UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file no. 0001077637
THE BRALORNE MINING COMPANY
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
Nevada 91-1948355
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
114 - 2274 Folkestone Way
West Vancouver, British Columbia, Canada V7S 2X7
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(Address of Principal Executive Officer) (Zip Code)
(604) 926-3839
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(ISSUER'S TELEPHONE NUMBER)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
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(TITLE OF CLASS)
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TABLE OF CONTENTS
ITEM PAGE
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PART 1
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Item 1 Description of Business 3
Item 2 Management's Discussion and Analysis or Plan
of Operation 14
Item 3 Description and Location of the Golden Claim 17
Item 4 Security Ownership of Certain Beneficial
Ownership and Management 18
Item 5 Directors, Executive Officers, Promoters and
Control Persons 20
Item 6 Executive Compensation 21
Item 7 Certain Relationships and Related Transactions 22
Item 8 Description of Securities 23
PART 11
Item 1 Market Price of and Dividends on the Registrant's
Common Equity and Other Stockholders Matters 24
Item 2 Legal Proceedings 24
Item 3 Disagreement With Accountants and Financial Disclosure 25
Item 4 Recent Sales of Unregistered Securities 25
Item 5 Indemnification of Directors and Officers 27
PART F/S
Financial Statements 29
PART 111
Item 1 Index to Exhibits 38
Item 2 Description of Exhibits 38
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DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference: None
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PART 1
The Bralorne Mining Company (the "Registrant") is filing this Form 10-SB on a
voluntary basis to
(1) provide current, public information to the investment community;
(2) to expand the availability of secondary trading exemptions under the
Blue Sky laws and thereby expand the trading market in the Registrant's
securities, and
(3) to comply with prerequisites for listing of the Registrant's securities
on NASDAQ.
ITEM 1. DESCRIPTION OF BUSINESS
HISTORICAL OVERVIEW OF THE COMPANY
The Bralorne Mining Company, a Nevada corporation, was incorporated on
December 2, 1998. The Registrant has no subsidiaries and no affiliated
companies. The Registrant's executive offices are located at 114 - 2274
Folkestone Way, West Vancouver, British Columbia, Canada, V7S 2X7, (Tel)
604-926-3839.
The Registrant is seeking a quotation on the OTC Bulletin Board. To
date it has not made an application to file the require forms with the NASD but
once the United States Securities and Exchange Commission has no further
comments on this Form 10-SB it anticipates filing the necessary information and
documents as required to be listed on the OTC Bulletin Board.
The Registrant is engaged in the exploration of mineral properties. The
Registrant presently has the mineral rights to a mineral claim located in the
Bralorne area of British Columbia and plans to explore this claim during the
late fall 1999.
To date, the Registrant has undertaken certain exploration activities
on its mineral claim as more fully described within this Form.
The Registrant has no revenue to date from the exploration of its
mineral claim, and its ability to effect its plans for the future will depend on
the availability of financing. Such financing will be required to explore its
mineral property to a stage where a decision can be made by management as to
whether an ore body exists and can be successfully brought into production. The
Registrant anticipates obtaining such funds from its directors and officers,
financial institutions or by way of the sale of its capital stock in the future
(see Part 1, Item 2 - "Plan of Operations"), but there can be no assurance that
the Registrant will be successful in obtaining additional capital for
exploration activities from the sale of its capital stock or in otherwise
raising substantial capital.
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PLANNED BUSINESS
In addition to exploring its mineral claim, the Registrant plans to
expand its mineral properties through the purchase, staking or joint venturing
of other mineral properties. (See Part 1, Item 2 - Management's Discussion and
Analysis or Plan of Operation").
Much of the discussion contained in this section is "forward looking".
Actual results may materially differ from the Registrant's plans as currently
contemplated.
Information concerning all the factors associated with the Registrant
is set forth in this Item 1 and in Items 2 and 3 below. FOR A COMPLETE
UNDERSTANDING OF SUCH FACTORS, THIS ENTIRE DOCUMENT, INCLUDING THE FINANCIAL
STATEMENTS AND THEIR ACCOMPANYING NOTES, SHOULD BE READ IN ITS ENTIRETY.
Exploration of the Registrant's Mineral Claim
a. Acquisition of the Mineral Claim
The mineral claim held by the Registrant is called the "Golden" and was
purchased from a director of the Registrant, Edward Skoda for the sum of $1.00.
Edward Skoda was instrumental in staking the Golden claim on March 17, 1998 and
has held the claim in good standing ever since. On September 15, 1999, the
Registrant registered as an extraprovincial company under the Company Act of
British Columbia. Upon registration the Registrant obtained Free Miner
Certificate Number 142255 (Exhibit 99 (d)). This Free Miner Certificate is good
until September 14, 2000 and allowed the Registrant to transfer from the name of
Mr. Skoda to itself the Golden mineral claim. The transferred of the Golden
mineral claim to the name of the Registrant occurred on September 15, 1999 under
Event Number 3139258. The mineral rights to the Golden mineral claims are under
the direct control of the Registrant.
b. Title of the Mineral Claim
The Registrant is in receipt of Record of 4 Post Claim under Tenure No.
361742 that has been stamped as received by the Ministry of Energy, Mines and
Petroleum Resources for the Province of British Columbia. This document is dated
March 26, 1998. It confirms the mineral claim was staked by Edward Skoda. In
addition, the Registrant is in receipt of Statement of Work - Cash Payment
stamped by the Gold Commissioner's Office on February 26, 1999 accepting the
exploration work done on the Golden Claim. This document confirms that
exploration work was performed on the mineral claim in order to maintain it in
good standing until March 17, 2000.
c. Meaning of "staking" and how Mr. Skoda staked the Claim.
The word "staking" is used by the Ministry of Energy, Mines and
Petroleum in Mineral Tenure Act to define work on the ground which means cutting
trees for posts, setting up prepared posts, affixing tags to existing legal
posts and marking lines. The requirement of the Mineral Tenure Act is that to
obtain the rights to minerals the ground must be staked. The work "staking" is
used to satisfy the requirements of the Mineral Tenure Act whereby a "stake",
being a wooden post, must be driven into the ground at the corner of the claim.
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To comply with the requirements of the Mineral Tenure Act Mr. Skoda performed
the following:
(a) Mr. Skoda checked the status of the land to be staked by a review of the
records at the Gold Commissioner's Office prior to going to the Bralorne
area. This review ensured Mr. Skoda that the property in question was
not recorded in the name of another person or company. It was free for
staking.
(b) With Mr. Skoda's Free Miner Certificate still in good standing, he
acquired title and topographical maps from the Gold Commissioner's
Office, purchased several metal tags to be affixed to the stake before
traveling to the Bralorne area.
(c) At the town of Gold Bridge, 1.9 miles from the Golden Claim, Mr. Skoda
purchased the stakes to be used as the legal and identification posts.
He used two stakes as required in a four post claim; one legal post and
the other an identification post. Before going to the Claim Mr. Skoda
prepared the posts (stakes) by cutting the lower bottom of each into a
sharp point for ease of hammering them into the ground. The wooden posts
(stakes) have to meet certain size specifications as follows:
a. it must be at least one metre (39.37 inches) above the ground in
height;
b. it must be squared and faced on four sides for at least 25cm
(9.8 inches) from the top;
c. the width of each of the four facings at the top of the post must
be at least:
i. 89mm (3.5 inches) for legal posts; and
ii. 38mm (1.5 inches) and 89mm (3.5 inches) for identification
posts.
(d) Due to heavy snow conditions, Mr. Skoda rented a helicopter from
Pemberton, British Columbia, some 10 miles from the town of Gold Bridge.
Since there were extreme topographical conditions present, being water,
glacial ice or heavy snow conditions, Mr. Skoda was allowed to "witness"
post the Claim. Under the Mineral Tenure Act a "witness" post may only
be used when it is impossible to access any portion of the intended
boundary of the area to be claimed. It must be placed in according to
the following procedures:
- Place a legal post as near as possible to where the legal post
should be, but in no case more than 5,000 metres (5,468 yards).
This becomes the "witness" post.
a. Mark the "witness" post on the side facing the point where the
legal corner post should be with:
1. the words "Witness Post"; and
2. the bearing and distance of the intended true
position of the legal corner post.
b. Firmly affix to the same side of the post a metal tag embossed
with the words "Legal Corner Post", and fill in the required
information.
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c. Place the "identification" post no closer than 100 metres
(109.36 yards) from the "witness" post. This post should be
placed in as conspicuous a location as possible, but must not
be closer than 100 metres from the "witness" post.
d. Mark the side of the "identification" post that faces the
"witness" post with the following information:
a. the words "identification post";
b. the name of the claim;
c. the serial number of the metal tag placed on the
witness post;
d. the true bearing and distance to the witness post;
and
e. the date that the post is placed.
e. The line between the witness post and the identification post
must be marked by blazing standing trees on the two sides
facing the posts, and by cutting the underbrush. Flagging and
painting may be used in addition, and pickets placed if there
are no trees. This line and the "identification" post are
necessary to ensure there is adequate marking on the ground to
identify the claim location.
In performing his duties of staking the Golden Claim, Mr. Skoda adhered to the
above requirements and filed with the Ministry of Energy, Mines and Petroleum
the required information as contained in the Record of 4 Post Claim - Mineral
Tenure Act (Section 23)
d. Status of the Golden Claim
The legal interest the Registrant has in the Golden Claim pertains only
to the mineral rights. The Registrant does not own the land; in this case, the
land is owned by the Crown, being the Province of British Columbia. The
Registrant has the right to extract, by mining, the mineral on the claim but
cannot construct a building, cut a tree or undertake any trenching activities
unless it has filed a "Notice of Work and Reclamation" Form as required under
the Mining Act. The Registrant has the right to undertake any exploration work
on the Golden Claim for a period of one year from the date of staking the claim.
The cost of the work performed can be applied to maintain the Golden Claim in
good standing for a further period of time. The Registrant established a grid
for exploration purposes in February 1999. This work was credited as assessment
work and therefore has maintained the Golden Claim in good standing for a
further year. The limitations to the Registrant in exploring the Golden Claim is
mainly having to file all work to be done with the Ministry of Energy, Mines and
Petroleum Resources and receive this department's approval prior to commencing
the work.
There are no restriction on the Registrant as to the quantity of
minerals its extracts from the Golden claim. What minerals are extracted are the
property of the Registrant. The Province of British Columbia imposes no taxes on
the mineral claims and does not receive a royalty of any kind. The only
condition is to maintain the Golden mineral claim in good standing through
annual exploration work on the claim in an amount equal or greater than the
annual assessment amount.
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All new claims are valid for one year. The anniversary date is the
annual occurrence of the date of record that is the staking completion date of
the claim. To maintain a claim the holder must, on or before the anniversary
date of the claim, pay the prescribed recording fee and either:
i. record the exploration and development work carried out
on that claim during the current anniversary year; or
ii. pay cash in lieu-of-work.
Only work done in the current anniversary year can be recorded and this
work must be recorded on or before the anniversary date that ends the current
anniversary date.
Work performed must equal or exceed the minimum specified value per
unit, in the case of the Golden Claim this is $67 per unit or a total of $1,200,
or the equivalent value paid in cash. The Registrant did exploration work rather
than pay in-cash-lieu. Therefore, the right to the minerals on the Golden Claim
will remain with the Registrant for a further twelve month period ending on
March 17, 2000.
e. Location of Golden Mineral Claim
The Golden claim is located approximately 180 kilometres (113 miles )
north of Vancouver and 3 kilometres (1.3 miles) east of the town of Gold Bridge
in southwestern British Columbia. The geographical centre of the claim is given
by the U.T.M. coordinates 513100E, 5634300N (Lat. 50(Degree)51'45"N, Long.
122(Degree)48'50"W) on N.T.S. mapsheet 92J/15. The town of Gold Bridge can be
accessed by all weather gravel road (highway #40B) from Lillooet or via the
Hurley River forestry road from Pemberton. Access to the north end of the claim
is gained by following the logging road east of Gold Bridge for four kilometres
on the south side of Carpenter Lake. Turn south from the junction at this point
and follow the road leading to McDonald Lake (3 km) for access to the east side
of the claim.
The property is situated at the northwest end of the Bendor Range
within the Coast Mountains where steeply forested northwest facing slopes range
from 2200 feet to 4000 feet in elevation. The winters are cold with generally
high snowfall accumulations and summers are hot and dry.
f. The Bralorne Mine
The Registrant does not own either directly or indirectly any interest
in the mine known as the Bralorne which is located within five kilometers of the
Golden claim. Reference to the Bralorne Mine in this Form is for historical
reference only and there is no intention to make the reader believe that the
Registrant has any interest in the Bralorne Mine.
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g. History of the Bralorne Area
The history of the area surrounding the Golden mineral claim is that of
an active area in exploration and mining of gold and other precious metals. The
first occurrence of gold in the Bridge River area was recorded in 1863, when
Chinese prospectors found placer deposits in the Bridge River. In 1896, the
first Lode claims were located on sub-outcropping quartz fissure veins.
Subsequent discoveries continued until larger U.S. and Canadian interests began
to gain control of the fragmented mining properties during the 1920's.
Most production from the camp came from the Bralorne and Pioneer mines
which saw production levels peak during the 1930's and 40's. In 1959, with
reserves depleted and closure imminent, Pioneer Gold Mines amalgamated with
Bralorne mines. By 1971 Bralorne mines suspended operations due to the high
costs of mining at increasing depths. Combined the Bralorne and Pioneer mines
produced more gold than any other mine in British Columbia's history. During the
period 1900-1971 production totaled 4,154,119 ounces of gold and 950,510 ounces
of silver from 7,931,000 tonnes of ore averaging 0.53 ounces/ton recovered gold.
Of the over 73 documented mineral occurrences in the camp only five have
achieved production. Production figures for these mines are listed below:
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MINE TONNES GOLD SILVER COPPER LEAD ZINC
(KG) (KG) (KG) (KG) (KG)
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Congress 943 2.5 1.3 38 - -
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Wayside 36,977 166.0 26.0 - - -
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Minto 79,073 546.0 1,573.0 9,673 56,435 -
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Pioneer 2,240,552 41,475.0 7,611.0 - 59 139
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Bralorne 4,954,473 87,759.0 21,969.0 - 157 -
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During early exploration of the Bridge River camp a number of small
vein showings were worked along the south shore of Carpenter Lake. Small-scale
production of silver-gold-antimony ores was achieved in the 1930's and 40's from
Kelvin, Olympic and Reliance occurrences. At approximately the same period major
development work took place on the BRX property. The property includes a large
block of reverted crown granted claims and some modified claims covering 1,068
hectares and six major concessions (Golden Gate, Arizona, Ural, Gloria Kitty,
Whynot and California). Over 5,400 metres of diamond drilling and 9,000 metres
of underground development have been completed on the BRX property primarily on
the Arizona, Ural and California vein systems. The only recorded production was
from the Arizona Mine which produced 467 grams of gold and 311 grams of silver
from 4,343 tonnes of ore in 1938.
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h. Recent Geological Work in the Bralorne area.
In May 1987, Chevron Minerals Ltd. began an extensive surface
exploration program on the Wayside property of which a portion is now covered by
the Golden claim. Details of the exploration programs are documented in B.C.
Department of Mines assessment reports #16,718 and #18,240. Over 400 geochemical
soil samples were collected along contour traverses in the north half and east
boundary area of the claim. Property scale geological mapping (1:5000),
prospecting and geophysical surveys were completed by Chevron geologists as part
of the 1988 exploration program in this area. Analysis of soil geochemical
samples produced minor elevated gold values (10 to 15 ppb Au) in 45 samples
although analysis of the rock samples failed to return any significant results.
Twenty-nine line kilometers of VLF-EM 16 was completed in the area just north of
the town of Gold Bridge along east-west lines spaced 50 metres apart. Results of
this survey indicate several north-south trending conductors possibly related to
parallel fault contacts of chert/greenstone.
Initial results were not considered encouraging and although the
sampling and geophysical surveys were lacking in some detail Chevron decided to
continue to focus on the main zones of mineralization around the Wayside mine.
Exploration activity on the property since that time was minimal and the claim
was allowed to lapse in March 1998 when it was staked by Edward Skoda.
As noted above the Company has undertaken a small exploration program
on the Golden claim in February, 1999. This is in anticipation of performing a
systematic soil sampling program in the late fall of 1999. This will identify
any anomalies for further sampling and eventual drilling.
The cost of the exploration program, comprising establishment of a grid
for future soil sampling, was $1,200. This cost was borne by the Registrant.
During November 1999, the Company explored the south west corner of its
claim where a geochemcial grid was laid out in February. Prior to the sampling
of the grid, the grid was extended by an additional 2,100 meters (6,300 feet).
Subsequently soil sampling was flagged every 20 meters (60 feet). A total of
fifty-one soil samples were taken from the south west corner of the claim and
submitted to Chemex Labs Ltd. for gold analysis. Because of the unconsolidated
volcanic ash covering the area of the sampling program, representative samples
were obtained by digging through the volcanic ash to reach soil contact. The
average depth of the digging was approximately one foot.
In addition to the soil sampling program the Goldern claim was
prospected for old showning and trenchings. From this prospecting work it would
appear that no past systematic sampling techniques applied to this confined
area.
From the assays of the soil samples done by Chemex Labs Ltd., there
would appear to be no significant gold values in the majority of the samples
taken. Several samples showed some gold bearing content but not significant to
warrant an increased sampling program in that specific area. The balance of the
geochemical grid will be sampled during the forthcoming year to determine
whether there is significant gold carried in the soil. The Company did not assay
its fifty-one samples for any other minerals other than gold.
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i. Regional Geology
Government mappers have published comprehensive descriptions of the
geology of the Bridge River region and appear in Cairnes (1937), and more
recently Leitch and Godwin (1986) and Church (1987). The region lies within a
fault bounded block of oceanic rocks called the Bridge River terrane and
sandwiched between the larger accreted terranes of Stikinia on the east and
Wrangellia on the west. The Bridge River terrane could be abducted oceanic floor
transported with one of the larger terranes.
The base of the Bridge River terrane is composed of Permo-Triassic back arc
volcanics and sediments of the Fergusson (Bridge River) Group. This is overlain
by formations of the Triassic-Jurassic Cadwallader Group. The stratified rocks
are intruded by syn-volcanic intermediate plutons (Bralorne intrusives) and
faulted against ophiolitic ultramafic intrusions (President Intrusions).
Jurassic and Cretaceous basinal sediments and rift volcanics (Taylor Creek and
Kingsvale Groups) are sequentially intruded by Cretaceous and Tertiary plutons
of felsic composition (Coast Range and Bendor Intrusions). Relatively flat lying
Tertiary intermediate to mafic volcanics (Rexmount porphyry and Plateau basalt)
cap the lithologic sequence.
j. Geology Exploration Proposed for the Golden Claim
A geological report dated February 3, 1999 prepared by Calvin Church,
P. Geo, recommended an exploration program on the Golden claim to consist of:
o Airphoto interpretation and reconnaissance mapping is required to determine
structural breaks and intersecting fault structures very important to ground
preparation and the formation of mineral deposits in the area.
o Construction of a soil geochemical grid across structural features sampled at
25 metre intervals on lines spaced 100 metres apart. Major north-south striking
stratigraphic contacts (greenstone-chert) should be prospected and the grids
orientated perpendicular to them should they appear to be mineralized.
o Prospecting and detailed geological mapping at 1:2000 scale or better over the
entire claim area. Prospecting could be prioritized according to favorable
geologic contacts especially where VLF-EM conductors have already been
identified.
o Providing favorable results are obtained in the soil geochemical sampling
program additional exploration consisting of trenching and drilling would be
recommended to target anomalies from that program.
k. Registrant's Main Product
The Registrant's primary product will be the sale of minerals, both
precious and commercial. The Registrant is not at the stage of development
whereby minerals can be mined and sold thereby giving the Registrant a cash
flow.
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l. Registrant's Exploration Facilities
At Gold Bridge there exists a mill facility. Presently the mill is not
operating and may not be for some time. Discussions between Mr. Skoda, director
of the Registrant, and the mill manager indicated that approximately $660,000
would have to be spent on the mill prior to it being operational. There is no
guarantee that the Registrant will be able to use this mill for processing its
ore. No discussions with the mill owners regarding its future use by the
Registrant have occurred to date.
In the event that the Gold Bridge mill does not open the Registrant
will have to operating a small mill to crush the ore and turn it into
concentrate which can be transported by truck to the lower mainland area of
British Columbia where several refineries are located. This will be at least
five years into the future and therefore the Registrant cannot estimate the cost
or size of a mill to be build on the Golden claim.
During the exploration period, the Registrant will use tent facilities
to house its geological workers since this will be by far the most economic way
to proceed.
m. The Amount of Time that Management Devotes to the Registrant
Management does not devote full time to the operations of the
Registrant. Mr. Skoda has been the director who has been most active in the
development of the Registrant in that he staked the property, recorded the
necessary documents with the Gold Commissioner's Office, engage the services of
Calvin Church, Professional Geologist, and organized and performed the
exploration work in February 1999. The two other directors have been kept
abreast of the activities of the exploration but have mainly been involved with
administration. None of the directors work full time for the Registrant.
Until recently the current day-to-day operations of the Registrant have
virtually been nil. Commencing the last week of September Mr. Skoda has been
involved in determining an exploration program on the Golden Claim. This program
started during the last week of September and will continue for at least two
weeks into October. The exploration program will consist of extending the
previous geochemical grid to cover additional ground within the claim itself and
selecting a specific area for taking soil samples for chemical assay.
n. Risk Inherent in Mineral Properties
There are certain inherent risks with mineral properties from the point
of view of the Registrant and its shareholders as follows:
1. The Golden claim does not contain a known body of commercial ore and,
therefore, any program conducted on the Golden claim would be an
exploratory search of ore.
2. There is no certainty that any expenditures made in the exploration of
the Golden claim properties will result in discoveries of commercial
quantities of ore. Most exploration projects do not result in the
discovery of commercially mineable deposits of ore.
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3. Resource exploration and development is a speculative business, marked
by a number of significant risks including, among other things,
unprofitable effort resulting not only from the failure to discover
mineral deposits but from finding mineral deposits which, though
present, are insufficient in size or grade to return a profit from
production. The marketability of any minerals acquired or discovered
may be affected by numerous factors which are beyond its control and
which cannot be accurately predicted, such as market fluctuations, the
proximity and capacity of milling facilities, mineral markets and
processing equipment, and such other factors as government regulations,
including regulations relating to royalties, allowable production,
importing and exporting of minerals, and environmental protection. The
mineral industry is intensely competitive and the Registrant competes
with other companies that have greater resources.
4. Mining operations generally involve a high degree of risk. Hazards such
as unusual or unexpected formations and other conditions are involved.
The Registrant may become subject to liability for pollution, cave-ins
or hazards against which it cannot insure or which it may not elect to
insure. The payment of such liabilities may have a material, adverse
effect on the Registrant's financial position.
5. Prior to commencing mining operations on any of its properties, the
Registrant must meet certain environmental requirements. Compliance
with these requirements may prove to be difficult and expensive. The
Province of British Columbia has enacted statutory provisions to
protect the Crown's property. The Acts that the Registrant has to
adhere to are the "Timber Harvesting Practices Regulations", Mineral
Tenure Act, Coal Act and Forestry Act. Environmental concerns relate to
the use and supply of water, the need to cut timber and removal of
overburden; being the soil above the hard rock. No building or fixtures
of any nature can be erected without the prior approval of the district
inspector for the Province. To undertake any form of work program
beyond grid preparation and soil sampling, the Registrant will have to
prepare a "Mineral & Coal Notice of Work and Reclamation" Form that
requires the Registrant to indicate its expected exploration program
and how it will affect water and soil concerns. The cost and effect of
adhering to the environmental requirements is unknown to the Registrant
at this time and cannot be reasonably estimated.
6. While the Registrant has obtained the usual industry standard title
reports with respect to the Golden claim, this should not be construed
as a guarantee of title. The Golden claim may be subject to prior
unregistered agreements or transfers or native land claims and title
may be affected by undetected defects. Certain of the units comprising
the claim may be under dispute and resolution of a dispute may result
in the loss of some or all of such units or a reduction in the
Registrant's interest therein.
7. The Golden claim has never been surveyed and, accordingly, the precise
location of the boundaries of the claim and ownership of mineral rights
on specific tracts of land comprising the claim may be in doubt.
8. The Registrant will have to submit for approval a "Mineral & Coal
Notice of Work and Reclamation" Form and will only be able to undertake
exploration work on the Golden Claim if approval is received. No Form
was required for establishing a grid for subsequent geophysical work
and soil sampling but approval will have to be obtained to do an
exploration program involving any removal of overburden. The Registrant
has not submitted any Notice of Work and therefore is not awaiting any
governmental approval.
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No building or fixtures of any nature can be erected without the prior
approval of the district inspector. To ensure the claim is left in good
condition after a further exploration program the Registrant will have
to post a refundable bond; the amount being determined at that time by
the district inspector. The Registrant does not presently know what the
bond will be assessed at. Upon satisfaction from the district inspector
that the property has no environment problems, the full value of the
bond would be returned to the Registrant.
OTHER MINERAL PROPERTIES
The Registrant has not identified any other mineral properties either
for staking or purchasing. It is contemplated that the Registrant will seek
other mineral properties in the near future in order to diversify its holdings
into other areas of interest and minerals. The Registrant has not as yet
inaugurated any steps towards the investigation of any mineral claims, and does
not presently have the financial capacity to do so. Any staking and/or
purchasing of mineral claims may involve the issuance of substantial blocks of
the Registrant's shares.
EMPLOYEES
As at January 31, 2000, the Registrant did not have any employees
either part time or full time. The officers and directors are not employees
since they do not receive any remuneration for their services nor do they work
full time on the affairs of the Registrant.
The Registrant is not a party to any employment contracts or collective
bargaining agreements. The British Columbia area has a relatively large pool of
people experienced in exploration and development of mineral properties; being
mainly geologists and mining consultants. In addition, there is no lack of
people who have experience in working on the mineral claim either as laborers or
prospectors. The Registrant will use independent workers and consultants
initially since the exploration period in the Bralorne area is limited to the
summer months and the Registrant does not wish to carry the extra expense of
having full time employees.
COMPETITION
There are numerous other mining companies, both large and small, in the
British Columbia area, including geological work undertaken by the Provincial
Government of British Columbia.
Management believes that the mining industry is at a low point in
development due to weakening mineral prices and a lack of capital being invested
into mining activities. With this inactivity there are various mineral claims
which have expired and are available for staking. On the other hand, there are
numerous small mining companies wishing to enter into a joint venture
arrangement with other mining companies. Accordingly, management does not
believe that competition will be a significant problem in its growth in the
immediate future.
The Provincial Government is not in direct competition with independent
mining companies since its main purpose is to assess the mineral potential of
certain areas in the Province and prepare annual reports detailing their
findings. This is an advantage to all independent mining companies since they
are able to stake the properties reported on by the Provincial Government unless
they are currently owned by another party.
13
<PAGE>
The exploration and development business is highly competitive and
highly fragmented, dominated by both large and small mining companies. Success
will largely be dependent on the Registrant's ability to attract talent from the
mining field. There is no assurance that the Registrant's mineral expansion
plans will be realized.
YEAR 2000 COMPUTER PROBLEMS
The Registrant relies on information supplied to it by its auditor,
accountant, legal counsel, transfer agent, suppliers, geologist and other
professionals who all use computers. Many existing computer programs use only
two digits to identify a year in the date field; i.e., "98" instead of "1998".
These programs were designed and developed without considering the impact of the
upcoming change in the century, i.e., Year 2000. If not corrected, many computer
applications could fail or create erroneous results by or at the Year 2000. The
Registrant has:
(i) investigated new computer software to determine which software
programs have addressed the Year 2000 issue and will be
suitable for the Registrant to purchase once it decides upon
computer equipment for itself;
(ii) reviewed the possible contingent liabilities the Registrant may
have to third parties as a result of non-compliant systems; and
(iii) has examined the extent the Registrant depends on third parties
whose systems may not be Year 2000 compliant.
However, there may be untold numbers of unforeseen circumstances or unknown
factors which the Registrant has not yet identified, determined or anticipated
regarding the Year 2000 computer problems, and such problems could have a
material adverse affect on the Registrant's business operations and financial
condition. Consequently, the Registrant can give no assurance that the Year 2000
compliance can be fully achieved without costs and uncertainties that may
seriously and substantially adversely affect the Registrant's operations and
financial results.
To date the Registrant has experienced no Year 2000 problems but there may be
problems still existing with its credits, suppliers and customers which are
unknown to it.
This discussion contains forward-looking statements regarding the Registrant's
Year 2000 problems and their effect on the Registrant. In this regard, the
Registrant is relying upon the "safe harbor" provided under the Private
Securities Litigation Reform Act of 1995 for protection from liabilities in the
event such statements are not proven accurate.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
The discussion contained in this Item 2 is "forward looking", which
means projecting future activities including, without limitation, statements
regarding the Registrant's expectations,
14
<PAGE>
beliefs, intentions or strategies regarding future business operations and
projected earnings from mining operations, which are subject to may risks.
All forward-looking statements included in this document are based on
information available to the Registrant on the date hereof. The Registrar's
actual results may differ materially as a result of certain factors, including
those set forth hereafter and elsewhere in this Form 10-SB. Potential investors
should consider carefully the previously stated factors, as well as the more
detailed information contained elsewhere in this Form 10-SB, before making a
decision to invest in the common stock of the Registrant.
Actual work performed on the Golden claim may differ from the recommended work
program as set forth in the geological report dated February 3, 1999 prepared by
Calvin Church, P.Geo.
PLAN OF OPERATION
The Registrant has to date concentrated on the Golden claim. In the
future, the Registrant will seek to investigate numerous other mining properties
to determine which ones are of merit and are of interest to the Registrant.
Subject to the availability of financing, the Registrant will seek to increase
its inventory of mineral properties and, if acceptable to management, enter into
joint venture agreements to develop mineral properties. (See Part 1, Item 1 -
"Description of the Business"). The Registrant will seek to generate such funds
through the sale of securities and/or institutional financing. If an underwriter
can be found, a public offering of common stock will be considered;
alternatively the Registrant will seek to raise funds through a private offering
of securities to an institutional buyer or through a registered broker dealer.
The Registrant does not presently have any financing arranged for nor has any
underwriter yet expressed interest in such an offering, and there can be no
assurance that an underwriter can be found on terms acceptable to the
Registrant. In the absence of such financing, the Registrant may be unable to
put its plans into effect.
LIQUIDITY AND CAPITAL RESOURCES
As at November 30, 1999, the Registrant had $3,324 of assets, and
$4,200 of liabilities, including cash or cash equivalents amounting to $3,324.
The Registrant has no contractual obligations for either lease
premises, employment agreements or work commitments on the Golden claim and has
made no commitments to acquire any asset of any nature.
Operational and administrative expenses of the Registrant for 2000 are
projected to be approximately $5,000 for exploration work on the Golden claim
and $8,000 for general and administrative expenses. The majority of the general
and administrative expenses relate to filing costs, transfer agents fees and
audit and accounting.
The Registrant has sufficient funds to pay for the current exploration
work on its mineral claim, pay the current liabilities and meet its future
financial commitment to its auditors for the November 30th audited financial
statements. If any exploration work is required during 2000 the Registrant will
require additional funds. Management feels the Registrant will require some
working capital during the next twelve months and will have to raise these funds
either from the directors and officers, bank financing or an issuance of its
capital stock. At the present time,
15
<PAGE>
management cannot estimate the additional amount required over the next twelve
months due to not knowing at this time the cost of the year 2000 exploration
program.
The Registrant's independent auditor has qualified his audit opinion as
follows:
"The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company is in the
development stage and will need additional working capital for its
planned activities, which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these
matters are described in Note 5. These financial statements do not
include any adjustment that might result from the outcome of this
uncertainty."
The auditor is stating to the reader of this Form 10-SB that unless the
Registrant is able to raise additional working capital to finance its
exploration activities, the Registrant will not be able to continue as a company
and will cease to operate. The Registrant has sufficient funds on hand to
undertake a geophysical survey and soil sampling program but does not have funds
to develop the Golden claims further. The Registrant has no immediate plans to
raising additional working capital and hence the auditor is alerting the readers
of this Form 10-SB that there is a possibility that the Registrant will not be
able to continue as an operating entity.
The Registrant's plan of operation for the next twelve months will be
to undertake a further geophysical survey and soil sampling program, within the
perimeters of the grid established out in February 1999 and extended in November
1999. Geophysical survey uses sound waves generated by geological equipment that
sends these sound waves into the rock structure to determine various faults and
mineralization. The sound waves are automatically recorded on a chart that
allows the geologist to identify areas of interest. Soil sampling is a method of
taking samples of the soil and sending them into a laboratory for mineral
analysis. It was important to establish the grid in February 1999 and in
November 1999 since both geophysical survey and soil sampling require a grid
structure to be meaningful. The samples of both geophysical survey and soil
sampling are taken at a similar point in each square within the grid. The
geophysical survey and soil sampling was completed on part of the geochemcial
grid in November 1999 as indicated elsewhere in this Form 10-SB.
The cash requirements to undertake a further geophysical survey and
soil sampling in the summer of the year 2000 will be approximately $5,000. The
Registrant does not have cash on hand sufficient to undertake this exploration
program. The Registrant will be taking soil samples from other areas within the
geochemical grid since the results of the first soil sampling program did not
warrant further exploration in that specific area. Additional funds will be
required by the Registrant. The funds might be from an advance from the
directors and officers, bank financing or by way of an issuance of the
Registrant's capital stock. At this time there is no indication as to what the
cost of additional exploration work will be once the geophysical survey and soil
sampling has been performed.
Management does not believe the Registrant's operations have been
materially affected by inflation.
The fiscal year end of the Registrant is November 30, 1999.
16
<PAGE>
ITEM 3. DESCRIPTION AND LOCATION OF THE GOLDEN CLAIM
The Registrant has purchased from Edward Skoda, a director of the
Registrant, for the cost of staking 18 units metric claims, comprising 25.3
square miles, situated within the Bridge River gold camp near the town of Gold
Bridge, 180 kilometers (113 miles) north of Vancouver, British Columbia, Canada
and 3 kilometers (1.9 miles) east of Gold Bridge. The geographical center of the
claim is given by the U.T.M. coordinates 514800E, 5631700N (Lat. 50 (degree)
50(Degree)20(Degree)N, long. 122 (degree) 47(Degree)30(Degree)W) on N.T.S. map
sheet 92J/15. The recorded name of the claim is "Golden".
The property associated with the Golden claim has been described by
Calvin Church in his report dated February 3, 1999 and attached hereto as
Exhibit 99 as "massive to finely bedded cherty agillites and volcanics of the
Bridge River (Fergusson) Group outcrop and underlie the claim area. Argillites
are not well exposed in stream valleys due to their fractured nature and weather
brown-orange when exposed at higher elevations. Dark green to purple colored
basalts of the Pioneer Formation weather brown and provide the host for
mineralized veins of the Reliance occurrence on the Menika Mining Co. Ltd.
property two kilometers to the east. Tertiary aged diorite porphyry dykes have
been found to cut the Bendor pluton and were probably emplaced at about the same
time but have not yet been mapped on the property. Similar dioritic feldspar
porphyry dykes are aligned parallel to bedding on the Minto and Congress mines
and are related to mineralizing events there. As is common in the Bridge River
area, much of the claim is covered by a layer of recent volcanic ash which
varies from a few centimeters to a metre thick in some areas.
Exploration work carried out by Chevron Minerals Ltd. in 1988 included 1:5000
scale geological mapping of the area currently covered by the Golden claim.
Locally the property consists of intermediate to mafic volcanic flows in contact
with sediments composed of cherty agrillite and interbedded sequences of thin
bedded chert separated by very thin argillaceous material. The chert unit has
been very tightly folded in north-northwest direction with steep subvertical
dips. The greenstone unit is less deformed except when in fault contact with the
chert unit along the primary stratigraphic contact where interlayers of chert
occur within the greenstone along the contact. These features trend
approximately north-south with a steep westerly dip (80-85(Degree)). Bedded and
crosscutting narrow quartz-carbonate veins and lenses occur sporadically within
the sediments occasionally containing minor pyrite.
Most of the alternations in the rocks southeast of Carpenter Lake is
due to the low grade regional metamorphism (chlorite, calcite, hermatitic zones
in greenstone, etc.). Quartz veins (<1cm) are abundant in the chert, whereas
calcite veins (1 to 5cm) are common in greenstone. Near the contact of the two
major rock units the greenstone is pervasively carbonatized and iron-carbonate
alteration is noted. Rare large quartz veins, up to 50 cm in width, occur within
the greenstone. Cairnes (1937) mapped a large fault through Sucker Lake and
extending southward along Fergusson Creek just south of the property.
Miller-Tait (1998) discovered a north-south trending unnamed fault he believes
defines the east boundary of all the faults at Bralorne-Pioneer. The fault
follows a chain of lakes that include Mead, Kingdom, Noel and McDonald lakes and
crosses the Golden claim near its east boundary. Sheared and highly altered
outcrop mapped on the south bank of Steep Creek are evidence for a steep
northwest trending shear or fault zone. On the north side of Steep Creek, Menika
Mining's drill programs have targeted crosscutting northeast trending structures
hosting gold-arsenic-stibnite mineralization.
Mineralization consists of pyrrhotite, pyrite and trace amounts of
chalcopyrite hosted primarily within volcanics and feldspar porphyry dykes. Most
sulphide occurrences are narrow,
17
<PAGE>
generally less than one meter, containing minor quartz-carbonate lenses and are
in close proximity to the sediment/volcanic contact zones. Minor gossans occur
in the underlying sediments near the contact zone. The contact zones represent
the best exploration targets although economic grade mineralization has not yet
been discovered."
The mineral rights are those of the Registrant. The land itself is
owned by the Crown, being the Province of British Columbia. Other than
environmental restrictions indicated previously under "Risk Inherent in Mineral
Properties", the Registrant has the right to explore and mine for minerals as
long as the Golden Claim is in good standing; all annual assessments are fully
paid. Presently the annual assessment is $67 per unit but in the year 2001 the
annual assessment will be $134 per unit for a total annual charge of $2,412.
OFFICES
The Registrant's executive offices are located at 114 - 2274 Folkestone
Way, West Vancouver, British Columbia, Canada. The office is located in the
personal residence of the President of the Registrant. There is no charge to the
Registrant for using this office.
OTHER PROPERTY
The Registrant does not own any other property other than the rights to the
minerals located on the Golden claim.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERSHIP AND MANAGEMENT
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the
beneficial ownership of each person who is known to the Registrant to be the
beneficial owner of more than 5% of the Registrant's Common Stock as of January
21, 2000.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Name and Address Amount and Nature Percent
of of Beneficial of Beneficial of
Class Owner Ownership (1),(2) Class (2)
----- ------ ----------------- ---------
<S> <C> <C> <C>
Common JAMES BRUCE 2,500,000 22.64 %
Shares 114 - 2274 Folkestone Way
West Vancouver, B.C.
Canada, V5A 2W1
Common RAYMOND CONTOLI 1,500,000 13.59 %
Shares 5587 Whitcom Place
Tsawwasson, B.C.
Canada, V4L 1E2
Common EDWARD SKODA 1,000,000 9.06 %
Shares 320 - 1100 Melville Street
Vancouver, B.C.
Canada, V6E 4A6
</TABLE>
18
<PAGE>
(1) As of January 31, 2000, there were 11,040,050 common shares
outstanding. Unless otherwise noted, the security ownership disclosed
in this table is of record and beneficial.
(2) Under Rule 13-d under the Exchange Act, shares not outstanding but
subject to options, warrants, rights, conversion privileges pursuant to
which such shares may be acquired in the next 60 days are deemed to be
outstanding for the purpose of computing the percentage of outstanding
shares owned by the persons having such rights, but are not deemed
outstanding for the purpose of computing the percentage for such other
persons.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of each officer and director, and of all directors and
executive officers as a group as of January 31, 2000.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Name and Address Amount and Nature Percent
of of Beneficial of Beneficial of
Class Owner Ownership (1),(2) Class (2)
----- ------ ----------------- ---------
<S> <C> <C> <C>
Common JAMES BRUCE 2,500,000 (3) 22.64 %
Shares 114 - 2274 Folkestone Way
West Vancouver, B.C.
Canada, V5A 2W1
Common RAYMOND CONTOLI 1,500,000 (4) 13.59 %
Shares 5587 Whitcom Place
Tsawwasson, B.C.
Canada, V4L 1E2
Common EDWARD SKODA 1,000,000 (5) 9.06 %
Shares 320 - 1100 Melville Street
Vancouver, British Columbia
Canada, V6E 4A6
All officers and directors as a 5,000,000 45.29 %
group (three persons)
</TABLE>
(1) As of January 31, 2000, there were 11,040,050 common shares
outstanding. Unless otherwise noted, the security ownership disclosed
in this table is of record and beneficial.
(2) Under Rule 13-d under the Exchange Act, shares not outstanding but
subject to options, warrants, rights, conversion privileges pursuant to
which such shares may be acquired in the next 60 days are deemed to be
outstanding for the purpose of computing the percentage of outstanding
shares owned by the persons having such rights, but are not deemed
outstanding for the purpose of computing the percentage for such other
persons.
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<PAGE>
(3) Mr. Bruce is President of the Registrant and a controlling shareholder.
This stock is restricted since it was issued in compliance with the
exemption from registration provided by Section 4 (2) of the Securities
Act of 1933, as amended. After this stock has been held for one (1)
year, Mr. Bruce could sell 1% of the outstanding stock every three
months. Therefore, this stock cannot be sold except in compliance with
the provisions of Rule 144.
(4) Mr. Contoli is Secretary Treasurer and a director of the Registrant.
This stock is restricted since it was issued in compliance with the
exemption from registration provided by Section 4 (2) of the Securities
Act of 1933, as amended. After this stock has been held for one (1)
year, Mr. Contoli could sell 1% of the outstanding stock every three
months. Therefore, this stock cannot be sold except in compliance with
the provisions of Rule 144.
(5) Mr. Skoda is a director of the Registrant. This stock is restricted
since it was issued in compliance with the exemption from registration
provided by Section 4 (2) of the Securities Act of 1933, as amended.
After this stock has been held for one (1) year, Mr. Skoda could sell
1% of the outstanding stock every three months. Therefore, this stock
cannot be sold except in compliance with the provisions of Rule 144.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies the Registrant's directors and executive
officers as of January 31, 2000. Directors are elected at the Registrant's
annual meeting of stockholders and hold office until their successors are
elected and qualified. The Registrant's officers are appointed annually by the
Board of Directors and serve at the pleasure of the Board.
Term as
Director
Name Position Held Expires
---- ------------- -------
JAMES BRUCE President and Director 2000
EDWARD SKODA Director 2000
RAYMOND CONTOLI Secretary/Treasurer and 2000
Director
JAMES BRUCE, 71, has been the President and a Director of the
Registrant since its inception. Mr. Bruce received a degree from the University
of British Columbia in Agriculture in 1950. After graduation he became Vice
President of Sales and General Manager for Imperial School Furniture where he
worked for 14 years before becoming Vice President of Sales for Co-ordinated
Business Interiors. Subsequent to his departure from Co-ordinated Business
Interiors he became a registered broker for Hemsworth Turton where his
responsibilities were to promote equity funding for public and private
companies. In 1969 he became President of White Water International and
Inter-American Nickel Corp. which was in the process of developing a water
purification system. In 1972, he accepted the position of Senior Account Manager
for Finning Tractor (Caterpillar Distributor) where he was employed until 1981.
Since that time, Mr. Bruce has been President and Chief Executive Officer for
Newgen
20
<PAGE>
Environmental Systems Inc. (formerly New Generation Power Corp.), a public
company currently trading on the Alberta Stock Exchange.
RAYMOND CONTOLI, 60, has been the Secretary Treasurer and a Director of
the Registrant since its inception. Upon graduation from high school Mr. Contoli
worked with his father in the family jewelry business until the untimely death
of his father. After managing the business for a number of years, Mr. Contoli's
son has entered into partnership with him. Mr. Contoli has worked for Leo
Contoli & Son Ltd. for over forty years. Mr. Contoli has acquired shares of
various public companies over the years but has not been a director or officer
of a public company until serving on the Board of the Registrant.
EDWARD SKODA, 51, has been a Director of the Registrant since its
inception. Mr. Skoda has served in various capacities in the mining industry
over the last twenty five years including being a project coordinator, senior
civil inspector of mines, shift boss and mine superintendent. Mr. Skoda has been
educated at the Haileybury School of Mines and later at the British Columbia
School of Technology where he obtained a diploma in Business Management. Mr.
Skoda has worked for his personal company, Mine Select Inc., for the past five
years. Mine Select Inc. undertakes consulting services for various private and
public companies; namely, White Hawk Resources Inc. (a Vancouver Stock Exchange
listed company), Monitor Gold International Inc. (a private company) and The
Canadian Mining Company (a company listed on the Alberta Stock Exchange in which
Mr. Skoda is a director). He holds licenses for blasting, first aid and being a
volunteer fireman. Mr. Skoda has been employed by mining companies over the
years in such countries as Australia, Ireland, New Zealand and the United
States.
None of the Directors or Executive Officers work full time for the
Registrant, but intend to devote such time as their responsibilities require.
None of the Registrant's Directors are currently directors of other companies
registered under the Securities Act of 1934.
There are no family relationships between the directors, executive
officers or with any person under consideration for nomination as a director or
appointment as an executive officer of the Registrant.
ITEM 6. EXECUTIVE COMPENSATION
None of the Registrant's executive officers have received compensation
since the Registrant's inception.
The following table sets forth compensation paid or accrued by the
Registrant during the period ended January 31, 2000 to the Registrant's
President and shows compensation paid to any other officers or directors.
21
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (199 - 2000)
Long Term Compensation (US Dollars)
------------------------------------------------
Annual Compensation Awards Payouts
-------------------------------- ------ -------
(a) (b) (c) (e) (f) (g) (h) (i)
Other Restricted All other
annual stock Options/ LTIP compen-
Name and Princi- Comp. awards SAR payouts sation
pal position Year Salary ($) ($) (#) ($) ($)
------------ ---- ------ --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James Bruce, 1998-1999 -0- -0- -0- -0- -0- -0-
President 2000
Edward Skoda, 1998-1999 -0- -0- -0- -0- -0- 2,200 (*)
Director 2000
Raymond Contoli, 1998-1999 -0- -0- -0- -0- -0- -0-
Secretary/Treasurer 2000
and Director
</TABLE>
(*) There has been no compensation given to any of the Directors or Officers
during 1999 other than $2,200 paid to Edward Skoda to perform assessment work on
the Golden mineral claim and maintain it in good standing for an additional
year. Mr. Skoda charged $250 per day for eight days for line cutting and
flagging a grid on the Golden claim. The balance of the funds given to him,
being $200, was used to purchase supplies for establishing the soil sampling
gird.
There are no stock options outstanding as at January 31, 2000 and no
options have been granted in either 1999 or 2000, but it is contemplated that
the Registrant may issue stock options in the future to officers, directors,
advisers and future employees.
COMPENSATION OF DIRECTORS
Members of the Board of Directors do not receive cash compensation for
their services as Directors. Directors are not presently reimbursed for expenses
incurred in attending Board meetings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 15, 1999, the Registrant issued 5,000,000 shares of its
common stock between James Bruce, as to 2,500,000 shares, Raymond Contoli, as to
1,500,000 shares, Edward Skoda, as to 1,000,000 shares, in consideration of
their services in organizing the Registrant and becoming directors. The terms of
this transaction were determined by the Board of Directors at the time there
were no other stockholders. These shares are restricted since they were issued
in compliance with the exemption form registration provided by Section 4 (2) of
the Securities Act of 1933, as amended. After these shares have been held for
one (1) year, the directors noted above could sell in a given three month period
shares based on 1% of the outstanding stock of the Registrant. Therefore, these
shares cannot be sold except in compliance with the provisions of Rule 144. The
share certificates registered in the names of each of the directors noted above
have a legend affixed to them restricting their sale.
The Registrant acquired the Golden claim from Edward Skoda for the sum
of $1.00. In addition the Registrant paid Mr. Skoda the sum of $2,200 for
performing assessment work on the property. The actual charges for Mr. Skoda
time was $2,000, being $250 per day for eight days work on the claim. Had the
Registrant engaged the services of an independent geologist, the charge per day
would have been $350.
Certain parties interested in the Registrant's success have contributed
and continue to contribute time, office space, telephone, and other expenses,
without compensation or
22
<PAGE>
reimbursement. The parties interested in the success of the Registrant are its
officers and directors. Mr. Bruce has contributed office space and telephone at
no cost to the Registrant whereas Mr. Skoda has contributed time in identifying,
staking and recording the mineral claim, engaging the services of Calvin Church
to prepare the geological report, reviewing the reports and performing the
exploration work in February 1999.
Certain directors of the Registrant are directors, officers,
stockholders and employees of other companies engaged in the mining industry,
and conflicts of interest may arise between their duties as directors of the
Registrant and as directors and officers of other companies. Mr. Bruce is a
director and officer of Newgen Environmental Systems Inc., a public company
listed on the Alberta Stock Exchange. Newgen Environmental Systems Inc. is not
engaged in the exploration and development of mineral claims. Mr. Skoda holds
directorship and a position as an officer in two mining companies, other than
his personal company, Mine Select Inc. These companies are as follows:
Stock Exchange
Name of the Company Position Traded
------------------- -------- ------
Canadian Mining Company Director Alberta Stock Exchange
Quinto Mining Company Secretary and Director Vancouver Stock Exchange
ITEM 8. DESCRIPTION OF SECURITIES
The Registrant's articles of incorporation currently provide that the
Registrant is authorized to issue 200,000,000 shares of common stock, par value
$0.001 per share. As at January 31, 2000, 11,040,050 shares were outstanding.
COMMON STOCK
Each holder of record of the Registrant's common stock is entitled to
one vote per share in the election of the Registrant's directors and all other
matters submitted to the Registrant's stockholders for a vote. Holders of the
Registrant's common stock are also entitled to share ratably in all dividends
when, as, and if declared by the Registrant's Board of Directors from funds
legally available therefor, and to share ratably in all assets available for
distribution to the Registrant's stockholders upon liquidation or dissolution,
subject in both cases to any preference that may be applicable to any
outstanding preferred stock. There are no preemptive rights to subscribe to any
of the Registrant's securities, and no conversion rights or sinking fund
provisions applicable to the common stock.
Neither the Registrant's articles of incorporation nor its bylaws
provide for cumulative voting. Accordingly, persons who own or control a
majority of the shares outstanding may elect all of the Board of Directors, and
persons owning less than a majority could be foreclosed from electing any.
OPTIONS OUTSTANDING
There are no outstanding options. It is the intention of the Board of
Directors to grant stock options to directors, officers and future employees at
some time in the future. At the present time no consideration has been given to
the granting of stock options.
23
<PAGE>
PART 11
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
MARKET INFORMATION
The Registrant's stock is not presently traded or listed on any public
market. The Registrant anticipates filing the required documents with the NASD
Regulators, Inc. once the United States Securities and Exchange Commission has
no further comments on this Form 10-SB. The Registrant is hoping to have its
shares quoted on the OTC Bulletin Board but there is no assurance this will
happen.
HOLDERS
The number of record holders of the Registrant's common stock as at
January 31, 2000 was 40 of which 3 are directors. There have been no additional
shareholders since February 28, 1999 - the date of the attached audited
financial statements.
DIVIDENDS
The Registrant has never paid cash dividends on its common stock and
does not intend to do so in the foreseeable future. The Registrant currently
intends to retain any earnings for the operation and expansion of its business.
The Securities and Exchange Commission has adopted regulations which
generally define a "penny stock" to be equity securities that has a market price
(as defined) of less than $5.00 per share, subject to certain exemptions. The
Registrant's Common Stock may be deemed to be a "penny stock" and thus, if and
when it becomes listed and trading, of which there can be no assurance, will
become subject to rules that impose additional sales practice requirements on
broker/dealers who sell such securities to persons other than established
customers and accredited investors, unless the Common Stock is listed on The
NASDAQ Small Cap Market.
Consequently, the "penny stock" rules may restrict the ability of
broker/dealers to sell the Registrant's securities, and may adversely affect the
ability of holders of the Registrant's Common Stock to resell their shares in
the secondary market, assuming such market develops, of which there can be no
assurance.
FINANCIAL INFORMATION
The Registrant will furnish annual financial reports to stockholders,
certified by its independent auditor, and furnish management prepared unaudited
quarterly reports to its shareholders.
TRANSFER AGENT
The Registrant's transfer agent is Nevada Agency & Trust Co., 50 West
Liberty Street, Suite 880, Reno, Nevada, 89501.
ITEM 2. LEGAL PROCEEDINGS
There are no legal proceedings to which the Registrant is a party or to
which its property is subject, nor to the best of management's knowledge are any
material legal proceedings contemplated.
24
<PAGE>
ITEM 3. DISAGREEMENT WITH ACCOUNTANTS AND
FINANCIAL DISCLOSURE
From inception to date, the Registrant's principal accountant is
Andersen Andersen & Strong, L.C. of Salt Lake City, Utah. The firm's report for
the period from inception to November 30, 1999 did not contain any adverse
opinion or disclaimer, nor were there any disagreements between management and
the Registrant's accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
From inception through to January 31, 2000, the Registrant has issued
and sold the following unregistered shares of its common stock (the aggregated
value of all such offerings did not exceed US$1,000,000):
(i) Subscriptions of 5,000,000 shares by the Directors of the Registrant.
On January 15, 1999 the Registrant issued to its President, James
Bruce, 2,500,000 common shares, to its Secretary Treasurer, Raymond Contoli,
1,500,000 common shares, and to its third Director, Edward Skoda, 1,000,000
common shares, all at a price of $0.001 per share. These shares are restricted
since they were issued in compliance with the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended. After these
shares have been held for one year, the three directors could sell within a
three month period shares based on 1% of the outstanding stock in the
Registrant. Therefore, these shares can be sold after the expiration of one year
in compliance with the provisions of Rule 144. There are "stop transfer"
instructions placed against these certificates and a legend has been imprinted
on the stock certificates themselves.
(ii) Subscription for 6,000,000 shares at $0.002 per share
On January 26, 1999, the Registrant accepted subscriptions from twelve
corporate investors in the amount of 6,000,000 shares at a price of $0.002 per
share. Rule 504 exemption was claimed for the 6,000,000 shares. Forms D were
filed with the United States Securities and Exchange Commission. This stock can
be traded without restrictions. None are related to the directors or officers or
each other. All the shareholders live outside the United States.
None of these shareholders hold in excess of 5% of the issued and
outstanding shares of the Registrant. The names, address, amount and percent of
shares owned by each of these shareholders is as follows:
<TABLE>
<CAPTION>
Amount and
Title of Name and Address of Nature of Percent of
Class Beneficial Owner Beneficial Owner Class
----- ---------------- ---------------- -----
<S> <C> <C> <C>
Common Dortmund Unternehmen GmbH Ltd. 500,000 4.5%
35 Barrack Road
Belize City, Belize
Prihcipal Beneficial Shareholder: Maria Scott
Common Vorfahren Kapital S.A. 500,000 4.5%
35 Barrack Road
Belize City, Belize
Principal Beneficial Shareholder: Amir Sosa
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C> <C>
Common Flor Desarrollos S.A. 500,000 4.5%
Suite 13, First Floor
Oliaji Trade Centre
Francis Rachel Street
Victoria, Maha, Seychelles
Principal Beneficial Shareholder: Marie Gabb
Common Fougeres Compagnie S.A. 500,000 4.5%
Saffrey Square, Suite 205
Nassau, Bahamas
Principal Beneficial Shareholder: Jessica Garbutt
Common Tudella Desarrollo S.A. 500,000 4.5%
Arango-Orillac Building
2nd Floor - East 54 Street
Panama City, Panama
Principal Beneficial Shareholder: Tracey Williams
Common Groupo Estella S.a. 500,000 4.5%
Akara Blvd. 24 De Castro Street
Road Town, Tortola, BVI
Principal Beneficial Shareholder: Clifford Wilkins
Common Pancho Ventures S.A. 500,000 4.5%
No. 2 Commercial Centre Square
Alofi, Niue
Principal Beneficial Shareholder: David Finzer
Common Campo International Inc. 500,000 4.5%
Arango-Orillac Building, 2nd Floor
East 54th Street, Panama City, Panama
Principal Beneficial Shareholder: Keither King
Common Winchester Capital Corporation 500,000 4.5%
No. 2 Commercial Centre Square
Alofi, Niue
Principal Beneficial Shareholder: Juan Mashburn
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Common Coatsbridge Holdings Ltd. 500,000 4.5%
Saffrey Square, Suite 205
Nassau, Bahamas
Principal Beneficial Shareholder: Joy Vernon-Godfrey
Common Conquet Freres S.A. 500,000 4.5%
No. 2 Commercial Centre Square
Alofi, Niue
Principal Beneficial Shareholder: Richard Smith
Common Handler Kapital Ltd. 500,000 4.5%
Akara Blvd., 24 De Castro Street
Road Town, Tortola, BVI
Principal Benefical Shareholder: Ronald Lui
</TABLE>
The directors are unaware as to whether any of these shareholders have,
directly or indirectly, any contracts, arrangements, understanding,
relationships or otherwise have or share voting power over such shares issued to
these shareholders. Management is unaware of any person or persons, directly or
indirectly, having created a trust, proxy, power of attorney, pooling
arrangement or any other contracts, arrangement or devise with the purpose or
effect of divesting such corporate shareholder of beneficial ownership of the
Registrant's shares or preventing the vesting of such beneficially ownership.
The above noted corporate investors are not affiliates and are not statutory
underwriters as defined by 2(11) of the Securities Act of 1933, as amended.
Therefore, the twelve corporate shareholders can sell their shares in the market
without registration under the Securities Act of 1933, as amended.
(iii) Subscription for 40,050 shares at $0.25 per share
On February 5, 1999, the Registrant accepted subscriptions from 25
individual shareholders who purchased 40,050 common shares at a price of $0.25
per share. Rule 504 exemption was claimed and Forms D were filed with the United
States Securities and Exchange Commission. This stock can be traded without
restrictions provided persons owing less than 5% of the outstanding stock do so.
All the shareholders subscribing for shares are located outside of the United
States and none are US citizens. All shareholders are either friends, relatives
or business associates of one or more of the directors.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the Nevada General Corporation Law allows the
Registrant to indemnify any person who was or is threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding, by reason
of the fact that he or she is or was a director, officer, employee or agent of
the Registrant, or is or was serving at the request of the Registrant
27
<PAGE>
as a director, officer, employee, or agent of any corporation, partnership,
joint venture, trust, or other enterprise. The Registrant's Bylaws provide that
such person shall be indemnified and held harmless to the fullest extent
permitted by Nevada law.
Nevada law permits the Registrant to advance expenses in connection
with defending any such proceedings, provided that the indemnitee undertakes to
repay any such advances if it is later determined that such person was not
entitled to be indemnified by the Registrant. The Registrant's Bylaws require
that the Company advance such funds upon receipt of such an undertaking with
respect to repayment.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in such act, and is
therefore unenforceable.
28
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The following financial statements are filed with this Form 10-SB:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Certified Public Accountants 30
Financial Statements of The Bralorne Mining Company
Balance Sheet as at November 30, 1999 31
Statement of Operations for the Period from December 2, 1998 (Date
of Inception) to November 30, 1999 32
Statement of Cash Flows for the Period from December 2, 1998 (Date
of Inception) to November 30, 1999 33
Statement of Changes in Stockholders' Equity for the Period from
December 2, 1998 (Date of Inception) to November 30, 1999 34
Notes to Financial Statements 35
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 220
Certified Public Accountants and Business Consultants Board Salt Lake City, Utah, 84106
Member SEC Practice Section of the AICPA Telephone 801-486-0096
Fax 801-486-0098
</TABLE>
Board of Directors
The Bralorne Mining Company
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of The Bralorne Mining Company
(an exploration stage company) at November 30, 1999, and the statement of
operations, stockholders' equity, and cash flows for the period from December 2,
1998 (date of inception) to November 30, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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 balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Bralorne Mining Company at
November 30, 1999, and the results of operations, and cash flows for the period
from December 2, 1998 (date of inception) to November 30, 1999, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in the development
stage and will need additional working capital for its planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Salt Lake City, Utah /s/ "Andersen Andersen & Strong"
January 15, 2000
A member of ACF International with affiliated offices worldwide
30
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
BALANCE SHEET
NOVEMBER 30, 1999
================================================================================
ASSETS
CURRENT ASSETS
Cash $ 3,324
--------
Total Current Assets 3,324
--------
OTHER ASSETS
Mineral lease - Note 3 1
--------
$ 3,325
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,200
--------
Total Current Liabilities 4,200
--------
STOCKHOLDERS' EQUITY
Common stock 200,000,000 shares authorized, at $0.001 par
value; 11,040,050 shares issued and outstanding 11,040
Capital in excess of par value 15,972
Deficit accumulated during the development stage (27,887)
--------
Total Stockholders' Equity (deficiency) (875)
--------
$ 3,325
========
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM DECEMBER 2, 1998 (DATE OF INCEPTION)
TO NOVEMBER 30, 1999
================================================================================
REVENUE $ --
EXPENSES 27,887
-----------
NET LOSS $ (27,887)
===========
NET LOSS PER COMMON SHARE
Basic $ --
===========
AVERAGE OUTSTANDING SHARES
Basic 9,508,359
===========
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM DECEMBER 2, 1998 (DATE OF INCEPTION)
TO NOVEMBER 30, 1999
================================================================================
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(27,887)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Change in accounts payable 4,200
--------
Net Cash From Operations (23,687)
========
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of mineral lease (1)
--------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock 27,012
--------
Net Increase in Cash 3,324
Cash at Beginning of Period --
--------
Cash at End of Period $ 3,324
========
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
<TABLE>
<CAPTION>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 2,1998 (DATE OF INCEPTION)
TO NOVEMBER 30, 1999
==================================================================================================
COMMON STOCK CAPITAL IN
-------------------- EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------ ------ --------- -------
<S> <C> <C> <C> <C>
BALANCE DECEMBER 2, 1998 (date of inception) -- $ -- $ -- $ --
Issuance of common stock for cash
at $.001 - January 15, 1999 5,000,000 5,000 -- --
Issuance of common stock for cash
at $0.002 - January 26, 1999 6,000,000 6,000 6,000 --
Issuance of common stock for cash
at $.25 - February 5, 1999 40,050 40 9,972 --
Net operating loss for the period from
December 2, 1998 to November 30, 1999 -- -- -- (27,887)
---------- ---------- ---------- ----------
BALANCE NOVEMBER 30, 1999 11,040,050 $ 11,040 $ 15,972 $ (27,887)
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCLAL STATEMENTS
================================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
December 2, 1998 with authorized common stock of 200,000,000 shares at
$0.001 par value.
The Company was organized for the purpose of acquiring and exploring
mineral properties. At the balance sheet date a mineral property of unknown
reserves, had been acquired. The Company has not established the existence
of a commercially minable ore deposit and has not reached the development
stage and therefore is considered to be in the exploration stage.
The Company has completed Regulation D offerings of 6,040,050 common shares
for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICILES
Accounting, Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On November 30, 1999, the Company had a net operating loss carry forward of
$27,887. The tax benefit from the loss carry forward has been fully offset
by a valuation reserve because the use of the future tax benefit is
doubtful, since the Company has no operations and is unable to project any
reliable future net profits..
The loss carryforward will expire in 2020.
Earning (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding.
35
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Amortization of Capitalized Mineral Claim Costs
Cost of acquisition, exploration, carrying, and retained unproven
properties are expensed as incurred. Costs incurred in proving and
developing a property ready for production are capitalized and amortized
over the life of the mineral deposit or over a shorter period if the
property is shown to have an impairment in value.
Financial Instruments
The carrying amounts of financial instruments, including cash, mineral
claims, and accounts payable, are considered by management to be their
estimated fair values.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
3. PURCHASE OF MINERAL LEASES
During February, 1999 the Company acquired a mineral claim, for $1.00 from
a related party, known as the "Golden" consisting one 18 unit metric claim
situated with the Bridge River gold camp near the town of Gold Bridge,
British Columbia, with an expiration date of March 17, 2000.
The Company has not established the existence of a commercially minable ore
deposit and therefore all expenses for acquisition and exploration have
been expensed.
36
<PAGE>
THE BRALORNE MINING COMPANY
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCLAL STATEMENTS (CONTINUED)
================================================================================
4. RELATED PARTY TRANSACTIONS
Related parties have acquired 45% of the outstanding common stock.
5. GOING CONCERN
The Company will need additional working capital to be successful in its planned
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital for any future planned activity and the management of
the Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding, and long term financing, which will
enable the Company to operate in the coming year.
There can be no assurance that the Company can be successful in this effort.
37
<PAGE>
PART 111
ITEM 1. INDEX TO EXHIBITS
EXHIBIT
NO.
---
(2) Charter and By-Laws
(a) Articles of Incorporation of The Bralorne Mining Company
filed December 1, 1998 (filed herewith, page 38)
(b) Bylaws (filed herewith, page 42)
(3) Instruments Defining Rights of Securities Holders
(a) Text of stock certificates for common stock (filed herewith,
page 54)
(5) Voting Trust Agreements
None
(6) Material Contracts
(a) Not Made in the ordinary course of business
(i) Transfer Agent and Registrant Agreement between
Registrant and Nevada Agency & Trust Co., dated December
3, 1998 (filed herewith, page 55)
(10) Consent of experts and counsel
(i) Consent of Andersen Andersen & Strong, L.C., independent
certified public accountants (filed herewith, page 59)
(11) Statement re computation of per share earnings
Not applicable
(16) Letter of change in certifying accountant
Not applicable
(21) Subsidiaries of the Registrant
Not applicable
(24) Power of Attorney
Note
(99) Addition Exhibits
(a) Geology Report on the Golden Claim prepared by Calvin Church,
P. Geo. Dated February 3, 1999 (filed herewith, page 60)
(b) Bill of Sale Absolute - stamped by Ministry of Employment and
Investment, Energy and Minerals Division of the Province of
British Columbia (filed herewith, page 85)
(c) Certificate of Registration (filed herewith, page )
(d) Free Miner Certificate (filed herewith, page )
ITEM 2. DESCRIPTIONS OF EXHIBITS
[Attached, pages 38 through 85]
38
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
THE BRALORNE MINING COMPANY
(Registrant)
by /s/ James Bruce
--------------------------------
James Bruce, President
Dated: May 10, 2000
39
