UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
DELTA INTERNATIONAL MINING AND EXPLORATION, INC.
(Name of Small Business Issuer in its Charter)
NEVADA 86-0930439
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11649 E. CORTEZ DRIVE, SCOTTSDALE ARIZONA, 85259
(Address of principal executive offices)
Issuer's Telephone Number: (1-480-451-5456)
Securities to be registered under Section 12(b) of the Act:
NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
(Title of class)
<PAGE>
GLOSSARY OF TECHNICAL TERMS
Airborne geophysical survey - Measurements of the earth's physical variations
over a pre-described area using either helicopter or fixed wing transport to
carry the measuring device.
Alluvial - Pertaining to material eroded from its primary source, transported by
natural earth processes and deposited in stream sediments.
Anticline - A folded rock sequence that is convex upward.
Diamond indicator mineral - A mineral that is formed under the same physical
conditions as diamond, and is used to aid in the search for primary diamond
deposits. e.g. pyrope garnet, chromite, chrome diopside, ilmenite.
Dredge - A floating apparatus used to recover valuable minerals from stream
sediments.
Geochemical anomaly - A concentration of one or more elements in rock, soil,
sediment or vegetation markedly different from the normal concentrations in the
surroundings.
Geochemistry - The study of the relative and absolute abundance of elements in
the earth.
Ground magnetic survey - Measurements of variations of the earth's magnetic
characteristics using a ground-based magnetometer instrument over a
pre-described area.
Kimberlite - A volcanic rock originating from the earth's mantle composed of
olivine, phlogopite, diopside and minor accessory minerals, including occasional
diamond.
Lamproite - A volcanic rock originating from the earth's mantle composed of
olivine, diopside, phlogopite, richterite, leucite, sanidine, wadeite, and
priderite, plus accessory minerals, including occasional diamond.
Landsat satellite image - Image of the earth's surface collected by NASA's
Landsat satellite from earth's orbit.
Mantle - Intermediate zone of the earth, resting on the earth's core at a depth
of about 2,900 km, and surrounded by the earth's crust.
Microdiamond - A single diamond grain not exceeding 0.5 millimeters along its
longest axis.
Pipe - A tabular or cylindrical rock body usually vertical.
Reconnaissance exploration - Initial field investigation in the search for
valuable minerals.
Soil grid - A systematic array of points or lines along which soil geochemical
samples are collected.
Thrust fault - Fault in which the hanging wall appears to have moved upward
relative to footwall, opposite of gravity, or normal fault. Also called reverse
fault.
<PAGE>
PART 1
ITEM 1. DESCRIPTION OF BUSINESS
CORPORATE HISTORY
As used herein, the term "Company" refers to Delta International Mining and
Exploration, Inc., a corporation incorporated under the laws of Nevada on
February 25, 1998 under the name Behmen Group, Ltd. On May 18, 1999 the Company
changed its name to Delta International Mining and Exploring, Inc. by filing its
Certificate of Amendment of Articles of Incorporation. On June 30, 1999 the
Company changed its name to Delta International Mining and Exploration, Inc. by
filing its Certificate of Amendment of Articles of Incorporation. The Company is
engaged in the exploration of precious mineral resource properties through
subsidiaries. Presently the Company is in the exploration stage and there is no
assurance that a commercially viable mineral deposit and reserve exists in any
of its properties until sufficient geological work is done and a comprehensive
evaluation based upon such work concludes economic feasibility.
The Company has two wholly owned subsidiaries. These subsidiaries are Global
Gold Inc. ("Global"), all of the shares of which are owned directly by the
Company and Britt Minerals, Inc. all of the shares of which are owned by the
Company. Global in turn owns all of the shares of Global Gold Inc., S.A.
("Global S.A."). Global S.A. is in the business of exploring for diamonds and
gold in Bolivia and Britt Minerals Inc. is in the business of exploring for
diamonds in Montana.
On February 25, 1998, the Company completed a private placement of 2,996,000
shares of its Common Stock, at a price of $0.001 per share resulting in gross
proceeds of $2,996. The proceeds were used for the incorporation and startup
costs of the Company. On March 8, 1999, an aggregate of 2,450,000 shares of
common stock were surrendered for cancellation pursuant to agreements in writing
made the same date.
On April 19, 1999, the Company completed the purchase of all of the issued and
outstanding shares of Global. The names of the shareholders of Global and the
number of shares purchased from each is listed in the attached Exhibit 10-1. The
consideration for the purchase was the issuance of 3,976,250 shares of Common
Stock of the Company. The properties of Global S.A. are subject to a 2% gross
overriding royalty in favour of Front Range Exploration Corp. ("Front Range") on
all diamonds produced from the properties in Bolivia. Subsequent to September
30, 1999, Front Range has also been issued 300,000 shares of Common Stock of the
Company in consideration for locating properties in Bolivia for the Company.
On April 22, 1999 the Company completed a private placement of 65,000 shares of
its Common Stock at a price of $0.60 per share for proceeds to the Company of
$39,000 and issued 62,000 shares at a deemed price of $0.60 for services with a
deemed value of $37,200. On August 18, 1999, the Company completed a private
placement of 15,000 shares of its Common Stock at a price of $1.00 per share for
proceeds to the Company of $15,000. On September 30, 1999, the Company completed
a private placement of 100,000 shares of its Common Stock at a price of $0.48
per share for proceeds to the Company of $48,000. On February 14, 2000 the
Company completed a private placement of 150,000 shares of its Common Stock at a
price of $0.48 per share for proceeds to the Company of $72,000.
On October 15, 1999, the Company entered into an agreement for the purchase of
all of the issued and outstanding shares of Britt Minerals, Inc. The purchase
was completed on November 15, 1999. The consideration for the purchase was the
issuance of 600,000 shares of Common Stock of the Company. The properties of
Britt Minerals Inc. are subject to a 1.5% gross overriding royalty in favour of
its original shareholders on all diamonds produced from the properties in
Montana.
2
<PAGE>
MINING OPERATIONS AND RISKS
The properties of the Company are in the exploration stage and do not have any
proven mineral reserves. Should mineral reserves be discovered on the
properties, it is anticipated that the minerals would be predominantly gold in
the case of the Robert and Illimani Properties and diamonds in the case of the
Independencia and Montana properties. See Part I - Item 3. Description of
Property below.
Exploration for natural resources involves a high degree of risk and few
properties which are explored are ultimately developed into producing
properties. There is no assurance that the Company's exploration activities will
result in any discoveries of commercial bodies of ore or diamonds. The long term
profitability of the Company's operations will be in part directly related to
the cost and success, if any, of its exploration programs, which may be affected
by a number of factors.
Exploration for natural resources involves many risks, which even a combination
of experience, knowledge, and careful evaluation may not be able to overcome.
Operations in which the Company has a direct or indirect interest will be
subject to all the hazards and risks normally incident to exploration any of
which could result in work stoppages, damage to persons or property, and
possible environmental damage.
The Company does not currently carry liability insurance and may be found liable
for certain matters that may have a material adverse effect upon its financial
condition. In the event the Company does obtain liability insurance in an amount
which it considers adequate, the nature of these risks is such that liabilities
might exceed policy limits, the liabilities and hazards might not be insurable
risks, or the Company might not elect to insure itself against such liabilities
due to the high premium costs or other reasons, in which event the Company could
incur significant costs that could have a material adverse effect upon its
financial condition.
All phases of the Company's operations are subject to environmental regulation.
Generally, environmental legislation is evolving in a manner which will require
stricter standards and enforcement, increased fines and penalties for
non-compliance, more stringent environmental assessment of proposed projects,
and a heightened degree of responsibility for companies and their officers,
directors, and employees. There is no assurance that future changes in
environmental regulation, if any, will not adversely affect the Company's
operations. Environmental permits are not required for the proposed exploration
programs of the Company in Montana and Bolivia. Before drilling and any major
surface disturbance, it will be necessary to file a report on the flora of the
area. For mine development, it would be necessary to obtain state and municipal
approval. Given the early stage of exploration, it is premature to discuss the
specifics of the environmental permitting process, since the size, type, and
existence of an economic diamond source or ore body has not been defined, and
there is no assurance that an economic diamond source or ore body will be
located on the properties of the Company
The Company has not obtained title opinions for any of its properties and at the
present time does not intend to obtain any title opinions and will instead rely
on its own searches. There is therefore no guarantee that title to such
concessions will not be challenged or impugned. In some countries, the system
for recording title to the rights to explore, develop, and mine natural
resources is such that a title opinion provides only minimal comfort that the
holder has title. Also, in many countries claims have been made and new claims
are being made by aboriginal peoples that call into question the rights granted
by the governments of these countries.
The Company's revenues, if any, are expected to be in large part derived from
the extraction and sale of diamonds and base and precious metals such as gold
and silver. The price of those commodities has fluctuated particularly in recent
years, and is affected by numerous factors beyond the Company's control
including international, economic, and political trends, expectations of
inflation, currency exchange fluctuations, interest rates, global or regional
consumptive patterns, speculative activities, and increased production due to
new extraction developments and improved extraction and production methods. The
effect of these factors on the price of diamonds and base and precious metals,
and therefore the economic viability of any of the Company's exploration
projects, cannot accurately be predicted.
3
<PAGE>
There are many individuals and companies that are engaged in the mineral
exploration business, some of which are very large, established mining companies
with substantial capabilities and long earning records. The Company may be at a
competitive disadvantage in acquiring mineral exploration properties or in
purchasing, leasing, or obtaining mining equipment since it must compete with
these individuals and companies, most of which have greater financial resources
and larger technical staffs than the Company. There can be no assurance that the
Company will be successful in prospecting for or acquiring additional
exploration properties or arranging for their exploration.
Water is essential in all phases of the exploration and development of mineral
properties and the milling of any ore obtained as a result. Water is available
in sufficient quantities on the properties of the Company and management does
not expect that water supply will present any significant difficulties.
Mineral Industry of Bolivia
In 1985, in an effort to establish a free market economy, Bolivia implemented
political, judicial and economic structural reforms. Bolivia has based its
policies on sustainable development through economic stability. Socialist
policies of the past proved to be unworkable on an economic and social level, so
in recent years, mines and concessions were auctioned. Some of the main features
of the economic climate of Bolivia are as follows: one exchange rate, attractive
labour rates, no restriction nor taxes on capital entering or leaving the
country, profit remittance unrestricted with tax on dividends only 13%, no
restriction on imports, no discrimination against foreign ownership with 100%
ownership permitted, and no expropriation unless it is of national interest and
not without fair compensation. In addition, the 1999 inflation rate of 3.13% was
one of the lowest in South America.
In 1997, Bolivia adopted a new mining code. Concessions are measured in
quadrants 500 meters square (25 hectares or 60 acres) and are positioned on
government maps according to the Global Positioning System (GPS). Under the new
system there is very little potential for disputes over property boundaries or
priority of application. Concessions can be maintained indefinitely by paying an
annual tax that amounts to US$0.40 per acre.
Employees
As of the date of this registration statement, the Company employs two people on
a full time basis. These people are Gary Boyd and Robert E. Mathews, the
executive officers of the Company. The Company does not intend to hire any
additional full-time employees over the next 12 months and intends to hire
technical staff to carry out its projects on a temporary basis as such staff are
required.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Since inception, the Company's capital resources have been limited. The Company
has current liabilities of $142,022 and current assets of $24,915 and it will
have to raise additional funding for its operations over the next twelve months.
The Company has had to rely upon the sale of equity securities and shareholders
loans for cash required to fund the administration and operations of the
Company. For the period from its inception to September 30, 1999, the Company
had a deficit of $1,455,622. From the inception of Global on November 8, 1996 to
September 30, 1999, the Company, on a consolidated basis with Global, has
expended $643,782 on wages and salaries, $93,961 on professional fees, $606,943
on exploration expenses and $60,344 on administrative expenses.
4
<PAGE>
Effective April 19, 1999, the Company completed the acquisition of all of the
outstanding shares of common stock of Global in exchange for the issuance of
3,976,250 shares of Common Stock of the Company. As the Global shareholders
obtained effective control of the Company through the exchange of their shares
of Global for shares of the Company, the acquisition has been accounted for as a
reverse acquisition. Consequently, the consolidated statements of loss and
deficit and changes in cash flows reflect the results from operations and
changes in financial position of Global, the legal subsidiary, for the year
ended September 30, 1999 combined with those of the Company, the legal parent,
from the date of acquisition on April 19, 1999, in accordance with generally
accepted accounting principles for reverse acquisitions. In addition, the
comparative figures are those of Global, the legal subsidiary.
On November 15, 1999, the Company completed the purchase of all of the issued
and outstanding shares of Britt Minerals, Inc. in consideration of the issuance
of 600,000 shares of Common Stock of the Company. The operations of Britt
Minerals, Inc. which consist mainly of staking and acquisition costs do not
appear in the September 30, 1999 financial statements since the acquisition of
the shares of Britt Minerals, Inc. occurred after the Company's fiscal year end.
The operations of Britt Minerals, Inc. appear in the consolidated unaudited
financial statements for the 6 months ending March 31, 2000.
The Company's fiscal year end is September 30. The following is a summary of
certain selected financial information for the six months ended March 31, 2000,
the fiscal year ended September 30, 1999 and the period from its date of
incorporation on February 25, 1998 to September 30, 1998. Reference should be
made to the financial statements attached to this registration statement to put
the following summary in context. All dollar figures referred to in this section
relating to the Company are listed in US dollars unless otherwise noted.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
INCEPTION (FEBRUARY 25,
SIX MONTHS ENDED MARCH YEAR ENDED SEPTEMBER 30, 1998) TO YEAR ENDED
31, 2000 1999 SEPTEMBER 30, 1998
UNAUDITED AUDITED AUDITED
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues -- --
-----------------------------------------------------------------------------------------------------------------------
(Loss) from continuing operations $246,022 $(320,122) $(743,743)
-----------------------------------------------------------------------------------------------------------------------
(Loss) per common share $ 0.04 $ (0.01) $ (0.20)
-----------------------------------------------------------------------------------------------------------------------
Working capital (deficiency) $ 125,744 $(140,798) $ 179,935
-----------------------------------------------------------------------------------------------------------------------
Total assets $(204,767) $ 379,049 $ 310,563
-----------------------------------------------------------------------------------------------------------------------
Long-term obligations $ 250,000 $ 250,000 --
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
The Company has received loans from certain of its shareholders in the principal
sum of $250,000. The amount due to shareholders is unsecured with interest
payable at the rate of 12% per annum for the initial six months of the term of
the loan and thereafter at the rate of 10% per annum. The amount due to
shareholders is convertible into shares of the Company at the current market
price at the date of conversion. The Company plans to either repay the loans
upon securing a public financing after this registration statement becoming
effective or to have the shareholders convert their loans.
RESULTS OF OPERATIONS
During the fiscal year ended September 30, 1999, the Company completed the
acquisition of all of the issued and outstanding shares of Global. As a result
of this acquisition, the Company's financial statements have been consolidated
with those of Global. At the time of the acquisition, Global was an exploration
company with operations in Bolivia. From November, 1996 to April 19, 1999,
Global's subsidiary, Global S.A. had conducted a gold dredging exploration on
the Madre de Dios River near Sena, Bolivia. At the time of the acquisition,
Global had a net operating loss of $732,064. The loss was attributable to the
cost of acquiring machinery and equipment including the gold dredges ($420,000),
exploration expenses ($179,385) and administration expenses ($40,286).
From June of 1998 to September 30, 1999, the Company advanced $143,750 to Britt
Minerals, Inc. in order to fund the operations of Britt Minerals, Inc. This
amount was consolidated on the financial statements of the Company when it
acquired the shares of Britt Minerals, Inc. on November 15, 1999 and is not
required to be repaid.
The shareholders of Britt Minerals, Inc. at the time of the acquisition by the
Company were Peter Ellsworth and Gary Carlson. At the time the Company initially
agreed to acquire the shares of Britt Minerals, Inc., Mr. Ellsworth was not a
director of the Company. At the request of the Company, Mr. Ellsworth became a
director prior to the completion of formal documentation for the acquisition in
October of 1999. At the time of the acquisition therefore, Mr. Ellsworth was a
director of the Company and not dealing at arm's length. Mr. Carlson was dealing
at arm's length with the Company at the time of the acquisition. The funds
advanced to Britt Minerals, Inc. by the Company were used to finance geological
exploration ($41,221), to finance contract services with Peter Ellsworth and
Gary Carlson ($28,801), for field expenses and supplies ($13,305), and for claim
fees ($53,482). The balance of $6,941 was used for miscellaneous amounts
including travel and promotion, memberships and publications.
The Company through Global S.A. owns two (2) exploration dredges, along with
related equipment including four (4) boats / motors, two (2) welders and welding
equipment, tools, suction pipe, radio system, spare parts and miscellaneous
equipment. The cost of the exploration dredges and related equipment was
$294,000, which was paid for by the issuance of 2,940,000 shares of Global at a
deemed price of $0.10 per share. The share issuance was made to Gary Boyd and
Robert Mathews, the executive officers of the Company who were at the time of
the issuance, not dealing at arm's length with the Company.
Due to the lack of any revenues and the cumulative losses of $1,455,622 incurred
through September 30, 1999 and $1,844,014 through March 31, 2000, there is a
substantial doubt about the Company's ability to continue as a going concern, as
noted in the report of the independent auditors on the Company's financial
statements for the period ended September 30, 1999. The Company requires
additional financing to continue operations and to undertake the exploration
programs described below. If it is unable to obtain such financing it may be
unable to continue operations or engage in the exploration programs.
At March 31, 2000, the Company had a working capital deficiency of $125,744. The
increase was due to the loss incurred during the six months then ended. In
October, 1999, the Company borrowed the sum of $75,000 from a shareholder,
Charles Wells. This money was used for operating expenses and is convertible
into Common Stock at a price of $0.50 per share. Since it is not known at
present whether Mr. Wells intends to convert the loan, the amount has been
classified as a current liability and is included in the March 31, 2000 working
capital deficiency.
6
<PAGE>
ITEM 3. DESCRIPTION OF PROPERTIES
MINERAL PROPERTIES OF GLOBAL S.A.
Since November 16, 1996, Global's subsidiary, Global S.A., has conducted gold
exploration on its gold operation on the Madre de Dios River ("River") near
Sena, Bolivia. The River is a substantial tributary in the Amazon River drainage
basin. In this operation two dredges have been used for exploration. Global S.A.
does not have any property interest in the River but it has obtained a permit
from the Bolivian government for its dredging operations.
ILLIMANI PROPERTY
Global S.A. owns a 100% interest in the Charles concessions (the "Illimani
Property") located approximately 65 kilometres by gravel road east of La Paz,
Bolivia. The concessions are located in the high alpine at an elevation of 4,000
metres.
History and Previous Work
The Illimani area has a history of mining. Mining activity in the region of
Illimani predates the Spanish Conquistadors. Streambeds have been artisanaly
mined for alluvial gold for centuries. Two kilometres to the east of the
property is the Balsa Negra gold tungsten mine, circa 1920. Another three
kilometres further east along the Main Andean Thrust Fault is the Olla de Oro
Gold Mine, circa 1900. Four kilometres south across the Khanuma valley are a
number of gold and tin mines. The Illimani Property has had previous geological
reconnaisance performed on it. Global S.A. started a systematic exploration
program of geological traverses, mapping and soil grids in November 1997.
Proposed Work Program
The Company plans to build a tent camp on the property and use local labor to
trench the northern anticline. Limited hand trenching should determine if the
location would warrant the expensive road construction for further mechanized
trenching and drilling. Geological traverses will be made over the features on
the property believed to be causing the geochemical anomalies. The results of
the trenching program will determine whether a drill program is warranted. The
cost of the trenching program is estimated to be $10,000, and the cost of the
traverse is estimated to be $1,000. The work program will commence in the fall
of 2000.
INDEPENDENCIA CONCESSIONS
The Company owns a 100% interest in the Independencia Concessions encompassing
an area of 3,275 hectares or 7,860 acres located approximately 100 kilometers
directly south east of La Paz in the department of Cochabamaba. The
Independencia Concessions consist of the Independencia II, V,VI, and VII
concessions. Global S.A. plans a work program consisting of ground magnetics,
detailed geologic mapping and rock sampling during the fall of 2000, at a cost
of $35,000 to test the concessions for kimberlite.
ROBERT PROPERTY
The Company owns a 100% interest in the Robert Property. The Robert Property is
located 80 kilometres by paved highway south of La Paz, Bolivia. The property is
1550 hectares. The property is approximately 80% rocky outcrop or shallow soils.
7
<PAGE>
ROYALTY AGREEMENT
In consideration for the location of the above mineral properties in Bolivia,
Global S.A. has entered in an agreement in writing dated April 19, 1999 with
Front Range Exploration Corp. of the Turks and Caicos Islands for the grant of a
gross overriding royalty of 2% of the value of all diamonds produced from the
properties of Global S.A. located by Front Range Exploration Corp. In addition
the Company has issued 300,000 shares of Common Stock to Front Range Exploration
Corp.
BRITT MINERALS, INC.
MONTANA DIAMOND EXPLORATION PROPERTIES
Pursuant to an agreement in writing dated October 15, 1999, Global has acquired
all of the shares of Britt Minerals, Inc. Britt Minerals, Inc. is the registered
owner of diamond exploration properties in Montana.
The consideration for the acquisition was the issuance of 600,000 shares of
Common Stock of the Company. Further, the vendors shall receive a gross
overriding royalty of 1.5% of the value of all diamonds produced from the
properties.
The properties in which Britt Minerals, Inc. has an interest are the Bearmouth
Lamproite Diamond Prospect, the Rattler Gulch Property, the Yellow Water Butte
Property, the Three Buttes Property, Teigen Butte, McMurtry Creek, Laird Creek,
Missouri River Breaks, Gold Butte claims, Homestead property and Gjerde Ranch
Lease for a total of 11 properties covering approximately 11,332 acres.
DIAMOND EXPLORATION
Primary diamond deposits are mined from either kimberlite or lamproite rock,
which originate deep within the earth's crust. Diamonds exist at least 100km in
depth within the earth's mantle, and are transported to the earth's surface by
extremely rapid volcanic eruptions, which form rare kimberlite and lamproite
pipes. Diamond exploration focuses on these pipes, which are subsequently tested
for the presence of diamonds and diamond indicator minerals. Discovering
kimberlites and lamproites are the first steps to finding diamond deposits.
The diamond exploration properties owned by Britt Minerals Inc. are spread out
over 11 prospects in areas of kimberlites and lamproites. The areas are the
Garnet Range, Missouri River Breaks, Porcupine Dome and Grassrange diatreme
fields. Apart from these four (4) trends that have already been investigated,
there are other trends to be evaluated in Montana.
WORK PROGRAMS
The exploration for diamonds in Montana is in its initial stages. The properties
owned by the Company in Montana will require detailed field investigations and
regional reconnaissance exploration is planned to locate additional kimberlite
or lamproite pipes. Further the Company intends to carry out ground magnetic
surveys, detailed geologic mapping, rock sampling and stream sediment sampling
to evaluate the potential for diamonds within properties owned by the Company.
Regional reconnaissance exploration will utilize an airborne geophysical survey,
Landsat satellite image analysis, aerial photographic interpretation, stream
sediment geochemistry and follow-up field examinations. The following is an
estimated budget and preliminary exploration plans for each of the properties of
the Company in Montana.
8
<PAGE>
BEARMOUTH LAMPROITE DIAMOND PROSPECT Trenching and microdiamond sampling is
planned on the main zone to test the outcropping lamproite material. Ground
magnetic surveying, combined with detailed geologic mapping will explore the
remainder of the property for additional lamproite material. The work is
expected to cost $10,000 and the work will be completed during the summer of
2000.
RATTLER GULCH PROPERTY Ground magnetic surveying will be used to outline drill
targets. Several small diameter, shallow drillholes will test the concealed
material. The cost is estimated at $15,000 and work will be completed during the
summer of 2001.
YELLOW WATER BUTTE PROPERTY Detailed mapping, ground magnetic surveying and
diamond indicator mineral sampling are planned to outline microdiamond sample
sites. The work will cost $12,500 and it will be completed during the fall of
2000.
THREE BUTTES PROPERTY Detailed geological mapping, ground magnetic surveying,
trenching and diamond indicator mineral sampling are planned to determine if
microdiamond sampling is warranted. The cost is projected to be $8,000, and the
work will be completed during the summer of 2000.
TEIGEN BUTTE Detailed mapping and ground magnetic surveying is planned to
determine if drilling is warranted. The cost will be $3,000, and the work will
be performed during the fall of 2000.
MCMURTRY CREEK Ground magnetic surveying and geological mapping will be used to
locate microdiamond sample sites. The work will cost $3,000, and will be
performed during the summer of 2001.
LAIRD CREEK Diamond indicator mineral sampling will determine if any additional
work is warranted. The work will be completed during the fall of 2001, and is
estimated to cost $2,000.
MISSOURI RIVER BREAKS Geological mapping, ground magnetic surveying, and
detailed rock characterization will be used to outline trench sites and diamond
indicator mineral sample locations. The work will cost $15,000, and is planned
for the spring of 2001.
GOLD BUTTE CLAIMS Diamond indicator mineral samples will be collected to
determine if microdiamond sampling is warranted. The cost of the work is
estimated at $2,000, and is planned for the summer of 2001.
HOMESTEAD PROPERTY Detailed geological mapping, ground magnetic surveying,
indicator mineral sampling and microdiamond testing are planned. The test work
will cost $20,000, and will be completed during the summer of 2000.
GJERDE RANCH Ground magnetic surveys and diamond indicator mineral sample
testing are planned over three known targets, and reconnaissance exploration
will cover the remaining ranch property. The cost will be $20,000, and will be
initiated in the spring of 2001.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000, the outstanding Common
Stock of the Company owned or of record or beneficially by each person who owned
of record, or was known by the Company to own beneficially, more than 5% of the
Company's Common Stock, and the name and shareholdings of each Officer and
Director and all Officers and Directors as a group.
9
<PAGE>
--------------------------------------------------------------------------------
NAME AND ADDRESS OF NUMBER OF SHARES OF PERCENTAGE OF
BENEFICIAL OWNER COMMON STOCK OWNED COMMON STOCK
--------------------------------------------------------------------------------
Gary L. Boyd
11649 E. Cortez Drive 697,500 shares 15.43%
Scottsdale, AZ 85259 200,000 stock options
--------------------------------------------------------------------------------
Robert E. Mathews
242 Kings Road 275,000 stock options 28.72%
Lewisburg, KY 42256
1,395,000 shares
(beneficially owned
together with Jack Wells)
--------------------------------------------------------------------------------
W.C. McCaslin
30501 Green Valley Road 697,500 shares 11.99%
Gravois Mills, MO 65037
--------------------------------------------------------------------------------
Charles Wells
2445 Happy Hollow Road 825,000 shares 14.18%
Hopkinsville, KY 42240
--------------------------------------------------------------------------------
Jack Wells
991 West 1st Street 65,000 shares and beneficial
Owensboro, KY 42301 ownership of 1,395,000 with 1.11%
Robert Mathews
--------------------------------------------------------------------------------
(1) This table is based on 5,814,250 shares of Common Stock outstanding on
March 31, 2000. If a person listed on this table has the right to obtain
additional shares of Common Stock within sixty (60) days from March 31,
2000, the additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such person, but are not deemed
to be outstanding for the purpose of computing the percentage of any other
person. Charles Wells has the right to convert a loan made to the Company
in the sum of $75,000 into Common Stock of the Company at a price of $0.50
per share. This table does not include this right to convert as the
intention of Mr. Wells is not known to the Company at this time.
(2) These individuals are the officers and directors of the Company and may be
deemed to be "parents" of the Company as that term is defined in the rules
and regulations promulgated under the federal securities laws.
(3) The above figures include options to purchase 475,000 shares of Common
Stock. The Company has not yet adopted a formal Stock Option Plan.
10
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age, and position of each officer and
director of the Company. No director of the Company has been a director or
officer of a company registered under the 1934 Act. Further, no directors or
officers, promoters or control persons of the Company have in the past five
years been involved in any bankruptcy, criminal proceedings or securities
infractions.
NAME AGE POSITION
---- --- --------
Gary L. Boyd 52 Co-chairman of Board of Directors,
11649 E. Cortez Drive Director,President and Secretary
Scottsdale, AZ 85259
Robert E. Mathews 53 Co-chairman of the Board of
242 Kings Road Directors, Director, Chief Financial
Lewisburg, KY 42256 Officer, Treasurer
Peter C. Ellsworth 39 Director, Consulting Geologist
265 Benton Avenue
Missoula, MT 59801
All directors of the Company have served since April 7, 1999. The officers were
elected on April 7, 1999, and will serve for one year or until their respective
successors are elected and qualified.
The principal occupation and business experience during the last five years for
each of the present directors or executive officers of the Issuer are as
follows:
GARY L. BOYD - PRESIDENT, DIRECTOR, CO-CHAIRMAN OF THE BOARD
Mr. Boyd has been the President and Secretary of the Company since its
inception. From 1992 to 1996 Mr. Boyd was employed by South American Mining &
Minerals LLC, a company engaged in gold exploration, as the manager of gold
recovery operations Venezuela and Bolivia. For the last three years, Mr. Boyd
has been assessing mining properties for their eventual sale or transfer to the
Company. From 1977 to 1992 Mr. Boyd was employed by Digital Equipment
Corporation in various positions, such as District Personnel Manager, Regional
Human Resource Manager, U.S. Area Employee Relations Manager. Mr. Boyd has a
Bachelor of Arts Degree from Western Kentucky University.
ROBERT E. MATHEWS - CHIEF FINANCIAL OFFICER, TREASURER, DIRECTOR, CO-CHAIRMAN OF
THE BOARD
From 1994 to 1996 Mr. Mathews of Owensboro, KY. was self-employed, working with
Mr. Boyd in locating and acquiring properties in Bolivia for transfer or sale to
the Company. From 1988 to 1995, Mr. Mathews was a stockbroker in Owensboro, KY.
with Advest Inc., a regional brokerage firm. Prior to 1988, Mr. Mathews was an
Account Executive with Merrill Lynch out of Owensboro, KY. Mr. Mathews has a
Bachelor of Science in Business from Western Kentucky University.
PETER C. ELLSWORTH - DIRECTOR, CONSULTING GEOLOGIST
Mr. Ellsworth has 15 years of experience in exploration and mining for precious
metals, base metals, industrial minerals and diamonds. Since 1992, Mr. Ellsworth
has been based out of Missoula Montana as a consulting geologist dedicated to
the mineral exploration industry, including work in the U.S., Mexico and South
America. Some of the projects that Mr. Ellsworth has consulted on are the Echo
Bay Mexico S.A. de C.V. gold exploration project in Baja California Sur, Mexico,
Echo Bay Exploration Inc. diamond and gold exploration projects in Montana and
Washington, base metal exploration in Idaho for Cominco American, establishing
and managing gold and silver exploration programs in Mexico for MK Gold Co., and
copper and gold project acquisition in Chile. Mr. Ellsworth holds a Bachelor of
Science degree in Geology from Montana State University and a Master of Science
degree in Economic Geology from the University of Montana.
11
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION
Messrs. Boyd and Mathews have received compensation from the Company and its
subsidiary Global. That compensation has been $6,000 per month for the past 18
months for each if Messrs. Boyd and Mathews. The Company anticipates that it
will pay to Gary L. Boyd as President, compensation of $6,000 per month during
the current fiscal year, and to Robert E Mathews, Chief Financial Officer and
Treasurer, the sum of $6,000 per month during the current fiscal year.
The following table sets forth information for all persons who have served as
the chief executive officer of the Company since its inception in February,
1998:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG TERM COMPENSATION
--------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- --------------------------------------------
OTHER
ANNUAL RESTRICT SECURITIES
NAME AND COMPENSATION ED STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL SALARY BON ($) AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) US ($) ($) SARS (#) ($) ($)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary L. Boyd, 1999 $72,000 -0- -0- -0- -0- -0- -0-
President (1)
-------------------------------------------------------------------------------------------------------------------------
1998 $36,000 -0- -0- -0- 200,000 -0- -0-
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Boyd has been the President of the Company since its incorporation in
February 25, 1998.
OPTIONS GRANTED DURING THE MOST RECENTLY COMPLETED FISCAL YEAR
In February of 1998, the Company granted options to purchase 475,000 shares of
common stock to its officers at a price of $0.10 per share. The options vested
immediately and have no expiration date. None of the options have been exercised
as of March 31, 2000. As of March 31, 2000, the Company had not adopted a formal
stock option plan for its directors, officers and employees. The Company intends
to adopt in the future a standard stock option plan whereby directors, officers
and employees of the Company will be entitled to subscribe for up to 10% of the
issued and outstanding shares of the Company at prices to be fixed at the time
of grant.
PLANS AND OTHER COMPENSATION
No "Long Term Incentive Plan" has been instituted by the Company and none are
proposed at this time. Accordingly, there is no LTIP Awards Table set out in
this registration statement. The Company does not have a "Compensation
Committee".
No pension plans or retirement benefit plans have been instituted by the Company
and none are proposed at this time.
COMPENSATION
The Company anticipates it will pay to Gary Boyd, its president, and Robert
Mathews, its Chief financial officer/treasurer each compensation of $6,000 per
month during the current fiscal year. Further, Mr. Ellsworth will be compensated
at industry standard rates for their professional services rendered to the
Company and its subsidiaries
12
<PAGE>
In addition to the foregoing, officers and directors are also entitled to the
reimbursement of all reasonable business expenses.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 15, 2000, the Company purchased the shares of Britt Minerals, Inc.
from Gary Carlson, a former director of the Company, and Peter C. Ellsworth, a
director of the Company. Pursuant to the Agreement, Messrs. Carlson and
Ellsworth have each been issued 300,000 shares of Common Stock of the Company.
In addition, Messrs. Carlson and Ellsworth will each receive a royalty of .75%
(1.5% total) of the value of all diamonds produced from the properties of Britt
Minerals, Inc.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized share capital of the Company consists of 20,000,000 shares of
Common Stock at $0.001 par value. The Company also has authorized the issuance
of 5,000,000 shares of Preferred Stock US$0.001 par value. The Company does not
have any other classes of shares issued or outstanding. As of March 31, 2000,
the Company has a total of 5,814,250 shares of Common Stock issued and
outstanding. and no shares of Preferred Stock issued and outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share for each share held
of record on all matters submitted to a vote of stockholders except that
cumulative voting in the election of directors is required Subject to
preferences that may be applicable to the holders of outstanding shares of
Preferred Stock, if any, the holders of Common Stock are entitled to receive
such lawful dividends as may be declared by the Board of Directors. In the event
of a liquidation, dissolution or winding up of the affairs of the Company,
whether voluntary or involuntary, and subject to the rights of the holders of
outstanding shares of Preferred Stock, if any, the holders of shares of Common
Stock shall be entitled to receive pro rata all of the remaining assets of the
Company available for distribution to its stockholders. The Common Stock has no
preemptive, redemption, conversion or subscription rights. All outstanding
shares of Common Stock are fully paid and non-assessable. The issuance of Common
Stock or of rights to purchase Common Stock could have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from attempting to acquire, a majority of the outstanding voting stock of the
Company
PREFERRED STOCK
The Articles of Incorporation of the Company authorize the board of Directors to
issue, by resolution, 5,000,000 shares of Preferred Stock, in classes, having
such designations, preferences, rights and limitations and on such terms and
conditions as the Board of Directors may from time to time determine, including
the rights, if any, of the holders of such Preferred Stock with respect to
voting, dividends, redemptions, liquidation and conversion. As of March 31,
2000, no series of Preferred Stock have been designated and no shares have been
issued.
13
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company's Common Stock is not quoted on any exchange or quotation system.
The Company's Common Stock is issued in registered form and the following
information is taken from the records of Executive Registrar and Transfer
Agency, Ltd., 3145 W. Lewis, Suite 2, Phoenix, AZ, 85009, the registrar and
transfer agent for the Common Stock.
On September 30, 1999, the shareholders' list for the Company's Common Stock
showed 54 registered shareholders and 4,764,250 shares of Common Stock
outstanding.
On March 31, 2000 the shareholder's list for the Company's Common Stock showed
57 registered shareholders and 5,814,250 shares of Common Stock outstanding.
The Company has not paid dividends in the past and it does not expect to have
the ability to pay dividends in the near future. If the Company generates
earnings in the future, it expects that they will be retained to finance further
growth and, when appropriate, retire debt. The Directors of the Company will
determine if and when dividends should be declared and paid in the future based
on the Company's financial position at the relevant time. All of the Company's
shares are entitled to an equal share in any dividends declared and paid.
ITEM 2. LEGAL PROCEEDINGS
The officers and directors of the Company certify that to the best of their
knowledge, neither the Company nor any of its officers and directors are parties
to any legal proceeding or litigation. Further, the officers and directors know
of no threatened or contemplated legal proceedings or litigation. None of the
officers and directors has been convicted of a felony and none have been
convicted of any criminal offense, felony or misdemeanor relating to securities
or performance in corporate office. To the best knowledge of the officers and
directors, no investigations of felonies, misfeasance in office or securities
investigations are either pending or threatened at this time.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on accounting
and financial disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities of
the Company, without registration, since its inception in February 1998. No such
sales involved the use of an underwriter and no commissions were paid in
connection with the sale of any securities.
(a) During the period from the date of formation of the Company on February 25,
1998 to September 30, 1998, the Company issued 2,996,000 shares of Common Stock
at a price of $0.001 per share for proceeds to the Company of $2,996. An
aggregate of 2,450,000 of these were issued to Robert Nicholson (1,225,000
shares) and Earl Gilbrech (1,225,000 shares) with the balance of 546,000 shares
being issued to various parties, dealing at arm's length, none of whom owned
more than 100,000 shares. This issuance was exempt from registration under
Section 144 of Regulation D of the Securities Act of 1933, as amended. On March
8, 1999, an aggregate of 2,450,000 shares of common stock were surrendered for
cancellation by Earl Gilbrech and Robert Nicholson pursuant to agreements in
writing made the same date.
14
<PAGE>
(b) During the period from October 1, 1998 to September 30, 1999 the Company
issued 3,976,250 shares of Common Stock at a deemed price of $0.001 per share
pursuant to the share exchange with the shareholders of Global. See the list
attached as Exhibit 10-1 for a listing of the shareholders of Global and the
number of shares held by each shareholder. On April 22, 1999 the Company
completed a private placement with Jack Wells of 65,000 shares of its Common
Stock at a price of $0.60 per share for proceeds to the Company of $39,000 and
issued 62,000 shares at a deemed price of $0.60 for deemed proceeds to the
Company of $37,200 for administrative services rendered by Lorena Fernandez,
Owen Peer, Abraham Camacho, Esteban Camacho and Ronald Rowe. The Company also
issued on August 18, 1999 to Robert Ryan, 10,000 shares of Common Stock at a
deemed price of $1.00 per share by way of private placement for proceeds to the
Company of $10,000. The Company also issued on August 18, 1999 to Ronald Rowe,
5,000 shares of Common Stock at a deemed price of $1.00 per share by way of
private placement for proceeds to the Company of $5,000. The Company also issued
on September 30, 1999 to Charles Wells, a total of 100,000 shares of Common
Stock at a deemed price of $0.48 per share by way of private placement for
proceeds to the Company of $48,000. These issuances were exempt from
registration under Rule 144 of Regulation D of the Securities Act of 1933, as
amended.
(c) During the period from October 1, 1999 to March 31, 2000, the Company issued
900,000 shares of Common Stock at a deemed price of $.001 per share for property
acquisitions. An aggregate of 600,000 shares were issued to Peter Ellsworth
(300,000 shares) and Gary Carlson (300,000 shares) for the acquisition of the
shares of Britt Minerals, Inc. and 300,000 shares were issued to Front Range in
consideration for services provided in locating mineral properties in Bolivia.
The Company also issued to Charles Wells 150,000 shares of Common Stock at a
deemed price of $0.48 per share by way of private placement for proceeds to the
Company of $72,000. These issuances were exempt from registration under Rule 144
of Regulation D of the Securities Act of 1933, as amended.
The Company and Global have each issued shares at various times and at various
prices since incorporation. Each issuance of shares was priced at what was in
the opinion of the directors, the best possible price for the shares of the
Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.7502 of the General Corporation Law of Nevada and Article VII of the
Company's Articles of Incorporation permit the Company to indemnify its officers
and directors and certain other persons against expenses in defense of a suit to
which they are parties by reason of such office, so long as the persons
conducted themselves in good faith and the persons reasonably believed that
their conduct was in the Company's best interests or not opposed to the
Company's best interests, and with respect to any criminal action or proceeding,
had no reasonable cause to believe their conduct was unlawful. Indemnification
is not permitted in connection with a proceeding by or in the right of the
corporation in which the officer or director was adjudged liable to the
corporation or in connection with any other proceeding charging that the officer
or director derived an improper personal benefit, whether or not involving
action in an official capacity.
PART F/S
FINANCIAL STATEMENTS
The audited financial statements of the Company for the fiscal year ended
September 30, 1999, with comparative figures to September 30, 1998 are attached
hereto as pages F-1 to F-19. Effective April 19, 1999, the Company completed the
acquisition of 100% of the outstanding common shares of Global in exchange for
the issuance of 3,976,250 shares of common stock of the Company. Consequently,
the consolidated statements of loss and deficit and changes in cash flows
reflect the results from operations and changes in financial position of Global,
the legal subsidiary, for the year ended September 30, 1999 combined with those
of the Company, the legal parent, from the date of acquisition on April 19,
1999, in accordance with generally accepted accounting principles. In addition,
the comparative figures are those of Global, the legal subsidiary. On October
15, 1999, the Company entered into an agreement to acquire all of the shares of
Britt Minerals, Inc. Consequently, attached hereto as pages F-37 to F-45 are the
audited financial statements for Britt Minerals, Inc. for the nine months ended
September 30, 1999 with comparative figures for the period from June 12, 1998
(inception) to September 30, 1999. The March 31, 2000 unaudited financial
statements of the Company attached hereto as pages F-20 to F-36 account for the
acquisition of the shares of Britt Minerals, Inc. on a consolidated basis.
15
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
(A) Exhibits. Exhibits required to be attached are listed in the Description of
Exhibits beginning on page 17 of this Form 10-SB under "Item 2. Description of
Exhibits".
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
DELTA INTERNATIONAL MINING
AND EXPLORATION INC.
Date: July 10, 2000 By: "GARY L. BOYD"
--------------------
Gary L. Boyd, President
By: "ROBERT E. MATHEWS
------------------------
Robert E. Mathews, Chief Financial
Officer / Treasurer
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
C O N T E N T S
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
Accountant's report F-1
Consolidated balance sheet F-2
Consolidated statement of income F-3
Consolidated statement of changes in
stockholders' Equity F-4
Consolidated statement of cash flows F-5
Notes to the consolidated financial statements F-6 - F-14
CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
Independent auditor's report F-15 - F-16
Consolidated balance sheet F-17 - F-18
Consolidated statement of operations F-19
Consolidated statement of stockholders' Equity F-20
Consolidated statement of cash flows F-21 - F-22
Notes to the consolidated financial statements F-23 - F-32
BRITT MINERALS, INC.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999
Independent auditor's report F-33
Consolidated balance sheet F-34
Consolidated statement of operations F-35
Consolidated statement of cash flows F-36
Notes to the consolidated financial statements F-37 - F-38
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
<PAGE>
CHARLES R. LEWIS
--------------------------------------------------------------------------------
CERTIFIED PUBLIC ACCOUNTANT 123 S. MAIN ST., P. O. BOX 815
GREENVILLE, KY 42345
TELEPHONE (270) 338-1709
FAX (270) 338-7200
To The Board of Directors
Delta International Mining & Exploration, Inc.
(An Exploration Stage Enterprise)
Nevada
I have compiled the accompanying consolidated balance sheet of Delta
International Mining & Exploration, Inc. (An Exploration Stage Enterprise) as of
March 31, 2000, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for the three months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. I have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
/s/ Charles R. Lewis
---------------------------
Charles R. Lewis
Certified Public Accountant
June 12, 2000
F-1
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEET
March 31, 2000
ASSETS
------
CURRENT ASSETS
Cash $ 25,594
Tax Credit Receivable 1,390
-----------
Total Current Assets 26,984
-----------
FIXED ASSETS
Equipment, at cost 294,040
Less, accumulated depreciation (127,313)
-----------
Total Fixed Assets 166,727
-----------
TOTAL ASSETS 193,711
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------
CURRENT LIABILITIES
Advances Payable, Individual/Shareholder 98,612
Accrued Interest Payable 48,347
Accounts Payable - Trade 5,769
-----------
Total Current Liabilities 152,728
LONG-TERM DEBT
Note Payable - Shareholder 250,000
-----------
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value,
20,000,000 shares authorized, issued
and outstanding 5,814,250 shares 5,814
Additional Paid-in capital 1,653,183
Receivable from shareholders' - stock (24,000)
Accumulated deficit during development stage (1,844,014)
-----------
(209,017)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 193,711
==========
See accompanying notes and accountant's report.
F-2
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF INCOME
For the Six Months Ended March 31, 2000
REVENUES
--------
Financial Income $ 156
---------
EXPENSES
Salareis 77,000
Professional Fees 27,117
Rent 4,500
Exploration Expenses 88,888
Office Expense 775
Telephone 8,031
Bank Charges 566
Miscellaneous 551
Depreceiation Expense 26,500
Interest Expense 12,500
---------
246,178
Net Income (Loss) Before Income Taxes (246,022)
Provision for Income Taxes 0
---------
NET INCOME (LOSS) $(246,022)
See accompanying notes and accountant's report.
F-3
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Month Period Ended March 31, 2000
<TABLE>
<CAPTION>
Additional Shareholder Retained
Common Paid-In Loans - Earnings
Stock Capital Stock Deficit Total
------- ---------- ------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance
Sept. 30, 1999 $ 4,764 $1,585,037 $(82,000) $(1,597,992) $(90,191)
------- ---------- ------- ----------- --------
Net Income
(Loss) (246,022) (246,022)
Issurance of
Common Sock 1,050 68,146 69,196
Payment on
Shareholder Loans -
Common Stock 58,000 58,000
------- ---------- ------- ----------- --------
Balance
March 31, 2000 $5,814 $1,653,183 $(24,000) $(1,844,014) $(209,017)
</TABLE>
See accompanying nots and accountant's report.
F-4
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Month Period Ended March 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------
Net (Loss) $(246,022)
Adjustments to reconcile net income to
net cash provided (used) by operating
activities 26,250
Depreciation
(Increase) Decrease In:
Accounts Receivable 24,220
Advances Receivable 143,700
Increase (Decrease) In:
Accrued Interest Payable 12,500
Accounts Payable - Trade 35,256
---------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (74,608)
---------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Issuance of common stock 72,000
Acquisition of mineral properties (145,175)
Reduction of Shareholder Loans - Stock 58,000
---------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (15,175)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
New borrowings
Short-Term - Individual 98,614
---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 98,614
---------
NET INCREASE IN CASH 8,831
CASH AT BEGINNING OF YEAR 16,763
---------
CASH AT END OF YEAR $ 25,594
=========
SUPPLEMENTAL DISCLOSURES
Interest, paid 0
Income taxes paid 0
See accompanying notes and accountant's report.
F-5
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(An Exploration Stage Enterprise)
1.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
NOTE 1 ORGANIZATION AND BUSINESS
Delta International Mining & Exploration Inc. ("Delta" or the
"Company") was incorporated under the laws of Nevada on
February 25, 1998 and its principal business activity is
mineral property exploration and development.
Effective April 19, 1999, Delta and Global Gold Inc. (a
Bahamian Corporation incorporated on November 8, 1996)
executed their business combination agreement. Delta issued
3,976,250 common shares to the shareholders of Global Gold in
consideration for all of the issued and outstanding common
shares of Global Gold on the basis of one common share of
Delta for each common share of Global Gold. As the former
shareholders of Global Gold obtained effective control of the
Company through the share exchange, this transaction has been
accounted for in these financial statements as a reverse
acquisition and the purchase method of accounting has been
applied. Under reverse acquisition accounting, Global Gold is
considered to have acquired Delta with the results of Delta's
operations included in the consolidated financial statements
from the date of acquisition. Global Gold is considered the
continuing entity and consequently, the amounts prior to April
19, 1999 are those of Global Gold. Global Gold has a wholly
owned Bolivian subsidiary, Global Gold Inc., S.A. Prior to the
date of the business combination Delta had no operations.
All share and per share information in these financial
statements reflect:
a) The Consummation of the business combination
agreement whereby shares and options issued by Global
Gold Inc. were exchanged for shares of the Company's
Common stock and options to purchase shares of the
Company's Common stock, and
b) A change in the par value of Common stock from $0.10
per share to $0.001 per share.
NOTE 2 FINANCIAL CONDITION
The financial statements have been prepared on the going
concern basis, which assumes the realization of assets and
liquidation of liabilities in the normal course of business.
F-6
<PAGE>
NOTE 2 FINANCIAL CONDITION (continued)
As shown in the consolidated financial statements, to date,
the Company has generated no revenues and has accumulated
losses since inception of $1,597,992. These factors, among
others, raise substantial doubt about the Company's ability to
continue as a going concern. The Company's ability to continue
as a going concern is dependent on its ability to generate
future profitable operations and receive continued financial
support from its shareholders and other investors.
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and consolidation
The Consolidated financial statements of Delta International
Mining & Exploration, Inc. a development stage enterprise
includes the accounts of the Company and its wholly owned
subsidiary and are prepared according to generally accepted
accounting principles in the United States. All significant
intercompany transactions and balances have been eliminated in
consolidation.
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from those
estimates.
Machinery and equipment and depreciation
Machinery and equipment are valued at cost.
Machinery and equipment depreciation is calculated by applying
an annual rate of 12.5% starting in the month of purchase
using the straight line method. This rate is intended to
amortize the cost of assets over their estimated useful life.
Fiscal Year
The Company ends its fiscal year on September 30.
F-7
<PAGE>
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
Employee stock option plans
The Company adopted the disclosure provisions of Statement of
Financial Accounting Standards No. 123 ("SFAS 123").
Accounting for Stock Based Compensation". As permitted by SFAS
123, the Company has elected to continue to account for its
employee stock option plan in accordance with the provisions
of Accounting Principles Board Opinion No. 25 "Accounting for
Stock Issued to Employees" (APB 25). Under APB 25, when the
exercise price of the Company's employee stock options is less
than the market price of the underlying shares of the date of
grant, compensation expense is recognized.
Accounting for income taxes
The Company uses the liability method in accounting for income
taxes. Under this method, deferred tax assets and liabilities
are determined based on differences between financial
reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse.
Net loss per share
Basic net loss per share excludes dilution and is computed by
dividing net loss by the weighted average number of common
shares outstanding for the period. Diluted net loss per common
share was the same as basic net loss per common share for all
periods presented since the effect of any potentially dilutive
securities is excluded as they are anti-dilutive because of
Delta's net losses.
Mineral properties
The Company owns interest in mineral properties (Note 4), is
in the process of exploring and developing mineral properties
and has not yet determined whether these properties contain
mineral reserves that are economically recoverable.
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
The recoverability of mineral properties is dependent upon the
discovery of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to
complete the exploration and development of the mineral
properties, future profitable production or proceeds from the
disposition of the mineral properties and the Company's
ability to complete its obligations.
F-8
<PAGE>
Title to mineral properties involves certain inherent risks
due to the difficulties of determining the validity of certain
claims as well as the potential for problems arising from the
frequently ambiguous conveyancing history characteristic of
many mining properties. The Company has investigated title to
all the mineral properties to which it has an option to
acquire an interest and, to the best of its knowledge, title
to all of these properties is in good standing. The properties
in which the Company has committed to earn an interest are
located in Bolivia, South America and the Company is therefore
relying on title opinion by legal counsel who are basing such
opinions on the laws of Bolivia.
Exploration costs
In order to comply with directives from the Securities and
Exchange Commission (SEC) with respect to accounting for
exploration expenditures, the Company has expensed all costs
associated with the exploration of properties in which the
Company holds options to acquire an interest.
Financial instruments
The fair values of cash and accounts payable and accrued
liabilities approximate their carrying values due to the
relatively short periods to maturity of these instruments. It
is not possible to determine the fair value of amounts due to
shareholders as a maturity date is not determinable. The
maximum credit risk exposure for all financial assets is the
carrying amount of that asset.
Recently issued accounting standards
In June 1997, the Financial Accounting Standards Board (FASB)
adopted SFAS No. 130 "Reporting Comprehensive Income", which
requires an enterprise to report by major components and as a
single total, the change in net assets during the period from
non owner sources Delta adopted this statement during the year
ended September 30, 1998.
In February 1998, the FASB adopted SFAS 132, "Employers"
Disclosures About Pensions and Other Postretirement Benefits,
an Amendment of FASB Statements No. 87, 88, and 106, which
revises employers, disclosures about pension and other
postretirement benefit plans. This statement does not change
the measurement or recognition of those plans, but
standardizes the disclosure requirements for pensions and
other postretirement benefits to the extent practicable,
requires additional information on changes in the benefit
obligations and fair values of plan assets that will
facilitate financial analysis, and eliminates certain
disclosures. Delta adopted this statement during the year
ended September 30, 1998 and such adoption did not affect the
accompanying financial statements.
F-9
<PAGE>
In March 1998, the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-1, "Accounting for Costs
of Computer Software Developed or Obtained for Internal Use.
SOP 98-1 provides guidance for an enterprise on accounting for
the costs of computer software developed or obtained for
internal use. Delta adopted this statement during the year
ended September 30, 1998, and such adoption did not affect the
accompanying financial statements.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the
Costs of Start-up Activities", which requires companies to
expense the costs of start-up activities and organization
costs as incurred. Delta adopted this statement during the
year ended September 30, 1998, and such adoption did not
affect the accompanying financial statements.
In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" which defines
derivatives, requires that all derivatives be carried at fair
value, and provides for hedge accounting when certain
conditions are met. Delta will adopt this statement for its
fiscal year ending September 30, 2001. Management has not
fully assessed the implications of adopting this new standard.
NOTE 4 MINERAL PROPERTIES
The Company has interests in the following properties:
Charles Concession
Delta's subsidiary Global Gold Inc., S.A., has acquired by
staking a 100% interest in the Charles concessions (the
"Illimani Property") located approximately 65 kilometers by
gravel road east of La Paz, Bolivia.
Independencia Concessions
Global Gold Inc. S.A. has acquired by staking a 100% interest
in the Independencia Concessions which encompass an area of
3,275 hectares or 7,860 acres and are located approximately
100 kilometers directly south east of La Paz in the department
of Cochabamba.
Robert Property
Global Gold Inc., S.A. has also acquired by staking a 100%
interest in the Robert Property located 80 kilometers south of
La Paz, Bolivia. The property is 1550 hectares.
F-10
<PAGE>
Montana Properties
Delta International Mining & Exploration, Inc. through it's
wholly owned subsidiary, Britt Minerals, Inc. owns 11,252
acres of mineral properties through out the state of Montana.
Properties are located near Missoula, Great Falls, Chester,
Grassrange, Zortman and Forsyth.
The Company has expensed all costs of acquiring its interest
in the above properties.
NOTE 5 CASH
The composition of this account as of March 31, 2000 is as
follows:
1999
$
------
Citibank-Bolivia 6,094
Royal Bank of Scotland 97
Firstar-Hopkinsville 16,192
Missoula Federal Credit Union 3,211
------
25,594
======
NOTE 6 FIXED ASSETS
The composition of this account as of March 31, 2000 is as
follows:
Accumulated Net
Cost Depreciation Value
$ $ $
------- ------- -------
Dredging equipment 294,000 127,313 166,687
Furniture 40 -.- 40
------- ------- -------
294,040 127,313 166,727
======= ======= =======
F-11
<PAGE>
NOTE 7 SHAREHOLDER LOANS AND INTEREST PAYABLE
The composition of this account as of March 31, 2000 is as
follows:
<TABLE>
<CAPTION>
Date Due Accrued Interest
issued date Loan 03/31/00
<S> <C> <C>
02.02.98 02.02.02 $ 100,000 $16,611
03.15.98 03.15.02 100,000 21,417
04.13.98 04.13.02 50,000 10,319
-------- -------
250,000 48,347
======== =======
Date Issued Name No. of Shares Owned
----------- ------------- -------------------
02.02.98 W. C. McCaslin 697,500
03.15.98 Jack Wells* 65,000
04.13.98 Henry Ramsey Morris Jr 150,000
</TABLE>
*Jack Wells and Robert Mathews own 1,395,000 shares jointly.
The amount due to shareholders is unsecured and with interest
payable at the rate of 12% per annum for the initial six
months of the term of the loan and thereafter at the rate of
10% per annum. The amount due to shareholders is convertible
into shares of the Company at the current market price at the
date of conversion.
In October 1999, Charles Wells (shareholder) advanced money
($75,000) to the corporation for operating expenses by an
agreement that Mr. Wells has the option to convert the
advances into common stock at the price of $.50 per share. It
is the opinion of management that the intent of Mr. Wells is
not known at this date and this $75,000 shall be classified as
a current liability until a later date when an agreement has
been reached. Under an identical agreement, Mr Wells issued
another advance in the amount of $125,000 on March 14, 2000.
On March 31, 2000, only $23,612 of this amount had been
actually advanced.
NOTE 8 STOCK OPTIONS
In February 1998, the Company granted 475,000 options at an
exercise price of $0.10 per share to two officers for services
performed. The options vested immediately and have no
expiration date. For the fiscal year ended September 30, 1998
the Company recorded compensation expense of $ 332,500 in
connection with the options granted.
F-12
<PAGE>
At September 30, 1999 and December 31, 1999, no stock options
have been exercised.
As discussed in Note 3, Delta accounts for its stock - based
awards using the intrinsic value method in accordance with APB
25.
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", (SFAS 123) requires
the disclosure of pro forma net income and earnings per share
as if Delta had adopted the fair value method as of the
beginning of the period ended September 30, 1998. Delta
calculations were made using the minimum value method with the
following weighted average assumptions: expected life 60
months following the grant date; risk free interest rates of
6% in 1998; and no dividends during the expected term. The
pro-forma amounts are not materially different from the
amounts reported by Delta.
Also: see Note 7 regarding Mr. Wells (shareholder) advances of
$75,000 that potentially may be converted to common stock.
NOTE 9 INCOME TAXES
Substantially all losses incurred by Delta has been incurred
by its subsidiary in Bolivia. At September 30, 1999 Delta has
$ 732.064 in net operating losses available to offset future
taxable income in its Bolivian subsidiary. The net operating
losses may be carried forward for an unlimited number of years
until utilized to fully offset income.
A valuation allowance to the deferred tax asset for the
benefit of these net operating loss carry forward has been
established due to lack of operating history combined with
risks and uncertainties surrounding Delta's ability to
generate future taxable income.
NOTE 10 SUBSEQUENT EVENT
Issued 600,000 shares of Common Stock pursuant to an agreement
in writing dated October 15, 1999 with the shareholders of
Britt Minerals, Inc. Pursuant to the agreement, the Company
acquired all of the shares of Britt Minerals, Inc. The
consideration for the transfer was the issuance of 600,000
shares of Common Stock of the Company. Further, the vendors
shall receive a gross overriding royalty of 1,5% of the value
of all diamonds produced from the properties. Britt Minerals,
Inc. is the registered holder of 9 diamond exploration
properties in Montana covering approximately 4.158 acres. The
vendors of the shares of Britt Minerals, Inc. are Peter
Ellsworth and Gary Carlson.
F-13
<PAGE>
Issued 300,000 shares of Common Stock to Front Range
Exploration Corporation pursuant to an agreement that was
formalized in writing on October 15, 1999. Pursuant to this
agreement, in consideration of Front Range Exploration
Corporation locating mineral properties of merit in South
America, the Company agreed to issue 300,000 shares and has
granted a gross overriding royalty of 2% of the value of all
diamonds produced from properties located by Front Range
Exploration Corporation.
F-14
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
<PAGE>
1.1 INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders of
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(An Exploration Stage Enterprise)
Nevada
We have audited the accompanying consolidated balance sheet of Delta
International Mining & Exploration, Inc. and subsidiary (An Exploration Stage
Enterprise) as of September 30, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years 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 audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Delta International
Mining & Exploration, Inc. and subsidiary (An Exploration Stage Enterprise) as
of September 30, 1999 and 1998 and the results of their operations and their
cash flows for the years then ended in conformity with generally accepted
accounting principles in the United States of America.
F-15
<PAGE>
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As reflected in the
consolidated financial statements, the Company, has generated no revenues and
has accumulated losses since inception of $ 1,455,622. These factors, among
others, as discussed in Note 2, raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
BERTHIN AMENGUAL & ASOCIADOS
MEMBER FIRM
PANNELL KERR FORSTER - PKF INTERNATIONAL
/s/
-----------------------------(PARTNER)
LIC. HUGO BERTHIN AMENGUAL
La Paz - Bolivia MAT. PROF. No. CAUB-0482
January 6, 2000 RUC 2190931
F-16
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.2 CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999 AND 1998
ASSETS
1998
1999 AS RESTATED
$ $
CURRENT ASSETS
Cash 16,762 37,149
Deliveries to be accounted for 24,220 10,043
Advance payments-related companies 143,700 30,000
Tax credit receivable 1,390 1,023
Prepaid expenses 2,661
---------- ----------
TOTAL CURRENT ASSETS 186,072 80,876
---------- ----------
NON CURRENT ASSETS
FIXED ASSETS
Fixed assets - at cost 294,040 294,000
Accumulated depreciation (101,063) (64,313)
---------- ----------
TOTAL NON CURRENT ASSETS 192,977 229,687
---------- ----------
TOTAL ASSETS 379,049 310,563
========== ==========
F-17
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.2 CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999 AND 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1998
1999 AS RESTATED
$ $
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES
Shareholder loans 250,000 250,000
Interest payable 35,847 10,811
Accounts payable 41,023 -
---------- ----------
TOTAL LIABILITIES 326,870 260,811
---------- ----------
Minority interest 1
----------
STOCKHOLDERS' EQUITY
Common stock, $ 0.001 par value; 20,000,000 shares
authorized; issued and outstanding at September 30,
1999 - 4,764,250 shares; 1998 - 4,059,250 shares 4,765 4,060
Additional paid -in capital 1,585,036 1,181,191
Receivable from stockholders' (82,000)
Deficit accumulated during the development stage (1,455,622) (1.135.500)
---------- ------------
TOTAL STOCKHOLDERS' EQUITY 52,179 49,751
---------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 379,049 310,563
========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-18
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.3 CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998 AND FOR THE
PERIOD FROM INCEPTION TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FROM
INCEPTION TO
1998 SEPTEMBER 30,1999
1999 AS RESTATED AS RESTATED
$ $ $
---------- ---------- -----------
<S> <C> <C> <C>
INCOME
Financial income 69 660 1,928
---------- ---------- -----------
EXPENSES
Wages and salaries 170,282 459,000 643,782
Professional fees 22,521 71,440 93,961
Financial expenses 29,353 21,874 52,540
Exploration expenses 50,415 179,385 606,943
Administrative expenses 47,620 12,724 60,344
---------- ---------- -----------
320,191 744,423 1,457,570
---------- ---------- -----------
Loss before minority interest (320,122) (743,763) (1,455,642)
Minority Interest 20 20
---------- ---------- -----------
Net loss (320,122) (743,743) (1,455,622)
========== ========== ===========
Basic and Diluted Net Loss per share (0.01) (0.20) (0.41)
========== ========== ===========
Shares used calculating basic and diluted
Net loss per share 4,548,417 3,648,250 3,519,320
========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-19
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.4 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED TOTAL
ADDITIONAL DURING RECEIVABLE STOCKHOLDERS
COMMON STOCK PAID IN DEVELOPMENT FROM EQUITY COMPREHENSIVE
SHARES AMOUNT CAPITAL STAGE STOCKHOLDERS' (DEFICIT) INCOME (LOSS)
------ ------ ------- ----- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock for cash 237,500 $ 238 $ 224,701 $ -- $ -- $ 224,939 $ --
Issuance of common stock for Dredging --
Equipment 294,000 2,940 291,060 -- -- 294,000
Net loss -- -- -- (391,757) -- (391,757) (391,757)
----------- ------- ----------- ----------- --------- ----------- --------
BALANCES, SEPTEMBER 30, 1997 3,177,500 3,178 515,761 (391,757) -- 127,182 --
Issuance of common stock for cash 824,750 825 287,387 -- -- 288,212
Issuance of common stock for services 57,000 57 45,543 -- -- 45,600 --
Options granted to officers -- -- 332,500 -- -- 332,500 --
Net loss -- -- -- (743,743) -- (743,743) (743,743)
----------- ------- ----------- ----------- --------- ----------- --------
BALANCES, SEPTEMBER 30, 1998 4,059,250 4,060 1,181,191 (1,135,500) -- 49,751
Issuance of common stock for cash
and receivable from stockholders' 705,000 705 403,845 -- (82,000) 322,550 --
Net loss -- -- -- (320,122) -- (320,122) (320,122)
----------- ------- ----------- ----------- --------- ----------- --------
BALANCES, SEPTEMBER 30, 1999 4,764,250 $ 4,765 $ 1,585,036 $(1,455,622) $ (82,000) $ 52,179
========= ======= =========== =========== ========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-20
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.5 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 1999 AND 1998 AND FOR THE PERIOD FROM
INCEPTION TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FROM
INCEPTION
TO SEPTEMBER, 30
1999 1998 1999
$ $ $
---------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss as restated (320,122) (743,743) (1,455,622)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Stock issued for services 45,600 45,600
Non cash stock compensation 332,500 332,500
Depreciation 36,750 24,938 101,063
Interest payable 25,036 10,811 35,847
Minority interest 1 (20)
Changes in certain other accounts:
Accounts receivable (14,178) (9,326) (24,220)
Tax credit receivable (368) (1,023) (1,390)
Prepaid expenses 2,661 (2,661)
Accounts payable 41,023 41,023
---------- --------- ---------
Net cash (used) by operating activities (229,197) (342,924) (925,199)
---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed assets (40) (40)
Advances receivable (113,700) (30,000) (143,700)
---------- ---------- -----------
Net cash (used) by investing activities (113,740) (30.000) (143,740)
---------- ---------- -----------
</TABLE>
F-21
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.5 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 1999 AND 1998 AND FOR THE PERIOD FROM
INCEPTION TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FROM
INCEPTION
TO SEPTEMBER, 30
1999 1998 1999
$ $ $
--------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Shareholder loans 250,000 250,000
Proceeds from the issuance of Common Stock 322,550 288,212 835,701
--------- ---------- ----------
Net cash provided by financing activities 322,550 538,212 1,085,701
--------- ---------- ----------
Net increase (decrease) in cash (20,387) 165,288 16,762
Cash at beginning of year and period 37,149 (128,139) -
--------- ---------- ----------
CASH AT END OF YEAR AND PERIOD 16,762 37,149 16,762
========= ========== ==========
Supplemental disclosure of cash flow information
Interest paid - 10,908 10,908
========= ========== ==========
Supplemental disclosures of non cash activities:
Dredging equipment acquired in exchange for
Common Stock - - 294,000
========= ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-22
<PAGE>
DELTA INTERNATIONAL MINING & EXPLORATION, INC.
(AN EXPLORATION STAGE ENTERPRISE)
1.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
NOTE 1 ORGANIZATION AND BUSINESS
Delta International Mining & Exploration Inc. ("Delta" or the
"Company") is incorporated under the laws of Nevada on
February 25, 1998 and its principal business activity is
mineral property exploration and development.
Effective April 19, 1999, Delta and Global Gold Inc. (a
Bahamian Corporation incorporated on November 8, 1996)
executed their business combination agreement. Delta issued
3,976,250 common shares to the shareholders of Global Gold in
consideration for all of the issued and outstanding common
shares of Global Gold on the basis of one common share of
Delta for each common share of Global Gold. As the former
shareholders of Global Gold obtained effective control of the
Company through the share exchange, this transaction has been
accounted for in these financial statements as a reverse
acquisition and the purchase method of accounting has been
applied. Under reverse acquisition accounting, Global Gold is
considered to have acquired Delta with the results of Delta's
operations included in the consolidated financial statements
from the date of acquisition. Global Gold is considered the
continuing entity and consequently, the amounts prior to April
19, 1999 are those of Global Gold. Global Gold has a wholly
owned Bolivian subsidiary, Global Gold Inc., S.A. Prior to the
date of the business combination Delta had no operations.
All share and per share information in these financial
statements reflect:
a) The Consummation of the business combination
agreement whereby shares and options issued by Global
Gold Inc. were exchanged for shares of the Company's
Common stock and options to purchase shares of the
Company's Common stock, and
b) A change in the par value of Common stock from $0.10
per share to $0.001 per share.
NOTE 2 FINANCIAL CONDITION
The financial statements have been prepared on the going
concern basis, which assumes the realization of assets and
liquidation of liabilities in the normal course of business.
F-23
<PAGE>
NOTE 2 FINANCIAL CONDITION (CONTINUED)
As shown in the consolidated financial statements, to date,
the Company has generated no revenues and has accumulated
losses since inception of $ 1,455,622. These factors, among
others, raise substantial doubt about the Company's ability to
continue as a going concern. The Company's ability to continue
as a going concern is dependent on its ability to generate
future profitable operations and receive continued financial
support from its shareholders and other investors.
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND CONSOLIDATION
The Consolidated financial statements of Delta International
Mining & Exploration, Inc. a development stage enterprise
includes the accounts of the Company and its wholly owned
subsidiary and are prepared according to generally accepted
accounting principles in the United States. All significant
intercompany transactions and balances have been eliminated in
consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from those
estimates.
MACHINERY AND EQUIPMENT AND DEPRECIATION
Machinery and equipment are valued at cost.
Machinery and equipment depreciation is calculated by applying
an annual rate of 12.5% starting in the month of purchase
using the straight line method. This rate is intended to
amortize the cost of assets over their estimated useful life.
FISCAL YEAR
The Company ends its fiscal year on September 30.
F-24
<PAGE>
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION
Assets and liabilities of Global Gold Inc. S.A. are translated
into U.S. dollar equivalents at the rate of exchange in effect
on the balance sheet date; income and expenses are translated
at the average rates of exchange prevailing during the period.
The related translation adjustments are reflected in
stockholder's equity. Foreign currency gains or losses
resulting from transactions are included in results of
operations.
EMPLOYEE STOCK OPTION PLANS
The Company adopted the disclosure provisions of Statement of
Financial Accounting Standards No. 123 ("SFAS 123").
Accounting for Stock Based Compensation". As permitted by SFAS
123, the Company has elected to continue to account for its
employee stock option plan in accordance with the provisions
of Accounting Principles Board Opinion No. 25 "Accounting for
Stock Issued to Employees" (APB 25). Under APB 25, when the
exercise price of the Company's employee stock options is less
than the market price of the underlying shares of the date of
grant, compensation expense is recognized.
ACCOUNTING FOR INCOME TAXES
The Company uses the liability method in accounting for income
taxes. Under this method, deferred tax assets and liabilities
are determined based on differences between financial
reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse.
NET LOSS PER SHARE
Basic net loss per share excludes dilution and is computed by
dividing net loss by the weighted average number of common
shares outstanding for the period. Diluted net loss per common
share was the same as basic net loss per common share for all
periods presented since the effect of any potentially dilutive
securities is excluded as they are anti-dilutive because of
Delta's net losses.
MINERAL PROPERTIES
The Company owns interest in mineral properties (Note 4), is
in the process of exploring and developing mineral properties
and has not yet determined whether these properties contain
mineral reserves that are economically recoverable.
F-25
<PAGE>
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The recoverability of mineral properties is dependent upon the
discovery of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to
complete the exploration and development of the mineral
properties, future profitable production or proceeds from the
disposition of the mineral properties and the Company's
ability to complete its obligations.
Title to mineral properties involves certain inherent risks
due to the difficulties of determining the validity of certain
claims as well as the potential for problems arising from the
frequently ambiguous conveyancing history characteristic of
many mining properties. The Company has investigated title to
all the mineral properties to which it has an option to
acquire an interest and, to the best of its knowledge, title
to all of these properties is in good standing. The properties
in which the Company has committed to earn an interest are
located in Bolivia, South America and the Company is therefore
relying on title opinion by legal counsel who are basing such
opinions on the laws of Bolivia.
EXPLORATION COSTS
With respect to accounting for exploration expenditures, the
Company has expensed all costs associated with the exploration
of properties in which the Company holds options to acquire an
interest.
FINANCIAL INSTRUMENTS
The fair values of cash and accounts payable and accrued
liabilities approximate their carrying values due to the
relatively short periods to maturity of these instruments. It
is not possible to determine the fair value of amounts due to
shareholders as a maturity date is not determinable. The
maximum credit risk exposure for all financial assets is the
carrying amount of that asset.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board (FASB)
adopted SFAS No. 130 "Reporting Comprehensive Income", which
requires an enterprise to report by major components and as a
single total, the change in net assets during the period from
non owner sources Delta adopted this statement during the year
ended September 30, 1998.
F-26
<PAGE>
In February 1998, the FASB adopted SFAS 132, "Employers"
Disclosures About Pensions and Other Post retirement Benefits,
an Amendment of FASB Statements No. 87, 88, and 106, which
revises employers, disclosures about pension and other post
retirement benefit plans. This statement does not change the
measurement or recognition of those plans, but standardizes
the disclosure requirements for pensions and other post
retirement benefits to the extent practicable, requires
additional information on changes in the benefit obligations
and fair values of plan assets that will facilitate financial
analysis, and eliminates certain disclosures. Delta adopted
this statement during the year ended September 30, 1998 and
such adoption did not affect the accompanying financial
statements.
In March 1998, the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-1, "Accounting for Costs
of Computer Software Developed or Obtained for Internal Use.
SOP 98-1 provides guidance for an enterprise on accounting for
the costs of computer software developed or obtained for
internal use. Delta adopted this statement during the year
ended September 30, 1998, and such adoption did not affect the
accompanying financial statements.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the
Costs of Start-up Activities", which requires companies to
expense the costs of start-up activities and organization
costs as incurred. Delta adopted this statement during the
year ended September 30, 1998, and such adoption did not
affect the accompanying financial statements.
In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" which defines
derivatives, requires that all derivatives be carried at fair
value, and provides for hedge accounting when certain
conditions are met. Delta will adopt this statement for its
fiscal year ending September 30, 2001. Management has not
fully assessed the implications of adopting this new standard.
NOTE 4 MINERAL PROPERTIES
The Company has interests in the following properties:
CHARLES CONCESSION
Delta's subsidiary Global Gold Inc., S.A., has acquired by
staking a 100% interest in the Charles concessions (the
"Illimani Property") located approximately 65 kilometers by
gravel road east of La Paz, Bolivia.
F-27
<PAGE>
INDEPENDENCIA CONCESSIONS
Global Gold Inc. S.A. has acquired by staking a 100% interest
in the Independencia Concessions which encompass an area of
3,275 hectares or 7,860 acres and are located approximately
100 kilometers directly south east of La Paz in the department
of Cochabamba.
ROBERT PROPERTY
Global Gold Inc., S.A. has also acquired by staking a 100%
interest in the Robert Property located 80 kilometers south of
La Paz, Bolivia. The property is 1550 hectares.
The Company has expensed all costs of acquiring its interest
in the above properties.
NOTE 5 CASH
The composition of this account as of September 30, 1999 and
1998, are as follows:
<TABLE>
<CAPTION>
1999 1998
$ $
------ ------
<S> <C> <C>
Delta International Mining & Exploration, Inc. 11,649 25,750
Global Gold Inc. S.A. 5,113 11,399
------ ------
16,762 37,149
====== ======
</TABLE>
NOTE 6 DELIVERIES TO BE ACCOUNTED FOR
The composition of this account, is as follows:
1999 1998
$ $
------ ------
Officers 4,089 4,690
Employees 20,131 5,353
------ ------
24,220 10,043
====== ======
F-28
<PAGE>
NOTE 7 ADVANCE PAYMENTS - RELATED COMPANIES
The balance of this account as of September 30, 1999 is $
143,700, it corresponds to advance payments from Delta
International Mining & Exploration, Inc. to purchase 600,000
shares to be issued by Britt Minerals, a Montana Corporation
and related company. Once the sale contract is formalized with
Britt Minerals Inc, and the issue of shares is made, it will
become and investment for the Company (See Note 13).
NOTE 8 FIXED ASSETS
The composition of this account as of September 30, 1999 and
1998, is as follows:
AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
ACCUMULATED NET
COST DEPRECIATION VALUE
$ $ $
------- ------- -------
<S> <C> <C> <C>
Dredging equipment 294,000 101,063 192,937
Furniture 40 -.- 40
------- ------- -------
294,040 101,063 192,977
======= ======= =======
AS OF SEPTEMBER 30, 1998
ACCUMULATED NET
COST DEPRECIATION VALUE
$ $ $
------- ------- -------
Dredging equipment 294,000 64,313 229,687
======= ======= =======
</TABLE>
NOTE 9 SHAREHOLDER LOANS AND INTEREST PAYABLE
The composition of this account as of September 30, 1999 and
1998, is as follows:
<TABLE>
<CAPTION>
DATE DUE ACCRUED INTEREST
ISSUED DATE LOAN 1999 1998
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
02.02.98 02.02.02 $ 100,000 $ 11,611 $ 1,611
15.03.98 15.03.02 100,000 16,417 6,417
13.04.98 13.04.02 50,000 7,819 2,783
--------- -------- --------
250,000 35,847 10,811
========= ======== ========
</TABLE>
F-29
<PAGE>
The amount due to shareholders is unsecured and with interest
payable at the rate of 12% per annum for the initial six
months of the term of the loan and thereafter at the rate of
10% per annum. The amount due to shareholders is convertible
into shares of the Company at the current market price at the
date of conversion.
NOTE 10 ACCOUNTS PAYABLE
The composition of this account, is as follows:
SEPTEMBER 30,
1999 1998
---- ----
Officers $ 13,723 $ -
Others 27,300 -
-------- --- ---
$ 41,023 $ -
======== =======
NOTE 11 STOCK OPTIONS
In February 1998, the Company granted 475,000 options at an
exercise price of $0.10 per share to two officers for services
performed. The options vested immediately and have no
expiration date. For the fiscal year ended September 30, 1998
the Company recorded compensation expense of $ 332,500 in
connection with the options granted.
At September 30, 1999 no stock options have been exercised.
As discussed in Note 3, Delta accounts for its stock - based
awards using the intrinsic value method in accordance with APB
25.
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", (SFAS 123) requires
the disclosure of pro forma net income and earnings per share
as if Delta had adopted the fair value method as of the
beginning of the period ended September 30, 1998. Delta
calculations were made using the minimum value method with the
following weighted average assumptions: expected life 60
months following the grant date; risk free interest rates of
6% in 1998; and no dividends during the expected term. The
pro-forma amounts are not materially different from the
amounts reported by Delta.
F-30
<PAGE>
NOTE 12 INCOME TAXES
Substantially all losses incurred by Delta has been incurred
by its subsidiary in Bolivia. At September 30, 1999 Delta has
$ 732.064 in net operating losses available to offset future
taxable income in its Bolivian subsidiary. The net operating
losses may be carried forward for an unlimited number of years
until utilized to fully offset income.
A valuation allowance to the deferred tax asset for the
benefit of these net operating loss carry forward has been
established due to lack of operating history combined with
risks and uncertainties surrounding Delta's ability to
generate future taxable income.
NOTE 13 SUBSEQUENT EVENT
- Issued 600,000 shares of Common Stock pursuant to an
agreement in writing dated October 15, 1999 with the
shareholders of Britt Minerals, Inc. Pursuant to the
agreement, the Company acquired all of the shares of
Britt Minerals, Inc. The consideration for the
transfer was the issuance of 600,000 shares of Common
Stock of the Company. Further, the vendors shall
receive a gross overriding royalty of 1,5% of the
value of all diamonds produced from the properties.
Britt Minerals, Inc. is the registered holder of 9
diamond exploration properties in Montana covering
approximately 4.158 acres. The vendors of the shares
of Britt Minerals, Inc. are Peter Ellsworth and Gary
Carlson.
- Issued 300,000 shares of Common Stock to Front Range
Exploration Corporation pursuant to an agreement that
was formalized in writing on October 15, 1999.
Pursuant to this agreement, in consideration of Front
Range Exploration Corporation locating mineral
properties of merit in South America, the Company
agreed to issue 300,000 shares and has granted a
gross overriding royalty of 2% of the value of all
diamonds produced from properties located by Front
Range Exploration Corporation.
F-31
<PAGE>
NOTE 14 YEAR 2000 ISSUE (NON AUDITED)
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 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.
F-32
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SEPTEMBER 30, 1999
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Britt Minerals, Inc.
Missoula, Montana
We have audited the accompanying balance sheet of Britt Minerals, Inc. (an
exploration stage company) as of September 30, 1999 and the related statements
of operations, stockholders' equity and cash flows for the 9 months then ended
and for the period from June 12, 1998 (inception) to September 30, 1999. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Britt Minerals, Inc. as of
September 30, 1999, and the results of its operations and its cash flows for the
9 months then ended and from June 12, 1998 (inception) to September 30, 1999, in
conformity with generally accepted accounting principles.
[GRAPHIC OMITTED]
/s/
---------------------
Missoula, Montana
December 13, 1999
F-33
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
CURRENT ASSETS
Cash $ 1,329
Mineral properties -
--------
$ 1,329
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Advances payable $143,700
STOCKHOLDERS' EQUITY
Capital stock, 50,000 shares authorized, par value,
200 shares issued and outstanding 200
Deficit accumulated during
the development stage (142,571)
--------
(142,371)
--------
$ 1,329
========
The accompanying notes are an integral part of these financial statements.
F-34
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 1999 AND
FOR THE PERIOD FROM JUNE 12, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
From Inception
9 months Ended (June 12, 1998) to
Seotenber 39, 1999 September 30, 1999
------------------ ------------------
September 30, 1999
REVENUES $ - $ -
EXPENSES
Geological exploration 27,022 41,221
Contract services 4,632 28,801
Field expense and supplies 729 13,305
General and administrative 285 333
Claim fees 25,983 53,482
Professional fees 746 746
Memberships 1,000 1,000
Travel and promotion 2,229 2,229
Publications 1,454 1,514
------- -------
Total expenses 64,080 142,631
OTHER INCOME - Interest 60 60
------- -------
NET LOSS $ 64,080 $ 142,571
======== =========
The accompanying notes are an integral part of these financial statements.
F-35
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 1999 AND
FOR THE PERIOD FROM JUNE 12, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
From Inception
9 months Ended (June 12, 1998) to
September 30, 1999 September 30, 1999
------------------ ------------------
<S> <C> <C>
CASHFLOWS FROM OPERATING ACTIVITIES
Cash spent on mineral property exploration $ (53,005) $ (94,703)
Cash paid to suppliers and management (11,075) (47,928)
--------- ---------
Net cash flows used in operating activities (64,080) (142,631)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest earnings 60 60
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES -- 200
Issuance of capital stock 68,800 143,700
--------- ---------
Note proceeds received
Net cash flows from financing activities 68,800 143,900
--------- ---------
NET INCREASE IN CASH 4,780 1,329
CASH - Beginning of period (3,451) --
--------- ---------
CASH - End of period $ 1,329 $ 1,329
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-36
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations. Britt Minerals, Inc. (the company) is
incorporated under the laws of the State of Nevada and its
principal business activity is mineral property exploration and
development.
The company, through mineral property option agreements is in the
process of exploring and developing mineral properties and has not
yet determined whether these properties contain mineral reserves
that are economically recoverable.
Title to mineral properties involves certain inherent risks due to
the difficulties of determining the validity of certain claims as
well as the potential for problems arising from the frequently
ambiguous conveyancing history characteristic of many mining
properties. The company has investigated title to all of the
mineral properties to which it has an option to acquire an
interest and, to the best of its knowledge, title to all of these
properties is in good standing.
Going Concern. These financial statements have been prepared on
the going concern basis, which assumes the realization of assets
and liquidation of liabilities in the normal course of business.
As shown in the financial statements to date, the company has
generated no revenues and has cumulative losses since inception of
$142,571. The company's ability to continue as a going concern is
dependent on its ability to generate future profitable operations
and receive continued financial support from its shareholders and
other investors.
Cash and Cash Equivalents. For purposes of the statement of cash
flows, the company considers all highly liquid debt instruments
purchased with a maturity of three months or less when purchased
to be cash equivalents.
Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Exploration Costs. The company has expensed all costs associated
with the exploration of properties in which the company holds
options to acquire an interest.
S Corporation Income Tax Status. The company, with the consent of
its shareholders, has elected under the Internal Revenue Code to
be an S corporation. In lieu of corporation income taxes, the
shareholders of an S corporation are taxed on their proportionate
share of the company's taxable income. Therefore, no provision or
liability for federal or state income taxes has been included in
the financial statements.
-Continued
F-37
<PAGE>
BRITT MINERALS, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE B ADVANCES PAYABLE
Britt Minerals received advances totaling $143,700 since inception
through September 30, 1999. These advances were received from
Global Gold, Inc., a subsidiary of Delta International Mining and
Exploration, Inc. (Delta), a Nevada Corporation.
Subsequent to September 30, 1999, Britt Minerals was acquired by
Delta. As a condition of this transaction, these notes have been
eliminated (see Note C).
NOTE C SUBSEQUENT EVENT - SALE OF BRITT MINERALS, INC.
On October 15, 1999, 100% of the outstanding shares of Britt
Minerals were sold to Delta. As consideration for the sale both of
Britt Minerals' shareholders received 300,000 shares in Delta. In
addition, Delta granted the shareholders a mineral royalty of 2%
of all diamonds recovered from the properties.
As described in Note B, at the date of sale, Britt had outstanding
advances payable to Global Gold, Inc. of $143,700 which were
eliminated after the sale to Delta.
-Concluded
F-38
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER NUMBER DOCUMENT
3.1 Articles of Incorporation of the Company
3.2 Bylaws of the Company
3.3 Amendment to Articles of Incorporation of the
Company
4.1 See Exhibits 3.1 and 3.2
10.1 Share Exchange Agreement
10.2 Acquisition Agreement for the Bolivian properties
10.3 Acquisition agreement for all the shares of Britt
Minerals, Inc.
21 Subsidiaries of the Registrant
27 Financial Data Schedule
