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.
September 22, 2004
ITEM 3. NEWS RELEASE.
A news release was issued on September 22, 2004 through Canada
NewsWire and subsequently filed on SEDAR.
ITEM 4. SUMMARY OF MATERIAL CHANGE.
Breakwater Resources Ltd.'s ("Breakwater") earnings, cash flows and
common share price are highly sensitive to the price of zinc in
particular and commodity prices in general.
Following the acquisition of the Myra Falls operation, management of
Breakwater has calculated the sensitivity of Breakwater's earnings and
cash flow to changes in metal prices and in the US$/C$ exchange rate
based on production estimates for 2005.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE.
Breakwater's earnings, cash flows and common share price are highly
sensitive to the price of zinc in particular and commodity prices in
general.
Following the acquisition of the Myra Falls operation, management of
Breakwater has calculated the sensitivity of Breakwater's earnings and
cash flow to changes in metal prices and in the US$/C$ exchange rate
based on production estimates for 2005.
The following table illustrates these sensitivities.
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Sensitivities as reported in the Sensitivities for 2005
2003 Annual Report for 2004 (Cdn$ thousands)
(Cdn$ thousands)
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Zinc (US$0.01/pound) 3,010 3,202
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Lead (US$0.01/pound) 315 284
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Copper (US$0.01/pound) 72 311
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Silver (US$0.10/ounce) 174 291
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Gold (US$10.00/ounce) 436 725
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Exchange rate (US$0.01/Cdn$)* 763 1,342
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*When the Canadian dollar weakens against the US dollar earnings would
increase.
The Company expects to produce 403 million pounds of zinc in
concentrate this year, 360 million pounds in 2005 and 404 million
pounds in 2006. The 2005 production estimate
anticipates the closure of both the Bouchard-Hebert and Bougrine mines
and the 2006 production estimate anticipates the start-up of Langlois.
This material change report on Form 51-102F3 contains forward-looking
statements within the meaning of the United States Private Securities
Legislation Reform Act of 1995. When used in this material change
report 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 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.
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
ITEM 9. DATE OF REPORT
October 1, 2004.
BREAKWATER RESOURCES LTD.
"E. Ann Wilkinson" (signed)
_____________________________________
E. Ann Wilkinson
Corporate Secretary
2.