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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDED FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
COPPER VALLEY MINERALS LTD.
---------------------------
(Exact name of Company as specified in its charter)
NEVADA 98-0207554
- ------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 1880, 1055 West Georgia Street
Vancouver, British Columbia, Canada V6E 3P3
- ----------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 604-687-7962
------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
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(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE .................................................... 1
TABLE OF CONTENTS ............................................. 2
PART I ........................................................ 3
DESCRIPTION OF BUSINESS ....................................... 3
DESCRIPTION OF PROPERTY ....................................... 12
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES ....... 12
REMUNERATION OF DIRECTORS AND OFFICERS ........................ 13
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS .. 14
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ..... 14
DESCRIPTION OF SECURITIES ..................................... 14
PART II ....................................................... 16
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS .............. 16
LEGAL PROCEEDINGS ............................................. 16
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ................. 16
RECENT SALES OF UNREGISTERED SECURITIES ....................... 16
INDEMNIFICATION OF DIRECTORS AND OFFICERS ..................... 17
PART F/S ...................................................... 19
FINANCIAL STATEMENTS .......................................... 19A
PART III ...................................................... 20
INDEX TO EXHIBITS ............................................. 20
SIGNATURES .................................................... 21
2
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
Organization
- ------------
Copper Valley Minerals Ltd. (the "Company") was organized as a Nevada
corporation on June 11, 1998. The name of the Company was changed from
"Recon Rubber Corporation" to "Copper Valley Minerals Ltd." by the filing
of a Certificate of Amendment of the Articles of Incorporation with the
Nevada Secretary of State effective July 1, 1999.
Business
- --------
The Company is a natural resource company engaged in the acquisition,
exploration and development of mineral properties. The Company has an
option to acquire an interest in the properties described below under the
heading "New York Canyon Property Option Agreement". The Company intends
to carry out exploration work on the New York Canyon Property in order to
ascertain whether the New York Canyon Property possesses commercially
exploitable quantities of copper and ancillary precious minerals,
including gold and silver. There can be no assurance that a commercially
exploitable mineral deposit, or reserve, exists in the New York Canyon
Property until appropriate exploratory work is done and an economic
evaluation based on such work concludes economic feasibility.
New York Canyon Property Option Agreement
- -----------------------------------------
The Company has acquired an option (the "Option") to acquire a 51%
interest in certain mineral claims situated in the State of Nevada (the
"New York Canyon Property"). The Company acquired the Option pursuant to
an agreement dated March 31, 1999 between the Company, Kleinebar
Resources Ltd. ("Kleinebar"), Bill Henderson and Kurt Schendel
(Kleinebar, Bill Henderson and Kurt Schendel are referred to as the
"Optionors"). The consideration paid by the Company to the Optionor for
the grant of the Option was $1,000 US.
The Option is exercisable by the Company completing the following
payments to the Optionors and incurring the following required
exploration expenditures on the New York Canyon Property:
1. paying to the Optionors an aggregate of $300,000 in accordance with
the following schedule:
1. $50,000 on or before March 31, 2000;
2. $75,000 on or before March 31, 2001;
3. $75,000 on or before March 31, 2002;
4. $100,000 on or before March 31, 2003; and
2. incurring an aggregate of $1,009,000 of property exploration
expenditures on the New York Canyon Property within the following
periods:
1. $9,000 US on or before April 1, 2000;
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2. $150,000 US on or before April 1, 2001;
3. $150,000 US on or before April 1, 2002;
4. $240,000 US on or before April 1, 2003;
5. $450,000 US on or before April 1, 2004.
In the event that the Company spends, in any of the above periods, less
than the required sum, the Company may, at its option, pay to the
Optionors the difference between the amount actually spent and the
required exploration expenditure in full satisfaction of the exploration
expenditures to be incurred. In the event that the Company spends, in
any period, more than the required sum, then the excess will be carried
forward and applied to the required exploration expenditures to be
incurred in subsequent periods. If the Company fails to make any
required payment or incur any required exploration expenditure, the
Option will terminate and the Company will have no further rights to the
New York Canyon Property.
Property exploration expenditures include all costs of acquisition and
maintenance of the property, all expenditures on the exploration and
development of the property and all other costs and expenses of
whatsoever kind or nature, including those of a capital nature, incurred
or chargeable with respect to the exploration of the property. In
addition, until the Company shall have secured a 51% interest in the New
York Canyon Property, the Company is obligated to maintain in good
standing all mineral claims comprising the New York Canyon Property by
the doing and filing of assessment work or making of payments in lieu
thereof, by the payment of taxes and rentals, and the performance of all
other actions which may be necessary in that regard and in order to keep
the mineral claims free and clear of all liens and other charges. The
Company has made all payments necessary to maintain the minerals claims
for the subsequent twelve-month period.
Upon the Company acquiring a 51% interest in the New York Canyon Property
by exercise of the Option, the Company and the Optionors will enter into
a joint venture for the purpose of further exploring and developing and,
if economically and politically feasible, constructing and operating a
mine on the New York Canyon Property.
New York Canyon Property
- ------------------------
The New York Canyon Property is comprised of thirty seven (37) mineral
claims located in the Sante Fe mining district in Mineral County in the
State of Nevada (the "Mineral Claims"). The Mineral Claims consist of
twenty (20) continuous claims centered over what is locally referred to
as the "Long Shot Ridge" and seventeen (17) contiguous claims centered
over what is locally referred to as the "Copper Queen" mineral
occurrence.
The Mineral Claims were staked by Kleinebar in October, 1998. The
Mineral Claims and their locations are summarized as follows:
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- -----------------------------------------------------------
CLAIM NAME DATE LOCATED Location # of
Clms
- -----------------------------------------------------------
NYC 1,3,5,7, October 17, 1998 Sec 33,34 7
9,11,13 T8N R35E
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NYC 2,4,6,8, October 17, 1998 Sec 33, 7
10,12,14 T8N R35E
- -----------------------------------------------------------
NYC 35 October 17, 1998 Sec 4, 1
T7N R35E
- -----------------------------------------------------------
NYC 36 October 17, 1998 Sec 3, 1
T7N R35E
- -----------------------------------------------------------
NYC 37 October 17, 1998 Sec 33, 1
T8N R35E
- -----------------------------------------------------------
NYC 38 October 17, 1998 Sec 34, 1
T8N R35E
- -----------------------------------------------------------
NYC 39,40 October 17, 1998 Sec 34, 2
T8N R35E
- -----------------------------------------------------------
20
- -----------------------------------------------------------
- -----------------------------------------------------------
CLAIM NAME DATE LOCATED Location # of
Clms
- -----------------------------------------------------------
NYC 15-18 October 16, 1998 Sec 6 4
T7N R35E
- -----------------------------------------------------------
NYC 19-31 October 16, 1998 SEC 31 13
T8N R35E
- -----------------------------------------------------------
17
- -----------------------------------------------------------
The New York Canyon Property is located in the southeastern portion of
Mineral County, Nevada, thirty miles east of the county seat of
Hawthorne. Access to the Mineral Claims is via Highway 95 from Hawthorne
to Luning. From Luning, a seven (7) mile gravely country road provides
access to the New York Canyon Property.
Geological Report
- -----------------
The Company has obtained a geological report on the New York Canyon
Property prepared by Mr. Wes C. Hanson, Professional Geologist of 12161-
228 Street, Maple Ridge, British Columbia, Canada (the "Geological
Report"). The Geological Report is attached hereto as Exhibit 6. The
Geological Report summarizes the exploration history of the New York
Canyon Property, the regional geology of the New York Canyon Property and
provides conclusions and recommendations for a work program on the New
York Canyon Property. These results of the Geological Report are
summarized below.
A copy of the Geological Report is attached to this Registration
Statement as an Exhibit. The information provided in this Registration
Statement with respect to the Geological Report is qualified in its
entirety by reference to the complete text of this report.
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Exploration History of the New York Canyon Property
- ---------------------------------------------------
The Geological Report states that geological exploration in the vicinity
of the New York Canyon Property commenced in the 1870's with the
discovery of the Santa Fe Silver Mine in the Santa Fe mining district.
This discovery led to silver production from a number of other silver,
silver-lead and silver-copper deposits in the district. The discovery of
significant copper deposits, identified around 1893, saw mining activity
focus on the large copper deposits in the area. These deposits, mined via
short tunnels and open cuts, superceded the small silver mining
operations scattered throughout the area. The Geological Report states
that commercial copper production in the Santa Fe mining district was
achieved from 1906 to 1935.
Modern exploration of the area began in 1964 and continued until 1994.
The exploration during this period is summarized in the Geological
Report. The area has seen little exploration since 1994 due to poor
copper prices. The New York Canyon Property became available for staking
in September, 1998 due to the failure of the previous owner to pay
maintenance fees. The New York Canyon Property was staked by Kleinebar
at this time.
New York Canyon Property Geology
- --------------------------------
The geology of the New York Canyon Property is summarized in the
Geological Report. The Geological Report identifies copper as the
principal economic mineral in the area of the New York Canyon Property.
The Geological Report concludes that the New York Canyon Property has
significant potential for copper resources. In particular, the Long Shot
Ridge deposit appears to be amenable to processing copper ore. The
remainder of the New York Canyon Property offers good sulphide potential.
The Geological Report also concluded that while it is unlikely that a
"stand alone" gold or silver deposit exists, there is good potential to
enhance the overall net present value of any existing copper resources
with gold and/or silver mineralization. The potential for the property
to host significant gold and silver content is based on the following
observations:
1. Silver production was realized from this district and from operating
mines on the property in the past;
2. Anomalous gold and silver values have been identified from surface
rock sampling programs;
3. The Santa Fe Gold Mine operated by Homestake lies approximately 5
miles south-southeast of the Kleinebar claims.
4. The structural, geological and chemical conditions that caused the
skarnification and deposited low grade copper enrichment, are also
favorable conditions for the deposition of gold and silver
mineralization.
5. With the exception of a limited number of surface (and drill
samples), the property remains largely untested for precious metal
potential.
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Notwithstanding these conclusions, it should be noted that no assurance
can be given that there will be sufficient quantities of gold, silver or
other minerals to justify commercial mining of the Property.
Conclusions and Recommendations of the Geological Report
The author of the Geological Report concluded that the New York Canyon
Property offers an excellent opportunity for both improving the existing
copper resource and developing additional value from gold and/or silver
mineralization.
The New York Canyon Property has been affected by favorable geological
conditions for copper, gold and silver deposition. The claims remain
largely untested for gold and silver mineralization, even though historic
information indicates anomalous gold and silver values from surface rock
chip samples.
The Geological Report recommended proceeding with a limited exploration
program proposed by Kleinebar, as described below. In particular, the
Geological Report recommended proceeding with the collection of an
additional 150 samples in order to further determine the potential for
gold and silver associated with the copper mineralization on the
property.
The limited exploration program proposed by Kleinebar is a one phase
geological exploration program summarized as follows:
Proposed Year 1 Budget - Work Program
- -------------------------------------
Description Quantity Amount
- ------------ -------- ------
Geological Mapping @ $325/day 1 x 3 days $975.00
Geo-chemical Samplers @ $160/day 1 x 3 days $480.00
Room & Board for Above @ $100/day 2 x 3 days $600.00
Lab Analysis @ $15.00/sample 150 samples $2,250.00
Car Rental & Gas @ $125/day 3 days $375.00
Travel - Airfare 1 x $400 $400.00
Miscellaneous $90.00
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TOTAL: $5,170.00
=========
Company's Plan of Operation
- ---------------------------
The Company has determined to proceed with the limited exploration
program on the New York Canyon Property as recommended by the Geological
Report. The Company has raised sufficient funds from recent sales of its
securities, as set forth in Item 4 of Part II of this Registration
Statement, to proceed with this limited exploration program. The Company
will assess whether to
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proceed with further exploration programs upon completion of the
limited exploration program and an evaluation of the results of
the limited exploration program.
The Company had cash on hand in the amount of $34,647 as of October 31,
1999. The Company believes that these cash reserves are sufficient to
enable the Company to complete Phase One of the exploration program. The
Company believes that its cash reserves are also sufficient to meet its
obligations for the next twelve month period to C.H.M. Consulting Inc.
under the Management Agreement, as described below, and to pay for the
legal and accounting expense of complying with its obligations as a
reporting issuer under the Securities Exchange Act of 1934, in addition
to the cost of completing Phase One of the exploration program.
The Company will require additional funding in the event that the Company
determines to proceed with further exploration upon reviewing the results
of Phase One of the exploration program. The Company anticipates that
the cost of any additional exploration program is in excess of the
projected cash reserves of the Company upon completion of Phase One of
the exploration program. The Company anticipates that additional funding
will be in the form of equity financing from the sale of the Company's
common stock. There is no assurance that the Company will be able to
achieve additional sales of its common stock sufficient to fund
additional phases of the exploration program. The Company believes that
debt financing will not be an alternative for funding an additional
exploration program. The Company does not have any arrangements in place
for future equity financing of the Company.
If the Company does not secure additional financing, the Company will not
be able to complete any additional exploration programs or complete the
required payments to Kleinebar or the required exploration expenditures
under the Option. The Company will be required to abandon the Option in
the event that the Company is unable to achieve sufficient financing as
required to complete the exploration expenditures on the New York Canyon
Property or complete the required payments to Kleinebar. The Company
will consider bringing in a joint venture partner for the New York Canyon
Property if the Company is unable to achieve sufficient funding by itself
to proceed with the required exploration expenditures and the Company
does not want to abandon the New York Canyon Property. The Company will
pursue acquiring interests in alternate mineral properties in the event
of termination of the Option due to a failure to incur the required
exploration expenditures.
Management Agreement
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The Company has entered into a management agreement dated April 1, 1999
with C.H.M. Consulting Inc., a company controlled by J. Stephen Barley,
President of the Company, whereby C.H.M. Consulting Inc. has agreed to
provide management and administration services to the Company for a fee
of $750 US per month for a one-year term commencing April 1, 1999 (the
"Management Agreement"). The services include the management services of
Mr. Barley, reception, secretarial services, accounting services,
investor relations and general office services.
A copy of the Management Agreement is attached to this Registration
Statement as an Exhibit. The information provided in this Registration
Statement with respect to the Management Agreement is qualified in its
entirety by reference to the complete text of that agreement.
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Competition and Marketing
- -------------------------
The mining industry, in general, is intensely competitive. There can be
no assurance that even if commercial quantities of ore are discovered, a
ready market will exist for its sale. Numerous factors beyond the
control of the Company may affect the marketability of any substances
discovered. These factors include market fluctuations, the proximity and
capacity of natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes, royalties,
land tenure, land use, importing and exporting of minerals and
environmental protection. The exact effect of these factors cannot be
accurately predicted, but the combination of these factors may result in
the Company not receiving an adequate return on invested capital.
Compliance with Government Regulation
- -------------------------------------
The Company will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in the United States generally and in the State
of Nevada, specifically. In addition, production of minerals in the State
of Nevada will require prior approval of applicable governmental
regulatory agencies. There can be no assurance that such approvals will
be obtained. The cost and delay involved in attempting to obtain such
approvals cannot be known in advance.
During the exploration phase of the New York Canyon Property, the Company
will be subject to regulation by the Bureau of Land Management, a branch
of the US Department of the Interior. The Company has budgeted for
regulatory compliance costs in the proposed work program recommended by
the Geological Report. The Company will have to sustain the cost of
reclamation and environmental mediation for all exploration (and
development) work undertaken. The amount of these costs is not known at
this time as the Company does not know the extent of the exploration
program it will undertake, beyond completion of the recommended work
program, or if it will enter into production on the New York Canyon
Property. Because there is presently no information on the size, tenor,
or quality of any resource or reserve, it is impossible to assess the
impact of any capital expenditures on the Company, its earnings or
competitive position in the event a potentially-economic deposit is
discovered.
If the Company enters the production phase, the cost of complying with
permit and regulatory environment laws will be greater because the impact
on the project area is greater. Permits and regulations will control all
aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:
* Water discharge will have to meet drinking water standards (State
Water Quality Control Board);
* Dust generation will have to be minimal or otherwise re-mediated
(State Air Quality Control Board);
* Dumping of material on the surface will have to be re-contoured and
re-vegetated with natural vegetation (Bureau of Land Management);
* An assessment of all material to be left on the surface will need to
be environmentally benign (Bureau of Land Management);
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* Ground water will have to be monitored for any potential
contaminants (State Water Quality Control Board);
* The socio-economic impact of the project will have to be evaluated
and if deemed negative, will have to be re-mediated (County
Agencies); and
* There will have to be an impact report of the work on the local
fauna and flora including a study of potentially endangered species
(Bureau of Land Management).
Exploration Risk
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Exploration for minerals is a speculative venture necessarily involving
substantial risk. There is no certainty that the expenditures to be made
by the Company in the acquisition of the interests described herein will
result in discoveries of commercial quantities of ore. Hazards such as
unusual or unexpected formations and other conditions are involved in
mineral exploration and development. The Company may become subject to
liability for pollution, cave-ins or hazards against which it cannot
insure or against which it may elect not to insure. The payment of such
liabilities may have a material adverse effect on the Company's financial
position.
The Company cannot give any assurance as to what would be considered a
"commercial quantity" of ore for the New York Canyon Property. A
"commercial quantity" of ore is a quantity of ore which is sufficient to
economically justify commercial exploitation. In determining whether a
body of ore economically justifies exploitation, the Company will assess
those factors which impact on the economics of production of the New York
Canyon Property, including prevailing mineral prices, the concentration
of minerals within the ore, cost of mining and production, costs of
money, costs of environmental compliance and general economic conditions.
No Known Bodies of Ore
- ----------------------
There are no known bodies of ore on the Company's optioned property. The
business plan of the Company is to raise funds to carry out further
exploration with the objective of establishing ore of commercial tonnage
and grade. If the Company's exploration programs are successful,
additional funds will be required for the development of economic
reserves and to place them in commercial production. The only source of
future funds presently available to the Company is through the sale of
equity capital. The only alternative for the financing of further
exploration would be the offering by the Company of an interest in its
optioned property to be earned by another party or parties carrying out
further exploration or development thereof, which is not presently
contemplated.
Research and Development Expenditures
- -------------------------------------
During the past two fiscal years, the Company has not completed any
research or development expenditures.
Subsidiaries
- ------------
The Company has no subsidiaries.
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Employees
- ---------
The Company has no paid or full time employees, other than Mr. J. Stephen
Barley, President, Secretary and Treasurer of the Company. The Company
conducts its business through agreements with consultants and arms-length
third parties. The only officer of the Company, J. Stephen Barley,
provides his services on a part-time basis as required for the business
of the Company pursuant to the Management Agreement. Mr. Barley presently
commits approximately 15% of his business time to the business of the
Company. C.H.M. Consulting Inc., a company controlled by Mr. Barley, is
paid a management fee of $750 per month pursuant to the Management
Agreement for these services.
Patents and Trademarks
- ----------------------
The Company does not own, either legally or beneficially, any patent or
trademark.
YEAR 2000 RISK
- --------------
Background
Computer systems, software packages, and microprocessor dependent
equipment may cease to function or generate erroneous data when the Year
2000 arrives. The problem affects those systems or products that are
programmed to accept a two-digit code in date code fields. To correctly
identify the Year 2000, a four-digit date code field will be required to
be what is commonly termed "Year 2000 compliant."
Readiness
The Company has completed an assessment of all internal systems and
operations to determine Year 2000 compliance. The Company does not own
any computer hardware or license any computer software in its operations
as a geological exploration company. As such, the Company does not
anticipate any material adverse operational issues to arise from the Year
2000 problem affecting internal systems and operations.
The Company has investigated the Year 2000 compliance of all computer
hardware and computer software used by the Company's consultants in the
Company's business operations. The Company has relied upon the verbal
representations of each of its consultants that third party software used
by the consultant is Year 2000 compliant. The Company has relied upon
verbal representations by consultants that all computer hardware
purchased is Year 2000 compliant. The Company cannot give any assurance
that all computer hardware and software used by its consultants will be
Year 2000 compliant. Accordingly, there is no assurance that the Company
will not be affected by Year 2000 problems arising from problems with the
Year 2000 problems experienced by its consultants.
Risks
The Company may realize exposure and risk if the systems for which it is
dependent upon to conduct day-to-day operations are not year 2000
compliant. The Company's worst case scenario would be the loss of data
regarding its property and business operations and the inability of its
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consultants to provide consultant services to the Company until such time
as computer hardware and software was upgraded.
Estimated Year 2000 Costs
The Company estimates that its total internal cost for ensuring Year 2000
compliance for all internal systems to date to be less than $5,000. The
Company anticipates incurring internal costs of less than $10,000 in
completing its Year 2000 compliance plan. The Company has not incurred
any external cost in ensuring Year 2000 compliance in view of the fact
that the Company has only recently commenced operations and has relied
upon representations of its consultants as to Year 2000 compliance.
Contingency Planning
The Company's contingency plan consists of a back-up of all computer
databases and documentation.
Item 7. Description of Property
The Company has an option to acquire a 51% interest in the New York
Canyon Property, as described in detail in Item 6 of Part I of this
Registration Statement under "New York Canyon Property Option Agreement".
The Company does not own or lease any property other than its option to
acquire an interest in the New York Canyon Property.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the directors,
executive officers and significant employees of the Company, their
present positions with the Company, and their biographical information.
1. Directors and Officers
Name Age Office Term of Office
- ---- --- ------ --------------
J. Stephen Barley 43 President/Sec./Treas./ One year
Director
Geoffrey N. Goodall 38 Director One year
Mr. J. Stephen Barley is a director and is President of the Company. Mr.
Barley received his Bachelor of Commerce degree from the Mount Allison
University in New Brunswick, Canada in 1979. He received his law degree
from Dalhousie University in Nova Scotia, Canada in 1982. Mr. Barley
practiced as a lawyer with Casey & O'Neill and successor firms from 1984
to 1991. Mr. Barley practiced as a lawyer with J. Stephen Barley Law
Corporation from 1992 to 1997. Mr. Barley specialized in the areas of
corporate and securities law during the time of his private practice as a
lawyer with Casey & O'Neill and J. Stephen Barley Law Corporation. Mr.
Barley's clients included a number of publicly traded companies involved
in the business of mineral exploration. Mr. Barley has been involved as
a corporate finance consultant and as a director and investor in
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several private business ventures since 1997. Mr. Barley is a member
in good standing of the Law Society of British Columbia and the Law
Society of Alberta.
Mr. Geoffrey N. Goodall is a director of the Company. Mr. Goodall
received his Bachelor of Science, Geology, from the University of British
Columbia in 1984. Mr. Goodall is a member of the Association of
Professional Engineers and Geoscientists of British Columbia and is a
fellow of the Geological Association of Canada. Mr. Goodall worked as a
geologist with Fox Geological Services Inc. of Vancouver, British
Columbia, Canada from May, 1984 to May, 1997. Mr. Goodall's
responsibilities as a geologist with Fox Geological Services Inc.
increased throughout this period from conducting geological field surveys
to senior geologist in charge of project management. Mr. Goodall's
experience covers all aspects of mineral exploration from concept design
and implementation of reconnaissance exploration to detailed drilling and
preliminary ore reserve calculations. Mr. Goodall was Vice-President,
Exploration of Leigh Resources Corporation of Vancouver, British
Columbia, Canada from June, 1997 to September, 1998. Leigh Resources
Corporation is a public company, the shares of which are traded on the
Vancouver Stock Exchange. Mr. Goodall was responsible for the design,
implementation, and supervision of mineral exploration projects for Leigh
Resources. Mr. Goodall worked with Homestake Mining Inc. of San
Francisco, California from September to December, 1998. Mr. Goodall's
work with Homestake was as a contract geologist and duties included a
review of exploration programs and operations of Homestake Mining in
Bulgaria.
2. Significant Employees
The Company does not have any significant employees.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the Company's
three highest paid executive officers and directors for period from
commencement of the Company's business on April 1, 1999 to October 31,
1999. As indicated below, the Company does not presently pay any
compensation to any of its officers and directors. The Company may
during the course of the current year decide to compensate its officers
and directors for their services. No other compensation is anticipated
to be paid to any such officers other than the cash compensation set
forth below.
- -------------------------------------------------------------------
Summary Compensation Table
- -------------------------------------------------------------------
Name Position Year Management Fee
- ---- -------- ---- --------------
J. Stephen Barley President 1999 $5,200
- ------------------------------------------------------------------
The services of Mr. Barley are provided pursuant to the Management
Agreement with C.H.M. Consulting Inc. See Item 6 - "Description of
Business - Management Agreement".
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Item 10. Security Ownership of Management and Certain Security Holders
The following table sets forth information as of the date hereof, based
on information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person known by the
Company to own beneficially 5% or more of the Common Stock, (ii) each
director and officer and (iii) all directors and officers as a group:
Name and Address Amount of Percent
Title of Class of Beneficial Owner Beneficial Ownership of Class
- -------------- ------------------- -------------------- --------
Common Stock J. Stephen Barley 1,200,000 59.0%
2060 Gisby Street
West Vancouver, BC
Canada V7V 4N3
Common Stock Geoffrey N. Goodall NIL 0.0%
1315 Arborlynn Drive
North Vancouver, BC
Canada V7J 2V6
Common Stock Directors and Officers 1,200,000 59.0%
As a Group
Item 11. Interest of Management and Others in Certain Transactions
Except as set forth below, none of the directors or officers of the
Company, nor any proposed nominee for election as a director of the
Company, nor any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached to all
outstanding shares of the Company, nor any promoter of the Company, nor
any relative or spouse of any of the foregoing persons has any material
interest, direct or indirect, in any transaction since the date of the
Company's incorporation or in any presently proposed transaction which,
in either case, has or will materially affect the Company.
The Company has entered into the Management Agreement with C.H.M.
Consulting Inc., a company controlled by Mr. J. Stephen Barley, President
of the Company. Under the Management Agreement, the Company has agreed
to pay to C.H.M. Consulting Inc. a management fee of $750 per month for a
one year term in consideration for management and administration services
to be provided by C.H.M. Consulting Inc. to the Company. See Item 6 of
Part I of this Registration Statement under "Management Agreement".
Item 12. Description of Securities
Common Stock
The Company has authorized 100,000,000 common shares par value $0.001 of
Common Stock, of which 2,033,000 are currently outstanding.
14
<PAGE>
Holders of Common Stock have the right to cast one vote for each share
held of record on all matters submitted to a vote of holders of Common
Stock, including the election of directors. There is no right to
cumulate votes for the election of directors. Stockholders holding a
majority of the voting power of the capital stock issued and outstanding
and entitled to vote, represented in person or by proxy, are necessary to
constitute a quorum at any meeting of the Company's stockholders, and the
vote by the holders of a majority of such outstanding shares is required
to effect certain fundamental corporate changes such as liquidation,
merger or amendment of the Company's Certificate of Incorporation.
Holders of Common Stock are entitled to receive dividends pro rata based
on the number of shares held, when, as and if declared by the Board of
Directors, from funds legally available therefor, subject to the rights
of holders of any outstanding preferred stock. In the event of the
liquidation, dissolution or winding up of the affairs of the Company, all
assets and funds of the Company remaining after the payment of all debts
and other liabilities, subject to the rights of the holders of any
outstanding preferred stock, shall be distributed, pro rata, among the
holders of the Common Stock. Holders of Common Stock are not entitled to
pre-emptive or subscription or conversion rights, and there are no
redemption or sinking fund provisions applicable to the Common Stock.
All outstanding shares of Common Stock are fully paid and non-assessable.
Warrants
The Company does not have any warrants to purchase securities of the
Company outstanding.
Options
The Company does not have any options to purchase securities of the
Company outstanding. The Company may in the future establish an
incentive stock option plan for its directors, officers, employees and
consultants.
Transfer Agent
Pacific Stock Transfer Company of Las Vegas, Nevada is the transfer agent
for the Shares.
15
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Stockholder Matters
The Company anticipates applying for a listing on the OTC Bulletin Board
upon effectiveness of this registration statement. Currently, there is
no public market for the Company's stock and there is no assurance that a
public market will materialize.
As of the date of this registration statement, there were forty-seven
(47) registered shareholders in the Company. There are no dividend
restrictions in the Company.
None of the holders of the Company's common shares have any right to
require the Company to register its common shares pursuant to the
Securities Act of 1933.
The issuance of dividends to shareholders is at the discretion of the
board of directors of the Company. The Company has not issued any
dividends since its inception and does not have plans to do so in the
foreseeable future.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the
Corporation.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its accountants
since its inception in June, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,200,000 common shares at a price
of $0.005 per share on April 1, 1999 pursuant to Section 4(2) of the
Securities Act of 1933. All of these shares were sold to J. Stephen
Barley, the President, Secretary/ Treasurer and Director of the Company,
and are "restricted shares" within the meaning of the Securities Act of
1933.
The Company completed an offering of 800,000 common shares at a price of
$0.05 per share on April 1, 1999 to a total of thirteen (13) investors,
each of which investors was known to an officer and director of the
Company. The offering was completed pursuant to Rule 504 of Regulation D
of the Act which provides an exemption for issues of stock up to
$1,000,000, in the aggregate, by companies with a specific business plan
and that are not subject to the reporting requirements of the Securities
and Exchange Act of 1934. The offering was also completed pursuant to
exemptions provided by Section 46(j) of the Securities Act of British
Columbia.
The Company completed an offering of 33,000 common shares at a price of
$0.25 per share on April 5, 1999 to a total of thirty three (33)
investors, each of which investors was known to an officer and director
of the Company. The offering was completed pursuant to Rule 504 of
Regulation D of the Act which provides an exemption for issues of stock
up to $1,000,000, in the aggregate, by companies with a specific business
plan and that are not subject to the reporting requirements of
16
<PAGE>
the Securities and Exchange Act of 1934. The offering was also completed
pursuant to exemptions provided by Section 46(j) of the Securities Act of
British Columbia.
The aggregate of these offerings, if integrated under Rule 502 of
Regulation D of the Act is less than the $1,000,000 limit the exemption
allows.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as provided
under the Nevada Revised Statutes (the "NRS") and the Bylaws of the
Company.
Under the NRS, director immunity from liability to a corporation or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a corporation's articles of incorporation (which
is not the case with the Company's Articles of Incorporation). Excepted
from that immunity are: (i) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in which the
director has a material conflict of interest; (ii) a violation of
criminal law (unless the director had reasonable cause to believe that
his or her conduct was lawful or no reasonable cause to believe that his
or her conduct was unlawful); (iii) a transaction from which the director
derived an improper personal profit; and (iv) willful misconduct.
The By-laws of the Company provide that the Company will indemnify its
directors and officers to the fullest extent not prohibited by the Nevada
General Corporation Law; provided, however, that the Company may modify
the extent of such indemnification by individual contracts with its
directors and officers; and, provided, further, that the Company shall
not be required to indemnify any director or officer in connection with
any proceeding (or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the corporation,
(iii) such indemnification is provided by the Company, in its sole
discretion, pursuant to the powers vested in the corporation under the
Nevada General Corporation Law or (iv) such indemnification is required
to be made pursuant to the By-laws.
The By-laws of the Company provide that the Company will advance to any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer, of the corporation, or is or was
serving at the request of the corporation as a director or executive
officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon receipt of an
undertaking by or on behalf of such person to repay said amounts if it
should be determined ultimately that such person is not entitled to be
indemnified under the By-laws of the Company or otherwise.
The By-laws of the Company provide that no advance shall be made by the
Company to an officer of the Company (except by reason of the fact that
such officer is or was a director of the Company in which event this
paragraph shall not apply) in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts
17
<PAGE>
known to the decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in bad faith
or in a manner that such person did not believe to be in or not opposed
to the best interests of the Company.
18
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are
attached hereto.
1. Audited financial statements for the period ended April 30, 1999,
including:
(a) Balance Sheet;
(b) Statement of Loss and Deficit;
(c) Statement of Cash Flows;
(d) Statement of Stockholders' Equity;
(e) Notes to Financial Statements.
2. Consent of Auditor
3. Interim financial statements for the period ended October 31, 1999,
including:
(a) Balance Sheet;
(b) Statement of Loss and Deficit;
(c) Statement of Cash Flows;
(d) Statement of Stockholders' Equity;
(e) Notes to Financial Statements.
19
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
<PAGE>
------------------------------
Morgan & Company
------------------------------
Chartered Accountants
------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West
Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
------------------------------
AUDITORS' REPORT
To the Directors
Copper Valley Minerals
(Formerly Recon Rubber Corporation)
We have audited the balance sheet of Copper Valley Minerals
(Formerly Recon Rubber Corporation) (an exploration stage company)
as at April 30, 1999 and the statements of loss and deficit
accumulated during the exploration stage, cash flows and
stockholders' equity for the period then ended. 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 audit.
We conducted our audit in accordance with United States and
Canadian generally accepted auditing standards. 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 audit provides a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the Company as at
April 30, 1999 and the results of its operations and the cash
flows for the period then ended in accordance with United States
generally accepted accounting principles.
Vancouver, B.C. \s\ Morgan & Company
July 20, 1999 Chartered Accountants
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
BALANCE SHEET
APRIL 30, 1999
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
ASSETS
Current
Cash $ 48,961
Mineral Property (Note 3) 1,000
----------
$ 49,961
==================================================================
LIABILITIES
Current
Accounts payable $ 1,132
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
2,033,000 Common shares 2,033
Additional paid in capital 52,217
Deficit Accumulated During The Exploration Stage (5,421)
----------
48,829
----------
$ 49,961
==================================================================
Approved by the Directors:
\s\ J. Stephen Barley
- -------------------------------- ----------------------------
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
June 12 June 12
1998 1998
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Expenses
Office administration and sundry $ 752 $ 752
Mineral property exploration
expenditures 3,829 3,829
Professional fees 840 840
-------------------------
Net Loss For The Period 5,421 $ 5,421
===========
Deficit Accumulated During The
Exploration Stage, Beginning Of Period -
-----------
Deficit Accumulated During The
Exploration Stage, End Of Period $ 5,421
===========
Net Loss Per Share $ 0.03
===========
Weighted Average Number of Shares
Outstanding 188,897
==========
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
June 12 June 12
1998 1998
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (5,421) $ (5,421)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating
Activities
Change in accounts payable 1,132 1,132
----------- -----------
(4,289) (4,289)
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
----------- -----------
Cash Flow From Financing Activities
Share capital issued 54,250 54,250
----------- -----------
Increase In Cash 48,961 48,961
Cash, Beginning Of Period - -
----------- -----------
Cash, End Of Period $ 48,961 $ 48,961
==================================================================
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 30, 1999
(Stated in U.S. Dollars)
Common Stock
--------------------------
Additional
Paid-in
Shares Amount Capital Deficit Total
------------------------------------------------
Shares issued for
cash @ $0.005 1,200,000 $ 1,200 $ 4,800 $ - $ 6,000
Shares issued for
cash @ $0.05 800,000 800 39,200 - 40,000
Shares issued for
cash @ $0.25 33,000 33 8,217 - 8,250
Net loss for the
period - - - (5,421) (5,421)
------------------------------------------------
Balance, April 30,
1999 2,033,000 $ 2,033 $ 52,217 $(5,421) $ 48,829
================================================
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on June 12, 1998.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral
property and has not yet determined whether the property
contains ore reserves that are economically recoverable.
The recoverability of amounts shown as mineral property and
related deferred exploration expenditures is dependent upon
the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain
profitable production or proceeds from the disposition
thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on
mineral properties in which it has a continuing interest to
be amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration
expenditures will be written off. To date none of the
Company's properties have reached commercial production.
At least annually, the net deferred cost of each mineral
property is compared to management's estimation of the net
realizable value, and a write-down is recorded if the net
realizable value is less than the cumulative net deferred
costs.
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (SFAS
109). This standard requires the use of an asset and
liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
b) Financial Instruments
The Company's financial instruments consist of cash and
accounts payable.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
c) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
3. MINERAL PROPERTY
The Company has entered into an option agreement to acquire a
51% interest in the 37 mineral claims located in Mineral
County, Nevada.
In order to earn its interest, the Company must make cash
payments and incur exploration expenditures as follows:
Cash payments:
- - $1,000 on execution of the agreement (paid)
- - $50,000 on the first anniversary of the agreement
- - $75,000 on the second anniversary of the agreement
- - $75,000 on the third anniversary of the agreement
- - $100,000 on the fourth anniversary of the agreement
- - $120,000 per year thereafter until the property is placed
into commercial production
<PAGE>
COPPER VALLEY MINERALS LTD.
(FORMERLY RECON RUBBER CORPORATION)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
3. MINERAL PROPERTY (Continued)
The Company has the option to buyout the $120,000 yearly
minimum payment by making a one time payment of $1,000,000 in
cash or shares at not less than $0.50 per share.
Exploration expenditures:
- - $9,000 by April 1, 2000
- - a further $150,000 by April 1, 2001
- - a further $150,000 by April 1, 2002
- - a further $240,000 by April 1, 2003
- - a further $450,000 by April 1, 2004
Consideration paid to date: $ 1,000
======
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the
Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on
operations and financial reporting may range from minor errors
to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue
affecting the entity, including those related to the efforts
of customers, suppliers, or other third parties, will be fully
resolved.
5. SUBSEQUENT EVENT
Subsequent to April 30, 1999, the Company's name was changed to
Copper Valley Minerals Ltd.
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
OCTOBER 31, 1999
(Unaudited)
(Stated in U.S. Dollars)
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
BALANCE SHEET
OCTOBER 31, 1999
(Unaudited)
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
ASSETS
Current
Cash $ 34,647
Mineral Property (Note 3) 1,000
----------
$ 35,647
==================================================================
LIABILITIES
Current
Accounts payable $ 3,776
----------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
2,033,000 Common shares 2,033
Additional paid in capital 52,217
Deficit Accumulated During The Exploration Stage (22,379)
----------
31,871
----------
$ 35,647
==================================================================
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Six Inception
Months June 12
Ended 1998
October 31 To October 31
1999 1999
- ------------------------------------------------------------------
Expenses
Office administration and sundry $ 4,757 $ 5,509
Mineral property exploration
expenditures 945 4,774
Professional fees 11,256 12,096
-------------------------
Net Loss For The Period 16,958 $ 22,379
===========
Deficit Accumulated During The
Exploration Stage, Beginning Of Period 5,421
-----------
Deficit Accumulated During The
Exploration Stage, End Of Period $ 22,379
===========
Net Loss Per Share $ 0.01
===========
Weighted Average Number of Shares
Outstanding 2,033,000
==========
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Six Inception
Months June 12
Ended 1998
October 31 To October 31
1999 1999
- ------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (16,958) $ (22,379)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating
Activities
Change in accounts payable 2,644 3,776
----------- -----------
(14,314) (18,603)
---------------------------
Cash Flow From Investing Activities
Mineral property - (1,000)
----------- -----------
Cash Flow From Financing Activities
Share capital issued - 54,250
----------- -----------
Increase In Cash (14,314) 34,647
Cash, Beginning Of Period 48,961 -
----------- -----------
Cash, End Of Period $ 34,647 $ 34,647
==================================================================
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENT STOCKHOLDERS' EQUITY
(Unaudited)
(Stated in U.S. Dollars)
Common Stock
--------------------------
Additional
Paid-in
Shares Amount Capital Deficit Total
------------------------------------------------
Shares issued for
cash @ $0.005 1,200,000 $ 1,200 $ 4,800 $ - $ 6,000
Shares issued for
cash @ $0.05 800,000 800 39,200 - 40,000
Shares issued for
cash @ $0.25 33,000 33 8,217 - 8,250
Net loss for the
period - - - (5,421) (5,421)
------------------------------------------------
Balance, April 30,
1999 2,033,000 $ 2,033 $ 52,217 $ (5,421) $ 48,829
================================================
Net loss for
the period - - - (16,958) (16,958)
------------------------------------------------
Balance,
October 31, 1999 2,033,000 $ 2,033 $ 52,217 $(22,379) $ 31,871
================================================
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
(Unaudited)
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on June 12, 1998.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral
property and has not yet determined whether the property
contains ore reserves that are economically recoverable.
The recoverability of amounts shown as mineral property and
related deferred exploration expenditures is dependent upon
the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain
profitable production or proceeds from the disposition
thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on
mineral properties in which it has a continuing interest to
be amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration
expenditures will be written off. To date none of the
Company's properties have reached commercial production.
At least annually, the net deferred cost of each mineral
property is compared to management's estimation of the net
realizable value, and a write-down is recorded if the net
realizable value is less than the cumulative net deferred
costs.
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
(Unaudited)
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (SFAS
109). This standard requires the use of an asset and
liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
c) Financial Instruments
The Company's financial instruments consist of cash and
accounts payable.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
d) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
3. MINERAL PROPERTY
The Company has entered into an option agreement to acquire a
51% interest in the 37 mineral claims located in Mineral
County, Nevada.
In order to earn its interest, the Company must make cash
payments and incur exploration expenditures as follows:
Cash payments:
- - $1,000 on execution of the agreement (paid)
- - $50,000 on the first anniversary of the agreement
- - $75,000 on the second anniversary of the agreement
- - $75,000 on the third anniversary of the agreement
- - $100,000 on the fourth anniversary of the agreement
- - $120,000 per year thereafter until the property is placed
into commercial production
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
(Unaudited)
(Stated in U.S. Dollars)
3. MINERAL PROPERTY (Continued)
The Company has the option to buyout the $120,000 yearly
minimum payment by making a one time payment of $1,000,000 in
cash or shares at not less than $0.50 per share.
Exploration expenditures:
- - $9,000 by April 1, 2000
- - a further $150,000 by April 1, 2001
- - a further $150,000 by April 1, 2002
- - a further $240,000 by April 1, 2003
- - a further $450,000 by April 1, 2004
Consideration paid to date: $ 1,000
=======
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the
Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on
operations and financial reporting may range from minor errors
to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue
affecting the entity, including those related to the efforts
of customers, suppliers, or other third parties, will be fully
resolved.
<PAGE>
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: Certificate of Amendment of the Articles of Incorporation
Exhibit 3: Bylaws of the Company
Exhibit 4: New York Canyon Property Option Agreement
Exhibit 5: Management Contract between the Company and C.H.M.
Consulting Inc.
Exhibit 6: Geological Report on the New York Canyon Property
Exhibit 7: Consent of Geological Consultant to use of Report
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Form 10-SB registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
COPPER VALLEY MINERALS LTD.
Date: November 18, 1999
\s\ J. Stephen Barley
By: __________________________________
J. STEPHEN BARLEY, Director, President
Chief Executive Officer
