EXHIBIT 1
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1. NAME AND ADDRESS OF COMPANY.
Breakwater Resources Ltd.
Suite 950
95 Wellington Street West
Toronto, Ontario
M5J 2N7
ITEM 2. DATE OF MATERIAL CHANGE.
July 8, 2004
ITEM 3. NEWS RELEASE.
A news release was issued on July 8, 2004 through Canada NewsWire and
subsequently filed on SEDAR.
ITEM 4. SUMMARY OF MATERIAL CHANGE.
Breakwater Resources Ltd. announced that it has concluded a definitive
agreement with Boliden AB of Stockholm, Sweden to acquire 100% of the
shares of Boliden Westmin (Canada) Ltd. ("BWCL") which owns, amongst
other things, 100% of the Myra Falls zinc, copper, gold and silver
mine located on Vancouver Island, BC.
To purchase all of the shares of BWCL, Breakwater will issue to
Boliden 18 million shares, with a value of approximately $7.5 million,
and 5 million warrants exerciseable at $1.00 per share and expiring
January 27, 2009.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE.
Please see attached news release dated July 8, 2004.
ITEM 6. RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102.
Not applicable.
ITEM 7. OMITTED INFORMATION.
No material information was omitted from this material change report.
ITEM 8. EXECUTIVE OFFICER
E. Ann Wilkinson
Corporate Secretary
Breakwater Resources Ltd.
Telephone: (416) 363-4798 Ext. 277
2.
Item 9. Date of Report
July 16, 2004.
BREAKWATER RESOURCES LTD.
"E. Ann Wilkinson" (signed)
-----------------------------------
E. Ann Wilkinson
Corporate Secretary
[LOGO] Breakwater Resources Ltd.
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BREAKWATER RESOURCES LTD.
95 WELLINGTON STREET WEST, SUITE 950
TORONTO, ONT., M5J 2N7
Tel: (416) 363-4798
Fax: (416) 363-1315
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NEWS RELEASE
BREAKWATER SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
BOLIDEN WESTMIN (CANADA) LTD. FROM BOLIDEN AB
July 8, 2004 ... (BWR - TSX) BREAKWATER RESOURCES LTD. is pleased to announce
that it has concluded a definitive agreement with Boliden AB of Stockholm,
Sweden to acquire 100% of the shares of Boliden Westmin (Canada) Ltd. ("BWCL")
which owns, amongst other things, 100% of the Myra Falls zinc, copper, gold and
silver mine located on Vancouver Island, BC.
To purchase all of the shares of BWCL, Breakwater will issue to Boliden 18
million shares, with a value of approximately $7.5 million, and 5 million
warrants exerciseable at $1.00 per share and expiring January 27, 2009.
Management of Breakwater anticipates that, on a pro-forma basis, the acquisition
of BWCL will provide the following benefits to its shareholders.
o Be accretive to Breakwater's EPS and CFPS, metal production and ore
reserves.
o Result in the proportion of gross sales revenue derived from the sale of
copper concentrates increasing from 3% to 14% at current metal prices.
o Result in the proportion of gross sales revenue derived from the sale of
zinc concentrates decreasing from approximately 80% to 71% at current metal
prices.
o Increase Breakwater's overall size and position on the list of the world's
zinc concentrate producers.
o Add an additional mine with a minimum mine life of seven years, with a high
probability of twelve years' mine life.
o Increase Breakwater's zinc production by 68% over the period 2004 to 2010.
o Increase Breakwater's copper, gold and silver production by 367%, 139%, and
98% respectively.
o Increase Breakwater's net revenues by 85% over the period 2004 to 2010.
o Place Breakwater in a very favourable position for product delivery to its
valued Asian customers.
As part of the transaction, Breakwater will assume environmental liabilities of
approximately $21.5 million. However, Boliden is required to maintain the posted
environmental Letters of Credit for a period of one year, after which time
Breakwater is required to retire Boliden's obligation in this regard.
In addition to the Myra Falls mine other assets that will remain in BWCL
include, but are not limited to, a convertible debenture of Taseko Mines Limited
(TKO) with $17 million outstanding, 11.3 million shares of Expatriate Resources
Ltd., which owns a zinc property in the Yukon, and some other minor share
holdings in Eastmain Resources Inc., Majestic Gold Corp., Thor Exploration Ltd.,
E-Energy Ventures Inc., Caribbean Resources and Bret Resources.
The President and Chief Executive Officer of New Boliden, Mr. Jan Johansson,
will join the Board of Directors of BWR.
The closing is expected to take place the third week of July, and in any event,
no later than August 13, 2004, following which Breakwater will immediately take
over the management of the Myra Falls mine. A senior executive of Breakwater has
been on site for the past several weeks, working closely with local management
and preparing for an orderly transition.
Breakwater has commenced metallurgical testing of the ores in order to finalize
the design of a possible new mill flow sheet that would incorporate the recovery
of lead from the ores and provide an additional revenue source from lead
concentrate. It is anticipated that this circuit change will also result in an
improvement in the quality of the copper concentrate produced at the mine and
thus further increase revenue.
Mr. Torben Jensen, P.Eng., Breakwater's qualified person, in conjunction with
qualified persons from BWCL, estimates the Mineral Reserves and Resources for
the Myra Falls mine as of December 31, 2003 to be as shown in the following
table:
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TONNES ZN CU AU AG
(000S) (%) (%) G/T G/T
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Proven and Probable Reserves 7,747 6.3 1.2 1.2 40
Measured and Indicated Resources* 10,388 7.8 1.4 1.7 56
Inferred Resources 2,284 4.9 1.1 1.4 57
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*Measured and Indicated Resources include Proven and Probable Reserves.
The following table outlines the Consolidated Mineral Resources and Mineral
Reserves for Breakwater, including Myra Falls, as of December 31, 2003.
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TONNES ZN PB CU AG AU
(000'S) (%) (%) (%) (G/T) (G/T)
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PROVEN AND PROBABLE MINERAL RESERVES
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MYRA FALLS 7,747 6.3 - 1.2 40 1.2
BOUCHARD-HEBERT 1,126 6.1 - 0.4 27 0.9
BOUGRINE 475 10.2 1.8 - - -
EL MOCHITO 2,686 6.5 1.8 - 87 -
EL TOQUI 2,801 7.4 - - - 1.7
LANGLOIS 3,323 10.8 - 0.8 52 0.1
CARIBOU 5,057 6.5 3.4 - 90 -
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TOTAL 23,215 7.2 - - - -
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MEASURED AND INDICATED MINERAL RESOURCES*
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MYRA FALLS 10,388 7.8 - 1.4 56 1.7
BOUCHARD-HEBERT 1,218 6.9 - 0.4 30 1.0
BOUGRINE 768 11.4 2.1 - - -
EL MOCHITO 3,599 7.9 2.4 - 108 -
EL TOQUI 3,499 8.1 - - - 1.6
LANGLOIS 4,981 11.1 - 0.8 54 0.1
CARIBOU 5,152 7.4 3.9 - 95 -
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TOTAL 29,605 8.4 - - - -
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INFERRED MINERAL RESOURCES
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MYRA FALLS 2,284 4.9 - 1.1 57 1.4
BOUCHARD-HEBERT - - - - - -
BOUGRINE 68 10.7 1.9 - - -
EL MOCHITO 2,911 7.3 3.2 - 101 -
EL TOQUI 2,990 8.4 - - - 0.4
LANGLOIS 1,255 9.7 - 0.5 40 0.1
CARIBOU 4,163 6.7 3.2 - 98 -
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TOTAL 13,671 7.2 - - - -
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*Measured and Indicated Resources include Proven and Probable Reserves.
Disclosure on Reserves and Resources, other than Myra Falls, is also included in the
Company's Annual Report on Form 20-F filed on SEDAR.
Bill Heath, Vice President, Administration and presently on site for Breakwater
said, " I am confident that the salaried and hourly workforces in place at Myra
Falls are skilled and competent people with the ability to carry out their
duties in a safe, efficient and productive manner. We look forward to working
with the team at Myra Falls and participating in the community of Campbell River
and the broader community of British Columbia".
Breakwater Resources Ltd. is a mineral resource company engaged in the
acquisition, exploration, development and mining of base metal and precious
metal deposits worldwide. Breakwater has four producing zinc mines: the
Bouchard-Hebert mine in Quebec, Canada; the Bougrine mine in Tunisia; the El
Mochito mine in Honduras; and the El Toqui mine in Chile. The Company also owns
the Langlois mine in Canada, which is currently being prepared for a development
program to bring the mine back into production.
This news release contains forward-looking statements within the meaning of the
United States Private Securities Legislation Reform Act of 1995. When used in
this news release the words "anticipate", "believe", "intend ", "estimate",
"plans", "projects", "expect", "will", " budget", "could", "may", and similar
expressions are intended to identify forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Important
factors that could cause actual results to differ materially from those
currently anticipated are described above and in the Company's most recent
Annual Report on Form 20-F under "Risk Factors" on file with the U.S. Securities
and Exchange Commission and Canadian provincial securities regulatory
authorities. The Company disclaims any obligation to update or revise any
forward-looking statements whether as a result of new information, events or
otherwise.
For further information please contact:
Colin K. Benner Richard Godfrey
President and Vice-President and
Chief Executive Officer Chief Financial Officer (Acting)
(416) 363-4798 Ext. 269 (416) 363-4798 Ext. 276
E. Ann Wilkinson Bill Heath
Corporate Secretary Vice President of Administration
(416) 363-4798 Ext. 277 (416) 363-4798 Ext.267
Email: investorinfo@breakwater.ca Website: www.breakwater.ca