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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
EXPLORE TECHNOLOGIES, INC.
(Exact name of Company as specified in its charter)
NEVADA 88-0419476
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 505, 1155 Robson Street
Vancouver, British Columbia, Canada V6E 1B5
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
604-689-1659
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE.................................................1
TABLE OF CONTENTS..........................................2
PART I.....................................................3
DESCRIPTION OF BUSINESS....................................3
DESCRIPTION OF PROPERTY...................................12
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES...12
REMUNERATION OF DIRECTORS AND OFFICERS....................14
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS ................................15
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS ................................... 15
DESCRIPTION OF SECURITIES................................ 15
PART II ............................................... 16
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS ............ 16
LEGAL PROCEEDINGS........................................ 16
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ........... 17
RECENT SALES OF UNREGISTERED SECURITIES ................. 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS ............... 17
PART F/S ................................................ 19
FINANCIAL STATEMENTS .................................... 19A
PART III ................................................ 20
INDEX TO EXHIBITS ....................................... 20
SIGNATURES ...............................................21
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PART I
The issuer has elected to follow Form 10-SB, Disclosure
Alternative 2.
Item 6. Description of Business
Organization
Explore Technologies, Inc. (the "Company") was organized as a
Nevada corporation on December 18, 1998.
Business
The Company is a natural resource company engaged in the
acquisition, exploration and development of mineral properties.
The Company has an option to acquire an interest in the
properties described below under the heading "Miranda Property
Option Agreement". The Company intends to carry out exploration
work on the Miranda Property in order to ascertain whether the
Miranda Property possesses commercially developable quantities of
gold and other precious minerals. There can be no assurance that
a commercially mineable mineral deposit, or reserve, exists in
the optioned property until appropriate exploratory work is done
and an economic evaluation based on such work concludes economic
feasibility.
Miranda Property Option Agreement
By an agreement made as of December 22, 1998 between the Company
and Miranda Industries Inc. of Suite 505 - 1155 Robson Street,
Vancouver, British Columbia ("Miranda"), the Company acquired
from Miranda the option (the "Option") to acquire a 50% interest
in certain mineral claims situated in the State of Nevada (the
"Miranda Property"). The consideration paid by the Company to
Miranda for the grant of the Option was $1,000 US.
The Option is exercisable by the Company incurring the following
property exploration expenditures on the Miranda Property:
1. initial exploration expenditures in the amount of $10,000 US
by December 31, 1999; and
2. cumulative exploration expenditures in the amount of
$150,000 US by December 31, 2001.
Property exploration expenditures include all reasonable and
necessary monies expended on or in connection with the
exploration and development of the Miranda Property determined in
accordance with generally accepted accounting principles. In
addition, until the Company shall have secured a 50% interest in
the Miranda Property, the Company is obligated to make all
payments to Larry McIntosh pursuant to the Underlying Option
Agreement as required to enable Miranda to exercise the
Underlying Option to acquire the Miranda property from McIntosh,
as discussed below.
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Upon the Company acquiring a 50% interest in the Miranda Property
by exercise of the Option, the Company and Miranda may enter into
a joint venture for the purpose of further exploring and
developing and, if economically and politically feasible,
constructing and operating a mine on the Miranda Property.
The Company's Option is subject to an underlying option agreement
dated the 20th day of November, 1997 (the "Underlying Option
Agreement") between Miranda and Larry McIntosh of P.O. Box 1388,
Gardnerville, Nevada ("McIntosh") whereby Miranda acquired the
option to acquire the Miranda Property from McIntosh (the
"Underlying Option") by staking the mining claims comprising the
Miranda Property and making the following payments to McIntosh,
totalling $138,500 US, by the dates indicated below:
1. $ 2,500 US by November 20, 1998;
2. $ 7,000 US by November 20, 1999;
3. $ 9,000 US by November 20, 2000;
4. $10,000 US by November 20, 2001;
5. $10,000 US by November 20, 2002;
6. $20,000 US by November 20 of each of the years 2003 through
2007.
Miranda has represented to the Company that the mineral claims
comprising the Miranda Property have been staked and the initial
payment of $2,500 made to McIntosh, each as required to maintain
the Underlying Option in good standing. As stated above, until
the Company shall have secured a 50% interest in the Miranda
Property, the Company has agreed to make the necessary payments
to McIntosh in order to maintain the Underlying Option in good
standing. Upon completion of all payments required under the
Underlying Option, McIntosh will transfer to Miranda a 100%
interest in the Miranda Property and the claims comprising the
Miranda Property will be registered in the name of Miranda.
In addition, Miranda will be required to pay to McIntosh a
royalty equal to 2.5% of net smelter returns on the gross
proceeds received by the Company from the sale of any ore from
the mining of the Property, less costs of transportation,
refining and insurance costs. Upon payment of the total sum of
$500,000 US, the royalty will be reduced to 1.0% of net smelter
returns. Upon exercise of the Option by the Company, the Company
and Miranda will be obligated to pay this royalty to McIntosh in
equal shares as joint venture partners.
Miranda Property
The eleven lode claims comprising the Miranda Property have been
located and filed by Miranda on land administered by the U.S.
Bureau of Land Management. The claims are named Dune 1 - 8 and
22 - 24 and they are situated in sections 3, 4, 9, and 10 of T16N
and R32E.
The Miranda Property is located in the Stillwater Range about 2
miles (3.2 km) West of Sand Springs Pass on U.S. Highway 50 and
30 highway miles east of Fallon on U.S. 50 (48 km) in Churchill
County, Nevada. The property is approximately one half mile (0.8
km) north of the highway. The
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property is located approximately
23 miles (37 km) north of the Rawhide mine and 38 miles (61 km)
south-southwest of Fondaway Canyon.
Geological Report
The Company has obtained a geological report on the Miranda
Property prepared by John Rice, Consulting Geologist of P.O. Box
20074, Reno, Nevada 89515 (the "Geological Report"). The
Geological Report is attached hereto as Exhibit 6. The
Geological Report summarizes the exploration history of the
Miranda Property, the regional geology of the Miranda Property
and provides conclusions and recommendations for a work program
on the Miranda Property. These results of the Geological Report
are summarized below.
The Company has delivered copies of the Geological Report to the
purchasers of the Company's common stock pursuant to the
Company's offering of 5,000,000 shares of common stock at a price
of $0.01 per share and the Company's offering of 50,000 shares of
common stock at a price of $0.10 per share. See Part II - Item 4
- - "Recent Sales of Unregistered Securities".
Exploration History of the Miranda Property
The Miranda Property is an early stage exploration property
located in the Sand Springs Mining District, of Churchill County,
Nevada. The District has seen a long history of production
starting in 1905 and continuing until the mid-1960's.
Pegasus Gold Corporation had an exploration program on the
Miranda Property in 1992-1993. Their program consisted of
collecting 108 rock chip samples, cursory geologic mapping, and
drilling 13 reverse circulation drill holes. They intersected
anomalous gold in one drill hole and anomalous copper in two
other drill holes. Pegasus never followed up these anomalies.
Cordex Exploration also explored the area briefly, though did not
acquire it. Miranda became interested in the property in
September 1997. Miranda's program consisted of detailed geologic
mapping, rock chip and soil sampling, and conducting a ground
magnetometer survey.
Lithologies existing at the Miranda property include a Triassic
limestone overlain by an interbedded unit of phyllite, schist,
and metaconglomerate. Overlying the metasediments are Teritary
ryholite tuffs and extensive basalt flows. The limestone and
metasediments are intruded by a Cretaceous diorite. At the
contact of the limestone and diorite, in the western part of the
property, there is a major north-northeast striking shear zone.
The shear zone cuts the diorite and limestone and to the south of
these units it cuts the overlying ryholite.
The Miranda Property represents an opportunity of discovering a
skarn-hosted gold deposit near the contact of the Triassic
limestone and a Cretaceous diorite. In addition to the skarn
mineralization, there are numerous gold-bearing quartz +/-
tourmaline veins which cut the lower limestone unit and the
diorite. These discontinuous vein structures strike north-
northeast and dip steeply west. The limestone and diorite that
host these two styles of mineralization are located at the site
of a major north-northeast striking shear zone. Immediately to
the south of the limestone and diorite, the rocks are in fault
contact with an overlying Tertiary rhyolite. The rhyolite has
been downdropped a
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minimum of 400-500 feet (120-150 meters).
This block has been intersected by shearing but has not been cut
by north-northeast striking quartz +/- tourmaline veining. This
rhyolite block is also the host for at least one northwest
striking epithermal quartz vein structure. This vein is weakly
anomalous in gold but is strongly anomalous in mercury. This
northwest striking vein and the north-northeast striking shear
zone represents another target on the property.
Regional Geography
The Stillwater Range trends northerly through the center of
Churchill County, from Sand Springs Summit on U.S. 50 into
Pershing County. The range contains several units of deformed
Mesozoic rocks separated by thrust faults and is the center of a
large complex of Cretaceous mafic igneous rocks and a succession
of volcanic and intrusive rocks of Cenozoic age (Willden and
Speed, 1974). Fold axes in the layered Cenozoic rocks trend
northward.
The principal rock units in the Sand Springs Range, the
continuation of the Stillwater Range south of the highway, are
volcanic sedimentary rocks of Triassic and Jurassic age,
Cretaceous granitic rocks, and Tertiary volcanic rocks. The Sand
Springs Range contains the largest exposed pluton in Churchill
County, a composite body of granodiorite and quartz monzonite
radiometrically dated at 76-80 m.y. (Nevada Bureau of Mines,
1964). Tertiary volcanic rocks overlie the intrusive complex in
the vicinity of Sand Springs Summit.
Geological Work Program
Miranda completed an exploration work program on the Miranda
Property consisting of the following:
1. Rock Chip Samples
Miranda collected 34 random rock chip samples during their
studies of the area. Rock chip assay results from the quartz +/-
tourmaline veins ranged from 0.0002 ozs Au/t to 0.217ozs Au/t.
Seven samples were collected from skarn mineralized rocks. Assay
values from these samples ranged from 0.0004 ozs Au/t to 0.065
ozs Au/t. Two of the epithermal quartz veins in the southwestern
part of the property contained gold values of 0.008 ozs Au/t and
0.009 ozs Au/t, but contained 14.994 ppm Hg and 34.940 ppm,
respectively. Of the 7 samples collected from skarn, one assayed
1.2 % Cu. All together, 18 of the 34 samples (53%) contained
between 0.003 ozs Au/t to 0.21 ozs Au/t and 4 of the 34 samples
(12%) contained between 0.1% Cu to 1.2% Cu..
While the quartz +/- tourmaline veins were more anomalous in gold
than the skarn samples, neither of these host rocks had
significant mercury values. Mercury was anomalous in the volcanic
hosted epithermal zone to the southwest.
2. Soil Samples
Gold anomalies in the soil samples were confined to the soil
lines that were over the metasedimentary rocks and the diorite
which were the northern 2 lines (10600N, 11200N). These 2 lines
were also
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anomalous in copper and arsenic. Gold and copper
anomalies ranged from 0.0015 ozs Au/t to 0.016 ozs Au/t and 0.011
% Cu and 0.184 % Cu. Soil samples were also anomalous in arsenic.
Contours of these elements trend northeast (Plates 1, 2, and 3).
Mercury exhibits anomalies throughout the soil grid. When the
anomalies are contoured they form a strong north-northeast
trending mercury zone that correlates with the shear zone that
strikes in the same direction.
3. Magnetometer Survey
A magnetometer survey was conducted during December 1997. A total
of 19 line miles (30 kms.) were surveyed. The lines were oriented
N65W and were spaced 200 feet (60 meters) apart. Station spacing
on the lines was 50 feet (15 meters).
The magnetometer survey primarily picked-up the post-mineral
basalt flows that cover parts of the rhyolite tuffs and the
metasediments throughout the project area. In particular, neither
the diorite intrusive or the skarn altered areas were
magnetically anomalous. There was no more than a 60 gamma
increase over the surrounding area. The major northwest striking
fault that separates the diorite and limestone from the rhyolite
tuff to the south shows as a weak magnetic low. Associated with
this low is a soil mercury anomaly. There is also a weak low on
the southern part of the property, which strikes northwest. There
is also a mercury anomaly associated with this magnetic low.
Overall, the results of the magnetic survey show none to weak
responses over rocks that on the surface are mineralized and
altered. It would be hard to pick out targets based on the
magnetic survey alone.
Conclusion And Recommendations
Evaluation of the Sand Springs property has resulted in the
discovery of two gold-bearing areas in the western and
southwestern part of the claim block. In the western area,
anomalous gold values are hosted in the quartz +/- tourmaline
veins that occur in the diorite and limestone, and skarn
mineralized zones in the limestone adjacent to the diorite. The
target for this style of mineralization would be the skarn
mineralization in the limestone at the diorite contact. This
target is a near surface target and could be tested with drill
holes of less than 300 feet (90 meters).
The southwestern target would be along the southern trend of the
shear zone under the rhyolite tuff cover. This target would
extend from the northwest striking fault contact of the diorite
and limestone with the rhyolite to the south near the
intersection of the northwest striking epithermal quartz vein.
This target has low gold in rock chip samples but has anomalous
mercury in rock and soil. The low gold geochemical anomaly and
the downdropped displacement along the northwest fault suggests
that mineralized rock is deeper and that drill testing this
target will require drilling in excess of 500 feet (150 meters).
The copper anomalies intersected in Pegasus' drill holes PSS-12-
93 and PSS-13-93 were not followed-up. The intercepts in the two
holes are along a north-northeast strike and it would be a
straight forward proposition to test this anomalous zone along
trend.
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Skarn mineralization has been previously tested by drilling but
only 2 drill holes were located in what appears to be the best
target of the area. One of those holes (PSS-94-4) intersected 10
feet (3 meters) of 0.14 ozs Au/ton. This mineralized intercept
was never followed up. The second drill hole (PSS-94-1) did not
intersect any significant mineralization. This leaves the skarn
mineralized target and the quartz +/- tourmaline vein zone open
for discovery. The rhyolite tuff covered target has never been
drill tested and it is likely that it has never been explored.
Positive results from Miranda's exploration program suggests that
there is evidence of a skarn-hosted gold deposit on the property
and that untested drill targets remain and need to be tested. The
following table summarizes the costs involved in a three-phased
trench and drill program at Sand Springs. The first phase
involves a trenching program that will be used to locate and
justify a two-phased drilling program.
- ------------------------------------------------------------------
Work Program Proposed by Geological Report
- ------------------------------------------------------------------
Phase I Cost/unit Total Description
- ------- --------- ------ ---------------
Geologist 10 days $300 $3,000 Permitting and
the work
Expenses 6 days $80 $500 Room and Board
6 days $50 $300 Backhoe
$3,240 Trenches
Assaying 50 samples $25 $1,300 Reporting
$700 Final Report
Contingency $900 Road reclaim,
------ revegetation
Total Phase I $9,940
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Phase II Cost/unit Total Description
- --------- --------- ----- -------------
Geologist 10 days $300 $3,000 Drill site
location,
supervision
Permitting 1 day $300 $300 BLM permitting
Road Work 2 days $1,200 $2,400 Road
construction,
reclamation
Drilling 3,000 feet $10 $30,000 Drilling
Assays 600 samples $10 $6,000 Au, Ag, Cu
Land/Claim $1,800 Maintenance fee
Reporting 5 days $250 $1,250 Final report
--------
Sub-Total $44,750.00
Contingency 5% $2,237.50
--------
Total Phase II $46,987.50
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Phase III Cost/unit Total Description
- ---------- --------- ------- -----------------
Geologist 20 days $300 $6,000 Drill Supervision
Drilling 6,000 feet $10 $60,000 Drilling
Assays 1,200 samples $10 $12,000 Au, Ag, Cu
Reporting 5 days $250 $1,250 Final Report
Reclamation 2 days $1,200 $2,400 Road reclaim,
------- revegetation
Sub-Total $81,650.00
Contingency 5% $4,082.50
-------
Total Phase III $85,732.50
Company's Plan of Operation
The Company has determined to proceed with Phase One of the
exploration program on the Miranda Property. The Company has
raised sufficient funds from prior offerings of its securities,
as set forth in Item 4 of Part II of this Registration Statement,
to proceed with Phase One of the exploration
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program. The Company will assess whether to proceed with Phase Two
of the exploration program upon completion of Phase One and an
evaluation of the results of the Phase One program.
Administration
The Company has entered into a management contract dated December
28, 1998 with Senate Capital Group Inc. whereby Senate Capital
has agreed to provide office administration services to the
Company for a fee of $750 US per month for a one-year term
commencing January 1, 1999. The services include reception,
secretarial services, accounting services, investor relations and
general office services.
Competition and Marketing
The mining industry, in general, is intensively competitive and
there is not any assurance that even if commercial quantities of
ore are discovered, a ready market will exist for sale of same.
Numerous factors beyond the control of the Company may affect the
marketability of any substances discovered. These factors
include market fluctuations, the proximity and capacity of
natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of
minerals and environmental protection. The exact effect of these
factors cannot be accurately predicted, but the combination of
these factors may result in the Company not receiving an adequate
return on invested capital.
Compliance with Government Regulation
The Company will be required to comply with all regulations,
rules and directives of governmental authorities and agencies
applicable to the exploration of minerals in the United States
generally and in the State of Nevada, specifically. In addition,
production of minerals in the State of Nevada will require prior
approval of applicable governmental regulatory agencies. There
can be no assurance that such approvals will be obtained. The
cost and delay involved in attempting to obtain such approvals
cannot be known in advance.
During the exploration phase of the Miranda Property, the Company
will be subject to regulation by the Bureau of Land Management, a
branch of the US Department of the Interior. The Company has
budgeted for regulatory compliance costs in the proposed work
program recommended by the Geological Report. The Company will
have to sustain the cost of reclamation and environmental
mediation for all exploration (and development) work undertaken.
The amount of these costs is not known at this time as the
Company does not know the extent of the exploration program it
will undertake, beyond completion of the recommended work
program, or if it will enter into production on the Miranda
Property. Because there is presently no information on the size,
tenor, or quality of any resource or reserve at this time, it is
impossible to assess the impact of any capital expenditures on
the Company, its earnings or competitive position in the event a
potentially-economic deposit is discovered.
If the Company enters the production phase, the cost of complying
with permit and regulatory environment laws will be greater
because the impact on the project area is greater. Permits and
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regulations will control all aspects of the production program if
the project continues to that stage. Examples of regulatory
requirements include:
1. Water discharge will have to meet drinking water
standards (State Water Quality Control Board);
2. Dust generation will have to be minimal or otherwise
re-mediated (State Air Quality Control Board);
3. Dumping of material on the surface will have to be re-
contoured and re-vegetated with natural vegetation
(Bureau of Land Management);
4. An assessment of all material to be left on the surface
will need to be environmentally benign (Bureau of Land
Management);
5. Ground water will have to be monitored for any
potential contaminants (State Water Quality Control
Board);
6. The socio-economic impact of the project will have to
be evaluated and if deemed negative, will have to be
re-mediated (County Agencies); and
7. There will have to be an impact report of the work on
the local fauna and flora including a study of
potentially endangered species (Bureau of Land
Management).
Exploration Risk
Exploration for minerals is a speculative venture necessarily
involving substantial risk. There is not any certainty that the
expenditures to be made by the Company in the acquisition of the
interests described herein will result in discoveries of
commercial quantities of ore. Hazards such as unusual or
unexpected formations and other conditions are involved in
mineral exploration and development. The Company may become
subject to liability for pollution, cave-ins or hazards against
which it cannot insure or against which it may elect not to
insure. The payment of such liabilities may have a material
adverse effect on the Company's financial position.
No Known Bodies of Ore
There are not any known bodies of ore on the Company's
properties. The business plan of the Company is to raise funds
to carry out further exploration with the objective of
establishing ore of commercial tonnage and grade. If the
Company's exploration programs are successful, additional funds
will be required for the development of economic reserves and to
place them in commercial production. The only source of future
funds presently available to the Company is through the sale of
equity capital. The only alternative for the financing of
further exploration would be the offering by the Company of an
interest in its properties to be earned by another party or
parties carrying out further exploration or development thereof,
which is not presently contemplated.
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Research and Development Expenditures
During the past two fiscal years, the Company has not completed
any research or development expenditures. Miranda Industries
Inc., the vendor of the Miranda Property, has completed the
geological exploration program on the Miranda Property, as
discussed above.
Subsidiaries
The Company has no subsidiaries.
Employees
The Company has no paid or full time employees. The Company
conducts its business through agreements with consultants and
arms-length third parties. The only officer of the Company, Peter
Bell, as described below under Item 8, provides his services on a
part-time basis as required for the business of the Company.
None of the directors or officers are paid a salary for acting as
a director or officer. The Company may, however, pay fees to
directors and officers for work provided on a consulting fee
basis.
Patents and Trademarks
The Company does not own, either legally or beneficially, any
patent or trademark.
Item 7. Description of Property
The Company has an option to acquire a 50% interest in the
Miranda Property, as described in detail in Item 6 of Part I of
this Registration Statement under "Miranda Property Option
Agreement".
The Company does not own or lease any property other than its
option to acquire an interest in the Miranda Property. The
Company has entered into an office administration contract dated
December 28, 1998 with Senate Capital Group Inc. whereby Senate
Capital has agreed to provide office administration services to
the Company for a fee of $750 US per month for a one-year term
commencing January 1, 1999. The services include reception,
secretarial services, accounting services, investor relations and
general office services.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the directors,
executive officers and significant employees of the Company,
their present positions with the Company, and their biographical
information.
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1. Directors and Officers
Name Age Office Term of Office
- ---------------- --- -------------- --------------
Peter William Bell 63 President/Sec.
Treas./Director One year
Ross William
Johnston Bailey 37 Director One year
Richard Douglas Wilson 41 Director One year
Neil Murray-Lyon 52 Director One year
Mr. Peter William Bell is a director and is President of the
Company. Mr. Bell is a self-employed consultant and is a
director of Current Technology Corporation. Mr. Bell has a
Bachelor of Science Degree in Pharmacy from the University of
Manitoba and a Masters in Business Administration from the
University of Western Ontario. Mr. Bell practised as a licensed
pharmacist until 1968. Mr. Bell has provided a wide range of
consultant services to health care companies and organizations.
Mr. Bell has been a director and member of a number of health
care companies and professional organizations. Mr. Bell has been
a director and member of a number of health care companies and
professional organizations. Mr. Bell is a director of Current
Technologies Corporation, a company that is publicly traded on
the OTC Bulletin Board. Current Technologies Corporation markets
an electrostatic hair maintenance and re-growth process. Mr.
Bell has been a director of Current Technologies Corporation
since 1992. Mr. Bell is also a director and is the President of
Ezon Healthcare Corporation, a private company. Ezon Healthcare
Corporation is involved in the development of a graphic labeling
system for pharmaceutical products. Mr. Bell has been a director
and the President of Ezon Healthcare Corporation since 1997. Mr.
Bell was appointed to the Board of Directors of the Company on
December 29, 1998. Mr. Bell will provide services to the Company
on a part-time basis, as required for the business of the
Company. There is no requirement on Mr. Bell to provide a fixed
amount of time in the service of the Company. Consequently, the
amount of time he spends on Company business will depend on the
needs of the Company.
Mr. Ross William Johnston Bailey is a director of the Company and
has a Bachelors Degree in Mechanical Engineering from the
University of Victoria and is enrolled in the Masters in Business
Administration program at Simon Fraser University. Mr. Bailey
has been employed with Ballard Power Systems as a manufacturing
engineer since 1995. Mr. Bailey was appointed to the Board of
Directors of the Company on December 29, 1998.
Richard Douglas Wilson is a director of the Company. Mr. Wilson
is experienced in raising capital for mineral resource companies
through the public market since 1987. Mr. Wilson has been a
director and President of International Chargold Resources Ltd.
since 1996. International Chargold Resources is a company that is
publicly traded on the Vancouver Stock Exchange and that proposes
to build and operate a precious metals refinery in Ghana, West
Africa. Mr. Wilson has also been a director and secretary of
Regent Ventures Ltd. since 1993. Regent Ventures is a company
that is publicly traded on the Vancouver Stock Exchange and that
owns a mineral property in the Yukon Territories,
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Canada. Mr. Wilson was appointed to the Board of Directors of
the Company on December 29, 1998.
Mr. Neil G. Murray-Lyon is a director of the Company and is the
President, Chief Executive Officer, Chief Financial Officer and a
Director of Wotan Capital Inc. He was the Secretary of Colt
Energy Inc. ("Colt"), a junior capital pool corporation that
completed its Major Transaction to become a public oil and gas
company listed on the Alberta Stock Exchange (the "ASE") until
December, 1998 when Colt completed an arrangement with KeyWest
Energy Corporation. He is currently the Chairman and one of the
controlling shareholders of Tokenhouse Capital & Research Inc.,
an investor-relations firm from November, 1994 until July, 1998
when it became an investment company. Mr. Murray-Lyon was also
an independent investor relations consultant from 1987 to 1994.
From October, 1994 to March, 1996, he was the Secretary of
Patshare Capital Inc., a junior capital pool corporation listed
on the ASE that completed its Major Transaction and changed its
name to EveryWare Development Canada Corp. He was also a past
Director of Allrich Energy Group Inc., a junior capital pool
corporation listed on the ASE that completed its Major
Transaction and changed its name to AltaRex Corp. Mr. Murray-Lyon
was appointed to the Board of Directors of the Company on
December 29, 1998.
2. Significant Employees
The Company does not have any significant employees.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid executive officers and directors for
the fiscal year which will end on January 31, 2000 As indicated
below, the Company does not presently pay any compensation to any
of its officers and directors. The Company may during the course
of the current year decide to compensate its officers and
directors for their services. No other compensation is
anticipate to paid any such officers other than the cash
compensation set forth below.
Summary Compensation Table
Name Position Year Salary
- --------------------------- --------- ----- ------
Peter Bell President 1999 Nil
Ross William Johnston Bailey Director 1999 Nil
Richard Douglas Wilson Director 1999 Nil
Neil Murray-Lyon Director 1999 Nil
The Company does not pay to its directors any compensation for
each director serving on the Company's board of directors.
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Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth information as of the date hereof,
based on information obtained from the persons named below, with
respect to the beneficial ownership of the Common Stock by (i)
each person known by the Company to own beneficially 5% or more
of the Common Stock, (ii) each director and officer and (iii) all
directors and officers as a group:
Amount of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- ---------- --------
Common Stock Peter William Bell 1,000,000 16.53%
Common Stock Ross W.J. Bailey 100,000 1.65%
Common Stock Richard Douglas Wilson 100,000 1.65%
Common Stock Neil Murray-Lyon 225,000 3.72%
Common Stock Directors and Officers 1,425,000 23.55%
As a Group
Item 11. Interest of Management and Others in Certain
Transactions
None of the directors or officers of the Company, nor any
proposed nominee for election as a director of the Company, nor
any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all
outstanding shares of the Company, nor any promoter of the
Company, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any
transaction since the date of the Company's incorporation or in
any presently proposed transaction which, in either case, has or
will materially affect the Company.
Item 12. Description of Securities
Common Stock
The Company has authorized 25,000,000 common shares par value
$0.001 of Common Stock, of which 6,050,000 are currently
outstanding.
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of
holders of Common Stock, including the election of directors.
There is no right to cumulate votes for the election of
directors. Stockholders holding a majority of the voting power
of the capital stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a
quorum at any meeting of the Company's stockholders, and the vote
by the holders of a majority of such outstanding shares is
required to effect certain fundamental corporate changes such as
liquidation, merger or amendment of the Company's Certificate of
Incorporation.
15
<PAGE 16>
Holders of Common Stock are entitled to receive dividends pro
rata based on the number of shares held, when, as and if declared
by the Board of Directors, from funds legally available therefor,
subject to the rights of holders of any outstanding preferred
stock. In the event of the liquidation, dissolution or winding up
of the affairs of the Company, all assets and funds of the
Company remaining after the payment of all debts and other
liabilities, subject to the rights of the holders of any
outstanding preferred stock, shall be distributed, pro rata,
among the holders of the Common Stock. Holders of Common Stock
are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and non-assessable.
Warrants
The Company does not have any warrants to purchase securities of
the Company outstanding.
Options
The Company does not have any options to purchase securities of
the Company outstanding. The Company may in the future establish
an incentive stock option plan for its directors, officers,
employees and consultants.
Transfer Agent
Pacific Stock Transfer of Las Vegas, Nevada is the transfer agent
for the Shares.
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Stockholder Matters
The Company anticipates applying for a listing on the OTC
Bulletin Board upon effectiveness of this registration statement.
Currently, there is no public market for the Company's stock and
there is no assurance that a public market will materialize.
As of the date of this registration statement, there were forty-
five (45) registered shareholders in the Company. There are no
dividend restrictions in the Company.
None of the holders of the Company's common shares have any right
to require the Company to register its common shares pursuant to
the Securities Act of 1933.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the
Corporation.
16
<PAGE 17>
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its inception in December, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,000,000 common shares at a
price of $0.01 per share on December 29, 1998 pursuant to Rule
504 of Regulation D of the Act, and Section 46(j) of the
Securities Act of British Columbia. All of these shares were
sold to Peter Bell, the President, Secretary/ Treasurer and a
Director of the Company.
The Company completed an offering of 5,000,000 common shares at a
price of $0.01 per share on January 19, 1999 to persons known to
the officers and directors of the Company. The offering was
completed pursuant to Rule 504 of Regulation D of the Act which
provides an exemption for issues of stock up to $1,000,000, in
the aggregate, by companies with a specific business plan and
that are not subject to the reporting requirements of the
Securities and Exchange Act of 1934. The offering was also
completed pursuant to exemptions provided by Section 46(j) of the
Securities Act of British Columbia, Section 66(a) of the
Securities Act of Alberta, Sections 35(2) and 73(1)(9) of the
Securities Act of Ontario and Section 3 of the Securities Act of
Quebec.
The Company completed an offering of 50,000 common shares at a
price of $0.10 per share on January 25, 1999 to persons known to
the officers and directors of the Company. The offering was
completed pursuant to Rule 504 of Regulation D of the Act which
provides an exemption for issues of stock up to $1,000,000, in
the aggregate, by companies with a specific business plan and
that are not subject to the reporting requirements of the
Securities and Exchange Act of 1934. The offering was also
completed pursuant to exemptions provided by Section 46(j) of the
Securities Act of British Columbia, Section 66(a) of the
Securities Act of Alberta, Sections 35(2) and 73(1)(9) of the
Securities Act of Ontario and Section 3 of the Securities Act of
Quebec.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as
provided under the Nevada Revised Statutes (the "NRS") and the
Bylaws of the Company.
Under the NRS, director immunity from liability to a corporation
or its shareholders for monetary liabilities applies
automatically unless it is specifically limited by a
corporation's articles of incorporation (which is not the case
with the Company's Articles of Incorporation). Excepted from that
immunity are: (i) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) a
violation of criminal law (unless the director had reasonable
cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was
unlawful); (iii) a transaction from which the director derived an
improper personal profit; and (iv) willful misconduct.
The By-laws of the Company provide that the Company will
indemnify its directors and officers to the fullest extent not
prohibited by the Nevada General Corporation Law; provided,
however, that the
17
<PAGE 18>
Company may modify the extent of such
indemnification by individual contracts with its directors and
officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with
any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of
the corporation, (iii) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in
the corporation under the Nevada General Corporation Law or (iv)
such indemnification is required to be made pursuant to the By-
laws.
The By-laws of the Company provide that the Company will advance
to any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer, of the corporation, or is or was serving at the
request of the corporation as a director or executive officer of
another corporation, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay
said amounts if it should be determined ultimately that such
person is not entitled to be indemnified under the By-laws of the
Company or otherwise.
The By-laws of the Company provide that no advance shall be made
by the Company to an officer of the Company (except by reason of
the fact that such officer is or was a director of the Company in
which event this paragraph shall not apply) in any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding,
or (ii) if such quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in
bad faith or in a manner that such person did not believe to be
in or not opposed to the best interests of the Company.
18
<PAGE 19>
PART F/S
FINANCIAL STATEMENTS
19
<Page 19A>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
<Page 19B>
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
AUDITORS' REPORT
To the Directors
Explore Technologies, Inc.
We have audited the balance sheet of Explore Technologies, Inc.(an exploration
stage company) as at January 31, 1999 and the statements of loss and deficit
accumulated during the development stage, cash flows and stockholders' equity
for the period then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with United States and Canadian generally
accepted auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at January 31, 1999 and the
results of its operations and the cash flows for the period then ended in
accordance with United States generally accepted accounting principles.
Vancouver, B.C. /S/ Morgan & Company
February 4, 1999 Chartered Accountants
<Page 19C>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
BALANCE SHEET
JANUARY 31, 1999
(Stated in U.S. Dollars)
- ----------------------------------------------------------------
ASSETS
Current
Cash $ 60,170
Mineral property (Note 3) 1,000
--------
$ 61,170
- ----------------------------------------------------------------
LIABILITIES
Current
Accounts payable $ 3,571
--------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
25,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
6,050,000 Common shares 6,050
Additional paid in capital 58,950
Deficit Accumulated During The Exploration
Stage (7,401)
--------
57,599
$61,170
Approved by the Directors:
/s/Peter Bell /s/Rick Wilson
<Page 19D>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Expenses
Bank charges $ 14 $ 14
Office and sundry 154 154
Office facilities and services 750 750
Professional fees 6,483 6,483
------- -------
Net Loss For The Period 7,401 $ 7,401
-------
Deficit Accumulated During
The Exploration Stage,
Beginning Of Period -
-------
Deficit Accumulated During
The Exploration Stage,
End Of Period $ 7,401
--------
Net Loss Per Share $0.01
--------
Weighted Average Number
of Shares Outstanding 2,126,136
<Page 19E>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (7,401) $ (7,401)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating Activities
Change in accounts payable 3,571 3,571
---------------------------------
(3,830) (3,830)
---------------------------------
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
---------------------------------
Cash Flow From Financing Activities
Share capital issued 65,000 65,000
---------------------------------
Increase In Cash 60,170 60,170
Cash, Beginning Of Period - -
Cash, End Of Period $ 60,170 $ 60,170
<Page 19F>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS'EQUITY
January 31, 1999
(Stated in U.S. Dollars)
Common Stock
--------------------------------
Additional
Shares Amount Paid-in Capital Deficit Total
------------------------------------------------------
Shares issued for
cash @ $0.01 6,000,000 $6,000 $54,000 $ - $60,000
Shares issued for
cash @ $0.10 50,000 50 4,950 - 5,000
Net loss for the
period - - - (7,401) (7,401)
------------------------------------------------------
Balance, January
31, 1999 6,050,000 $6,050 $58,950 $ (7,401) $57,599
<Page 19G>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A. on December 18,
1998.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral property and has not
yet determined whether the property contains ore reserves that are
economically recoverable.
The recoverability of amounts shown as mineral property and related deferred
exploration expenditures is dependent upon the discovery of economically
recoverable reserves, confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain profitable production
or proceeds from the disposition thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a
precise determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on mineral properties
in which it has a continuing interest to be amortized over the recoverable
reserves when a property reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration expenditures will be
written off. To date none of the Company's properties have reached commercial
production.
At least annually, the net deferred cost of each mineral property is compared
to management's estimation of the net realizable value, and a write-down is
recorded if the net realizable value is less than the cumulative net deferred
costs.
<Page 19H>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109 -
"Accounting for Income Taxes" (SFAS 109). This standard requires the use of
an asset and liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some portion or all of a
deferred tax asset will not be realized, a valuation allowance is recognized.
b) Financial Instruments
The Company's financial instruments consist of cash and accounts payable.
Unless otherwise noted, it is management's opinion that this Company is not
exposed to significant interest or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
c) Net Loss Per Share
Net loss per share is based on the weighted average number of common shares
outstanding during the period plus common share equivalents, such as options,
warrants and certain convertible securities. This method requires primary
earnings per share to be computed as if the common share equivalents were
exercised at the beginning of the period or at the date of issue and as
if the funds obtained thereby were used to purchase common shares of the
Company at its average market value during the period.
3. MINERAL PROPERTY
The Company has entered into an option agreement to acquire a 50% interest,
subject to a 2.5% net smelter royalty, in the Sand Springs, Nevada property
for the following consideration:
- - cash payment of U.S. $1,000;
- - exploration expenditures totalling U.S. $150,000 by December 31, 2001, U.S.
$10,000 of which must be expended by December 31, 1999.
Consideration paid to date $ 1,000
<Page 19I>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent something other
than a date. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000, and, if not addressed, the impact on operations
and financial reporting may range from minor errors to significant systems
failure which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year 2000
Issue affecting the entity, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
<Page 19J>
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report dated February 4, 1999,
on the financial statements of Explore Technologies Inc. for the period ended
January 31, 1999 in the Company's Form 10 - SB. We also consent to the
application of such report to the financial information in the Form 10 - SB,
when such financial information is read in conjunction with the financial
statements referred to in our report.
Vancouver, Canada /S/ Morgan & Company
February , 1999 Chartered Accountants
<PAGE 20>
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: Bylaws of the Company
Exhibit 3: Miranda Property Option Agreement
Exhibit 4: Miranda Property Option Agreement with McIntosh
Exhibit 5: Option Facilities and Service Contract
Exhibit 6: Geological Report on the Miranda Property (amended)
Exhibit 7: Consent of Geological Consultant to use of Report
20
<PAGE 21>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this Amendment No. 2 to Form 10-SB
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
EXPLORE TECHNOLOGIES, INC.
Date: July 8, 1999
By: /s/ Peter Bell
PETER BELL, Director, President
Chief Executive Officer
<PAGE 22>
SAND SPRINGS PROJECT
CHURCHILL COUNTY, NEVADA
1998 PROJECT REPORT
John A Rice
For
MIRANDA INDUSTRIES INC.
December 1998
<PAGE 23>
AUTHOR'S CERTIFICATE
I, John A. Rice, of Reno, Nevada do hereby certify:
1) That I am a consulting geologist whose address is P.O. Box
20074, Reno, Nevada, 89515.
2) That I have practiced my profession as a geologist for 18
years.
3) That I am a graduate of Colorado State University with a
Bachelor of Science degree in Geology (1978) and a Masters of
Science degree in Economic Geology (1984) from the same
university.
4) That I consent to the use of this report dated December 1998,
entitled "Sand Springs Project, Churchill County, Nevada".
5) This report was prepared by myself from data collected during
the 1997 field season.
John A. Rice
/s/ John A. Rice
Consulting Geologist
<PAGE 24>
Table of Contents
SUMMARY 3
INTRODUCTION 3
LOCATION 4
HISTORY 4
WORK ACCOMPLISHED 6
REGIONAL GEOLOGY 8
LOCAL GEOLOGY 8
Stratigraphy 8
Structure 11
Alteration 12
Mineralization 13
RESULTS 13
Rock Chip Samples 13
Soil Samples 13
Magnetometer Survey 14
CONCLUSION AND RECOMMENDATIONS 14
REFERENCES 17
Figures
FIGURE 1 - LOCATION MAP 5
FIGURE 2 - SAMPLE LOCATION MAP 7
FIGURE 3 - GEOLOGIC MAP 9
FIGURE 4 - CROSS-SECTION 10
Appendices
APPENDIX 1 - ROCK CHIP ASSAYS 18
APPENDIX 2 - SOIL ASSAYS 19
Plates
PLATE 1 - GOLD SOIL GEOCHEM MAP 20
PLATE 2 - COPPER SOIL GEOCHEM MAP 21
PLATE 3 - MERCURY SOIL GEOCHEM MAP 22
2
<PAGE 25>
SUMMARY
The Sand Springs project is an early stage exploration
property located in the Sand Springs Mining District, of
Churchill County, Nevada. The district has seen a long history of
production starting in 1905 and continuing until the mid-1960's.
District wide production has been approximately 21,000 ounces
gold and 1,300,000 ounces silver.
Pegasus Gold Corporation had an exploration program on the
property in 1992-1993. Their program consisted of collecting 108
rock chip samples, cursory geologic mapping, and drilling 13
reverse circulation drill holes. They intersected anomalous gold
in one drill hole and anomalous copper in 2 other drill holes.
Pegasus never followed up these anomalies. Cordex Exploration
also explored the area briefly, though did not acquire it.
Miranda USA became interested in the property in September 1997.
Their program consisted of detailed geologic mapping, rock chip
and soil sampling, and conducting a ground magnetometer survey.
Lithologies existing at the Sand Springs property include a
Triassic limestone overlain by an interbedded unit of phyllite,
schist, and metaconglomerate. Overlying the metasediments are
Teritary ryholite tuffs and extensive basalt flows. The limestone
and metasediments are intruded by a Cretaceous diorite. At the
contact of the limestone and diorite, in the western part of the
property, there is a major north-northeast striking shear zone.
The shear zone cuts the diorite and limestone and to the south of
these units it cuts the overlying ryholite.
The Sand Springs project represents an opportunity of
discovering a skarn-hosted gold deposit near the contact of the
Triassic limestone and a Cretaceous diorite. In addition to the
skarn mineralization, there are numerous gold-bearing
quartz +/- tourmaline veins which cut the lower limestone unit
and the diorite. These discontinuous vein structures strike
north-northeast and dip steeply west. The limestone and diorite
that host these two styles of mineralization are located at the
site of a major north-northeast striking shear zone. Immediately
to the south of the limestone and diorite, the rocks are in fault
contact with an overlying Tertiary rhyolite. The rhyolite has
been downdropped a minimum of 400-500 feet (120-150 meters). This
block has been intersected by shearing but has not been cut by
north-northeast striking quartz +/- tourmaline veining.This
rhyolite block is also the host for at least one northwest
striking epithermal quartz vein structure. This vein is weakly
anomalous in gold but is strongly anomalous in mercury. This
northwest striking vein and the north-northeast striking shear
zone represents another target on the property.
INTRODUCTION
The Sand Springs property is an early-stage exploration
property in the Sand Springs Mining District. The Sand Springs
District includes the Summit King-Dan Tucker, Summit Queen, and
Twilight mines. The Sand Springs property lies approximately 2
miles (3.2 kms.) west of the Summit King mine. Gold was first
discovered in the area in 1905 at the Dan Tucker mine. Little
work was done on the property until 1912 when work on a 100 foot
shaft was initiated. Production started in 1919 (Vanderburg,
1940). Most of the production has come from
3
<PAGE 26>
the Summit Queen-Dan
Tucker mines. District wide production has been approximately
21,000 ounces. gold and 1,300,000 ounces. silver (Willden and
Speed, 1974). Some tungsten has been produced but the amount is
not known.
Limited scale production on the Summit King-Dan Tucker mines
is scheduled to begin in the summer of 1998 (Bill Campbell,
personal communication). A gentleman named John Wacker from
California is the operator/owner of the mine.
The majority of the field work and report preparation was
completed by John Rice, an independent geologist. The geophysical
survey was completed by Tom Carpenter, a consulting geophysicist,
and surveying was conducted by Grand River Exploration.
LOCATION
The Sand Springs property is located in the Stillwater Range
about 2 miles (3.2 kms.) west of Sand Springs Pass on U. S.
Highway 50 and 30 highway miles east of Fallon on U. S. 50 (48
kms.) in Churchill County, Nevada (Fig. 1). The property is
approximately one half mile (0.8 km.) north of the highway. The
property is located approximately 23 miles (37 kms.) north of the
Rawhide mine (1,600,000 ounces gold) and 38 miles (61 kms.)
south-southwest of Fondaway Canyon.
Eleven lode claims have been located and filed by Miranda
USA on land administered by the U. S. Bureau of Land Management.
The claims are named Dune 1-8, 22-24 and they are situated in
sections 3, 4, 9, and 10 of T16N and R32E.
HISTORY
The Sand Springs district has had a long history of
exploration and production. The following historical account was
taken from Arizona Geological Society's 1987 Walker Lane Report.
In 1905, two prospectors discovered vein mineralization
at the site of the Dan Tucker mine. Development on the
vein began in 1912 and production began in 1919. The
Martin Brothers, Co. leased the mine from the
prospectors. They initially produced 150 tons of ore
worth between $125-$300 per ton. The company explored
other east-west striking parallel vein structures that
contained rich cerargyrite ore. In 1924, the property
was acquired by Senator N. H. Getchell. In 1934, the
Dan Tucker mine was leased to Rosetta Mines Co. who
continued production and reportedly discovered a
"middle vein" of 9 foot (3 m) width located 1000 feet
(305 meters) east of the main shaft. There was no
recorded production from 1942-1947. After this time the
district saw intermittent
4
<PAGE 27>
FIGURE 1 - LOCATION MAP
<PAGE 28>
production from several mines until 1951. There is no
recorded production after 1952. Recent years has seen
many examinations and limited exploration for porphyry
copper in section 3, for tungsten along the southern
edge of the district associated with skarn
mineralization, and for precious metals along the
principal vein system.
WORK ACCOMPLISHED
Pegasus Gold Corporation had an exploration program in the
Sand Springs area in 1992-1993. Their program consisted of
collecting 108 rock chip samples. Forty-two out of the 108
samples (38%) contained greater than 100
ppb gold and 26 of the 108 samples (24%) contained greater than
0.1% Cu. A ground magnetic survey consisting of 32.45 miles (52
kms.) line miles was completed and 13 reverse circulation holes
were drilled for a total of 4,630 feet (1,410 meters). Pegasus'
exploration work was concentrated to the northeast of the area
that Miranda USA is working.
Pegasus' drilling found that the diorite intrusive
underlying the metasedimentary rocks is more widespread than
surface mapping indicated. The metasedimentary rocks were found
to be mainly a thin roof pendant on the diorite (Pegasus drill
report, 1993). Drill hole PSS-4-93 intersected 10 feet (3 meters)
of 0.15 ozs Au/t -between 290-300 feet (88-91 meters) within high
temperature calc-silicate skarn and quartz microveining. Drill
holes PSS-12-93 and PSS-13-93 had anomalous Cu mineralization.
Hole PSS-12-93 encountered 30 feet (9 meters) of 0.73% Cu between
60-90 feet (18.3-27.4 meters) and PSS-13-93 encountered 30 feet
(9 meters) of 0.44% Cu between 200-230 feet (60-70 meters). Drill
holes PSS-12-93 and PSS-13-93 are approximately 600 feet (185
meters) apart, along a north-northeast trend, which is the main
trend of structures and mineralization in the area.
Pegasus Gold Corporation never followed up these drill hole
anomalies even though their drill report recommended further work
in the area should be conducted.
Cordex explored the Sand Springs area also but never
acquired the property. They collected 25 rock chip samples with
anomalous samples assaying as high as 31,722 ppb gold (0.93 ozs
Au/t). Fifteen of the 25 samples (60%) assayed greater than 100
ppb gold. Their high silver value was 4.2 ozs Ag/t.
Cordex did not analyze for base metals.
Miranda USA became interested in the area when Larry
McIntosh brought it to their attention. Ed Chipp did a field
review of the area in September 1997 with Larry McIntosh and
recommended to Miranda USA that they conduct more detailed work
on the property. Detailed geologic mapping was completed along
with collecting 34 rock chip samples and collecting 242 soil
samples. In addition to the mapping and geochemical sampling,
nineteen line miles (30 kms.) of ground magnetic survey were
completed. Lines were 4,200 feet (1,280 meters) long and oriented
N65W. Lines were 200 feet (61 meters) apart and station spacing
was 50 feet (15 meters). Field
6
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FIGURE 2 - SAMPLE LOCATION MAP
<PAGE 30>
work on the property was conducted during the months of November
and December of 1997.
REGIONAL GEOLOGY
The Stillwater Range trends northerly through the center of
Churchill County, from Sand Springs Summit on U. S. 50 into
Pershing County. The range contains several units of deformed
Mesozoic rocks separated by thrust faults and is the center of a
large complex of Cretaceous mafic igneous rocks and a succession
of volcanic and intrusive rocks of Cenozoic age (Willden and
Speed, 1974). Fold axes in the layered Cenozoic rocks trend
northward (Page 1965).
The principal rock units in the Sand Springs Range, the
continuation of the Stillwater Range south of the highway, are
volcanic sedimentary rocks of Triassic and Jurassic age,
Cretaceous granitic rocks, and Tertiary volcanic rocks. The Sand
Springs Range contains the largest exposed pluton in Churchill
County, a composite body of granodiorite and quartz monzonite
radiometrically dated at 76-80 m.y. (Nevada Bureau of Mines,
1964). Tertiary volcanic rocks overlie the intrusive complex in
the vicinity of Sand Springs Summit.
LOCAL GEOLOGY
Stratigraphy
Willden and Speed (1974) have assigned 4 map units to a
Triassic or Jurassic age based on stratigraphic position, fossil
content, and similarities to lithologies of known age. These map
units are: -1) volcaniclastic rocks and limestone; 2) hornfels,
phyllite, and schist; 3) limestone and marble and; 4) basaltic
tuffs. The first unit is known to be no older than Triassic.
Granitic rocks are primarily of Jurassic age with some minor
Tertiary-aged granitic rocks exposed on the east slope of the
Stillwater Range. Tertiary units consist of rhyolite tuffs to
welded tuffs that are overlain by younger basalts.
The above units represented on the Sand Springs property
include the unit 1 Triassic limestone, unit 2 phyllite and
schist, Jurassic rocks of diorite composition, Tertiary rhyolite
tuffs and basalt flows (Fig. 3). The unit 1 limestone forms the
lower most sedimentary rock exposed in the project area. The
limestone is light to medium gray, is medium to thick bedded, and
is locally marbleized adjacent to the intrusive diorite contact.
It crops out in an area approximately 1,600 feet (490 meters)
long in a north-northeast direction by a maximum of 800 feet (245
meters) in width. The stratigraphic thickness of limestone as
exposed at the Sand Springs property is approximately 225 feet
(70 meters). The limestone is bounded to the west and north by
diorite. Overlying the limestone are metasedimentary rocks
consisting of phyllite, biotite schist, and metaclastic
conglomerate (Fig. 4). In the lower part of the metasedimentary
section the principal rock is the quartz-muscovite phyllite,
which is a light gray to greenish gray rock that is interbedded
with a dark brown, fine to medium grained, quartz pebble
metaconglomerate. This metaconglomerate is schistose in
appearance, especially near shear structures. The biotite schist
8
<PAGE 31>
FIGURE 3 - GEOLOGIC MAP
<PAGE 32>
FIGURE 4 - CROSS SECTION MAP
<PAGE 33>
is most common in the upper part of the metasedimentary section
that occurs on the property. This rock is dark gray to black,
fine grained, and calcareous. The stratigraphic thickness of the
metasedimentary rocks is a minimum of 1800 feet (550 meters) as
exposed in the project area. The limestone and metasedimentary
units strike N10?E to N40?E and dip 35? to 40? E.
The diorite intrudes the metasedimentary rocks and is
presumed to be Jurassic to Cretaceous in age. It has not been
observed intruding the volcanic rocks. The diorite is dark gray
to dark greenish gray, coarse grained crystalline, and commonly
pyritized throughout the area.
Tertiary rhyolite tuffs and welded tuffs are widespread in
the western and southern part of the project area. Tuffs strike
easterly and dip shallowly to the north. Overlying the rhyolite
tuffs and capping the metasedimentary rocks locally are an
extensive layer of thick Tertiary basalts. The basalts primarily
occur in the western part of the project area and westward and
are post-mineral.
Structure
Mesozoic structures of Early and Middle Jurassic age in the
Stillwater Range are primarily folds and thrust faults oriented
along a west-northwest axial trend with a vertical to south dip
(Willden and Speed, 1974). These structures are in turn folded
and faulted by a younger tectonic episode that has a northerly
axial trend. Cretaceous age diorite intrusions in the project
area has deformed and metamorphosed the sedimentary sequence of
rocks and has made it difficult to follow any continuity of
structures.
In the Sand Springs project area the most apparent structure
is a north-northeast striking shear zone that cuts the limestone
and diorite intrusive along the western part of the property. The
shear zone can be followed for at least 2,200 feet (670 meters)
in length in these two rock units and is up to 600 feet (185
meters) wide. The shear zone is marked by abundant quartz veins
and quartz-tourmaline veins. The veins strike north-northeast and
dip steeply west 60? to 85?. The veins range in thickness from a
few inches to 2 feet (0.6 meter). The longest quartz ? tourmaline
vein zone can be found in the diorite along a ridge near the
limestone contact. This particular vein is approximately 600 feet
(185 meters) long and is 1 foot (.3 meter) thick. Most of the
quartz-tourmaline veins are discreet veins which can not be
followed for more than a few tens of feet. Veins can be inferred
to be more continuous due to the continuity of shear and fault
structures.
There is strong evidence that the shearing has continued to
the south-southwest into the rhyolite tuffs that bound the
limestone and diorite along their southern contact. The rhyolite
tuffs are strongly sheared but there are no quartz +/- tourmaline
veins filling any of the sheer structures.
Low-angle ductile shears related to emplacement of the
diorite intrusive body form in the overlying limestone unit. These
shears are discontinuous and are
up 10 feet thick (3 meters). There are also an abundant amount of
west-northwest striking faults and joints throughout the
11
<PAGE 34>
project area. In the southwestern part of the project there is an
epithermal vein that also strikes west-northwest. The contact
between the limestone and diorite with the rhyolite tuff to the
south is a major post-mineral fault. This fault strikes N60?W and
is covered by alluvium to the southeast and is covered by basalt
to the northwest. Mapping of the basalt capped hills to the west
of the project area indicates that displacement along the fault
could be in the range of 400-500 feet (120-150 meters). The
southern block is the downdropped block.
Alteration
Besides the apparent metamorphism of the sediments by the
emplacement of the Cretaceous diorite intrusive there is
alteration related to skarn mineralization. Skarn alteration
occurs primarily in the lower part of the limestone unit adjacent
to the diorite intrusion. Skarn-altered areas are narrow and
elongated zones that strike north-northeast and dip easterly
which mimics the attitude of the limestone beds. Like the quartz
+/- tourmaline veins, the skarn altered zones are discontinuous
but can be followed up to 300 feet (90 meters) in length. Skarn
minerals include diopside, epidote, and garnet. The skarn is also
pyritic throughout the entire area. Skarn is locally anomalous in
gold.
Strong oxidation along faults and shears is common
throughout the project area and well beyond its limits. Anomalous
gold values are often associated with gossan deposits which occur
locally on north-northeast striking structures and along ductile
shears.
Silicification is a minor alteration component of the
mineralizing system. The gossanous zones are often variably
silicified. Wallrock immediately adjacent to the quartz-
tourmaline veins is also silicified. No significant jasperoid
bodies were found within the limestone. Some strong
silicification, but minor in extent, was associated with the
northwest striking quartz vein found in the rhyolite in the
southwestern part of the area.
The rhyolites are bleached and argillized throughout the
area in varying amounts. The pervasive and widespread character
of argillization may be an indication of the size and intensity
of the mineralizing system. In the project area, the rhyolite
tuffs crop out in all corners of the claim block. The rhyolites
also extend to the west, far beyond the limits of the claim
block. All of them are argillized to some extent. The Tertiary
rhyolite tuffaceous rocks that occur adjacent to the diorite,
either west or south, are strongly argillized. Farther south, in
the southwestern part of the project in the vicinity of the
northwest-striking vein there are many northwest and north-
northeast striking faults and fractures that are argillized
while the wallrock is only weakly altered to not
altered at all.
The widespread extent of argillic alteration and oxidation
strongly suggests that the mineralizing system is large. The
strongly-argillized faults and fractures of the southwestern part
of the area indicates that mineralization might be deep, but does
occur as reflected in rock chip geochemistry being anomalous in
gold and mercury.
12
<PAGE 35>
Mineralization
Gold mineralization is associated with quartz +/- tourmaline
veins and skarn mineralization. As mentioned above the most
prominent quartz +/- tourmaline vein is approximately 600 feet
(185 meters) long and 1 foot (0.3 meters) thick. Other veins
range in thickness from a few inches to 2 feet (0.6 meters) thick
but are considerably shorter. The quartz +/- tourmaline veins are
anomalous in gold and weakly anomalous in mercury but not in
silver.
Gold mineralization in skarn is associated with pyrite-
bearing altered rock. Skarn mineralization occurs in the lower
parts of the limestone that is adjacent to the diorite as
previously mentioned. Gold anomalies in the skarn are weaker than
in the quartz +/- tourmaline veins. In the northwestern part of
the property the quartz-tourmaline veins and skarn mineralization
represent the primary gold-bearing features.
In the southwestern part of the area mineralization is
represented by a small epithermal quartz vein that is weakly
anomalous in gold but strongly anomalous mercury.
RESULTS
Rock Chip Samples
Miranda collected 34 random rock chip samples during their
studies of the area. Rock chip assay results from the quartz +/-
tourmaline veins ranged from 0.0002 ozs Au/t to 0.217ozs Au/t.
Seven samples were collected from skarn mineralized rocks. Assay
values from these samples ranged from 0.0004 ozs Au/t to 0.065 ozs
Au/t. Two of the epithermal quartz veins in the southwestern part
of the property contained gold values of 0.008 ozs Au/t and 0.009
ozs Au/t, but contained 14.994 ppm Hg and 34.940 ppm,
respectively. Of the 7 samples collected from skarn, one assayed
1.2 % Cu. All together, 18 of the 34 samples (53%) contained
between 0.003 ozs Au/t to 0.21 ozs Au/t and 4 of the 34 samples
(12%) contained between 0.1% Cu to 1.2% Cu..
While the quartz +/- tourmaline veins were more anomalous in
gold than the skarn samples, neither of these host rocks had
significant mercury values. Mercury was anomalous in the volcanic
hosted epithermal zone to the southwest.
Soil Samples
Gold anomalies in the soil samples were confined to the soil
lines that were over the metasedimentary rocks and the diorite which
were the northern 2 lines (10600N, 11200N). These 2 lines were
also anomalous in copper and arsenic. Gold and copper anomalies
ranged from 0.0015 ozs Au/t to 0.016 ozs Au/t and 0.011 % Cu and
0.184 % Cu. Soil sample were also anomalous in arsenic. Contours
of these elements trend northeast (Plates 1, 2, and 3). Mercury
exhibits anomalies throughout the soil grid. When the anomalies
are contoured they form a strong north-northeast trending mercury
zone that correlates with the shear zone that strikes in
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<PAGE 36>
the same direction.
Magnetometer Survey
A magnetometer survey was conducted during December 1997. A
total of 19 line miles (30 kms.) were surveyed. The lines were
oriented N65W and were spaced 200 feet (60 meters) apart. Station
spacing on the lines was 50 feet (15 meters).
The magnetometer survey primarily picked-up the post-mineral
basalt flows that cover parts of the rhyolite tuffs and the
metasediments throughout the project area. In particular, neither
the diorite intrusive or the skarn altered areas were magnetically
anomalous. There was no more than a 60 gamma increase over the
surrounding area. The major northwest striking fault that
separates the diorite and limestone from the rhyolite tuff to the
south shows as a weak magnetic low. Associated with this low is a
soil mercury anomaly. There is also a weak low on the southern
part of the property, which strikes northwest. There is also a
mercury anomaly associated with this magnetic low.
Overall, the results of the magnetic survey show none to weak
responses over rocks that on the surface are mineralized and
altered. It would be hard to pick out targets based on the
magnetic survey alone.
CONCLUSION AND RECOMMENDATIONS
Evaluation of the Sand Springs property has resulted in the
discovery of two gold-bearing areas in the western and
southwestern part of the claim block. In the western area,
anomalous gold values are hosted in the quartz +/- tourmaline
veins that occur in the diorite and limestone, and skarn
mineralized zones in the limestone adjacent to the diorite. The
target for this style of mineralization would be the skarn
mineralization in the limestone at the diorite contact. This
target is a near surface target and could be tested with drill
holes of less than 300 feet (90 meters).
The southwestern target would be along the southern trend of
the shear zone under the rhyolite tuff cover. This target would
extend from the northwest striking fault contact of the diorite
and limestone with the rhyolite to the south near the intersection
of the northwest striking epithermal quartz vein. This target has
low gold in rock chip samples but has anomalous mercury in rock
and soil. The low gold geochemical anomaly and the downdropped
displacement along the northwest fault suggests that mineralized
rock is deeper and that drill testing this target will require
drilling in excess of 500 feet (150 meters).
The copper anomalies intersected in Pegasus' drill holes PSS-
12-93 and PSS-13-93 were not followed-up. The intercepts in the
two holes are along a north-northeast strike and it would be a
straight forward proposition to test this anomalous zone along
trend.
Skarn mineralization has been previously tested by drilling
but only 2 drill holes were located in what appears to be the best
target of the area. One of those holes (PSS-94-4)
14
<PAGE 37>
intersected 10
feet (3 meters) of 0.14 ozs Au/ton. This mineralized intercept was
never followed up. The second drill hole (PSS-94-1) did not
intersect any significant mineralization. This leaves the skarn
mineralized target and the quartz +/- tourmaline vein zone open
for discovery. The rhyolite tuff covered target has never been
drill tested and it is likely that it has never been explored.
Positive results from Miranda's exploration program suggests
that there is evidence of a skarn-hosted gold deposit on the
property and that untested drill targets remain and need to be
tested. The following table summarizes the costs involved in a
three-phased trench and drill program at Sand Springs. The first
phase involves a trenching program that will be used to locate and
justify a two-phased drilling program.
Proposed Work Program
Cost/unit Total Description
Phase I
Geologist 10 days $300 $3,000 Permitting and the work
Expenses 6 days $ 80 $ 500 Room and Board
6 days $ 50 $ 300
Backhoe $3,240 Trenches
Assaying 50 samples $ 25 $1,300
Reporting $ 700 Final Report
Contingency $ 900 Road reclaim, revegetation
------
Total Phase I $9,940
------
15
<PAGE 38>
Cost/unit Total Description
Phase II
Geologist 10 days $300 $3,000 Drill site location, supervision
Permitting 1 day $300 $ 300 BLM permitting
Road Work 2 day $1,200 $2,400 Road consturction, reclamation
Drilling 3000 feet $ 10 $30,000 Drilling
Assays 600 samples $ 10 $ 6,000 Au, Ag, Cu
Land/Claim $ 1,800 Maintenance fee
Reporting 5 days $250 $ 1,250 Final report
-------
Sub-Total $44,750.00
Contingency 5% $ 2,237.50
----------
Total Phase II $46,987.50
-----------
- -------------------------------------------------------------------------
Phase III
Geologist 20 days $300 $ 6,000 Drill Supervision
Drilling 6,000 feet $ 10 $60,000 Drilling
Assays 1,200 samples $ 10 $12,000 Au, Ag, Cu
Reporting 5 days $250 $ 1,250 Final Report
Reclamation 2 days $1,200 $ 2,400 Road reclaim, revegetation
-------
Sub-Total $81,650.00
Contingency 5% $ 4,082.50
----------
Total Phase III $85,732.50
----------
- -------------------------------------------------------------------------
16
<PAGE 39>
REFERENCES
Arizona Geological Society, 1987, Walker Lane Report
Campbell, Bill, 1997, Security Guard at Summit King Mine
Page, B. M., 1965, Preliminary geologic map of part of the
Stillwater Range, Churchill County, Nevada: Nevada Bureau
of Mines, Map 28
Pegasus Gold Corporation, 1993, Sand Springs Project Drill
Summary
Vanderburg, W. O., 1940, Reconnaissance of mining districts in
Churchill County, Nevada: U. S. Bureau of Mines, Information
Circular 7093
Willden, Ronald, and Speed, Robert C., 1974, Geology and Mineral
Deposits of Churchill County, Nevada: Nevada Bureau of Mines
and Geology: Bulletin 83
17
<PAGE 40>
APPENDIX 1 - ROCK CHIP ASSAYS
18
<PAGE 41>
APPENDIX 2 - SOIL ASSAYS
19
<PAGE 42>
PLATE 1 - GOLD SOIL GEOCHEM MAP
20
<PAGE 43>
PLATE 2 - COPPER SOIL GEOCHEM MAP
21
<PAGE 44>
PLATE 3 - MERCURY SOIL GEOCHEM MAP
22
<PAGE 45>
JOHN A. RICE
P.O. Box 20074
Reno, Nevada
89515
EXPLORE TECHNOLOGIES, INC.
Vancouver, British Columbia
CONSENT OF GEOLOGICAL CONSULTANT
I hereby consent to the inclusion of my report dated December 1998
entitled "Sand Springs Project, Churchill County, Nevada" with the
Amendment No. 2 Form 10-SB Registration Statement to be filed by Explore
Technologies, Inc. with the United States Securities and Exchange
Commission.
Dated the 29TH day of June, 1999
/s/ John A. Rice
John A. Rice,
Consulting Geologist
