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 1999
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, 1999
<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>
ELLIS FOSTER
CHARTERED ACCOUNTANTS
1650 West 1st Avenue
Vancouver, BC Canada V6J 1G1
Telephone: (604) 734-1112 Facsimile: (604) 714-5916
E-Mail: [email protected]
NOTICE TO READER
We have compiled the consolidated balance sheet of Minco Mining & Metals
Corporation as at June 30, 1999 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 19, 1999 Chartered Accountants
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Balance Sheet
June 30, 1999
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
ASSETS
Current
Cash and temporary investments $ 2,574,801 $ 3,265,685
Funds restricted for mineral exploration 9,039 49,286
Accounts receivable 34,655 60,696
Prepaid expenses and deposits 81,667 73,611
------------ ------------
2,700,162 3,449,278
Mineral interests (Note 1) 2,193,325 2,120,653
Capital assets 318,755 191,418
------------ ------------
$ 5,212,242 $ 5,761,349
============ ============
LIABILITIES
Current
Accounts payable and accrued liabilities $ 267,945 $ 96,227
------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 2) 9,975,833 8,872,968
Deficit (5,031,536) (3,207,846)
------------ ------------
4,944,297 5,665,122
------------ ------------
$ 5,212,242 $ 5,761,349
============ ============
</TABLE>
Approved by the Directors: "Ken Z. Cai" "Theodore H. Konyi"
------------ -------------------
Ken Z. Cai Theodore H. Konyi
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Statement of Operations and Deficit
Six Months Ended June 30, 1999
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Interest and sundry income $ 51,726 $ 60,288
------------ ------------
Administrative expenses
Accounting 41,265 55,726
Advertising 30,875 11,379
Amortization 45,650 29,491
Capital tax 10,706 -
Conference 8,608 5,409
Investor and government relations 65,675 72,825
Investor relations - consulting 82,698 78,753
Legal 13,653 20,448
Listing, filing and transfer agents 15,027 39,652
Management fees 16,273 53,669
Office and miscellaneous 25,565 29,201
Printing 10,004 14,553
Property investigation 20,148 104,509
Rent 51,971 71,219
Salaries and benefits 38,551 47,680
Telephone 13,879 30,996
Travel and transportation 12,433 27,658
Foreign exchange loss (gain) 3,646 (496)
------------ ------------
506,627 692,672
------------ ------------
Operating loss (454,901) (632,384)
Mineral interest written off (4,590) -
------------ ------------
Net loss for the period (459,491) (632,384)
Deficit, beginning of period (4,572,045) (2,575,462)
------------ ------------
Deficit, end of period $ (5,031,536) $ (3,207,846)
============ ============
Loss per share $ (0.03) $ (0.04)
============ ============
</TABLE>
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Statement of Changes in Financial Position
Six Months Ended June 30, 1999
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Cash provided by (used for) operating activities
Net loss for the period $ (459,491) $ (632,384)
Items not involving cash
- amortization 45,650 29,491
- mineral interest written off 4,590 -
------------ ------------
(409,251) (602,893)
Net change in non-cash working capital 298,275 (100,968)
------------ ------------
(110,976) (703,861)
------------ ------------
Cash provided by financing activities
Shares issued for cash 362,500 -
------------ ------------
Cash used for investing activities
Acquisition of capital assets (100,359) (9,580)
Deferred exploration costs (543,322) (307,745)
------------ ------------
(643,681) (317,325)
------------ ------------
Decrease in cash position (392,157) (1,021,186)
Cash position, beginning of period 2,966,958 4,286,871
------------ ------------
Cash position, end of period $ 2,574,801 $ 3,265,685
============ ============
</TABLE>
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1999
(Unaudited - See Notice to Reader)
1. Mineral Interests
<TABLE>
<CAPTION>
Jan. 1, 1999
Deferred to June 30 Deferred Deferred
Costs 1999 Costs Costs
Dec. 31 Exploration Amount June 30 June 30
1998 Costs Written Off 1999 1998
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emperor's Delight $ 89,316 $ 14,948 $ - $ 104,264 $ 89,316
Lengkou - - - - 388,272
Crystal Valley 100 - - 100 100
Stone Lake 100 - - 100 100
Changba Lijiagou
Lead-Zinc Deposit 134,803 - - 134,803 134,803
White-Silver Mountain 623,081 519,980 - 1,143,061 111,247
Chapuzi 330,218 - - 330,218 376,002
Xifanping Gold Deposits - - - - 34,960
Heavenly Mountains 436,519 - - 436,519 653,352
Savoyardinskii - 4,590 (4,590) - 325,969
Inner Mongolia 40,456 3,804 - 44,260 6,532
-------------------------------------------------------------------------------------------------
$1,654,593 $543,322 $ (4,590) $2,193,325 $2,120,653
=================================================================================================
</TABLE>
(a) The Emperor's Delight property is 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.
(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.
(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.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1999
(Unaudited - See Notice to Reader)
1. Mineral Interests (continued)
(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. Pursuant
to the Joint Venture Agreement signed on August 28, 1998, the Company
will earn an 80% interest in the entire property by expending not less
than US$4.8 million on exploration work within six years from the date
the Joint Venture business licence was granted.
An option was granted to Teck Corporation ("the Optionee") to acquire
70% of the Company's interest in the White Silver Mountain Project. In
order to exercise the option, the Optionee must:
(i) subscribe for and complete a private placement of 375,000 shares
at a price of $2.00 per share (subscribed and completed on July
9, 1998). The private placement includes three (3) sets of share
purchase warrants, each warrant entitling the Optionee to
purchase one additional common shares of the Company at
escalating prices as follows:
o 125,000 of the warrants shall be exercisable at a price of
$2.00 per share on or before July 9, 1999 (expired
subsequently);
o 125,000 of the warrants shall be exercisable at a price of
$3.00 per share on or before July 9, 1999 (exercised at
reduced price of $1.60 per share in July, 1999); and
o 125,000 of the warrants shall be exercisable at a price of
$3.45 per share on or before July 9, 2000.
(ii) exercise the second warrants on or before their expiry date (for
gross proceeds to the Company of $375,000);
(iii)fund all of the Company's obligations to incur exploration and
development expenditures on the property, pursuant to the Joint
Venture Agreement;
(iv) prepare a preliminary feasibility study on at least one mineral
deposit on the property in form satisfactory to the Company and
Baiyin Nonferrous Metals Company, on or before June 10, 2001; and
(v) prepare a feasibility study on the same deposit and, in the event
of a positive and bankable feasibility study, arrange all
financing required to place this deposit into commercial
production on or before June 10, 2002.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1999
1. Mineral Interests (continued)
(d) (continued)
The Company must use 100% of the proceeds of the private placement
($750,000) to fund the Phase I diamond drilling and surface
exploration program of the project. All proceeds from the exercise of
any warrants, however, will be used by the Company for its general
corporate purposes and will not be applied towards work on the White
Silver Mountain Project. The property interest retained by the Company
will be a carried interest.
(e) The Chapuzi property is 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
this property.
Pursuant to the 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.
(f) The Heavenly Mountains properties are located in Xinjiang Province,
China. The Company 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.
The Company abandoned a portion of these properties in 1998.
(g) 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 around
US$2.5 million over a four-year period.
The agreement is subject to the approval of the Chinese government.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
June 30, 1999
(Unaudited - See Notice to Reader)
2. Share Capital
Authorized: 100,000,000 common shares without par value
Issued:
<TABLE>
<CAPTION>
Shares Amount
---------- ----------
<S> <C> <C>
Balance, December 31, 1997 and June 30, 1998 15,370,123 $8,872,968
Issued pursuant to a private placement, less share 375,000 740,365
issuance cost of $9,635
---------- ----------
Balance, December 31, 1998 15,745,123 9,613,333
Private placement at $0.85 per share 250,000 212,500
Private placement at $1.00 per share 150,000 150,000
---------- ----------
Balance, June 30, 1999 16,145,123 $9,975,833
========== ==========
</TABLE>
(c) 4,211,689 of the shares issued are held in escrow, the release of
which is subject to the direction of the regulatory authorities.
(d) Stock options outstanding at June 30, 1999:
Number of Shares Exercise Price Expiry Date
---------------- -------------- -----------
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
75,000 $1.50 April 24, 2000
120,000 $1.01 January 12, 2000
120,000 $1.41 January 12, 2000
75,000 $1.20 February 4, 2001
75,000 $1.41 February 4, 2001
---------
1,701,200
(e) Warrants outstanding at June 30, 1999:
Number of Shares Exercise Price Expiry Date
---------------- -------------- -----------
1,600,000 $2.00 December 31, 2000
125,000 $2.00 July 9, 1999
(expired subsequently)
125,000 $3.00 July 9, 1999 (see Note 1d)
125,000 $3.45 July 9, 2000
125,000 $0.85 January 15, 2000
150,000 $1.20 February 4, 2000
---------
<PAGE>
3. Related Party Transactions
(a) The Company incurred the following expenses to its directors or
corporations controlled by its directors:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Management fees and salaries $ 53,893 $ 65,685
Property investigation - 20,702
Investor relations - consulting - 6,000
Deferred exploration costs 29,840 38,188
-------- --------
$ 83,733 $130,575
======== ========
</TABLE>
(b) Account payable of $51,914 (1998 - $51,632) is due to a director or a
corporation controlled by a director of the Company.
4. Comparative Figures
Certain 1998 comparative figures have been reclassified to conform with the
financial statement presentation adopted for 1999.
<PAGE>
Schedule "C": Management Discussion
Minco Mining & Metals Corporation
For the Quarter ended June 30, 1999
Project Activity
For this reporting period, the focus of the Company's project activity has been
continuously on exploration of the White Silver Mountain polymetallic project.
In addition to the new set of drilling equipment purchased at a cost of $97,337
and shipped to White Silver Mountain in March 1999, the exploration costs on the
White Silver Mountain project amounted to $519,980 as to the end of June 1999.
As to the end of second quarter, the first phase underground drilling program
has been successfully completed on the White Silver Mountain Project. This
program has defined an area of 200m by 300m beneath the current producing
Xiaotieshan mine.
A 200 metre long east drift towards a new drill station on 9900E has been
completed. The second phase drilling program consisting of approximately 8,000
metres will commence shortly to test two 200m by 300m areas along strike of the
existing ore bodies, one on the eastern side and the other on the western side
of the Phase I drilling. Upon completion of the Phase II drilling program, an
area of about 800m by 300m will have been tested, including the area tested
during Phase I. This major drilling program will continue through early year
2000 with the objective of defining a 10 million tonne reserve, which can be
placed into production in a cost effective and timely manner by using Baiyin
Non-Ferrous Metals Corporation's extensive milling and smelting capacity.
Concurrent with the Phase II underground drilling program, a surface exploration
program on the surrounding 110 square kilometre property will continue. Detailed
mapping, geochemical, and geophysical surveys will be conducted in areas which
host recently discovered lithologies and alteration typical of Volcanogenic
Massive Sulphide deposits.
In light of the privatization of the Chinese economy, and central government
planned phase-out of all subsidies to state companies, many state-owned mining
companies with quality mineral projects are now seeking foreign partners to
restructure their operations and to develop new mines. With a solid business
relationship with the Chinese mining industry community and regulatory agencies,
Minco holds a unique position among foreign mining companies currently operating
in China, to pursue quality projects in China. So far the company has reviewed
several good precious metal projects and more will be evaluated throughout 1999.
Financial Activity
As of June 30, 1999, the Company spent a total of $538,732 on its properties in
China. Additional costs amounted to $97,337 for new drilling equipment and parts
shipped to China for the White Silver Mountain project.
Overall administrative expenses decreased to $506,627 in first six months of
1999 from $692,672 for the comparable period of 1998. This 27% decrease is a
result of lower property investigation cost, management fees & employee
salaries, accounting & auditing costs, legal & filing fees, office rent,
<PAGE>
telecommunication, and travel costs, which were partially offset by increases in
advertising, amortization and investor relations consulting expenses.
During the period, management fees totaled $16,273 compared to $53,669 for the
same period in 1998; this drastic decline of 70% in management fees indicates a
consolidated management team and more cost-effective business practices within
the company. In addition, the company paid expenses of $67,460 incurred by its
Chairman, President and Chief Executive Officer or to corporations controlled by
them.
Office overhead dropped 34% to $49,448 from $74,750 for the comparable period of
1998.
Property investigation costs declined significantly to $20,148 for the first six
months of 1999 compared to $104,509 for the comparable period of 1998.
Miscellaneous Items
On June 28, 1999, the Company announced the retirement of Mr. Peter Tsaparas as
Chairman of the Board of Directors. Through his stewardship of Minco, Mr.
Tsaparas played a major role in the Company's highly successful entry into the
Chinese mining industry.
In July 1999, the Company announced the appointment of Mr. William Meyer to the
Board of Directors. Mr. Meyer replaces Mr. Wayne Spilsbury. Mr. Meyer, currently
Consultant, Teck Corporation, and formerly Vice-President, Exploration for Teck
(and President of Teck Exploration Ltd.), he joined Teck Exploration Ltd. in
1979 as Exploration Manager for Western Canada and the United States. In 1991,
he was appointed President of Teck Exploration Ltd., responsible for the
direction of exploration activities for Teck Corporation and its associated
companies worldwide. He is a director and officer of a number of public and
privately owned Companies.
In the mean time, the Company granted 150,000 units of Director's stock options
at a price of $1.65. The options will expire July 16, 2006.
On July 9, 1999, Teck exercised its option on an additional 125,000 Minco
warrants. As a result, Teck will take over as operator of the White Silver
Mountain project in Gansu Province, China. At Teck's sole option, it can earn a
56% interest in "Gansu Keyin", a Chinese registered joint venture company
between Minco and Baiyin Non-Ferrous Metals Corporation, by funding Minco's
obligation on the License Territory through production.
