SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ADVENTURE MINERALS INC.
-----------------------
(Exact name of Company as specified in its charter)
NEVADA 98-0208988
- ------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 414, 1859 Spyglass Place
Vancouver, British Columbia, Canada V6Z 4K6
- ----------------------------------- -------
(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
(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 ................................ 15
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
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PART I
The issuer has elected to follow Form 10-SB, Disclosure
Alternative 2.
Item 6. Description of Business
Organization
- ------------
Adventure Minerals Inc. (the "Company") was organized as a Nevada
corporation on February 16, 1999. The name of the Company was changed
from "Magic Bag Corporation" to "Adventure Minerals Inc." by the filing
a Certificate of Amendment of the Articles of Incorporation with the
Nevada Secretary of State effective July 28, 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 property described below under the
heading "Kukagami Lake Property Option Agreement". The Company intends
to carry out exploration work on the Kukagami Lake Property in order to
ascertain whether the Kukagami Lake Property possesses commercially
exploitable quantities of platinum and palladium. There can be no
assurance that a commercially exploitable mineral deposit, or reserve,
exists in the Kukagami Lake Property until appropriate exploratory work
is done and an economic evaluation based on such work concludes
economic feasibility.
Kukagami Lake Property Option Agreement
- ---------------------------------------
The Company has acquired an option (the "Option") to acquire a 70%
interest in a certain mineral claim situated in the Sudbury Mining
District in the Province of Ontario, Canada (the "Kukagami Lake
Property"). The Company acquired the Option pursuant to an agreement
dated April 1, 1999 between the Company and Excellerated Resources Inc.
("Excellerated"). The consideration paid by the Company to Excellerated
for the grant of the Option was $1,500 CDN.
The Option is exercisable by the Company incurring the following
minimum cumulative exploration expenditures on the Kukagami Lake
Property:
1. $13,500 CDN of exploration expenditures by April 30, 1999;
2. $136,500 CDN of exploration expenditures by April 1, 2000; and
3. $150,000 CDN of exploration expenditures by April 1, 2001.
The Company has advanced funds to Excellerated to be utilized as
exploration expenditures in the required amount of $13,500 CDN by April
30, 1999 in order to maintain the Option.
In the event that the Company incurs, in any of the above periods, less
than the required exploration expenditures, the Company may, at its
option, pay to Excellerated 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
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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 Kukagami Lake Property.
Property exploration expenditures are defined in the Kukagami Lake
Option Agreement to include all costs associated with the conduct of
exploration on the Kukagami Lake Property. These costs include all
cash, expenses, obligations and liabilities of whatever kind or nature
spent or incurred directly or indirectly associated therewith in
connection with the exploration and development of the Kukagami Lake
Property.
A copy of the Kukagami Lake Option Agreement is attached to this
Registration Statement as an Exhibit. The information provided in this
Registration Statement with respect to the Kukagami Lake Option
Agreement is qualified in its entirety by reference to the complete
text of that agreement.
Kukagami Lake Property
- ----------------------
The Kukagami Lake Property is comprised of one (1) mineral claim
located in the Sudbury Mining Division in the Township of Kelly in the
Province of Ontario, Canada (the "Mineral Claim"). The Mineral Claim
is owned by Excellerated subject to a 2% net smelter royalty in favor
of Mr. J. D. Jevning. The Mineral claim is un-patented and un-surveyed
and consists of 16 units.
The Mineral Claim is one of six mineral claims owned by Excellerated in
the vicinity of the Mineral Claim (these claims are referred to as the
"Excellerated Properties"). The claims comprising the Excellerated
Properties, including the Mineral Claim, were recorded on February 26,
1999.
Geological Report
- -----------------
The Company has obtained a geological report from Excellerated on the
Excellerated Properties prepared by Mr. James G. Burns, P. Eng, of 190
Graye Crescent, Timmins, Ontario (the "Geological Report"). The
Geological Report summarizes the exploration history of the
Excellerated Properties, the regional geology of the Excellerated
Properties and provides conclusions and recommendations for a work
program on the Excellerated Properties. 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.
Location of the Kukagami Lake Property
- --------------------------------------
The Kukagami Lake Property is located approximately 50 kilometers east
of Sudbury in the Township of Kelly, Province of Ontario, Canada.
Access to the Excellerated Properties is by secondary highway and then
via logging roads. Access is limited to snow-free months, unless
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logging operations are in progress in the area. There is no
infrastructure on the Excellerated Properties, other than logging
roads in the vicinity.
History of the Kukagami Lake Property
- -------------------------------------
Prospecting has been conducted in the vicinity of the Excellerated
Properties since the 1890's. The recent exploration of properties in
the vicinity of the Excellerated Properties is summarized in detail in
the Geological Report.
Geology of the Excellerated Properties
- --------------------------------------
The Excellerated Properties are underlain by a geological feature known
as the "gowganda" formation, which is a sedimentary sequence of rock.
The sedimentary rock is intruded throughout the Excellerated Properties
by a geological feature known as the "Nipissing Gabbro". The geology
of the Excellerated Properties is discussed in detail in the Geological
Report. The Geological Report confirms a recognized close spatial
relationship between the Nipissing Gabbro formation and mineralization.
Minerals associated with the Nipissing Gabbro formation include
copper-nickel-platinum group elements in the area of the Kukagami Lake
Property. Platinum group elements include platinum and palladium.
Mineralization on the Excellerated Properties
- ----------------------------------------------
The Geological Report confirms that there are no known minerals
deposits nor occurrences on the Excellerated Properties, but
occurrences of copper-nickel-platinum group elements do occur in the
general area of the Excellerated Properties. The Geological Report
concludes that copper and gold mineralization is associated with coarse
veins within carbonite-albite alteration zones hosted in either
sedimentary rock units or Nipissing Gabbro. The Geological Report also
concluded that copper-nickel-platinum group elements sulphide
mineralization occurs as disseminations within the Nipissing Gabbro or
as massive pods at the base of the intrusion. The Geological Report
summarized occurrences of copper-nickel-platinum group element
occurrences within the Kelly Township area in the vicinity of the
Excellerated Properties.
Recommendations
- ---------------
The Geological Report identified the exploration objective for the
Excellerated Properties as being copper-nickel-platinum group element
deposits hosted by the Kelly Township Nipissing Gabbro. A prudent work
program is recommended by the Geological Report on the Excellerated
Properties. The geological program recommended by the Geological
Report consists of a staged, multi-discipline exploration program
comprising geological mapping, outcrop sampling and whole rock
analysis, petrographic studies, magnetometer and induced polarization
surveys, humus and soil geo-chemical surveys, and prospecting.
The recommended exploration program is summarized in detail in the
Geological Report. The Geological Report recommended completing the
geological exploration program in two phases. Phase One would consist
of line cutting, geological mapping, whole rock analysis, petrographic
studies, prospecting and geophysical and geo-chemical surveys. Phase
Two would include
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target definition, fill-in, geo-chemical and geophysical surveys,
plus approximately 2,000 meters of diamond drilling to test
anomalies identified.
The Geological Report identified the budget for Phase One and
Phase Two of the Exploration Program on the Excellerated
Properties as follows:
PROPOSED EXPLORATION BUDGET (CANADIAN FUNDS)
- -------------------------------------------------------------------
Phase I CDN Funds
- ------- ---------
Geological mapping, sampling: estimate 30 days @
$350/d 10,500
Petrographic studies : allow 5,000
Whole rock analysis : estimate 50 samples @ $50/sample 2,500
Humus sampling (grid) : estimate 20 days @ $200/d 4,000
Humus analyses : estimate 250 samples @ $30/sample 3,500
Soil sampling & prospecting (non grid) : estimate 10
days @ $550/d 5,500
Soil samples : estimate 200 samples @ $30/sample 6,000
Magnetometer survey : 100 km @ $75/km 7,500
IP survey : estimate 30 days @ 1,500/d plus report 50,000
Report preparation : allow 10 days @ $350/d 3,500
Travel, accommodation, etc.: allow 10,000
------
Sub Total $ 139,000
Contingency : 7.9% 11,000
----------
Total $ 150,000
Phase II
Fill-in surveys : allow $ 25,000
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Diamond drilling : 2000 m @ $50/m 100,000
Assays/analysis : allow 10,000
Supervision, core logging, report writing : estimate
25 days @ $350/d 8,750
Core splitter : estimate 10 days @ $200/d 2,000
Travel & accommodation, etc. : allow 3,000
-----
Sub Total $ 148,750
Contingency : 7.6% 11,250
----------
Total $ 160,000
Grand Total 310,000.CDN
===========
- -------------------------------------------------------------------
Conclusions of the Geological Report
- ------------------------------------
The Geological Report concluded that the Nipissing Gabbro intrusion
underlying the Excellerated Properties is considered highly prospective
for copper-nickel-platinum group element mineralization. Accordingly,
the Excellerated Properties warrant a more detailed examination of its
mineral potential. The Geological Report recommends the two-phase
multi-discipline exploration program described above to investigate the
economic potential of these Properties.
Company's Plan of Operation
- ---------------------------
The Company and Excellerated have agreed that the Company is
responsible for 10% of the Phase One program being $15,000 CDN.
Excellerated has also agreed to accept the $15,000 CDN property payment
as being a payment for the Company's share of the Phase One program.
The Company has therefore funded its share of the Phase One of the
exploration program on the Excellerated Properties as recommended by
the Geological Report. The Company has raised sufficient funds from
prior offerings of its securities, as set forth in Item 4 of Part II of
this Registration Statement, to fund its share of Phase One of the
exploration program. The Company will assess whether to proceed with
further exploration programs upon completion of Phase One of the
exploration program and an evaluation of the results of this
exploration program.
The Company had cash on hand in the amount of $40,500 US as of August
15, 1999. The Company has funded its share of 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, including the legal and accounting expense of complying with
its obligations as a
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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 its share of Phase Two of the
exploration program. The anticipated cost of the Company's share of
Phase Two of the exploration program is approximately $16,000 CDN which
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 Phase Two of the exploration
program. The Company believes that debt financing will not be an
alternative for funding Phase Two of the exploration program. The
Company does not have any arrangements in place for future equity
financing.
If the Company does not secure additional financing, the Company will
not be able to complete its share of Phase Two of the exploration
program or meet its obligation to Excellerated under the Option to
incur $300,000 of exploration expenditures, in aggregate, on the
Kukagami Lake Property by April 1, 2001. The Company will be required
to abandon the Option in the event that the Company is unable to
achieve sufficient financing as required to incur $300,000 of
exploration expenditures on the Kukagami Lake Property by April 1,
2001. The Company will consider brining in a joint venture partner
for the Kukagami Lake 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 Kukagami
Lake 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
- --------------------
The Company has entered into a management agreement dated April 1, 1999
with WFC Management Corporation, a company controlled by Mr. Grayson
Hand, whereby WFC Management Corporation 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 and expiring
March 31, 1999 (the "Management Agreement"). The services include the
management services of Mr. Hand, 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.
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
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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 Province of Ontario. In addition,
production of minerals in the Province of Ontario 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 Excellerated Properties, the
Company will be subject to regulation by the Ministry of Natural
Resources, a ministry of the Province of Ontario. 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
Excellerated Properties. 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;
* Dust generation will have to be minimal or otherwise re-mediated;
* Dumping of material on the surface will have to be re-contoured
and re-vegetated with natural vegetation;
* An assessment of all material to be left on the surface will need
to be environmentally benign;
* Ground water will have to be monitored for any potential;
* The socio-economic impact of the project will have to be evaluated
and if deemed negative, will have to be re-mediated; and
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* There will have to be an impact report of the work on the local
fauna and flora including a study of potentially endangered
species.
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 Excellerated Properties. 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 Excellerated Properties, 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.
Employees
- ---------
As of August 15, 1999, the Company had no employees, other than its
officers.
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The Company's one officer is Mr. Grayson Hand who is President,
Secretary and Treasurer of the Company. Mr. Hand provides his services
on a part-time basis as required for the business of the Company. Mr.
Hand presently commits approximately 15% of his business time to the
business of the Company. The Company presently pays to WFC Management
Corporation, a company controlled by Mr. Hand, a management fee of $750
per month pursuant to the Management Agreement.
The Company does not pay to its directors any compensation for each
director serving as a director on the Company's board of directors.
The Company conducts its business through agreements with consultants
and arms-length third parties.
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.
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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 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 70% interest in the Mineral
Claim, as described in detail in Item 6 of Part I of this Registration
Statement under "Excellerated Properties Option Agreement". The
Company does not own or lease any property other than its option to
acquire an interest in the Kukagami Lake 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
- ---- --- ------ --------------
Grayson W. Hand 62 President/Secretary/ One year
Treasurer/Director
Gordon A. Keevil 47 Director One year
Mr. Grayson Hand is a director and is President of the Company. Mr.
Hand is a Vancouver businessman who has over 25 years of senior
management and executive level business experience. He has acted as a
director of Global Technologies Inc., Medical Polymers Technologies
Inc., Tanisys Technology Inc. and Leigh Resources Ltd., each of which
is a publicly
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traded company. Mr. Hand was president of Leigh Resources from
July 7, 1995 to January 21, 1997. Mr. Hand was appointed a
director of Leigh Resources in July, 1995 and remains a director
of Leigh Resources. Mr. Hand's business experience includes
senior management positions and ownership of companies in the
communication field as well as public companies.
Mr. Gordon A. Keevil is a director of the Company. Mr. Keevil
graduated with a degree in geology from Queen's University in 1975 and
has since early 1976 worked in natural resource exploration and
development. He has concentrated on exploration working predominately
with listed junior resource companies. He has served as a director or
officer of a number of Canadian
Companies. Between 1976 and 1988, Mr. Keevil served as a director and
officer of Quinterra Resources Inc., Seaforth Mines Ltd., Highland Crow
Resources Inc., Emerald Lake Resources Inc., all listed on the
Vancouver Stock Exchange, and Noramco Mining Corp., listed on the
Toronto Stock Exchange. From 1992 to 1993, Mr. Keevil was a director
and president of Dorado Resources, a private oil and gas company in
Calgary. From 1995 to 1996, he was a consultant to Spokane Resources
Ltd. and Ivory Oils and Minerals Inc. of Vancouver. Since 1997, Mr.
Keevil has been a director and officer of Leigh Resource Corporation of
Vancouver, Canada. Since 1997, he has also been a director of Stealth
Ventures Ltd. of Vancouver, Canada. Mr. Keevil also serves as a
consultant to exploration companies active in the mineral resource
industry.
2. Significant Employees
---------------------
The Company does not have any significant employees.
3. Term of Office
--------------
Officers and directors of the Company serve for a term of one year
until the next annual general meeting of the Company or until removed
in accordance with the by-laws of the Company.
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 June 30,
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
- ---- -------- ---- --------------
Grayson Hand President 1999 $2,250
- ------------------------------------------------------------------
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The services of Mr. Hand are provided pursuant to the Management
Agreement with WFC Management Corporation. See Item 6 - "Description
of Business - Management Agreement".
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 Grayson Hand 1,200,000 59.0%
Suite 414
1859 Spyglass Place
Vancouver, BC
Canada V5Z 4K6
Common Stock Gordon A. Keevil 0 0%
3790 Southridge Avenue
West Vancouver, BC
Canada V7V 3J1
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, one 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 WFC
Management Corporation, a company controlled by Mr. Grayson Hand,
President of the Company. Under the Management Agreement, the Company
has agreed to pay to WFC Management Corporation a management fee of
$750 per month for a one year term in consideration for management and
administration services to be provided by WFC Management Corporation to
the Company. See Item 6 of Part I of this Registration Statement under
"Management Agreement".
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Item 12. Description of Securities
Common Stock
The Company has authorized 25,000,000 common shares par value $0.001 of
Common Stock, of which 2,033,000 are currently outstanding.
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 February 19, 1999
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 01, 1999 pursuant to Section 4(2) of the
Securities Act of 1933. All of these shares were sold to Grayson Hand,
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 2, 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
16
<PAGE>
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 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 wilful 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) wilful
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.
17
<PAGE>
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 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 ending 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
19
<PAGE>
MAGIC BAG 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
Magic Bag Corporation
We have audited the balance sheet of Magic Bag 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 22, 1999 Chartered Accountants
<PAGE>
MAGIC BAG CORPORATION
(An Exploration Stage Company)
BALANCE SHEET
APRIL 30, 1999
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
ASSETS
Current
Cash $ 42,954
Mineral Property (Note 3) 1,000
Exploration Advance (Note 4) 8,299
----------
$ 52,253
==================================================================
LIABILITIES
Current
Accounts payable $ 2,081
----------
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 (4,078)
----------
50,172
----------
$ 52,253
==================================================================
Approved by the Directors:
<PAGE>
MAGIC BAG CORPORATION
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
February 17 February 17
1999 1999
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Expenses
Office administration and sundry $ 784 $ 784
Mineral property exploration
Expenditures 963 963
Professional fees 2,331 2,331
---------- ------------
Net Loss For The Period 4,078 $ 4,078
============
Deficit Accumulated During The
Exploration Stage,
Beginning Of Period -
----------
Deficit Accumulated During The
Exploration Stage,
End Of Period $ 4,078
==========
Net Loss Per Share $0.01
=====
Weighted Average Number of Shares
Outstanding 805,905
==========
<PAGE>
MAGIC BAG CORPORATION
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
February 17 February 17
1999 1999
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (4,078) $ (3,328)
Adjustments To Reconcile Net Loss To
Net Cash Used By Operating
Activities
Change in accounts payable 2,081 1,331
---------- ----------
(1,997) (1,997)
---------- ----------
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
Exploration advance (8,299) (8,299)
---------- ----------
(9,299) (9,299)
---------- ----------
Cash Flow From Financing Activities
Share capital issued 54,250 54,250
----------- -----------
Increase In Cash 42,954 42,954
Cash, Beginning Of Period - -
----------- -----------
Cash, End Of Period $ 42,954 $ 42,954
===================================================================
<PAGE>
MAGIC BAG 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 - - - (4,078) (4,078)
-------------------------------------------------
Balance, April 30,
1999 2,033,000 $ 2,033 $ 52,217 $(4,078) $ 50,172
=================================================
<PAGE>
MAGIC BAG 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 February 17, 1999.
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>
MAGIC BAG CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(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 dated April 1,
1999 to acquire a 70% interest in a mineral claim block located
in the Sudbury Mining District, Ontario, Canada.
In order to earn its interest, the Company must make cash
payments and incur exploration expenditures as follows:
Cash payment of CDN $1,500 (paid)
Exploration expenditures totalling CDN $150,000 by
April 1, 2000 with an additional CDN $150,000 in
exploration expenditures to be incurred by April 1,
2001
Consideration paid to date (CDN $1,500) $ 1,000
=======
<PAGE>
MAGIC BAG CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
4. EXPLORATION ADVANCE
The Company has advanced $8,299 in connection with an
exploration program which is to commence subsequent to April
30, 1999.
5. 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>
------------------------------
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
------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report, dated
July 22, 1999, on the financial statements of Adventure Minerals
Inc. (formerly Magic Bag Corporation) for the period ended April
30, 1999 in the Company's Registration Statement on Form 10-SB.
We also consent to the application of such report to the
financial information in the Registration Statement on Form 10-
SB, when such financial information is read in conjunction with
the financial statements referred to in our report.
Vancouver, Canada \s\ Morgan & Company
August 24, 1999 Chartered Accountants
<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: Kukagami Lake Property Option Agreement
Exhibit 5: Management Contract between the Company and WFC
Management Corporation
Exhibit 6: Geological Report on the Kukagami Lake Property
Exhibit 7: Consent of Geological Consultant to use of Report
20
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.
ADVENTURE MINERALS INC.
Date: August 20, 1999
\s\ Grayson Hand
By: _________________________________
GRAYSON HAND, Director, President
Chief Executive Officer
<PAGE>
Articles of Incorporation Filing fee:
(PURSUANT TO NRS 78) Receipt #:
STATE OF NEVADA
Secretary of State
(For filing office use) (For filing office use)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
IMPORTANT: Read instructions on reverse side before completing
this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: Magic Bag Corporation
-----------------------------------
2. RESIDENT AGENT: (designated resident agent and his STREET
ADDRESS in Nevada where process may be served)
Name of Resident Agent: Michael A. Cane
---------------------------------
Street Address: 101 Convention Center Dr., Suite 1200
----------------------------------------------
Street No. Street Name
Las Vegas, NV 89109
----------------------------------------------
City Zip
3. SHARES: (number of shares the corporation is authorized
to issue)
Number of shares with par value: 25 Million
-----------
Par value: $ .001 No. without par value: _________
---------
4. GOVERNING BOARD: shall be styled as (check one):
X Directors ______ Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 member(s) and
the names and addresses are as follows: -----
J. Stephen Barley 2060 Gisby Street, West Vancouver, V7V 4M3
- ----------------- ------------------------------------------
Name Address City/State/Zip
- ----------------- ------------------------------------------
Name Address City/State/Zip
5. PURPOSE: (optional) : The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory
requirements to incorporate under NRS 78. You may attach
additional information pursuant to NRS 78.037 or any other
information you deem appropriate. If any of the additional
information is contradictory to this form it cannot be filed and
will be returned to you for correction.
Number of pages attached 0 .
---------
7. SIGNATURES OF INCORPORATORS: The names and addresses of
each of the incorporators signing the articles.
Michael A. Cane
- ------------------------------ ------------------------------
Name (print) Name (print)
101 Convention Ctr Dr. #1200,
- ------------------------------ -----------------------------
Address Address
Las Vegas, NV 89109
- ------------------------------ -----------------------------
City/State/Zip City/State/Zip
\s\ Michael A. Cane
- ------------------------------ -----------------------------
Signature Signature
State of Nevada County of Clark State of Nevada County of Clark
------ ----- ------ -----
This instrument was acknowledged This instrument was acknowledged
before me on before me on
February 16, , 1999, by , 1999, by
- ------------- -- -------------------
Michael A. Cane
- ------------------------------- --------------------------------
Name of Person Name of Person
as incorporator of ____________ as incorporator of _____________
Magic Bag Corporation _________ ________________________________
\s\ Ann Marie Gibson
- ------------------------------- --------------------------------
Notary Public Signature Notary Public Signature
(affix notary stamp or seal) (affix notary stamp or seal)
ANN MARIE GIBSON
Notary Public - Nevada
No. 99-49969-1
My appt. exp. Nov. 17, 2002
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
I, Michael A. Cane hereby accept appointment as Resident Agent
--------------------- for the above named corporation.
\s\ Michael A. Cane 02-16-99
- --------------------------- -----------------------------
Signature of Resident Agent Date
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
Filed by:
MAGIC BAG CORPORATION
The undersigned, President and Secretary of Magic Bag Corporation
(the "Corporation") does certify:
THAT the sole shareholder of said Corporation, on the 1st day of
April, 1999, adopted a resolution to amend the original articles
as follows:
Article I is hereby amended to read as follows:
The name of this corporation is ADVENTURE MINERALS INC.
The number of shares of the Corporation outstanding and entitled
to vote on an amendment to the Articles of Incorporation is
1,200,000 common shares. Said change and amendment has been
consented to and approved by a unanimous vote of the shareholders
of each class of stock outstanding and entitled to vote thereon.
\s\ Grayson W. Hand
-----------------------
Grayson W. Hand
President and Secretary
Province of British Columbia )
) ss.
Country of Canada )
On July 22nd, 1999, personally appeared before me, a
Notary Public, Grayson W. Hand, who acknowledged
that they executed the above instrument.
\s\ J. Stephen Barley
- ---------------------
Signature of Notary
J. Stephen Barley
Barrister & Solicitor
Suite 1880, Royal Centre
1055 West Georgia Street, Box 11122
Vancouver, B.C.
V6E 3P3 657-7962
(Notary Stamp or seal)
<Page >
BY-LAWS
OF
ADVENTURE MINERALS INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Las
Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such place
as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of
Nevada as the Board of Directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given
<Page >
by or at the direction of the Board of Directors, (B) otherwise
properly brought before the meeting by or at the direction of
the Board of Directors, or (C) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of
the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive
offices of the corporation not later than the close of business
on the sixtieth (60th) day nor earlier than the close of business
on the ninetieth (90th) day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the
event that no annual meeting was held in the previous year or the
date of the annual meeting has been changed by more than thirty
(30) days from the date contemplated at the time of the previous
year's proxy statement, notice by the stockholder to be timely
must be so received not earlier than the close of business on
the ninetieth (90th) day prior to such annual meeting and not
later than the close of business on the later of the sixtieth
(60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for a
stockholder's meeting, stockholders must provide notice as required
by the regulations promulgated under the 1934 Act. Notwithstanding
anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the
annual meeting shall, if the facts warrant, determine and declare
at the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this paragraph
(b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by
any stockholder of the corporation entitled to vote in the election
of directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall
be made pursuant to timely notice in writing to the Secretary of
the corporation in accordance with the provisions of paragraph (b)
of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name,
age, business address and residence address of such person, (B) the
principal occupation or employment of such person, (c) the class
and number of shares of the
2
<Page >
corporation which are beneficially owned by such person, (D) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nominations
are to be made by the stockholder, and (E) any other information
relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to
such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the
Secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to
the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the
procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or
the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The
Board of Directors shall determine the time and place of such
special meeting, which shall be held not less than thirty-five (35)
nor more than one hundred twenty (120) days after the date of the
receipt of the request. Upon determination of the time and place
of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 7 of these Bylaws. If
the notice is not given within sixty (60) days after the receipt of
the request, the person or persons requesting the meeting may set
the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders called
by action of the Board of Directors may be held.
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Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes, excluding
abstentions. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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Section 10. Voting Rights. For the purpose of determining
those stockholders entitled to vote at any meeting of the
stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation
on the record date, as provided in Section 12 of these Bylaws,
shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the stockholders
entitled to vote, present in person or by proxy, shall act as
chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as
secretary of the meeting.
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(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or
convenient. Subject to such rules and regulations of the Board of
Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or
order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted
proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the
commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and
closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of
parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from any
increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholder vote, be
filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and
qualified. A vacancy in the Board of Directors
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shall be deemed to exist under this Bylaw in the case of the death,
removal or resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a particular
time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or
more directors shall resign from the Board of Directors, effective
at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each
director so chosen shall hold office for the unexpired portion of
the term of the director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained pursuant
to Section 2 hereof. Unless otherwise restricted by the Articles
of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the state of Nevada
which has been designated by resolution of the Board of Directors
or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
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equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during normal
business hours, at least twenty-four (24) hours before the date and
time of the meeting, or sent in writing to each director by first
class mail, charges prepaid, at least three (3) days before the
date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof,
however called or noticed, or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if
a quorum be present and if, either before or after the meeting,
each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records
or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of
the exact number of directors fixed from time to time in accordance
with the Articles of Incorporation, a quorum of the Board of
Directors shall consist of a majority of the exact number of
directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however, at
any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without
a meeting, if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be approved
by the Board of Directors, including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance,
if any, for attendance at each regular or special meeting of the
Board of Directors and at any meeting of a committee of
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the Board of Directors. Nothing herein contained shall be construed
to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the
extent permitted by law and provided in the resolution of the Board
of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation
to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be permitted
by law. Such other committees appointed by the Board of Directors
shall consist of one (1) or more members of the Board of Directors
and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his
death or voluntary resignation from the committee or from the Board
of Directors. The Board of Directors may at any time for any
reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
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he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given to
each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director
who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special
meeting given in the manner provided for the giving of written
notice to members of the Board of Directors of the time and place
of special meetings of the Board of Directors. Notice of any
special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director
by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority
of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of
a majority of those present at any meeting at which a quorum is
present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary.
The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person
may hold any number of offices of the corporation at any one time
unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors.
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Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors shall designate
from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book of
the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
The President may direct any Assistant Secretary to assume and
perform the duties of the Secretary in the absence or disability of
the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
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(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform
the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Treasurer and
Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time
to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which
event the resignation shall become effective at such later time.
Unless otherwise specified in such notice, the acceptance of any
such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation the
corporate name without limitation, or to enter into contracts on
behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding
upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
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corporation, and other corporate instruments or documents requiring
the corporate seal, and certificates of shares of stock owned by
the corporation, shall be executed, signed or endorsed by the
Chairman of the Board of Directors, or the President or any Vice
President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. Every holder of stock in the corporation shall be
entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a
written notice containing the information required to be
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set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a
statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations,
preferences and relative participating, optional or other special
rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences
and/or rights. Except as otherwise expressly provided by law,
the rights and obligations of the holders of certificates
representing stock of the same class and series shall be
identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a
properly endorsed certificate or certificates for a like number of
shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or
more classes of stock of the corporation to restrict the transfer
of shares of stock of the corporation of any one or more classes
owned by such stockholders in any manner not prohibited by the
General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not
be more than sixty (60) nor less than ten (10) days before the date
of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
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of any other lawful action, the Board of Directors may fix, in
advance, a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days
prior to such action. If no record date is filed, the record
date for determining stockholders for any such purpose shall be
at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by
the Chairman of the Board of Directors, the President or any Vice
President, or such other person as may be authorized by the Board
of Directors, and the corporate seal impressed thereon or a
facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature, or where
permissible facsimile signature, of a trustee under an indenture
pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures
of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee
as aforesaid, shall be signed by the Treasurer or an Assistant
Treasurer of the corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on
any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation
and issued and delivered as though the person who signed the same
or whose facsimile signature shall have been used thereon had not
ceased to be such officer of the corporation.
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ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of the
Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of
Incorporation.
Section 41. Dividend Reserve. Before payment of any
dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers,
Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation 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
corporation, 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 under subsection (d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
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(c) Expense. The corporation shall 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 mounts if it should be
determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation 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 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 corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the director
or officer. Any right to indemnification or advances granted by
this Bylaw to a director or officer shall be enforceable by or on
behalf of the person holding such right in any court of competent
jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim
is made within ninety (90) days of request therefor. The claimant
in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his
claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for
the corporation to indemnify the claimant for the amount claimed.
In connection with any claim by an officer of the corporation
(except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such
action clear and convincing evidence that such person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with
respect to any criminal action or proceeding that such person acted
without reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its
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Board of Directors, independent legal counsel or its stockholders)
that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
claimant has not met the applicable standard of conduct. In any
suit brought by a director or officer to enforce a right to
indemnification or to an advancement of expenses hereunder, the
burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this
Article XI or otherwise shall be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the Nevada
General Corporation Law, the corporation, upon approval by the
Board of Directors, may purchase insurance on behalf of any person
required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
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(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director,
officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Bylaw
with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation"
as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last
known post office address as shown by the stock record of the
corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
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(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of
fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as
above provided, shall be deemed to have been given as at the time
of mailing, and all notices given by facsimile, telex or telegram
shall be deemed to have been given as of the sending time recorded
at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect of
any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or right,
or enjoy any privilege or benefit, or be required to act, or within
which any director may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him ill the manner above
provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such
notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law
or of the Articles of Incorporation or Bylaws of the corporation,
to any person with whom communication is unlawful, the giving of
such notice to such person shall not be require and there shall be
no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the
event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
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person shall be reinstated. In the event that the action taken
by the corporation is such as to require the filing of a
certificate under any provision of the Nevada General
Corporation Law, the certificate need not state that notice was
not given to persons to whom notice was not required to be given
pursuant to this paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend,
or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall
be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
Declared as the Amended By-Laws of Adventure Minerals Inc. as of
the ____ day of July, 1999.
Signature of Officer: /s/ Grayson W. Hand
-------------------
Name of Officer: GRAYSON HAND
Position of Officer: President, Secretary, Treasurer
and Director
21
<PAGE>
MINING CLAIMS OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 1st day of April 1999.
BETWEEN:
EXCELLERATED RESOURCES INC., a company duly
Incorporated pursuant to the laws of the Province
of British Columbia and having an office at
600-700 West Pender Street, Vancouver,
British Columbia V6C 1G8
(hereinafter called the "Optionor")
OF THE FIRST PART
AND:
MAGIC BAG CORPORATION, a company duly incorporated
pursuant to the laws of the state of Nevada, and
having an office at
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the beneficial owner of a 100% interest in
mineral claim block 1236087 located in Kelly Township, in the
Sudbury Mining District, Ontario (the "Property").
B. The Optionor has agreed to option to the Optionee the right
to acquire a 70% undivided interest in the Optionor's
interest in the Property, in consideration for the payment of
monies and the performance of work on the Property as herein
set forth.
NOW THEREFORE WITNESSETH that in consideration of the premises and
mutual covenants and agreements hereafter contained, the parties
agree as follows:
1. DEFINITIONS
-----------
1.01 In this Agreement:
(a) "Agreement" means this Agreement, as the same may
be amended, supplemented or modified from time to time.
<PAGE>
2
(b) "Expenditures" means all costs
associated with the conduct of Exploration on the
Property and will include all cash, expenses,
obligations and liabilities of whatever kind or
nature spent or incurred directly or indirectly
associated therewith in connection with the
exploration and development of the Property,
including without limiting the generality of
the foregoing, monies expended in maintaining the
Property in good standing by the doing and filing
of assessment work, in doing geophysical,
geochemical and geological surveys, drilling, assaying
and metallurgical testing in acquiring facilities, in
paying the fees, wages, salaries, travelling
expenses and fringe benefits (whether or not
required by law) of all persons engaged in work
with respect to and for the benefit of the
Property, in paying for food, lodging and other
reasonable needs of such persons, and in
supervision of management of all work done with
respect to and for the benefit of the Property,
including overhead expenses that shall not exceed
10% of such expenditures.
(c) "Exploration" means all work done by either party
hereto in connection with the assessment and
exploration of the Property including without
limitation, geological, geophysical, geochemical,
drilling, sampling, assaying and assessment work
on the Property;
(d) "Option" means the option granted to the Optionee
to acquire a 70% interest in and to the Property
as provided for in this Agreement free and clear
of all encumbrances;
(e) "Programs" means plans, including budgets, for
every kind of work done on or in respect of the
property by or under the direction of or on behalf
of or for the benefit of a party, and, without
limiting the generality of the foregoing, includes
assessment work, geophysical, geochemical and
geological surveying, studies and mapping,
investigating, drilling, designing, examining,
equipping, improving, surveying, shaft sinking,
raising, cross-cutting and drifting, searching
for, digging, trucking, sampling, working and
procuring minerals, ores, metals and concentrates,
surveying and bringing any mineral claims to lease
or patent, reporting, and all other work usually
considered to be prospecting, exploration,
development and mining work.
(f) "Property" shall mean and include:
(i) mineral claim block 1230087, Kelly Township,
Sudbury Mining District;
(ii) all rights and appurtenances pertaining to
the mineral claim, leases, rights or other
interests from time to time comprising the
Property
<PAGE>
3
including all water and water rights,
rights of way, and easements both
recorded and unrecorded to which the holder
of the Property is entitled in respect
thereof.
2. GRANT AND MAINTENANCE OF OPTION
-------------------------------
2.01 The Optionor hereby gives and grants to the Optionee
the sole and exclusive right and option to purchase an undivided
70% right, title and interest in the Optionor's interest in the
Property in accordance with the terms of this Agreement.
2.02 In order to keep the right and Option granted to the
Optionee in good standing and in force and effect, the Optionee
shall be obligated to:
(a) Pay to the Optionor $15,000;
(b) Incur total minimum cumulative Expenditures for
exploration and development work on the Property
as follows:
(i) $150,000 within 12 months of the date of this
Agreement;
(ii) a further $150,000 within 24 months of this
Agreement.
2.03 In the event the Optionee does not incur the minimum
expenditures within the required time period, the Optionee is
still required to complete the assessment work or pay cash in lieu
of in order to maintain the claim in good standing.
3. EXERCISE OF OPTION
------------------
3.01 At such time as the Optionee has made the required
payments and made the Expenditures on the Property set out in
paragraph 2 herein, this Option shall be deemed to have been
exercised by the Optionee and the Optionee shall have thereby,
without any further act, acquired an undivided 70% interest in and
to the Property free and clear of all liens, claims, and
encumbrances created by, through or under the Option.
4. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
----------------------------------------------
4.01 In order to induce the Optionee to enter into and to
complete the transactions contemplated by this Agreement, the
Optionor represents and warrants to the Optionee that:
<PAGE>
4
(a) the Optionor is the beneficial owner of 100% of the
Property and has the sole right to enter into this
Agreement and to sell and assign the Property free and
clear of any liens or encumbrances created by, through
or under the Option;
(b) to the best of its knowledge, the Property has been
properly staked and recorded in compliance with the
applicable mining regulations and there are no disputes
over the title, the staking or recording of such
mineral claims, or outstanding agreements or options to
acquire or purchase the Property or any portion thereof
save and except as disclosed to the Optionee, and no
person has any royalty or other interest whatsoever in
production from the Property with the exception of
Douglas Jevning who holds a 2% Net Smelter Royalty on
the Property;
(c) to the best of its knowledge, the Property is in good
standing and is free and clear of any liens, charges or
encumbrances or claims by any other party of any nature
or kind whatsoever;
(d) neither the Optionor nor any predecessor in interest or
title has done anything whereby the Property may become
encumbered;
4.02 The Optionor shall indemnify and save the Optionee
harmless from all loss, damage, costs, actions, and suits arising
out of or in connection with any breach of any representation,
warranty, covenant, agreement or condition made by it and
contained in this Agreement.
4.03 The representations and warranties contained in this
paragraph are provided for the exclusive benefit of the Optionee,
and a breach of any one or more thereof may be waived by the
Optionee in whole or in part at any time without prejudice to its
rights in respect of any other breach of the same or any other
representation or warranty.
4.04 The representations and warranties contained in this
Paragraph 5 shall survive the execution hereof for a two-year
period.
5. REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
----------------------------------------------
5.01 In order to induce the Optionor to enter into and to
complete the transactions contemplated by this Agreement, the
Optionee represents and warrants to the Optionor that, on the date
hereof and on the date of the issuance of any shares of the
Optionee pursuant hereto:
(a) it has been and will continue to be duly incorporated
and validly exists as a corporation in good standing
under the laws of the state of Nevada and has and will
have full capacity to enter into this Agreement and
carry out the transactions contemplated hereby;
<PAGE>
5
(b) the Optionee has full corporate power and authority to
enter into this Agreement and the entering into of this
Agreement does not conflict with any applicable laws or
with the charter documents of the Optionee or any
contract or other commitment to which the Optionee is a
party;
(c) the execution of this Agreement and the performance of
its terms have been duly authorised by all necessary
corporate actions including resolutions of the board of
directors of the Optionee, and
5.02 The Optionee shall indemnify and save the Optionor
harmless from all loss, damage, costs, actions and suits arising
out of or in connection with any breach of any representation,
warranty, covenant, agreement or condition made by it and
contained in this Agreement.
5.03 The representations and warranties contained in this
paragraph are provided for the exclusive benefit of the Optionor,
and a breach of any one or more thereof may be waived by the
Optionor in whole or in part at any time without prejudice to its
rights in respect of any other breach of the same or any other
representation or warranty.
5.04 The representations and warranties contained in this
paragraph shall survive the execution hereof.
6. COVENANTS OF THE OPTIONEE
-------------------------
6.01 During the term of this Agreement, the Optionee
covenants and agrees with the Optionor to:
(a) carry out and record or cause to be carried out and
recorded all such assessment work upon the Property as
may be required in order to maintain the Property in
good standing at all times;
(b) keep the Property clear of liens and other charges
arising from its operations, and to keep the Optionor
indemnified in respect thereof;
(c) carry on all operations on the Property in a good and
miner-like manner and in compliance with all applicable
governmental regulations and restrictions; and
7. TERMINATION
-----------
7.01 This Agreement shall terminate upon any of the
following events:
<PAGE>
6
(a) in the event that the Optionee shall fail to comply
with any of its other obligations as contained herein,
and, within fifteen (15) days of receipt by the
Optionee of written notice from the Optionor of such
default, the Optionee has not:
(i) cured such default, substantially corrected such
default or commenced proceedings to cure such
default and prosecuted same to completion without
undue delay, or
(ii) given the Optionor notice that it denies that such
default has occurred and that it is submitting the
question to arbitration as herein provided.
If arbitration is sought, a party shall not be in
default until the matter shall have been determined
finally by appropriate arbitration as provided for
under paragraph 9;
(d) by the Optionee giving the Optionor thirty (30) days
written notice.
7.02 In the event the Optionee decides to abandon the
Property, or any of the mining claims on the Property, or in the
event of termination of this Agreement for any other reason, the
Optionee shall turn over to the Optionor copies of all maps,
reports, assay results, contracts and other data and documentation
in the possession of the Optionee in connection with its
operations on the Property.
7.03 Upon the termination of this Agreement, the Optionee
shall cease to be liable to the Optionor in debt, damages or
otherwise save for the performance of those of its obligations
which should have been performed before the date of termination of
this Agreement.
7.04 Upon termination of this Agreement, the Optionee shall
vacate the property within a reasonable time after such
termination, but shall have the right of access to the Property
for a period of six months after termination for the purpose of
removing its chattels, machinery, equipment and fixtures
therefrom. Notwithstanding any applicable law, upon termination
of this Agreement, the Optionee shall be entitled to remove from
the Property, within the time prescribed above, any and all
chattels, machinery, equipment, fixtures and other items of every
nature or kind whatsoever that it has caused to be placed or fixed
thereon.
8. FORCE MAJEURE
-------------
8.01 The time for performance of any act or making any
payment of any expenditure required under this Agreement shall be
extended by the period of any delay or inability to perform due to
fire, strikes, labour disturbances, riots, civil commotion, wars,
act of God, any present or future law or governmental regulation,
any shortages of labour, equipment or materials, or any other
cause not reasonably within the control of the party in default.
<PAGE>
7
9. ARBITRATION
-----------
9.01 Any controversy or claim arising out of or in relation
to this Agreement or any breach hereof shall be settled by a
single arbitrator mutually agreed upon by Optionee and Optionor.
The arbitration shall be settled in accordance with the rules of
the British Columbia Commercial Arbitration Centre and a decision
of the arbitrator shall be binding upon the parties hereto.
10. NOTICES
-------
10.01 Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered to such party, at the address for such party
specified above, in each case directed to the attention of the
Secretary. The date of receipt of such notice, demand or other
communication shall be the date of delivery.
10.02 Either party may at any time and from time to time
notify the other party in writing of a change of address and the
new address to which notice shall be given thereafter until
further change.
11. GENERAL TERMS
-------------
11.01 The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and assurances
as may be requisite, or which counsel for the parties may deem
necessary to effectively carry out the intent of this Agreement.
11.02 This Agreement shall represent the entire understanding
between the parties with respect to the Property and supersedes
any previous agreements. No representations or inducements have
been made save as herein set forth. No changes, alterations, or
modifications of this Agreement shall be binding upon either party
until and unless a memorandum in writing to such effect shall have
been signed by all parties hereto.
11.03 Time shall be of the essence of this Agreement.
11.04 The titles to the articles to this Agreement shall not
be deemed to form part of this Agreement but shall be regarded as
having been used for convenience of reference only.
11.05 This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of British Columbia,
Canada.
11.06 The parties hereto hereby submit to the exclusive
jurisdiction of the Courts of British Columbia in respect of any
dispute arising out of this Agreement.
<PAGE>
8
11.07 This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors
and assigns.
11.08 The Optionee shall not assign its interest in this
Agreement without the prior written consent of Optionor, not to be
unreasonably withheld.
11.09 All references to dollar amounts contained in this
Agreement are references to Canadian funds.
11.10 This Agreement may be executed in several counterparts,
each of which will be deemed to be an original and all of which
will together, constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the day and year first above written.
EXCELLERATED RESOURCES INC.
- -------------------------
Per: Authorized Signatory
MAGIC BAG CORPORATION
\s\ Grayson Hand
- -------------------------
Per: Authorised Signatory
<PAGE>
MANAGEMENT AGREEMENT
AGREEMENT dated for reference the 1st day of April, 1999.
BETWEEN: WFC MANAGEMENT CORPORATION, a company incorporated
under the laws of British Columbia
(hereinafter called "WFC")
OF THE FIRST PART
AND: ADVENTURE MINERALS INC., a company incorporated
under the laws of the State of Nevada
(hereinafter called "Adventure")
OF THE SECOND PART
WHEREAS WFC has business and management expertise and
maintains an office with reception services, secretarial
services and office administration services, including
telephone and computer services;
AND WHEREAS Adventure requires management services, reception
services, secretarial services, office administration
services, including telephone and computer services, and
wishes WFC to provide same to Adventure;
NOW THEREFORE THE PARTIES HAVE AGREED and do hereby agree as
follows:
1. WFC hereby agrees to provide the management services of
Grayson Hand as President of the Adventure to carry out
management and direction of the business of the Company,
including managing and supervising any mineral exploration
activities carried out by Adventure.
2. WFC hereby agrees to provide reception services,
secretarial services and office administration services,
including telephone and computer services, to Adventure.
3. In consideration of WFC providing all the above mentioned
services to Adventure, Adventure agrees to pay to WFC,
$750.00 U.S. per month payable on the 1st day of each month.
4. In addition to the above expense stated above, Adventure
agrees to reimburse WFC for any expenses directly
attributable to performing its obligations to Adventure
pursuant to this Agreement.
<PAGE>
5. Adventure shall pay any directly attributable expenses on
receipt of an invoice from WFC.
6. This Agreement shall be for a term of one year commencing
April 1, 1999 and ending March 31, 2000.
7. No amendment or termination of this Agreement shall be
valid unless it is in writing and executed by both parties.
8. Time shall be of the essence of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
WFC MANAGEMENT CORPORATION
by its authorized signatory
\s\ Grayson Hand
- ---------------------------------
Signature of Authorized Signatory
President
- ---------------------------------
Name of Authorized Signatory
ADVENTURE MINERALS INC.
by its authorized signatory
\s\ Grayson Hand
- ---------------------------------
Signature of Authorized Signatory
President
- ----------------------------------
Name of Authorized Signatory
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION ............................................... 1
PROPERTY DESCRIPTION & LOCATION ............................ 1
ACCESS, INFRASTRUCTURE, CLIMATE, LOCAL RESOURCES &
PHYSIOGRAPHY ............................................... 2
HISTORY..................................................... 3
GEOLOGY..................................................... 6
MINERALIZATION.............................................. 7
RECOMMENDATIONS & COSTS .................................... 9
CONCLUSION.................................................. 12
REFERENCES.................................................. 13
CERTIFICATE................................................. 14
LIST OF TABLES
TABLE 1 Kukagami Lake Claims Data ...................... 2
TABLE 2 Cu-Ni-PGE Occurrences in the Kelly Twp. Area ... 8
TABLE 3 Proposed Exploration Budget .................... 11
LIST OF FIGURES
After Page
FIGURE 1 Location Map : scale 1:100,000 ................ 1
FIGURE 2 Claim Map ...................................... 1
FIGURE 3 Geology Map; scale 1:31,680..................... 3
FIGURE 4 Regional Geology : scale 1:253,440 ............. 6
FIGURE 5 Schematic Diagram for a Nipissing Gabbro Sill .. 6
FIGURE 6 Local Topography : scale 1:20,000 .............. 6
FIGURE 7 Summary Lithological Sequence in a
Nipissing Sill ................................. 7
<PAGE>
SUMMARY REPORT
FOR THE
KUKAGAMI LAKE PROPERTY
OF
EXCELLERATED RESOURCES INC.
INTRODUCTION
On April 12, 1999 Mr. W. Iny president of Excellerated
Resources Inc. (Excellerated) requested the preparation of a
summary report for Excellerated s 6 claim (93 unit) Kukagami Lake
property located in Kelly township, Ontario.
The region about Kelly township has, within the last six
months, become the focus of increasing exploration activity
following the discovery of significant occurrences of platinum
and palladium mineralization (PGE) in both Kelly and Janes
townships. Since the property has only recently been acquired by
Excellerated no exploration program has as of yet been conducted
by the company. This report, then, summarizes past exploration
conducted on the property and its immediate surroundings, the
regional and property geology, and the styles of Pt & Pd
mineralization in the area. Recommendations are made for a
staged, multi discipline work program to investigate the
potential for Pt & Pd deposits on the property. Metric units and
Canadian dollars are used in this report.
No property visit was conducted. Pertinent assessment
files were reviewed at the Sudbury Resident Geologist's office on
April 13, 1999.
PROPERTY DESCRIPTION & LOCATION
Excellerated s Kukagami Lake property lies 50 km
northeast of downtown Sudbury. Geographical co-ordinates for the
approximate centre of the property are 46 o 45' north latitude by
80 o 29' west longitude, and the NTS quadrants are 41 I/9, 10, 15
& 16 (Figure 1).
The six unpatented and unsurveyed claims (93 units) are
situated in central Kelly township, Sudbury Mining Division
(Figure 2), and are owned 100% by Excellerated subject to a 2%
NSR
<PAGE>
3
interest payable to Mr. J.D. Jevning. Pertinent data
regarding the claims are presented in Table 1. Minimum
exploration expenditures of $37,200 must be incurred on or before
February 26, 2001.
Two small areas along the shore of Maskinonge Lake, one
each on claims 1236087 & 1230075 (Figure 2), were temporarily
withdrawn from staking in 1987 (Order No. W-101/87-NER) pending
the implementation of a cottage lot program. That order was
rescinded (Order No. 0-S-3/96) in 1996, and no cottage lots were
sold during that period. The program may be re-initiated in the
future, and if so claim holders would be notified.
TABLE I
Kukagami Lake Claims' Data
- ------------------------------------------------------------------
Claim No Units Date Recorded Date Work Min. Req'd
Req'd by Expenditure
1230070 13 Feb. 26/1999 Feb. 26/2001 $ 5,200
1230071 16 Feb. 26/1999 Feb. 26/2001 6,400
1230072 16 Feb. 26/1999 Feb. 26/2001 6,400
1230074 16 Feb. 26/1999 Feb. 26/2001 6,400
1230075 16 Feb. 26/1999 Feb. 26/2001 6,400
1236087 16 Feb. 26/1999 Feb. 26/2001 6,400
-- --------
93 $ 37,200
- ------------------------------------------------------------------
ACCESS, INFRASTRUCTURE, CLIMATE, LOCAL RESOURCES & PHYSIOGRAPHY
The property may be reached by vehicle following
secondary highway 535 and extensions northward for 35 km from
Hagar (located 50 km east of Sudbury on Highway 17) to Washagami
on the Canadian National Railway line, and thence via logging
roads to Ford s Camp at the dam at the south end of Maskinonge
Lake (Figure 1). From there a recently constructed logging road
<PAGE>
4
crosses the central part of the claims and branch roads service
other parts of the property, but since a bridge has been removed
approximately 1 km from the dam travel is restricted to ATVs
only. The east shore of the lake is, of course, easily
accessible by boat. Unless logging operations are in progress
north of Washagami, vehicle access is limited to the snow free
months.
If required the western section of the property may be
reached by boat from Kukagami Lake. A road which joins Highway
17 just east of Callum is open year round to the Sportsman's
Lodge located on the southwest shore of the lake. Road distance
from Highway 17 to the lodge is about 25 km.
Other than the logging road mentioned above there is no
infrastructure on the property. The Sportsman s Lodge and the
cottages along the west shore of Kukagami Lake are supplied with
electrical power.
Sudbury and area experience a temperate climate with
moderate to long cold winters and short warm to hot summers.
Total precipitation is about 1000 mm including 3+ m of snow. The
mean minimum and mean maximum temperatures for the warmest and
coldest months are 12o C & 25o C and -21o C & -10o C respectively.
Topography is moderately rugged, with numerous small but
steep hills. Elevation ranges from 255 m at Maskinonge Lake to
364 m in central claim 1230071. Approximately 35% of the claims
are water covered.
In the past few years some 20% of the property has been
selectively logged for white pine, jack pine and poplar. Other
species present include birch, black spruce & cedar.
HISTORY
Prospecting has been conducted in the Kelly township
since at least the 1890s. In 1896 Gold Cliff Mines Limited
stripped an area on a large peninsula in northern Kukagami Lake
and exposed several small veins mineralized with rusty quartz and
chalcopyrite hosted in greywacke (Coleman, 1998). Gold Cliff
later drove an 55 m adit westward from the shore of the lake
beneath the stripped area and intersected two quartz veins, one
12 cm thick at 30 m and another 60 cm thick at 43 m, both of
which were reportedly gold bearing (Scott & Woolham, 1987).
<PAGE>
5
Summaries of company exploration data from the Sudbury
Resident's Geologist assessment files follow. The approximate
location of drill holes and any other pertinent information are
shown on Figure 3.
1967 Newmont Mining Corporation of Canada Limited (Newmont)
At the time Newmont conducted a regional program
exploring for uranium hosted in the Proterozoic age
Huronian sediments. Hole # 13 was drilled near the
north end of Gawasi Lake to a depth of 1309 m.
Sedimentary rock units were cored to 1300 m, and
Archean volcanic rocks thereafter. No sills nor
dykes of Nipissing gabbro were encountered.
1969-1970 Kennco Explorations, (Canada) Limited : (Kennco)
In February 1969 Kennco flew a combined
electromagnetic (Mark V Input) and magnetometer survey
over all or parts of 10 townships, including the
southwestern of Kelly, as part of their examination
of the potential for the Nipissing gabbro to host
copper deposits. Roughly 60% of the Excellerated
claims were covered. Flight lines were oriented NE/SW
and spaced 305-365 m apart. No electromagnetic
anomalies were detected within Excellerated s
property boundaries.
As part of their follow-up program Kennco trenched two
locations in Kelly township, the East area located
150 m SE of the # 3 post of 1230070 and the West
near the narrows on Kukagami Lake 2 km west of 1230070.
Eight Winkie holes (251 m) were drilled in the East
area. The best intersection encountered was in hole
PSOT 6 which assayed 0.48% Cu & 0.24% Ni over 7.47 m.
An additional eight holes (1635 m) were drilled
elsewhere on the property including a fence, numbers
KU - 4, 5, 6 & 7 southwestward from the East area. No
rational for any of the holes is mentioned in the
files. The best intersection reported (and referred
to later in this report as the Central area) was
1.7 m interval of 0.44% Cu & 0.31% Ni in hole KU -3.
1986-1987 Nickeldale Resources Inc. : (Nickeldale)
Initially, Nickeldale's property consisted of 37 claims
units including 1 on current claim 1230070 & 3 on
1230071. Nickeldale's exploration program of
geochemical (humus), magnetometer and VLF-em surveys
was managed by Derry, Michener Booth & Wahl (DMBW).
Humus samples were analysed for Cu, Ni, Au, Pt & Pd.
Eleven multi element anomalies were outlined. One of
which, some 300 m by 150 m in size with values of 266
to 579 ppm Cu, 290 to
<PAGE>
6
465 ppm Ni, 7 to 21 ppb Au, 34 to 42 ppb Pt
& 31-35 ppb Pd, is located in south central
claim # 1230071. There is no record of any
follow-up work to evaluate the anomaly. The
magnetometer survey successfully defined the
gabbro/sediment contacts and delineated a NNW
striking olivine diabase dyke. VLF-em responses
were inconclusive and appeared related to
topographical features such as shorelines & drainages.
The property was expanded to 79 claims units and
covered roughly the southern of Excellerated s
current land position. A combined helicopter
magnetometer and VLF-em survey was flown in the
spring of 1987 on 100 m spaced lines, oriented NW/SE,
and utilizing VLF stations at Cutler Main and
Annapolis Maryland. VLF results were of little value
as the anomalies detected were coincident with lake
bottoms and other drainages.
1995 Brian Wright : (Wright)
Wright held two claims equivalent to claim 1230126 &
1230127 which tie onto Excellerated's property. Max-
Min II horizontal loop electromagnetic (4 km),
magnetometer (20 km) and Maxi Probe (six short lines)
surveys were traversed over the east arm of Kukagami
Lake. Two east-west striking Max-Min conductors
were delineated.
1996 Flag Resources Ltd. : (Flag)
Flag drilled a 236 m hole to the north of claim
1230071 (exact location unreported). Huronian
sedimentary rocks (greywacke, siltstone and
pebblewacke) were cored.
1998-1999 Pacific Northwest Capital Corp. : (PFN)
PFN have taken an option on a block of claims to the
south of Excellerated that covers the Kennco East,
Central and West areas. Assays of three grab samples
from the east area, reported in a news release dated
December 17, 1998, ranged to 4.5 g/t Pd, 5.1 g/t Pt
and 3.5 g/t Au.
Several studies and reports that pertain to the geology
and/or mineral potential of Kelly township have been published
by the provincial government. In 1898 Coleman visited the
Gold Cliff gold showing on Kukagami Lake and reported his
observations in Bureau of Mines Report, Volume 7.
Thomson and Card mapped Kelly and Davis townships in 1959 at
a scale of 1:15,840. Their work was published in 1963 as
Ontario Department of Mines Geological Report No. 15
accompanied by map 2037 at a scale of 1:31,680.
<PAGE>
7
During the 1977 & 1978 field seasons Dressler mapped the Lake
Wanapitei area which encompassed all or part of 13 townships
including the western 1/6 of Kelly. Ontario Geological Survey
(OGS) Report 213 was issued in 1982 with maps 2450 & 2451 at
1:31,680.
Finn et al. conducted a study on the petrology, geochemistry
and economic potential of the Wanapitei intrusive west of Kelly
Township. Results were published in 1982 as OGS Miscellaneous
Paper 103.
In OGS Open File 5771 published in 1991 Gates describes the
various mineral occurrences for several townships located east
of Sudbury including Kelly.
Lightfoot and Naldrett studied the petrology and geochemistry
of the Nipissing gabbro to develop strategies for Ni, Cu & PGE
exploration. Various sites between Sault Saint Marie & Cobalt
were sampled. Results were published in 1996 as OGS Study 58.
GEOLOGY
Kelly township and surrounding area are predominantly
underlain by the Gowganda Formation, a sedimentary sequence of
conglomerate, greywacke, argillite and quartzite, that is part of
the extensive Middle Precambrian aged Cobalt Group of the
Huronian Super group. In the vicinity of the property units
typically strike northerly and dip eastward at 0 - 30o , but
locally display gentle open folds or flexures (Figure 3). At
Gawasi Lake the sequence is 1300 m thick and unconformably
overlies Archean volcanic rocks. Whether the entire sequence
cored is of the Gowganda Formation or also includes underlying
formations is uncertain.
The Huronian sedimentary rocks have been intruded
throughout their areal extent by the 2.2 Ga Nipissing gabbro
(Figure 4). These intrusions have been emplaced as undulatory,
sill-like sheets consisting of basins and arches connected by
limbs (Figure 5). Normally the intrusions are relatively
undifferentiated, and consist simply of a basal quartz diabase
unit overlain by gabbro. An extremely differentiated intrusion
would have a quartz diabase base, successively overlain by
hypersthene gabbro, varied textured gabbro, granophyre and an
upper quartz diabase units (Lightfoot and Naldrett, 1996).
There is a recognized close spatial relationship between
mineralization and the Nipissing intrusions. Metal associations
with the intrusions vary and include Ag, Co & Ni near Cobalt, Cu-
Ni-PGE (platinum group elements) in the central sector (ie.
<PAGE>
8
Kelly township and area) and Cu in the western region.
The gabbro body exposed in Kelly and Davis townships
displays a general circular outline (Figure 4). On the north rim
the dip to the gabbro/sediment contact, determined from Kennco
holes KU- 4, 5, 6 & 7, is southerly, and thus suggestive of a
basin shaped structure. The degree of differentiation of this
body is unknown.
On the property & in the immediate area the gabbro forms
caps on the higher hills whereas the lower areas are underlain by
sedimentary rocks (Figure 6). Based on this observation and the
fact that no gabbro units were cored in Newmont hole #13, it is
unlikely that gabbro exists beneath the areas mapped as
sediments.
Occasional, highly magnetic, WNW striking, steeply
dipping olivine diabase dykes cross cut the previous two rock
units.
There are two general fault directions in the area. A
set of sinistral NW/SE faults of unknown displacement traverse
the area. An interpreted N/S fault follows beneath Maskinonge
Lake (Figure 3).
MINERALIZATION
There are no known mineral deposits nor occurrences on
the Excellerated Resources property, but in the general area
deposits and/or occurrences of Cu-Au and Cu-Ni-PGE do occur. The
Cu-Au mineralization (pyrite, chalcopyrite, arsenopyrite, native
gold and occasionally pyrrhotite, native copper or galena) are
associated with quartz veins within carbonate-albite alterations
zones hosted in either sedimentary rock units or Nipissing
gabbro. Examples include the Northstar located in southwest
Davis township which in 1987 produced 57,270 tonnes grading 0.90%
Cu & 7.2 g/t Au, the Comstock in northeast Rathburn township
which produced intermittently a total of 664 tonnes @ 6.7 g/t Au
and the Gold Cliff in northwest Kelly township.
Cu-Ni-PGE sulphide mineralization occurs as
disseminations within the Nipissing gabbro or as massive pods at
the base of the intrusions. Those intrusions that are
mineralized are differentiated (but not strongly) to the point
that they possess a gabbronorite but not a granophyre zone.
Typically, mineralized portions within the Nipissing gabbro are
hypersthene rich (10-30
<PAGE>
9
modal % hypersthene), magnesium rich (>9 weight % MgO) with
low abundance of Ti02 (< 0.42 weight % Ti02) and Zr (< 52 ppm Zr)
(Lightfoot & Naldrett, 1996). The relationship between
mineralization and the various differentiated zones is shown
schematically in (Figure 7). Some examples of Cu-Ni-PGE
occurrences in the immediate area are listed in following
Table 2.
<PAGE>
10
TABLE 2
Cu-Ni-PGE Occurrences in the Kelly Twp. Area
- ------------------------------------------------------------------
Name Township References
Rathburn
Lake Rathburn Massive sulphide pod occurs at the Gates, 1991
base of the Wanapitei intrusion.
Mean values for 11 samples are
0.25% Ni, 10.13% Cu, 10.2 g/t Pt,
32.0 g/t Pd, 43.3 g/t Ag and
2.91 g/t Au.
JR Janes Disseminated sulphides are located McDougall,
within an 8-10 m thick zone located 1998
20-30 m above the lower contact of
the Nipissing gabbro. A 13.3 m
interval in trench # 1 assayed
0.42% Ni, 1.04% Cu, 0.44 g/t Pt,
3.52 g/t Pd, 0.40 g/t Au.
Mineralization is known to extend
for in excess of 500 m along the
contact.
Kennco
West Kelly 3-5% pyrrhotite & minor Gates, 1991
chalcopyrite occur disseminated
in a fine grained, massive gabbro.
Assays for an OGS sample are 410
ppm Cu, 176 ppm Ni, nil Pt & nil Pd.
Kennco
Central Kelly Kennco drill hole KU - 3 Gates, 1991
intersected 1.7 m of 0.44% Cu,
0.31% Ni approximately 20 m
above the lower gabbro contact.
Kennco
East Kelly This showing, located approximately Gates, 1991
150 m southeast of Excellerated # 3 Barr, 1999
post for claim 1230070, contains
3-5% fine to medium grained
pyrrhotite & chalcopyrite over an
exposed cliff face 3 m high
by 10-15 m long. An OGS sample
containing 2-3% disseminated
sulphides assayed 0.50% Cu,
0.20% Ni, 100 ppb Au, 340 ppb Pt
and 1500 ppb Pd. The best assays
for grab samples by PFN are
4.5 g/t Pd, 5.1 g/t Pt and 3.5
g/t Au.
- ------------------------------------------------------------------
<PAGE>
11
Sulphide minerals in mafic intrusions crystallize from
immiscible sulphide liquids and accumulate at the base of the
intrusions under gravitational forces to form deposits such as at
Rathburn Lake. Since other Cu-Ni-PGE sulphide occurrences lie
well above the base of the intrusion in the more central
hypersthene rich sections, Lightfoot & Naldrett (1996) surmised
that sulfur saturation of the magma was achieved only after the
differentiation of the lower portions of those sills. They
further suggest that the late crystallisation of the sulphides
would make gravitational accumulation of sulphides into massive
bodies less likely in flat sills, but perhaps more likely in
stagnant dyke systems, inclined sheets, or ring complex.
Background values for four (4) non sulphide bearing
samples of Kelly township gabbro as determined by DMBW ranged
from 23-61 ppm Ni, 32-146 ppm Cu, 5-15 ppb Pd, <15 ppb Pt and 2-
19 ppb Au (Scott & Woolham, 1987). Corresponding values for ten
(10) samples from the Wanapitei intrusion are <10-70 ppb Pd, <20-
35 pp Pt and <2 to 20 ppb Au (Finn et al., 1982). Reasons for
the higher PGE values in the Wanapitei intrusion are unclear, but
may be related to the reverse differentiation trend identified in
that body. Eight (8) DMBW samples from the Kelly township
intrusion mineralized with 1-3% disseminated sulphide (pyrite,
chalcopyrite & pyrrhotite) ranged from background levels to 3.5
times the highest background values for Ni, 6.8 times for Cu, 15
times for Pd, 5.6 times for Pt and 4.1 times for Au. The highest
Pt values was from a sample of blebby sulphides as opposed to
the more evenly disseminated sulphides.
RECOMMENDATIONS & COSTS
The principal exploration objectives for Excellerated's
six claims Kukagami Lake property are Cu-Ni-PGE deposits hosted
by the Kelly township Nipissing gabbro. Disseminated sulphide
occurrences of these metals are known to the south, southwest &
west of claim 1230070 and thus deposits of this style are the
obvious targets on which to focus. In addition, since the gabbro
body may be basin shaped (ie. inclined contacts rather than flat)
then the possibility for massive sulphide deposits occurring at
the intrusion base should not be ignored. Consequently, a
prudent work program is required to explore for both mineral
deposit styles.
<PAGE>
12
A staged multi discipline exploration program comprising
geological mapping, outcrop sampling & whole rock analysis,
petrographic studies, magnetometer & induced polarization (IP)
surveys, humus & soil geochemical surveys, and prospecting is
recommended herein and and discussed in detail below. Most of
the work can be accomplished during the summer months, but due to
the numerous lakes some lines of the geophysical surveys will
need to be extended onto the ice.
* A reference grid on which to conduct the various surveys is
necessary. Only those portions of the claim underlain by
gabbro need be gridded.
* Geological mapping and sampling may be conducted
concurrently. Outcrops should be examined for the presence
of sulphide mineralization and evidence of zonation/
differentiation within the gabbro. Every exposure of the
contact with the sediments should be described & measured in
detail. Rock samples for whole rock analysis should be
collected on a semi regular pattern in order to locate areas
of elevated MgO and reduced Ti02 & Zn levels potentially
indicative of differentiation within the intrusion. Assay
for Cu, Ni, Pd, Pt & Au will help to identify areas of above
background values and potential concentrations of those
metals..
* Petrographic studies of rock samples to measure hypersthene
content will also aid the determination the degree of
differentiation.
* The gabbro/sedimentary contact as shown on the government
Map 2037 (Figure 3) appears to have been interpreted from a
combination of outcrop pattern and topography. A
magnetometer survey will allow for a much more accurate
resolution.
* The intrusion is flattish dipping, and known to exceed 300 m
in thickness. Thus only a very limited portion of the
contact may be examined easily. The IP electrical method
responds to both disseminated and massive sulphide
concentrations and will thereby provide drill targets.
Moreover, the parameters of the survey are easily varied to
ensure that the base of the intrusion is tested.
* DMBW have shown that humus geochemical sampling & analysis
is an effective approach for locating potential mineralized
areas in non outcrop regions. Initially a
<PAGE>
13
sample spacing of 40 m is recommended which may be filled in
as required for anomalous areas.
* As mentioned earlier there is very little probability that
gabbro exists in those areas of the claims mapped as
sediments. There is, however, a possibility that deposits
of Cu-Au mineralization may occur in the sedimentary areas
&/or in the gabbro. A soil geochemical survey is therefore
recommended for the non gridded portion of the property.
These sections should be sampled & prospected along chain &
compass lines extended from the ends of the grid lines with
samples collected at 40 m intervals.
Line cutting, geological mapping, whole rock analysis,
petrographic studies, prospecting plus the geophysical and
geochemical surveys are included in Phase 1 of the proposed
program. Phase II comprises an estimate for target definition
fill-in geochemical & geophysical surveys plus an allowance for
2000 m of diamond drilling to test anomalies identified. The
budget for the program is detailed in Table 3.
<PAGE>
14
TABLE 3
PROPOSED EXPLORATION BUDGET
- ------------------------------------------------------------------
Phase I
Line cutting : estimate 100 km
@ $275/km $ 27,500
Geological mapping, sampling:
estimate 30 days @ $350/d 10,500
Petrographic studies : allow 5,000
Whole rock analysis : estimate
50 samples @ $50/sample 2,500
Humus sampling (grid) :
estimate 20 days @ $200/d 4,000
Humus analyses : estimate
250 samples @ $30/sample 3,500
Soil sampling & prospecting
(non grid) : estimate 10
days @ $550/d 5,500
Soil samples : estimate 200
samples @ $30/sample 6,000
Magnetometer survey : 100 km
@ $75/km 7,500
IP survey : estimate 30 days
@ 1,500/d plus report 50,000
Report preparation : allow
10 days @ $350/d 3,500
Travel, accommodation, etc.:
allow 10,000
----------
Sub Total $ 139,000
Contingency : 7.9% 11,000
----------
Total $ 150,000 $150,000.
Phase II
Fill-in surveys : allow $ 25,000
Diamond drilling : 2000 m @ $50/m 100,000
Assays/analysis : allow 10,000
Supervision, core logging, report
writing : estimate 25 days
@ $350/d 8,750
Core splitter : estimate
10 days @ $200/d 2,000
Travel & accommodation, etc. : allow 3,000
---------
Sub Total $ 148,750
Contingency : 7.6% 11,250
----------
Total $ 160,000 160,000.
--------
Grand Total $310,000.
=========
- ------------------------------------------------------------------
CONCLUSIONS
Excellerated Resources Inc.'s Kukagami Lake property
overlies a portion of the northern rim of the basin shaped Kelly
township Nipissing gabbro intrusion. Three (3) known sulphide
mineral occurrences with elevated Cu-Ni assays are hosted in the
intrusion, one of which located within 150 m of Excellerated's
south boundary also boasts significant PGE values. A multi-
element humus geochemical anomaly situated near a mapped
gabbro/sedimentary contact was delineated by a previous claim
owner but never tested. For these reasons the gabbro intrusion
<PAGE>
15
underlying the property is considered highly prospective for Cu-
Ni-PGE mineralization, and thus the property warrants a more
detailed examination for its mineral potential than has been
conducted in the past. In addition, those portions of the
property underlain by sedimentary rocks have a very low potential
for Cu-Ni-PGE occurrences, but are none the less prospective for
Cu-Au mineralization associated with quartz veins within
carbonate-albite alteration zones. Therefore, to effectively
investigate the economic potential of the property a two phased
multi disciplined exploration program with a total cost of
$310,000 is recommended.
Respectfully submitted,
\s\ James G. Burns
James G. Burns P. Eng.
April 19, 1999
<PAGE>
16
REFERENCES
Barr, H. 1998. Kelly & Janes project exploration update; Company
news release, December 17, 1998.
Coleman, A.P. 1898. Fourth report on the West Ontario gold region;
Bureau of Mines, Annual Report, Vol. 7, Pt 2, p. 139-140.
Finn, G.C., Edgar, A.D., and Rowell, W. F. 1982. Petrology,
Geochemistry, and Economic Potential of the Nipissing
Diabase; Grant 100, p.43-47 in Geoscience Research
Grant Program. Summary of Research 1981-1982, edited
by E.G. Pye, Ontario Geological Survey, Miscellaneous
Paper 103, 219p.
Gates, B.I. 1991. Sudbury Mineral Occurrence Study; Ontario
Geological Survey, Open File Report 5771, 235p.
Lightfoot, P.C. and Naldrett, A.J., 1996. Petrology and
geochemistry of the Nipissing Gabbro: Exploration
strategies for nickel, copper, and platinum group
elements in a large igneous province; Ontario
Geological Survey, Study 58, 81p.
McDougall, S. 1998. Pacific North West targets
platinum-palladium in Ontario; The Northern Miner,
November 30, 1998.
Scott, K.V., and Woolhan, R.W. 1987. Report on Kukagami Lake
property, Kelly Township, Ontario; assessment report
for Nickeldale Resources Inc. prepared by Derry,
Michener, Booth & Wahl, 17p.
Thomson, J.E. and Card, K.D. 1963. Geology of Kelly and Davis
Township; Ontario Department of Mines, Geological Report #15,
Accompanied by map 2037, scale 1:31680, 20p.
<PAGE>
17
CERTIFICATE
FOR
JAMES G. BURNS
1) I am the author of this report.
2) I reside at 190 Graye Crescent, Timmins, Ontario, Canada.
3) I graduated from Queen's University at Kingston, Ontario in
1969 with a B.Sc. (Honours) in Geological Science. I have
been practising my profession continuously since that date.
4) I am a member of the Association of Professional Engineers
of Ontario, the Canadian Institute of Mining and Metallurgy,
and the Prospectors and Developers Association of Canada.
5) This report is based upon my personal review of pertinent
data, and discussions with persons familiar with the
general region.
6) I have not received nor do I expect to receive any interest
in the Kelly township property. I do not own nor do I
expect to receive, directly or indirectly, any securities of
Excellerated Resources Inc.
7) I consent to the use of this report by Excellerated
Resources Inc. for all purposes normal to the business
of the company.
Timmins, Ontario \s\ James G. Burns
James G. Burns P.Eng
April 19, 1999
<PAGE>
JAMES G. BURNS
190 Graye Crescent
Timmins, Ontario
Canada P4N 8K8
ADVENTURE MINERALS INC.
Suite 414 - 1859 Spyglass Place
Vancouver, British Columbia
Canada V52 4K6
CONSENT OF GEOLOGICAL CONSULTANT
--------------------------------
I hereby consent to the inclusion of my report dated April 19, 1999
entitled "Kukagami Lake Property of Excellerated Resources Inc."
with the Form 10-SB Registration Statement to be filed by Adventure
Minerals Inc. with the United States Securities and Exchange
Commission.
Dated the 18th day of August, 1999
\s\ James G. Burns
- --------------------
James G. Burns,
Consulting Geologist
