UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal year ended December 31, 1999
Commission file number 0-27447
EURASIA GOLD FIELDS, INC.
(Exact name of small business issuer as specified in its charter)
Florida 98-0190293
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2
(Address of principal executive offices)
Registrant's telephone number, including area code 604-687-4432
Securities registered under Section 12(b) of the Securities Exchange Act of
1934: None
Securities registered pursuant to Section 12 (g) of the Securities Exchange Act
of 1934:
Title of each class Name of each exchange on
which registered
----------------------- ---------------------------------
Common stock, par value $0.001 per share OTC Market - Pink Sheets
--------------------------------------------- ---------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Security Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
Revenue for the fiscal year ended December 31, 1999 was $Nil
The aggregate market value of the Registrant's voting common Stock held by
non-affiliates was $9,421,875 as of September 18, 2000. There were 12,100,000
shares of the registrant's Common Stock outstanding as of September 18, 2000.
Documents incorporated by reference herein: None
Transitional Small Business disclosure format (check one); YES [_] NO [X]
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EURASIA GOLD FIELDS, INC.
This annual report contains statements that plan for or anticipate the
future and are not historical facts. In this Report these forward looking
statements are generally identified by words such as "anticipate", "plan",
"believe", "expect", "estimate", and the like. Because forward-looking
statements involve future risks and uncertainties, these are factors that could
cause actual results to differ materially from the estimated results. The
factors that could cause actual results to differ materially from those
projected in the forward-looking statements include (i) the risks and hazards
inherent in the mining business (including environmental hazards, industrial
accidents, weather or geologically related conditions, (ii) changes in the
market prices of gold and silver, (iii) the uncertainties inherent in the
Company's production, exploratory and development activities, including risks
relating to permitting and regulatory delays, (iv) the uncertainties inherent in
the estimation of gold and silver ore reserves, (v) changes that could result
from the Company's future acquisition of new mining properties or business, (vi)
the effects of environmental and other governmental regulations, and (vii) the
risks inherent in the ownership or operation of or investment in mining
properties or business in foreign countries. These risks and uncertainties are
detailed in Item 1. "Business", Item 2. "Properties", Item 6. "Management's
Discussion and Analysis of Financial Condition and Results of Operations" Item 7
"Financial Statements", Item 12 "Certain Relationships and Related
Transactions".
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for such statements, may not apply to this Report.
ITEM 1. BUSINESS
(A) GENERAL
Eurasia Gold Fields, Inc. (the "Company" or "Eurasia") was incorporated
under the laws of the State of Florida on May 22, 1995 as Snack-N-Pop Vending,
Inc. On March 2, 1998 the Company changed its name to Eurasia Gold Fields, Inc.
and is an exploration stage enterprise. The Company was inactive between May 22,
1995 and March 2, 1998.
Eurasia Gold Fields, Inc. is engaged through its subsidiaries in the
exploration of gold and silver mining properties located primarily in the
Okinski district of the Republic of Buriatia in south-eastern Siberia, Russia.
None of the Company's properties contain any known Mineral Reserves. See "Item
2. Description of Property."
During 1999, the Company conducted initial exploration programs for gold
mineralization on its properties in the Okinski district of the Republic of
Buriatia in south-eastern Siberia, Russia.
The Company's common stock is traded on the OTC Market Pink Sheets.
The Company has not declared or paid dividends on its shares since incorporation
and does not anticipate doing so in the near future.
The Company's offices are located at 1505 - 1060 Alberni Street, Vancouver,
British Columbia, Canada, V6E 4K2.
(B) SIGNIFICANT DEVELOPMENTS IN FISCAL 1999 AND SUBSEQUENT EVENTS
In September 1999 the Company voluntarily filed Form 10-SB with the
Securities and Exchange Commission ("SEC") in the United States to register its
common stock.
The Company conducted initial exploration programs for gold mineralization
on its properties in the Okinski district of the Republic of Buriatia in
south-eastern Siberia, Russia during
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the last half of 1999. Exploration work will continue in 2000 on the most
prospective areas. The extent of the work will be dependent on the outcome of
further reconnaissance.
(C) EXPLORATION AND DEVELOPMENT
The Company conducts exploration activities from its headquarters in
Vancouver, Canada. The Company controls mineral exploration concessions in the
Okinski district of the Republic of Buriatia in south-eastern Siberia, Russia.
The Company's strategy is to concentrate its investigations into:
(1) Existing operations where an infrastructure already exists;
(2) Properties presently being developed and/or in advanced stages of
exploration which have potential for additional discoveries; and
(3) Grass-roots exploration opportunities.
The Company is currently concentrating its exploration activities on its
properties in the Okinski district of the Republic of Buriatia in south-eastern
Siberia, Russia.
All of the Company's properties are in the exploration stages only and are
without a known body of Mineral Reserves. Development of the properties will
follow only if satisfactory exploration results are obtained. Mineral
exploration and development involves a high degree of risk and few properties
that are explored are ultimately developed into producing mines. There is no
assurance that the Company's mineral exploration and development activities will
result in any discoveries of commercially viable bodies of mineralization. The
long-term profitability of the Company's operations will be, in part, directly
related to the cost and success of its exploration programs, which may be
affected by a number of factors.
Exploration Program for year 2000
1. Completion of the data compilation work started in 1999.
2. Obtaining easting, northing and elevation information for the samples taken
to date. This information would allow three dimensional modeling and
spatial statistical analysis of the data. Also, this information is
critical for structural geology analysis and projection for subsurface
testing (drilling or underground development).
3. Extend existing trench sample profiles in selected areas of veins in the
Main Shear at Zunospinskoye. This would test the immediate hanging wall and
footwall to the veins and evaluate the melange or sheared zone hosting the
quartz veins, particularly in the beresenite altered granitoid boudins.
4. Structural mapping of trenches and the mineralized showings and their
immediate area in the various shear zones / melange zones. Emphasis would
be on whether the high grade zones identified on surface can be correlated
to structural elements. (Higher grade ore shoots are usually the result of
intersecting structures in similar lode precious metal deposits in Canada
and Australia).
5. Detailed geology mapping (at Tainskoye) to locate and project contacts
between granites and altered carbonate and terrigenous rocks. Once
identified, these will form diamond drill targets to test hypothesis of the
presence of Zun-Kholbinskoye type mineralization (precious metal bearing,
veinlet / fracture zones at the contact area).
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(D) EMPLOYEES
As of January 31, 2000 and September 31, 2000 there were two (2) full time
employees and two (2) part time employees.
(E) REGULATION OF MINING ACTIVITY
The Company's interests in its projects will be subject to various laws and
regulations concerning exploration, production, taxes, labor standards,
environmental protection, mine safety and other matters. In addition, new laws
or regulations governing operations and activities could have a material adverse
impact on the Company.
Article 72 of the Russian Constitution (the "Constitution") provides that
the subsoil and other natural resources are a matter of joint jurisdiction
between the federal government and the regional governments of the Russian
Federation. Article 76 of the Constitution states that legislative acts passed
into law by the regions of the Russian Federation may not contradict federal
laws and in the event of a conflict, federal law shall prevail. The State
Committee for Geology and Underground Resources ("Geolkom", currently being
reorganized into the Ministry of Natural Resources and the State Committee on
the Environment) has both a central federal office and regional offices and has
authority to grant licences or amend their terms. It is organized for operations
on two levels in accordance with federal/regional jurisdiction. Consequently,
the regulation of subsoil resources generally, as well as granting of mineral
licences through competitive bids and transferring of mineral licences, depends
to a large extent on federal law.
(F) FOREIGN COUNTRIES AND REGULATORY REQUIREMENTS
Mineral exploration, development and mining activities on the Company's
properties may be affected in varying degrees by political stability, and the
policies of other nations. Any changes in regulations or shifts in political
conditions are beyond the control of the Company and may adversely affect its
business. Operations may be affected by government laws and regulations or the
interpretations thereof, including those with respect to export controls,
expropriation of property, employment, land use, water use, environmental
legislation and mine safety. Operations may be also affected by political and
economic instability, confiscatory taxation, restriction on currency
conversions, imports and sources of supplies, the expropriation of private
enterprises, economic or other sanctions imposed by other nations, terrorism,
military repression, crime, and extreme fluctuations in currency exchange rates
and high inflation and make it more difficult for the Company to raise funds for
the development of its mineral interests in some countries.
In the Okinski district of the Republic of Buriatia in south-eastern
Siberia, Russia the Company is subject to regulations relating to business,
taxation, mining and the environment. With regard to business activities and
taxation, the Company has a registered branch in Russia and will comply with
commercial and taxation requirements through Russian legal and accounting
services. Generally there is no restriction on the level of foreign investment.
Foreign investors can acquire a 100% interest in a project, although some
tenders may require that the foreign investor participate through a wholly-owned
Russian subsidiary.
(G) COMPETITION
Many companies are engaged in the exploration and development of mineral
properties. The company encounters strong competition from other mining
companies in connection with the acquisition of properties producing or capable
of producing gold, lead, zinc and industrial minerals. Many of these companies
have substantially greater technical and financial resources than Patagonia and
thus the company may be at a disadvantage with respect to some of its
competitors.
The marketing of minerals is affected by numerous factors, many of which
are beyond the control of the company. Such factors include the price of the
mineral in the marketplace, imports of
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minerals from other nations, the availability of adequate refining and
processing facilities, the price of fuel, electricity, labor, supplies and
reagents and the market price of competitive minerals. In addition, sale prices
for many commodities are determined by world market forces or are subject to
rapid and significant fluctuations that may not necessarily be related to supply
or demand or competitive conditions that in the past have affected such prices.
Significant price movements in mineral prices over short periods of time may be
affected by numerous factors beyond the control of the Company, including
international economic and political trends, expectations of inflation, currency
exchange fluctuations (specifically, the U.S. dollar relative to other
currencies), interest rates and global or regional consumption patterns,
speculative activities and increased production due to improved mining and
production methods. The effect of these factors on the price of minerals and,
therefore, the economic viability of any of the Company's projects cannot
accurately be predicted. As the Company is in the development stage, the above
factors have had no material impact on operations or income.
(H) ENVIRONMENTAL REGULATIONS
All phases of the Company's operations in the Okinski district of the
Republic of Buriatia in south-eastern Siberia, Russia are subject to
environmental regulations (see E - Regulation of Mining Activity). Environmental
legislation in all countries is evolving in a manner which will require stricter
standards and enforcement, increased fines and penalties for non-compliance,
more stringent environmental assessments of proposed projects and a heightened
degree of responsibility for companies and their officers, directors and
employees. Although the Company believes it is in compliance with all applicable
environmental legislation, there is no assurance that future changes in
environmental regulation, if any, will not adversely affect the Company's
operations.
(I) MINING RISKS AND INSURANCE
Mineral exploration involves many risks, which even a combination of
experience, knowledge and careful evaluation may not be able to overcome.
Operations in which the Company has a direct or indirect interest will be
subject to all type of hazards and risks or unexpected formations, cave-ins,
pollution, all of which could result in work stoppages, damages to property, and
possible environmental damages. The Company does not have general liability
insurance covering its operations and does not presently intend to obtain
liability insurance as to such hazards and liabilities. Payment of any
liabilities therefore could have a materially adverse effect upon the Company's
financial condition.
While the Company has reviewed and is satisfied with the title for any
claim in which it has a material interest there is no guarantee the title to
such concession will not be challenged or impugned.
ITEM 2. DESCRIPTION OF PROPERTY
All of the Company's properties are in the preliminary exploration
stage and do not contain any known body of ore.
The Company owns the following mineral concessions located in the
Okinski district of the Republic of Buriatia in south-eastern Siberia,
Russia:
(a) Zun Ospinskoye Property
The licence for the exploration and development of this property was
issued under the number UDE00179 type BP to Kitoi.
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(b) Tainskoye Property
The licence for the exploration and development of this property was
issued under the number UDE140 type BP to Arkhei.
Pursuant to an agreement dated December 9, 1997, the Company acquired
these mineral concessions by issuing 7,000,000 common shares to the
vendors. As the vendors became the controlling shareholders of the Company
after the above-mentioned transactions, the concessions
The two Buriat Project properties, Zunospinskoye and Tainskoy, are
located in the Okinski district of the Buriat Republic in south-eastern
Siberia, Russia. They are about 200 Kilometers west of Irkutsk and 120
kilometers east of Orlik (administrative center for the district). Access
is by gravel and dirt roads and/or helicopter.
The properties occur in rugged mountain terrain. The Zunospinskoye
property covers 440 hectares whereas the Tainskoye property comprises 1400
hectares. Elevations range from 1800 to 3200 meters with the mineralized
showings at elevations from 2100 to 2600 meters.
The Buriat properties occur in a complicated geological structural
province called the East Sayan province. The regions contain sedimentary
and igneous rocks of Archean, Proterozoic, Cambrian, Devonian, Jurassic and
Tertiary age. Major formations present are the Proterozoic Ilchirsky
ophiolite belt, Lower Paleozoic Kholbinsky Intrusive complex (granites,
diorites), Archean plagiogniesses of the Garganskaya block, and
Proterozoic, schists and carbonates. Tertiary basalts and dikes overlay
units at Zunospinskoye and intrude all units in both areas.
This main gold-bearing province is related to the Upper Proterozoic
(Bailalian) metallogenic cycle.
Zunospinskoye Field
The Zunospinskoye deposit consists of precious metal mineralization in
three main shear or tectonically disrupted zones: Main, North and South.
These steep east dipping zones occur in all lithologic units. They are of
variable thickness with the Main Zone having widths of up to 100 meters.
Surface traces of all three were observed and have strike lengths of at
least 1 to 2 kilometers.
Strong tectonic fabrics mark the zones and overprint all lithologic
units within a particular sheared zone. A sheared zone varies from a
strongly foliated section to a melange containing boudinage structures in
an intensely sheared host. Boudins comprise granite and granodiorite bodies
and quartz veins. The host units consist of mafic to ultramafic intrusive
rocks, limestone units and carbonaceous schists.
Alteration is a common feature. Main types are carbonate (mainly
ankerite), talc, fuchsite and a quartz, muscovite +/- albitic plagioclase
assemblage (collectively called beresenite). Beresenite sections occur in
the granitoid and limestone units. Carbonate and talc alteration
predominate in the mafic to ultramafic assemblages.
Gold and silver mineralization is found in quartz veins and boudins
and granitoid boudins. More specifically, in the granitoid boudins gold
mineralization is associated with beresenite alteration. Sampled widths for
mineralization in both veins and boudins range from 0.1 to 7 meters, with
an average of about 4 meters. Precious metal mineralization also occurs 10
to 50 cm into the strongly sheared envelopes to the veins and boudins.
Generally, sulphide content is low, ranging from 3 to 5 percent. Principal
sulphides include pyrite, pyrrhotite, sphalerite, chalcopyrite and galena.
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The mineralization at Zunospinskoye has been evaluated to date by
numerous trenches (concentrated on the Main Zone), 8 drill holes (C1 to C8)
and 2 adits (ST1 at 2575 meters elevation and ST2 at 2525 meters
elevation). Core from drill holes C6, C7 and C8 were left at the old work
camp and is in reasonable condition. However, all mineralized intervals
were removed from site. The adits were inaccessible.
Tainskoye Field
The Tainskoye deposit consists of precious metal mineralization in a
single shear or tectonically disrupted zone. This zone is steep east
dipping and occurs in granitic rocks close to (but not in) ultramafic
lithologies. The zone is relatively narrow (1 to 20 meters, usually less
than 10 meters). Surface traces were observed and have exposed strike
lengths of at least 0.5 kilometers.
The Tainskoye shear zone contains narrow (generally from 5 cm to 1
metre), anastomosing, strongly foliated shears within a distinctly less
foliated zone. Mineralized quartz veins occur within these strongly
foliated areas.
Alteration is pervasive and comprises quartz, muscovite and albitic
plagioclase (collectively called beresenite). Narrow (up to 5 meters)
intensely beresenite altered zones are found within and sub-parallel to the
sheared zone.
Gold and silver mineralization occurs in the quartz veins and
intensely beresenite altered zones. Sampled widths for mineralization in
the veins range from 0.1 to 5 meters, with an average of about 1 meter.
Generally, sulphide content is low, ranging from 3 to 5 percent. Principal
sulphides include pyrite, pyrrhotite, sphalerite, chalcopyrite and galena.
The mineralization at Tainskoye has been evaluated by numerous
trenches.
ITEM 3. LEGAL PROCEEDINGS
The company is not party to any litigation, and has no knowledge of any
pending or threatened litigation against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) The Common Stock of the Company has been quoted on the OTC Market Pink
Sheets since November 18, 1999. Between March 7, 1998 and November 17, 1999
the Common Stock of the Company was quoted on the NASD OTC Bulletin Board.
The following table sets forth the high and low bid prices for the Common
Stock for the calendar quarters indicated as reported by the OTC Market
Pink Sheets for the last two years. These prices represent quotations
between dealers without adjustment for retail markup, markdown or
commission and may not represent actual transactions.
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First Quarter Second Quarter Third Quarter Fourth Quarter
------------- -------------- ------------- --------------
1999 - High $3.1875 $2.8750 $2.8750 $2.6250
--------------------------------------------------------------------------------
1999 - Low $2.5625 $1.6560 $2.0000 $1.6870
--------------------------------------------------------------------------------
1998 - High $2.5000 $2.6875 $2.8125 $3.5000
--------------------------------------------------------------------------------
1998 - Low $1.4687 $2.2500 $2.0000 $2.1250
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(b) As of September 18, 2000, there were 24 holders of record of the
Common Stock.
(c) There were no Common Stock cash dividends paid in 1999, 1998 or 1997.
The amount and frequency of cash dividends are significantly
influenced by metal prices, operating results and the Company's cash
requirements.
RECENT SALES OF UNREGISTERED SECURITIES
During 1999 and 1998 the Registrant has sold securities in the manner
set forth below without registration under the Securities Act of 1933, as
amended (the "Act").
(1) On January 12, 1998, the Company issued 2,000,000 shares at a
price of $0.35 per share for an aggregate consideration of
$700,000 pursuant to Rule 504 of Regulation D.
Except for 5,040,000 shares issued pursuant to Rule 504, such shares
are "restricted securities," as that term is defined in the rules and
regulations promulgated under the Securities Act of 1933, as amended,
subject to certain restrictions regarding resale. Certificates evidencing
all of the above-referenced securities have been stamped with a restrictive
legend and will be subject to stop transfer orders.
The Registrant believes that each of the above-referenced transaction
was exempt from registration under the Act, pursuant to Section 4(2) of the
Act and the rules and regulations promulgated thereunder as a transaction
by an issuer not involving any public offering.
ITEM 6. MANAGEMENT'S' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
(A) GENERAL
The Company is a mineral exploration company based in Vancouver,
Canada and Moscow, Russia and is engaged in the exploration for precious
metals. The Company was incorporated under the laws of the State of Florida
on May 22, 1995, under the name Snack-N-Pop Vending, Inc. On March 2, 1998
the Company changed its name to Eurasia Gold Fields, Inc. and is an
exploration stage enterprise. The company was inactive between May 22, 1995
and March 2, 1998.
SFAS 121 Impairment Reviews; Write-down of Mining Properties
In accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Dispossed Of" ("SFAS 121"), the Company reviews the carrying
value of its assets whenever events or changes in the circumstances
indicate that the carrying amount of its assets may not be fully
recoverable. Generally, SFAS 121 provides that an asset impairment exists
if the total amount of the estimated future undiscounted cash flows of the
assert are less than the carrying value of the asset. If it is determined
that impairment exists, the amount of the impairment loss that should be
recorded, if any, is the amount by which the carrying value of the asset
exceeds its fair
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value. As of December 31, 1999 the Company reviewed the carrying value of
its Long-Lived Assets and determined a reduction in the carrying value was
not necessary.
None of the Company's properties contain any known Mineral Reserves.
The Company's common stock is traded on the OTC Market Pink Sheets.
(B) FINANCING
In Fiscal 1999, the Company raised $0 (1998 - $700,000, 1997 -
$300,000) through the issuance of 0 (1998 - 2,000,000, 1997 - 3,000,000)
common shares at $0 (1998 - $0.35, 1997 - $0.10) per share pursuant to Rule
504 of Regulation D.
Pursuant to an agreement dated December 8, 1997 the Company acquired
two mineral concessions in the Okinski district of the Republic of Buriatia
in south-eastern Siberia, Russia by issuing 7,000,000 restricted common
shares. The shares were valued at equal to the par value of the shares
issued. The amount was treated as an exploration expense in 1997.
(C) Results of Operations
(a) Twelve-Month Period Ended December 31, 1999 versus Twelve-Month Period
Ended December 31, 1998
Net Loss:
For the twelve-month period ended December 31, 1999 the Company
recorded a loss of $213,144 or $0.02 per share, compared to a loss of
$307,466 or $0.03 per share in 1998. The Company was inactive between
May 22, 1995 and March 2, 1998.
Revenues:
The Company had no operating revenues for the twelve-month period
ended December 31, 1999 (1998 - $0).
Costs and Expenses:
General and administrative expenses - For the twelve-month period
ended December 31, 1999 the Company recorded general and
administrative expenses of $72,202 compared to $81,280 in 1998.
Professional fees - accounting and legal - For the twelve-month period
ended December 31, 1999 the Company recorded accounting fees of
$31,823 (1998 - $22,000) and legal fees of $13,000 (1998 - $19,764).
$9,073 (1998 - $12,000) of the accounting fees relate to the filing of
the Registration Statement on Form 10-SB. $13,000 (1998 - $14,000) of
the legal expenses relate to a due diligence examination of the
Russian properties and the setup of the Russian subsidiary.
Exploration expenditures - For the twelve-month period ended December
31, 1999 the Company recorded exploration expenses of $79,045 (1998 -
$184,867).
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(b) Twelve-Month Period Ended December 31, 1998 versus Twelve-Month Period
Ended December 31, 1997
Between May 22, 1995 and March 2, 1998 the Company had limited
financial activity other than as related to organizational expenses of
$5,000.
Net Loss:
For the twelve-month period ended December 31, 1998 the Company
recorded a loss of $307,466 or $0.03 per share, compared to a loss of
$6,362 or $0.00 per share in 1997. The Company was inactive between
May 22, 1995 and March 2, 1998. Revenues:
The Company had no operating revenues for the twelve-month period
ended December 31, 1998 (1997 - $0).
Costs and Expenses:
General and administrative expenses - For the twelve-month period
ended December 31, 1998 the Company recorded general and
administrative expenses of $81,280 compared to $0 in 1997.
Professional fees - accounting and legal - For the twelve-month period
ended December 31, 1998 the Company recorded accounting fees of
$22,000 (1997 - $0) and legal fees of $19,764 (1997 - $0). $12,000 of
the accounting fees relate to the filing of the Registration Statement
on Form 10-SB in September 1999. $14,000 of the legal expenses relate
to a due diligence examination of the Russian properties and the setup
of the Russian subsidiary.
Exploration expenditures - For the twelve-month period ended December
31, 1998 the Company recorded exploration expenses of $184,867 (1997 -
$7,000).
(D) Financial Condition and liquidity
At December 31, 1999 the Company had cash of $215,222 (1998 -
$519,229) and working capital of $533,355 (1999 - $666,145) respectively.
Total liabilities as of December 31, 1999 were $8,500 (1998 - $12,292).
Net cash used in operating activities in the twelve-month period ended
December 31, 1999 was $289,007 compared to $285,174 in the twelve-month
period ended December 31, 1998. Net cash used in investing activities in
the twelve-month period ended December 31, 1999 was $15,000 compared to net
cash used in investing activities of $186,235 in the prior year's
comparable period. Net cash received from financing activities in the
twelve-month period ended December 31, 1999 was $0 compared to net cash
received from financing activities of $700,000 in the prior year's
comparable period.
The Company has sufficient working capital to (i) pay its
administrative and general operating expenses through December 31, 2000 and
(ii) to conduct preliminary exploration programs. However, without cash
flow from operations, it may need to obtain additional funds (presumably
through equity offerings and/or debt borrowing) in order, if warranted, to
implement additional exploration programs on its properties. Failure to
obtain such additional financing may result in a reduction of the Company's
interest in certain properties or an actual foreclosure of its interest.
The Company has no agreements or understandings with any person as to such
additional financing.
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None of the Company's properties has commenced commercial production
and the Company has no history of earnings or cash flow from its
operations. While the Company may attempt to generate additional working
capital through the operation, development, sale or possible joint venture
development of its properties, there is no assurance that any such activity
will generate funds that will be available for operations.
The Company has not declared or paid dividends on its shares since
incorporation and does not anticipate doing so in the foreseeable future.
(E) YEAR 2000 ISSUES.
The "Year 2000 problem", as it has come to be known, refers to the
fact that many computer programs use only the last two digits to refer to a
year, and therefore recognize a year that begins with "20" as instead
beginning with "19". For example, the year 2000 would be read as being the
year 1900. If not corrected, this problem could cause many computer
applications to fail or create erroneous results.
The Company has modified and tested all the critical applications of
its information technology ("IT"), the result of which is that all such
critical applications are now Year 2000 compliant. The Company believes
that virtually all of the non-critical applications of its IT are Year 2000
compliant. The Company is using independent consultants to oversee the Year
2000 project as well, as to perform certain remediation efforts. In
addition, progress on the Year 2000 project is also monitored by senior
management, and reported to the Board of Directors. The total amount of the
payments made to date and to be made hereafter to such independent
consultant are not expected to be material. New equipment and software was
installed during the third and fourth quarters of 1999. Based on the
Company's analysis to date, the Company believes that its material non-IT
systems are either Year 2000 compliant, or do not need to be made Year 2000
compliant in order to continue to function in substantially the same manner
in the Year 2000. The Company's Year 2000 compliance work has not caused,
nor does the Company expect that it will cause, a deferral on the part of
the Company of any material IT or non-IT projects.
However, there can be no assurance that any of the Company's vendors
or others, with whom it transacts business, will be Year 2000 compliant
prior to such date. The company is unable to predict the ultimate effect
that the Year 2000 problem may have upon the Company, in that there is no
way to predict the impact that the problem will have nation-wide or
world-wide and how the Company will in turn be affected, and, in addition,
the company cannot predict the number and nature of its vendors and
customers who will fail to become Year 2000 compliant prior to January 1,
2000. Significant Year 2000 difficulties on the part of vendors or
customers could have a material adverse impact upon the Company. The
Company intends to monitor the progress of its vendors and customers in
becoming Year 2000 compliant. The Company has formulated a contingency plan
to deal with the potential non-compliance of vendors and customers.
As of September 18, 2000 the Company has not experienced any year 2000
problems nor has any of the Company's vendors or others with whom it
transacts business.
(F) NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS 133
requires companies to recognize all derivative contracts as either assets
or liabilities on the balance sheet and to measure them at fair value. If
certain conditions are met, a derivative may be specifically designated as
a hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition (i) the changes
in the fair value of the hedged asset or the liability that are
attributable to the hedged risk or (ii) the earnings effect of the hedged
11
<PAGE>
forecasted transaction. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000.
Historically, the Company has not entered into derivatives contracts
either to hedge existing risks or for speculative purposes. Accordingly,
the Company does not expect adoption of the new standards on January 1,
2001 to affect its financial statements.
ITEM 7. INANCIAL STATEMENTS
See ITEM 13 of this Report for information with respect to the
financial statements filed as a part hereof, including financial statements
filed pursuant to the requirements of this ITEM 7.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None
PART III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
The following table lists the names and positions of the executive
officers and directors of the Company as of December 31, 1999 and September
18, 2000. All executive officers and directors have been elected and
appointed to serve until their successors are elected and qualified.
Additional information regarding the business experience, length of time
served in each capacity and other matters relevant to each individual are
set forth below the table.
Name Position
---- --------
Agustin Gomez de Segura Age 51, President and Director since April 17, 1998.
1994 to 1998 Vice President of the Russian investment
bank Alina-Moscow.
Jorge L. Lacasa Age 62, Director since April 17, 1998. 1984 to
current, President of Alanco Development Inc., a
project finance company. Between 1993 and 1997
advisor to United States gas company Enron in the
Commonwealth of Independent States ("CIS").
David E. Jenkins Age 46, Director since April 17, 1998. Founder,
President and Director of Aurora Gold Corporation
since October 1995. President of Patagonia Gold
Corporation and Director of Eurasia Gold Fields, Inc.
President of DataLogic Marketing Corporation, 1989 to
current. Investment advisor for PaineWebber, Inc. and
Blythe Eastman Dillon Inc., 1983 to 1989
There are no family relationships between any of the executive officers.
12
<PAGE>
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE, OF
THE EXCHANGE ACT OF 1934
Section 16(a) of the Securities and Exchange Act 10 1934 requires the
Company's officers and director, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports
of ownership and changes to ownership with the Securities and Exchange
commission (the "SEC"). Officers, directors and greater than ten percent
shareholders are required by the SEC to furnish the Company with copies of
all Section 16 (a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company
believes that during the fiscal year ended December 31, 1999 all filings
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION
(A) General
The following table sets forth information concerning the compensation of
the named executive officers for each of the registrant's last three completed
fiscal year:
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------------------------- -----------------------------------------------------
Awards Payments
--------------------------- -------------------------
Securities
Other Under- All
Annual Restricted Lying other
Name And Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary Bonuses Sation Award(s) SARs Payouts sation
($) ($) ($) ($) (=) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Agustin Gomez de Segura 1999 -0- -0- -0- None None None -0-
------------------------------------------------------------------------------------------------------------------------------------
President and 1998 -0- -0- -0- None None None -0-
------------------------------------------------------------------------------------------------------------------------------------
Director 1997 -0- -0- -0- None None None -0-
------------------------------------------------------------------------------------------------------------------------------------
Jorge L. Lacasa 1999 -0- -0- -0- None None None -0-
------------------------------------------------------------------------------------------------------------------------------------
Director 1998 -0- -0- -0- None None None -0-
------------------------------------------------------------------------------------------------------------------------------------
1997 -0- -0- -0- None None None -0-
====================================================================================================================================
</TABLE>
None of the Company's officers or directors was party to an employment
agreement with the Company. Directors and/or officers receive expense
reimbursement for expenses reasonably incurred on behalf of the Company.
During the fiscal year ending December 31, 1999 the entire board of
directors acted as the Company's compensation committee.
(B) Options/SAR Grants Table
No options have been awarded to Agustin Gomez de Segura or Jorge L. Lacasa.
(C) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
No options have been awarded to Agustin Gomez de Segura or Jorge L. Lacasa.
13
<PAGE>
(D) Long-Term Incentive Plans ("LTIP") Awards Table
The Company does not have a Long-term Incentive Plan.
(E) Compensation of Directors
The Company does not pay a fee to its outside, non-officer directors.
The Company reimburses its directors for reasonable expenses incurred by
them in attending meetings of the Board of Directors. During fiscal 1999
non-officers directors received a total of $12,000 in consulting fees.
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of September 18, 2000
by (i) each person who is known by the Company to own beneficially more
than five percent (5%) of the Company's outstanding Common Stock; (ii) each
of the Company's directors and officers; and (iii) all directors and
officers of the Company as a group. As at September 18, 2000, there were
12,100,000 shares of Common Stock issued and outstanding.
Name of Shares of Common Approximate
Beneficial Stock Beneficially Percentage
Owner Owned Owned
----- ----- -----
Golden Country Consortium Ltd.(1) 1,000,000 8.3%
Pasea Estate
Road Town, Tortola, B.V.I
Publix Overseas Ltd.(1) 1,000,000 8.3%
Pasea Estate
Road Town, Tortola, B.V.I
Bars Ltd.(1) 920,000 7.6%
Rubliovskoye Shosse 16/4
Moscow, Russia
Redbridge Minerals (Overseas) Ltd.(1) 900,000 7.4%
5 Costis Palomas Street
Nicosia, Cyprus
Alanco Development Inc.(1) 855,000 7.1%
Bank of America Bldg
Panama City, Panama
Seal Overseas Ltd.(1) 850,000 7.0%
140-142 Austin Road
Kowloon, Hong Kong
Barrington Ltd.(1) 800,000 6.6%
12 Remy Oliver Street
Fort Louis, Mauritius
Kastalia Ltd.(1) 750,000 6.2%
12 Remy Oliver Street,
Fort Louis, Mauritius
14
<PAGE>
Boavista Securities Ltd.(1) 650,000 5.4%
12 Harcourt Road Central
Hong Kong
Finiss Investments Ltd.(1) 630,000 5.2%
8 Acroplis Avenue
Nicosia, Cyprus
Officers and Directors
----------------------
Jorge L. Lacasa 7,500 *
Valle de Laciana 31
D-28034 Madrid, Spain
Agustin Gomez de Segura 7,500 *
Raimundo F. Villaverde 26,
E-28003 Madrid, Spain
David E. Jenkins Nil *
1505-1060 Alberni Street
Vancouver, B.C. Canada V6E 4K2
Officers and Directors (3 persons) 15,000 *
(1) To the best of the Company's knowledge, none of the above companies
are affiliated to the officers and directors of the Company except as
follows: Jorge L Lacasa is affiliated with Alanco Development Inc. and
Agustin Gomez de Segura is affiliated with Publix Overseas Ltd.
* Less than 1%.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The proposed business of the Company raises potential conflicts of
interests between the Company and certain of its officers and directors.
One of the current directors of the Company is a director of other
mineral resource companies, David Jenkins is a Director and President of
Aurora Gold Corporation and a Director and President of Patagonia Gold
Corporation, and to the extent that such other companies may participate in
ventures in which the Company may participate, the directors of the Company
may have a conflict of interest in negotiating and concluding terms
regarding the extent of such participation. In the event that such a
conflict of interest arises at a meeting of the directors of the Company, a
director who has such a conflict will abstain from voting for or against
the approval of such participation or such terms. In appropriate cases, the
Company will establish a special committee of independent directors to
review a matter in which several directors, or Management, may have a
conflict. From time to time, several companies may participate in the
acquisition, exploration and development of natural resource properties
thereby allowing for their participation in larger programs, involvement in
a greater number of programs and reduction of the financial exposure with
respect to any one program. It may also occur that a particular company
will assign all or a portion of its interest in a particular program to
another of these companies due to the financial position of the company
making the assignment. In determining whether the Company will participate
in a particular program and the interest therein to be acquired by it, the
directors will primarily consider the potential benefits to the Company,
the degree of risk to which the Company may be exposed and its financial
position at that time. Other than as indicated, the Company has no other
procedures or mechanisms to deal with
15
<PAGE>
conflicts of interest. The Company is not aware of the existence of any
conflict of interest as described herein.
Directors and/or officers will receive expense reimbursement for
expenses reasonably incurred on behalf of the Company.
Included in accounts payable at December 31, 1999 is $0 (1998 - $0)
due to directors and corporations controlled by directors in respect of
salaries, consulting fees and reimbursement for operating expenses.
The Company does not pay a fee to its outside, non-officer directors.
The Company believes that consulting fees and reimbursement for operating
expenses paid to corporations owned by directors are comparable to amounts
that would have been paid to at arms length third party providers of such
services.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(1) FINANCIAL STATEMENTS - Reference is made to the Financial Statements
appearing on pages F-1, through F-14
(2) EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
1.1 Articles of Incorporation *
1.2 By-Laws *
1.3 Consent of Action of the Majority Shareholders and Sole Director *
1.4 Articles of Amendment to Snak-N-Pop Vending, Inc. *
1.5 Articles of Amendment to Snak-N-Pop Vending, Inc. *
1.6 Certificate of Filing of Articles of Amendment *
3.1 Asset Purchase Agreement Dated December 8th, 1997 *
21.1 Subsidiaries of the Company
27.1 Financial Data Schedule
----------
* Previously Filed
(b) Reports on Form 8-K
None
----------
16
<PAGE>
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 thereunder duly authorized.
Date: September 19, 2000 BY: /s/ Jorge L. Lacasa
---------------------------
Jorge L. Lacasa
Director and President
Date: September 19, 2000 BY: /s/ Agustin Gomez de Segura
---------------------------
Agustin Gomez de Segura
Director
EXHIBIT (1) THE FOLLOWING FINANCIAL STATEMENTS REQUIRED TO BE INCLUDED IN ITEM
8 ARE LISTED BELOW
INDEX TO FINANCIAL STATEMENTS
Financial Statements Page
-------------------- ----
Report of Independent Accountants F-2
Consolidated Balance Sheets F-3
Consolidated Statements of Stockholders' Equity F-4
Consolidated Statement of Operations F-6
Consolidated Statement of Cash Flows F-7
Notes to Consolidated Financial Statements F-8 to F-12
Financial Statement Schedules *
*Financial Statement Schedules have been omitted as not applicable
17
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
Index
-----
Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
F1
<PAGE>
MOORE STEPHENS ELLIS FOSTER LTD.
CHARTERED ACCOUNTANTS
1650 West 1st Avenue
Vancouver, BC Canada V6J 1G1
Telephone: (604) 734-1112 Facsimile: (604) 714-5916
E-Mail: [email protected]
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES ("the Company")
(An exploration stage enterprise)
We have audited the consolidated balance sheets of Eurasia Gold Fields, Inc. &
Subsidiaries (an exploration stage enterprise) as at December 31, 1999 and 1998,
the consolidated statement of stockholders' equity for the period from May 22,
1995 (inception) to December 31, 1999, the consolidated statements of operations
and cash flows for the period from May 22, 1995 (inception) to December 31, 1999
and for the years ended December 31, 1999 and 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide a reasonable basis for our
opinion.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 1999
and 1998 and the results of its operations and cash flows for the period from
May 22, 1995 (inception) to December 31, 1999 and for the years ended December
31, 1999 and 1998 in conformity with generally accepted accounting principles in
the United States.
Vancouver, Canada "MOORE STEPHENS ELLIS FOSTER LTD."
January 31, 2000 Chartered Accountants
F2
--------------------------------------------------------------------------------
MS An independently owned and operated member of Moore Stephens North America,
Inc. Members in principal cities throughout North America. Moore Stephens North
America, Inc. is a member of Moore Stephens International Limited, members in
principal cities throughout the world.
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Balance Sheets
December 31, 1999 and 1998
(Expressed in US Dollars)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
1999 1998
------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current
Cash $ 215,222 $ 519,229
Notes receivables - related party (Note 3) 72,071 --
Available-for-sale securities (Note 4) 254,562 159,208
------------------------------------------------------------------------------------
541,855 678,437
Mineral property rights (Note 5) -- --
------------------------------------------------------------------------------------
Total assets $ 541,855 $ 678,437
====================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current
Accounts payable and accrued liabilities $ 8,500 $ 12,292
------------------------------------------------------------------------------------
Stockholders' Equity
Share capital
Authorized:
50,000,000 common shares, with par value of $0.001 each
Issued:
12,100,000 common shares 12,100 12,100
Additional paid-in capital 999,900 999,900
Accumulated deficit during exploration stage (531,972) (318,828)
Accumulated other comprehensive income (loss)
- unrealized (loss) gains on securities available for sale 53,327 (27,027)
------------------------------------------------------------------------------------
Stockholders' equity 533,355 666,145
------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 541,855 $ 678,437
====================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Approved by the Directors:
---------------------- -------------------------
Director Director
F3
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Statements of Stockholders' Equity
From May 22, 1995 (inception) to December 31, 1999 Page 1 of 2
(Expressed in US Dollars)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Accumulated
Compre- Other Total
Common stock Additional hensive Compre- Stock-
------------------------ paid-in Income Accumulated hensive holders'
Shares Amount capital (Loss) Deficit Income (Loss) equity
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Issued for cash, June 1, 1995 100 $ 100 $ 4,900 $ -- $ -- $ -- $ 5,000
Net loss for the year -- -- -- -- (5,000) -- (5,000)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
December 31, 1995 and 1996 100 100 4,900 -- (5,000) -- --
Stock split, 1,000:1 on
August 14, 1997 99,900 -- -- -- -- -- --
Issuance of stock for mineral
property rights, December 8, 1997 7,000,000 7,000 -- -- -- -- 7,000
Issuance of stock for cash,
December 22, 1997 3,000,000 3,000 297,000 -- -- -- 300,000
Net loss for the year -- -- -- -- (6,362) -- (6,362)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 10,100,000 10,100 301,900 -- (11,362) -- 300,638
Issuance of stock for cash,
January 12, 1998 2,000,000 2,000 698,000 -- -- -- 700,000
Comprehensive income
- Net (loss) for the year (307,466) (307,466) (307,466)
Other comprehensive income
- Change in unrealized gains (loss) -- -- -- (27,027) -- (27,027) (27,027)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(continued)
F4
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Statements of Stockholders' Equity
From May 22, 1995 (inception) to December 31, 1999 Page 2 of 2
(Expressed in US Dollars)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Accumulated
Compre- Other Total
Common stock Additional hensive Compre- Stock-
------------------------ paid-in Income Accumulated hensive holders'
(continued) Shares Amount capital (Loss) Deficit Income (Loss) equity
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Comprehensive (loss) (334,493)
=========
Balance, December 31, 1998 12,100,000 12,100 999,900 (318,828) (27,027) 666,145
Comprehensive income
- Net (loss) for the year -- -- -- (213,144) (213,144) -- (213,144)
Other comprehensive income
- Change in unrealized gains (loss) -- -- -- 80,354 -- 80,354 80,354
-----------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss (132,790)
=========
Balance, December 31, 1999 12,100,000 $ 12,100 $ 999,900 $ (531,972) $ 53,327 $ 533,355
=========================================================================== ======================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F5
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Statement of Operations
(Expressed in US Dollars)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
May 22 Year Year
1995 (inception) Ended Ended
to December 31 December 31 December 31
1999 1999 1998
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
General and administrative expenses
Administrative and general $ 153,482 $ 72,202 $ 81,280
Professional fees - accounting and legal 86,587 44,823 41,764
Salaries and consulting fees 75,493 44,047 26,446
-----------------------------------------------------------------------------------------------------
315,562 161,072 149,490
Exploration expenses 270,912 79,045 184,867
-----------------------------------------------------------------------------------------------------
586,474 240,117 334,357
-----------------------------------------------------------------------------------------------------
Less: Income (loss)
Interest income 59,569 26,779 32,022
Interest expense (5,888) (627) (5,131)
Foreign exchange gain 821 821 --
-----------------------------------------------------------------------------------------------------
54,502 26,973 26,891
-----------------------------------------------------------------------------------------------------
Net (loss) for the period $ (531,972) $ (213,144) $ (307,466)
=====================================================================================================
(Loss) per share $ (0.02) $ (0.03)
=====================================================================================================
Weighted average shares outstanding 12,100,000 12,039,560
=====================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F6
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIARIES
(An exploration stage enterprise)
Consolidated Statement of Cash Flows
(Expressed in US Dollars)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
May 22 Year Year
1995 (inception) Ended Ended
to December 31 December 31 December 31
1999 1999 1998
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from (used in)
operating activities
Net (loss) for the period $ (531,972) $ (213,144) $ (307,466)
Adjustment to reconcile net loss to
net cash used in operating activities:
- issuance of common stock for
mineral properties 7,000 -- --
Changes in assets and liabilities:
- decrease (increase) in notes receivable
from related party (72,071) (72,071) 10,000
- increase (decrease) in accounts payable 13,500 (3,792) 12,292
--------------------------------------------------------------------------------------------------------
(583,543) (289,007) (285,174)
--------------------------------------------------------------------------------------------------------
Cash flows from (used in)
investing activities
Purchase of available-for-sale securities (201,235) (15,000) (186,235)
--------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issuance of common stocks 1,000,000 -- 700,000
--------------------------------------------------------------------------------------------------------
Increase (decrease) in cash for the period 215,222 -- (304,007)
Cash and cash equivalents,
beginning of period -- 519,229 290,638
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 215,222 $ 215,222 $ 519,229
========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F7
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
1. Nature of Business and Going Concern
The Company was incorporated under the laws of the State of Florida on May
22, 1995 as Snack-N-Pop Vending, Inc., and changed its name to Eurasia Gold
Fields, Inc. on March 2, 1998. The Company is in the business of
exploration and development of mineral properties.
On December 9, 1997, the Company acquired mineral property rights in Russia
in exchange for the issuance of 7,000,000 common shares.
The continued operations of the Company is dependent upon the discovery of
economically recoverable reserves, or proceeds from the dispositions
thereof, the ability of the Company to obtain financing, to complete
development of the properties and on future profitable operations.
2. Significant Accounting Policies
(a) Basis of Consolidation
These consolidated financial statements, prepared in accordance with
accounting principles generally accepted in the United States, include
the accounts of the Company and its wholly-owned Russian subsidiaries,
Kitoi, Arkhei and RDDM, all of which are limited liability companies.
Significant inter-company accounts and transactions have been
eliminated.
(b) Cash and Cash Equivalents
Cash equivalents are comprised of certain highly liquid instruments
with a maturity of three months or less when purchased. There were no
cash equivalents as of December 31, 1999.
(c) Mineral Properties and Exploration Expenses
Exploration costs are charged to operations as incurred as are normal
development costs until such time that proven reserves are discovered.
From that time forward, the Company will capitalize all costs to the
extent that future cash flow from reserves equals or exceeds the costs
deferred. As at December 31, 1999 and 1998, the Company did not have
proven reserves.
F8
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(d) Available-for-sale Securities
Available-for-sale securities are carried at fair market value with
unrealized holding gains and losses included in stockholders' equity.
Realized gains and losses are determined on an average cost basis when
securities are sold.
(e) Concentration of Credit Risk
The Company places its cash and cash equivalents with high credit
quality financial institutions. The Company routinely maintains
balances in a financial institution beyond the insured amount. As of
December 31, 1999 the Company had $ 155,058 in a bank beyond insured
limits.
(f) Foreign Currency Transactions
The Parent Company, Kitoi, Arkhei and RDDM maintain their accounting
records in U.S. dollars. They translate foreign currency transactions
into their functional currency in the following manner.
At the transaction date, each asset, liability, revenue and expense is
translated into the functional currency by the use of the exchange
rate in effect at that date. At the period end, monetary assets and
liabilities are translated into functional currency by using the
exchange rate in effect at that date. The resulting foreign exchange
gains and losses are included in operations.
(g) Advertising Expenses
The Company expenses advertising costs as incurred. Total advertising
costs charged to expenses for the years ended December 31, 1999 and
1998 were $16,464 and $Nil, respectively.
(h) Impairment
Certain long-term assets of the Company are reviewed when changes in
circumstances require as to whether their carrying value has become
impaired, pursuant to guidance established in Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of".
Management considers assets to be impaired if the carrying value
exceeds the future projected cash flows from related operations
(undiscounted and without interest charges). If impairment is deemed
to exist, the assets will be written down to fair value.
F9
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(i) Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates and assumptions.
(j) Fair Value of Financial Instruments
The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial
instruments include cash, non-trade account receivables, investments
and accounts payable and accrued liabilities. Fair values were assumed
to approximate carrying values for these financial instruments, except
where noted, since they are short term in nature and their carrying
amounts approximate fair values or they are receivable or payable on
demand. Management is of the opinion that the Company is not exposed
to significant interest, credit or currency risks arising from these
financial instruments.
(k) Income Taxes
The Company has adopted Statement of Financial Accounting Standards
(SFAS") No. 109, "Accounting for Income Taxes", which requires the
Company to recognize deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized
in the Company's financial statements or tax returns using the
liability method. Under this method, deferred tax liabilities and
assets are determined based on the temporary differences between the
financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse.
(l) Loss Per Share
Loss per share is computed using the weighted average number of shares
outstanding during the year. Effective for the year ended December 31,
1997, the Company adopted SFAS No. 128, "Earnings Per Share".
F10
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(m) Comprehensive Income
In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income", which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. The
Company is disclosing this information on its Statement of
Stockholders' Equity. Comprehensive income comprises equity except
those resulting from investments by owners and distributions to
owners. SFAS No. 130 did not change the current accounting treatments
for components of comprehensive income.
(n) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 requires companies to recognize all derivatives contracts
as either assets or liabilities in the balance sheet and to measure
them at fair value. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which is to match
the timing of gain or loss recognition on the hedging derivative with
the recognition of (i) the changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk or (ii)
the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. SFAS No. 133 is
effective for all fiscal quarters of fiscal years beginning after June
15, 2000.
Historically, the Company has not entered into derivatives contracts
either to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of the new standards
on January 1, 2000 to affect its financial statements.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-up
Activities", ("SOP 98-5") which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-activities and organization costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after December 15,
1998 with initial adoption reported as the cumulative effect of a
change in accounting principle. Adoption of this standard has no
material effect on the financial statements.
F11
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
3. Notes Receivable
Notes receivable are unsecured, non-interest bearing and are due on demand.
The notes are due from companies related by a common director.
4. Available-for-sale Securities
--------------------------------------------------------------------------
Gross Gross
unrealized unrealized Market
Cost gains losses value
--------------------------------------------------------------------------
December 31, 1999
Equity securities $201,235 $ 53,327 $ -- $254,562
==========================================================================
December 31, 1998
Equity securities $186,235 $ -- $ (27,027) $159,208
==========================================================================
5. Mineral Properties and Exploration Licences
The Company owns the following mineral concessions located in the Okinski
district of the Republic of Buriatia in southeastern Siberia, Russia:
(a) Zun Ospinskoye Property
The licence for the exploration and development of this property was
issued under the number UDE00179 type BP to Kitoi.
(b) Tainskoye Property
The licence for the exploration and development of this property was
issued under the number UDE140 type BP to Arkhei.
Pursuant to an agreement dated December 9, 1997, the Company acquired these
mineral concessions by issuing 7,000,000 common shares to the vendors. As
the vendors became the controlling shareholders of the Company after the
above-mentioned transactions, the concessions were valued at equal to the
par value of the shares issued. The amount was treated as exploration
expense in 1997.
F12
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
6. Income Taxes
(a) The Company has estimated net losses for tax purposes to December 31,
1999, totalling approximately $525,000, which may be applied against
future taxable income. Accordingly, there is no tax expense charged to
the Statement of Operations for the years ended December 31, 1999 and
1998. The Company evaluates its valuation allowance requirements on an
annual basis based on projected future operations. When circumstances
change and this causes a change in management's judgement about the
realizability of deferred tax assets, the impact of the change on the
valuation allowance is generally reflected in current income.
The right to claim these losses is expected to expire as follows:
2017 5,000
2018 307,000
2019 213,000
---------------------------------------
$525,000
=======================================
(b) The tax effects of temporary differences that give rise to the
Company's deferred tax asset (liability) are as follows:
1999 1998
---------------------------------------------------------------
Tax loss carryforwards $ 72,000 $ 104,000
Valuation allowance (72,000) (104,000)
---------------------------------------------------------------
$ -- $ --
===============================================================
No tax effect has been recorded on the accumulated other comprehensive
income unrealized gains on securities available-for-sale due to the
existence of U.S. tax loss carryforwards.
7. Comparative Figures
Certain 1998 comparative figures have been reclassified to conform with the
financial statement presentation adopted for 1999.
F13
<PAGE>
EURASIA GOLD FIELDS, INC. & SUBSIDIAIRIES
(An exploration stage enterprise)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Expressed in US Dollars)
--------------------------------------------------------------------------------
8. Related Party Transactions
Related party transactions not disclosed elsewhere in these financial
statements for the year ended December 31, 1999, include consulting fees of
$25,000 (1998 - $Nil), $12,000 (1998 - $ Nil) of which were paid to a
director and $12,000 (1998 - $ Nil) of which were paid to a shareholder of
the Company and were charged to operations in 1999.
F14
