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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 31, 2000
[ ] Transition Report pursuant to 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period to
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Commission File Number 0-27295
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ADVENTURE MINERALS INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0208988
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Suite 414, 1859 Spyglass Place
Vancouver, British Columbia, Canada V6Z 4K6
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 604-872-4107
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None
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(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days [ ] Yes [ X] No
State the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
2,033,000 Shares of $.001 par value Class A Common Stock outstanding
as of March 1, 2000.
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and Item 310 (b) of
Regulation S-B, and, therefore, do not include all information and
footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' equity
in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a
fair presentation of the results of operations and financial position
have been included and all such adjustments are of a normal recurring
nature. Operating results for the nine months ended January 31, 2000
are not necessarily indicative of the results that can be expected
for the year ending April 30, 2000.
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
BALANCE SHEET
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
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ASSETS
Current
Cash $ 27,637
Mineral Property (Note 4) 1,000
Exploration Advance (Note 5) 8,299
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$ 36,936
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LIABILITIES
Current
Accounts payable $ 13,757
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SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares,
par value $0.001 per share
Issued and outstanding:
2,033,000 Common shares 2,033
Additional paid in capital 52,217
Deficit Accumulated During The Exploration Stage (31,071)
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23,179
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$ 36,936
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Contingencies (Note 6)
Commitments (Note 7)
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
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NINE INCEPTION
MONTHS FEBRUARY 17
ENDED 1999 TO
JANUARY 31 JANUARY 31
2000 2000
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Expenses
Office administration and sundry $ 7,124 $ 7,908
Mineral property exploration expenditures 532 1,495
Professional fees 18,692 21,023
Stock transfer fees 645 645
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Net Loss For The Period 26,993 $ 31,071
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Deficit Accumulated During The Exploration
Stage, Beginning Of Period 4,078
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Deficit Accumulated During The Exploration
Stage, End Of Period $ 31,071
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Net Loss Per Share $0.01
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Weighted Average Number of Shares
Outstanding 2,033,000
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
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NINE INCEPTION
MONTHS FEBRUARY 17
ENDED 1999 TO
JANUARY 31 JANUARY 31
2000 2000
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Cash Flow From Operating Activities
Net loss for the period $ (26,993) $ (31,071)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activities
Change in accounts payable 11,676 13,757
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(15,317) (17,314)
Cash Flow From Investing Activities
Mineral property - (1,000)
Exploration advance - (8,299)
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- (9,299)
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Cash Flow From Financing Activities
Share capital issued - 54,250
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Increase (Decrease) In Cash (15,317) 27,637
Cash, Beginning Of Period 42,954 -
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Cash, End Of Period $ 27,637 $ 27,637
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
Common Stock
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Additional
Paid-in
Shares Amount Capital Deficit Total
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Shares issued for
cash at $0.005 1,200,000 $ 1,200 $ 4,800 $ - $ 6,000
Shares issued for
cash at $0.05 800,000 800 39,200 - 40,000
Shares issued for
cash at $0.25 33,000 33 8,217 - 8,250
Net loss for the
period - - - (4,078) (4,078)
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Balance, April 30,
1999 2,033,000 2,033 52,217 (4,078) 50,172
Net loss for the
period - - - (26,993) (26,993)
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Balance, January
31, 2000 2,033,000 $ 2,033 $52,217 $ (31,071) $ 23,179
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
1. BASIS OF PRESENTATION
The unaudited financial statements as of October 31, 1999
includes herein have been prepared without audit pursuant to
the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in financial statements prepared in
accordance with United States generally accepted principles
have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. It is suggested
that these financial statements be read in conjunction with the
April 30, 1999 audited financial statements and notes thereto.
2. 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 the amount shown as mineral property
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.
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property Costs
The Company capitalizes the acquisition costs of mineral
properties in which it has a continuing interest to be
amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable acquisition costs will be written off.
To date the Company has not established the commercial
feasibility of its mineral property therefore all
exploration expenditures are being expensed.
b) Foreign Currency Translation
The Company's functional currency is the U.S. dollar.
Transactions in foreign currency are translated into U.S.
dollars as follows:
i) monetary items at the rate prevailing at the balance
sheet date;
ii) non-monetary items at the historical exchange rate;
iii) revenue and expense at the average rate in effect
during the applicable accounting period.
Gains or losses arising in translation are included in the
results of operations.
c) 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.
d) 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.
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
c) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
4. 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
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4. EXPLORATION ADVANCE
The Company has advanced $8,299 in connection with an
exploration program which had not commenced at January 31,
2000.
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ADVENTURE MINERALS INC.
(formerly Magic Bag Corporation)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
5. CONTINGENCIES
a) Mineral Property
The Company's mineral property interest has been acquired
pursuant to an option agreement. In order to retain its
interest the Company must satisfy the terms of the option
agreement described in Note 4.
b) 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.
7. COMMITMENT
The company has entered into an agreement with a company
controlled by its president to provide management services for
a one year term at $750 per month expiring March 31, 2000.
8. NAME CHANGE
During the period the company's name was changed from Magic Bag
Corporation to Adventure Minerals Inc.
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Item 2. Management's Discussion and Analysis or Plan of
Operations
The Company is an exploration stage company engaged in the
acquisition, exploration and development of mineral properties.
The Company has an option (the "Option") to acquire an interest
in a property in the Kukagami Lake region of the Sudbury Mining
District in the Province of Ontario, Canada (the "Kukagami Lake
Property"). The Company acquired the Option from Excellerated
Resources Inc. ("Excellerated") pursuant to an option agreement
dated April 1, 1999. 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.
Company's Plan of Operation
The Company is proceeding with phase one of a recommended work
program on the Kukagami Lake Property. The recommended work
program will be undertaken by Excellerated on the Kukagami Lake
Property and on adjacent properties owned by Excellerated. The
Company will fund its proportionate share of this exploration
program. The Company has advanced the amount of $8,299 US to
Excellerated towards the Company's proportionate share of the
cost of phase one of the exploration program. The Company will
be obligated to pay to Excellerated any amount by which the
Company's share of the cost of phase one of the work program
exceeds the amount advanced.
The Company has raised sufficient funds from prior offerings of
its securities, as set forth in Item 4 of Part II of the
Company's Form 10-SB Registration Statement, to fund its share of
phase one of the exploration program to be carried out by
Excellerated. 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 $27,637 US as of
January 31, 2000. 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
nine-month period to W.F.C. Management Corporation under the
Company's management agreement with W.F.C. Management Corporation
and to pay for the legal and accounting expense of complying with
its obligations as a reporting issuer under the Securities
Exchange Act of 1934, in addition to the cost of completing phase
one of the exploration program.
The Company incurred operating expenses in the amount of $26,993
for the nine months ending January 31, 2000. These operating
expenses included an amount of $6,750 paid to W.F.C. Management
Corporation, a company controlled by Mr. Grayson Hand, a director
and President of the Company. These operating expenses also
included $18,692 in professional fees which were primarily
attributable the preparation and filing of the Company's Form 10-
SB registration statement with the Securities and Exchange
Commission.
The Company 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
$10,700 US which is in excess of the projected cash reserves of
the Company upon completion of phase one of
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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 $286,500 CDN (equal to approximately $196,453
US as at March 1, 2000) 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 $286,500 CDN (equal to approximately $196,453 US as at
March 1, 2000) 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.
The Company has not purchased or sold any plant or significant
equipment and does not expect to do so in the foreseeable future.
The Company currently has no employees, other than its sole
officer, Mr. Grayson Hand, President, Secretary and Treasurer of
the Company, and does not expect to hire any employees in the
foreseeable future. The Company conducts its business through
agreements with consultants and arms-length third parties.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
From time to time, the Company will make written and oral
forward-looking statements about matters that involve risk and
uncertainties that could cause actual results to differ
materially from projected results. Important factors that could
cause actual results to differ materially include, among others:
* Fluctuations in the market prices of platinum and palladium
* General domestic and international economic and political
conditions
* Unexpected geological conditions or unfavourable results of
exploration
* Difficulties associated with managing complex operations in
remote areas
* Unanticipated milling and other processing problems
* The speculative nature of mineral exploration
* Environmental risks
* Changes in laws and government regulations, including those
relating to taxes and the environment
* The availability and timing of receipt of necessary
governmental permits and approval relating to operations,
expansion of operations, and financing of operations
* Fluctuations in interest rates and other adverse financial
market conditions
* Other unanticipated difficulties in obtaining necessary
financing
* The failure of equipment or processes to operate in accordance
with specifications or expectations
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* Labor relations
* Accidents
* Unusual weather or operating conditions
* Force majeure events
* Other risk factors described from time to time in the
Company's filings with the Securities and Exchange Commission.
Many of these factors are beyond the Company's ability to control
and predict. Investors are cautioned not to place undue reliance
on forward-looking statements. The Company disclaims any intent
or obligation to update its forward-looking statements, whether
as a result of receiving new information, the occurrence of
future events, or otherwise.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
(a) None
(b) Reports on Form 8-K--None
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SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorised.
ADVENTURE MINERALS INC.
Date: March 10, 2000
/s/ Grayson Hand
By: ---------------------------------
GRAYSON HAND, Director, President
Chief Executive Officer
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