We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Brazilian | LSE:BDY | London | Ordinary Share | CA1058741010 | COM SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.45 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
1st Quarter Results
BRAZILIAN DIAMONDS LIMTIED
QUARTERLY REPORT FOR THE THREE MONTH PERIOD ENDED 31 MARCH 2008
For the three months ended March 31, 2008, Brazilian Diamonds Limited
("Brazilian Diamonds" or "the Company") has continued to focus its
exploration activities on exploring kimberlite bodies located on its
properties in Brazil while seeking ways to maximize the value from
its extensive diamondiferous alluvial gravel inventories located on
some of these same properties.
The Company is encouraged by the recent publication of the
government's inter-departmental deliberations over the finalization
of permanent boundaries for the Serra da Canastra National Park which
is located in proximity to the Canastra 1 project. A new draft bill
(Projeto de Lei # 1448/2007) has now been submitted to the Brazilian
Congress which excludes the Company's diamond areas from any new
proposed National Park Boundary. Whilst it is difficult to estimate
the time required for new legislation to pass through the Congress,
it appears to have support from both the Government and Opposition
parties and therefore is expected to be resolved expeditiously. Once
approved, the Company will be able to commence trial mining at its
Canastra 1 project.
Drilling of Regis was completed in 2007 with the results confirming
that the Regis kimberlite is diamond-bearing. Due to the very large
size of this kimberlite, the Company has decided that an extensive
drill program from the central zone will be needed and that this
would best be handled in a joint venture.
Following completion of Stage I bulk sampling at the Santo Antonio do
Bonito alluvials project, the Company with their joint venture
partners are evaluating the economic viability of developing a large
scale, dredge based mining operation on the property. The Company is
also examining the possibility of establishing other forms of large
scale mining operation at this project. Decisions on these prospects
are expected during 2008.
The Company is continuing the drilling and pit testing of its 6
hectare, Salvador 1 kimberlite. Excavation of the second pit was
completed in the current quarter and excavation of the third pit was
started. Results from the first of the bulk sample pits identified
at least six different kimberlitic rock types or "phases". Each of
these phases potentially may carry a different diamond grade and
quality of diamonds. The identification of multiple phases
emphasized the importance of testing the entirety of all six pits to
determine a representative diamond concentration for the body.
Following completion of this mini-bulk sample, the Company will
assess the results obtained with a view to implementing a larger
scale bulk sample as part of a pre-feasibility study for a future
mine development.
For further information contact:
Brazilian Diamonds Limited
Ken Judge, Chairman + 44 7733 001 002
Stephen Fabian, CEO ++ 55 31 8814 5111
Hanson Westhouse Limited (Nomad to the Company) + 44 113 246 2610
Tim Feather/Matthew Johnson
Landsbanki Securities (UK) Limited (Broker to the + 44 207 426 9000
Company)
Tom Hulme
Introduction
The following discussion of performance and financial condition
should be read in conjunction with the interim consolidated financial
statements of the Company for the three months ended March 31, 2008.
The Company's financial statements are prepared in accordance with
Canadian GAAP. The Company's reporting currency is Canadian
dollars. The date of this Management's Discussion and Analysis is
May 12, 2008.
Description of Business
Brazilian Diamonds is a development stage resource company engaged in
the acquisition, exploration and development of kimberlite and
alluvial diamond properties in Brazil. The Company has over 100,000
hectares of alluvial and kimberlite exploration properties in the
Paranaiba and Santo Antônio do Bonito River Basins and the Patos de
Minas region as well as over 115,000 hectares of prospective
exploration properties in the Serra da Canastra Kimberlite Province
including the advanced stage diamondiferous Canastra 1 kimberlite
pipe. In addition, the Company has its own diamond laboratory used
in the recovery of kimberlite indicator minerals and in 2006 the
Company received an ISO 17025 rating for the facility.
The Company's head office is located in Belo Horizonte, Brazil and
corporate office is located in Vancouver British Columbia, Canada.
Exploration headquarters are located in Patos de Minas, Brazil.
The Company is a reporting issuer in Ontario and British Columbia,
Canada and its common shares trade on the Toronto Stock Exchange and
Alternative Investment Market ("AIM") of the London Stock Exchange
under the symbol BDY.
Discussion of Operations
Current Year Activity
December March
31 Acquisition Deferred Amortization/ 31
2007 (Disposal) Exploration Write Down 2008
Coromandel 9,745 - 86 - 9,831
Patos de
Minas 3,183 - 35 (3,020) 198
Serra da
Canastra 7,462 - 93 - 7,555
Salvador 1 2,078 - 554 - 2,632
Data Sets 2,115 - - (67) 2,048
Other
projects 74 - 8 - 82
Total 24,657 - 776 (3,087) 22,346
December March
31 Acquisition Deferred Amortization/ 31
2006 (Disposal) Exploration Write Down 2007
Coromandel 8,620 - 1,125 - 9,745
Patos de
Minas 2,737 - 446 - 3,183
Serra da
Canastra 7,121 - 341 - 7,462
Salvador 1 466 - 1,612 - 2,078
Data Sets 2,383 - - (268) 2,115
Other
projects 63 - 11 - 74
Total 21,390 - 3,535 (268) 24,657
During the three months ended March 31, 2008, the Company's diamond
drilling and sampling activities were focused on the Salvador 1,
Santo Antonio Do Bonito and Regis projects which are being
prioritized for further evaluation.
Salvador 1 Kimberlite Testing
During the current quarter, the Company is continuing with
macro-diamond testing of its wholly owned Salvador 1 kimberlite. The
Company will continue to evaluate what further activity should be
undertaken as results from each test pit becomes available.
The Salvador 1 kimberlite is a six hectare body partly exposed
beneath the sands and gravels of an old alluvial diamond mine in
central Bahia State, Brazil. The ongoing testing of the Salvador 1
kimberlite has completed excavation from the first two of six
scheduled six pits. Each pit is designed to extract approximately
1,300 tonnes of kimberlite from different parts of the kimberlite
pipe.
Extraction from Pit 1 began in the last quarter of 2007 and
excavation is currently proceeding on the third pit. The kimberlite
is multiphase, with as many as six kimberlite rock types identified
in Pit 1. A single one of these phases dominates most of the
excavated sample from Pit 1. A full report will be completed upon
completion of all stages of processing.
Processing of the first kimberlite sample began in December 2007 and
has been accelerated in the first quarter of 2008 as on-site plant
procedures for the treatment of recovered kimberlite has been
improved. The processing plant consists of a primary disaggregation
rotary pan, followed by x-ray flowsort and grease table for the
recovery of diamonds. It has been augmented with a roll crusher to
better handle harder kimberlite fragments, however sample treatment
remains slower than excavation.
While none of the samples extracted to date have been fully
processed, the Company has recovered 66 diamonds weighing 7.78
carats, with the largest stone weighing 2.65 carats from the Pit 1
kimberlite material processed to date. These diamonds come from four
separate samples taken from Pit 1 and represent a total of 1,460
tonnes of extracted kimberlite ("in-situ").
Approximately 52% of the total kimberlite extracted to date has begun
to be processed and significant parts of that require further
recrushing to liberate fine diamonds.
Processing of the kimberlite sub-sample from the top one metre
portion of Pit 1 is almost complete with 35 diamonds weighing 2.51
carats recovered from 128 tonnes of in-situ kimberlite processed.
More than half of this sample remains to be reprocessed through the
plant after crushing to liberate diamonds enclosed in kimberlite
fragments recovered during the first processing pass. These stones
were tested as the Company's ISO 17025 certificated laboratory in
Patos de Minas.
The second sub-sample of Pit 1 weighing a total of 123 tonnes from a
depth of one to two metres into the kimberlite has yielded 20
diamonds weighing 4.45 carats but with part of the sample still
awaiting first pass and second pass processing, as well as quality
control tests at the Patos Laboratory.
The third kimberlite sub-sample of Pit 1 is less than half way
through processing and has yielded so far 11 stones weighing 0.82
carats, demonstrating that the Salvador 1 kimberlite carries diamonds
to the maximum tested depth of 11 metres below the kimberlite
surface.
Complete size and weight distributions will be reported upon
completion of all sub-samples for Pit 1.
Quality control and quality assurance is being undertaken at the
Company's certified ISO 17025 indicator mineral processing laboratory
on Patos de Minas, where concentrates are re-examined for diamonds
that may not have been recovered in processing by the on-site plant.
Salvador 1 Alluvial Sand and Gravel Testing
Concurrent with the kimberlite sampling and processing at Salvador 1,
a separate processing plant is being used to recover diamonds from
the sands and gravels overlying the Salvador 1 kimberlite.
The on-site reporting of the preliminary results from the separate
sand and gravel processing plant include recovery of 124 diamonds
weighing 17.86 carats from 1,420 cubic metres of bulk volume of
gravel and sand material. Two-thirds of the material has yet to be
processed through the recovery plant (flowsort and grease tables).
The material initially processed includes sands and gravels from
above Pit 1 and the kimberlite-alluvial surface and the four largest
diamonds recovered so far weigh between 0.91 and 1.06 carats.
Patos de Minas
During the year ended December 31, 2007, the land, building and
assets in Parima were transferred to Samsul for R$285,000. The land
is now registered in Samsul with the Brazilian land registry. For
the quarter ended March 31, 2008, deferred expenses of $3,020,00 were
written off and all mineral licenses were transferred from Parima to
Samsul for $nil value.
Historical Information
Following the acquisition of several mineral exploration databases
from De Beers, the Company now has access to the accumulated results
of more than 30 years of exploration activity in the Canastra, Santo
Antonio do Bonito, Patos de Minas regions in Minas Gerais and the
Chapada Diamantina region in Bahia. Included within the Canastra
data set are indicator mineral samples, microprobe chemical analyses,
and 19,000 line kilometres of proprietary airborne geophysics
covering the entire region. De Beers has also provided details about
35 known kimberlite occurrences and the results of ground geophysics
within the Canastra region. The Chapada Diamantina data set,
acquired in September 2006 from De Beers, includes 194,120 line
kilometres of airborne geophysics, indicator mineral samples,
microprobe analysis and mineral licenses covering the Salvador 1
kimberlite body plus five other kimberlites.
This data complements an already significant database the Company
previously acquired as a result of the purchase of De Beers'
Brazilian subsidiary Mineracao do Sul in August 2002. That
acquisition also included 40,000 hectares of mineral claims in the
Canastra area and the Canastra 1 kimberlite for which licenses are
being sought to commence trial mining. The licencing process has
been complicated by the potential expansion of a nearby National
Park. Although there is every indication that a licence will be
granted to mine Canastra 1, it is not possible to accurately estimate
the timetable for such a grant. While the Company continues to work
with various ministries of the Brazilian federal government in an
effort to hasten the process for the license grant, the Company has
been concentrating the majority of its exploration activity and
resources on its other prospective projects outside the Canastra
Region.
During the past three years, the Company has committed significant
resources evaluating kimberlite targets in the Santo Antonio do
Bonito River Basin and Patos de Minas regions.
Salvador 1
In 2007, the Company collected 6 replicate samples totaling 6 tonnes
from the Salvador 1 kimberlite in an attempt to confirm results from
a smaller (580 kg) sample taken in 2006. In total, 111 diamonds were
recovered from these new samples which together with original sample
tallied 120 diamonds. Preparations began in the third quarter of
2007 for the collection of six much larger samples of approximately
650 m3 each from different parts of the Salvador 1 kimberlite in
order to better assess its diamond potential. Excavation of the
first pit was completed in the fourth quarter and excavation of the
second and third pits were started. Results from the first of the
bulk sample pits identified at least six different kimberlitic rock
types or "phases". Each of these phases potentially may carry a
different diamond sample.
Serra da Canastra
The Company is awaiting final approval before commencing the
environmental licensing process for the development of the Canastra 1
kimberlite body for which mine feasibility work has already been
completed and the required Mines Department approvals are already in
place. The Company will bring Canastra 1 into production once the
environmental licensing process is completed.
Coromandel
The Company and its Joint Venture partners continue to assess various
alternatives for the possible development of one or more alluvial
mining operations at the Santo Antonio do Bonito alluvial project.
These options may include large scale dredging operations on the
broader river flat areas along the Santo Antonio do Bonito river as
well as a smaller scale operation on what are considered to be highly
prospective but narrower river terrace areas.
Patos de Minas
During the first quarter of 2007, the Company's administrative
functions in Brazil were consolidated at the Patos de Minas office
and laboratory with the Company continuing to maintain a small
representative corporate office in Belo Horizonte. Through these
measures, the Company has been able to significantly reduce its
Brazilian overhead from the levels existing prior to the
restructuring carried out in the second half of 2006.
Stage II drilling of holes RDH-03, 04, 05 and 06 at the Company's
100% owned Regis kimberlite project was completed in the first
quarter of 2007 and following receipt and evaluation of the final
results of lab testing of drill cores for micro-diamonds, the Company
will be in a position to determine what further activity should be
undertaken on this kimberlite.
Financial Performance
First Quarter
The loss for the three months ended March 31, 2008 was $290,000 as
compared to a loss of $279,000 for the same period last year before
other income (expenses). The increase in expenses over the same
period last year is due to an increase in office costs of $9,000,
investor relations expense of $8,000 and a decrease in interest
income of $33,000.
Cash and cash equivalent balances increased by $245,000 to $701,000
at March 31, 2008. The cash spending for mineral properties was
$709,000. The working capital was $583,000 (2007 - $2,806,000).
Of the $709,000 deferred exploration costs, $86,000 was spent on
kimberlite exploration in the Santo Antonio do Bonito River Basin,
$93,000 was expended on kimberlite projects in the Serra da Canastra
Kimberlite
Province, $35,000 was spent on the Patos de Minas project, $554,000
was spent on Salvador 1, and $8,000 was spent on other projects. The
data sets are amortized over ten years. For the three months ended
March 31, 2008, $67,000 (2007 - $78,000) was amortized and
proportionally allocated to the related mineral properties. The
current period's exploration expenditures were $189,000 less than the
same period last year due to a reduction in the drilling undertaken
during the period. Deferred expenses of $3,020,000 (2007 - $nil)
were written off in the quarter ending March 31, 2008. All mineral
licenses were transferred from Parima to Samsul for $nil value.
Results of Operations
Summary of Quarterly Results
The table below present's selected financial data for the Company's
eight most recently completed quarters.
June June
($000) Mar.31 Dec.31 Sept.30 30 Mar.31 Dec.31, Sept.30, 30
2008 2007 2007 2007 2007 2006 2006 2006
Financial
results
Net
loss(income) (3,193) (265) 426 -278 279 988 263 1,020
for period
Comprehensive 367 192 743 67 663 - - -
loss**
Basic and
diluted loss 0.02 0.00 0.00 0.00 0.00 0.01 0.00 0.01
(income) per
share
Expenditures
on resource
properties 709 1,213 573 591 898 1,009 974 803
Balance sheet
data
Cash and
short term 701 456 1,075 2,147 3,037 4,514 1,529 2,696
deposits
Resource 22,346 24,657 23,693 22,865 22,274 21,390 20,451 19,477
properties
Total assets 23,903 26,408 25,689 25,910 26,249 26,762 22,875 23,142
Shareholders' 23,428 25,968 25,069 25,074 24,796 25,075 21,869 22,131
equity
Selected Annual Information
The following financial data has been prepared in accordance with
Canadian generally accepted accounting principles in Canadian
currency:
Year ended Year ended Year ended
($000) December 31 December 31 December 31,
2007 2006 2005
Financial results
Net loss for period * 162 2,763 790
Other comprehensive loss** 1,503 - -
Basic and diluted loss per share 0.00 0.02 0.01
Expenditures on resource
properties 2,988 3,130 2,472
Balance sheet data
Cash and cash equivalents 456 4,514 1,082
Mineral properties 24,657 21,390 17,770
Total assets 26,408 26,762 19,889
Shareholders' equity 25,968 25,075 18,600
* Net loss for December 31, 2006 includes $.6M stock-based
compensation (2005 - $Nil) and reorganization costs of $0.25m (2005
$nil)
** The Company has reflected in its financial statements as at and
for the year ended December 31, 2007 the adjustments and disclosures
required by the following CICA Handbook Sections 3855 Financial
Instruments - Recognition and Measurement; Section 3861 Financial
Instruments - Disclosure and Presentation; Section 3865 - Hedges;
Section 1530 Comprehensive Income and Section 3251 Equity. However,
the Company did not accurately record the effect of these new
pronouncements n the 2007 quarterly financial statements. Management
has reflected the appropriate adjustments to comprehensive loss in
the Summary of Quarterly Results above
Liquidity and Capital
The Company does not currently own or have an interest in any
producing mineral properties and does not derive any revenues from
operations. The Company's activities have been funded through equity
financing and the Company expects that it will continue to be able to
utilize this source of financing until it develops cash flow from
operations. There can be no assurance, however, that the Company
will be successful in its efforts. If such funds are not available
or other sources of finance cannot be obtained, then the Company will
curtail its activities to a level for which funding is available or
can be obtained.
Most of the capital equipment for operations at Canastra 1 has
already been acquired and is included as part of resource
properties. The Company has minimal operating lease commitments
(refer to Contractual Commitments).
These financial statements have been prepared using Canadian
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and settlement
of liabilities in the normal course of business as the come due. For
the three months ended March 31, 2008, the Company reported a loss of
$3,193,000 and an accumulated deficit of $74,029,000 at that date. In
addition to its ongoing working capital requirements, the Company
must secure sufficient funding for existing commitments as well as
ongoing mineral property exploration. These circumstances lend
substantial doubt as to the ability of the Company to meet its
obligations as they come due and, accordingly, the appropriateness of
the use of accounting principles applicable to a going concern.
In recognition of these circumstances, the Company has secured
funding in the amount of $2,456,000 net of share issue costs at March
31, 2008. This funding, while substantial, is not sufficient to
enable the Company to fund all aspects of its operations and,
accordingly, management is pursuing other financing alternatives to
fund the Company's operations so it can continue as a going concern.
Management expects that the Company will be able to secure the
necessary financing through a combination of new equity issue or debt
instruments and the entering into joint venture arrangements.
Nevertheless, there is no assurance that these initiatives will be
successful.
The Company's ability to continue as a going concern is dependent
upon its ability to fund its ongoing operating costs and exploration
and development of mineral properties, attain profitable mining
operations, or receive proceeds from the disposition of its mineral
property interests. These financial statements do not reflect the
adjustments to the carrying values of assets and liabilities and the
reported expenses and balance sheet classifications that would be
necessary were the going concern assumption inappropriate, and these
adjustments could be material.
Subsequent Events
a) April 8, 2008, the Company received $1,435,700 from share
subscription receivable.
Contractual Commitments
Except as outlined below, the Company has no other contractual
commitments.
2008 2009 2010 2011 Total
Office leases $89 $- $- $- $89
Photocopier leases 9 12 12 1 34
Services agreement with HRG 153 - - - 153
$251 $12 $12 $1 $276
Off Balance Sheet Arrangements
The Company has not entered into any off-balance sheet arrangements
other than those disclosed in Commitment note 10 of the interim
consolidated financial statements.
Transactions with Related Parties
During the three months ended March 31, 2008 and 2007, the Company
entered into the following transactions with related parties:
2008 2007
$ $
HRG Management Ltd. - Kenneth Judge, Kerry Beamish
Paid or accrued contractual service costs (note 51,000 53,000
9(a))
Received or accrued miscellaneous office recoveries 7,000 14,000
(note 9(b))
Deposits made (note 9(c)) 80,000 35,000
Hamilton Capital Partners Limited ("HCPL") - Kenneth
Judge
Paid or accrued consulting fees and office rent 43,000 45,000
Sale of Hidefield shares (note 9(d)) 185,000 -
Massif Limited - Stephen L. Fabian
Paid or accrued management fees - (note 9(e)) 30,000 35,000
Lang Michener - David Cowan
Paid or accrued legal fees - (note 9(f)) 3,000 1,000
Hidefield Gold PLC - Kenneth Judge, Francis
Johnstone
Accrued or recovered office and technical costs - 25,000
(note 9(g))
a) Effective February 1, 2006, the Company entered into a
services agreement with HRG Management Ltd. ("HRG") in which the
Company agreed to pay a monthly corporate administration fee of
approximately $17,000 that includes office rent, administration,
accounting, corporate secretarial, chief financial officer, investor
relations and other related services. HRG is a management company
jointly owned by the Company and certain other public companies, all
of which share office space and staff on a cost recovery basis. The
Company share directors and officers in common with HRG. The
agreement expires December 31, 2008 and can be terminated by either
party prior to expiration with 90 days written notice.
b) At March 31, 2008, HRG owed the Company $7,000 (2007 -
$9,000) in office recoveries and have normal trade terms. At March
31, 2007, $5,000 was due from companies with common directors of the
Company in office recoveries and have normal trade terms.
c) At March 31, 2008, included in accounts receivable, prepaids
and deposits is $80,000 (2007 - $35,000) of deposits made to HRG for
fixed assets and services.
d) The Company received proceeds of $185,000 on the sale of 2
million Hidefield Gold plc shares at 4.75 pence from HCPL.
e) The Company paid management fees of $30,000 (2007 - $35,000)
to Massif Limited, a company in which Stephen L. Fabian is
interested.
f) Paid or accrued professional fees of $3,000 (2007 - $1,000)
to a law firm in which David Cowan, director is a partner.
g) Accrued or recovered office and technical costs of $Nil (2007
- - $25,000) from Hidefield Gold PLC ("HIF") have been capitalized to
mineral properties.
Share Capital Information
The table below presents the Company's common share data as of May
12, 2008.
Number of
Exercise Price Expiry date common shares
Common shares, issued
and outstanding 194,370,722
Securities convertible
into common shares -
Warrants $0.70 May 25, 2008 2,500,000
Options $0.25 May 21, 2008 50,000
March 29,
$0.65 2009 100,000
October 26,
$0.45 2009 3,275,000
$0.41 April 5, 2011 3,150,000
$0.25 July 12, 2012 3,125,000
October 12,
$0.25 2012 100,000
206,670,722
Critical Accounting Estimates
The preparation of financial statements requires the Company to
select from possible alternative accounting principles, and to make
estimates and assumptions that determine the reported amounts of
assets and liabilities at the balance sheet date and reported costs
and expenditures during the reporting period. Estimates and
assumptions may be revised as new information is obtained, and are
subject to change. The Company's accounting policies and estimates
used in the preparation of the Financial Statements are considered
appropriate in the circumstances, but are subject to judgments and
uncertainties inherent in the financial reporting process.
Stock Based Compensation
In calculating the value of stock options granted, management is
required to make significant estimates in relation to the future
volatility of the Company's share price and the period in which stock
options will be exercised. The selection of the volatility factor and
the estimate of the expected option life will have a significant
impact on costs recognized for stock based compensation. The
estimates concerning volatility are made with reference to historical
volatility, which is not necessarily an accurate indicator of
volatility that will be experienced in the future. Management
assumes that stock options will remain unexercised until immediately
prior to their expiry date, which may not be the case.
Carrying Value of Assets
The Company reviews the carrying value of mineral properties and
deferred exploration costs when there are any events or circumstances
that may indicate impairment. Where estimates of future cash flows
are available, an impairment charge is recorded if the undiscounted
future net cash flows are less than the carrying amount. Reductions
in the carrying value of the properties are recorded to the extent
the net book value of the property exceeds the discounted value of
future cash flows. Where estimates of future cash flows are not
available and where other conditions suggest impairment, management
assess if carrying value can be recovered and provides for impairment
if so indicated. As at March 31, 2008, the Company has written down
$3,020,000 in deferred expenses.
Asset Retirement Obligations
The Company relied on the results of a professional, engineering firm
and used the discount and inflation rate as at December 31, 2007 to
estimate the fair value of its asset retirement obligations.
Changes in Accounting Policies
The Company implemented the following accounting policy changes
during the period.
Effective January 1, 2008, the Company adopted three new accounting
standards issued by the Canadian Institute of Chartered Accountants
("CICA"); Section 1535 - Capital Disclosures, Section 3862 -
Financial Instruments - Disclosure, Section 3863 - Financial
Instruments - Presentation. These standards were adopted on a
prospective basis, and as such prior periods have not been restated.
a) Section 1535, "Capital Disclosures", establishes standards
for disclosing information about an entity's capital and how it is
managed. These standards require an entity to disclose the following:
i. its objectives, policies and
processes for managing capital;
ii. summary quantitative data about
what the Company views as capital;
iii. whether during the period, it
complied with any externally imposed capital requirements to which it
is subject;
iv. when the entity has not complied with
such requirement, the consequences of such non-compliance.
b) Financial Instruments - Disclosure (Section 3862) and
Presentation (Section 3863)
These standards replace CICA 3861, Financial Instruments - Disclosure
and Presentation. The increased disclosures will enable users to
evaluate the significance of financial instruments for an entity's
financial position and performance, including disclosures about fair
value. In addition, disclosure is required of qualitative and
quantitative information about exposure to risks arising from
financial instruments, including specified minimum disclosures about
credit risk, liquidity risk and market risk. The quantitative
disclosures must provide information about the extent to which the
entity is exposed to risk, based on information provided internally
to the entity's key management personnel.
Risk
There are significant risks that might affect further development of
the Company. Although the Company has prospective diamond projects
and has demonstrated that it has the ability to obtain environmental
and trial mining permits, there is a risk that these projects will
not be economically mineable or that the required permits will be
granted in the future. Further, future market prices for diamonds
are not predictable. There is also a risk that should additional
development of the properties be required, financing may not be
obtainable. Repatriation of earnings and capital from Brazil is
subject to compliance with registration requirements. There can be no
assurance that restrictions on repatriation will not be imposed in
the future.
Management's Responsibility for Financial Statements
The information provided in this report, including the financial
statements, is the responsibility of management. In the preparation
of these statements, estimates are sometimes necessary to make a
determination of future values for certain assets or liabilities.
Management believes such estimates have been based on careful
judgments and have been properly reflected in the accompanying
financial statements.
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported to
senior management, including the President, Chief Executive Officer
("CEO") and the Chief Financial Officer ("CFO"), on a timely basis so
that appropriate decisions can be made regarding public disclosure.
An evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures was conducted as of
March 31, 2008, by and under the supervision of management, including
the CEO and the CFO. Based on this evaluation, the CEO and the CFO
have concluded that the Company's disclosure controls and procedures,
as defined by Multilateral Instrument 52-109, Certification of
Disclosure in Issuers' Annual and Interim Filings, are effective to
ensure that information required to be disclosed in reports filed or
submitted under Canadian securities legislation is recorded,
processed, summarized and reported within the time period specified
in those rules and forms and reported to senior management so that
appropriate decisions can be made regarding public disclosure.
Internal Control Over Financial Reporting
Internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements in accordance with
Canadian GAAP. Management is responsible for establishing and
maintaining adequate internal control over financial reporting for
the Company.
An evaluation of the design of the Company's internal control over
financial reporting was conducted as of March 31, 2008, by and under
the supervision of management, including the CEO and the CFO. Based
on this evaluation, the CEO and the CFO have concluded that the
Company's design of internal control over financial reporting, as
defined by Multilateral Instrument 52-109, Certification of
Disclosure in Issuers' Annual and Interim Filings, is sufficient to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance
with Canadian GAAP.
There have been no changes in internal control over financial
reporting during the three months ended March 31, 2008 that have
materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
Other information
Additional information is available on the Company's website at
www.braziliandiamonds.com or on SEDAR at www.sedar.com.
Consolidated Balance Sheet
Expressed in thousands of Canadian Dollars
March 31 December 31
2008 2007
$ $
Assets
Current assets
Cash and cash equivalents 701 456
Accounts receivable, prepaids and deposits 265 240
Due from related parties 7 17
973 713
Investments 584 1,038
Mineral properties 22,346 24,657
23,903 26,408
Liabilities
Current liabilities
Accounts payable and accrued liabilities 390 336
Hidefield options - 19
Asset retirement obligation 85 85
475 440
Shareholders' Equity
Capital stock 95,304 92,848
Share subscription receivable (1,436) -
Warrants 519 519
Contributed surplus 2,817 2,817
Deficit (74,029) (70,836)
Accumulated other comprehensive income 253 620
23,428 25,968
23,903 26,408
Nature of Operations and Going Concern (note
1)
Consolidated Statements of Loss and Deficit
(expressed in thousands of Canadian dollars, except per share
amounts)
Three months Three months
ended March 31 ended March 31
2008 2007
$ $
Expenses
Corporate administrative services 17 18
Consultants 52 56
Foreign exchange loss - 14
Insurance 13 14
Interest income (1) (34)
Investor relations 49 41
Legal and audit 32 39
Office costs 50 41
Regulatory 34 39
Salaries and management fees 30 35
Travel 14 16
290 279
Other (income) expenses
Unrealized gain on Hidefield options (19) -
Gain on sale of investments (98) -
Write-down of mineral properties 3,020 -
Loss for the period 3,193 279
Deficit - Beginning of period 70,836 70,674
Deficit - End of period 74,029 70,953
Loss per common share - basic and
diluted 0.02 0.002
Weighted average common shares
outstanding (000's) 170,125 168,414
Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
Three months Three months
ended March 31 ended March 31
2008 2007
$ $
Cash flows from operating activities
Loss for the period (3,193) (279)
Add (deduct) items not affecting cash
Amortization - 2
Write down of mineral properties 3,020 -
Gain on sale of investments (98) -
Unrealized gain on Hidefield options (19) -
Changes in non-cash working capital
related to operations
Accounts receivable, prepaids and
deposits (25) (67)
Related parties receivable 10 (1)
Accounts payable and accrued
liabilities 54 (232)
(251) (577)
Cash flows from financing activities
Decrease in long term debt - (2)
Issue of shares for private placement 2,596 -
Subscription receivable (1,436) -
Share issue costs (140) -
1,020 (2)
Cash flows from investing activities
Deferred mineral property costs (709) (898)
Proceeds from sale of Hidefield
shares 185 -
(524) (898)
Increase (decrease) in cash and cash
equivalents 245 (1,477)
Cash and cash equivalents - Beginning
of the period 456 4,514
Cash and cash equivalents - End of
the period 701 3,037
Supplemental cash flow information
Notes to Consolidated Financial Statements
1. Nature of Operations and Going Concern
The Company is engaged in the exploration for and development of
mineral resources. The properties of the Company are without a known
body of commercial ore, the exploration programs undertaken and
proposed constitute an exploratory search, and there is no assurance
that the Company will be successful in its search. The Company has
not earned any revenue to date from its current operations and is
therefore considered to be in the development stage. The business of
exploring for minerals and mining involves a high degree of risk, and
few properties that are explored are ultimately developed into
producing mines. Significant expenses may be required to establish
ore reserves, to develop recovery processes, and to construct mining
and processing facilities at a particular site. It is not possible to
ensure that the current exploration programs planned by the Company
will result in a profitable commercial mining operation.
Although the Company has taken steps to verify title to mineral
properties in which it has an interest, in accordance with industry
standards for the current stage of exploration of such properties,
these procedures do not guarantee the Company's title. Property
title may be subject to prior agreements and non-compliance with
regulatory requirements.
The Company is actively exploring and maintaining its current mineral
property portfolio in Brazil. It expects to selectively explore and
develop the portfolio itself, through joint venture or other
arrangements. The scheduling and scale of such future activities
will depend on results and market conditions. Repatriation of
earnings and capital from Brazil is subject to compliance with
registration requirements.
These financial statements have been prepared using Canadian
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and settlement
of liabilities in the normal course of business as the come due. For
the three months ended March 31, 2008, the Company reported a loss of
$3,193,000 and an accumulated deficit of $74,029,000 at that date. In
addition to its ongoing working capital requirements, the Company
must secure sufficient funding for existing commitments as well as
ongoing mineral property exploration. These circumstances lend
substantial doubt as to the ability of the Company to meet its
obligations as they come due and, accordingly, the appropriateness of
the use of accounting principles applicable to a going concern.
In recognition of these circumstances, the Company has secured
funding in the amount of $2,456,000 (note 13 (a)) net of share issue
costs at March 31, 2008. This funding, while substantial, is not
sufficient to enable the Company to fund all aspects of its
operations and, accordingly, management is pursuing other financing
alternatives to fund the Company's operations so it can continue as a
going concern. Management expects that the Company will be able to
secure the necessary financing through a combination of new equity
issue or debt instruments and the entering into joint venture
arrangements. Nevertheless, there is no assurance that these
initiatives will be successful.
The Company's ability to continue as a going concern is dependent
upon its ability to fund its ongoing operating costs and exploration
and development of mineral properties, attain profitable mining
operations, or receive proceeds from the disposition of its mineral
property interests. These financial statements do not reflect the
adjustments to the carrying values of assets and liabilities and the
reported expenses and balance sheet classifications that would be
necessary were the going concern assumption inappropriate, and these
adjustments could be material.
2. Significant accounting policies
These interim consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles,
and they follow the same accounting policies and methods of
application as the most recent annual financial statements.
Consequently, these statements should be read in conjunction with the
audited annual consolidated financial statements for the year ended
December 31, 2007.
3. Investments
March 31 2008
Number of Shares Amount % Holding
Hidefield Gold plc 7,625,000 $584 2.77%
March 31 2007
Number of Shares Carrying value Fair value % Holding
Hidefield Gold
plc 14,625,000 $634 $2,373 5.32%
a) During the period ended March 31, 2008, the Company
recognized an unrealized loss of $367,000 (2007 - $Nil) on marketable
securities designated as available-for-sale in other comprehensive
income.
b) On February 8, 2008, the Company sold 2,000,000 Hidefield
Gold plc ("Hidefield") shares at a price of 4.75 pence (market value
- - 4.20 pence) per share for a total of $185,000 to Hamilton Capital
Partners Limited (note 9(d)) and recorded a gain of $98,000 on the
sale.
c) On January 25, 2008, the Company's 7,125,000 Hidefield
options expired and the $19,000 unrealized fair value of the
Hidefield options was written down. During the year ended December
31, 2005, the Company sold 12,125,000 Hidefield units to related
parties. Each Hidefield unit was sold for 4.5 pence and was comprised
of one ordinary common share of Hidefield and an option granted to
acquire one additional ordinary share of Hidefield from the Company's
remaining shareholding at 6 pence per share ("the Hidefield
options").
- ---END OF MESSAGE---
http://hugin.info/139023/R/1218496/255335.htm
1 Year Brazilian Chart |
1 Month Brazilian Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
