SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ____________
Commission File No. 0-27277
COPPER VALLEY MINERALS LTD.
----------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 98-0207554
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Suite 1880, 1055 West Georgia Street
Vancouver, British Columbia, Canada V6E 3P36
--------------------------------------- ----------
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 604-687-7962
------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12 (g) of the Act:
100,000,000 shares of common stock
Check whether the issuer (l) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [ ]
Revenues for year ended April 30, 2000 were $0.
The aggregate market value of the voting stock held by
non-affiliates computed by reference to the last reported sale price
of such stock as of : No market trading
The number of shares of the issuer's Common Stock outstanding
as of June 30, 2000 is 2,033,000.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE>
PART I
This report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ
materially from those projected in the forward-looking statements as
a result of the risk-related factors set forth herein.
ITEM 1. 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"). To date, the consideration paid by the
Company to the Optionors for the grant of the Option is $8,000 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 in the
future as follows:
1. paying to the Optionors an aggregate of $300,000 in accordance
with the following schedule:
1. $50,000 on or before March 31, 2001;
2. $75,000 on or before March 31, 2002;
3. $75,000 on or before March 31, 2003;
4. $100,000 on or before March 31, 2004; and
2
<PAGE>
2. incurring an aggregate of $990,000 of property exploration
expenditures on the New York Canyon Property within the following
periods:
1. $150,000 US on or before April 1, 2001;
2. $150,000 US on or before April 1, 2002;
3. $240,000 US on or before April 1, 2003;
4. $450,000 US on or before April 1, 2004.
The Company negotiated an amendment to the Option Agreement in
March 2000 which gave the Company a one year extension on the
dates required to meet the cash payments. This amendment is
attached as an exhibit hereto.
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 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
3
<PAGE>
Highway 95 from Hawthorne to Luning. From Luning, a seven (7) mile
gravel country road provides access to the New York Canyon Property.
Exploration History of the New York Canyon Property
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.
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 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.
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
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.
Conclusions and Recommendations of the Geological Report
The Geological Report identifies copper as the principal economic
mineral in the area of the New York Canyon Property and concludes
that the New York Canyon Property has significant potential
for copper resources. 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 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, which would consist
of geological mapping and geochemical sampling. The exploration
program would include the collection of an additional 150 rock
samples from the property. The samples would be analyzed in order
to further determine the potential for gold and silver associated
with the copper mineralization on the property. The estimated
budget of the limited exploration program is $5,170.
4
<PAGE>
Management Agreement
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")
and extended thereafter on a month to month basis. This agreement
is currently continuing on a month to month basis. The services
include the management services of Mr. Barley, reception, secretarial
services, accounting services, investor relations and general
office services.
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:
5
<PAGE>
* 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);
* 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
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
6
<PAGE>
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 incurred any
research or development expenditures.
Subsidiaries
The Company has no subsidiaries.
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.
ITEM 2. 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 1 of this
Form 10-KSB Annual Report 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 3. Legal Proceedings
The Company is not a party to any material legal proceedings
and to the knowledge of the Company, no such proceedings are
threatened or contemplated.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to our security holders for a vote during
the fiscal year ending April 30, 2000.
7
<PAGE>
PART II
ITEM 5. Market for Registrant's Common Equity and
Related Stockholders Matters
Market Information
The Company's common stock has been approved for trading
on the NASD over the counter bulletin board under the
symbol "CVMN". There have been no trades of the Company's common
stock on the NASD over the counter bulletin board to date.
As at June 30, 2000 there were forty-seven (47) registered
shareholders of the Company's common stock.
The Company has not previously declared or paid any dividends
on its common stock and does not anticipate declaring any
dividends in the foreseeable future.
Recent Sales of Unregistered Securities
The following is a list of equity securities sold by the
Company within the past three years that were not registered
under the Securities Act.
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. The Company received
total proceeds of $6,000 from this offering. No commissions or
fees were paid in connection with the offering. All of these
shares were sold to J. Stephen Barley, the President,
Secretary/Treasurer and a Director of the Company, and were
issued as "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 Company
received total proceeds of $40,000 from this offering. No commissions
or fees were paid in connection with the offering. 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 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 Company received total
proceeds of $8,250 from this offering. No commissions or fees
were paid in connection with the offering. 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.
8
<PAGE>
ITEM 6. Management's Discussion and Analysis or Plan of Operation
Plan of Operation
The Company has determined to proceed with a limited exploration
program on the New York Canyon Property, as recommended by a
geological report obtained by the Company. The Company has
raised sufficient funds from recent sales of its securities,
as set forth in Item 1 of Form 10-KSB Annual Report, to proceed
with this limited exploration program. The Company will assess
whether to 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 $8,963 as of
April 30, 2000. The Company believes that these cash reserves
are sufficient to enable the Company to complete the recommended
limited exploration program. The Company believes that its cash
reserves are also sufficient to meet its obligations for the next
2 month period to C.H.M. Consulting Inc. under the Company's
management agreement with C.H.M. Consulting Inc. 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 the recommended limited
exploration program.
The Company currently has no employees, other than its sole
officer, Mr. J. Stephen Barley, a director and President,
Secretary and Treasurer of the Company, and does not expect
to hire any employees in the foreseeable future. The Company
conducts its business through agreements with consultants and
arms-length third parties.
Results Of Operations
The Company did not earn any revenues during 1999. The
Company does not anticipate earning revenues until such time
as the Company enters into commercial production of the
Company's mineral properties. The Company is presently in
the exploration stage of its development and there is no
assurance that the Company will discover commercially exploitable
levels of mineral resources on its properties, or if such
resources are discovered, that the Company will enter into
commercial production of its mineral properties.
The Company incurred operating expenses in the amount of
$34,468 for the year ended April 30, 2000. These operating
expenses included an amount of $9,000 paid to C.H.M.
Consulting Inc., a company controlled by Mr. J. Stephen Barley,
a director and President of the Company. These operating
expenses also included $21,077 in professional fees which were
primarily attributable the preparation and filing of the Company's
Form 10-SB registration statement with the Securities and Exchange
Commission.
The Company incurred a loss of $34,468 for the year ending
April 30, 2000, compared to a loss of $5,421 for the period
from incorporation to April 30, 1999. The increased loss
was reflective of a full 12-month year reporting period and
increased profession fees as associated with increased operating
expenses incurred by the Company during the year. Operating
expenses during the year consisted primarily of fees payable
to C.H.M. Consulting Inc. and professional fees, including
professional fees incurred with the filing of the Company's
Form 10-SB registration statement.
9
<PAGE>
Liquidity And Capital Resources
The Company had cash of $8,963 as of April 30, 2000 and working
capital of $6,361 as of April 30, 2000.
The Company will require additional funding in the event that
the Company determines to proceed with further exploration
upon reviewing the results of the initial phase 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
initial phase 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.
The Company has not purchased or sold any plant or significant
equipment and does not expect to do so in the foreseeable future.
Forward-Looking Statements
Many statements made in this report are forward-looking statements
that are not based on historical facts. Because these
forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to
differ materially from those expressed or implied by these
forward-looking statements. The forward-looking statements made
in this report relate only to events as of the date on which the
statements are made.
Impact of the Year 2000 Issue
The "Year 2000 problem" arose because many existing computer
programs use only the last two digits to refer to a year.
Therefore, these computer programs were not expected to
properly recognize a year that begins with "20" instead of
the familiar "19". Many experts believed that if not corrected
this problem would lead to widespread computer failures. Since
the turn of the century, however, the Company has not
experienced any adverse effects of this Year 2000 problem.
10
<PAGE>
ITEM 7. Financial Statements
The Company's audited financial statements for the period
ending April 30, 1999 and 2000, including the following,
are attached hereto.
(a) Balance Sheets;
(b) Statements of Loss and Deficit;
(c) Statement of Stockholders' Equity;
(d) Statements of Cash Flows;
(e) Notes to Financial Statements.
ITEM 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
We have had no changes in or disagreements with our
accountants on accounting or financial disclosures.
11
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
APRIL 30, 2000 AND 1999
(Stated in U.S. Dollars)
<PAGE>
AUDITORS' REPORT
To the Shareholders
Copper Valley Minerals Ltd.
We have audited the balance sheets of Copper Valley Minerals Ltd.
as at April 30, 2000 and 1999, and the statements of loss and
deficit, stockholders' equity, and cash flows for the year ended
April 30, 2000, and for the period ended April 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 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 audits provide 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, 2000 and 1999, and the results of its operations
and cash flows for the year ended April 30, 2000, and for the
period ended April 30, 1999 in accordance with United States
generally accepted accounting principles.
Without qualifying our opinion, we draw attention to Note 1(b)
to the financial statements. The Company incurred a net loss
of $34,468 during the year ended April 30, 2000 and as at that
date, the Company's current assets exceeded its current
liabilities by $6,361. These factors, along with other matters
as set forth in Note 1(b) raise substantial doubt that the
Company will be able to continue as a going concern.
Vancouver, B.C. "Morgan & Company"
June 16, 2000 Chartered Accountants
Comments by Auditors on United States - Canada Difference
In Canada, reporting standards for auditors do not permit
the addition of an explanatory paragraph when the financial
statements account for, disclose and present in accordance
with generally accepted accounting principles conditions
and events that cast substantial doubt on the Company's
ability to continue as a going concern. Although our audit
was conducted in accordance with both United States and
Canadian generally accepted auditing standards, our report
to the shareholders dated June 16, 2000 is expressed in
accordance with United States reporting standards which require
a reference to such conditions and events in the auditors' report.
Vancouver, B.C. "Morgan & Company"
June 16, 2000 Chartered Accountants
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
BALANCE SHEETS
(Stated in U.S. Dollars)
APRIL 30
2000 1999
-----------------------------------------------------------------
ASSETS
Current
Cash $ 8,963 $ 48,961
Mineral Property (Note 3) 8,000 1,000
----------------------
$ 16,963 $ 49,961
-----------------------------------------------------------------
LIABILITIES
Current
Accounts payable $ 2,602 $ 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 2,033
Additional paid in capital 52,217 52,217
Deficit Accumulated During
The Exploration Stage (39,889) (5,421)
-----------------------
14,361 48,829
-----------------------
$16,963 $49,961
------------------------------------------------------------------
Approved by the Directors:
------------------------------ -----------------------------
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENTS OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
------------------------------------------------------------------------
PERIOD FROM
DATE OF
YEAR ORGANIZATION INCEPTION
ENDED JUNE 12, 1998 JUNE 12, 1998
APRIL 30, TO TO
2000 APRIL 30, 1999 APRIL 30, 2000
-------------------------------------------------------------------------
Expenses
Office administration
and sundry $ 11,320 $ 752 $ 12,072
Mineral property
exploration expenditures 946 3,829 4,775
Professional fees 21,077 840 21,917
Stock transfer fees 1,125 - 1,125
-------------------------------------------
Net Loss For The Period 34,468 5,421 $ 39,889
-------------
Deficit Accumulated During
The Exploration Stage, 5,421 -
Beginning Of Period ------------------------------
Deficit Accumulated During
The Exploration Stage, $ 39,889 $ 5,421
End Of Period
------------------------------------------------------------
Net Loss Per Share $ 0.02 $ 0.03
------------------------------------------------------------
Weighted Average Number
of Shares Outstanding 2,033,000 188,897
------------------------------------------------------------
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
----------------------------------------------------------------------------
PERIOD FROM
DATE OF
YEAR ORGANIZAITON INCEPTION
ENDED JUNE 12, 1998 JUNE 12, 1998
APRIL 30, TO TO
2000 APRIL 30, 1999 APRIL 30, 2000
-----------------------------------------------------------------------------
Cash Flow From Operating
Activity
Net loss for the period $ (34,468) $ (5,421) $ (39,889)
Adjustments To Reconcile
Net Loss To Net Cash Used
By Operating Activity
Change in accounts payable 1,470 1,132 2,602
-----------------------------------------------
(32,998) (4,289) (37,287)
-----------------------------------------------
Cash Flow From Investing
Activity
Mineral property (7,000) (1,000) (8,000)
-----------------------------------------------
Cash Flow From Financing
Activity
Share capital issued - 54,250 54,250
-----------------------------------------------
Increase (Decrease) In Cash (39,998) 48,961 8,963
Cash, Beginning Of Period 48,961 - -
-----------------------------------------------
Cash, End Of Period $ 8,963 $ 48,961 $ 8,963
-----------------------------------------------------------------------------
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 30, 2000 AND 1999
(Stated in U.S. Dollars)
Common Stock
------------------------------
Additional
Paid-In
Shares Amount Capital Deficit Total
---------------------------------------------------
Shares issued for cash
at $0.005 1,200,000 $ 1,200 $ 4,800 $ - $ 6,000
Shares issued for cash
at $0.05 800,000 800 39,200 - 40,000
Shares issued for cash
at $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 - - - (34,468) (34,468)
----------------------------------------------------
Balance, April 30, 2000 2,033,000 $ 2,033 $ 52,217 $ (39,889)$ 14,361
----------------------------------------------------
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 AND 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 Costs
The Company capitalizes the acquisition costs of 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 acquisition
costs will be written off. To date the Company has not established
the commercial feasibility of its mineral property, therefore all
exploration expenditures are being expensed.
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 AND 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, and disclosure
of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and
expenses for the reporting period. Actual results could differ
from these estimates.
c) Foreign Currency Translation
The Company's functional currency is the U.S. dollar.
Transactions in foreign currency are translated into U.S.
dollars as follows:
i) monetary items at the rate prevailing at the balance
sheet date;
ii) non-monetary items at the historical exchange rate;
iii) revenue and expense at the average rate in effect
during the applicable accounting period.
Gains or losses arising in translation are included in
the results of operations.
d) 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.
e) 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.
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 AND 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
f) 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 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 March 31, 1999 (paid)
- $7,000 on the first anniversary of the agreement (paid)
- $50,000 on the second anniversary of the agreement
- $75,000 on the third anniversary of the agreement
- $75,000 on the fourth anniversary of the agreement
- $100,000 on the fifth anniversary of the agreement
- $120,000 per year thereafter until the property is placed
into commercial production
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:
- 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 $ 8,000
--------
<PAGE>
COPPER VALLEY MINERALS LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 AND 1999
(Stated in U.S. Dollars)
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. Although the change in date has
occurred, it is not possible to conclude that all aspects of the
Year 2000 Issue that may affect the entity, including those related
to customers, suppliers, or other third parties, have been fully
resolved.
<PAGE>
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.
Directors and Officers
The following information sets forth the names of the officers
and directors of the Company, their present positions with the
Company, and their biographical information.
Name Age Office(s) Held
------------ ------- -----------------------
J. Stephen Barley 44 Director and President,
Secretary and Treasurer
Geoffrey N. Goodal 38 Director
Mr. J. Stephen Barley is a director and is President, Secretary
and Treasurer 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 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.
12
<PAGE>
Significant Employees
The Company does not have any significant employees.
Terms of Office
Directors of the Company are appointed for a one year term to hold
office until the next annual general meeting of the holders of the
Company's Common Stock or until removed from office in accordance
with the Company's by-laws. Officers of the Company are appointed
by the Company's board of directors and hold office until removed
by the Company's board of directors.
Section 16(a) Beneficial Ownership Reporting Compliance
The following persons have failed to file, on a timely basis, the
identified reports required by section 16(a) of the Exchange Act
during the most recent fiscal year.
------------------------------------------------------------------
Number Transactions Known Failures
of Late Not Timely To File a
Name and Principal Position Reports Reported Required Form
------------------------------------------------------------------
J. Stephen Barley, President 2 0 None
Secretary and Treasurer
Geoffrey N. Goodall, Director 2 0 None
ITEM 10. Executive Compensation
The following table sets forth certain information as to the
Company's highest paid officers and directors for its fiscal
year ended April 30, 2000. No other compensation was paid
to any such officer or directors other than the cash compensation
set forth below. Compensation attributed to J. Stephen Barley was
paid to C.H.M. Consulting Inc.. See Item 1 of this Annual Report
entitled "Description of Business - Employees".
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Other All
Annual Other
Com Com
Pen Restricted pen
Sa Stock Options/* LTIP sa
Name Title Year Salary Bonus tion Awarded SARs(#) payouts($) tion
---- ----- ---- ------ ----- ---- ------- ------- ---------- ----
J. Stephen President 2000 $9,000 $0 $0 0 0 0 0
Barley Director
Geoffrey Director 2000 $0 $0 $0 0 0 0 0
Goodall
13
<PAGE>
ITEM 11. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth information as of June 30, 2000,
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:
Amount of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner 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 NIL%
1315 Arborlynn Drive
North Vancouver, BC
Canada V7J 2V6
Common Stock Directors and Officers 1,200,000 59.0%
As a Group
The percentage of shares owned by each of the above persons is
based on a total of 2,033,000 shares of the Company's common
stock issued and outstanding as of June 30, 2000.
ITEM 12. Certain Relationships and Related 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 1 of Part I of this
Form 10-KSB Annual Report.
14
<PAGE>
ITEM 13. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
Exhibits
Exhibit 3.1: Articles of Incorporation *
Exhibit 3.2: Certificate of Amendment of the Articles of
Incorporation*
Exhibit 3.2: By-laws*
Exhibit 10.1: New York Canyon Property Option Agreement *
Exhibit 10.2: Management Contract between the Company and
C.H.M. Consulting Inc.*
Exhibit 10.3: Geological Report on the New York Canyon Property*
Exhibit 10.4: Consent of Geological Consultant to use of Report *
Exhibit 10.5: Amendment to Option Agreement
Exhibit 27.1: Financial Data Schedule
----------------
* Incorporated by reference from our registration statement
on Form 10-SB12G/A filed with the commission on November 26,1999
- File No. 0-27277.
Financial Statements
See Part II, Item 7.
Reports on Form 8-K
None.
15
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
COPPER VALLEY MINERALS LTD.
By: /s/ J. Stephen Barley
___________________________________
J. Stephen Barley, Director
President, Secretary and Treasurer
Date:7-24-00
In accordance with the Securities Exchange Act, this report
has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
By: /s/ J. Stephen Barley
___________________________________
J. Stephen Barley, Director
President, Secretary and Treasurer
Date:7-24-00
By: /s/ Geoffrey N. Goodall
___________________________________
Geoffrey N. Goodall, Director
Date:7-24-00
