS OUR AUDITOR UNTIL THE CLOSE OF OUR NEXT ANNUAL MEETING.
AMENDMENT TO ARTICLES
Background - private placement of convertible debentures
On July 18, 2002 we completed a private placement of an aggregate of
US$300,000 in principal amount of unsecured convertible debentures for cash
proceeds of US$250,000. The balance of US$50,000 was issued in consideration for
the settlement of an existing demand liability. The debentures mature and will
become repayable, with accrued interest at the rate of 2% per annum, on July 31,
2004. The debentures are convertible into Units of the Corporation at the rate
of 1 Unit for each US$0.10 in principal amount of the debentures and will be
deemed to have been so converted as at July 31, 2003. If on July 31, 2003 the
authorized capital of the Corporation includes a class of Variable Multiple
Voting Shares having the special rights and restrictions described below, each
Unit will consist of (a) one Variable Multiple Voting Share and (b) one
non-transferable share purchase warrant, exercisable at US$0.30 at any time
prior to July 31, 2004, to acquire one Subordinate Voting Share (i.e. a Common
share). If, on July 31, 2003, the authorized capital of Central Minera does not
include Variable Multiple Voting Shares, the debentures will be deemed to have
been converted on that date into Units consisting of (a) 1 Common share and (b)
one non-transferable share purchase warrant, exercisable at US$0.30 at any time
prior to July 31, 2004, to acquire two Common shares.
Purpose of the proposed amendment to the Articles
The purpose of the proposed amendment to the Articles is to create a class
of Multiple Variable Voting Shares having the rights provided for as part of the
terms attached to the convertible debentures and to re-designate the existing
Common shares as Subordinate Voting Shares without any change in their rights.
Under the Yukon Business Corporations Act (the "YBCA") a special resolution
(that is, one voted for by a majority of two-thirds of the votes cast) is
required to make the amendments to our Articles that are necessary to create a
class of Variable Multiple Voting Shares with the rights described above, and to
re-designate the existing Common shares as Subordinate Voting Shares. The text
of the proposed special resolution (the "Special Resolution") is set out in
Schedule A to this proxy circular.
The Variable Multiple Voting Shares will have the following rights:
1. Voting Rights
At any meeting of shareholders, the number of votes attached to each
Variable Multiple Voting Share will be determined by the formula:
B x 0.55
--------
A x 0.45
6
Where B is the number of issued Subordinate Voting Shares and A is the
number of issued Variable Multiple Voting Shares.
2. Exchange right
Each Variable Multiple Voting Share will be exchangeable at any time,
at the option of the holder, into one Subordinate Voting Share. Upon
the number of outstanding Variable Multiple Voting Shares falling
below 1,500,000, all outstanding Variable Multiple Voting Shares will
be deemed to have been exchanged for Subordinate Voting Shares.
3. Concurrent capital alterations
If the Variable Multiple Voting Shares are subdivided or consolidated,
the Subordinate Voting Shares will be subdivided or consolidated in
the same manner and to the same extent..
4. Restrictions on transfer
The Variable Multiple Voting Shares will be transferable only with the
prior approval of a resolution of the Board of Directors of the
Corporation.
Upon conversion of the outstanding debentures on July 31, 2003, 3,000,000
Variable Multiple Voting Shares will be issued. If there is no increase in the
number of presently outstanding Common shares (which will be re-designated
Subordinate Voting Shares), there will be 21,760,068 such shares outstanding.
Accordingly, each Variable Multiple Voting Share will be entitled to (21,760,068
x 0.55 = 11,968,037) / (3,000,000 x 0.45 = 1,350,000), or 8.87 votes. As a
class, therefore, the Variable Multiple Voting Shares will be entitled to cast
26,610,000 votes and the Subordinate Voting Shares will be entitled to cast
21,760,068 votes.
If the Special Resolution is passed and the outstanding debentures are
converted into Variable Multiple Voting Shares, the holders of those shares will
together hold sufficient votes to determine the outcome of most matters
submitted to a vote of the shareholders of the Corporation. In addition, control
of the Corporation could change through a purchase of all of the Variable
Multiple Voting Shares without any concurrent purchase of Subordinate Voting
Shares.
SHAREHOLDERS' RIGHTS OF DISSENT
The shareholders are entitled to the dissent rights set out in Section 193
of the YBCA and to be paid the fair value of their common shares or if such
shareholder dissents to the special resolution (the "Amendment Resolution") to
amend the Articles (the "Amendment") and the Amendment becomes effective.
Neither a vote against the Amendment resolution, nor an abstention or the
execution or exercise of a proxy vote against such resolution will constitute
notice of dissent, but a shareholder need not vote against such resolution in
order to object. A shareholder must dissent with respect to all common shares
either held personally by him or on behalf of any one beneficial owner and which
are registered in one name. A brief summary of the provisions of Section 193 of
the YBCA is set out below.
Persons who are beneficial owners of common shares registered in the name
of a broker, custodian, nominee or other intermediary who wish to dissent should
be aware that ONLY A REGISTERED SHAREHOLDER IS ENTITLED TO DISSENT. A
shareholder who beneficially owns common shares but is not the registered holder
thereof, should contact the registered holder for assistance.
In order to dissent, a shareholder must send to Central Minera in the
manner set forth below, a written notice of objection (the "Objection Notice")
to the Amendment resolution. On the action approved by the Amendment resolution
becoming effective, the making of an agreement between Central Minera and the
dissenting shareholder as to the payment to be made for the dissenting
shareholder's shares or the
7
pronouncement of an order by the Court, whichever first occurs, the shareholder
ceases to have any rights as a shareholder other than the right to be paid the
fair value of his shares in an amount agreed to by Central Minera and the
shareholder or in the amount of the judgment, as the case may be, which fair
value shall be determined as of the close of business on the last business day
before the day on which the resolution from which the dissent was adopted. Until
any one of such events occurs, the shareholder may withdraw his dissent or
Central Minera may rescind the resolution and in either event, the proceedings
shall be discontinued.
If the Amendment is approved, the dissenting shareholder who sent an
Objection Notice, or Central Minera, may apply to the Court to fix the fair
value of the common shares held by the dissenting shareholder and the Court
shall make an order fixing the fair value of such common shares, giving judgment
in that amount against Central Minera in favour of the dissenting Shareholders
and fixing the time by which Central Minera must pay that amount to the
dissenting shareholder. If such an application is made by a dissenting
shareholder , Central Minera shall, unless the Court otherwise orders, send to
each dissenting shareholder a written offer (the "Offer to Purchase") to pay to
the dissenting shareholder, an amount considered by the directors of Central
Minera to be the fair value of the subject common shares., together with a
statement showing how the fair value of the subject common shares was
determined. Every Offer to Purchase shall be on the same terms. At any time
before the Court pronounces an order fixing the fair value of the dissenting
shareholder's common shares, a dissenting shareholder may make an agreement with
Central Minera for the purchase of his common shares, in the amount of the Offer
to Purchase, or otherwise. The Offer to Purchase shall be sent to each
dissenting shareholder within 10 days of Central Minera being served with a copy
of the originating notice. Any order of the Court may also contain directions in
relation to the payment to the shareholder of all or part of the sum offered by
Central Minera for the common shares, the deposit of the share certificates
representing the common shares, and other matters.
If Central Minera is not permitted to make a payment to a dissenting
shareholder due to there being reasonable grounds for believing that Central
Minera is or would after the payment be unable to pay its liabilities as they
become due, or the realizable value of Central Minera's assets would thereby be
less than the aggregate of its liabilities, then Central Minera shall, within
ten days after the pronouncement of an order, or the making of an agreement
between the shareholder and Central Minera as to the payment to be made for his
common shares, notify each dissenting shareholder that it is unable lawfully to
pay such dissenting shareholders for their shares.
Notwithstanding that a judgment has been given in favour of a dissenting
shareholder by the Court, if Central Minera is not permitted to make a payment
to a dissenting shareholder for the reasons stated in the previous paragraph,
the dissenting shareholder by written notice delivered to Central Minera within
30 days after receiving the notice, as set forth in the previous paragraph, may
withdraw his notice of objection in which case Central Minera is deemed to
consent to the withdrawal and the shareholder is reinstated to his full rights
as a shareholder, failing which he retains his status as a claimant against
Central Minera to be paid as soon as it is lawfully able to do so or, in a
liquidation, to be ranked subordinate to the rights of creditors of Central
Minera but in priority to its shareholders.
In order to be effective, a written Objection Notice must be received by
Central Minera's Registered and Records Office, Campion Macdonald, 200 - 204
Lambert Street, Whitehorse, Yukon Territory, Y1A 3T2 or by the Chairman of the
meeting, prior to the commencement or recommencement thereof.
The foregoing summary does not purport to provide a comprehensive statement
of the procedures to be followed by a dissenting shareholder who seeks payment
of the fair value of his common shares. Section 193 of the YBCA requires strict
adherence to the procedures established therein and failure to do so may result
in the loss of all dissenters' rights. Accordingly, each Shareholder who might
desire to exercise the dissenters' rights should carefully consider and comply
with the provisions of the section and consult such shareholders' legal advisor.
8
UNLESS THEY ARE INSTRUCTED OTHERWISE, THE PERSONS NAMED IN THE ENCLOSED
FORM OF PROXY INTEND TO VOTE FOR THE SPECIAL RESOLUTION.
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PART THREE - COMPENSATION AND OTHER INFORMATION
- --------------------------------------------------------------------------------
COMPENSATION OF DIRECTORS
We do not pay our directors a fee for acting as such. They are, however,
entitled to be reimbursed for reasonable expenditures incurred in performing
their duties as directors.
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Ann C. Eilers served as President of Central Minera throughout the
financial year ended June 30, 2002. No other executive officer of the
Corporation was paid more than $40,000 in compensation during that financial
year. The following table provides a summary of the compensation earned by Ms.
Eilers during the financial year ended June 30, 2002 and in the two preceding
financial years.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
NAME AND OTHER ANNUAL SECURITIES UNDER OPTIONS
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION GRANTED(#)
- ------------------ ---- ------ ----- ------------ ----------
Anne C. Eilers(1) 2002 US$35,754(2) Nil Nil 800,000(3)
President and CEO 2001 US$59,769(2) Nil Nil 800,000(3)
2000(1) US$53,974(2) Nil Nil 375,000(3)
(1) From May 5, 1999 to March 13, 2000 Ms. Eilers was Secretary of the
Corporation. On March 13, 2000 she was appointed President of the
Corporation. Ms. Eilers resigned as President on July 18, 2002.
(2) The amounts shown were paid to Ms. Eilers, A.C. Eilers & Associates
Management Corp. and Buzz Communications Inc., both companies controlled by
Anne C. Eilers.
(3) These options were held by A.C. Eilers & Associates Management Corp. and
Buzz Communications Inc., both companies controlled by Anne C. Eilers. They
lapsed on October 18, 2002.
STOCK OPTION PLAN
At the annual meeting held in December 1996 the shareholders of Central
Minera approved the adoption of a Stock Option Plan designed to enable the
Corporation to attract, retain and motivate qualified employees. Certain
amendments to the Plan were approved by our shareholders in December 1999. As
amended, the Plan allows us to grant options to present and former directors,
officers, employees, consultants and advisors. The Plan is administered by our
Board of Directors which is authorized to decide to whom options may be granted,
the number of options granted to any person, the exercise price, which may not
be less than $0.15 per share, the term (which may not be longer than 10 years
from the date of grant) and any restrictions upon exercise. A maximum of
3,000,000 shares may be made subject to options under the Plan. There are
currently 1,325,000 outstanding options, all exercisable at US$0.20 per share
and all expiring on December 31, 2005. Of these, 1,050,000 are held by our
directors and senior officers.
No options were exercised, nor were any new options granted, in the
financial year ended June 30, 2002. The following table sets out certain
information concerning options outstanding as at the end of that financial year:
9
VALUE OF UNEXERCISED
SECURITIES AGGREGATE UNEXERCISED OPTIONS AS IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE AT JUNE 30, 2002 JUNE 30, 2002
NAME AND PRINCIPAL POSITION EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------- -------- -------- ------------------------- -------------------------
Anne C. Eilers Nil Nil 800,000/800,000 Nil
President and Director
On July 18, 2002 Anne C. Eilers resigned as President and a Director of the
Corporation, and was replaced by Michael Cytrynbaum. Ms. Eilers' options expired
in accordance with their terms on September 14, 2002 (as to 375,000 options) and
October 18, 2002 (as to 425,000 options), having not been previously exercised.
On October 7, 2002 the Board of Directors approved the grant of an option
to Mr. Cytrynbaum to purchase up to 500,000 shares at a price of US$0.20 and
also approved (a) the extension from December 3, 2003 to December 31, 2005 of
the expiry date on an aggregate of 200,000 options previously granted to Murray
Kosick and Reinhard Siegrist and (b) the grant to each of them of new options to
purchase 150,000 shares at a price of US$0.20 each expiring on December 31,
2005. In addition, options to purchase an aggregate of 125,000 shares at a price
of US$0.20 and expiring on December 31, 2005 were granted to certain officers
and employees.
MANAGEMENT CONTRACTS
The Corporation has entered into an agreement dated July 18, 2002 with
First Fiscal Management Ltd. ("First Fiscal") to provide it with management
services, including assisting in formulating and developing the Corporation's
strategic vision and policy and making recommendations to the board of directors
with respect to the ongoing development of its business, finances and affairs.
First Fiscal has also agreed to provide secretarial support services and office
facilities to the Corporation and is entitled to a monthly fee of $15,000 and to
be reimbursed for reasonable expenses incurred in the course of providing the
services. The principal shareholder of First Fiscal is Michael Cytrynbaum who is
the President of the Corporation. The agreement may be terminated by First
Fiscal on 60 days' written notice and by the Corporation on at least six months
written notice or, if First Fiscal commits a material breach of the agreement,
is unwilling or unable to provide the services contracted for or commits fraud
or serious neglect or misconduct in performing the services, immediately. If the
Corporation terminates the agreement by notice to First Fiscal, it is entitled
to a lump sum payment of the management fee multiplied by the number of months
in the notice period.
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
No proposed nominee for election as a director, and no director or officer
of Central Minera who has served in such capacity since the beginning of the
last financial year of the Corporation, and no shareholder holding of record or
beneficially, directly or indirectly, more than 10% of the Corporation's
outstanding Common shares, and none of the respective associates or affiliates
of any of the foregoing, had any interest in any transaction with the
Corporation or in any proposed transaction since the last completed financial
year that has materially affected Central Minera or is likely to do so, except:
(a) Michael Cytrynbaum, the President and a director of the Corporation,
is interested in the management agreement with First Fiscal Management
Ltd. that is described above under the heading "Management Contracts;
(b) Barbara Cytrynbaum, the wife of Michael Cytrynbaum, purchased for cash
US$50,000 in principal amount of unsecured convertible debentures
referred to in Part II of this proxy circular under the heading
"AMENDMENT TO THE ARTICLES - Background"; and
10
(c) Murray Kosick, a director of Central Minera, purchased for cash
US$25,000 in principal amount of unsecured convertible debentures
referred to in Part II of this proxy circular under the heading
"AMENDMENT TO THE ARTICLES - Background".
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED ON AT THE MEETING
As disclosed elsewhere in this proxy circular, Murray Kosick, one of our
directors, and Barbara Cytrynbaum, the wife of our President and one of our
directors, respectively hold $25,000 and $50,000 in principal amount of
unsecured convertible debentures of Central Minera. If the special resolution to
amend our Articles to create a class of Variable Multiple Voting Shares is
approved, their debentures will be converted, on July 31, 2003, into 250,000 and
500,000 Variable Multiple Voting Shares respectively.
ADDITIONAL INFORMATION
You may obtain additional information about Central Minera in our Annual
Report for the year ended June 30, 2002, which is included with this proxy
circular. Additional copies may be obtained without charge upon request to the
Corporation at Suite 1040 - 885 West Georgia Street; telephone (604) 687-6191;
fax (604) 669-0131. You may also access our disclosure documents through the
Internet on the Canadian System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.
DIRECTORS' APPROVAL
The board of directors of Central Minera has approved the contents of this
proxy circular and its distribution to each shareholder entitled to receive
notice and to the Auditors of the Corporation.
Vancouver, B.C., November 14, 2002
(signed) "Joan Jamieson"
JOAN JAMIESON
Corporate Secretary.
SCHEDULE A
to the Management Proxy Circular dated November 14, 2002 of Central Minera Corp.
SPECIAL RESOLUTION TO AMEND ARTICLES OF CORPORATION
RESOLVED, as a special resolution, that:
1. section 1 of the Articles of the Corporation be amended to authorize the
issuance of:
(a) a class consisting of an unlimited number of shares without par value
designated "Subordinate Voting Shares; and
(b) a class consisting of 3,000,000 Variable Multiple Voting Shares
without par value,
having the special rights and restrictions set out in Exhibit I to this
Resolution.
2. notwithstanding that this special resolution has been duly passed by the
shareholders of the Corporation, the Board of Directors of the Corporation may,
in their sole discretion and without further approval of the shareholders of the
Corporation, revoke this special resolution at any time prior to effecting the
amendment to the Articles set out in paragraph 1 hereof;
3. any director or officer of the Corporation is hereby authorized, for and on
behalf of the Corporation, to execute and deliver Articles of Amendment and to
execute and, if appropriate, deliver all such documents and do all such things
as in the opinion of such director may be necessary or desirable to implement
this special resolution and the matters authorized hereby.
EXHIBIT I
The rights, privileges, conditions and restrictions attached to the Variable
Multiple Voting Shares and to the Subordinate Voting Shares shall be as follows:
1. General. Except as otherwise expressly provided herein, each Variable
Multiple Voting Share and each Subordinate Voting Share shall have the same
rights with respect to dividends, return of capital or other distribution of the
assets of the Corporation upon a liquidation or dissolution or other
distribution of assets among its shareholders for the purpose of winding up its
affairs, whether voluntary or involuntary and with respect to attendance at
meetings of shareholders, as if such shares constituted a single class.
2. Meetings and Voting. (a) The holders of the Variable Multiple Voting Shares
and the holders of the Subordinate Voting Shares shall be entitled to receive
notice of any meeting of shareholders of the Corporation and to attend and vote
thereat as a single class on all matters to be voted on by the shareholders of
the Corporation. At any such meeting:
(i) the number of votes attached to each Variable Multiple Voting Share
will be determined by the formula:
B x 0.55
--------
A x 0.45
where B is the number of issued Subordinate Voting Shares and A is the
number of issued Variable Multiple Voting Shares; and
(ii) each Subordinate Voting Share will be entitled to one vote per share.
ii
(b) Paragraph (a) (i) does not apply to a meeting where only the holders of
shares of one class are entitled to vote separately pursuant to any provision of
the Yukon Business Corporations Act or otherwise.
3. Exchange of Variable Multiple Voting Shares into Subordinate Voting Shares.
(a) Each outstanding Variable Multiple Voting Share may at any time be
exchanged, at the option of the holder exercised by notice in writing to the
Corporation signed by the holder and accompanied by a certificate or
certificates representing the Variable Multiple Voting Shares in respect of
which the holder desires to exercise such right of exchange, into one
Subordinate Voting Share.
(b) Upon receipt of the notice and certificate or certificates, the Corporation
shall, effective as of the date of such receipt, issue or cause to be issued a
certificate or certificates representing the number of Subordinate Voting Shares
issuable upon conversion. If less than all of the shares represented by a
certificate in respect of which the holder has given the notice referred to in
paragraph (a) are to be exchanged, the holder shall be entitled to receive a new
certificate representing the Variable Multiple Voting Shares represented by the
original certificate that are not to be exchanged.
(c) Upon the number of outstanding Variable Multiple Voting Shares falling
below 1,500,000, all Variable Multiple Voting Shares then outstanding will be
deemed to have been exchanged on the same basis for Subordinate Voting Shares
without further action on the part of the holder.
4. Subdivision or consolidation. If at any time the Variable Multiple Voting
Shares or the Subordinate Voting Shares are at any time subdivided, consolidated
or otherwise reclassified or exchanged for the shares of another class, except
as a result of the exercise of the right of exchange provided for in paragraph
3, the rights privileges and restrictions attached to the shares of the other
class shall be amended at the same time so as to preserve the rights conferred
hereby on each class in relation to the other class.
5. Transfer of Variable Multiple Voting Shares restricted. No Variable
Multiple Voting Share shall be transferred except with the prior approval of a
resolution of the directors of the Corporation. The directors may in their
absolute discretion refuse to approve of any proposed transfer and shall not be
required to given any reason for such refusal.
iii
SCHEDULE B
to the proxy circular of Central Minera Corp. dated November 14, 2002
EXTRACT FROM YUKON BUSINESS CORPORATIONS ACT
Shareholder's right to dissent
193.(1) Subject to sections 194 and 243, a holder of shares of any class of a
corporation may dissent if the corporation resolves to
(a) amend its articles under section 175 or 176 to add, change or remove
any provisions restricting or constraining the issue or transfer of
shares of that class,
(b) amend its articles under section 175 to add, change or remove any
restrictions on the business or businesses that the corporation may
carry on,
(c) amalgamate with another corporation, otherwise than under section 186
or 189,
(d) be continued under the laws of another jurisdiction under section 191,
or
(e) sell, lease or exchange all or substantially all its property under
section 192.
(2) A holder of shares of any class or series of shares entitled to vote under
section 178 may dissent if the corporation resolves to amend its articles in a
manner described in that section.
(3) In addition to any other right he may have, but subject to subsection (20),
a shareholder entitled to dissent under this section and who complies with this
section is entitled to be paid by the corporation the fair value of the shares
held by him in respect of which he dissents, determined as of the close of
business on the last business day before the day on which the resolution from
which he dissents was adopted.
(4) A dissenting shareholder may only claim under this section with respect to
all the shares of a class held by him or on behalf of any one beneficial owner
and registered in the name of the dissenting shareholder.
(5) A dissenting shareholder shall send to the corporation a written objection
to a resolution referred to in subsection (1) or (2)
(a) at or before any meeting of shareholders at which the resolution is to
be voted on, or
(b) if the corporation did not send notice to the shareholder of the
purpose of the meeting or of his right to dissent, within a reasonable
time after he learns that the resolution was adopted and of his right
to dissent.
(6) An application may be made to the Supreme Court after the adoption of a
resolution referred to in subsection (1) or (2),
(a) by the corporation, or
(b) by a shareholder if he has sent an objection to the corporation under
subsection (5),
to fix the fair value in accordance with subsection (3) of the shares of a
shareholder who dissents under this section.
iv
(7) If an application is made under subsection (6), the corporation shall,
unless the Supreme Court otherwise orders, send to each dissenting shareholder a
written offer to pay him an amount considered by the directors to be the fair
value of the shares.
(8) Unless the Supreme Court otherwise orders, an offer referred to in
subsection (7) shall be sent to each dissenting shareholder
(a) at least ten days before the date on which the application is
returnable, if the corporation is the applicant, or
(b) within ten days after the corporation is served with a copy of the
originating notice, if a shareholder is the applicant.
(9) Every offer made under subsection (7) shall
(a) be made on the same terms, and
(b) contain or be accompanied by a statement showing how the fair value
was determined.
(10) A dissenting shareholder may make an agreement with the corporation for the
purchase of his shares by the corporation, in the amount of the corporation's
offer under subsection (7) or otherwise, at any time before the Supreme Court
pronounces an order fixing the fair value of the shares.
(11) A dissenting shareholder
(a) is not required to give security for costs in respect of an
application under subsection (6), and
(b) except in special circumstances shall not be required to pay the costs
of the application or appraisal.
(12) In connection with an application under subsection (6), the Supreme Court
may give directions for
(a) joining as parties all dissenting shareholders whose shares have not
been purchased by the corporation and for the representation of
dissenting shareholders who, in the opinion of the Supreme Court, are
in need of representation,
(b) the trial of issues and interlocutory matters, including pleadings and
examinations for discovery,
(c) the payment to the shareholder of all or part of the sum offered by
the corporation for the shares,
(d) the deposit of the share certificates with the Supreme Court or with
the corporation or its transfer agent,
(e) the appointment and payment of independent appraisers, and the
procedures to be followed by them,
(f) the service of documents, and
(g) the burden of proof on the parties.
(13) On an application under subsection (6), the Supreme Court shall make an
order
v
(a) fixing the fair value of the shares in accordance with subsection (3)
of all dissenting shareholders who are parties to the application,
(b) giving judgment in that amount against the corporation and in favour
of each of those dissenting shareholders, and
(c) fixing the time within which the corporation must pay that amount to a
shareholder.
(14) On
(a) the action approved by the resolution from which the shareholder
dissents becoming effective,
(b) the making of an agreement under subsection (10) between the
corporation and the dissenting shareholder as to the payment to be
made by the corporation for his shares, whether by the acceptance of
the corporation's offer under subsection (7) or otherwise, or
(c) the pronouncement of an order under subsection (13),
whichever first occurs, the shareholder ceases to have any rights as a
shareholder other than the right to be paid the fair value of his shares in the
amount agreed to between the corporation and the shareholder or in the amount of
the judgment, as the case may be.
(15) Paragraph (14)(a) does not apply to a shareholder referred to in paragraph
(5)(b).
(16) Until one of the events mentioned in subsection (14) occurs,
(a) the shareholder may withdraw his dissent, or
(b) the corporation may rescind the resolution,
and in either event proceedings under this section shall be discontinued.
(17) The Supreme Court may in its discretion allow a reasonable rate of interest
on the amount payable to each dissenting shareholder, from the date on which the
shareholder ceases to have any rights as a shareholder by reason of subsection
(14) until the date of payment.
(18) If subsection (20) applies, the corporation shall, within ten days after
(a) the pronouncement of an order under subsection (13), or
(b) the making of an agreement between the shareholder and the corporation
as to the payment to be made for his shares,
notify each dissenting shareholder that it is unable lawfully to pay dissenting
shareholders for their shares.
(19) Notwithstanding that a judgment has been given in favour of a dissenting
shareholder under paragraph (13)(b), if subsection (20) applies, the dissenting
shareholder, by written notice delivered to the corporation within 30 days after
receiving the notice under subsection (18), may withdraw his notice of
objection, in which case the corporation is deemed to consent to the withdrawal
and the shareholder is reinstated to his full rights as a shareholder, failing
which he retains a status as a claimant against the corporation, to be paid as
soon as the corporation is lawfully able to do so or, in a liquidation, to be
ranked subordinate to the rights of creditors of the corporation but in priority
to its shareholders.
(20) A corporation shall not make a payment to a dissenting shareholder under
this section if there are reasonable grounds for believing that
vi
(a) the corporation is or would after the payment be unable to pay its
liabilities as they become due, or
(b) the realizable value of the corporation's assets would thereby be less
than the aggregate of its liabilities.
- --------------------------------------------------------------------------------
CENTRAL MINERA CORP. -
Form of Proxy for use at Annual Meeting to be held on December 17, 2002
THIS FORM OF PROXY IS SOLICITED BY AND ON BEHALF OF MANAGEMENT
- --------------------------------------------------------------------------------
NOTES TO PROXY
1. EVERY SHAREHOLDER HAS THE RIGHT TO APPOINT SOME OTHER PERSON OF THEIR
CHOICE, WHO NEED NOT BE A SHAREHOLDER, TO ATTEND AND ACT ON THEIR BEHALF AT
THE MEETING. IF YOU WISH TO APPOINT A PERSON OTHER THAN THE PERSONS WHOSE
NAMES ARE PRINTED HEREIN, PLEASE INSERT THE NAME OF YOUR CHOSEN PROXY
HOLDER IN THE SPACE PROVIDED.
2. If the securities are registered in the name of more than one owner, for
example, joint ownership, then all those registered should sign this form.
3. The form of proxy should be signed in the exact manner that the name
appears on it.
4. If the form of proxy is not dated, it will be deemed to be dated on the
date on which it is mailed to the holder.
5. The securities represented by this form of proxy will be voted in
accordance with any directions given by the holder. If the holder does not
give any instructions with respect to any matter, this securities
represented by this form of proxy will be voted as recommended by the
Management of Central Minera Corp. Further, if a matter is properly put
before the meeting that is not expressly contemplated by this form of
proxy, this proxy will be voted on that matter in accordance with the best
judgment of the Management of Central Minera Corp.
APPOINTMENT OF PROXY-HOLDER
I/WE BEING SHAREHOLDER(S) OF CENTRAL MINERA CORP. PRINT THE NAME OF THE PERSON YOU ARE APPOINTING ========================
HEREBY APPOINT: IF THE PERSON IS SOMEONE OTHER THAN THE
OR MANAGEMENT APPOINTEES NAMED ON THIS FORM
Michael Cytrynbaum, President, or failing him,
Murray Kosick, Director ========================
as my/our proxy with full power of substitution and to vote in accordance with
the following directions and all other matters that may come before the meeting
of Central Minera Corp. to be held in the Boardroom at Suite 1810-1111,
Vancouver, British Columbia V6E 4M3 on Tuesday, December 17, 2002 at 11:00 a.m.
(Vancouver time) and at any adjournment thereof.
2
1. ELECTION OF DIRECTORS
=>
===========
FOR all nominees listed in the Circular
=>
===========
FOR all nominees listed in the Circular other than PLEASE SPECIFY NAME OF INDIVIDUAL:
=>
===========
WITHHOLD vote from all nominees listed in the Circular
2. APPOINTMENT OF AUDITORS
FOR WITHHOLD
=========== ===========
APPOINTMENT OF STEELE & CO. =>
=========== ===========
3. RESOLUTIONS
FOR AGAINST
=========== ===========
SPECIAL RESOLUTION TO AMEND ARTICLES OF CORPORATION =>
=========== ===========
QUARTERLY FINANCIAL STATEMENTS
MARK THIS BOX IF YOU WOULD LIKE TO RECEIVE QUARTERLY FINANCIAL STATEMENTS. IF ===========
YOU DO NOT MARK THIS BOX OR DO NOT RETURN THIS FORM IT WILL BE ASSUMED THAT YOU
DO NOT WANT TO RECEIVE QUARTERLY FINANCIAL STATEMENTS ===========
AUTHORIZED SIGNATURE - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
I/We authorize you to act in accordance with my/our instructions set out above.
I/We hereby revoke any proxy previously given with respect to the meeting or at
any adjournment thereof.
Signature(s) Day Month Year
- ------------------------------------------------------------------------- --------------------------------------------------
- ------------------------------------------------------------------------- --------------------------------------------------
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
STEELE & CO.*
CHARTERED ACCOUNTANTS *Representing
incorporated professionals
SUITE 808 TELEPHONE: (604) 687-8808
808 WEST HASTINGS STREET TELEFAX: (604) 687-2702
VANCOUVER, B.C., CANADA V6C 1C8 EMAIL: EMAIL@STEELE-CO.CA
AUDITORS' REPORT
TO THE SHAREHOLDERS OF CENTRAL MINERA CORP.
We have audited the balance sheets of Central Minera Corp. (a development
stage company) as at June 30, 2002 and 2001 and the statements of
operations and deficit and cash flow for the years then ended. 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 audits.
We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at June 30, 2002 and
2001 and the results of its operations and changes in its cash resources
for the years then ended in accordance with Canadian generally accepted
accounting principles consistently applied.
Vancouver, Canada "STEELE & CO."
September 11, 2002 CHARTERED ACCOUNTANTS
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING CONFLICT
In the United States, reporting standards for auditors require the
addition of an explanatory paragraph (following the opinion paragraph)
when the financial statements are affected by conditions and events that
cast substantial doubt on the Company's ability to continue as a going
concern, such as that described in Note 1 of these financial statements.
Our report to the shareholders dated September 11, 2002 is expressed in
accordance with Canadian reporting standards which do not permit a
reference to such uncertainties in the auditors' report when the
uncertainties are adequately disclosed in the financial statements.
Vancouver, Canada "STEELE & CO."
September 11, 2002 CHARTERED ACCOUNTANTS
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(EXPRESSED IN U.S. DOLLARS)
JUNE 30,
------------------------------
2002 2001
------------ ------------
ASSETS
CURRENT
CASH (NOTE 4) $ 6,021 $ 30,805
FUNDS HELD IN TRUST (NOTE 8) 175,000 -
ACCOUNTS RECEIVABLE AND PREPAID EXPENSES 8,929 15,863
MARKETABLE SECURITIES (NOTE 5) 6,418 6,418
196,368 53,086
------------ ------------
RENT DEPOSIT - 17,559
CAPITAL (NOTE 6) - 2,424
MINERAL PROPERTIES AND INTERESTS (NOTE 7) 2 2
------------ ------------
$ 196,370 $ 73,071
============ ============
LIABILITIES
CURRENT
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $ 75,290 $ 19,118
LOAN PAYABLE (NOTE 10) 19,749 -
------------ ------------
95,039 19,118
------------ ------------
SHARE CAPITAL AND DEFICIT
CONVERTIBLE DEBENTURES (NOTE 8) 250,000 -
SHARE CAPITAL (NOTE 9) 41,441,857 41,441,857
DEFICIT (41,590,526) (41,387,904)
------------ ------------
101,331 53,953
------------ ------------
$ 196,370 $ 73,071
============ ============
RELATED PARTY TRANSACTIONS (NOTE 10)
COMMITMENTS AND CONTINGENCIES (NOTE 11)
APPROVED BY THE DIRECTORS
"Michael Cytrynbaum"
- --------------------------------------
"Murray F. Kosick"
- --------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE YEARS ENDED JUNE 30,
TO JUNE 30, ------------------------------------------------
2002 2002 2001 2000
------------- ------------ ------------- -------------
ADMINISTRATION EXPENSES
ACCOUNTING AND AUDIT $ 685,214 $ 23,845 $ 24,771 $ 34,154
CONSULTING FEES 1,693,818 40,490 64,048 89,647
AMORTIZATION 281,939 912 15,194 8,940
LEGAL 1,713,892 75,944 33,673 77,191
OFFICE 921,463 12,268 14,072 18,900
RENT 726,272 72,065 65,010 43,695
SALARIES AND BENEFITS 279,398 - - 6,600
TRANSFER AGENT AND FILING FEES 145,417 8,042 11,418 4,971
TRAVEL AND PROMOTION 1,194,529 999 4,648 4,531
------------- ------------- ------------ -------------
7,641,942 234,565 232,834 288,629
------------- ------------- ------------ -------------
INTEREST AND OTHER INCOME (1,510,588) (30,242) (85,495) (11,067)
LOSS (GAIN) ON FOREIGN EXCHANGE 55,496 (3,213) 4,462 3,700
WRITE-DOWN OF INVESTMENT IN
PRIVATE COMPANY (NOTE 7) 1,000,799 - 1,000,799 -
(GAIN) ON SALE AND WRITE-DOWN OF
MARKETABLE SECURITIES (16,040) - 7,222 (23,262)
WRITE-DOWN OF MINERAL
PROPERTIES (NOTE 7) 24,724,036 - 960 582,468
LOSS ON SALE OF CAPITAL ASSETS 11,307 1,512 - 9,795
TERMINATION COSTS PAID
INTO COURT 264,000 - - 264,000
ALLOWANCE (RECOVERIES) FOR
LAWSUIT SETTLEMENT 564,462 - (310,538) -
LOSS ON SALE OF SUBSIDIARY 8,855,112 - - -
------------- ------------- ------------- -------------
33,948,584 (31,943) 617,410 825,634
------------- ------------- ------------- -------------
NET LOSS FOR THE PERIOD 41,590,526 202,622 850,244 1,114,263
DEFICIT BEGINNING OF THE PERIOD - 41,387,904 40,537,660 39,423,397
------------- ------------- ------------- -------------
DEFICIT END OF THE PERIOD $ 41,590,526 $ 41,590,526 $ 41,387,904 $ 40,537,660
============= ============= ============= =============
NET LOSS PER COMMON SHARE $ .01 $ .04 $ .08
============= ============= =============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 21,760,068 21,760,068 14,233,777
============= ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE YEARS ENDED JUNE 30,
TO JUNE 30, ------------------------------------------------
2002 2002 2001 2000
------------ ----------- ------------ -------------
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD $(41,590,526) $ (202,622) $ (850,244) $ (1,114,263)
ITEMS NOT INVOLVING CASH
AMORTIZATION 281,938 912 15,194 8,940
LOSS ON SALE OF SUBSIDIARY 8,855,112 - - -
LOSS ON SALE OF CAPITAL
ASSETS 11,307 1,512 - 9,795
WRITE-DOWN OF INVESTMENT 1,000,799 - 1,000,799 -
WRITE-DOWN OF MINERAL
PROPERTIES 24,724,036 - 960 582,468
SHARE CONSIDERATION PAYABLE
INCLUDED IN ALLOWANCE FOR
LAWSUIT SETTLEMENT 375,000 - - -
------------ ----------- ------------ -------------
(6,342,334) (200,198) 166,709 (513,060)
------------ ----------- ------------ -------------
NET CHANGE IN NON-CASH
WORKING CAPITAL ITEMS
ACCOUNTS RECEIVABLE AND
PREPAID EXPENSES (8,929) 6,934 7,990 391,961
RENT DEPOSIT - 17,559 - (17,559)
MARKETABLE SECURITIES (6,418) - 162 (6,580)
ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES 75,290 56,172 (41,842) (23,904)
PAYABLE UNDER STIPULATION
OF SETTLEMENT AGREEMENT - - - (450,000)
OWING TO RELATED PARTIES - - - -
------------ ----------- ------------ -------------
(6,282,391) (119,533) 133,019 (619,142)
------------ ----------- ------------ -------------
FINANCING ACTIVITIES
LOAN AND DEBENTURES PAYABLE 269,749 269,749 - -
FUNDS HELD IN TRUST (175,000) (175,000) - -
SHARES ISSUED FOR CASH 25,316,857 - 901,002 330,000
------------ ----------- ------------ -------------
25,411,606 94,749 901,002 330,000
------------ ----------- ------------ -------------
INVESTING ACTIVITIES
MINERAL PROPERTIES (17,310,637) - (957) (33,022)
INVESTMENT IN PRIVATE COMPANY (1,000,799) - (1,000,800) -
PURCHASE OF CAPITAL ASSETS (811,758) - (3,636) -
------------ ----------- ------------ -------------
(19,123,194) - (1,005,393) (33,022)
------------ ----------- ------------ -------------
CHANGE IN CASH FOR THE PERIOD 6,021 (24,784) 28,628 (322,164)
CASH BEGINNING OF THE PERIOD - 30,805 2,177 324,341
------------ ----------- ------------ -------------
CASH END OF THE PERIOD $ 6,021 $ 6,021 $ 30,805 $ 2,177
============ =========== ============ =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
1. GOING CONCERN CONSIDERATIONS
These financial statements have been prepared on the assumption that the
Company will continue as a going concern, meaning it will continue in
operation for the foreseeable future and will be able to realize assets and
discharge liabilities in the normal course of operations. Different bases
of measurement may be appropriate when a company is not expected to
continue operations for the foreseeable future. As at September 11, 2002,
the Company had not reached a level of operations which would finance
day-to-day activities. The Company's continuation as a going concern is
dependent upon its ability to attain profitable operations and generate
funds therefrom and/or raise equity capital or borrowings sufficient to
meet current and future obligations.
For the years ended June 30, 2002, 2001 and 2000, the Company sustained
operating losses of $202,622, $850,244 and $1,114,263 respectively.
2. CONTINUING OPERATIONS
The Company is engaged in the acquisition, exploration and development of
mineral properties. At the Company's annual general meeting in December,
2000, the shareholders approved the consolidation of the Company's shares
to a maximum ratio of 1:20 and to change its domicile. The directors are
authorized to implement these changes at their discretion. No changes have
been implemented.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Mineral Properties
The Company accounts for its mineral properties whereby all direct
costs relative to the acquisition are capitalized and all exploration
and development of these properties are expensed until an economic
feasibility study is completed. All pre-production revenue and option
proceeds received are first credited against the costs of the related
property, with any excess credited to earnings. Once commercial
production has commenced, the net costs of the applicable property are
charged to operations using the unit-of-production method based on
reserves. On an ongoing basis, the Company evaluates each property
based on results to date to determine the nature of exploration work
that is warranted in the future. If there is little prospect of future
work being carried out on a property, the costs related to that
property are written down to the estimated amount recoverable.
The Company's mineral properties are in the exploration stage and it
has not yet been determined whether the properties contain ore reserves
that are economically recoverable. The amounts shown for mineral
properties are not intended to reflect present or future values. The
recoverability of the investment in these properties is dependent upon
the existence of economically recoverable reserves, confirmation of the
Company's interest in the mineral properties, the ability of the
Company to finance their development and upon future profitable
production.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b. Foreign Currency Translation
The Company's operations have been translated into U.S. dollars using
the temporal method. Under this method, monetary assets and liabilities
have been translated at the period end exchange rates. Non-monetary
assets have been translated using historical rates of exchange.
Revenues and expenses have been translated into U.S. dollars at the
average rate of exchange prevailing during the period, except for
amortization which is translated at exchange rates applicable to the
related asset. Translation gains or losses are included in the
determination of earnings.
c. Loss Per Share
Loss per share has been calculated using the weighted average number of
shares outstanding.
d. Estimates and Fair Values
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 during the reporting period. Significant areas requiring
the use of management estimates relate to the determination of
impairment of assets, environmental issues and the outcome of lawsuits.
Actual results could differ from those estimates. The financial
instruments, which are reported as assets and liabilities, both
recognized and unrecognized, are carried at amounts which approximate
fair values.
e. Stock-Based Compensation Plans
The Company grants to its directors, employees and consultants
incentive stock options to acquire shares in the Company at or above
market value at the date of grant. The options are exercisable upon
issue and have fixed exercise prices and expiry dates not exceeding
five years. Generally, the Company is entitled to reserve up to 10% of
its issued capital for stock-based compensation plans. No compensation
expenses are recognized for these options when issued. Any
consideration received on the exercise of options is credited to share
capital.
f. Income Taxes
The Company accounts for income taxes whereby the cost (benefit) of
current and future income taxes is recognized as income tax expense in
the determination of results of operations for the period. Future
income tax liabilities (assets) are the amount of income taxes arising
from taxable temporary differences between the tax bases of an asset or
liability and its carrying amount in the balance sheet. Income tax
liabilities and assets are recognized when they are more likely than
not to be realized and are measured using the income tax rates and laws
that are expected to apply at the time of settlement or realization.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g. Cumulative and Comparative Figures
The cumulative amounts in the statements of operations and cash flow
include the results of operations which were discontinued by the
disposal or abandonment of subsidiary companies. Certain of the
comparative figures have been re-classified to conform to the current
year's financial statement presentation.
4. CASH
The Company maintains its cash balances in various currencies. At the year
end, the currencies held and the United States equivalents were as follows:
2002 2001
--------- ----------
Canadian dollars $ 3,051 $ 22,981
U.S. dollars 2,970 7,824
--------- ----------
$ 6,021 $ 30,805
========= ==========
5. MARKETABLE SECURITIES
Marketable securities are carried in the accounts at the lesser of quoted
market value and cost. The current quoted market value of the securities is
$6,600.
6. CAPITAL ASSETS
NET BOOK VALUE
2002 2001
------- --------
Office furniture and equipment $ - $ 2,424
======= =======
7. MINERAL PROPERTIES AND INTERESTS
a. Investment in Private Company
The Company acquired a 15.72% interest in a private company incorporated
in Nevada, U.S.A. The Nevada company is in the development stage and is
exploring properties in southern Nevada (the "Eldorado Project"). It is
unlikely that any benefit will accrue to the Company during the
development stages and the Company's investment of $1,000,800 has been
written down to a nominal value.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
7. MINERAL PROPERTIES AND INTERESTS (CONTINUED)
b. Mineral Property Interests
The Company owns a 25% interest in five mineral claims in the Mackenzie
Mining District of the Northwest Territories which are carried at a
nominal value. The remaining 75% interest is owned by a public company
under common management. The Company has abandoned its mineral
interests in Mexico, Nicaragua and Nevada and all property-related
costs have been expensed.
8. CONVERTIBLE DEBENTURES
The Company has completed a convertible debenture issue of U.S. $300,000,
of which U.S. $175,000 was held in trust with the Company's lawyers at June
30, 2002. The debentures are unsecured, bear interest at 2% per annum, and
have a maturity date of July 31, 2004. The debentures will be deemed to
have been converted into units of the Company on July 31, 2003 in the ratio
of one unit for each U.S. $.10 (3,000,000 units). Each unit will consist
of, if the authorized capital of the company includes variable multiple
voting common shares (Note 9), one variable multiple voting common share
and one non-transferrable share purchase warrant to acquire one subordinate
voting common share at $.30 per share, otherwise, one common share and one
non-transferrable share purchase warrant to acquire two common shares at
U.S. $.30 per share before July 31, 2004. Related parties have subscribed
for U.S. $125,000 of the debentures.
Funds received $ 75,000
Funds held in trust 175,000
---------
Balance at June 30, 2002 250,000
Funds received subsequent to the year end 50,000
---------
Total $ 300,000
=========
9. SHARE CAPITAL
a. Authorized and Proposed
Unlimited number of common shares without par value
The company intends to present for shareholder approval at its 2002
annual general meeting a resolution to alter its existing share capital
into variable multiple voting common shares and subordinate voting
common shares. The variable multiple voting common share will be
identical to the subordinate shares except they will entitle the holder
to more than one vote calculated on a predetermined ratio between the
share classes. The variable multiple voting common shares will be
convertible into subordinate shares at a ratio of 1:1 with a mandatory
conversion if the then outstanding balance is less than 1,500,000
shares.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
9. SHARE CAPITAL (CONTINUED)
b. Issued
PRICE PER
SHARE SHARES CONSIDERATION
---------- ---------- ---------------
Balance June 30, 2000 15,756,728 $ 40,165,855
Shares issued
For cash - Private placement $ .30 3,003,340 901,002
For debt settlement $ .125 3,000,000 375,000
---------- ------------
Balance June 30, 2001 and 2002 21,760,068 $ 41,441,857
========== ============
c. Escrow Agreements
Issued and outstanding share capital includes 2,562,500 shares of the
Company which are subject to escrow agreements.
d. Share Purchase Options
Details of director, employee and consultants share purchase options are as
follows:
BALANCE BALANCE
JUNE 30, JUNE 30, EXERCISE
2001 CHANGE 2002 PRICE EXPIRY DATE
--------- -------- --------- --------- ----------------------------
1,100,000 (700,000) 400,000 $ .20 December 3, 2003
- 700,000 700,000 October 18, 2002
1,065,000 - 1,065,000 $ .20 September 14, 2002 (expired)
--------- -------- ---------
2,165,000 - 2,165,000
========= ======== =========
f. Share Purchase Warrants
BALANCE BALANCE
JUNE 30, JUNE 30, EXERCISE
2001 CHANGE 2002 PRICE EXPIRY DATE
--------- -------- --------- ---------- ---------------------------
3,000,000 - 3,000,000 $.15/2 wts November 30, 2003
3,003,340 - 3,003,340 $.30/2 wts November 30, 2003
--------- -------- ---------
6,003,340 - 6,003,340
========= ======== =========
Under the conversion terms of the convertible debentures the company is
obligated to issue 3,000,000 common shares and share purchase warrants by July
31, 2003.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
10. RELATED PARTY TRANSACTIONS
The loan payable is from a shareholder and is unsecured, non-interest
bearing and payable on demand.
Accounts payable includes $Nil (2001 - $5,756) owing to a company
controlled by a director/officer and a public company under common
management. The amounts owing are unsecured with no fixed repayment terms.
Related party transactions not separately disclosed elsewhere in these
financial statements were as follows:
2002 2001 2000
---------- ----------- -----------
Consulting or other fees paid to directors/officers or
to companies controlled by directors/officers $ 35,754 $ 59,769 $ 78,222
========== =========== ===========
Occupancy costs charged to companies controlled
by a director/officer and a public company under
common management $ 29,135 $ 52,280 $ 36,285
========== =========== ===========
Sale of marketable securities to a public company
under common management $ - $ - $ 25,400
========== =========== ===========
11. COMMITMENTS AND CONTINGENCIES
Subsequent to the year end, the Company entered into a management
agreement, with a company controlled by a director, which requires minimum
annual payments of approximately $118,000. The agreement contains a clause
requiring a termination payment of approximately $60,000.
The Company commenced an action to recover $264,000 claimed by certain
former officers as remuneration for services rendered and termination
payments. The amount has been paid into Court pending settlement of the
action and was expensed during 2000. Any recoveries will be recorded as a
reduction of costs in the period received.
12. INCOME TAXES
As at June 30, 2002, the Company has Canadian operating losses available to
reduce future years' taxable income of approximately $3,780,000. The losses
commence to expire in 2003. No future income tax benefit has been reflected
in the financial statements.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
13. SEGMENTED INFORMATION
The Company is organized based on geographic areas. Information by
reportable segment is as follows:
MEXICO AND
2002 CANADA USA OTHER TOTAL
---- ---------- ---------- ---------- ------------
Operations
Interest income $ (199) $ - $ - $ (199)
Amortization 912 - - 912
Administration and other 201,909 - - 201,909
---------- ---------- --------- ------------
Loss for the year $ 202,622 $ - $ - $ 202,622
========== ========== ========= ============
Total assets $ 196,370 $ - $ - $ 196,370
========== ========== ========= ============
MEXICO AND
2001 CANADA USA OTHER TOTAL
---- ---------- ---------- ---------- ------------
Operations
Interest income $ (22,169) $ - $ - $ (22,169)
Amortization 15,194 - - 15,194
Administration and other (143,580) 1,000,799 - 857,219
-------- --------- --------- ------------
Loss for the year $ (150,555) $1,000,799 $ - $ 850,244
========== ========== ========= ============
Total assets $ 73,070 $ 1 $ - $ 73,071
========== ========== ========= ============
MEXICO AND
2000 CANADA USA OTHER TOTAL
---- ---------- ---------- ---------- ------------
Operations
Interest income $ (11,067) $ - $ - $ (11,067)
Amortization 8,940 - - 8,940
Administration and other 621,944 1,375 493,071 1,116,390
---------- ---------- --------- ------------
Loss for the year $ 619,817 $ 1,375 $ 493,071 $ 1,114,263
========== ========== ========= ============
Total assets $ 64,049 $ 1 $ 105 $ 64,155
========== ========== ========= ============
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
14. RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED
IN THE UNITED STATES ("US GAAP")
These financial statements have been prepared in accordance with accounting
principles generally accepted in Canada. A description of accounting
principles that differ in certain respects from United States generally
accounting principles follows:
a. Income Taxes
For the purposes of U.S. GAAP, the Company adopted Financial Accounting
Standards Board Statement No. 109 "Accounting for Income Taxes".
Statement 109 changed the method companies use to account for income
taxes from the deferral method to an asset and liability method. As
indicated, the Company has unrecognized losses being carried forward for
income tax purposes. As there is no certainty as to utilization of the
losses, the benefit attributable thereto would be fully offset by a
valuation allowance. Accordingly, the application of Statement 109 does
not result in a material difference for U.S. GAAP accounting purposes.
b. Stock-Based Compensation
For purposes of U.S. GAAP, the Company has chosen to apply the intrinsic
value based method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB No. 25") "Accounting for Stock Issued to
Employees" for measuring the value of stock-based compensation. The
intrinsic value-based method requires that compensation expense be
recorded at the time of granting for the excess of the quoted market
price over the exercise price granted to employees and directors under
stock option plans. If a stock option is not exercised, the compensation
expense recorded in the previous period is reversed by decreasing the
compensation expense in the period of forfeiture.
For U.S. GAAP purposes, escrowed shares would be considered to be a
compensatory arrangement between the Company and the holder of the
shares. Accordingly, the difference between the fair value of shares at
the time the shares are eligible for release from escrow and the issue
price of the shares is recognized as a charge to income in the period
they are eligible for release from escrow.
c. New Accounting Standards
i. The Company has adopted the Statement of Financial Accounting
Standards No. 130 ("SFAS 130") "Reporting Comprehensive Income" with
no impact on U.S. GAAP differences.
ii. The Company does not have any derivative or hedging instruments and,
therefore, Statement of Financial Accounting Standards No. 133
("SFAS 133") "Accounting for Derivative Instruments and Hedging
Activity" has no impact on U.S. GAAP differences.
CENTRAL MINERA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002
(EXPRESSED IN U.S. DOLLARS)
14. RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED
IN THE UNITED STATES ("US GAAP") (CONTINUED)
c. New Accounting Standards (Continued)
The effect of the differences between Canadian GAAP and U.S. GAAP on the
balance sheets and statements of operations and deficit is summarized
below:
JUNE 30, 2002 2001 2000
-------- -------------- -------------- --------------
Share capital, under Canadian GAAP $ 41,441,857 $ 41,441,857 $ 40,165,855
Adjustment for APB No. 25 21,563 21,563 21,563
-------------- -------------- --------------
Share capital under U.S. GAAP $ 41,463,420 $ 41,463,420 $ 40,187,418
============== ============== ==============
Deficit, under Canadian GAAP $ (41,590,526) $ (41,387,904) $ (40,537,660)
Adjustment for APB No. 25 (21,563) (21,563) (21,563)
-------------- -------------- --------------
Deficit, under U.S. GAAP $ (41,612,089) $ (41,409,467) $ (40,559,223)
============== ============== ==============
YEAR ENDED JUNE 30, 2002 2001 2000
------------------ -------------- -------------- --------------
Loss for the period under Canadian GAAP $ (202,622) $ (850,244) $ (1,114,263)
Adjustment for APB No. 25 - - 655,312
-------------- -------------- --------------
Net (loss) for the year under U.S. GAAP $ (202,622) $ (850,244) $ (458,951)
============== ============== ==============
Net (loss) per share under U.S. GAAP $ (.01) $ (.04) $ (.03)
============== ============== ==============
There is no effect on the statement of cash flow for the
difference between Canadian GAAP and U.S. GAAP.
MANAGEMENT DISCUSSION AND ANALYSIS
CURRENT OPERATIONS
Central Minera Corp. (the "Company") was largely inactive during the year ended
June 30, 2002. Both during that year and subsequently, the principal efforts of
management have been related to the litigation commenced by the Company in the
Supreme Court of British Columbia to recover approximately US$264,000 paid out
to former management upon their resignation in April 1999. These funds were
ordered paid into Court. The litigation to determine entitlement to the funds is
scheduled to be heard by the Court in November 2002. If the Company is
successful in the litigation, it intends to apply any recovery to working
capital.
On July 18th, 2002, Ms. Anne Eilers resigned as President and a Director of the
Company and Mr. Michael Cytrynbaum was appointed a director and President in her
place. In connection with the change the Company surrendered its lease of office
space in North Vancouver, British Columbia and entered into an agreement with a
private company affiliated with Mr. Cytrynbaum pursuant to which the Company is
provided with certain management and administrative services and office
facilities.
Subsequent to the June 30, 2002 year end, the Company completed a convertible
debenture issue of US $300,000, US$250,000 of which was paid in cash and the
balance by discharge of a pre-existing indebtedness due on demand. The
debentures are unsecured, bear interest at 2% per annum and have a maturity date
of July 31, 2004. The debentures will be deemed to have been converted into
units of the Company on July 31, 2003 in the ratio of one unit for each US $0.10
in principal amount advanced. The proceeds of the sale of the debentures are
being applied to meet current working capital requirements.
GENERAL
The Company has a limited history of operations and has not generated any
operating revenues.
The Company's assets currently consist of:
o a 25% interest in five mineral claims in the Mackenzie Mining District in
the Northwest Territories;
o a 100% interest in the California Mine Crown Grants situated in the
Kootenay Land District of British Columbia. Under an Option to Purchase and
Royalty Agreement made as of November 13, 2001, as amended, an unrelated
third party has the option to acquire all of the Company's interest in
these claims for an aggregate consideration consisting of $65,000 Cdn in
cash and 300,000 shares payable in stages prior to December 18, 2004. To
date $5,000 Cdn has been paid in cash and 100,000 shares have been
delivered.
o a 15.72% interest in Cactus Gold Corp ("Cactus"), a private Nevada
corporation which owns certain mining properties including the Josh Claim.
RESULT OF OPERATIONS
(a) Year ended June 30, 2002 compared to the year ended June 30, 2001
During the year ended June 30, 2002, the Company incurred a loss of
$202,622, as compared to a loss of $850,244 for the year ended June 30,
2001. The difference is substantially attributable to the write-down of the
investment in Cactus of $1,000,799 in the year ended June 30, 2001. The
Company incurred administrative expenses of $234,565 in the year ended June
30, 2002 as compared to $232,834 in the year ended June 30, 2001.
(b) Year ended June 30, 2001 compared to the year ended June 30, 2000
During the year ended June 30 2001, the Company incurred a loss of
$850,244, as compared to a loss of $1,114,263 for the year ended June 30,
2000. The loss in the year ended June 30, 2001 the write-down of the
investment in Cactus of $1,000,799. In the year ended June 30, 2000, the
Company set up allowance for funds paid into court of $264,000 as well as
the write-down of the Company's investment in its Canadian and foreign
mineral properties of $582,468. Administration expenses before amortization
decreased to $218,000 for the year ended June 30, 2001 compared to $280,000
for the year ended June 30, 2000.
(c) Year ended June 30, 2000 compared to the year ended June 30, 1999
During the year ended June 30, 2000, the Company incurred a loss of
$1,114,263, as compared to a loss of $11,112,000 for the year ended June
30, 1999. The loss in the year ended June 30, 2000 included funds paid to
court of $264,000 as well as write-downs of its Canadian and foreign
mineral properties of $582,468. This compares to a write-down in mineral
property interests of $184,000 for the year ended June 30, 1999, an
$875,000 allowance for the lawsuit settlement and an $8,855,000 loss on the
sale of the Company's Nicaraguan subsidiary. Administration expenses before
amortization decreased to $280,000 for the year ended June 30, 2000 from
$1,238,000 for the year ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
(a) Working Capital
On June 30, 2002, the Company had a working capital of $101,329, as compared
to a working capital of $33,968 at June 30, 2001. As none of the Company's
mineral properties have advanced to the commercial production stage and it
has no history of earnings or cash flow from operation, the Company relies
on the sale of its equity
shares for its source of funds. During the year ended June 30, 2001, the
Company raised $901,002 from the sale of its shares. During the year ended
June 30, 2000 the Company raised $330,000 from the sale of its shares.
Subsequent to the year ended June 30, 2002, the Company raised $300,000
($250,000 received to June 30, 2002) through the sale of convertible
debentures. Cumulatively from the Company's inception, it has raised
$25,317,000 through the sale of its shares.
(b) Property Acquisitions and Divestures
The Company has limited financial resources and there is no assurance that
additional funding will be available to allow the Company to complete
sufficient work on any of its properties to determine the existence of gold
reserves, or if warranted, to establish the feasibility of production from
such reserves. Failure to obtain additional financing could result in delay
or indefinite postponement of further exploration and development with the
possible loss of properties.
The Company presently has no producing properties and the Company's material
properties contain no known mineral reserves; the limited activities on such
properties to date have been exploratory in nature. Except as disclosed
herein, the Company does not possess reliable information concerning the
history of previous operations including the names of previous operators, if
any, on any of its properties. This may all need to be reconsidered
depending on
(c) Financing
Subsequent to the year end, the Company completed a convertible debenture
issue for gross proceeds of US $300,000, $250,000 of which was paid in cash
and the balance by discharge of a demand liability of $50,000. The
debentures are unsecured, bear interest at 2% per annum and have a maturity
date of July 31, 2004. The debentures will be deemed to have been converted
into units of the Company on July 31, 2003 in the ratio of one unit for each
US $0.10 (3,000,000 units). Each unit will consist of, if the authorized
capital of the company includes variable multiple voting common shares, one
variable multiple voting common share and one non-transferable share
purchase warrant to acquire one subordinate voting common share at US $0.30
per share, otherwise, one common share and one non-transferable share
purchase warrant to acquire two common shares at US $0.30 per share before
July 31, 2004.
(d) Exploration Activities
The Company is not actively exploring any properties at this time.
(e) Market Risk Sensitive Instruments
The Company does not hold any market risk sensitive instruments other than
75,000 shares of Pinewood Resources Ltd. (book value $6,418).
(f) Forward Looking Statements
This report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities and
Exchange Act of 1934k, as amended (the "Exchange Act"). Any statements that
express or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions of future events or
performance (often, but not always, using words or phrases such as "expects"
or "does not expect", "is expected", "anticipates", or "does not
anticipate", "plans", "estimates", or "intends", or stating that certain
actions, events or results "may", "could", "would", "might", or "will" be
taken, occur or be achieved) are not statements of historical facts and may
be "forward-looking statements". Forward-looking statements are based on
expectations, estimates and projections at the time the statements are made
and include, but are not limited to, the statements under Management's
Discussion and Analysis of Financial Condition and Results of Operations and
located elsewhere herein regarding industry prospects and the Company's
financial position. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
Company's expectations are more fully disclosed in the Company's Form 20-F.
Important risks include the company's lack of cash flow and resultant need
for additional funding, the risks associated with resource exploration and
development, the fact that there are no proven reserves, risks associated
with the property title, currency fluctuation, metal prices, environment and
political situations. All subsequent written and oral forward-looking
statements attributed to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.
PACIFIC CORPORATE TRUST COMPANY
625 HOWE STREET - 10TH FLOOR VANCOUVER, B.C. V6C
3B8
TELEPHONE: (604) 689-9853 FAX: (604) 689-8144
November 15, 2002
B.C. Securities Commission Executive Director 701
W Georgia Street, 9th Floor Vancouver, B.C. V7Y
1L2
Dear Sirs\Mesdames:
RE: CENTRAL MINERA CORP
MAILING ON NOVEMBER 15, 2002
We confirm that on the above date, the following material issued by the subject
Company was forwarded by prepaid first class mail to all of the registered
members of the Company and to intermediaries in accordance with National
Instrument 54-101:
O Notice of Meeting O Information Circular
O Proxy O Supplemental Return Card
O Form 51-901F O Schedules B & C
O Annual Financial Statements for the Year
Ending June 30, 2002
The filing fee(s) for the financial statements have been remitted via SEDAR.
Yours truly,
PACIFIC CORPORATE TRUST COMPANY
"Heather Plume"
Heather Plume HP/jo
cc: TSX Venture Exchange cc: Central Minera Corp
cc: Alberta Securities Commission cc: Getz Prince Wells
cc: Registrar of Securities - YT cc: Steele & Co