SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 23, 1996
FISCHER-WATT GOLD COMPANY, INC.
- ----------------------------------------------------------------------
(Exact name of registrant as specified in charter)
NEVADA 0-17386 88-0227654
- ----------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) file number) Identification No.)
1410 Cherrywood Drive Coeur d'Alene, Idaho 83814
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 208-664-6757
<PAGE>
Item 5. Other Events.
On August 23, 1996, Fischer-Watt Gold Company, Inc., mailed
a letter dated August 19, 1996 from its Chairman and Chief
Executive Officer to its shareholders. His letter reviewed the
recent past and indicated his plans for the future. A copy of
the letter is filed herewith as Exhibit 1.20 and is incorporated
herein by reference thereto.
(c) Exhibits
Item 601 Code Exhibit
- ---- -------- -------
1 20 Letter to Shareholders from George Beattie,
Chairman and Chief Executive Officer dated
August 19, 1996 and mailed August 23, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Fischer-Watt Gold Company, Inc.
Date: August 29, 1996 George Beattie, President
FISCHER-WATT GOLD COMPANY, INC
1410 Cherrywood Drive Coeur d'Alene, ID 83814
208-664-6757 Fax 208-667-6516
MID-YEAR REPORT TO SHAREHOLDERS
August 19, 1996
Dear Shareholder,
In addition to completing a major financing and initiating an
exciting exploration and property acquisition program during the
first six months of fiscal 97, ending July 31, 1996, Fischer-Watt
Gold continued its dramatic improvements at the El Limon gold mining
operation in Colombia.
OPERATIONS
At the El Limon mine, gold production has increased with 5,735
ounces being produced over the six month period. Second quarter
production was at a record 3115 ounces and a life-of-mine monthly
production record was attained in July with production of 1,180
ounces. These strong results stem from the grade control program
at the El Limon mine, the introduction of new satellite ore
sources and increased mill recoveries due to operational
modifications.
The characteristics of the ore body, such as vein width and
grade, have not changed. The improved output is being
accomplished by a two stage upgrading of the mined ore where
waste rock that became mixed in with the vein material during the
mining sequence is removed prior to the ore being milled. A
large percentage of this waste is now being removed while the ore
is still underground. The separation is based on the different
breakage characteristics of the ore and waste with the waste rock
breaking into larger fragments than the vein material. A second
ore and waste separation is carried out on the surface. This
sorting is based on color since the waste rock is a uniform dark
rock compared to the lighter colored ore. These measures have
resulted in a 70% increase in mill feed grade for the latest half
year compared to the equivalent period a year earlier.
Since a significant portion of this ore-waste separation is
carried out underground, that waste is no longer being hoisted
thereby creating hoisting capacity for additional ore. In this
way, mill throughput of the upgraded ore has been maintained at
around 2,000 tonnes per month. Color separation or ore and waste
will be carried out underground once installation of an ore
washing and slurry pumping system is completed. This should be
fully operational by the fourth quarter of FY 97.
Milled tonnages, feed grades and ounces of gold production
compared to previous periods demonstrate the improvements to
date.
Ounces
Tonnes Grade Production
------ ----- ----------
FY 97 1st half 11,904 17.5 5,735
FY 96 2nd half * 10,467 15.9 4,817
FY 96 1st half 12,224 10.3 3,562
*FWGO acquired the mine in September 96
Mine site exploration is focused on the north and south
extensions of the El Limon vein. To the north, Level 5
development has exposed 160 meters of the vein with an average
width of over 0.5 meters and an average grade of over 35 grams of
gold per tonne. By extrapolation of the geology from upper
levels there are indications that another 90 meters of vein can
be expected in this area. To the south, a diamond drilling
program is underway on the Siete concession located immediately
south of the El Limon mine.
Development of Level 1 at La Aurora, 6 kilometers south of El
Limon, is well underway and ore is being delivered from this site
to the mill. At present this material contributes about 100
ounces of gold per month to production. Full scale stoping will
start in the fourth quarter and this satellite will become an
increasingly important source of ore to the mill. A second
satellite source is under development at Juan Vara, 2 kilometers
south of the El Limon mine where, earlier in the year, surface
diamond drill holes intersected a vein quite similar to the El
Limon vein in width and grade. A 700 meter long ramp is being
driven to access the vein at about 50 meters below the surface.
The efficiency of the processing operation has been steadily
increasing as a result of several operational modifications.
Gold recovery has averaged 93% over the last 3 months compared to
88% a year earlier. The Company's metallurgical consultants
continue to provide recommendations for improving the performance
of the processing plant and assay laboratory.
Personnel changes, production cost controls, metal revenue
enhancement programs and new purchasing procedures have been
instituted at the mine and in the Medellin office to further
increase performance.
EXPLORATION
The new drill program at the El Carmen property, located 25
kilometers northeast of El Limon, is planned to start in the
third quarter and a considerable increase in reserves is
anticipated. El Carmen already has a reserve and resource base
totaling 130,000 ounces of gold but, to date, has only been
drilled to a vertical depth of 70 meters.
Fischer-Watt's exploration team, based out of Medellin office,
has commenced its Colombian regional exploration program.
Numerous disseminated gold mineralization prospects are being
examined and we believe that the renowned high grade northern
Colombian gold fields can host open-pittable, bulk minable
deposits. To date, very little exploration has been carried out
in this part of Colombia for these deposits.
In Nevada, Fischer-Watt's exploration includes a preliminary
drill program on the Coal Canyon property which will be carried
out this year. The property is located on a highly prospective
trend of gold mineralization north of Eureka. In addition, new
areas are constantly being evaluated for eventual staking and
acquisition. The Company's joint venture partners on the Red
Canyon, Afgan-Kobeh and Tempo properties continue with
exploration programs as per their agreements.
FINANCIAL
In March of this year Fischer-Watt raised $5 million through an
offshore equity offering. The securities offered were not
registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements. These funds
will finance mine capital equipment for Colombia as well as
provide working capital for further development, expansion and
exploration in Colombia and Nevada.
Due to the international accounting complexities of Fischer-Watt's
two recent acquisitions, and because of the change in the Company's
auditors, the Company has been unable to meet its public company
periodic reporting obligations since January 1996. Our new auditors,
BDO Seidman, LLP are nearing completion of their audits and the
Company's filings will be up to date shortly.
The Company, because of its production and exploration
initiatives, is now attracting a strong international,
institutional investor base. We are, therefore, investigating
the possibility of listing the shares on a North American stock
exchange. A successful listing would provide for wider
distribution, increased liquidity and further growth
possibilities for both our institutional and retail investors.
MANAGEMENT
Over the half year period the Company has added three new members
to the Board of Directors.
Peter Bojtos was appointed a Director, Vice Chairman and Vice
President. Peter is a professional engineer and mining executive
who was Chairman and CEO of Greenstone Resources Ltd. Prior to
that he was the President of several other North America mining
companies. James M. Seed has a comprehensive background in
banking, business and finance. He serves as a Trustee of the
Galaxy Funds and is a Commissioner of the State of Rhode Island
Investment Commission. Jorge E. Ordonez is an engineering
geologist and an experienced mining executive. He is the
Director of Mines and Metallurgy for Grupo Acerero Del Norte,
Mexico's largest steel producer. Jorge is also a partner in
Fischer-Watt's Mexican exploration subsidiary.
After serving on the Fischer-Watt board for several years, Larry
Buchanan has stepped down. We extend thanks to Larry for his
valuable contribution to the Company and wish him well with his
new exploration venture.
In addition to his duties as a Director, Dr. Anthony Taylor was
appointed Vice President-Exploration. Tony has managed
international metals exploration for senior mining companies
since 1964 and is credited with the discovery of several
important deposits. As founder and President of Great Basin
Exploration and Mining Co. he led the merger of that entity with
Fischer-Watt. Michele Wood was recently appointed as the
Company's Chief Financial Officer. She has extensive experience
in accounting, including senior positions with Hecla Mining
Company and KPMG Peat Marwick. Alexis Zapata, previously our
Senior Mine Geologist at El Limon, is now the Company's Colombian
Regional Geologist.
OUTLOOK
Fischer-Watt is now a well-financed company with steadily
increasing gold production supported with an aggressive
exploration program in Colombia and Nevada. Over the near term
our main objective at El Limon is to increase the high grade mill
tonnage throughput to its maximum capacity of 2,500 tonnes per
month by fully developing the satellite veins at La Aurora and
Juan Vara. The longer term objective is to significantly raise
gold production levels through the development of the El Carmen
property. Innovative exploration programs point the way to the
Company's future.
Yours sincerely,
George
- ------------
George Beattie
Chairman & Chief Executive Officer
