SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 1998
MINCO MINING & METALS CORPORATION
(Translation of registrant's name into English)
Suite 1200, 543 Granville Street
Vancouver, British Columbia
Canada V6C 1X8
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]
Form 20-F |X| Form 40-F |_|
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes |_| No |X|
1. Consolidated financial statements for the six months ended June 30, 1998
<PAGE>2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Minco Mining & Metals Corporation
Date: December 6, 2000 By: /s/ Ken Cai
Ken Cai, President and C.E.O.
<PAGE>
NOTICE TO READER
We have compiled the consolidated balance sheet of Minco Mining & Metals
Corporation as at June 30, 1998 and the consolidated statements of operations
and deficit and changes in financial position for the period then ended from
information provided by management. We have not audited, reviewed or otherwise
attempted to verify the accuracy or completeness of such information. Readers
are cautioned that these statements may not be appropriate for their purposes.
Vancouver, Canada "ELLIS FOSTER"
August 5, 1998 Chartered Accountants
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Balance Sheet
June 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1998 1997
ASSETS ---- ----
<S> <C> <C>
Current
Cash and temporary investments $ 3,265,685 $ 5,115,133
Funds restricted for mineral exploration (Note1a) 49,286 374,404
Accounts receivable 60,696 91,786
Prepaid expenses and deposits 73,611 99,911
------------ ------------
3,449,278 5,681,234
Mineral interests (Note 1) 2,120,653 1,293,348
Capital assets 191,418 176,446
------------ ------------
$ 5,761,349 $ 7,151,028
============ ============
LIABILITIES
Current
Accounts payable and accrued liabilities $ 96,227 $ 103,303
------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 2) 8,872,968 8,820,468
Deficit (3,207,846) (1,772,743)
------------ ------------
5,665,122 7,047,725
------------ ------------
$ 5,761,349 $ 7,151,028
============ ============
</TABLE>
Approved by the Directors: "Peter Tsaparas" "Robert Callander"
---------------- ------------------
Peter Tsaparas Robert Callander
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Statement of Operations and Deficit
Six Months Ended June 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Interest and sundry income $ 60,288 $ 107,727
------------ ------------
Administrative expenses
Accounting 55,726 38,971
Advertising 11,379 14,348
Amortization 29,491 23,235
Capital taxes - 20,612
Computer costs - 1,513
Conference 5,409 22,947
Entertainment 15,608 37,174
Investor relations - consulting 78,753 47,760
Legal 20,448 31,194
Listing, filing and transfer agents 39,652 7,797
Management fees 53,669 43,051
Office and miscellaneous 29,201 50,651
Printing 14,553 71,605
Promotion and government relations 57,217 77,855
Property investigation 104,509 38,999
Rent 71,219 89,184
Salaries and benefits 47,680 74,923
Telephone 30,996 40,087
Travel and transportation 27,658 46,507
Foreign exchange loss (gain) (496) 3,482
------------ ------------
692,672 781,895
------------ ------------
Operating loss (632,384) (674,168)
Minority interest - 545
------------ ------------
Net loss for the period (632,384) (673,623)
Deficit, beginning of period (2,575,462) (1,099,120)
------------ ------------
Deficit, end of period $ (3,207,846) $ (1,772,743)
============ ============
Loss per share $ (0.04) $ (0.04)
============ ============
</TABLE>
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Statement of Changes in Financial Position
Six Months Ended June 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash provided by (used for) operating activities
Net loss for the period $ (632,384) $ (673,623)
Items not involving cash
- amortization 29,491 23,235
- minority interest's share of loss - (545)
------------ ------------
(602,893) (650,933)
Net change in non-cash working capital (117,011) (219,751)
------------ ------------
(719,904) (870,684)
Cash provided by financing activities
Shares issued for cash, net of issuance costs - 158,000
------------ ------------
Cash provided by (used for) investing activities
Acquisition of capital assets (9,580) (120,363)
Acquisition of minority shareholder's
interest in Temco - (175,000)
Deferred exploration costs (307,745) (872,717)
Decrease in funds restricted
for mineral exploration 16,043 163,096
------------ ------------
(301,282) (1,004,984)
------------ ------------
Decrease in cash position (1,021,186) (1,717,668)
Cash position, beginning of period 4,286,871 6,832,801
------------ ------------
Cash position, end of period $ 3,265,685 $ 5,115,133
============ ============
</TABLE>
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1998
(Unaudited - See Notice to Reader)
1. Mineral Interests
<TABLE>
<CAPTION>
1998 1997
----------------------------------------------- -------------
Deferred
Acquisition Exploration Total Total
Costs Costs Costs Costs
(Schedule)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emperor's Delight $ 100 $ 89,216 $ 89,316 $ 189,471
Lengkou - 388,272 388,272 -
Crystal Valley 100 - 100 100
Stone Lake 100 - 100 100
Changba Lijiagou
Lead-Zinc Deposit 100 134,703 134,803 32,464
White-Silver Mountain - 111,247 111,247 -
Chapuzi and
Xifanping Gold Deposits - 410,962 410,962 296,263
Heavenly Mountains - 653,352 653,352 522,975
Savoyardinskii 104,446 221,523 325,969 96,296
Inner Mongolia - 6,532 6,532 -
Sundry - - - 155,679
-------------------------------------------------------------------------------------------
$104,846 $2,015,807 $2,120,653 $1,293,348
===========================================================================================
</TABLE>
(a) The Emperor's Delight and Lengkou properties are located in Hebei
Province, China. Pursuant to the Joint Venture Agreement, Temco can
earn a 55% interest in the properties by spending US$4.4 million over
a five-year period. The funds restricted for mineral explorations, as
shown in the financial statements, are funds restricted for this joint
venture.
(b) The Crystal Valley and Stone Lake properties are located in Hebei
Province, China. These projects are subject to the approval of the
appropriate Chinese government authorities.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1998 (Unaudited - See Notice to Reader)
1. Mineral Interests (continued)
(c) The Company acquired its rights to the Changba-Lijiagou Lead Zinc
Project located in Gansu Province, China through the "Cooperation
Agreement Regarding the Development of the Changba Lijiagou Lead Zinc
Deposit" between the Company and Baiyin Non Ferrous Metals Corporation
("BNMC") signed on November 17, 1997. The Company can earn a 75%
interest in the deposits of Deep Changba, Lijiagou and the Joint Area
by taking the project through development, to produce 3,500 tonnes of
ore per day. Besides the deposits, BNMC is also contributing the
existing 3,500 tonnes per day on site concentrator and all related
infrastructure.
(d) The Company acquired its rights to the White Silver Mountain project
located in Gansu Province, China through the "Cooporation Agreement
for Mineral Exploration and Development" between the Company and
Baiyin Non Ferrous Metals Corporation ("BNMC") signed on November 17,
1997. The project includes exploration ground in or around a number of
past and presently producing properties in the Baiyin Ore Field
located close to the city of Baiyin, Gansu Province, China. The
Company will earn an 80% interest in the entire property by paying for
exploration work and taking any one discovery to the pre-feasibility
stage.
(e) The Chapuzi and Xifanping Gold Deposits are located in Sichuan
Province, China. The Company has entered into a cooperative joint
venture agreement with the Sichuan Bureau of the Ministry of Geology
and Mineral Resources on the Chapuzi property.
Pursuant to an agreement, the Company shall have the right to earn a
51% interest by spending $5 million on exploration and development in
the Chapuzi Gold Deposit. The Company may earn a 75% interest by
placing the project into production.
Initial due diligence studies on the Xifanping project are being
performed. The Company has an exclusive right to negotiate and enter
into a joint venture contract on the Xifanping property, subject to
the approval of the appropriate Chinese government authorities.
(f) The Heavenly Mountains properties are located in Xinjiang Province,
China. Temco has an exclusive right to negotiate and enter into a
joint venture contract with the Xinjiang Bureau of the Ministry of
Geology and Mineral Resources and to invest in certain mineral
properties located in Xinjiang Uygur Autonomous Region in China.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1998 (Unaudited - See Notice to Reader)
1. Mineral interests (continued)
(g) The Company has acquired an 80% interest in a gold/antimony property
located in the Savoyardinskii area in Karakuldzinskii Region, Osh
Oblast, Kyrgyz Republic. The mineral exploration licence pertaining to
this property is held by the joint venture partners which own the
remaining 20% interest of the property. The licence is valid until
December 31, 1999 and is renewable.
A finder's fee comprising US$35,000 and 35,000 common shares of the
Company was paid and issued in connection with the acquisition of this
property interest. Following direct expenditures of US$1,000,000 on
the property, another finder's fee of 75,000 shares of the Company is
payable; following aggregate expenditures of US$2,000,000 on the
property, an additional finder's fee of 75,000 common shares of the
Company is payable.
(h) The Inner Mongolia property is located in Inner Mongolia Autonomous
Region, China. Pursuant to the Cooperative Joint Venture Agreement,
the Company can earn a 75% interest in the property by spending RMB18
million over a four-year period.
2. Share Capital
(a) Authorized: 100,000,000 common shares without par value
(b) Issued:
<TABLE>
<CAPTION>
Shares Amount
---------- -----------
<S> <C> <C>
Balance, December 31, 1996 15,202,123 $ 8,662,468
Issued pursuant to exercise of warrants at $1.20 per share 125,000 150,000
Issued pursuant to exercise of options at $1.00 per share 8,000 8,000
Balance, June 30, 1997 15,335,123 8,820,468
Issued for finder's fee at $1.50 per share 35,000 52,500
---------- -----------
Balance, December 31, 1997 and June 30, 1998 15,370,123 $ 8,872,968
========== ===========
</TABLE>
(c) 4,286,689 of the shares issued are held in escrow, the release of which is
subject to the direction of the regulatory authorities.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1998 (Unaudited - See Notice to Reader)
2. Share Capital (continued)
(d) Stock options outstanding at June 30, 1998:
Number of Shares Exercise Price Expiry Date
---------------- -------------- -----------
75,000 $1.50 March 31, 2000
826,100 $1.41 March 5, 2006
215,500 $1.41 June 20, 2007
97,300 $1.41 October 8, 2006
97,300 $1.41 March 6, 2007
38,300 $1.63 August 31, 1998
12,500 $1.34 August 31, 1998
125,000 $2.00 July 2, 1999
125,000 $3.00 July 2, 1999
125,000 $3.45 July 2, 2000
75,000 $1.50 April 24, 2000
---------
1,812,000
=========
(e) Warrants outstanding at June 30, 1998:
Number of Shares Exercise Price Expiry Date
---------------- -------------- -----------
1,600,000 $2.00 December 31, 1998
3. Related Party Transactions
(a) The Company incurred the following expenses to its directors or
corporations controlled by its directors:
1998 1997
---- ----
Management fees and salaries $ 65,685 $ 43,051
Property investigation 20,702 11,121
Investor relations - consulting - 2,760
Deferred exploration costs 38,188 65,496
Rent 6,000 -
-------- --------
$130,575 $122,428
======== ========
(b) Account payable of $51,632 (1997 - $49,458) is due to a corporation
controlled by a director of the Company.
4. Comparative Figures
Certain 1997 comparative figures have been reclassified to conform with the
financial statement presentation adopted for 1998.
<PAGE>
MINCO MINING & METALS CORPORATION
Consolidated Schedule of Deferred Exploration Costs
Six Months Ended June 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
White
Emperor's Silver Heavenly Inner
Delight Lengkou Changba Mountains Chapuzi Mountains Savoyardinskii Mongolia
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, beginning of period $ 89,216 $364,811 $ 82,596 3,700 $376,002 $ 621,367 $170,370 $ -
Amortization - - - - - - - -
Assaying - - - - - - - 348
Drilling and trenching - - - - - - - -
Engineering - 2,420 24,519 458 - - - -
Equipment - - - - - - - -
Field office administration - 4,214 - - - - - -
Field office rent - - - - - - - -
Field office supplies - - - 613 - - - -
Geochemical sampling - - - - - 14,156 11,102 -
Geological mapping - - - - 8,519 - 7,401 -
Geological consulting - - 3,650 48,845 7,078 9,837 7,040 3,214
Geological translation - - 6,961 - 525 875 316 -
Geophysics - - - - - - 18,503 -
Labour - 6,203 - - - - - -
Legal - - - 2,487 - - - -
Miscellaneous - - 2,592 2,638 14,829 2,279 6,480 -
Project management - 2,197 6,779 12,794 - - - -
Remote sensing - - - - - - - -
Reporting and license - - - - - - - -
Travel and transportation - 8,427 7,606 39,712 4,009 4,838 311 2,970
---------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $ 89,216 $388,272 $134,703 $111,247 $ 410,962 $ 653,352 $221,523 $ 6,532
=================================================================================================================================
</TABLE>
<PAGE>
Schedule "C" : Management Discussion
Minco Mining & Metals Corporation
For the period ending June 30, 1998
Project Activity
Activity centered on preparations for the 3,600 metre Phase I diamond drill
program on the White Silver Mountain Project in Gansu province. This program
will be conducted from the bottom level of the operating Xiaotieshan Mine and
its target is newly discovered mineralization below the known mineralized zones.
Subsequent to the end of the second quarter, the Company had established a field
office in Baiyin, work had commenced on construction of the underground drill
stations and an assessment of the economic geology potential of the Baiyin
region had begun.
The Company announced that Teck Corporation had signed an option agreement on
the White Silver Mountain project and was making a private placement in the
Company. Proceeds from the private placement, $750,000, were to fund the Phase I
drilling and initial surface exploration programs on the project.
The Company is currently awaiting access to the drill core from the
Changba-Lijiagou lead zinc project in order to conduct its geological due
diligence on the deposit. Minco's partner on this project, Baiyin Non Ferrous
Metals Corporation, is working on acquiring the drill core from the government
exploration division that carried out the definition drilling on both deposits.
Assuming a positive review of the geological information, the Company will
proceed with its pre-feasibility studies on the project.
At the end of the second quarter, the Company's consulting geologist departed
for the Kyrghyzstan to conduct an evaluation of the work completed on the
Savoyardinski gold project.
To the end of the reporting period, the Company was evaluating several
opportunities to invest in additional gold and base metal projects in China.
Financial Activity
As of June 30, 1998, the Company spent a total of $307,745 on its properties in
China and Kyrghyzstan.
Overall administrative expenses decreased to $692,672 in the first six months of
1998 from $781,895 for the comparable period of 1997. This decrease is a result
of lower printing costs, employee salaries, conference, travel and
transportation, which were partially offset by increases in property
investigation and investor relations costs and listing and filing fees.
The closure of the Toronto office in November of 1997 was mainly responsible for
the declines in rent, telephone and salaries and benefits categories to $149,895
for the first six months of 1998 from $204,194 for the same period of 1997.
General office costs, conference, legal, advertising, promotion, travel,
transportation and entertainment costs overall declined to $181,473 from
$352,281 for the same period last year.
<PAGE>
Property investigation costs increased from $38,999 for the first six months of
1997 to $104,509 for the same period of 1998, reflecting the Company's increased
property investigation activities in China.
The listing, filing and transfer agents, investor relations-consulting and
accounting cost increased from $94,528 for the first two quarters of 1997 to
$174,131 for the same period of 1998. This increase is largely due to the
preparation of the annual general meeting, the listing on the Toronto Stock
Exchange as well as 20F registration with the Securities and Exchange
Commission.
During the period, total management fees and salaries increased to $65,685 from
$43,051 in same period 1997. In addition, the Company incurred expenses of
$64,890 to its Chairman, President and Chief Executive Officer and Vice
President of Exploration or to corporations controlled by them, compared to
expenses of $79,377 for the same period last year.
Interest and investment income for the period amounted to $60,288 compared with
$107,727 for the first six months of 1997. This change reflects a drop in the
value of the Company's temporary investment portfolio.
Miscellaneous Items
The Company extended the time of expiry on its 1,600,000 outstanding share
purchase warrants from June 30, 1998 to December 31, 1998. In addition, the
exercise price of such warrants has been reduced from $2.55 per share to $2.00
per share. If at any time prior to December 31, 1998 the ten day weighted
average trading price of the common shares of the company exceeds $2.50 per
share ( the "triggering event") the warrants must expire on the 30th day
following the occurrence of the triggering event regardless of any later expiry
date that may be identified in the terms of the warrants.
The Company also announced a non-brokered private placement in the Company by
Teck Corporation for 375,000 shares priced at $2.00 per share . The placement
includes additional share purchase warrants as follows: 125,000 shares priced at
$2.00 for one year; 125,000 shares priced at $3.00 for one year and 125,000
shares priced at $3.45 for two years. Proceeds from the initial placement are to
be used exclusively for the Phase I program on the White Silver Mountain
project. With this private placement, Teck Corporation receives an option to
earn 70% of Minco's interest in the property. To exercise the option, Teck must
exercise the additional 125,000 share purchase warrants at $3.00 per share and
fund all of Minco's obligations on the project to production. The exercise of
the back-in option by Teck would leave Minco with a 24% carried interest in the
property.
Pursuant to a letter of agreement dated June 11th, Cominco Limited, can exercise
further back-in rights at any time up to the pre-feasibility stage by repaying
Teck and Minco one and a half times total project expenditures to that point and
by funding its pro rata share of feasibility and development costs. If Cominco
exercises this right, the ownership distribution on the project will be Cominco
20%, Teck 41%, Baiyin Non Ferrous Metals 20% with Minco retaining a 19% carried
interest in the project.
