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Name | Symbol | Market | Type |
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21Shares AG | EU:MANA | Euronext | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.0051 | 0.29% | 1.7456 | 1.8977 | 1.8164 | 1.9217 | 1.7267 | 1.7649 | 4,510 | 16:35:02 |
RNS Number:8612T Mano River Resources Inc 05 January 2004 MANO RIVER RESOURCES INC NEWS RELEASE 05 January 2004 No: 2004/1 TSX-Venture Exchange (Trading Symbol: MNO) London Stock Exchange - AIM (Trading Symbol: MANA) PUBLICATION OF THIRD QUARTER 2003 ACCOUNTS The Board of Mano River Resources Inc. is pleased to release the Accounts of the Company for the quarter ended October 31st 2003, together with the Management Discussion & Analysis. On behalf of the Board of Mano River Resources Inc. Tom Elder President and CEO For further information on Mano River Resources and its exploration programme, you are invited to visit the Company's website at www.manoriver.com or contact one of the following: Tom Elder President and CEO UK +44 (0) 1235 810 740 Guy Pas Chairman Switzerland +41 22 758 2151 Anthony Rhatigan Vice-Chairman Mobile +44 (0)7785 297 348 Raz Hussein Controller Canada +1 (604) 689 1700 Dru Edmonstone Seymour Pierce UK +44 (0) 20 7107 8000 Gary Middleton Capital PR UK +44 (0) 20 7902 0703 The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release Schedule 'C' Management Discussion and Analysis for the Quarter Ending October 31st, 2003 The Consolidated Financial Statements for Mano River Resources Inc. ("Mano" or the "Company") covering the quarter ending October 31st, 2003 are provided herein for your review. Unless otherwise indicated, all amounts herein are in US dollars. Description of Business Mano is engaged in the acquisition, exploration and development of gold and diamond properties. Through its subsidiaries, it holds interests in properties located in Guinea, Liberia and Sierra Leone. Operations and Financial Condition The Company completed the period ending October 31st, 2003 with a net loss of $387,901 as compared to a net loss of $275,761 for the corresponding quarter in 2002. This is a $112,140 increase in net loss compared to 2002. This increase was primarily due to a write-off of resource property of $90,090 in the second quarter of 2003. The operating expenses excluding the write-off of resource property amounted to $301,284 for Q3 2003, compared with $283,419 for Q3 2002. The increase of $17,865 over 2002 was due to increases in administrative expenses. Some administrative expense categories experienced higher costs: bank and interest charges increased mainly due to interest payable on a convertible debenture. Investor communications expense increased significantly during the quarter, as the Company focused its effort on expanding investor awareness of the Company's exploration projects. Revenue for the quarter, consisting of interest income, was $3,473 as compared to $7,658 in 2002, a decrease of $4,185 as a result of lower interest rates. Total assets on October 31, 2003, were $12,756,697 as compared to $12,253,662 at year ended January 31, 2003. As at October 31, 2003, the Company had total current liabilities of $290,465 as compared to $402,859 at year ended January 31, 2003. Current liabilities include $208,338 due to related parties for management fees, bridging loans and reimbursable expenses. At October 31, 2003, the Company had cash and cash equivalents of $162,379 as compared to $39,643 at October 31, 2002. The Company had as at October 31, 2003 a working capital deficiency of $101,194 as compared to deficiency of $466,439 at October 31st 2002. The Company's ability to continue its operations is dependent on its capacity to secure additional financing on an ongoing basis and, while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. In order to continue developing its mineral properties, management actively pursues such additional sources of financing. Exploration and Project Development Exploration activity during the quarter under review continued to be focused on gold and diamonds in Sierra Leone. a. *Diamond Exploration - Sierra Leone In August 2003, Mano announced that it had received further encouraging results from diamond exploration within its two Exclusive Prospecting Licences (EPLs) in the Kono diamond district of Sierra Leone, the highlights of which were as follows: *Five 1 tonne Mini-Bulk Samples collected from Lion-1, 2, 3 and 5 dykes *Macrodiamonds recovered from Lion-1, 2 and 5 samples *Preliminary (diluted) grades of up to 94 cpht (in Lion-5) *Additional 200 loam samples collected over high interest stream anomalies in area of no previously known kimberlites The first mini-bulk sample from the Lion-1 dyke having returned an encouraging grade of 65cpht, Mano then embarked on further mini-bulk sampling of the Lion-1, 2, 3 and 5 kimberlite dykes. These samples, each comprising 1 tonne of kimberlite, were washed and jigged on site to recover diamonds in the +0.71 to -2.0mm and +2.0mm size fractions. The results are set out in Table 1 below: Table 1 - Results of Mini-Bulk Samples Kimberlite Sample No. +0.71mm No. +2.0mm Total Weight Calculated Number Diamonds Diamonds (carats) Grade (cpht) Lion-1 50225 2 1 0.15 15 Lion-2 50223 12 3 0.46 46 Lion-2 50231 35 5 0.45 45 Lion-3 50227 0 0 0 0 Lion-5 50229 15 5 0.94 94 All of the diamonds recovered from these samples were weighed and described by John Gurney's Mineral Services laboratory in Cape Town. A significant grade of 94cpht was obtained for a sample of the Lion-5 dyke, which has been mapped for a distance of approximately 1km. Mano's stream and loam sample results show that this dyke extends in a westerly direction well into Mano's EPL and eastwards into the immediately adjacent DiamondWorks-owned ground, where it links with the latter's Koidu Pipes and Dykes project on which commercial mining reportedly commenced in December. Sampling of a further loam block in the Yengema East EPL was completed and the 200 samples exported to South Africa for analysis. During the course of the sampling large blocks of hypabyssal kimberlite float were identified which appear to represent an undiscovered kimberlite in an area where there are no previous kimberlites identified. Intensive artisanal mining within the block points to these as yet undiscovered kimberlites potentially being diamond bearing. b. *Gold Exploration - Sierra Leone Mano's portfolio of gold targets in Sierra Leone comprises: i. *The Joint Venture (JV) with Golden Prospect Plc (AIM:GOL) over contiguous exploration licences in the Sonfon area, at the northern end of the Sula Mountains greenstone gold belt. The JV has defined a 3km long gold in soil anomaly, below which trenching has revealed a gold-bearing stockwork vein system with a best trench intersection of 7.3m @ 7.4g/t. (see www.manoriver.com/mano/projects/gold_sl_sonfon.shtml). ii. *The two strategically located Nimini Central and Nimini South EPLs within the Nimini Hills greenstone gold belt, which host parts of known lode gold deposits shared with two EPLs held by AfCan Mining (TSX-V:AFK), over which AfCan has a Heads of Agreement for a Joint Venture with Ashanti Goldfields (see www.manoriver.com/mano/projects/gold_sl_nimini.shtml) iii. *The North and South Pampana EPLs containing the Yirisen gold deposit within the Yirisen-Massamank mineralised trend, 30km north of the Baomahun gold deposit. In November 2003, Mano announced that it had signed a Letter of Agreement for joint venturing all of the above EPLs with Golden Star Resources. See below for details. In September 2003, Mano announced that a review of historic data had defined high-grade drill targets at the Yirisen gold project on the North Pampana EPL and extended its potential strike length. The key highlights were: *Drill targets defined beneath high grade gold zone with best trench intersect of 6.4m@23g/t (see news release of 11th September 2003 for details) *Total inferred strike of Yirisen gold system extends over 4km and remains open The Yirisen project is located 150km east of Freetown, within Mano's North Pampana EPL which, together with the Company's contiguous South Pampana EPL, targets crustal scale gold mineralised shear zones across 140km2 of the southern end of the Sula Mountains greenstone gold belt. The EPLs include stretches of the Pampana River comprising one of Sierra Leone's richest alluvial gold mining districts. Reconnaissance work undertaken in May 2003 by independent consultants ACA Howe International Ltd, indicated that artisanal mine workings currently extend for 1.5km to the southwest of the project, to depths of up to 15m. The total inferred strike length for the Yirisen gold system is currently estimated to be in excess of 4km and remains open along strike. A targeted follow up programme including drilling, trenching and soil surveying is currently being planned and, subject to financing, will be undertaken to test the vertical continuation of gold mineralization and the strike extension of the mineralized system. Detailed maps are available on the following webpage http://www.manoriver.com/mano/ projects/gold_sl_pampana.shtml. In the release, on the subject of the results from the historic survey data, Mano's CEO, Dr Tom Elder commented: "The availability of such a comprehensive exploration database for a project which exhibits the apparent high potential seen at Yirisen is rare. The extensive gold in soil anomalies, which indicate the gold system is open along strike and which are coincident in places with high grade trench and drill results, means the Yirisen gold project is at the drill ready stage. The results from the historic database indicate that Yirisen has many of the hallmarks of a significant gold deposit with excellent exploration potential". Three sets of historic data have been integrated into Mano's Geographical Information System (GIS), as detailed below. i. *Geological Survey of Sierra Leone - 1958 Hard rock gold mineralization first noted at Yirisen by the Geological Survey of Sierra Leone in 1958. Seven north easterly trending sub-vertical lodes of gold mineralised quartz veining, averaging 150m in length identified. Sampling returned numerous gold intersections in trenches, with a best value of 6.4m grading 23 g/t gold (see news release of 11th September 2003 for complete data). ii. *Northern Province Prospecting Venture (NPPV) - mid 1960s In the mid 1960s, the NPPV undertook mapping, soil geochemical surveying, trenching and drilled three holes at Yirisen yielding a best intersection in hole K-1 of 0.51m grading 24.5 g/t gold (see news release of 11th September 2003 for complete data). The distribution of results from the drill holes suggests that only zones containing visible gold may have been sampled, while the host rock material between these intercepts appears to have not been sampled. Based on maps prepared by NPPV, it is considered likely by Mano that drill hole K-2 was collared too far east to have intersected the zone of mineralization. iii. *United Nations Revolving Fund (UNRF) - mid 1980s Between 1984 and 1987, the United Nations Revolving Fund (UNRF) for Natural Resources Exploration undertook an extensive regional programme of gold exploration in the Pampana district. Stream sediment sampling, soil sampling, topographic surveying, mapping, pitting and trenching were undertaken. Two areas, namely, Yirisen and Masamank (South Pampana EPL) were targeted for detailed follow up. At Yirisen, soil sampling grids were extended 2.5km north-eastward from the northern limit of known gold mineralization. Two anomalous gold zones were defined by a 50 parts per billion (ppb) gold-in-soil contour. The most southerly anomaly comprised three parallel mineralised trends, one of which continues for 700m from the mapped extent of the Yirisen project. Some 1,200m north-east of the known mineralization, a second 1,500m by 200m gold anomaly extends along the contact between amphibolite and talc schist lithologies. A second grid, 400m east of the main Yirisen grid at Kalmoro, identifies a 750m by 500m northeast trending anomalous gold zone. LIBERIA AND GUINEA There was no exploration activity during the period under review. Programmes in Liberia will recommence as soon as an improving security situation allows. Investor Relations Press Releases issued during the quarter covered such issues as the exercise of warrants, recovery of diamonds from Kono dykes, and definition of drill targets at Yirisen. Subsequently, Mano announced the signature of the Heads of Agreement with Golden Star over Yirisen and the commencement of a placement aimed at raising up to GBP2.5m (see below). Mano also announced, in November 2003, the appointment of Capital Integrated Marketing Communications (Europe) Ltd ("Capital"), to act as its financial public relations adviser in the UK. This ensures continuity of service, following the move to that company of Mano's London-based investor relations manager, Mr Gary Middleton. Capital is a financial PR company with offices in Australia, London and China, specialising in natural resources. Its strengths lie in the personal relationship it has with the media and with the financial community, through the extensive contacts and experience of its staff. Capital will provide a valuable service to Mano, aimed at lifting its profile so as to achieve a better appreciation in the investment community and media of the Company's portfolio of gold and diamond exploration projects in West Africa. The increased coverage of the Company's activities in both the specialized and general press was exemplified by Mano recently featuring simultaneously in no fewer than six UK national papers in one day, including the Guardian, Independent, Daily Mail and Telegraph. Corporate On 7th August 2003, Mano announced that it had received notice of the conversion of warrants covering 1,250,000 fully paid common shares in the Company at 3p per share for total proceeds of #37,500. Dealings in the shares on AIM commenced on Tuesday 12 August 2003. As agreed with the parties concerned at the time of the June 2003 Private Placement, the Board announced in August that it had approved arrangements to satisfy accrued amounts totalling GB#70,485 due for payment as of 31 January 2003 with Mano shares at the same price as the placement, i.e. GB#0.025. The debt settlement subsequently received regulatory approval by the TSX Venture Exchange and the 2,819,397 new shares resulting from the settlement were admitted to trading on AIM. The shares for debt settlement, in combination with the June private placement, was seen as strengthening Mano's financial position, as it aggressively pursues exploration of its promising mineral properties. The debt settlement represented amounts mainly incurred up to the end of the 2002-03 financial year and owing directly or indirectly to directors, or companies with which they are associated, and senior officers of Mano for directors' fees, management services, reimbursable expenses and loan advances supporting exploration. The Board considers that the settlement of these amounts in shares helps to preserve the Company's cash as it continues to advance exploration of its properties. On August 14th, 2003, the Company granted a total of 905,000 incentive stock options ("Options") to certain employees and directors to purchase common shares in the capital stock of the Company, including 100,000 each to directors Malcolm Burne and Jonathan Challis. The Options are exercisable at a price of Cdn$0.10 per share for a period of five years ending on August 14th 2008 and were subsequently approved by the TSX Venture Exchange. Subsequent Events - Corporate On November 25th, Mano announced that it had signed a Letter of Agreement ("LoA") with Golden Star Resources ("GSR"), containing all the main terms of a proposed joint venture covering three licence packages ("the Joint Venture Licences") within the highly prospective greenstone gold bearing belts in Sierra Leone. About GSR GSR is a gold producer with an aggressive growth strategy in West Africa. Its major assets are located in Ghana, where it holds interests in the Bogoso/ Prestea open-pit gold mine, the Prestea underground mine, and the Wassa gold project. GSR has gold reserves of 3 million ounces and is forecast to produce 350,000 ounces per year in 2005. Its shares are listed on the TSX (GSC) and AMEX (GSS) markets. Regarding the LoA Mano's CEO, Dr Tom Elder, commented: "Golden Star are the perfect partner for Mano. They are mainly West Africa focussed, have a proven ability to build and operate major gold mines and, like Mano, have an aggressive growth strategy. Through its pioneering approach (started in 1996) Mano was able to select what are generally considered to be three of the country's top gold prospects. Once GSR has earned its equity interest, Mano has ensured that it will have the option to contribute pro rata funding to each prospect in order to maintain its 49% interest through to gold production." Terms of the LoA Under the terms of the LoA, GSR can earn a 51% interest in the gold rights of the licences currently held by Mano, as follows: 1. *Pampana North, Pampana South Licences (termed hereafter Pampana Licences), 2. *Sonfon North and Sonfon South Licences (termed hereafter Sonfon Licences), 3. *Nimini Central and Nimini South Licences (termed hereafter Nimini Licences) See http://www.manoriver.com/mano/projects/gold_sl_overview.shtml for the location of the Joint Venture Licences. The LoA provides for a 60 day period for due diligence and the completion of the full Joint Venture Agreement. GSR will make an investment of US$6M over a staged four-year period in order to earn a 51% interest in the Joint Venture Licences, earning a final equity of up to either 71% or 85% if Mano does not co-fund respectively the Feasibility Study nor mine development. The main terms of the LOA are as follows: Stage 1 GSR commits to spend a minimum US$1,000,000 by 31 December 2004, to earn the right to proceed to Stage 2. Mano will operate an agreed programme during this period. No equity will be earned by GSR at this stage. A decision to proceed with the next stage must be made by 31 December 2004. Stage 2 GSR spends up to US$1,750,000 on the projects by 31 December 2005, with Mano operating an agreed programme. No equity will be earned by GSR at this stage. A decision to proceed with the next stage must be made by 31 December 2005. Stage 3 GSR spends a further US$2,500,000 on the projects and may elect to manage and operate at the beginning of this stage. The expenditure must be met by 31st August 2006. Upon completion of this stage GSR will have earned a 51% equity in the Nimini and Sonfon Licences, subject to having expended a minimum of US$2M and US$1.5M respectively on these two projects. Stage 4 GSR may spend a further US$750,000 on the Pampana Licences by 31 December 2007 to earn a 51% interest. A decision to proceed with this stage must be made by 31 December 2006. At the end of this stage GSR will have earned a 51% interest in the Pampana Licences. Within 120 days of completing Stage 3 in the case of the Nimini and Sonfon Licences, and Stage 4 in the case of the Pampana Licences, GSR may elect to proceed to a Feasibility Study (FS) for any or all of the projects. Mano has the right to elect to contribute pro-rata to the FS to retain its 49% equity. If it decides not to do so, GSR may sole-fund the FS to earn a further 14% interest, thereby taking its equity to 65%. Upon completion of a positive FS on any or all of the projects GSR may elect to proceed to mine development. Mano has the right to contribute pro-rata to any mine development to retain its 49% equity or dilute to either a 15% or 29% free carried interest depending on its earlier elections to co-fund the feasibility study and mine construction, GSR thereby advancing to a 71% or 85% equity depending on elections made. In either case, Mano will retain a 2% Net Smelter Return (NSR) royalty on production in excess of the first 1M oz of gold from each project. The proposed Joint Venture Agreement remains subject to regulatory approval and definitive documentation. On December 10th 2003, the Company announced that it had arranged, subject to regulatory approval, a brokered Private Placement to raise gross proceeds of between GBP1.5 million and GBP2.5 million. The Placement at a price of GBP0.05 per common share was arranged in the UK of 20 million common shares through Williams de Broe and up to 30 million shares through Seymour Pierce. Commission of 4% will be paid. Application will be made for approval of the Placement by the TSX Venture Exchange and for the new shares to be admitted to trading on AIM. The proceeds of the Placement will be used by Mano to continue the Company's exploration programme over its range of promising gold and diamond targets in the Mano River Union countries, particularly kimberlite diamond exploration in Sierra Leone and advancing its gold projects in western Liberia, and for general working capital purposes. The Chairman and CEO visited both Sierra Leone and Liberia in November and, with increasing market recognition of the recent positive evolution in the regional political and economic landscape, Mano is starting to capitalise on its position as the pre-eminent gold and diamond explorer in the sub-region. Subsequent Events - Exploration In November the Company announced the results of exploration work under way at Yirisen in Sierra Leone, highlights being: *3.75 km long gold system open along strike *Zone of mineralisation locally up to 200m wide *5,000m - 10,000m multi-rig drill programme planned to produce resource estimate Independent consultants ACA Howe International Ltd reported from a visit to Yirisen that several bands of high-grade gold mineralization occur over a total width of up to 200m. Artisanal workings confirm that gold is not solely restricted to the high-grade veins and that, within both the oxide and sulphide zones, it is partially free milling. Mano's geological field crews have now completed a surface exploration programme, involving cutting more than 400 channel samples, aimed at verifying previous sampling. This will enable an aggressive first phase drilling programme to be designed to thoroughly test the mineralization and, subject to results obtained, permit the estimation of a preliminary resource. It is anticipated that this drill programme will commence in the first quarter of 2004. The channel samples have been shipped to OMAC in Ireland, with results expected early in January 2004. Consolidated Balance Sheets (Prepared by Management without audit) (Stated in U.S. Dollars) Nine months Year ended ended October January 31, 31, 2003 2003 $ $ (unaudited) (audited) ---------------------- --------- --------- ASSETS Current Cash and cash equivalents 162,379 184,116 Accounts receivable 32,892 2,139 ---------------------- --------- --------- 195,271 186,255 Investments (Note 3) 34,496 34,496 Resource properties (Note 4) 3,955,000 4,045,090 Deferred exploration costs 8,231,320 7,647,211 Reclamation bonds (Note 5) 340,610 340,610 ---------------------- --------- --------- 12,756,697 12,253,662 ---------------------- --------- --------- LIABILITIES Current Liabilities Accounts payable and accrued liabilities 88,127 97,664 Due to related parties (Note 9) 208,338 305,195 ---------------------- --------- --------- 296,465 402,859 Provision for reclamation (Note 5) 340,610 340,610 Convertible debenture (Note 8) 216,973 138,723 SHAREHOLDERS' EQUITY Share capital (Note 6) 16,712,859 15,867,323 Subscriptions (Note 7) 73,544 - Equity component of convertible debenture 96,000 96,000 Cumulative translation difference (21,755) (21,755) Deficit (4,957,999) (4,570,098) ---------------------- --------- --------- 11,902,649 11,371,470 ---------------------- --------- --------- 12,756,697 12,253,662 ---------------------- --------- --------- Consolidated Statements of Loss (Prepared by Management without audit) Stated in U.S. Dollars) Three months Three months Nine months Nine months ended October ended October ended October ended October 31, 2003 31, 2002 31, 2003 31, 2002 $ $ $ $ (unaudited) (unaudited) (unaudited) (unaudited) -------------- -------- -------- -------- -------- Revenue Interest income 1,267 3,151 3,473 7,658 -------------- -------- -------- -------- -------- Expenses Administrative and office expenses 1,326 832 3,995 4,494 Bank and interest charges 1,014 191 8,799 512 Directors fees 6,000 8,000 8,000 21,000 Foreign exchange loss (gain) (1,190) (3,779) 91 922 Investor communications 20,033 - 47,001 - Loss on sale of investments - - - 5,568 Management fees 24,000 12,000 59,500 67,500 Mine maintenance expenses 1,479 12,292 33,469 41,212 Nominated broker and adviser 6,129 9,959 26,187 32,930 Professional fees, legal, audit and accounting 19,623 11,833 75,294 76,776 Transfer agent and regulatory fees 20,628 2,354 37,101 26,405 Travel and promotion - - 1,847 6,100 -------------- -------- -------- -------- -------- 99,042 53,682 301,284 283,419 -------------- -------- -------- -------- -------- Loss before under noted item (97,775) (50,531) (297,811) (275,761) Write-off of resource property - - (90,090) - -------------- -------- -------- -------- -------- Loss for the period (97,775) (50,531) (387,901) (275,761) -------------- -------- -------- -------- -------- Loss per share (0.001) (0.000) (0.002) (0.002) -------------- -------- -------- -------- -------- Consolidated Statements of Deficit (Prepared by Management without audit) Stated in U.S. Dollars) Nine months Year ended ended October January 31, 31, 2003 2003 $ $ (unaudited) (audited) --------------- --------- --------- Deficit, Beginning of year -4,570,098 -4,217,881 Loss for the Period (387,901) (352,217) --------------- --------- --------- Deficit, End of Period (4,957,999) (4,570,098) --------------- --------- --------- Consolidated Statements of Cash Flows (Prepared by Management without audit) Stated in U.S. Dollars) Three months Three months Nine months Nine months ended October ended October ended October ended October 31, 2003 31, 2002 31, 2003 31, 2002 $ $ $ $ (unaudited) (unaudited) (unaudited) (unaudited) --------------- -------- --------- --------- --------- Operating Activities Loss for the period (97,775) (50,531) (387,901) (275,761) --------------- -------- --------- --------- --------- Changes in non-cash working capital accounts Loss on sale of investments - - - 5,568 Write-off of resource property - - 90,090 - Accounts receivable (23,998) 2,168 (30,753) (3,386) Accounts payable (32,225) 76,128 (9,537) 19,830 --------------- -------- --------- --------- --------- (153,998) 27,765 49,800 (253,749) --------------- -------- --------- --------- --------- Financing Activities Issuance of share capital (net of costs) - - 728,989 631,412 Subscriptions 73,544 73,544 - Proceeds from sale of investments - - - 94,432 Convertible debenture - - 78,250 200,000 Due to related parties 71,607 56,470 19,690 (70,188) --------------- -------- --------- --------- --------- 145,151 56,470 900,473 855,656 --------------- -------- --------- --------- --------- Investing Activities Resource properties - Acquisition of resource properties - - - (86,196) Deferred exploration expenditures (247,702) (247,835) (584,109) (601,166) --------------- -------- --------- --------- --------- (247,702) (247,835) (584,109) (687,362) --------------- -------- --------- --------- --------- Increase ( Decrease) In Cash (256,549) (163,600) (21,737) (85,455) Cash, Beginning of Period 418,928 203,243 184,116 125,098 --------------- -------- --------- --------- --------- Cash, End of Period 162,379 39,643 162,379 39,643 --------------- -------- --------- --------- --------- Supplemental disclosure of non-cash financing and investing activities During the quarter ended October 31, 2003, the Company: Issued 2,819,397 common shares in settlement of $116,547 due to related parties During the quarter ended October 31, 2002, the Company: Issued 6,427,545 common shares in settlement of $415,295 due to related parties Consolidated Statements of Deferred Exploration Costs (Prepared by Management without audit) Stated in U.S. Dollars) Three months Three months Nine months Nine months ended October ended October ended October ended October 31, 2003 31, 2002 31, 2003 31, 2002 $ $ $ $ (unaudited) (unaudited) (unaudited) (unaudited) --------------- -------- --------- --------- --------- Deferred exploration expenditures Assays incl. Shipment 4,305 2,695 26,546 8,893 Communications 8,388 6,915 25,253 22,825 Consultants 36,339 52,157 79,142 101,101 Data, images, reports and maps 2,084 233 6,243 2,269 Geologists' support - 5,212 1,345 8,688 Licenses and permit fees 34,896 10,000 92,242 123,735 Project/field office costs, other 26,762 51,903 64,152 69,418 Salaries and wages 96,631 81,733 196,513 178,421 Subsistence 8,426 14,251 37,817 33,396 Transportation 29,871 22,736 54,856 52,420 --------------- -------- --------- --------- --------- Net expenditures during the period 247,702 247,835 584,109 601,166 Balance, Beginning of period 7,983,618 7,231,435 7,647,211 6,878,104 --------------- -------- --------- --------- --------- Balance, End of period 8,231,320 7,479,270 8,231,320 7,479,270 --------------- -------- --------- --------- --------- 1.NATURE OF OPERATIONS AND CONTINUING OPERATIONS The Company is engaged in the acquisition, exploration and development of gold and diamond properties. The Company is in the development stage and has no source of cash flows other than loans from related parties or equity offerings. These consolidated financial statements are prepared on a going concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business. The Company's ability to continue on a going concern basis depends on its ability to successfully raise additional financing. If the Company cannot obtain additional financing the Company may be forced to realize its assets at amounts significantly lower than the current carrying value. 2.SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with generally accepted accounting principles in Canada and reflect the following significant accounting policies. The United States dollar has been identified as the Company's currency of measurement and is used for external reporting purposes. (a)Principles of consolidation These financial statements include the accounts of Mano River Resources Inc. and its principal subsidiary, Mano River Resources Ltd. and its subsidiaries. (b)Cash and cash equivalents Cash and cash equivalents consists of cash on hand, deposits in banks and highly liquid investments with an original maturity of ninety days or less. (c)Investments Investments are recorded at the lower of cost and net realizable value (d)Resource properties and deferred exploration costs The Company follows the method of accounting for its mineral properties whereby all costs related to acquisition, exploration and development are capitalized by property. (e)Loss per share Loss per share is computed using the weighted average number of shares outstanding during the year. 3.INVESTMENTS October 31, January 31, 2003 2003 --------- --------- St. Andrew Goldfields Ltd. (formerly Royal Victoria Minerals Ltd.) $34,496 $34,496 ------------------ --------- --------- 34,496 34,496 ------------------ --------- --------- The St. Andrew Goldfields Ltd. Investment consists of 520,000 common shares with a quoted market value at October 31, 2003 of $122,200 (January 31, 2003 -$75,925) The Royal Victoria Minerals Ltd., St. Andrew Goldfields Ltd. and United Tex-Sol Mines completed a business combination by way of a plan of arrangement with St. Andrew as the surviving entity. Under the terms of the arrangement, Royal Victoria shareholder received two common shares of St. Andrew for each Royal Victoria common share. 4.RESOURCE PROPERTIES October 31, January 31, 2003 2003 ----------- ---------- Acquisition costs Liberia, West Africa $320,000 $320,000 Guinea, West Africa 1,940,000 1,940,000 Sierra Leone, West Africa 1,695,000 1,695,000 ManoTaur Joint Venture, Canada - 90,090 ------------------ ----------- ---------- Closing balance $3,955,000 $4,045,090 ------------------ ----------- ---------- 5.RECLAMATION BONDS As at October 31, 2003, term deposits totaling $340,610 (January 31, 2003 - $340,610) have been pledged to the State of Washington as security for reclamation costs on the Van Stone property. A reclamation provision has been accrued in the amount of $340,610. The Company has completed an assessment of the reclamation and closure costs and it is anticipated that costs incurred will not exceed this provision. The Company will continually monitor the costs related to the Van Stone mine and will make further provision if it is determined necessary. 6.SHARE CAPITAL (a)Authorized -Unlimited common shares without par value (b)Issued Shares Amounts -------- ---------- Balance at January 31, 2002 101,162,671 $ 14,357,213 Shares issued on private placement (net of 26,300,000 1,094,815 costs) Shares issued for settlement of debt 6,427,545 415,295 ---------------------- -------- ---------- Balance at January 31, 2003 133,890,216 15,867,323 ---------------------- -------- ---------- Shares issued on private placement (net of 17,250,000 668,094 costs) Shares issued on exercise of warrants 1,250,000 60,895 Shares issued for settlement of debt 2,819,397 116,547 ---------------------- -------- ---------- Balance at October 31, 2003 155,209,613 16,712,859 ---------------------- -------- ---------- As at October 31, 2003, the following stock options were outstanding: Exercise price Number of per share Common Shares (Cdn$) Expiry date ------------- ---------- ------------- 2,540,000 $0.34 February 12, 2004 100,000 $0.34 April 14, 2005 990,000 $0.22 May 1, 2006 845,000 $0.10 February 21, 2007 5,000,000 $0.11 March 21, 2007 905,000 $0.10 August 14, 2008 ------------- ---------- ------------- 10,380,000 ------------- ---------- ------------- 7.SUBSCRIPTIONS SharesAmount Share subscription for exercise of warrants1,550,00073,544 The Company received US$73,544 for the conversion of warrants covering 1,550,000 fully paid common shares at GBP 0.03 per share. At October 31, 2003, the common shares had not been issued. 8.CONVERTIBLE DEBENTURE The Company entered into a convertible debenture agreement with respect to advances from a company controlled by a director. Advances totaling $200,000 will under this debenture be repayable on April 30, 2004, together with accumulated interest at 6% per annum. The principal amount is convertible by the holder into common shares of the Company at a price of #0.04 per share at any time prior to repayment and this transaction has been approved by the regulatory authorities. 9.RELATED PARTY TRANSACTIONS During the year to date, the Company incurred billings of $91,720 from related parties for management fees and professional services. All transactions with related parties have occurred in the normal course of operations. As at October 31, 2003, the amount due to related parties totals $208,338. These balances are payable on demand and have arisen from the provision of services referred to above and provision of short-term bridge financing. 10.FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial assets and liabilities are cash and cash equivalents, accounts receivable, investments, accounts payable and accrued liabilities, and due to related parties. The fair values of these financial instruments are estimated to approximate their carrying values due to their immediate or short-term nature except for investments whose fair value is described in Note 3. Due to the nature of the Company's operations, there is no significant credit or interest rate risk. As at October 31, 2003, the Company held approximately $128,766 cash in bank accounts denominated in U.K. pounds. The Company has taken no action to reduce its exposure to foreign currency risk. 11. SUBSEQUENT EVENTS Subsequent to October 31, 2003, the Company: a. *arranged a private placement for up to 50 million common shares at GBP 0.05p per share to raise gross proceeds of between GBP2 million and GBP2.5 million. A commission of 4% will be paid to the brokers. This private placement has been conditionally accepted by the regulatory authorities. b. *received notice of the conversion of warrants covering 3,900,000 fully paid common shares at GBP 0.03 per share, raising gross proceeds of GBP 117,000 (US$196,338). This information is provided by RNS The company news service from the London Stock Exchange END QRTEAKFSEDDLEFE
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