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 September 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 nine months ended
September 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 September 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"
October 29, 1998 Chartered Accountants
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Balance Sheet
September 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
ASSETS
Current
Cash and temporary investments $ 3,349,090 $ 4,630,551
Funds restricted for mineral exploration (Note2a) 42,441 265,325
Accounts receivable 37,381 71,813
Prepaid expenses and deposits 148,452 82,834
------------ ------------
3,577,364 5,050,523
Mineral interests (Note 2) 2,386,317 1,703,654
Capital assets, net of accumulated
amortization of $128,600 373,249 175,860
------------ ------------
$ 6,336,930 $ 6,930,037
============ ============
LIABILITIES
Current
Accounts payable and accrued liabilities $ 96,488 $ 92,175
------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 3) 9,622,968 8,872,968
Deficit (3,382,526) (2,035,106)
------------ ------------
6,240,442 6,837,862
------------ ------------
$ 6,336,930 $ 6,930,037
============ ============
</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
Nine Months Ended September 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Interest and sundry income $ 103,481 $ 235,536
------------ ------------
Expenses
Accounting and audit 70,865 54,471
Advertising 11,776 14,632
Amortization 60,124 31,546
Capital taxes 15,015 20,612
Computer costs - 1,903
Conference 5,409 42,269
Entertainment 19,777 45,884
Investor relations - consulting 87,097 110,883
Legal 50,456 51,249
Listing, filing and transfer agents 46,422 35,361
Management fees 72,336 66,446
Office and miscellaneous 39,888 70,670
Printing 28,812 75,142
Promotion and government relations 66,940 100,162
Property investigation 67,087 51,707
Rent 108,430 127,158
Salaries and benefits 72,600 152,264
Telephone 44,377 58,402
Travel and transportation 44,632 64,795
Foreign exchange gain (1,498) (3,489)
------------ ------------
910,545 1,172,067
------------ ------------
Operating loss (807,064) (936,531)
Minority interest - 545
------------ ------------
Net loss for the period (807,064) (935,986)
Deficit, beginning of period (2,575,462) (1,099,120)
------------ ------------
Deficit, end of period $ (3,382,526) $ (2,035,106)
============ ============
Loss per share $ (0.05) $ (0.06)
============ ============
</TABLE>
<PAGE>
MINCO MINING AND METALS CORPORATION
Consolidated Statement of Changes in Financial Position
Nine Months Ended September 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 $ (807,064) $ (935,986)
Items not involving cash
- amortization 60,124 31,546
- minority interest's share of loss - (545)
------------ ------------
(746,940) (904,985)
Net change in non-cash working capital (168,276) (193,829)
------------ ------------
(915,216) (1,098,814)
------------ ------------
Cash provided by financing activities
Shares issued for cash, net of issuance costs 750,000 158,000
Shares issued for finder's fee - 52,500
------------ ------------
750,000 210,500
------------ ------------
Cash provided by (used for) investing activities
Acquisition of capital assets (222,044) (128,089)
Mineral interests acquisition costs - (100,976)
Acquisition of minority shareholder's
interest in Temco - (175,000)
Deferred exploration costs (573,409) (1,182,046)
Decrease in funds restricted
for mineral exploration 22,888 272,175
------------ ------------
(772,565) (1,313,936)
------------ ------------
Decrease in cash position (937,781) (2,202,250)
Cash position, beginning of period 4,286,871 6,832,801
------------ ------------
Cash position, end of period $ 3,349,090 $ 4,630,551
============ ============
</TABLE>
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited - See Notice to Reader)
1. Consolidation
These consolidation financial statements include the accounts of Minco
Mining & Metals Corporation ("Minco") and its wholly-owned British Virgin
Island subsidiary, Triple Eight Mineral Corporation ("Temco"). All material
inter-company balances have been eliminated.
2. 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 - 396,118 396,118 128,502
Crystal Valley 100 - 100 100
Stone Lake 100 - 100 100
Changba Lijiagou
Lead-Zinc Deposit 100 134,703 134,803 35,560
White-Silver Mountain - 244,676 244,676 -
Chapuzi and
Xifanping Gold Deposits - 410,962 410,962 373,439
Heavenly Mountains - 654,779 654,779 577,976
Savoyardinskii 104,446 250,526 354,972 235,458
Inner Mongolia - 10,456 10,456 -
Sundry - 90,035 90,035 163,048
-------------------------------------------------------------------------------------------
$104,846 $2,281,471 $2,386,317 $1,703,654
===========================================================================================
</TABLE>
(a) The Emperor's Delight and Lengkou properties are located in Hebei
Province, China. Pursuant to the Joint Venture Agreement, the Company
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
September 30, 1998 (Unaudited - See Notice to Reader)
2. 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. 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.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
September 30, 1998 (Unaudited - See Notice to Reader)
2. 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.
3. Share Capital
(a) Authorized: 100,000,000 common shares without par value
(b) Issued:
<TABLE>
<CAPTION>
Shares Amount
---------- ----------
<S> <C> <C>
Balance, September 30, 1996 15,200,123 $8,739,468
Additional share issuance cost pursuant to an
Exchange Offering Prospectus - (79,000)
Issued pursuant to exercise of options at $1.00 per share 2,000 2,000
---------- ----------
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
Issued for finder's fee at $1.50 per share 35,000 52,500
---------- ----------
Balance, September 30, 1997 and December 31, 1997 15,370,123 8,872,968
Issued pursuant to a private placement 375,000 750,000
---------- ----------
Balance, September 30, 1998 15,745,123 $9,622,968
========== ==========
</TABLE>
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
September 30, 1998 (Unaudited - See Notice to Reader)
3. Share Capital (continued)
(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 September 30, 1998:
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
---------
1,311,200
=========
(e) Warrants outstanding at September 30, 1998:
Number of Shares Exercise Price Expiry Date
---------------- -------------- ------------
1,600,000 $2.00 December 31, 1998
125,000 $2.00 July 9, 1999
125,000 $3.00 July 9, 1999
125,000 $3.45 July 9, 2000
---------
1,975,000
=========
4. Related Party Transactions
(a) The following expenses were accrued or paid to senior officers,
directors or corporations controlled by certain directors of the
Company:
1998 1997
---- ----
Management fees and salaries $ 89,124 $ 79,000
Property investigation 24,434 16,526
Investor relations - consulting - 2,760
Deferred exploration costs 73,206 78,544
Rent 12,000 -
$198,764 $176,830
(b) Account payable of $51,632 (1997 - $49,458) is due to a corporation
controlled by a director of the Company.
<PAGE>
MINCO MINING & METALS CORPORATION
Notes to Consolidated Financial Statements
September 30, 1998 (Unaudited - See Notice to Reader)
5. 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
Nine Months Ended September 30, 1998
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
White
Emperor's Silver Heavenly Inner
Delight Lengkou Changba Mountains Chapuzi Mountains Savoyardinskii Mongolia Sundry
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 - - - - - - 361 348 -
Drilling and trenching - - - - - - - - -
Engineering - 2,307 24,519 503 - - - - -
Equipment - 540 - - - - - - -
Field office administration - 6,929 - 2,056 - - 3,472 - -
Field office rent - - - - - - - - -
Field office supplies - - - 24,542 - - - - -
Geochemical sampling - - - - - 14,156 11,102 - -
Geological mapping - - - - 8,519 - 7,401 - -
Geological consulting - - 3,650 88,747 7,078 10,120 21,940 3,214 90,035
Geological translation - - 6,961 - 525 1,179 316 - -
Geophysics - - - - - - 18,503 - -
Labour - 9,067 - - - - - - -
Legal - - - 9,864 - - - - -
Miscellaneous - - 2,592 5,415 14,829 2,279 6,480 - -
Project management - 2,093 6,779 35,613 - - 4,200 - -
Remote sensing - - - - - - - - -
Reporting and licence - - - - - - - - -
Travel and transportation - 10,371 7,606 74,236 4,009 5,678 6,381 6,894 -
---------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $89,216 $396,118 $134,703 $244,676 $410,962 $654,779 $250,526 $10,456 $90,035
=================================================================================================================================
</TABLE>
<PAGE>
MINCO MINING & METALS CORPORATION
Quarterly Report Supplementary Information
September 30, 1998
SCHEDULE B:
1. a) Deferred costs - see attached financial statements
b) Related party transactions - see attached financial statements
2. a) Securities issued during the period - 375,000
b) Options granted during the period - Nil
3. a) Authorized share capital - 100,000,000
Issued share capital - 15,745,123
b) Options and warrants outstanding - see attached financial statements
c) Number of shares held in escrow - 4,211,689
d) Directors:
Ken Cai
Robert Callander
Wayne Spilsbury
Peter Tsaparas
Hans J. Wick
<PAGE>
Schedule "C" : Management Discussion
Minco Mining & Metals Corporation
For the period ending September 30, 1998
Project Activity
For this reporting period, project activity has been focused on exploration of
the White Silver Mountain polymetallic project. In addition to an amount of
$240,976 spent on White Silver Mountain project as to the end of September, a
complete set diamond drill rig has been purchased at a cost of $240,835 and
shipped to china for White Silver Mountain project in August,1998.
Surface mapping programs are well underway as planned for the White Silver
Mountain project, the preparatory underground development for diamond drilling
is completed as at the end of the 3rd quarter. Data has been compiled,
reinterpreted and evaluated for with encouraging results.
Company geologists are confident that substantial resources can be built around
three intersections in joint venture space below the Xiaotieshan deposit.
Pending a successful Phase I program, budgeted at $750 000, from a recent
private placement by Teck Corporation, the Company plans to drill a further
7,500 metres in a Phase II program to test the continuity of the deposits along
strike to the east and west. If the initial program is successful, Teck may
exercise its back-in rights to acquire a majority interest in and to become the
operator of the project, thereby assuming all costs of the Phase II and
subsequent work, leaving Minco with a 24% carried interest to production.
All known deposits on the property were discovered by systematic drilling of
gossans. However, the mineralization recently intersected by BNMC below the
Xiaotieshan Mine has no obvious surface expression. This fact, together with new
field observations on aspects of the host volcanic stratigraphy, suggest that
the belt has potential to host major mineral reserves. These observations are
now being further investigated in the field by Teck and Company geologists, with
the aim of defining new target areas which will be followed-up with geophysical
surveys and/or surface diamond drilling programs.
The Company's short term aims for this project are to define at least 10 million
tones of additional base and precious metals reserves below Xiaotieshan and to
generate new target areas in the belt. The medium term objectives are to
generate cash flow by placing reserves, to be defined from current drill
programs, into production as quickly as possible and furthermore, to build a
large reserve base from other prospective zones within the 100 square kilometer
license area. Management believes that new reserves can be developed in a cost
effective and timely manner by using BNMC's extensive milling and smelting
capacity in the area.
Due to the favorable regulatory policy changes of the central government
regarding mineral exploration and development activities carried by foreign
companies, more local operators with better quality mineral projects are now
seeking foreign partners, it is the management's intention to pursue a more
<PAGE>
active new property investigation activity in this year, so far the company has
already evaluated a few good precious metal projects and more are to be reviewed
during the next period.
Financial Activity
As to Sept 30, 1998, the Company spent a total of $573,409. on its properties in
China and Kyrghyzstan. In addition, a complete set of diamond drill rig has been
purchased and shipped to china for white silver mountain project at a total cost
of $240,835 during August,1998.
Overall administrative expenses decreased to $910,545 in the first nine months
of 1998 from $1172,067 for the comparable period of 1997. This 22% decrease is a
result of lower printing cost, employee salaries, conference, promotion and
investor relation, travel and transportation, which were partially offset by
increases in property investigations, , and listing and filing fees mostly
associated with the listing on the Toronto Stock Exchange and registration with
the Securities and Exchange Commission.
The closure of the Toronto office in November of 1997 was mainly responsible for
the 1/3 decline in rent, telephone and salaries and benefits categories to
$225,075 for the first nine months of 1998 from $337,824 for the same period of
1997.
General office cost, conference, legal, advertising, investor
relations-consulting, promotion, travel, transportation and entertainment costs
overall declined significantly to $354,787 from $575,686 for the same period
last year.
Property investigation costs increased from $51,707 for the first nine months of
1997 to $67,087 for the same period of 1998, reflecting the company's increased
new property investigation activities in china.
The listing, filing and transfer agents, accounting and audit cost increased
from $89,832 for the first 3 quarters of 1997 to $117,287 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 slightly increased from $66,446 of 1997
to $72,336 for the comparable period of 1998. In addition, the company incurred
expenses of $198,764 to its Chairman, President and Chief Executive Officer and
Vice President of Exploration or to corporations controlled by them, compared to
the expenses of $176,830 for the same period last year. This increase is mainly
due to a lump-sum of $24,000 has been paid out to the company's Vice President
of Exploration as severance payment for his departure in September, 1998.
Interest and investment income for the period amounted to $103,481 compared with
$235,536 for the first nine months of 1997. This change reflects a drop in the
value of the company's temporary investment portfolio.
<PAGE>
Miscellaneous Items
During the 3rd quarter, the Company announced the closing of the private
placement transaction previously announced in June,1998. By this transaction,
Teck corporation purchased 375,000 shares in Minco at $2.00 per share. Proceeds
of this transaction, $750,000 will be used to fund exploration programs on the
Company's polymetallic White Silver Mountain project in Gansu, China. The shares
issued to Teck are subject to a statutory hold period expiring on June 9th,
1999. The private placement includes three sets of share purchase warrants;
125,000 shares exercisable at $2.00 per share, 125,000 shares exercisable within
one year at $3.00 per share and 125,000 shares exercisable within two years at
$3.45 per share. The warrants priced at $3.00 per share must be exercised in
order for Teck to maintain its option on the White Silver Mountain project.
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.
