FORM 6-K, BELMONT RESOURCES INC.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the nine months ended October 31, 1999.
BELMONT RESOURCES INC.
(Translation of Registrant's Name Into English)
SEC File Number: 000-29616
#1180 - 666 Burrard Street, Vancouver, B.C. Canada V6C 2X8
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of 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 X No
--- ---
[If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-686.
<PAGE>
BELMONT RESOURCES INC.
Nine months Ended October 31, 1999
Index
Page No.
PART I Financial Information 2
Item 1 Financial Statements
Consolidated Balance Sheets October 31, 1999 and
January 31, 1999 2
Statement of Operations and Deficit for three and nine
months ended October 31, 1999 and October 31, 1998 3
Cash Flow for the three and nine months ended
October 31, 1999 and October 31, 1998 3
PART II Supplementary Information for the Quarter ended
October 31, 1999 4
Item 1 Deferred Exploration & Development Costs 4
Item 2 .. a) Securities Issued During the Quarter ended
October 31, 1999 4
b) Summary of Options Granted During the Quarter ended
October 31, 1999 4
Item 3 a) Authorized and Issued Share Capital as at
October 31, 1999 4
b) Summary of Options, Warrants and Convertible Securities
Outstanding as at October 31, 1999 5
c) Shares in Escrow or Subject to Pooling as at
October 31, 1999 5
d) List of Directors as at October 31, 1999 5
PART III Management Discussion for the Quarter ended October 31,
1999 and up to the date of this Report 5
Item 1 Nature of Business 5
Item 2 Use of Proceeds 5
Item 3 Related Party Transactions 5
Item 4 Investor Relations Activities 5
Item 5 Significant Events & Transactions 6
a) Acquisitions & Dispositions 6
b) Material Expenditures 6
c) News Releases & Material Change Reports 6
d) Breaches of Corporate, Securities or other laws,
or of an Issuer's Listing Agreement with the Vancouver
Stock Exchange 6
e) Regulatory Approval 6
f) Working Capital 7
g) General 7
<PAGE>
Page 1
BELMONT RESOURCES INC.
- ---------------------
FINANCIAL INFORMATION
Attached are the Consolidated Financial Statements of Belmont Resources Inc. for
the three and nine months ended October 31, 1999.
For further information, please contact:
Gary Musil
Secretary/Director
(604) 683-6648
email: [email protected]
website: www.belmont-resources.com
Stock Symbols:
VSE ("BEO")
OTC B-B ("BEOVF")
- -------------------------------------------------------------------
BELMONT RESOURCES INC.
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(IN CANADIAN DOLLARS)
As at As at
October 31, January 31,
1999 1999
------------- ------------
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 39,172 $ 229,809
Accounts receivable 13,682 17,436
Marketable securities 3,437,100 3,437,100
Deferred income taxes 0 0
Prepaid expenses 3,017 3,486
--------- ---------
3,492,971 3,687,831
INVESTMENTS IN SECURITIES 2,291,400 2,291,400
RESOURCE PROPERTIES 5,475,268 5,339,126
ADVANCES 55,000 55,000
CAPITAL ASSETS 222,382 222,382
---------- ----------
$11,537,021 $11,595,739
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $69,866 $45,744
Future income taxes 568,603 568,603
---------- ----------
638,469 614,347
---------- ----------
DUE TO SHAREHOLDERS 0 220
---------- ----------
NON-CONTROLLING INTEREST 8,673 8,673
---------- ----------
FUTURE INCOME TAXES 539,837 539,837
---------- ----------
SHAREHOLDERS' EQUITY
Share Capital 13,605,665 13,520,425
Deficit (3,255,623) (3,087,763)
---------- ----------
10,350,042 10,432,662
---------- ----------
$11,537,021 $11,595,739
- - -----------------------------------------------------------------------------
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Page 3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN CANADIAN DOLLARS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
October 31 October 31
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Expenses
Operating 0 0 0 0
Corporate administration 57,796 59,429 169,646 179,321
--------- --------- --------- ---------
57,796 59,429 169,646 179,321
--------- --------- --------- ---------
Earnings (loss) from operations (57,796) (59,429) (169,646) (179,321)
--------- --------- --------- ---------
Other income (expense)
Interest and other income 1,369 938 1,786 9,985
Loss on marketable securities 0 0 0 0
Provision for decline in value
of marketable securities 0 0 0 0
--------- --------- --------- ---------
1,369 938 1,786 9,985
--------- --------- --------- ---------
Earnings (loss) before taxes (56,427) (58,491) (167,860) (169,336)
--------- --------- --------- ---------
Earnings (loss) for the period (56,427) (58,491) (167,860) (169,336)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN CANADIAN DOLLARS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
October 31 October 31
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash provided by (used in)
Operating activities
Earnings (loss) for the period $(56,427) $(58,491) $(167,860) $(169,336)
Items not affecting cash
Depreciation and depletion 0 0
Loss on marketable securities,
net of tax provision 0 0
Provision for decline in value
of marketable securities 0 0
Deferred taxes 0 0
Other 0 0
Change in non-cash operating
working capital
Accounts receivable 3,915 666 3,754 (6,805)
Prepaid expenses (2,792) (16) 469 (48,510)
Accounts payable 13,626 5,821 24,122 (27,867)
--------- --------- --------- ---------
Net cash provided by (used in)
operating activities (36,094) (52,020) (139,515) (252,518)
Investing activities
Mining property expenditures (14,519) (1,648) (136,142) (16,804)
Oil & gas project expenditures 0 (143,300) 0 (265,556)
--------- --------- --------- ----------
Net cash used in
investing activities (14,519) (144,948) (136,142) (282,360)
--------- --------- --------- ----------
Financing activities
Issue of capital stock, net 0 75,600 85,240 193,200
Other (220) 0 (220)
--------- --------- --------- ---------
Net cash provided by financing
activities (220) 75,600 85,020 193,200
--------- --------- --------- ---------
Increase (decrease) in cash and
short-term investments (50,833) (121,368) (190,637) (341,678)
Cash and short-term investments
at beginning of period 90,005 417,213 229,809 637,523
--------- --------- --------- ---------
Cash and short-term investments
at end of period $39,172 $295,845 $39,172 $295,845
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<PAGE>
Page 4
PART II SUPPLEMENTARY INFORMATION FOR THE QUARTER ENDED OCTOBER 31, 1999
1) DEFERRED EXPLORATION & DEVELOPMENT COSTS AND RELATED PARTY TRANSACTIONS
DURING THE QUARTER ENDED OCTOBER 31, 1999 AND CURRENT FISCAL
YEAR-TO-DATE:
Deferred exploration & development - Costs are related to work on the Pezinok
gold/antimony mineral property, the Lac Rocher nickle/cobalt property, and the
Golden Loon platinum property, which the Company is currently reviewing.
Related Party Transactions - See Schedule C - Management Discussion.
2) a) SECURITIES ISSUED DURING THE QUARTER ENDED OCTOBER 31, 1999:
<TABLE>
<CAPTION>
Date of Type of No. of Price Total Type of
Issue Security Type of Issue Shares Issued Share Proceeds Consideration
- -------- -------- ----------------- ------------- ------ -------- -------------
<C> <C>
NIL
</TABLE>
b) SUMMARY OF OPTIONS GRANTED DURING THE QUARTER ENDED OCTOBER 31, 1999:
<TABLE>
<CAPTION>
Date Granted No. of Shares Director or Employee Exercise Expiry Date
Price
- ------------ ------------- -------------------- -------- ---------------
<C> <C> <C> <C> <C>
Sept. 17/99 75,000 Vojtech Agyagos $0.32 Sept. 17, 2001
Sept. 17/99 425,000 Nicolo Bellanca $0.32 Sept. 17, 2001
Sept. 17/99 150,000 Gary Musil $0.32 Sept. 17, 2001
Sept. 17/99 100,000 Kenneth B. Liebscher $0.32 Sept. 17, 2001
Sept. 17/99 100,000 Peter E. Serck $0.32 Sept. 17, 2001
</TABLE>
3) a) AUTHORIZED AND ISSUED SHARE CAPITAL AS AT OCTOBER 31, 1999:
The Company has authorized share capital of 50,000,000 common shares with no
par value.
The Company has issued and allotted shares of its capital stock totalling
19,764,012.
<PAGE>
Page 5
b) SUMMARY OF OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES OUTSTANDING AS AT
OCTOBER 31, 1999:
Security Number Exercise Price Expiry Date
- -------- ------- --------------- ------------
*Options(1) 5,000 $0.56 August 6, 1999
*Options(2) 889,000 $0.32 February 24, 2000
Options 850,000 #0.32 September 17, 2001
*(1) Options expired unexercised (2) Option price amended to $0.32
c) SHARES IN ESCROW OR SUBJECT TO POOLING AS AT OCTOBER 31, 1999:
- - Common shares in escrow - NIL
d) LIST OF DIRECTORS AS AT OCTOBER 31, 1999:
Vojtech Agyagos President/Director
Gary Musil Secretary/Director
Kenneth B. Liebscher Director
Peter P.H. John Director
Nicolo Bellanca Director
Peter E. Serck Director
PART III MANAGEMENT DISCUSSION
The following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto included in this report
and in the Registration Statement Form 20 F/R filed by the Company with the
Securities and Exchange Commission.
All statements, other than statements of historical fact, included herein,
including without limitation, statements regarding potential mineralization
and reserves, exploration results and future plans and objectives of Belmont
Resources Inc., are forward-looking statements that involve various risks
and uncertainties. There can be no assurance that such statements will prove
to be accurate, and actual results and future events could differ materially
from those anticipated in such statements. Important factors that could
cause actual results to differ materially from Belmont expectations are
disclosed under the heading "Risk Factors" and elsewhere in Belmont documents
filed from time to time with the Vancouver Stock Exchange, The United States
Securities and Exchange Commission and other regulatory authorities.
REVIEW OF OPERATIONS IN THE QUARTER ENDED OCTOBER 31, 1999 AND UP TO
THE DATE OF THIS REPORT:
1) Nature of Business:
At the Pezinok II mining concession the Company is inviting joint venture
partners to fund further metallurgical testing work, partners who have financial
resources and expertise, with the Company retaining an interest in the project.
With low gold prices causing major gold mine closures, management felt it wise
to pursue other exploration activity such as oil and gas. In March 1998 the
Company entered into an agreement to acquire the rights to explore for oil and
gas in a 209,950-acre concession area in eastern Slovakia, and subsequently sold
its interest to EuroGas Inc.
In March 1999 the Company acquired a mineral property in the Lac Rocher area of
Quebec where a recent nickle/cobalt discovery was announced.
2) Use of Proceeds:
During the quarter the Company received nil through the exercise of incentive
stock options.
3) Related Party Transactions:
During the quarter (year to date) transactions took place with related parties:
(i) Management fees totalling $13,500 ($40,500) were accrued/paid to an
officer/director.
(ii) The Company incurred $14,140 ($42,540) in office administrative
services with a company controlled by a director.
(iii) Office rent totalling $4,500 ($13,500) was paid to a company managed
by a director.
4) Investor Relations Activities:
There were no new investor relation's activities undertaken by or on behalf of
the Company during the quarter except for the dissemination of press releases to
the media, interested shareholders, investors, and brokers. No investor
relation's arrangements or contracts were entered into during the quarter.
<PAGE>
Page 6
5) Significant Events & Transactions:
(a) Acquisitions & Dispositions:
See section (c) following - January 20, March 8 and March 16, and December 16,
1999 news releases.
(b) Material Expenditures:
The major increases were: Wages & Administrative services $49,306 in 1999
($43,458 in 1998). These were mainly due to costs incurred in preparation of the
20-F filing with the U.S. Securities and Exchange Commission (the "SEC") and the
year-end audited financials. Overall operating costs decreased 5.4% ($9,675)
less than 1998. The Company incurred $266,000 in costs relating to the
acquisition of the Maseva Gas interest in a 209,950 acre concession area in
eastern Slovakia during the first three quarters last year, however nil during
1999 as the interest has since been sold to EuroGas, Inc. The Company did incur
approx. $114,150 in costs (shares issued, property cash payments and report
preparation) related to the acquisition of the Lac Rocher area prospect during
the first half of 1999.
(c) News Releases & Material Change Reports:
January 20, 1999 - The Company announced the closing of the sale of its 90%
ownership in Maseva Gas s.r.o. to EuroGas, Inc. (OTC-EUGS). Belmont has received
2.5 million shares of EuroGas, Inc. along with a 2-year warrant to purchase a
further 2.5 million shares of EuroGas, Inc. at $2.50 USD per share.
Belmont commissioned an evaluation report by Geological Exploration and
Environmental Research Services Ltd. ("GEOMEGA") of Budapest, Hungary
coordinated by Dr. Frerenc Horvath. This report indicated a large potential
reserve south of the Trebisov area where EuroGas has already successfully
drilled and also west of the Ptruksa Field. GEOMEGA recommended that a 3D
seismic survey be completed over 360 Km2 of the concession. This extensive
report has been turned over to EuroGas.
Belmont will retain a 22.5% working interest in the 849.7 Km2 (209,950-acre)
concession area of Eastern Slovakia. In addition, EuroGas will also bear the
costs of drilling the first two new wells on the concession at no cost to
Belmont.
March 8, 1999 - The Company has entered into an option agreement with Mike
Lavoie to acquire a 100% interest in a Lac Rocher area prospect. The agreement
provides for payments of $30,000 and $25,000 (paid) and the issuance of 100,000
shares (paid) in two tranches. The prospect property is also subject to a 2%
NSR. A finder's fee in cash and shares was paid.
The prospect property consists of 67 contiguous claims (1072 hectares - 4.14 sq.
miles) bordering a major geological contact of gneissic rocks (south) and the
volcanics (north) of the "Troilus volcano sedimentary belt". Major mining
companies such as Falconbridge Limited and Noranda Inc. have now joined the
staking rush in the area. The Belmont property is located approximately 10 Km NE
of the Nuinsco discovery and is adjacent to claims staked by Falconbridge.
March 16, 1999 - The Company announced that it has entered into an agreement
with MONTORO RESOURCES INC. ("MNQ".V), whereby Montoro has an option to earn a
50 percent interest in all 67 mineral claims acquired by Belmont in the Lac
Rocher area of northwestern Quebec. In order to earn its interest Montoro must
pay $30,000 (remains outstanding) over two months, the issuance of 50,000 shares
(received) upon regulatory approval and incur a minimum $35,000 of exploration
expenditures by September 30, 1999 (remains outstanding).
December 16, 1999 - The Company reported that it has entered into an Initial
Agreement with McCallan Oil & Gas GesmbH of Austria ("McCallan"), a wholly owned
subsidiary of Sierra International Group, Inc.
Sierra recently acquired 100% of McCallan, an Austrian oil and gas concern with
its headquarters in London, UK.
Sierra/McCallan grants Belmont an option to acquire a 25% interest in EnviGeo
Trade s.r.o. (a private Slovakian Company, owned 90% by McCallan). EnviGeo owns
a 2478.9 square km oil and gas exploration license known as the Prieskumne
Uzemie Medzilaborce ("PUM") located in northeastern Slovakia. A 'Geological
Overview and Petroleum Prospect Evaluation' of the concession area has recently
been completed by Geomega Ltd. of Hungary (Dr. Ferenc Horvath, Project
Coordinator and Associates). Based on the available geological data from
Slovakia and some relevant information from the neighbouring Polish Carpathians,
Geomega concluded that very good hydrocarbon prospects exist in the concession
block.
The terms of the agreement are: (a) the payment by Belmont to EnviGeo (on behalf
of Sierra/McCallan) of Cdn $100,000 which shall be a refundable deposit, and (b)
the payment by Belmont to Sierra/McCallan of an additional CDN $400,000 within
90 days, subject to Belmont completing a due diligence assessment of PUM.
Further terms will be detailed in a definitive agreement and released upon
completion.
Belmont is an International Resource Company that controls a gold/antimony
property and has a working interest with EuroGas, Inc. on another oil/gas
concession in the Slovak Republic. Belmont is also currently reviewing an oil
prospect in Texas and a platinum property in British Columbia.
For a discussion of the contingencies and uncertainties to which information
respecting future events is subject, see Belmont's 1999 annual report on Form
20F and other SEC reports.
(a) Breaches of corporate, securities or other laws, or of an Issuer's
listing agreement with the Vancouver Stock Exchange: None
(b) Regulatory Approval:
(i) The Company engaged an U.S. legal firm to assist in preparing its annual
20-F filing with the SEC to maintain its fully reporting company status. This
was completed August 3/99 and filed electronically through EDGAR. Copies can be
obtained from the Company upon request or can be reviewed on the SEC website at
www.sec.gov in the EDGAR Archives.
<PAGE>
Page 7
(ii) On September 30, 1999 the Company received acceptance from the
Vancouver Stock Exchange for filing the options as proposed on September 17/99.
(c) Working Capital:
Quarter ending working capital is in excess of $2,854,000 not including the
Investment is Securities relating to the value of EuroGas securities that will
be available for resale after year-end. The Company is actively pursuing and
negotiating other acquisitions in Eastern Europe.
(d) General:
(i) The Company has completed the transaction with EuroGas, Inc. ("EUGS")
and has received 2,500,000 shares of EUGS.
(ii) On July 21, 1999 the Company completed its AGM and received approval
for all matters presented at the meeting.
(iii) 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 are 1900 or some other date, resulting in errors when information
using the year 2000 date 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 system failure,
which could affect a Company's ability to conduct normal business operations. It
is not possible to be certain that all aspects of the Year 2000 Issue affecting
the Company, including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
The Company has been evaluating the potential impact of Year 2000 issues on its
operations and taking appropriate action to ensure uninterrupted operations into
the year 2000 and beyond. Year 2000 issues primarily affect the technology used
by the Company in the management of internal financial data in business
applications. All internal business systems use purchased software that is Year
2000 compliant with any required upgrades to be completed by November 1999. In
some situations, Year 2000 risk has been assessed as a result of third party
relationships, particularly in relation to electronic communication with news
disseminators. In these instances the Company is communicating with the vendors
to ensure that no interruptions will occur that will affect the operations of
the Company.
(iv) On October 13, 1999 the Company provided the SEC and EUGS with Form 144
- - Notice of Proposed Sale of Securities relating to the sale of 870,000 EUGS
shares.
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.
Belmont Resources Inc.
-------------------------------
(Registrant)
Date Jan. 10, 2000
-------------------------
By /s/ Gary Musil
- ------------------------------
Secretary/Director
