UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS COMPANYS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file no. 0001122993
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BROOKMOUNT EXPLORATIONS INC.
(NAME OF SMALL BUSINESS COMPANY IN ITS CHARTER)
Nevada "Applied for"
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(State or Other Jurisdiction of (I.R.S.Employer Identification No.)
Incorporation or Organization)
Apt. 22 - 1106 Avenue Road
Toronto, Ontario, Canada M4N 2E1
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(Address of Principal Executive Officer) (Zip Code)
(416) 737-5879
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(Company's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
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(Title of Class)
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TABLE OF CONTENTS
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ITEM PAGE
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PART 1
Glossary of Geological and Technical Terms 3
Item 1 Description of Business 8
Item 2 Management's Discussion and Analysis or Plan of Operation 22
Item 3 Description of Property 25
Item 4 Security Ownership of Certain Beneficial Ownership and
Management 25
Item 5 Directors, Executive Officers, Promoters and Control Persons 28
Item 6 Executive Compensation 29
Item 7 Certain Relationships and Related Transactions 29
Item 8 Description of Securities 31
PART 11
Item 1 Market Price of and Dividends on the Company's Common Equity
and Other Stockholders Matters 33
Item 2 Legal Proceedings 33
Item 3 Disagreement With Accountants and Financial Disclosure 33
Item 4 Recent Sales of Unregistered Securities 34
Item 5 Indemnification of Directors and Officers 34
PART F/S
Financial Statements 36
PART 111
Item 1 Index to Exhibits 45
Item 2 Description of Exhibits 45
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DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference: None
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GLOSSARY OF GEOLOGICAL AND TECHNICAL TERMS
Aeromagnetic prospecting - A technique of geophysical exploration of an area
using an airborne magnetometer to survey that area.
Agglomeration - In beneficiation, a concentration process based on the adhesion
of pulp particles to water.
Amphibolite - A crystalloblastic rock consisting maily of amphibole and
plagioclase with little or no quartz.
Archean - Said of the rocks of the Archeozoic, the earlier part of the
Precambrian time.
Aeral geology - The branch of geology that pertains to the distribution,
position, and form of the areas of the Earth's surface occupied by different
types of rock or by different geologic units.
Anastomosing - Pertaining to a network of branching and rejoining fault or vein
surfaces or surface traces.
Anomaly - Deviation from a general rule, method, or analogy; abnormal.
Argillite - A compact rock, derived either from mudstone (claystone or
siltstone), or shale.
Asbestos - A commerical term applied to silicateminerals that separate readily
into thin, strong fibers that are flexible, heat resistant, and chemically
inert, thus making them suitable for uses where incombustible, nonconducting, or
chemically resistant material is required.
Ash - The inorganic residue after burning.
Auriferous - Refers to a substance that contains gold, especially, gold-bearing
mineral deposits.
Biotite - A common rock-forming mineral in crystalline rocks, either as an
original crystal in igneous rocks or as a metamorphic product.
Bleb - A vesicle, blister, bubble.
Break - A plane of discontinuity in the coal seam such as a slip, fracture,
joint, or cleat. The surfaces are in contact or slightly separated.
Carbonate - A compound containing the acid radical CO3 of carbonic acid. Bases
react with carbonic acid to form carbonates.
Chalcopyrite - The main copper ore, CuFeS2. A widely occurring mineral found
mainly in veins.
Chert - A hard, dense, dull to semivitreous sedimentary rock , consisting
dominantly of interlocking crystals of quartz.. The term "flint" is essentially
synonymous.
Chlorite - The tabular crystals of chlorite cleave into small thin flakes or
scales that are flexible but not elastic; they may also be considered as clay
minerals when very fine grained.
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Clastic rocks - A sedimentary rock composed of broken fragments that are derived
from preexisting rocks of any origin.
Concordant - Said of intrusive igneous bodies, the contacts of which are
parallel to the bedding or foliation of the country rock.
Crystalline - Resembling a crystal; clear, transparent, pure.
Core - A cylindrical section of rock, usually 5 to 10 cm in diameter and up to
several meters in length, taken as a sample of the interval penetrated by a core
bit and brought to the surface for geologic examination and/or laboratory
analysis.
Deformation - A general term for the process of folding, faulting, shearing,
compression, or extension of the rocks as a result of various Earth forces.
Diabase - A dike-rock with ophitic texture.
Diorite - A group of plutonic rocks intermediate in composition between acidic
and basic.
Dipole - Coordinate valence link between two atoms.
Dike - A sheet-like body of igneous rock intrudes; or an ore body is formed in
older rocks.
Ductile - Said of certain materials and other substances that readily deform
plastically.
Electromagnetic - Of, pertaining to or produced by electromagnetism.
Electromagnetism - Magnetism developed by a current of electricity.
Facies - A term of wide application, referring to such aspects of rock units as
rock type, mode of origin, composition, fossil content, or environment of
deposition.
Fault - A fracture in rock along which there has been an observable amount of
displacement. When faults occur along parallel or subparallel sets of planes
they are called fault or fracture zones.
Feldspar - Constitutes 60% of the Earth's crust, feldspar occurs in all rock
types and decomposes to form much of the clay in soil.
Felsic - Term used to describe light coloured rocks containing feldspar,
feldpathoids and silica.
Fold - A curve or bend of a planar structure such as rock strata, bedding
planes, foliation, or cleavage. A fold is usually a product of deformation,
although its definition is descriptive and not genetic and may include primary
structures.
Foliation - A general term for a planar arrangement of textural or structural
features in any type of rock.
Geochemical survey - A survey involving the chemical analysis of systematically
collected samples of rock, soil, stream sediments, plants, or water.
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Geophysical surveying - The exploration of an area in which geophysical
properties and relationships unique to the area are mapped by one or more
geophysical methods.
Glaciation - The formation, movement, and recession of glaciers or ice sheets.
Graphite - A hexagonal and trigonal mineral; scaly, soft, lustrous metallic ;
conducts electricity well, is soft and unctuous.
Greenschist - A schistose metamorphic rock whose green color is due to the
presence of chlorite, epidote, or actinolite.
Greywacke - An immature sandstone having > 15% clay minerals.
Humus - Dark-colored, organic, well-decomposed soil material consisting of the
residues of plant and animal materials together with synthesized cell substances
of soil organisms and various inorganic elements.
Hydrothermal - Pertaining to hot water, or the action of hot water such as a
mineral deposit precipitated from hot aqueous solution, with or without
demonstrable associate with igneous processes.
Igneous rock - Rock formed by the solidification of molten material that
originated within the Earth.
Interbedded - Between two layers; eg. A lava flow may occur interbedded between
two layers of sediments.
Intrusion - A body of igneous rock which has formed itself into pre-existing
rocks, either along some definite structural feature or by deformation and
cross-cutting of the invaded rocks.
Isoclinal fold - A fold whose limbs are parallel.
Komatiite - Magnesium-rich ultramafic volcanic rock of high temperature origin.
Lacustrine - Pertaining to, formed in, growing in, or inhabiting lakes.
Lapilli - Pyroclastics that may be either essential, accessory, or accidental in
origin, of a size range that has been variously defined within the limits of 2mm
and 64mm. The fragments may be either solidified or still viscous when they
land.
Lava - Fluid rock such as that which issues from a volcano.
Lithology - The character of a rock described in terms of its structure, color,
mineral composition, grain size and arrangement of its component parts.
Mafic - Pertaining to or composed dominantly of the ferromagnesian rock-forming
silicates; said of some igneous rocks and their constituent minerals.
Mercury - A liquid mineral, metallic silver to tin white.
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Metamorphism - The mineralogical, chemical and structural adjustment of solid
rocks to physical and chemical conditions that have generally been imposed at
depth below the surface zones of weathering and cementation, and that differ
from the conditions under which rocks in question originated.
Mineralization - The process of processes by which a mineral or minerals are
introduced into a rock, resulting in a valuable or potentially valuable deposit.
Pipe - A cylindrical , more or less vertical ore body.
Plagioclase - Commonly labradoite or bytownite.
Polarization - The difference between the equilibrium value of the potential of
an electrode and the value attained when an appreciable current flows through a
system.
Pyrite - The most widespread sulphide mineral, chemical formula: FeS2.
Pyroclastic - Produced by explosive or aerial ejection of ash, fragments and
glassy material from a volcanic vent.
Pyrrhotite - A mineral, Fe1-xS, found in basic igneous rocks, pegmatites and
contact metamorphic rocks.
Quartz - A form of silica occurring in hexagonal crystals or in crystalline
masses.
Rhyolite - Fine-grained to glassy light colored volcanic rocks.
Sedimentary rock - A rock resulting from the consolidation of loose sediment
that has accumulated in layers.
Sericitic - A white, fine-grained potassium mica occuring in small scales as an
alteration product of various alluminosilicate minerals, having a silky luster,
and found in various metamorphic rocks.
Silica - Silicon dioxide.
Siltstone - An indurated silt having the texture and composition of shale but
lacking its fine lamination of fissility; a massive mudstone in which the silt
predominates over clay.
Sphalerite - The main ore of zinc, ZnS, found in metasomatic deposits with
galena, hydrothermal vein deposits, and in replacement deposits.
Splay - One of a series of small faults at the extremities of a major fault.
Splays are typically associated with rifts.
Stratiform - Having the form of a layer, bed or stratum; consisting of roughly
parallel bands or sheets such as a stratiform intrusion.
Stratigraphic - Pertaining to the composition, sequence, and correlation of
stratified rocks.
Stringer - Ahorizontal timber to connect uprights in a frame.
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Sulfide - A compound of sulfur with an element.
Syenite - A group of plutonic rocks containing alkali feldspar, a small amount
of plagioclase, one or more mafic minerals.
Syn - Concurrent, associated, like.
Till - Dominantly unsorted drift deposited by and underneath a glacier without
reworking by meltwater, and consisting of clay, silt, sand, gravel and boulders.
Topography - The general configuration of a lang surface or any part of the
Earth's surface, including its relief and the position of its natural manmade
features.
Tuff - A general term for all consolidated pyroclastic rocks.
Tuffaceous - Said of sediments containing up to 50% tuff.
Ultramafic - Said of an igneous rock composed chiefly of mafic minerals
Uranium - A radioactive, silvery-white, metallic element.
Volcanic Rock - A generally finely crystalline or glassy igneous rock resulting
from volcanic action at or near the Earth's surface, either ejected explosively
or extruded as lava.
Volcanism - The process by which magma and its associated gases rise in the
crust and are extruded onto the Earth's surface and into the atmosphere.
Volcanogenic - The production of a vent in the surface of the Earth through
which magma and associated gases and ash erupt.
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PART 1
Brookmount Explorations Inc. (the "Company") is filing this Form 10-SB on a
voluntary basis to:
1 provide current, public information to the investment community;
2 to expand the availability of secondary trading exemptions under the Blue
Sky laws and thereby expand the trading market in the Company's securities,
and
3 to comply with prerequisites for listing of the Company's securities on
NASDAQ.
ITEM 1. DESCRIPTION OF BUSINESS
HISTORICAL OVERVIEW OF THE COMPANY
The Company was incorporated on December 9, 1999. The Company has no
subsidiaries and no affiliated companies. The executive offices of the Company
are located at Apartment 22 - 1106 Avenue Road, Toronto, Ontario, Canada, M4N
2E1 (Tel: 416-737-5879).
The Company is engaged in the exploration of mineral properties. (see Part
1, "Exploration of the BROOKMOUNT Claim"). No ore body has been discovered and
no substantial exploration has been done on its mineral claim. The Company is
purely an exploration company. There is no assurance that any ore body will ever
be found and that the Company will have sufficient funds to undertake the
exploration work required to identify an ore body.
Management anticipates that the Company's shares will be qualified on the
system of the National Association of Securities Dealers, Inc. ("NASD") known as
the OTC Bulletin Board.
The Company owns one mineral property known as the `BROOKMOUNT' claim
located in Chazel Township near Rouyn-Noranda, north western Quebec, Canada. It
does not presently own any other mineral properties. The Company holds the
rights to the minerals on the Brookmount property until January 31, 2002. The
land itself is owned by the Province of Quebec (known as the "Crown").
The Company has no revenue to date from the exploration of its mineral
property, and its ability to effect its plans for the future will depend on the
availability of financing. Such financing will be required to develop the
Company's mineral property to a stage where a decision can be made by management
as to whether an ore body exists and can be successfully brought into
production. The Company anticipates obtaining such funds from its directors and
officers, financial institutions or by way of the sale of its capital stock in
the future (see Part 1, Item 2 - "Managements Discussion and Analysis or Plan of
Operations"), but there can be no assurance that the Company will be successful
in obtaining additional capital for exploration activities from the sale of its
capital stock or in otherwise raising substantial capital.
PLANNED BUSINESS
In addition to exploring and developing, if warranted, its mineral
property, the Company plans to seek out additional mineral properties either by
way of purchase, staking or joint venturing. (See Part 1, Item 2 - Management's
Discussion and Analysis or Plan of Operation").
Much of the discussion contained in this section is "forward looking" in
that actual results may materially differ from the Company's plans as currently
contemplated. Information concerning all the factors associated with the Company
is set forth in this Item 1 and in Items 2 and 3 below. FOR
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A COMPLETE UNDERSTANDING OF SUCH FACTORS, THIS ENTIRE DOCUMENT, INCLUDING THE
FINANCIAL STATEMENTS AND THEIR ACCOMPANYING NOTES, SHOULD BE READ IN ITS
ENTIRETY.
All dollar amounts shown in this document are stated in US dollars unless
otherwise noted.
EXPLORATION OF THE BROOKMOUNT CLAIM
The Company retained J.G. Burns, P. Geo., of Timmins, Ontario, to summarize
the geology and mineral potential on its mineral claim near Rouyn-Noranda,
Quebec. His report is dated February 23, 2000. The mineral claim was recorded
100% in the name of Brookmount on December 20, 1999 and subsequently registered
on February 01, 2000 with the Ministry of Mines for Quebec.
The Claim covers approximately 500 acres located within Chazel Township,
Abitibi West County, Quebec, 45 miles north north east from the city of
Rouyn-Noranda, Quebec.
The Company was incorporated on December 9, 1999 and engaged the services
of George Fournier to "stake" a mineral claim for it in Chazel Township, Abitibi
West County, Quebec.
"Staking" of a claim is the method used by the Ministry of Mines for the
Province of Quebec in verifying title to the minerals on Crown property. The
individual staking a claim, known as the "staker" inserts a post or stake into
the ground of unstaked property and defines this post as the corner post or
"identification" post. A serial pre-numbered tag, purchased from the Ministry of
Mines, is affixed to the post and the date and time of inserting the post into
the ground is recorded on it as well as the proposed name of the claim. The
staker is required to walk in a line in one directions from the stake and
another line at a 90 degree angle from the original walk starting at the corner
post for another 1500 feet. Upon completion of these two walks the staker
records the number of units being staked upon the metal tag on the corner post.
This information is recorded on a 4 foot Post Mineral Claim form and filed with
the Ministry of Mines.
The Company has not identified any other mineral properties for staking
and, therefore, has only the BROOKMOUNT property. It is the intention of
management to identify other properties of merit in the future but to date none
have been identified.
PROPERTY DESCRIPTION
Five claims (approximately 500 acres) numbered 5245578 to 5245582 inclusive
located in Lots 50 to 54, Range III, Chazel Township, Abitibi West County,
Quebec comprise the property. Assessment work with a minimum value of $6,000
must be submitted to the Ministry of Mines by December 02, 20001 or 60 days
prior to the claims expiry date on January 31, 2002.
LOCATION AND ACCESS
The property lies in northwestern Quebec some 45 miles north north east
from the city of Rouyn-Noranda, Quebec in NTS quadrant 32 D/15. Approximate
geographical co-ordinates are 48 degrees 54' north latitude by 78 degrees 54'
west longitude.
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An all weather north/south gravel road passes along the boundary between
Chazel and Disson Townships, and connects to Highway 111 some 6.3 miles south of
the village of Authier Nord. Since this road leads to the mining town of Joutel
and is also used as a main logging haul road, it is kept open year round. A bush
road that provides access to Lac Langy, but which is unplowed in winter, leads
to within 2/5 mile of the northeast corner of the claim group.
CLIMATE, PHYSIOGRAPHY AND LOCAL RESOURCES
The climate of the area is characterized by long cold winters and short
warm to hot summers. Total precipitation is about 40 inches including 10 feet of
snow. Break-up of freeze-up conditions may impinge upon exploration activities,
but normally exploration and mining (both open pit and underground) are
conducted year round.
Within the general area the topography is basically flat with only the
occasional low hill. Elevation ranges from 352 yards on the property to 3/10
mile at Colline Oditan 1.9 miles to the north. Vegetation in the area is mixed
boreal forest. Tree species present on the property are spruce, jackpine,
balsam, tamarack, cedar, birch and poplar. Glacial till and glacial-lacustrine
clay soils dominate the area. The property is extensively covered by low, swampy
ground.
No infrastructure exists on the property. Infrastructure in the general
area includes
A) an intricate road network,
B) electrical power - the grid extends to Authier Nord, 4.4 miles from
the property,
C) railway - the main east/west line of the Canadian National Railway
passes 10.6 miles to the south,
D) numerous base metal and gold mines and mills and
E) a copper smelter at Rouyn-Noranda.
Most goods and services as well as experienced person required for both
exploration and mining are readily available in the towns of Macamic, La Sarre
and Rouyn-Noranada and the surrounding area.
EXPLORATION HISTORY
GENERAL
Chazel Township and general area have been prospected and explored since
the early 1900s. Gold was originally the main commodity sought, but interest in
base metals increased following the discovery in 1922 of the Oditan Copper-Zinc
occurrence in Lot 40, Range IV, Chazel Township and in 1925 of the Normetal
Copper-Zinc-Silver-Gold deposit in Lots 43 and 44, Range X, Desmeloizes Township
some 25 miles to the west. Exploration for Copper-Nickel and asbestos deposits
was undertaken in the 1970s but since the 1980s the major emphasis once again
shifted to gold.
PAST EXPLORATION
Summaries for work conducted on properties now overlain by the Brookmount
claim is as follows.
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1973-1975: DOME EXPLORATIONS (CANADA) LIMITED ["DOME"]
Dome's 41 full lot claims in Ranges III and IV in Chazel and Dission
Townships included the present Brookmount property, and were staked to
cover several anomalies defined by an airborne electromagnetic survey
contracted by the Quebec government in 1972. Ground magnetic and horizontal
loop electromagnetic (HLEM) surveys conducted in 1973 over Lots 42 to 47,
Range III Chazel Township defined a strong 3/10 miles long HLEM anomaly
with a low but precise magnetic correlation. Hole 60C-1, drilled in 1974 in
Lot 45 Range III to a depth of 100 yards, tested the anomaly and cored
mafic and felsic tuff and lapilli tuff. A 5.3 yards section of mafic tuff
with minor graphite and mineralized with 10% pyrite as massive bands and
rounded blebs assayed 0.08% Copper.
An HLEM survey conducted over the remainder of the property in 1975 defined
a strong, long, formational conductor in Range IV as well as four shorter
anomalies some 220 yards south of the former. Two of the shorter anomalies
lie within the Brookmount claims in Lots 50 to 52 and 53 and 54
respectively, and are situated about 220 to 275 yards south of the north
boundary. Drill testing was recommended for both conductors but there are
no records to indicate that either were ever drilled.
1986-1987: RESOURCES MACAMIC INC. ["MACAMIC"]
Macamic held a contiguous, irregularly shaped block of 97 claims in Ranges
III to VII Chazel Township and Ranges III and IV Dission Township. Both the
present Brookmount claims and the Oditan occurrence were included within
their property limits.
The property was acquired as a gold project. Work conducted in 1986
included induced polarization (IP), HLEM, magnetic and geological surveys.
Nine short lines of IP (dipole-dipole configuration) scattered about the
property were surveyed. On one line, 32 E, which extended from the north
onto the Brookmount property in Lot 52, a well defined anomaly coincident
with an HLEM conductor (Dome survey) was detected. The anomaly was
recommended as a first priority drill target.
Macamic's magnetic and HLEM surveys covered the Brookmount property, and
two HLEM anomalies, numbers 68 and 69, were defined within it. Anomaly 68
extends for >880 yards across Lots 48 to 52, shows weak magnetic
correlation and corresponds in form to the Dome anomaly. It was rated a
first priority target. Anomaly 69 in Lots 54 and 55 was considered to be an
extension of 68 and was rated a second priority target.
No outcrops were noted on the Brookmount property during the course of the
Macamic geological survey. The closest outcrops (of sericitic felsic tuff)
are located in Lots 55 and 56 along the Range III/IV line.
Duration Mines Limited optioned Macamic's property in 1987 and drilled
seven holes totalling 0.7 miles. Neither the IP anomaly nor HLEM anomalies
# 68 and # 69 mentioned above were tested. In fact, no hole was located on
the current Brookmount claims but three, numbered CM-87-01 (0.098 miles),
02 (0.14 miles) & 03 (0.051 miles), were in close proximity to the east in
Range III. CM-87-02, located in the north part of Lot 58, Range III, Chazel
Township, tested an HLEM anomaly on strike with those on the Brookmount
property. A steeply north dipping (75 degrees to 85 degrees), north facing
sequence of felsic ash tuff, tuff and lapilli tuff was cored. Normally,
there were <2% sulphides
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throughout the hole but a 1.7 yards section from 199.1 to 200.6 was
mineralized with 60% pyrite and pyrrhotite plus minor graphite. There were
no assays of significance.
Holes CM-87-01 (Lot 2, Range III, Dission Township) and CM-87-03 (Lot 60,
Range III, Chazel Township) tested EM anomalies in the central portions of
the respective lots/claims. In CM-87-01 tuff units of intermediate to
felsic composition, greywacke and argillite were the main units cored. The
tuff unit between 124 and 219 yards contained trace to 10% sulphides.
Graphitic zones between 136 and 146 yards corresponded to the EM
conductors. No significant assays were reported.
Holed CM-87-03 cut felsic to intermediate tuffaceous units. Numberous
pyritic graphite bands were interesected from 59 to 84 yards. No
significant assays were reported.
1991-1992: BHP-UTAH MINES LTD./ BHP MINERALS CANADA LTD. ["BHP"]
In 1991/92 BHP held a contiguous block of 149 claims Ranges II and III
Chazel Township and in Ranges II, III and IV Dission Township. The property
was part of an ongoing gold project, originally initiated in 1984 in
Ligneris Township to the east, to assess the mineral potential of the
Authier Fault/Break.
In 1991 geological mapping, a humus soil geochemical survey as well as
magnetic, VLF, HLEM amd multi frequency GEOPROBE geophysical surveys were
undertaken although results for the geophysical surveys were not submitted
for assessment credit. Sixty-six claims were mapped in detail on 220 yards
spaced lines.
From this mapping and a compilation of previous work it was determined that
A) the Authier Fault is associated with the contact between
sedimentary rocks to the south and volcanogenic units to the
north,
B) the contact is further south than previously indicated,
C) the main break of the Authier Fault crosses Range II,
D) the fault is a ductile shear with a late brittle phase and
E) the fault has an anastomosing anatomy with individual splays
varying from <11 yards to 220 yards in width.
With respect to the current Brookmount claims the underlying rock units
were construed to be mainly tuff, crystal tuff and lapilli tuff.
Furthermore, a splay from the Authier Fault was interpreted to pass in a
general northwesterly direction through the southern portion of the claims.
The humus soil geochemical survey also covered the Brookmount claims and
consisted of 1640 samples total. Samples were analysed for gold plus a
package of 34 elements by INAA (instrumental neutron activation analysis).
Most (90%) of the samples assayed <10 ppb gold, but thresholds levels of 30
ppb gold (anomalous) and 70 ppb gold (strongly anomalous) were determined.
Two strongly anomalous results were reported for samples in Lots 47 and 48,
Range III, Chazel Township. Results and observations for the other elements
were minimal.
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A seven hole, 2170 m drill program was conducted in 1992. Two holes,
numbered AT-40-92 and AT-43-92, were located just to the east of the
Brookmount property in Lots 48 and 47 respectively. Neither hole tested the
HLEM anomaly first identified by Dome and confirmed by Micamic. Hole
AT-40-92 was drilled to 0.19 miles and tested coincident Maxmin and gold in
humus (158 ppb) anomalies. Sedimentary units interbedded with fine grained
tuff, crystal tuff and lapilli tuff were the principal units cored.
Sulphide content averaged 2-4% pyrite plus pyrrhotite but ranged to 7%. A
1.6 foot graphitic interval was noted at 149 yards. Best assays included
510 ppb gold/ 3.4 yards from a lapilli tuff and 320 ppb Gold/ 3.4 yards
from an interval of crystal tuff plus sediments.
Hole AT-43-92 (347 m) tested coincident VLF, Maxmin and gold in humus (72
ppb Gold) anomalies. Fine grained tuff, crystal tuff and lapilli tuff and
interbedded sediments mineralized with 1-2% pyrite and pyrrhotite were
cored. The most significant assay was 140 ppb Gold / 3.3 yards from a
carbonate-biotite altered fault zone.
Hole AT-44-92 (220 yards) was drilled on the current Brookmount property at
the southern end of Lot 54. It was targeted on a VLF anomaly suspected of
representing a deformation zone coincident with a gold in humus value of 23
ppb. The hole intersected laminated sediments interbedded with fine grained
tuff. There were no significant assays.
PROPERTY VISIT
Due to the lack of outcrop on the property and the prevailing snow
condition at the time this report was written, the usefulness of a property
visit was deemed to be minimal and was not undertaken. The claim staker, George
Fournier, informed J. G. Burns, Professional Geologist who prepared a geological
report for the Company, that during the course of staking he observed several of
the original survey posts for the lot corners and also two north/south picket
lines from a past exploration program. Therefore, reconstruction of the old grid
to enable an exact tie-in of information should be a simple task.
GEOGLOGY
REGIONAL GEOLOGY
Chazel Township and immediate area lie within the central portion of the
Abitibi greenstone belt (AGB) within the Abitibi subprovince of the Superior
Province. The AGB is an Archean aged (2.7 Ga) assemblage of volcanic,
sedimentary and related intrusive rocks that extends for some 375 miles from
Timmins, Ontario to Chibougamau, Quebec and constitutes the major portion of the
Abitibi subprovince. Within the general area the predominant lithologies consist
of Early Precambrian mafic to felsic volcanic plus clastic (with minor chemical)
sedimentary rocks, which occur as an undulatory but general east/west striking
band. Major subdivisions within the band are from south to north:
o 2.8 miles of clastic sediments - mainly greywacke and siltstone;
o 4.1 miles of intermediate to mafic volanic flows with minor felsic and
sedimentary sub units;
o 0.94 miles of volanic felsic and mafic pyroclastic units +/- flows; and
o 1.6 miles of felsic pyroclastic units +/- minor sedimentary units.
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These units have been intruded by several syn to late felsic stocks of
syenite to diorite composition. The Oditan-Nissing stock, 1.9 miles north of the
Brookmount property, has dimensions of 7.5 miles east/west by 2.5 miles
north/south.
All of the above rock types have been subjected to regional deformation and
regional metamophism. As a result the volcanic and sedimentary lithologies have
been isoclinally folded, normally about east/west axes, so that the bedding is
now steeply inclined to near vertical, and the intrusions display a well
developed foliation. The metamorphic grade of the volcanic and sedimentary units
is generally greenschist facies but ranges to lower amphibolite facies near the
contacts with the intrusions.
Late Precambrian northeast trending diabase dykes cut all previous rock
types.
The AGB has been dissected by numerous regional, sub-concordant major
deformation zones, which normally occur between intrusive bodies at or near the
volcanic/sedimentary contacts (Palma and Dowling, 1992). At least two such zones
cross Chazel Township. In Quebec the Chicobi fault extends east/west for some 94
miles from the Ontario/Quebec border to Seneterre. It merges with the 63 miles
Laflamme fault near the Chazel east boundary. The Authier fault referred to in
the BHP reports may represent one of these two faults or a splay from them.
PROPERTY
There are no outcrops mapped on the property. Overburden depth, as
indicated from nearby drill holes, ranges to at least 22 yards (CM-87-02). The
property geology has been modified from that on MER Geoscientifique Compilation
Map 32 D/15-0301 based upon the detailed mapping and interpretation of the
immediate area by BHP and the results of the one drill hole on the property and
several others in close proximity.
A sequence of interbedded fine grained tuff, crystal tuff, lapilli tuff and
clastic sedimentary units plus minor intermediate to felsic flows underlie the
southern 80% of the property. Approximately 220 yards south of the north
boundary these units are in contact with an overlying sequence composed mainly
of intermediate volcanic flows with subordinate tuff and sedimentary units. The
contact with the Oditan-Nissing syenite-diorite intrusion is interpreted to be
about 660 to 770 yards north of the north boundary.
The volcanic and sedimentary units strike more or less east/west and from
observations recorded for Duration hole CM-87-02 they dip steeply at 75 degrees
to 85 degrees and face (young) to the north (Green, 1987). Individual units vary
from <3.3 feet to more than several 10's of yards in thickness. Sulphide
mineralization in the tuff and sedimentary units is generally <2% but ranges
locally to 60% over short interval often with concentrations of graphite.
The Authier fault passes through the southwestern portion of the property,
and is crosscut by a late northwest striking fault. Very little horizontal
displacement is apparent on this latter fault.
Carbonate and silica alteration, which are more intense in proximity to
fault zones, are the most common alteration products noted in the drill logs.
Sericite and chlorite are mentioned but their mode of occurrence is unclear.
14
<PAGE>
On the property, the most significant features are the untested HLEM
anomalies (Macamic anomalies # 68 and # 69) which occur at the contact between
the tuff/sedimentary units to the south and the younger volcanic flows to the
north. These anomalies are on strike to the west with the Oditan occurrence and
the anomaly tested by Dome hole 60C-1 in which a 5.37 yards interval assayed
0.08% Copper, and to the east by the anomaly tested by Macamic hole CM-87-02
which cut 1.7 yards of 60% pyrite plus pyrrhotite.
MINERALIZATION
The AGB has been, and still is, one of the most prolific sources for
metallic mineral wealth in Canada. Some 65% of Canadian gold production has come
from deposits situated along major east/west trending deformation zones and
associated splays within the belt (J. Boldy, "An Economical Perspective on
Canadian Gold Deposits, 1981). Major gold centres along these deformation zones
include Timmins, Kirkland Lake and Larder Lake in Ontario and Noranda, Malartic
and Val d'Or in Quebec. Significant amounts of copper, zinc, silver and gold
have been and are being mined from volcanogenic massive sulphide (VMS) deposits
located at Timmins, Ontario and at Noranda, Normetal, Val d'Or, Matagami and
Chibougamau, Quebec. Komatiitic hosted nickel-copper deposits were previously
mined at Timmins, Ontario and Malartic, Quebec. Other commodities produced from
major deposits include iron from banded iron formation at Kirkland Lake, Ontario
and asbestos from ultramafic complex near Matheson, Ontario. Significant
resources of Nickel and Copper are known near Timmins, Ontario and Val d'Or,
Quebec.
There are no known mineral deposits nor occurences on the property, but
there are numerous gold and base metal occurrences within the same lithological
assemblage on strike from the property. Those of particular interest are briefly
described below.
ODITAN OCCURRENCE: This occurrence of low Copper and Zinc values is located in
Lot 40, Range IV, Chazel Township. A 9.9 yards thick stratiform mineralized zone
hosted by rhyolite and sediments has been traced for a length of 0.13 miles.
Mineralization is VMS in style and consists of massive and disseminated pyrite,
pyrrhotite, chalcopyrite and sphalerite. The HLEM anomaly associated with this
occurence lies some 0.31 miles south of the same long regional formational
anomaly north of the two untested anomalies on the Brookmount property and is
therefore on strike with them.
NORMETAL MINE: This former Copper-Zinc-Silver-Gold producer was located 25 miles
west northwest of the property in Range X Desmeloizes Township. VMS style
massive and disseminated mineralization was associated with a south facing
sequence of sericite and chlorite altered felsic fragmental, ie. tuff, lapilli
tuff and agglomerate rocks (C. Tolman, "Normetal Mine Area, Abitibi-West
County"; Quebec Department of Mines, Map 653, 1951). These units are part of the
same assemblage present at the Brookmount property. The difference in facing
direction is indicative of the positions of the two properties on opposite sides
of a fold axis. Between 1937 and 1975 the mine produced 10,109,000 tonnes at an
average grade of 0.79% Cu, 5.30% Zn, 0.86 g/t Gold and 65.48 g/t Silver (C.
Lavergne, "Minerals and Tonage Value of Production in Quebec", 1985). Despite
its modest size it has been the second largest zinc producer in Quebec (A.
Simard "Relationship between Mineral Deposits and Geological Domain of the
Abitibi Volcano-Plutonic Belt of Northern Quebec", 1990). A satellite deposit,
Normetmar, has a combined total resource from three zones 590,000 tonnes grading
0.19% Copper, 11.04% Zinc and 34.6 g/t Silver (A. A. Jakubek, "Canadian Mining
Deposits., 1990).
15
<PAGE>
VIOR DEPOSIT: This VMS style Gold-Silver-Zinc deposit is located in Ranges IX
and X Ligneris Township and Range I Celeron Township 18.8 miles east northeast
of the Brookmount claims. The three auriferous zones - North, Central and South
- are hosted by cherty tuff, tuff and ash tuff and lapilli tuff respectively.
Chlorite and/or sericite and/or carbonate and/or silica alteration are present
at all zones. Pyrite is the main sulphide mineral, is ubiquitous at all three
zones and occurs as semi massive beds, disseminated and in fractures. The better
gold values are associated with late stage quartz veins. No resource has as yet
been calculated for the deposit.
EXPLORATION POTENTIAL
During the past 15 years the property and area have been subjected to two
extensive gold exploration programs by Macamic and BHP. In both cases the
principal targets were gold deposits hosted within or in close proximity to
major structural features. No base metal exploration has been conducted since
the mid 1970s and that work appears to have been a cursory check by ground
electromagnetic methods of anomalies detected from an airborne survey. Clearly
then the potential for the discovery of base metal deposits has not been
exhausted, and a re-examination of the exploration data for the property from a
base metal perspective is long overdue.
An idealized simple Copper-Zinc VMS base metal deposit consists of a
concordant massive sulphide (>60% suphide minerals) lens that is
stratigraphically underlain by a discordant stockwork or stringer zone of
vein-type sulphide mineralization contained in a pipe ("feeder" pipe) of
hydrothermally altered rock. The stockwork represents the near surface
channelway of a submarine hydrothermal system and the massive sulphide lens the
accumulation of sulphides precipitated on the sea floor above and around the
discharge vent. Submarine volcanic flows and pyroclastic rocks are the usual
host lithologies (although sediments may also be present), and deposits normally
occur at a contact between stratigraphic units. Of the metallic minerals, pyrite
is ubiquitous throughout the deposit, chalcopyrite and pyrrhotite are dominant
in the core of the stockwork zone and sphalerite is concentrated in the massive
sulphide lens. Chlorite and sericite are the main alteration minerals associated
with the feeder pipe. A single deposit or mine may consist of several individual
massive sulphide lenses and the underlying stockwork zones. Deposits often occur
in clusters. Often the deposits are blanketed by a thin pyritic horizon that
extends as a stratigraphic marker away from the deposit. Dimension for a massive
sulphide lens are normally a few hundred yards for its areal axes and up to 10's
of yards thick. The stockwork zone is typically a few 10's of yards in diameter
but extends for several hundreds of yards into the footwall below the massive
sulphide lens. The average size and grade of 58 VMS deposits from the AGB are
9.2 million tonnes at 1.47% Copper, 3.43% Zinc, 31.9 g/t Silver and 0.8 g/t
Gold. (The above description was summarized from Lydon, 1988 and Chartrand and
Cattalani, 1990.)
Obviously then, VMS deposits represent extremely attractive exploration
targets. The massive sulphide lens of a deposit almost always responds extremely
well to electromagnetic geophysical methods. By contrast, the stringer zone, due
to the lesser concentrations of sulphides is more easily detected by IP, and may
also display a magnetic signature due to the presence of pyrrhotite. Once a
deposit and surrounding host rocks have been subjected to regional deformation,
the geophysical picture potentially indicative of a VMS deposit would be a short
(<1100 yards) or a series of short electromagnetic anomalies possibly with an
associated magnetic anomaly in close proximity to a stratigraphically overlying,
much longer, regional, formational, electromagnetic anomaly.
16
<PAGE>
Any EM anomaly with a signature and in a geological setting as described
above rates testing. Two such anomalies (Macamic anomalies # 68 and # 69) exist
on the Brookmount property. Both occur at a lithological interface between
volcanic pyroclastic rocks and flows, lie along strike from a known VMS
occurrence, stratigraphically underlie a regional formational anomaly, and have
strike lengths <0.63 miles. Therefore, both definitely warrant closer scrutiny.
RECOMMENDATIONS AND COSTS
PHASE 1
HLEM anomalies # 68 and # 69 are both covered by the present five claims.
However, since a) the Brookmount claims barely cover the strike extent of the
HLEM anomalies, b) the lithologies in the area dip steeply northward and c) the
anomalies are located close to the north boundary of the claims, then clearly
the staking additional claims to cover the along strike and down dip extension
of any potential deposit and to provide space for any mine site development
would be prudent. To that end the staking of two (2) additional claims to the
west of the property in range III, one (1) to the east in Range III and eight
(8) immediately to the north in Range IV is recommended.
Even though the anomalies have been well defined with previous "state of
the art" HLEM surveys the exact location of their axes must be redefined prior
to costly follow-up drilling. Therefore, a program of line cutting followed by
HLEM and magnetic surveys is required. Initially, the whole property need not be
surveyed geophysically, rather the work may be restricted to the anomalies
themselves. To effect these surveys the BHP grid lines should be reconstructed
at 110 yard spacings across Lots 49 to 55 for a distance of 0.63 miles to both
sides of the Range III/IV line. A detailed Max-Min HLEM survey using 110 and 165
yard cables and two frequencies and accompanied by a magnetic survey are to be
completed over the entire grid. Any subtle anomalies are to be further screened
with IP.
Both anomalies require drill tesing. Two 330 yard holes are alloted at this
stage one for each anomaly plus one 440 yard hole to immediately follow-up any
interesting core intersections of massive or stringer type sulphide
mineralizaiton or of chlorite/sericite alteration.
PHASE II
PHASE II will be dependant upon the results of PHASE I. Any ore or sub-ore
grade or anomalous assays should be delineated with additional drilling. Two and
a half (2.5 ) miles, sufficient for eight to twelve holes, has been allowed for
a first pass follow-up.
BUDGET
<TABLE>
<CAPTION>
PHASE I
-------
<S> <C> <C> <C>
CLAIM STAKING: 11 claims at $125/claim $ 1,375
LINE CUTTING: 44 km @ $300/km 13,200
MAX-MIN SURVEY: 84 km @ $150/km 12,600
MAG SURVEY: 44 km @ $80/km 3,520
IP SURVEY: 5 days @ $1,500/day 7,500
DRILLING: 1000 m @ $45/m 45,000
Ancillary costs (assays, etc. 25%) 11,250
REPORTING: 5 days @ $350/day 1,750
---------
Sub Total $ 96,195
</TABLE>
17
<PAGE>
<TABLE>
<S> <C> <C> <C>
Contingency (10.2%) 9,805
---------
Total $ 106,000 $106,000
</TABLE>
<TABLE>
<CAPTION>
PHASE II
<S> <C> <C> <C>
DRILLING: 4000 m @ $45/m 180,000
Ancillary costs (25%) 45,000
REPORTING: allow 10 days @ $350/day 3,500
--------
Sub Total $228,500
Contingency (9.4%) 21,500
--------
Total $250,000 250,000
--------
GRAND TOTAL $356,000
========
</TABLE>
CONCLUSIONS
Exploration data for Brookmount Exploration Inc.'s Chazel Township, Quebec
property have been reviewed, analysed and evaluated. Although no mineral
deposits nor mineral occurrences are known to exist on the property VMS style
Copper-Zinc and Gold-Copper-Zinc deposits and occurrences lie on strike within
the same lithological assemblage. Two untested electromagnetic anomalies on the
property display geophysical signatures consistent with those associated with
VMS deposits. Both of these anomalies require further evaluation.
A two phased exploration program consisting of ground geophysical surveys
and core drilling and designed to fully evaluate the property for VMS style
mineralization is recommended. Approximate costs are $106,000.00 for Phase 1 and
$250,000.00 for Phase II.
COMPANY'S MAIN PRODUCT
The Company's main product is the sale of commercial and precious minerals
that can be extracted once the mineral property has been explored and developed.
Since the property has yet to be explored by the Company there is no guarantee
any ore body will ever be found.
COMPANY'S EXPLORATION FACILITIES
The Company has no plans to construct a mill or smelter on the Brookmount
claim until an ore body of reasonable worth is found (which may be never).
While in the exploration phase, the crew of the Company will be living in
the town of Rouyn-Noranda due to its close proximity to Brookmount claim and to
avoid building any permanent facilities.
RECENT EXPLORATION WORK BY THE COMPANY ON THE BROOKMOUNT MINERAL CLAIM
The Company has not yet undertaken any exploration work on the Brookmount
claim since its original staking. At this time the Company does not have
sufficient funds on hand to start a work commitment and there is no indication
when it will have sufficient funds.
18
<PAGE>
RISK INHERENT IN MINERAL PROPERTIES
The Company and its shareholders are aware of the following risks:
1. NO KNOWN ORE BODY
The Brookmount claim does not contain a known body of commercial ore and,
therefore, any program conducted on these properties would be an
exploratory search for ore. An ore body may never be found on the property.
2. EXPENDITURES MAY NEVER FIND AN ORE BODY
There is no certainty any expenditures made in the exploration of the
Brookmount claim will result in discoveries of commercial quantities of
ore. Most exploration projects do not result in the discovery of
commercially mineable deposits of ore.
3. FUNDS FOR EXPLORATION MIGHT NOT BE AVAILABLE
Resource exploration is a speculative business in that a company might not
be able to raise any funding subsequent to the initial capital.
4. INSIGNIFICANT MINERAL DEPOSIT
The Company might discover a mineral deposit which might not be the size
and grade to ensure profitability when mined. It requires a certain number
of tones and grade of the ore to ensure profitable operations and if these
two factors are not present the Company will not be able to proceed.
5. MARKETING FACTORS BEYOND THE CONTROL OF THE COMPANY
The marketability of any minerals acquired or discovered may be affected by
factors beyond the control of the Company. For example, fluctuations of the
price of commercial minerals, the nearest to the claim of milling
facilities, governmental regulations, cost of labor and equipment, taxes
and quotas on production and selling, etc. Any of these factors will have
an impact on the Company's operations and its profitability.
6. COMPETITION WITHIN THE MINING INDUSTRY
Competition within the mining industry is very competitive. The Company
will have to compete with other companies who are better known and have
more available funds. The Company might find it difficult to obtain
financing or stake properties of merit.
7. MINING INVOLVES A HIGH DEGREE OF RISK.
Mining operations generally involve a high degree of risk. Hazards such as
unusual or unexpected formations and other conditions are involved. The
Company may become subject to liability for pollution, cave-ins or hazards
against which it cannot insure or which it may not elect to insure. The
payment of such liabilities may have a material, adverse effect on the
Company's financial position.
19
<PAGE>
8. ENVIRONMENTAL CONCERNS
Prior to commencing mining operations on any of its properties, the Company
must meet certain environmental requirements. Compliance with these
requirements may prove to be difficult and expensive. The Company might be
liable for pollution if it does not adhere to the requirements. Environment
concerns relate to the use and supply of water, the animal life in the
area, fish living in the streams, the need to cut timber and removal of
overburden; being the soil above the hard rock. No building or fixtures of
any form can be erected without the prior approval of the district
inspector for Ontario. The cost and effect of adhering to the environment
requirements are unknown to the Company at this time and cannot be
reasonably estimated.
9. TITLE TO THE CLAIM.
While the Company has obtained the usual industry standard title reports
with respect to the Brookmount claim, this should not be construed as a
guarantee of title. This property may be subject to prior unregistered
agreements or transfers or native land claims and title may be affected by
undetected defects. Certain of the claims may be under dispute and
resolving of a dispute may result in the loss of all of such property or a
reduction in the Company's interest therein.
10. CONFLICT OF INTEREST
Some of the Directors of the Company are also directors and officers of
other companies and conflicts of interest may arise between their duties as
directors of the Company and as directors, officers of other companies.
Even with full disclosure by all the directors and officers, the Company
cannot insure that it will receive fair and equitable treatment in every
transaction.
11. QUALIFICATION ON GOING CONCERN BY THE AUDITORS
The Company's auditors, in the audited financial statements attached to
this Form 10-SB, has qualified their audit opinion on whether the Company
will be able to raise sufficient funds to complete its objectives and, if
not, indicates that the Company might not be able to continue as a going
concern. Without adequate future financing the Company might cease to
operate.
12. NO SURVEY HAS BEEN PERFORMED
The Brookmount claim has never been surveyed and, accordingly, the precise
location of the boundaries of the property and ownership of mineral rights
on specific tracts of land comprising the property may be in doubt.
13. CONCENTRATION OF OWNERSHIP BY MANAGEMENT.
The management of the Company, either directly or indirectly, owns
3,500,000 shares. It might be difficult for any one shareholder to solicit
sufficient votes to replace the existing management. Therefore, any given
shareholder may never have a voice in the direction of the Company.
20
<PAGE>
14. MINING EXPERIENCE BY MANAGEMENT
None of the other directors of the Company has had any mining experience.
L. OTHER MINERAL PROPERTIES
The Company has not found any other mineral properties either for staking
or purchasing but will seek other mineral properties during the next year or so
to diversify its holdings. The Company does not presently have the financial
capacity to undertake a large staking program. Any staking and/or purchasing of
mineral properties may involve the issuance of substantial blocks of the
Company's shares. The Company has no intentions of purchasing for cash or other
considerations any mineral properties from its officers and/or directors.
EMPLOYEES
As at November 30, 2000, the Company did not have any employees either part
time or full time. Initially the Company does not wish to bear the burden of
carrying full time employees especially during periods when it is difficult to
work on the property due to weather conditions.
The executive officers identified the Brookmount claim, incorporating the
Company, obtaining the assistance of professionals as needed, identifying
potential investors to contribute the initial "seed capital", coordinating
various filing requirements and other matters normally performed by the
executive officers without any compensation. The Company has given recognition
in the financial statements for the period ended July 31, 2000 to this
contribution by expensing $4,000 for services of the President and crediting
capital contribution for a like amount.
The Company is not a party to any employment contracts or collective
bargaining agreements. The Ontario area has a relatively large pool of people
experienced in exploration of mineral properties; being mainly geologists and
mining consultants. In addition, there is no lack of people who have experience
in working on mineral properties either as laborers or prospectors. Initially
the Company will use independent workers and consultants on a part time basis.
COMPETITION
In Canada there are numerous mining and exploration companies, both big and
small. All of these mining companies are seeking properties of merit and
availability of funds. The Company will have to compete against such companies
to acquire the funds to develop its mineral claim. The availability of funds for
exploration is sometimes limited and the Company might find it difficult to
compete with larger and more well-known companies for capital. Even though the
Company has the rights to the mineral on its claim there is no guarantee it will
be able to raise sufficient funds in the future to maintain its mineral claim in
good standing. Therefore, if the situation occurs that it does not have
sufficient funds for exploration the claim might lapse and be staked by other
mining interests. The Company might be forced to seek a joint venture partner to
assist in the development of its mineral claim. In this case, there is the
possibility that the Company might not be able to pay its proportionate share of
the exploration costs and might be diluted to an insignificant carried interest.
Even when a commercially viable ore body is discovered, there is no
guarantee competition in refining the ore will not exist. Other companies may
have long term contracts with refining companies thereby inhibiting the
Company's ability to process its ore and eventually market it. At
21
<PAGE>
this point in time the Company does not have any contractual agreements to
refine any potential ore it might discover on its mineral claim.
The exploration business is highly competitive and highly fragmented,
dominated by both large and small mining companies. Success will largely be
dependent on the Company's ability to attract talent from the mining field.
There is no assurance that the Company's mineral expansion plans will be
realized.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The discussion contained in this Item 2 is "forward looking" in that actual
work performed on the Company's mineral property may differ from the recommended
work program as set forth in the geological report dated February 23, 2000 by J.
G. Burns, P. Geo. Factors that could cause the work program to differ are
described throughout this Form 10SB.
PLAN OF OPERATION
To date the Company has concentrated on the Brookmount claim. In the
future, the Company will seek to investigate other mining properties to
determine which ones are of merit and are of interest to the Company. Subject to
the availability of financing, the Company will seek to increase its inventory
of mineral properties and, if acceptable to management, enter into joint venture
agreements to develop various other mineral properties of merit. (See Part 1,
Item 1 - "Description of the Business"). The Company will seek to generate such
funds through the sale of securities and/or institutional financing. If an
underwriter can be found, a public offering of common stock will be considered;
alternatively the Company will seek to raise funds through a private offering of
securities to an institutional buyer or through a registered broker dealer. The
Company does not presently have any financing arranged for nor has any
underwriter yet expressed interest in such an offering, and there can be no
assurance that an underwriter can be found on terms acceptable to the Company.
In the absence of such financing, the Company may be unable to put its plans
into effect.
LIQUIDITY AND CAPITAL RESOURCES
As at July 31, 2000, the Company had $2,074 of assets, and $2,313 of
liabilities of which $100 is due to the President of the Company. The cash
equivalent as at July 31, 2000 was $2,074.
The Company has no contractual obligations for either lease premises,
employment agreements or work commitments on the Brookmount claim and has made
no commitments to acquire any asset of any nature.
Operational and administrative expenses of the Company for 2001 are
projected to be approximately $6,500 which will comprise audit and accounting
($1,950), filing fees with regulatory authorities - Edgar ($1,800), transfer
agent's fees ($2,000) and miscellaneous ($750). The Brookmount claim is in good
standing until January 31, 2002 and, if warranted, the Company need not spend
any money on its claim until that date. The current cash position is not
sufficient to pay the above noted expenses but, if required, the officers and
directors can advance additional funds to the Company.
22
<PAGE>
Since December 9, 1999, the date of inception, the Company has incurred
the following expenses:
<TABLE>
<S> <C> <C>
Audit and accounting (i) $ 2,250
Bank Charges and interest (ii) 30
Consulting (iii) 5,000
Geology report (iv) 2,225
Incorporation costs written-off (v) 670
Management fee (vi) 4,000
Office expenses (vii) 534
Rent (viii) 1,600
Staking costs (ix) 1,726
Telephone (x) 400
Transfer agent's fees (xi) 2,695
Travel expenses (xii) 6,589
--------
Total expenses for the period $27,719
========
</TABLE>
(i) Audit and accounting - $2,250
The Company had its financial statements audited as at July 31, 2000, as
attached to this Form 10-SB. The accounting and preparation of a working paper
file for submission to the auditors was prepared by the Company's Accountant.
(ii) Bank changes and interest- $30
Monthly service charges for operating the account and interest credits for the
funds on hand as charged and credited by the Bank of Montreal.
(iii) Consulting- $5,000
The Company incurred various costs associated with the preparation of corporate
minutes, filings with Internal Revenue Services, and other required corporate
documents.
(iv) Geology report - $2,225
The Company engaged the services of James D. Burns, B. Sc, P. Eng., to write a
report to the Company detailing the mineralization on the Brookmount claim and
recommending a future work program. This report was completed on February 23,
2000 and has been summarized in this Form 10SB under the heading of "Exploration
of Brookmount Claim."
(v) Incorporation costs written-off - $670
The Company has treated the cost of incorporation as a period cost and has
written it off as an expense in the current period rather than capitalize it and
amortization it over a period of time.
(vi) Management fee - $4,000
The Company has not paid any fees to its directors or officers during the
current period. Nevertheless, the Company realizes that there is a cost involved
in the directors and officers
23
<PAGE>
devoting time and effort to the affairs of the Company. Therefore, a management
fee of $4,000 has been expensed and credited to capital contribution during the
current period.
(vii) Office expenses - $534
Office expenses represent the printing of cheques for use by the Company,
administrative services, photocopying and fax charges.
(viii) Rent - $1,600
The Company uses the personal residence of the Secretary Treasurer of the
Company as an office. No charge has been incurred by the Company. Nevertheless,
the Company recognizes that there is a cost to using an office and therefore has
expensed $1,600 and credited to capital contribution a similar amount.
(ix) Staking costs - $1,726
The Company engaged the services of George Fernier Contractors to stake the
Brookmount claim in Chazel Township of Quesbec, Canada.
(x) Telephone - $400
The Company has not incurred any telephone charges to date. Nevertheless, the
Company recognizes the fact that there is a telephone cost to operating a
business and therefore has expensed $400 with an offsetting credit to capital
contribution. This expense was determined on the fair market value of operating
a telephone line for an eight month period.
(xi) Transfer agent's fees - $2,695
Transfer agent's fees comprise $1,200 as the annual fee paid to maintain an
account with the transfer agent and $1,495 for preparation and issuance of share
certificates. The Company has treated for accounting purposes the annual fee of
$1,200 as a period cost and has written it off in the current period rather than
amortizing it over the entire year.
(xii) Travel Expenses-$6,589
The Company incurred various travel expenses in having its management and
consultants arrange for the staking of the Brookmount claim.
Management estimates that the current funds on hand will not be sufficient
to allow the Company to undertake exploration activities on the Brookmount
claim. The funds required over the next several months will be for filing fees,
accounting and general office expenses. Nevertheless, the Company will have to
raise additional funds to remain as a going concern.
The only three methods available to the Company to obtain further funding
are as follows:
a) Advances from its directors and officers sufficient to enable the Company
to undertake some, but not all, of the recommendations set forth by Mr.
Burns. No commitment on the part of the directors or officers has been made
to date;
b) Obtain institutional financing based on the personal guarantees of the
Company's officers and directors. The directors and officers have not
considered this method at the present time; and
24
<PAGE>
c) Insurance of the common stock of the Company either to existing
shareholders or to the general public. No plans at the present time have
been made to obtain funding from this source.
Management does not believe the Company's operations have been materially
affected by inflation.
ITEM 3. DESCRIPTION OF PROPERTY
The Brookmount claim consists of 500 acres situated within the Chazel
Township, Abitibi West County, Quebec, 73 km (approximately 50 miles) north
north east of Rouyn-Noranda, Quebec. The property is 100% owned by the Company.
The Brookmount claim is situated in a generally flat terrain with only the
occasional low hill. The property ranges from an elevation of 960 feet to 1,320
feet. Tree species present on the property are spruce, jackpine, balsam,
tamarack, cedar, birch and poplar. The entire property, being situated on the
Canadian Shied, is considered northern territory, characterized by long cold
winters and short warm to hot summers. There are creeks that flow through the
property and gravel roads which allow an easier access to the property.
OFFICES
The Company's executive offices are located in Apartment 22 - 1106 Avenue
Road, Toronto, Ontario, Canada, M4N 2E1. The office is located in the personal
residence of the President of the Company. There is no charge to the Company for
office but an imputed charge of $1,600 has been expensed during the current
period with an offsetting entry to capital contribution. The Company realizes it
will require an office once it has started exploration work on the Brookmount
claim, but has yet to choose the office's location.
INCORPORATION IN THE STATE OF NEVADA
The Company incorporated in the State of Nevada rather than Ontario because
of tax reasons. For example, both the Federal and Provincial Governments impose
tax on any profits made. This corporate tax could range as high as 51% of net
income. In addition the Province of Ontario has an annual capital tax based on
the number of shares outstanding. By having a Nevada-based company, the Company,
if it ex-provincially incorporates in Ontario, will only be subject to a 15%
withholding tax as set forth in the Canada/US Tax Treaty.
OTHER PROPERTY
The Company does not own any other property other than the rights to the
minerals located on the Brookmount claim.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERSHIP AND MANAGEMENT
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the
beneficial ownership of each person who is known to the Company to be the
beneficial owner of more than 5% of the Company's Common Stock as of November
30, 2000.
25
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Name and Address Amount and Nature Percent
of of Beneficial of Beneficial of
Class Owner Ownership (1),(2) Class (2)
----- ------ ----------------- ---------
<S> <C> <C> <C>
Common Shares FRED HALLBERG 3,000,000 32.31%
Apt. 22 - 1106 Avenue Road
Toronto, Ontario
Canada, M4N 2E1
Common Shares RAYMOND TANG 600,000 6.46%
871-1078 East 31st Street
Vancouver, British Columbia
Canada, V7A 2E5
LISA TANG 515,000 5.55%
#205-8077 Alexsandra Road
Richmond, British Columbia
Canada, V7A 2E5
Common Shares JOHN VAUGHAN 500,000 5.39%
25A Claremont Avenue
Pointe-Claire, Quebec
Canada, H9S 5C6
Common Shares KIT FAN LEUNG 500,000 5.39%
830-1268 West Broadway
Vancouver, British Columbia
Canada, V6H 1G6
Common Shares HUANG GUANG QUAN 490,000 5.28%
215-5471 Arcadia Road
Richmond, British Columbia
Canada, V7A 2E5
Common Shares TANG ZI MOND 475,000 5.12%
208-2150 Brunswick
Vancouver, British Columbia
Canada, V7A 2E5
</TABLE>
(1) As of November 30, 2000, 2000 there were 9,282,400 common shares
outstanding. Unless otherwise noted, the security ownership disclosed in
this table is of record and beneficial.
(2) Under Rule 13-d under the Exchange Act, shares not outstanding but subject
to options, warrants, rights, conversion privileges pursuant to which such
shares may be acquired in the next 60 days are deemed to be outstanding for
the purpose of computing the percentage of outstanding shares owned by the
persons having such rights, but are not deemed outstanding for the purpose
of computing the percentage for such other persons.
(3) These shares are restricted since they were issued in compliance with the
exemption from registration provided by Section 4(2) of the Securities Act
of 1933, as amended. After these
26
<PAGE>
shares have been held for one year, Mr.Hallberg, President of the Company,
could sell 1% of the outstanding stock in the Company every three months.
Therefore, this stock can be sold after the expiration of one year in
compliance with the provisions of Rule 144. There is "stock transfer"
instructions placed against these certificates and a legend has been
imprinted on the stock certificates themselves.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of each officer and director, and of all directors and
executive officers as a group as of November 30, 2000.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Name and Address Amount and Nature Percent
of of Beneficial of Beneficial of
Class Owner Ownership (1),(2) Class (2)
----- ------ ----------------- ---------
<S> <C> <C> <C>
Common Fred Hallberg 3,000,000 (3) 32.31%
Shares Apt. 22-1106 Avenue Road
Toronto, Ontario
Canada, M4N 2E1
Common Yiu Lam Ko NIL 0.00%
Shares 203 - 8020 Ryan Road
Richmond, British Columbia
Canada, V7A 2E4
Common John Vaughan 500,000 (4) 5.39%
Shares 25A Claremont Avenue
Pointe-Claire, Quebec
Canada, H9S 5C6
Common Directors and Officers as a 3,500,000 37.70%
Shares Group
</TABLE>
(1) As of November 30, 2000 there were 9,282,400 common shares outstanding.
Unless otherwise noted, the security ownership disclosed in this table is
of record and beneficial.
(2) Under Rule 13-d under the Exchange Act, shares not outstanding but subject
to options, warrants, rights, conversion privileges pursuant to which such
shares may be acquired in the next 60 days are deemed to be outstanding for
the purpose of computing the percentage of outstanding shares owned by the
persons having such rights, but are not deemed outstanding for the purpose
of computing the percentage for such other persons. None of the directors
or officers have any options, warrants, rights or conversion privileges
outstanding.
(3) Fred Hallberg is President and Director of the Company and one of the
controlling shareholders. This stock is restricted since it was issued in
compliance with the exemption from registration provided by Section 4 (2)
of the Securities Act of 1933, as amended. After this stock has been held
for one (1) year, Mr. Hallberg could sell a percentage of his shares every
three months based on 1% of the outstanding stock. Therefore, this stock
cannot be sold except in compliance with the provisions of Rule 144.
(4) John Vaughan is a Director of the Company and one of the controlling
shareholders. This stock is restricted since it was issued in compliance
with the exemption from registration
27
<PAGE>
provided by Section 4 (2) of the Securities Act of 1933, as amended. After
this stock has been held for one (1) year, Mr. Vaughan could sell a
percentage of his shares every three months based on 1% of the outstanding
stock. Therefore, this stock cannot be sold except in compliance with the
provisions of Rule 144.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS AND EXECUTIVE OFFICERS
The Company's directors and executive officers, as of November 30,
2000, are listed in the table below. Directors are elected at the Company's
annual meeting of stockholders. They hold office until their successors are
elected and qualified. The Company's officers, responsible to the Board of
Directors, are appointed annually by the Board.
<TABLE>
<CAPTION>
Term as
Director
Name Position Held Expires
---- ------------- -------
<S> <C> <C>
Fred Hallberg President and Director 2001
Yiu Lam Ko Secretary Treasurer and
Director 2001
John Vaughan Director 2001
</TABLE>
FRED HALLBERG, President of the Company, received his Secondary School
Diploma from Brantford C.V.S. in Brantford, Ontario in 1994. In 1995 he
completed his first year of the Fire Protection Engineering Degree at Seneca
College in Toronto, Ontario. In 1996, he took a position as Manager of the Aroma
Coffee Bar and Eatery in Toronto, where he trained and supervised staff and
monitored and maintained cash balances. He was promoted to Franchise Consultant
with the Aroma Coffee Bar in 1997 where he is assisting new franchise owners
with the operation of restaurants.
YIU LAM KO, Secretary Treasurer and Director of the Company was born in
China. After moving to Vancouver, British Columbia, Canada, Mr. Ko entered into
various sales services for Chinese Companies. In 1990 he became advertising
manager for a Chinese news paper located in Vancouver before becoming involved
in 1996 in starting his own advertising and printing company.
JOHN VAUGHAN, Director of the Company, owned and operated several Radio
Shack outlets in Toronto, Ontario from 1976 to 1979. In 1979 he moved into the
restaurant business where he owned and managed Battalion Holdings Inc., which
ran five well known and successful restaurants in Toronto. From Toronto, he
moved to Montreal, Quebec in 1991, where he owns and operates several
restaurants. He also runs a company that offers management consulting to the
restaurant industry in Quebec.
Although Fred Hallberg, Yiu Lam Ko and John Vaughan do not work full
time for the Company, they plan to devote whatever time is required once the
mineral property has an exploration program ready for its development. The
President of the Company will spend approximately 25 hours a month on
administration and planning for the Company's future exploration program while
the Secretary Treasurer will work for 15 hours per month to prepare corporate
documents. Once development of the Brookmount claim takes place, the President
and Secretary Treasurer will find that their hours each month will increase
although they will be relying upon mining professionals to undertake the
exploration program on behalf of the Company.
28
<PAGE>
None of the directors or officers are related to each other and are not
related to any person under consideration for nomination as a director or
appointment as an executive officer.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's executive officers have received compensation
since the Company's inception.
The following table sets forth compensation paid or accrued by the
Company during the period ended November 30, 2000 to the Company's President,
Director and Secretary Treasurer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (2000)
Long Term Compensation (US Dollars)
---------------------------------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (e) (f) (g) (h) (i)
Other Restricted All other
Annual stock Options/ LTIP compen-
Name and Princi- Comp. awards SAR payouts sation
pal position Year Salary ($) ($) (#) ($) ($)
------------ ---- ------ --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Fred Hallberg 1999- -0- -0- -0- -0- -0- -0-
President and 2000
Director
Yiu Lam Ko 1999- -0- -0- -0- -0- -0- -0-
Secretary Treasurer 2000
and Director
John Vaughan 1999- -0- -0- -0- -0- -0- -0-
Director 2000
</TABLE>
There has been no compensation given to any of the Directors or Officers during
1999 and 2000. There are no stock options outstanding as at November 30, 2000
and no options have been granted in 2000, but it is contemplated that the
Company may issue stock options in the future to officers, directors, advisers
and future employees.
COMPENSATION OF DIRECTORS
Members of the Board of Directors do not receive cash compensation for
their services as Directors. Directors are not presently reimbursed for expenses
incurred in attending Board meetings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has never before filed a prospectus specified under Section
10(a) of the Securities Act of 1933 at this time. The Company raised funds from
its officers and directors relatives, friends and business associates as more
fully described below.
29
<PAGE>
SHARES ISSUED TO DIRECTORS AND OFFICERS
Fred Hallberg, President, 3,000,000 shares at $0.001 per share for cash
consideration.
John Vaughan, Director, 500,000 shares at a price of $0.001 per share
for cash consideration.
Both the above share issues are restricted since they were issued in
compliance with the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended. After this stock has been held for one year,
the holders of these shares of the Company could sell a percentage of their
shares every three months based on 1% of the outstanding stock in the Company.
Therefore, this stock can be sold after the expiration of one year in compliance
with the provisions of Rule 144. There are "stop transfer" instructions placed
against this stock and a legend is imprinted on each stock certificate.
SHARES ISSUED TO OTHER SHAREHOLDERS
On or about February 10, 2000, the Company issued 5,750,000 shares to
individuals, other than directors and officers for the consideration of $0.002
per share, for a total consideration of $11,500. All shares were paid for in
cash. These shares were issued in accordance with the exemption from
registration provided by Rule 504 of Regulation D of the Securities Act of 1933,
as amended and an appropriate Form D was filed in connection with the issuance
of these shares.
On or about March 16, 2000, the Company issued 32,400 shares to individuals
other than directors or officers, for consideration of $0.20 per share, for a
total consideration of $6,480. All shares were paid for in cash. These shares
were issued in accordance with the exemption from registration provided by Rule
504 of Regulation D of the Securities Act of 1933, as amended and an appropriate
Form D was filed in connection with the issuance of these shares.
The director and officer of the Company have contributed and continue
to contribute time, office space, telephone, and other expenses, without
compensation or reimbursement. The Company has given recognition to this
contribution by including in expenses and crediting capital surplus the
following amounts:
<TABLE>
<S> <C>
Management fees $ 4,000
Rent 1,600
Telephone 400
-------
$ 6,000
=======
</TABLE>
One of the directors of the Company is a director, officer and
stockholder of another company. Therefore, conflicts of interest may arise
between his duty as director of the Company and as a director and an officer of
other companies. All such possible conflicts will be disclosed and the directors
concerned will govern himself in respect thereof to the best of his ability in
accordance with the obligations imposed on him under the laws of the State of
Nevada.
All officers and the director are aware of their fiduciary
responsibilities under corporate law, especially insofar as taking advantage,
directly or indirectly, of information or opportunities acquired in their
capacities as officers and director of the Company. Any transaction with
officers or directors will only be on terms consistent with industry standards
and sound business practice in accordance with the fiduciary duties of those
persons to the Company, and depending upon the magnitude of the transactions and
the absence of any disinterested board members, the transactions may be
submitted to the shareholders for their approval in the absence of any
independent board members.
30
<PAGE>
The three directors are prepared to advance money to the Company for an
exploration program on the Brookmount claim. Such commitment would not exceed
$50,000. If the Company is unable to raise further money from the issuance of
its capital stock or institutional investors and the directors are unwilling to
advance further funds subsequent to the above noted advancement, then the
Company will not be able to operate as a going concern and might cease to exist.
The Company has not entered into any transactions with a related party
and does not intend to do so in the immediate future. It is the intention of the
Company to deal with third parties in all its acquisitions of properties.
REPORTS TO SECURITY HOLDERS
Prior to filing this Form 10-SB, the Company has not been required to
deliver annual reports. To the extent that the Company is required to deliver
annual reports to security holders through its status of a reporting company,
the Company shall deliver annual reports. Also, to the extent the Company is
required to deliver annual reports by the rules or regulations of any exchange
upon which the Company's shares are traded, the Company shall deliver annual
reports. If the Company is not required to deliver annual reports, the Company
will not go to the expense of producing and delivering such reports. If the
Company is required to deliver annual reports, they will contain audited
financial statements as required.
Prior to the filing of this Form 10-SB, the Company has not filed
reports with the Securities and Exchange Commission. Once the Company becomes a
reporting company, management anticipates that Forms 3, 4, 5, 10K-SB, 10Q-SB,
8-K and Schedules 13D along with the appropriate proxy material will have to be
filed as they come due. If the Company issues additional shares, the Company may
file additional registration statements for those shares.
The public may read and copy any material of the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding the issuers that file electronically with the Commission. The Internet
address of the Commission's site is (http://www.sec.gov).
ITEM 8. DESCRIPTION OF SECURITIES
The Company's Articles of Incorporation currently provide that the
Company is authorized to issue 200,000,000 shares of common stock, par value
$0.001 per share. As at November 30, 2000, 9,282,400 shares were outstanding.
COMMON STOCK
Each holder of record of the Company's common stock is entitled to one
vote per share in the election of the Company's directors and all other matters
submitted to the Company's stockholders for a vote. Holders of the Company's
common stock are also entitled to share ratably in all dividends when, as, and
if declared by the Company's Board of Directors from funds legally available
therefore, and to share ratably in all assets available for distribution to the
Company's stockholders upon
31
<PAGE>
liquidation or dissolution, subject in both cases to any preference that may be
applicable to any outstanding preferred stock. There are no preemptive rights to
subscribe to any of the Company's securities, and no conversion rights or
sinking fund provisions applicable to the common stock.
Neither the Company's Articles of Incorporation nor its Bylaws provide
for cumulative voting. Accordingly, persons who own or control a majority of the
shares outstanding may elect all of the Board of Directors, and persons owning
less than a majority could be foreclosed from electing any.
OPTIONS OUTSTANDING
There are no outstanding options. It is the intention of the Board of
Directors to grant stock options to directors, officers and future employees at
some time in the future. At the present time no consideration has been given to
the granting of stock options.
32
<PAGE>
PART 11
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
MARKET INFORMATION
The Company's stock is not presently traded or listed on any public
market. Upon effectiveness of the Company's registration statement under the
Securities Exchange Act of 1934, it is anticipated one or more broker dealers
may make a market in its securities over-the-counter, with quotations carried on
the National Association of Securities Dealers, Inc.'s "OTC Bulletin Board".
There is no established market price for the shares. There are no
common shares subject to outstanding options or warrants or securities
convertible into common equity of the Company. The number of shares subject to
Rule 144 is 3,500,000 shares. Each share certificate has the appropriate legend
affixed thereto. There are no shares being offered to the public and no shares
have been offered pursuant to an employee benefit plan or dividend reinvestment
plan.
HOLDERS
There are 37 record holder of the Company's common stock as at November
30, 2000. Two of these shareholders are current directors and officers.
DIVIDENDS
The Company has never paid cash dividends on its common stock and does
not intend to do so in the foreseeable future. The Company currently intends to
retain any earnings for the operation and expansion of its business.
TRANSFER AGENT
The Company's transfer agent is Nevada Agency & Trust Co., 50 West
Liberty Street, Suite 880, Reno, Nevada, 89501.
ITEM 2. LEGAL PROCEEDINGS
There are no legal proceedings to which the Company is a party or to
which its property is subject, nor to the best of management's knowledge are any
material legal proceedings contemplated.
ITEM 3. DISAGREEMENT WITH ACCOUNTANTS AND
FINANCIAL DISCLOSURE
From inception to date, the Company's principal accountant is Andersen
Andersen & Strong, L.C. of Salt Lake City, Utah. The firm's report for the
period from inception to July 31, 2000 did not contain any adverse opinion or
disclaimer, nor were there any disagreements between management and the
Company's accountants.
33
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
From inception through to November 30, 2000, the Company has issued and
sold the following unregistered shares of its common stock (the aggregated value
of all such offerings did not exceed US$1,000,000):
(i) Subscription for shares by Directors and Officers of the Company
a. Subscription for shares by current directors and officers
On January 7, 2000 the Company issued to its President, Fred Hallberg,
3,000,000 common shares, and issued to John Vaughan, a Director, 500,000 common
shares at $0.001 per share.
The shares issued to the present directors and officers are restricted
since they were issued in compliance with the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended. After this
stock has been held for one year, Directors could sell within a three month
period a percentage of their shares based on 1% of the outstanding stock in the
Company. Therefore, this stock can be sold after the expiration of one year in
compliance with the provisions of Rule 144. There are "stop transfer"
instructions placed against this certificate and a legend has been imprinted on
the stock certificate itself.
(ii) Subscription for 5,750,000 shares
On February 10, 2000, the Company accepted subscriptions from fourteen
investors in the amount of 5,750,000 shares at a price of $0.002 per share. In
all cases the consideration was cash. These shares were issued in accordance
with the exemption from registration provided by Rule 504 of Regulation D of the
Securities Act of 1933, as amended, and an appropriate Form D was filed in
connection with the issuance of these shares.
(iii) Subscription for 32,400 shares
On March 16, 2000, the Company accepted subscriptions from twenty-one
investors in the amount of 32,400 shares at a price of $0.20 per share. In all
cases the consideration was cash. These shares were issued in accordance with
the exemption from registration provided by Rule 504 of Regulation D of the
Securities Act of 1933, as amended, and an appropriate Form D was filed in
connection with the issuance of these shares.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation contain provisions which, in substance,
eliminate the personal liability of the Board of Directors and officers of the
Company and its shareholders from monetary damages for breach of fiduciary
duties as directors to the extent permitted by Nevada law. By virtue of these
provisions, and under current Nevada law, a director of the Company will not be
personally liable for monetary damages for breach of fiduciary duty, except
liability for:
a. breach of his duties of loyalty to the Company or to its shareholders;
b. acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
c. dividends or stock repurchase or redemptions that are unlawful under
Nevada law; and
34
<PAGE>
d. any transactions from which he or she receives an improper personal
benefit.
These provisions pertain only to breaches of duty by individuals solely
in the capacity as directors, and not in any other corporate capacity, such as
an officer, and limit liability only for breaches of fiduciary duties under
Nevada law and not for violations of other laws (such as Federal securities
laws). As a result of these indemnifications provisions, shareholders may be
unable to recover monetary damages against directors for actions taken by them
that constitute negligence or gross negligence or that are in violation of their
duties, although it maybe possible to obtain injunctive or other equitable
relief with respect to such actions.
The inclusion of these indemnification provisions in the Company's
By-laws may have the effect of reducing the likelihood of derivation litigation
against directors, and may discourage or deter shareholders or management from
bringing lawsuit action, if successful, might otherwise benefit the Company or
its shareholders.
The Company will be entering into separate indemnification agreements
with its directors and officers containing provisions that provide for the
maximum indemnification allowed to directors and officers under Nevada law and
the Company, among other obligations, to indemnify such directors and officers
against certain liabilities that may arise by reason of their status as
directors and officers, other than liabilities arising from willful misconduct
of a culpable nature, provided that such persons acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interest
of the Company and, in the case of criminal proceeding, had no reasonable cause
to believe that his conduct was unlawful. In addition, the indemnification
agreement provides generally that the Company will, subject to certain
exceptions, advance the expenses incurred by director and officers as a result
of any proceedings against them as to which they may be entitled to
indemnifications. The Company believes these arrangements are necessary to
attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in such act, and is
therefore unenforceable.
35
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The following financial statements are filed with this Form 10-SB:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Certified Public Accountants
Financial Statements Brookmount Explorations Inc. 37
Balance Sheet as at July 31, 2000 38
Statement of Operations for the Period from December 9, 1999 (Date
of Inception) to July 31, 2000 39
Statement of Changes in Stockholders' Equity for the Period from
December 9, 1999 (Date of Inception) to July 31, 2000 40
Statement of Cash Flows for the Period from December 9, 1999 (Date
of Inception) to July 31, 2000 41
Notes to Financial Statements 42
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite202
-------------------------------- Salt Lake City, Utah 84106
Certified Public Accountants and Business Consultants Telephone 801-486-0096
Fax 801-486-0098
</TABLE>
The Board of Directors
Brookmount Explorations Inc.
Vancouver, B.C.
REPORT OF CERTIFIED INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have reviewed the condensed balance sheet of Brookmount Explorations Inc.
(exploration stage company) as of July 31, 2000 and the statement of operations,
stockholders' equity and cash flows for the period December 9, 1999 (date of
inception) to July 31, 2000. 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 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 statements 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 Brookmount Explorations Inc. at
July 31, 2000 and the results of operations, and cash flows for the period
December 9, 1999 (date of inception) to July 31, 2000, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in the exploration
stage and does not have the necessary working capital for its planned activity,
which raises doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ "Andersen Andersen and Strong"
Salt Lake City, Utah
September 10, 2000
37
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
BALANCE SHEET
JULY 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 2,074
---------
Total Current Assets 2,074
---------
OTHER ASSETS
Mineral claims - Note 3 --
---------
$ 2,074
=========
LIABILITIES
Accounts payable $ 2,313
---------
2,313
---------
STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par value
9,282,400 shares issued and outstanding 9,282
Capital in excess of par value 18,198
Deficit accumulated during the development stage (27,719)
---------
Total Stockholders' Deficiency (239)
---------
$ 2,074
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD DECEMBER 9, 1999 (DATE OF INCEPTION) TO JULY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
REVENUES $ --
EXPENSES 27,719
--------
NET LOSS $ 27,719
========
NET LOSS PER COMMON SHARE
Basic $ --
========
AVERAGE OUTSTANDING SHARES
Basic 7,318,734
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD DECEMBER 9, 1999 (DATE OF INCEPTION) TO JULY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL IN
COMMON STOCK EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------ ------ --------- -------
<S> <C> <C> <C> <C>
BALANCE DECEMBER 9, 1999 (DATE OF INCEPTION) -- $ -- $ -- $ --
Issuance of common stock for cash at
$0.001-January 7, 2000 3,500,000 3,500 -- --
Issuance of common shares for cash at
$0.002-February 10, 2000 5,750,000 5,750 5,750 --
Issuance of common shares for cash at
$0.20-March 16, 2000 32,400 32 6,448 --
Contributions to capital by officer-
expenses -- -- 6,000 --
Net operating loss for the period
December 9, 1999 to July 31, 2000 -- -- -- (27,719)
--------- ---------- --------- ----------
BALANCE JULY 31, 2000 9,282,400 $ 9,282 $ 18,198 $ (27,719)
========= ========= ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
40
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 9, 1999 (DATE OF INCEPTION) TO JULY 31, 2000
<TABLE>
<CAPTION>
CASH FLOWS FROM
OPERATING ACTIVITIES:
<S> <C>
Net loss $ (27,719)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Changes in accounts payable 2,313
Contributions to capital - expenses 6,000
-------
Net Cash Flows (defecit) from Operations (19,406)
--------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock 21,480
--------
Net Change in Cash 2,074
Cash at Beginning of Period --
--------
Cash at End of Period $ 2,074
=========
SCHEDULE OF NONCASH OPERATING ACTIVITIES
Contributions to capital by officer - expenses - 2000 $ 6,000
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
41
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
December 9, 1999 with the authorized common stock of 200,000,000 shares
at $0.001 par value.
The Company was organized for the purpose of acquiring and developing
mineral properties. At the report date mineral claims, with unknown
reserves, had been acquired. The Company has not established the
existence of a commercially minable ore deposit and therefore has not
reached the development stage and is considered to be in the
exploration stage (see note 3).
Since its inception the Company has completed two Regulation D
offerings of 9,282,400 shares of its common capital stock for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of
dividends.
Income Taxes
At July 31, 2000, the Company had a net operating loss carry forward of
$27,719. The tax benefit from the loss carry forward has been offset by
a valuation reserve because the use of the future tax benefit is
undeterminable since the Company has no operations.
The loss carry forward expires in the year 2022.
Basic and Diluted Net Income (Loss) per Share
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net
income (loss) per share amounts are computed using the weighted average
number of common shares and common equivalent shares outstanding as if
shares had been issued on the exercise of the preferred share rights
unless the exercise becomes antidilutive and then only the basic per
share amounts are shown in the report.
42
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Capitalization of Mineral Claim Costs
Costs of acquisition, exploration, carrying, and retaining unproven
properties are expensed as incurred. Costs incurred in proving and
developing a property ready for production are capitalized and
amortized over the life of the mineral deposit or over a shorter period
if the property is shown to have an impairment in value. Expenditures
for mine equipment will be capitalized and depreciated over their
useful lives.
Environmental Requirements
At the report date environmental requirements related to the mineral
leases acquired (note 3) are unknown and therefore any estimate of any
future cost cannot be made.
Financial Instruments
The carrying amounts of financial instruments, including cash and
accounts payable are considered by management to be their estimated
fair values. These values are not necessarily indicative of the amounts
that the Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were assumed in preparing these
financial statements.
43
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. MINERAL CLAIMS
The Company has acquired five mineral claims located in the Chazel
Township, Abitibi West County in the province of Quebec with an
expiration date of January 31, 2002.
The claims have not been proven to have a commercially minable ore
reserve and therefore all costs of exploration and retaining the
properties have been expensed.
The claims may be retained by the Company by the completion of yearly
assessment work of $6,000Cn or by a payment of $6,000Cn. The next
assessment work is due December 2, 2001.
4. RELATED PARTY TRANSACTIONS
Related parties acquired 38 % of the common stock.
5. GOING CONCERN
The Company will need additional working capital to be successful in
its planned activity and continuation of the Company as a going concern
is dependent upon obtaining additional working capital and the
management of the Company has developed a strategy, which it believes
will accomplish this objective through additional equity funding, and
long term financing, which will enable the Company to operate in the
coming year.
44
<PAGE>
PART 111
ITEM 1. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO.
--------
<S> <C>
(2) Charter and By-Laws
(a) Articles of Incorporation of Brookmount Explorations Inc. filed
December 9, 1999 (filed herewith, page 47)
(b) Bylaws (filed herewith, page 51)
(3) Instruments Defining Rights of Securities Holders
(a) Text of stock certificates for common stock (filed herewith, page 62)
(5) Voting Trust Agreements
None
(6) Material Contracts
(a) Not made in the ordinary course of business
(i) Transfer Agent and Registrar Agreement between Registrant and Nevada
Agency & Trust Co., dated January 6, 2000 (filed herewith, page 63)
(10) Consent of experts and counsel
(i) Consent of Andersen Andersen & Strong, L.C., independent certified public
accountants (filed herewith, page 66)
(11) Statement re computation of per share earnings
Not applicable
(16) Letter of change in certifying accountant
Not applicable
(21) Subsidiaries of the Registrant
Not applicable
(24) Power of Attorney
Note
(27) Financial Data Schedule Worksheet (filed herewith, page 67)
(99) Addition Exhibits
None
ITEM 2. DESCRIPTIONS OF EXHIBITS
</TABLE>
[Attached, pages 47 through 69]
45
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
BROOKMOUNT EXPLORATIONS INC.
(the Company)
by /s/ "Fred Hallberg"
-------------------------------
Fred Hallberg
President and Director
Dated: December 19, 2000
46
<PAGE>
EXHIBIT NO. 2 (A)
ARTICLES OF INCORORATION
OF
BROOKMOUNT EXPLORATIONS INC.
* * * * *
The undersigned, acting as incorporator, pursuant to the provisions of the
laws of the State of Nevada relating to private corporations, hereby adopts the
following Articles of Incorporation:
ARTICLE ONE. [NAME]. The name of the corporation is:
BROOKMOUNT EXPLORATIONS INC.
ARTICLE TWO. [RESIDENT AGENT]. The initial agent for service of process is
Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, City of
Reno, County of Washoe, State of Nevada 89501.
ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is
organized are to engage in any activity or business not in conflict with the
laws of the State of Nevada or of the United States of America, and without
limiting the generality of the foregoing, specifically:
1. [OMNIBUS] . To have to exercise all the powers now or hereafter
conferred by the laws of the State of Nevada upon corporations
organized pursuant to the laws under which the corporation is organized
and any and all acts amendatory thereof and supplemental thereto.
11. [CARRYING ON BUSINESS OUTSIDE STATE). To conduct and carry on its
business or any branch thereof in any state or territory of the United
States or in any foreign country in conformity with the laws of such
state, territory, or foreign country, and to have and maintain in any
state, territory, or foreign country a business office, plant, store or
other facility.
111. [PURPOSES TO BE CONSTRUED AS POWERS] . The purposes specified
herein shall be construed both as purposes and powers and shall be in
no wise limited or restricted by reference to, or inference from, the
terms of any other clause in this or any other article, but the
purposes and powers specified in each of the clauses herein shall be
regarded as independent purposes and powers, and the enumeration of
specific purposes and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or of the general
powers of the corporation; nor shall the expression of one thing be
deemed to exclude another, although it be of like nature not expressed.
47
<PAGE>
ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have authority to
issue an aggregate of TWO HUNDRED MILLION (200,000,000) Common Capital Shares,
PAR VALUE ONE MILL ($0.001) per share for a total capitalization OF TWO HUNDRED
THOUSAND DOLLARS ($200,000).
The holders of shares of capital stock of the corporation shall not be
entitled to pre-emptive or preferential rights to subscribe to any unissued
stock or any other securities which the corporation may now or hereafter be
authorized to issue.
The corporation's capital stock may be issued and sold from time to time
for such consideration as may be fixed by the Board of Directors, provided that
the consideration so fixed is not less than par value.
The stockholders shall not possess cumulative voting rights at all
shareholders meetings called for the purpose of electing a Board of Directors.
ARTICLE FIVE. [DIRECTORS]. The affairs of the corporation shall be governed
by a Board of Directors of no more than eight (8) nor less than one (1) person.
The names and addresses of the first Board of Director are:
NAME ADDRESS
---- -------
Frederick Hans Hallberg 297 Roselawn Avenue
Toronto, Ontario
Canada, M4R 1G2
Yiu Lam Ko 203 - 8020 Ryan Road
Richmond, British Columbia
Canada, V7A 2E4
John Leslie Vaughan 25 A Claremont Avenue
Point-Claire, Quebec
Canada, H9S 5C6
ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock of the corporation,
after the amount of the subscription price or par value has been paid in, shall
not be subject to pay debts of the corporation, and no paid up stock and no
stock issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. [INCORPORATOR]. The name and address of the incorporator of
the corporation is as follows:
NAME ADDRESS
---- -------
Amanda Cardinalli 50 West Liberty Street, Suite 880
Reno, Nevada 89501
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence of the
corporation shall be perpetual.
48
<PAGE>
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the corporation shall be
adopted by its Board of Directors. The power to alter, amend, or repeal the
By-laws, or to adopt new By-laws, shall be vested in the Board of Directors,
except as otherwise may be specifically provided in the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meeting of stockholders shall be
held at such place within or without the State of Nevada as may be provided by
the By-laws of the corporation. Special meetings of the stockholders may be
called by the President or any other executive officer of the corporation, the
Board of Directors, or any member thereof, or by the record holder or holders of
at least ten percent (10%) of all shares entitled to vote at the meeting. Any
action otherwise required to be taken at a meeting of the stockholders, except
election of directors, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by stockholders having at
least a majority of the voting power.
ARTICLE ELEVEN . [CONTRACTS OF CORPORATION]. No contract or other
transaction between the corporation and any other corporation, whether or not a
majority of the shares of the capital stock of such other corporation is owned
by this corporation, and no act of this corporation shall in any way be affected
or invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or officers of such
other corporation. Any director of this corporation, individually, or any firm
of which such director may be a member, may be a party to, or may be pecuniarily
or otherwise interested in any contract or transaction of the corporation;
provided, however, that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors of this
corporation, or a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is so interested,
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE.TWELVE. [LIABILITY OF DIRECTORS AND OFFICERS]. No director or
officer shall have any personal liability to the corporation or its stockholders
for damages for breach of fiduciary duty as a director or officer, except that
this Article Twelve shall not eliminate or limit the liability of a director or
officer for (i) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of dividends in violation of the
Nevada Revised Statutes.
IN WITNESS WHEREOF, the undersigned incorporator has hereunto affixed her
signature at Reno, Nevada this 8th day of December, 1999.
by /s/ "Amanda Cardinalli"
-----------------------------
AMANDA CARDINALLI
CONSENT TO SERVE AS RESIDENT AGENT
The Nevada Agency and Trust Company, located at 50 West Liberty
Street, Suite 880, Reno Nevada 89501, hereby consents to serve as Resident Agent
in the State of Nevada for the following Corporation:
49
<PAGE>
BROOKMOUNT EXPLORATIONS INC.
We understand that as agent for the Corporation, it will be our
responsibility to receive service of process in the name of the corporation; to
forward all mail to the Corporation; and to immediately notify the office of the
Secretary of State in the event of our resignation, or of any changes in the
registered office of the Corporation for which we are an agent.
IN WITNESS WHEREOF, the undersigned authorized representative of
the Nevada Agency and Trust Company has hereunto affixed her signature at Reno,
Nevada this 9th day of December, 1999.
by /s/ "Amanda Cardinalli"
-----------------------------
AMANDA CARDINALLI
50
<PAGE>
EXHIBIT NO. 2 (B)
BY LAWS
OF
BROOKMOUNT EXPLORATIONS INC.
A NEVADA CORPORATION
ARTICLE I
OFFICES
SECTION 1. The registered office of this corporation shall be in the City of
Reno, State of Nevada.
SECTION 2. The Corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
SECTION 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or without
the State of Nevada as the Directors shall determine. Special meetings of the
stockholders may be held at such time and place within or without the State of
Nevada as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
SECTION 2. Annual meetings of the stockholders shall be held on the anniversary
date of incorporation each year if not a legal holiday and, and if a legal
holiday, then on the next secular day following, or at such other time as may be
set by the Board of Directors from time to time, at which the stockholders shall
elect by vote a Board of Directors and transact such other business as may
properly be brought before the meeting.
SECTION 3. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation, may
be called by the President or the Secretary, by resolution of the Board of
Directors or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose of the proposed meeting.
SECTION 4. Notices of meetings shall be in writing and signed by the President
or Vice-President or the Secretary or an Assistant Secretary or by such other
person or persons as the Directors shall designate. Such notice shall state the
purpose or purposes for which the meeting is called and the time and the place,
which may be within or without this State, where it is to be held. A copy of
such notice shall be either delivered personally to or shall be mailed, postage
prepaid, to each stockholder of record entitled to vote at such meeting not less
than ten nor more than sixty days before such meeting. If mailed, it shall be
directed to a
51
<PAGE>
stockholder at his address as it appears upon the records of the corporation and
upon such mailing of any such notice, the service thereof shall be complete and
the time of the notice shall begin to run from the date upon which such notice
is deposited in the mail for transmission to such stockholder. Personal delivery
of any such notice to an officer of the corporation or association, or to any
member of a partnership shall constitute delivery of such notice to such
corporation, association or partnership. In the event of the transfer of stock
after delivery of such notice of and prior to the holding of the meeting, it
shall not be necessary to deliver or mail such notice of the meeting to the
transferee.
SECTION 5. Business transactions at any special meeting of stockholders shall be
limited to the purpose stated in the notice.
SECTION 6. The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Articles of
Incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcements at the
meeting, until a quorum shall be presented or represented. At such adjourned
meetings at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
SECTION 7. When a quorum is present or represented at any meeting, the vote of
the holders of 10% of the stock having voting power present in person or
represented by proxy shall be sufficient to elect Directors or to decide any
question brought before such meeting, unless the question is one upon which by
express provision of the statute or of the Articles of Incorporation, a
different vote shall govern and control the decision of such question.
SECTION 8. Each stockholder of record of the corporation shall be entitled at
each meeting of the stockholders to one vote for each share standing in his name
on the books of the corporation. Upon the demand of any stockholder, the vote
for Directors and the vote upon any question before the meeting shall be by
ballot.
SECTION 9. At any meeting of the stockholders any stockholder may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all the powers
conferred by such written instruction upon all of the persons so designated
unless the instrument shall otherwise provide. No proxy or power of attorney to
vote shall be voted at a meeting of the stockholders unless it shall have been
filed with the Secretary of the meeting when required by the inspectors of
election. All questions regarding the qualifications of voters, the validity of
proxies and the acceptance of or rejection of votes shall be decided by the
inspectors of election who shall be appointed by the Board of Directors, or if
not so appointed, then by the presiding officer at the meeting.
SECTION 10. Any action which may be taken by the vote of the stockholders at a
meeting may be taken without a meeting if authorized by the written consent of
stockholders holding at least a majority of the voting power, unless the
provisions of the statute or the
52
<PAGE>
Articles of Incorporation require a greater proportion of voting power to
authorize such action in which case such greater proportion of written consents
shall be required.
ARTICLE 3
DIRECTORS
SECTION 1. The business of the corporation shall be managed by its Board of
Directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these Bylaws directed or required to be exercised or done by the
stockholders.
SECTION 2. The number of Directors which shall constitute the whole board shall
be riot less than one and not more than eight. The number of Directors may from
time to time be increased or decreased to not less than one nor more than eight
by action of the Board of Directors. The Directors shall be elected at the
annual meeting of the stockholders and except as provided in section 2 of this
Article, each Director elected shall hold office until his successor is elected
and qualified. Directors need not be stockholders.
SECTION 3. Vacancies in the Board of Directors including those caused by an
increase in the number of Directors, may be filed by a majority of the remaining
Directors, though less than a quorum, or by a sole remaining Director, and each
Director so elected shall hold office until his successor is elected at the
annual or a special meeting of the stockholders. The holders of a two-thirds of
the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the Directors by vote at a meeting
called for such purpose or by a written statement filed with the Secretary or,
in his absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the vacancies
on the Board of Directors resulting therefrom shall only be filled from the
stockholders.
A vacancy or vacancies on the Board of Directors shall be deemed to exist
in case of death, resignation or removal of any Director, or if the authorized
number of Directors be increased, or if the stockholders fail at any annual or
special meeting of stockholders at which any Director or Directors are elected
to elect the full authorized number of Directors to be voted for at that
meeting.
The stockholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors. If the Board of Directors
accepts the resignation of a Director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective
No reduction of the authorized number of Directors shall have the effect of
removing any Director prior to the expiration of his term of office.
53
<PAGE>
ARTICLE 4
MEETING OF THE BOARD OF DIRECTORS
SECTION 1. Regular meetings of the Board of Directors shall be held at any place
within or without the State which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation regular meetings shall be held at the registered
office of the corporation. Special meetings of the Board may be held either at a
place so designated or at the registered office.
SECTION 2. The first meeting of each newly elected Board of Directors shall be
held immediately following the adjournment of the meeting of stockholders and at
the place thereof. No notice of such meeting shall be necessary to the Directors
in order legally to constitute the meeting, provided a quorum be present. In the
event such meeting is not so held, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors.
SECTION 3. Regular meetings of the Board of Directors may be held without call
or notice at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
SECTION 4. Special meetings of the Board of Directors may be called by the
Chairman or the President or by the Vice-President or by any two Directors.
Written notice of the time and place of special meetings shall be delivered
personally to each Director, or sent to each Director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as it
is shown upon the records or if not readily ascertainable, at the place in which
the meetings of the Directors are regularly held. In case such notice is mailed
or telegraphed, it shall be deposited in the postal service or delivered to the
telegraph company at least forty-eight (48) hours prior to the time of the
holding of the meeting. In case such notice is delivered or taxed, it shall be
so delivered or taxed at least twenty-four (24) hours prior to the time of the
holding of the meeting. Such mailing, telegraphing, delivery or taxing as above
provided shall be due, legal and personal notice of such Director.
SECTION 5. Notice of the time and place of holding an adjourned meeting need not
be given to the absent Directors if the time and place be fixed at the meeting
adjourned.
SECTION 6. The transaction of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though transacted at a
meeting duly held after regular call and notice, if a quorum be present, and if,
either before or after such meeting, each of the Directors not present signs a
written waiver of notice, or a consent of holding such meeting, or approvals of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.
SECTION 7. The majority of the authorized number of Directors shall be necessary
to constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
Directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board of Directors, unless a greater number be
required by law or by the Articles of Incorporation. Any action of
54
<PAGE>
a majority, although not at a regularly called meeting, and the record thereof,
if assented to in writing by all of the other members of the Board shall be as
valid and effective in all respects as if passed by the Board in regular
meeting.
SECTION 8. A quorum of the Directors may adjourn any Directors meeting to meet
again at stated day and hour; provided, however, that in the absence of a
quorum, a majority of the Directors present at any Directors meeting, either
regular or special, may adjourn from time to time until the time fixed for the
next regular meeting of the Board.
ARTICLE 5
COMMITTEES OF DIRECTORS
SECTION 1. The Board of Directors may, by resolution adopted by a majority of
the whole Board, designate one or more committees of the Board of Directors,
each committee to consist of two or more of the Directors of the corporation
which, to the extent provided in the resolution, shall and may exercise the
power of the Board of Directors in the management of the business and affairs of
the corporation and may have power to authorize the seal of the corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by the
Board of Directors. The members of any such committee present at any meeting and
not disqualified from voting may, whether or not they constitute a quorum,
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. At meetings of such
committees, a majority of the members or alternate members at any meeting at
which there is a quorum shall be the act of the committee.
SECTION 2. The committee shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
SECTION 3. Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if
a written consent thereto is signed by all members of the Board of Directors or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
ARTICLE 6
COMPENSATION OF DIRECTORS
SECTION 1. The Directors may be paid their expenses of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefore. Members of special or standing
committees may be allowed like reimbursement and compensation for attending
committee meetings.
55
<PAGE>
ARTICLE 7
NOTICES
SECTION 1. Notices to Directors and stockholders shall be in writing and
delivered personally or mailed to the Directors or stockholders at their
addresses appearing on the books of the corporation. Notices to Directors may
also be given by fax and by telegram. Notice by mail, fax or telegram shall be
deemed to be given at the time when the same shall be mailed.
SECTION 2. Whenever all parties entitled to vote at any meeting, whether of
Directors or stockholders, consent, either by a writing on the records of the
meeting or filed with the Secretary, or by presence at such meeting or oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had at a meeting regularly called and noticed, and at such meeting any business
may be transacted which is not excepted from the written consent to the
consideration of which no objection for want of notice is made at the time, and
if any meeting be irregular for want of notice or such consent, provided a
quorum was present at such meeting, the proceedings of said meeting may be
ratified and approved and rendered likewise valid and the irregularity or defect
therein waived by a writing signed by all parties having the right to vote at
such meeting; and such consent or approval of stockholders may be by proxy or
attorney, but all such proxies and powers of attorney must be in writing.
SECTION 3. Whenever any notice whatever is required to be given under the
provisions of the statute, of the Articles of Incorporation or of these Bylaws,
a waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE 8
OFFICERS
SECTION 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. Any person may
hold two or more offices.
SECTION 2. The Board of Directors at its first meeting after each annual meeting
of stockholders shall choose a Chairman of the Board who shall be a Director,
and shall choose a President, a Secretary and a Treasurer, none of whom need be
Directors.
SECTION 3. The Board of Directors may appoint a Vice-Chairman of the Board,
Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers
and such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 4. The salaries and compensation of all officers of the corporation
shall be fixed by the Board of Directors.
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SECTION 5. The officers of the corporation shall hold office at the pleasure of
the Board of Directors. Any officer elected or appointed by the Board of
Directors may be removed any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the Board of Directors.
SECTION 6. The CHAIRMAN OF THE BOARD shall preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
SECTION 7. The VICE-CHAIRMAN shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of the
Board and shall perform other such duties as the Board of Directors may from
time to time prescribe.
SECTION 8. The PRESIDENT shall be the chief executive officer of the corporation
and shall have active management of the business of the corporation. He shall
execute on behalf of the corporation all instruments requiring such execution
except to the extent the signing and execution thereof shall be expressly
designated by the Board of Directors to some other officer or agent of the
corporation.
SECTION 9. The VICE-PRESIDENTS shall act under the direction of the President
and in absence or disability of the President shall perform the duties and
exercise the powers of the President. They shall perform such other duties and
have such other powers as the President or the Board of Directors may from time
to time prescribe. The Board of Directors may designate one or more Executive
Vice-Presidents or may otherwise specify the order of seniority of the
Vice-Presidents. The duties and powers of the President shall descend to the
Vice-Presidents in such specified order of seniority.
SECTION 10. The SECRETARY shall act under the direction of the President.
Subject to the direction of the President he shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record the
proceedings. He shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and will perform
other such duties as may be prescribed by the President or the Board of
Directors.
SECTION 11. The ASSISTANT SECRETARIES shall act under the direction of the
President. In order of their seniority, unless otherwise determined by the
President or the Board of Directors, they shall, in the absence or disability of
the Secretary, perform the duties and exercise the powers of the Secretary. They
shall perform other such duties and have such other powers as the President and
the Board of Directors may from time to time prescribe.
SECTION 12. The TREASURER shall act under the direction of the President.
Section Subject to the direction of the President he shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all money and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the
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President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
If required by the Board of Directors, the Treasurer shall give the
corporation a bond in such sum and with such surety as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
SECTION 13. The ASSISTANT TREASURERS in order of their seniority, unless
otherwise determined by the President or the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
ARTICLE 9
CERTIFICATES OF STOCK
SECTION 1. Every stockholder shall be entitled to have a certificate signed by
the President or a Vice- President and the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more that one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights, shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such stock.
SECTION 2. If a certificate is signed (a) by a transfer agent other than the
corporation or its employees or (b) by a registrar other than the corporation or
its employees, the signatures of the officers of the corporation may be
facsimiles. In case any officer who has signed or whose facsimile signatures
have been placed upon a certificate shall cease to be such officer before such
certificate is issued, such certificate may be issued with the same effect as
though the person had not ceased to be such officer. The seal of the
corporation, or a facsimile thereof, may, but need not be, affixed to
certificates of stock.
SECTION 3. The Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against
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any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
SECTION 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duty endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation, if it is satisfied that all provisions of the laws and
regulations applicable to the corporation regarding transfer and ownership of
shares have been compiled with, to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books.
SECTION 5. The Board of Directors may fix in advance a date not exceeding sixty
(60) days nor less than ten (IO) days preceding the date of any meeting of
stockholders, or the date of the payment of any dividend, or the date of the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining the
consent of stockholders for any purpose, as a record date for the termination of
the stockholders entitled to notice of and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
give such consent, and in the such case, such stockholders, and only such
stockholders as shall be stockholders of record on the date so fixed, shall be
entitled to notice of and to vote as such meeting, or any adjournment thereof,
or to receive such payment of dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
such record date fixed as aforesaid.
SECTION 6. The corporation shall be entitled to recognize the person registered
on its books as the owner of the share to be the exclusive owner for all
purposes including voting and dividends, and the corporation shall not be bound
to recognize any equitable or other claims to or interest in such shares or
shares on the part of any -other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE 10
GENERAL PROVISIONS
SECTION 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property or in shares of the capital stock, subject to
the provisions of the Articles of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends or for
repairing and maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive to the interests of the
corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
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SECTION 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
SECTION 4. The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
SECTION 5. The corporation may or may not have a corporate seal, as may be from
time to time determined by resolution of the Board of Directors. If a corporate
seal is adopted, it shall have inscribed thereon the name of the corporation and
the words "Corporate Seal" and "Nevada". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
ARTICLE 11
INDEMNIFICATION
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or a
person of whom he is the legal representative is or was a Director or officer of
the corporation or is or was serving at the request of the corporation or for
its benefit as a Director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest legally permissible under the
General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorney's fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and Directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such Directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a Director or officer
of the corporation, or is or was serving at the request of the corporation as a
Director or officer of another corporation, or as its representative in a
partnership, joint venture. trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
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The Board of Directors may form time to time adopt further Bylaws with
respect to indemnification and amend these and such Bylaws to provide at all
times the fullest indemnification permitted by the General Corporation Law of
the State of Nevada.
ARTICLE 12
AMENDMENTS
SECTION 1. The Bylaws may be amended by a majority vote of all the stock issued
and outstanding and entitled to vote at any annual or special meeting of the
stockholders, provided notice of intention to amend shall have been contained in
the notice of the meeting.
SECTION 2. The Board of Directors by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the stockholders,
but the stockholders may from time to time specify particulars of the Bylaws
which shall not be amended by the Board of Directors.
APPROVED AND ADOPTED DECEMBER 17, 1999.
CERTIFICATE OF THE SECRETARY
I, Yiu Lam Ko, hereby certify that I am the Secretary of BROOKMOUNT EXPLORATIONS
INC., and the foregoing Bylaws, consisting of 8 pages, constitute the code of
Bylaws of this company as duly adopted at a regular meeting of the Board of
Directors of the corporation held on December 17, 1999.
IN WITNESS WHEREOF, I have hereunto subscribed my name on December 17, 1999.
/s/ "Yiu Lam Ko"
-----------------------
Yiu Lam Ko - Secretary-Treasurer
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Exhibit 3(a)
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
SPECIMEN STOCK CERTIFICATES
NUMBER CUSIP NO. 114270 10 1
SHARES
BROOKMOUNT EXPLORATIONS INC.
Authorized Common Stock: 200,000,000 Shares
Par Value: $0.001
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
-Shares of BROOKMOUNT EXPLORATIONS INC. Common Stock -
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid until countersigned by the Transfer Agent and registered by the
Registrar.
Witness the facsimile seal of the Corporation and the
facsimile of its duly authorized officers.
Dated:
------------------------------------ -----------------------------------
Secretary President
Not valid unless countersigned by transfer agent
Countersigned Registered:
NEVADA AGENCY AND TRUST COMPANY
50 WEST LIBERTY STREET, SUITE 880
RENO, NEVADA, 89501
By
------------------------------
Authorized Signature
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EXHIBIT 6 (a) (i)
TRANSFER AGENT AND REGISITRAR AGREEMENT
THIS AGREEMENT made and entered into this 6th day of January, 2000, by and
between:
NEVADA AGENCY AND TRUST COMPANY, 50 West Liberty Street, Suite 880, Reno, Nevada
89501, hereinafter called "TRANSFER AGENT," and
BROOKMOUNT EXPLORATIONS INC., 25 A Claremont Avenue, Point-Claire, Quebec, H9S
5C6, a Nevada corporation, hereinafter called "COMPANY."
NOW THEREFORE, for valuable consideration and the mutual promises
herein contained, the parties hereto agree as follows, to wit:
1. [APPOINTMENT OF TRANSFER AGENT] The COMPANY hereby appoints TRANSFER
AGENT as the Transfer Agent and Registrar for the COMPANY'S Common Stock,
commencing on this 6th day of January, 2000.
2. [COMPANY'S DUTY] The COMPANY agrees to deliver to TRANSFER AGENT a
complete up-to-date stockholder list showing the name of the individual
stockholder, current address, the number of shares and the certificate numbers,
it being specifically understood and agreed that the TRANSFER AGENT is not to be
held responsible for any omissions or error, that may leave occurred prior to
this Agreement whether on the part of the COMPANY itself or its previous
transfer agent or agents. The COMPANY hereby agrees to indemnify TRANSFER AGENT
in this regard.
3. [STOCK CERTIFICATES] The COMPANY agrees to provide an adequate number
of stock certificates to handle the COMPANY'S transfers oil a current basis.
Upon receipt of TRANSFER AGENT'S request, the COMPANY agrees to furnish
additional stock certificates as TRANSFER AGENT deems necessary considering the
volume of transfers. The stork certificates shall be supplied at COMPANY'S cost.
The TRANSFER AGENT agrees to order stock certificates from its printer upon
request of the COMPANY.
4. [TRANSFER AGENT DUTIES] TRANSFER AGENT agrees to handle the
COMPANY'S transfers, record the same, and maintain a ledger, together with a
file containing all correspondence relating to said transfers, which records
shall be kept confidential and be available to the COMPANY and its Board of
Directors, or to any person specifically authorized by the Board of Directors to
review the records which shall be made available by TRANSFER AGENT during the
regular business hours.
5. [TRANSFER AGENT REGISTRATION] TRANSFER AGENT warrants that it is
registered as a Transfer Agent with the United Stakes Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
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6. [STOCKHOLIDER LIST] From time to time, as necessary for Company
stockholders meeting or mailings, the TRANSFER AGENT will certify and make
available to the current, active stockholders list for COMPANY purposes. it is
agreed that a reasonable charge for supplying such list will be made by TRANSFER
AGENT to the COMPANY. It is further agreed that in the event the TRANSFER AGENT
received a request or a demand from a stockholder or the attorney of agent for a
stockholder, for a list of stockholders, the TRANSFER AGENT will serve notice of
such request by certified mail to the COMPANY. The COMPANY will have forty-eight
(48) hours to respond in writing to the TRANSFER AGENT. If the COMPANY orders
the TRANSFER AGENT to withhold delivery of a list of stockholders as requested,
the TRANSFER AGENT agrees to follow the orders of the COMPANY. The COMPANY will
then follow the procedure set forth in the Uniform Commercial Code to restrain
the TRANSFER AGENT from making delivery of a stockholders list.
7. [TRANSFER FEE] TRANSFER AGENT agrees to assess and collect from the
person requesting a transfer and/or the transferor, a fee of Fifteen and No/100
dollars ($15.OO) for each stock certificate issued, except original issues of
stock or warrant certificates, which fees shall be paid by the COMPANY. This fee
may be decreased or increased at any time by the TRANSFER AGENT. This fee shall
be the property of the TRANSFER AGENT.
8. [ANNUAL FEE] The COMPANY agates to pay the TRANSFER AGENT an annual fee
of TWELVE HUNDRED DOLLARS ($1,200.00) each year. This fee reimburses the
TRANSFER AGENT for the expense and time required to respond to the written and
oral inquiries from brokers and the investing public, as well as maintaining the
transfer books and records of the corporation. The annual fee will be due on 1st
of July of each year and is subject to annual review.
8 [TERMINATION] This Agreement may be terminated by either party given
written notice of such termination to the other party at least ninety (90) days
before the effective date. The TRANSFER AGENT shall return all of the transfer
records to the COMPANY and its duties and obligations as TRANSFER AGENT shall
cease at that time. The TRANSFER AGENT will be paid a Termination Fee of $1.00
per registered stockholder of the Company at the time the written termination
notice is served.
I0. [COMPANY STA'I'US] The COMPANY will promptly advise the TRANSFER AGENT
of any changes or amendments to the Articles of Incorporation, any significant
changes in corporate status, changes in officers, etc., and of all changes in
filing status with the Securities and Exchange Commission, or any state entity,
and to hold the, TRANSFER AGENT harmless from its failure to do so.
II- [INDEMNIFICATION OF TRANSFER AGENT] The COMPANY agrees to
indemnify and hold harmless the TRANSFER AGENT, from any and all loss, liability
of damage, including reasonable attorneys' fees and expenses, arising out of, or
resulting from the assertion against the TRANSFER AGENT of any claims, debts or
obligations in connection with any of the TRANSFER AGENT'S duties as set forth
in the Agreement, and specifically it is understood that the
TRANSFER AGENT shall have the right to apply to independent counsel at the
COMPANY'S expense in following the COMPANY'S directions and orders.
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12. [COUNTERPARTS] This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be an original,
but all such counterparts shall constitute one and the same instrument.
13. [NOTICE] Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage prepaid,
addressed as follows:
TO THE COMPANY:
John Leslie Vaughan
BROOKMOUNT EXPLORATIONS INC.
25 A Claremont Avenue
Point-Claire, Quebec, H9S 5C6
TO THE TRANSFER AGENT:
NEVADA AGENCY AND TRUST COMPANY
50 West Liberty Street, Suite 880
Reno, Nevada 89501
14. [MERGER CLAUSE] This Agreement supersedes all prior agreements and
understandings between the parties and may not be changed or terminated orally,
and no attempted change, termination or waiver of any of the provisions hereof
shall binding unless in writing and signed by the parties hereto.
15. [GOVERNING LAW] This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
THIS AGREEMENT has been executed by the parties hereto as of the day and year
1st above written, by the duly authorized officer or officers of said parties,
and the same will be binding upon the assigns and successors in interest of the
parties hereto.
NEVADA AGENCY AND TRUST COMPANY
TRANSFER AGENT
BY /S/ "AMANDA CARDINALLI"
-------------------------------
AMANDA CARDINALLI, VICE PRESIDENT
BROOKMOUNT EXPLORATIONS INC.
COMPANY
BY /S/ "YIU LAM KO"
-------------------------------
YIU LAM KO
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EXHIBIT 10
<TABLE>
<CAPTION>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 202
-------------------------------- Salt Lake City, Utah 84106
Certified Public Accountants and Business Consultants Telephone 801-486-0096
MEMBER SEC PRACTICE SECTION OF THE AICPA
</TABLE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
BROOKMOUNT EXPLORATIONS INC.
We hereby consent to the use of our report dated September 10, 2000, for the
period ended July 31, 2000 in the registration statement of Brookmount
Explorations Inc. filed in the registration From 10 SB.
/s/ "Andersen"
------------------------------------
Andersen Andersen and Strong L.L.C.
September 10, 2000
Salt Lake City, Utah
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