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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
Form 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NEVADA STAR RESOURCE CORP.
(Name of Small Business Issuer in its charter)
State of Washington 98-0155690
---------------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10735 Stone Avenue North
Seattle, WA 98133
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(Address of principal executive offices) (Zip Code)
(Issuer's telephone number, including area code) (206) 367-2525
Securities to be registered under Section 12(b) of the Act:
Name of each exchange on
which each class is to be
Title of each class to be so registered: registered:
---------------------------------------- -------------------------
None None
Securities registered under Section 12(g) of the Act:
Common Stock
----------------------------------------
(Title of class)
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
DESCRIPTION DOCUMENT PAGE
PART I
ITEM 1 DESCRIPTION OF BUSINESS 3
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION 5
ITEM 3 DESCRIPTION OF PROPERTY 6
ITEM 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 19
ITEM 5 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS 20
ITEM 6 EXECUTIVE COMPENSATION 21
ITEM 7 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 23
ITEM 8 DESCRIPTION OF SECURITIES 24
PART II
ITEM 1 MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS 25
ITEM 2 LEGAL PROCEEDINGS 25
ITEM 3 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 25
ITEM 4 RECENT SALES OF UNREGISTERED SECURITIES 26
ITEM 5 INDEMNIFICATION OF DIRECTORS AND OFFICERS 27
PART F/S 28
PART III
ITEM 1 INDEX TO EXHIBITS 47
ITEM 2 DESCRIPTION OF EXHIBITS 47
SIGNATURES 48
EXHIBIT EX-3.(i) 49
EXHIBIT EX-3.(ii) 50
EXHIBIT EX-3.(iii) 67
EXHIBIT EX-10.(iv) 71
EXHIBIT EX-21 81
EXHIBIT EX-27 82
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Nevada Star Resource Corp(together with its subsidiaries, "NSR" or the
"Company"), is engaged in the business of acquiring, exploring and developing
mineral properties, primarily those containing copper, gold, silver and
associated base and precious metals. All of the Company's properties are
currently in the exploration stage, which is in the stage of determining
feasibility for development. No reserves have been identified on any of the NSR
properties.
The Company was incorporated under the laws of the Company Act of British
Columbia, Canada on April 29, 1987. In 1992 the Company made an offer to acquire
certain mineral exploration properties locted in Sonora, Mexico. Those
properties were controlled by a Pacific Rainier, Inc. a privately held company
controlled by Monty D. Moore. At the time of the offer Mr. Moore was not an
affiliate of Nevada Star Resources. The acquisition price, which was eventually
paid through the issuance of shares of the Company to Pacific Rainier, Inc. The
terms of the transaction were approved by the Vancouver Stock Exchange. The
deemed value of the shares to be issued to Pacific Rainier, Inc. was higher than
the current market price for the shares. After the completion of the acquisition
of the properties from Pacific Rainier. Inc., Mr. Moore invested monies in the
Company to enable the Company to continue its exploration activities. Mr. Moore
became the President and a Director of the Company in 1993. Since that time Mr.
Moore has made in excess of $700,000 of interest-free advances to the Company to
fund its operations.
On June 17, 1998 the Company was continued into the Yukon under Section 190 of
the Yukon Business Corporation Act. The Company conducts its operations through
its wholly-owned subsidiaries, Nevada Star Resource Corp. (U.S.), a Nevada
corporation and Nevada Star Resource de Mexico, S.A. de C.V., a wholly-owned
subsidiary of Nevada Star Resource Corp. (U.S.). The Company's executive offices
are located at 10735 Stone Avenue North, Seattle, WA 98133, Tel. (206) 367-2525.
Unless otherwise noted, all dollar amounts are quoted in Canadian Dollars.
Employees
The Company has no paid employees. NSR relies primarily upon the use of
consultants to accomplish its exploration activities. None of the Company's
executive officers are employed by the Company. Management services are provided
on an "as-needed" basis without compensation, generally less than five hours per
week. The Company has no oral or writen contracts for services with any member
of management.
One director, Stuart Havenstrite provides approximately 40 hours of geologic
consulting services per week to the Company. Director Rick Havenstrite, P.E.
was employed full-time on the Milford, Utah property to perform mining
engineering services. In March, 1999, Mr. Havenstrite was reduced to time and
compensation. His employment was terminated on May 15, 1999 because the project
was completed. The Company expects that it will re-employ Mr. Havenstrite at
such time as his services are again required. Other consultants are retained on
the basis of ability and experience. There is no preliminary agreement or
understanding existing or under contemplation by the Company (or any person
acting on its behalf) concerning any aspect of the Company's operations pursuant
to which any person would be hired, compensated or paid a finder's fee.
3
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
Competition
There is aggressive competition within the minerals industry to discover and
acquire properties considered to have commercial potential. The Company
competes for the opportunity to participate in promising exploration projects
with other entities, many of which have greater resources than the Company. In
addition, the Company competes with others in efforts to obtain financing to
explore and develop mineral properties.
Properties
The Company presently operates from office space provided on a rent free basis
by the Company's president, Monty D. Moore. In the event that this space becomes
unavailable in the future the Company will seek to lease office space from an
unaffiliated party at prevailing competitive rates.
Government Regulation and Environmental Concerns.
The Company is committed to complying and, to its knowledge, is in compliance
with all governmental and environmental regulations. Permits from a variety of
regulatory authorities are required for many aspects of mine operation and
reclamation. The Company cannot predict the extent to which future legislation
and regulation could cause additional expense, capital expenditures,
restrictions, and delays in the development of the Company's U.S. properties,
including those with respect to unpatented mining claims.
The Company's activities are not only subject to extensive federal, state and
local regulations controlling the mining of and exploration for mineral
properties, but also the possible effects of such activities upon the
environment. Future legislation and regulations could cause additional expense,
capital expenditures, restrictions and delays in the development of the
Company's properties, the extent of which cannot be predicted. Also, as
discussed above, permits from a variety of regulatory authorities are required
for many aspects of mine operation and reclamation. In the context of
environmental permitting, including the approval of reclamation plans, the
Company must comply with know standards, existing laws and regulations that may
entail greater or lesser costs and delays depending on the nature of the
activity to be permitted and how stringently the regulations are implemented by
the permitting authority. The Company is not presently aware of any specific
material environmental constraint affecting its properties that would preclude
the economic development or operation of any specific property.
If the Company becomes more active on its U.S. properties, it is reasonable to
expect that compliance with environmental regulations will increase costs to the
Company. Such compliance may include feasibility studies on the surface impact
of the Company's proposed operations; costs associated with minimizing surface
impact; water treatment and protection; reclamation activities, including
rehabilitation of various sites; on-going efforts at alleviating the mining
impact on wildlife; and permits or bonds as may be required to ensure the
Company's compliance with applicable regulations. It is possible that the costs
and delays associated with such compliance could become so prohibitive that the
Company may decide to not proceed with exploration, development, or mining
operations on any of its mineral properties.
Offshore Regulation.
4
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
The Company is aware of comparable environmental regulation in offshore counties
where it operates. The Company is committed to full compliance with the
regulations and has engaged legal counsel in Mexico who will, in part, assist
the Company to assure compliance.
The Company is prepared to engage additional professionals, if necessary, to
ensure regulatory compliance but in the near term expects its activities to
require minimal regulatory oversight. If the Company expends the scope of its
activities in the future it is reasonable to expect expenditures on compliance
to rise. Based upon the experience of other companies with which the Company is
familiar, management believes the costs of environmental regulation offshore
will be somewhat lower than costs typical in the United States.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION
NSR's plan of operation for the next twelve months on its properties in the
Milford District in Beaver County, Utah will consist solely of property
maintenance. The company's annual cost to hold the property is about $33,000
including claim holding costs and taxes. All taxes and holding costs are
current.
Pursuant to the terms of the Company's agreement on its Alaska Nickel-
Platinum-Copper property the Company does not anticipate that it will incur
any costs on the property until mid-year 2001.
The Company intends to attempt to negotiate a joint-venture or lease-option
agreement with an unaffiliated third party on its La Cienega property. If the
Company is unsuccessful in its attempts to negotiate joint-venture or
lease-option agreements the Company intends to relinquish its rights to these
mining claims and concessions. The Company is not currently in discussions with
any potential party regarding a joint venture or lease-option.
The Company intends to attempt to negotiate joint-venture or lease-option
agreements with unaffiliated third parties on its Yaqui Placer and Gold Hill
properties. If the Company is unsuccessful in its attempts to negotiate
joint-venture or lease-option agreements the Company intends to terminate the
respective option agreements and relinquish its interests in the properties. The
Company is not currently in discussions with any potential party regarding a
joint venture or lease-option.
The Company anticipates that it will utilize the services of independent
consultants to accomplish its maintenance work and therefore does not anticipate
that there will be a significant increase in the number of employees.
The Company does not anticipate the purchase or sale of any plant or significant
equipment. The Company currently has sufficient funds to satisfy cash demands
for operations for the next 12 months. The Company has no plans to raise
additional funds in the next twelve months.
At the present time the Company has no current plans, arrangements, agreements
or undertakings to acquire any additional exploration properties.
None of the Company's properties have any proven or probable reserves as defined
by Industry Guide 7.
5
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
ITEM 3. DESCRIPTION OF PROPERTY.
MILFORD DISTRICT
PROPERTY LOCATION AND ACCESSIBILITY
The Milford District property consists of 55 patented mining claims, 232
unpatented mining claims, five Utah State leases, and 93 acres of fee land,
aggregating approximately 8,200 acres. The Company has two exploration targets
in the district, the Cortex and OK properties.
The property lies within approximately10 miles northwest of the town of Milford
in Beaver County, Utah. Milford has a population of 1,200 and is a major
division point on the Union Pacific Railroad. Milford has typical facilities
for a town of its size. NSR owns a railroad spur right of way 9 miles east of
the property where sulfuric acid can be received and trucked to the property,
where copper cathodes can be loaded and shipped to market. Electric power
adequate to service the processing facility is available 5 miles from the
property.
The property can be accessed from Milford by traveling 4 miles west-northwest on
Utah State Highway 21, then six miles north-northwest on a graveled
county-maintained road. Access is excellent year round.
The property lies at an elevation of 5,000 to 6,200 ft. in moderately rugged
hills surrounded by alluvial pediment. Climate is typical of the Great Basin:
temperatures range from 0F to 100F, with average highs in the summer of 80F;
lows in the summer of 50F; average highs in winter of 40F; and average lows in
winter of 25F. Precipitation averages 10 inches annually with approximately
50% coming as snow.
HISTORY
The Milford district was organized in 1872 but had only small and intermittent
production prior to 1962. Most of the early production was from the Old Hickory
tungsten mine and the Montreal iron mine. The pre-1962 production had a total
value of less than $3 million.
Early in the 1960's a group of former US Steel geologists recognized that copper
in this district was intimately associated with magnetite. An extensive ground
magnetic survey of the district showed several strong magnetic anomalies, most
of them buried beneath alluvium. Subsequent drilling demonstrated that most of
the anomalies were associated with significant copper deposits.
Several companies partially mined the deposits delineated by the drilling.
These deposits included the Bawana deposit, located on ground presently
controlled by other parties, and the Hidden Treasure and Maria deposits, now
optioned to Nevada Star. A flotation plant was constructed to process the ores
and later and acid leach circuit was added. The copper concentrate and cement
copper produced from the leaching process was sold to copper smelters for final
processing.
According to NSR, the OK property was mined and, according to published figures,
produced 900,000 tons of copper ore grading 1.25% copper from 1967 until 1974.
The ore was processed at the Essex mill, located 3 miles west-northwest of
Milford. The mill was a combination flotation and acid vat leach facility sized
at 850 tons per day, built to process OK intrusion-hosted ores as well as skarn
ores from the Cortex property. Production from the entire district is reported
as 22,300 tons of copper contained in 2,010,000 tons of ore grading 1.59% Cu
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
The property lay idle until the early 1990s, when Cortex acquired the Hidden
Treasure Mine and deposit, Maria mine and deposit, Copper Ranch deposit, and
surrounding ground. Cortex conducted confirmation drilling on the Copper Ranch
deposit and did extensive sampling and metallurgical test work on the Maria
deposit. The copper appears to be acid leachable in the Maria ores. Cortex
agreed in late 1997 to sell the property to Nevada Star rather than develop it
itself.
The OK properties lay idle until the early 1990's when Centurion acquired the OK
Mine and surrounding ground and conducted confirmation drilling on the OK mine.
The program also drilled eastward along trend defining additional copper
mineralization in the vicinity of the Mary I mine about one mile to the east.
Centurion decided in late 1997 to option the property to NSR rather than develop
it.
GEOLOGY
Much of the geologic work and geologic interpretations done in the district were
conducted by Peter Joraleman in the 1970's and reported in Copper Resources of
the Rocky District, Beaver County, Utah, 1980, prepared for the Toledo Mining
company. Much of the discussion given below is from his report and augmented by
more recent data compiled by NSR and MDA.
The Milford district lies within an east-trending belt of altered granite to
diorite intrusives. Mineralization is dated at Cretaceous through late
Tertiary. Regional controls on mineralization are thought to be deep-seated
crustal structures. The area is on the eastern leading edge of a Late Mesozoic
to Early Tertiary Sevier thrust system with the mountains comprising the hanging
wall of the eastern Mineral Mountains complex. The Mineral Mountains complex
consists of thick Palezoic through mid-Mesozoic carbonate and clastic rocks.
Geology of the Milford district is structurally complex, as it has been
subjected to compression and later extension from the Mesozoic Period through
the Tertiary Period.
Oligocene volcanic rocks consisting of andesite flows and pyroclastic rocks were
extruded over much of the area, and these rocks were then intruded by a series
of Oligocene rocks related to the Mineral Mountain batholith.
The Southern corner of the project is underlain by a fine to medium-grained
grondiorite stock composed of plagioclase, quartz, and biotite with minor
orthoclase, hornblende, and magnetite. there are also small outcrops of quartz
monzonite of the Rocky Mountain Stock.
To the north and northeast of the OK mine, there are several altered porphyritic
dikes which contain abundant magnetite and chalcopyrite within a zone of
disseminated and vein-controlled mineralization. Two small outcrops of quartz
monzonite occur west of the OK within the volcanic rocks.
MINERALIZATION
MINERAL DEPOSIT DESCRIPTIONS
Copper deposits in the Milford district occur as four distinct types:
7
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
TYPE 1 copper deposits occur in pipe-shaped deposits entirely contained in
silicified quartz monzonite or granodiorite; the best example of this is the OK
deposit. Nearby on trend is the Mary I deposit which is similar though less
silicified. Chalcopyrite and bornite occur with minor molybedenite. About 75%
of the sulfide minerals have been oxidized to tenorite, chrysocolla, malachite
and azurite. Gold and silver are present, but are not of economic significance
when acid leaching is used to recover the copper.
This type 1 deposit is known to occur only on the OK property. The OK deposit
has been explored with nearly 200 holes drilled by several operators from 1964
until 1997. The OK deposit is approximately 1,200 ft. long, averages 100 ft.
wide, and has been delineated by drilling to a depth of up to 500 ft.
Preliminary pit designs by NSR take the pit to a depth of 400 ft.
The Mary I deposit has been explored with approximately 50 drill holes. The
deposit, as presently defined, is 600 ft. long, 150 ft. wide and has been
delineated by drilling to a depth of 150 ftThese deposits have been delineated
on approximately 100 ft. spacing or closer though the deposit is not completely
drilled out.
TYPE 2 copper deposits occur in bodies of garnet-magnetite skarn adjacent to
quartz monzonite. These deposits form elongated tabular zones of irregular
orientation. Deposits of this type include the Hidden Treasure, Maria, and
Copper Ranch deposits. These deposits are not as continuous as Type I and
require closer drill hole spacing.
TYPE 3 deposits consist of remobilized copper occurring in sediments and
associated with calcite. Currently the Sunrise deposit is the only known
example of this type. The Sunrise deposit is not related to skarn
mineralization, and is low in magnetite. The Sunrise deposit occurs partly on
Cortex property and partly on claims controlled by others.
TYPE 4 deposits, which are of no apparent economic importance, are iron deposits
consisting of magnetic skarn with no associated copper.
FEASIBILITY STUDY
In 1998 NSR commissioned a feasibility study to evaluate the Company's
properties in the Milford District. Three independent engineering companies
evaluated the property. The Company spent approximately $800,000 on the studies
including data confirmation, ore reserve calculation, pit design, metallurgical
test work, engineering studies and capital cost estimation. The feasibility
study concludes that "open pit mining, acid leaching and solvent
extraction-electrowinning can produce LME grade A cathode copper at the property
and provide positive economic returns at sale prices above $0.75 per pound
copper.
The Company plans to continue property maintenance and exploration during 1999,
but will not commence plant construction or mine development until the price of
copper improves and the status of the resource can be upgraded from
mineralization to reserves.
8
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
TERMS OF ACQUISITION
By an agreement dated November 7, 1997 between the Company and Centurion Mines
Corporation (the "Vendor"), the Company will purchase copper properties in four
townships in Beaver County, Utah. Consideration will be the issuance of 2
million common shares of the Company over five years. The vendor also retains a
12% net profits interest to apply to all copper production coming from any
claims. Deferred exploration and development expenditures of $597,003 have been
incurred to date by the Company on the property.
By an agreement dated November 4, 1997 between the Company and Cortex Mining &
Exploration Co. Inc. (the "CME"), the Company will purchase mining claims in
Beaver County, Utah. Consideration will be 2 million common shares of the
Company issued in two tranches: one million shares upon closing and another one
million upon the Company's successful completion of a favourable feasibility
study or upon commencement of commercial production. The CME also retains a 2%
net smelter return royalty which will not exceed 3 million dollars (U.S.) in
aggregate. The Company will also grant to Cortex one million warrants for the
Company's common shares, price at $1.00 U.S. per share.
A finder's fee of 225,000 shares at a deemed price of $0.65 CDN. is payable.
EAGLE (RIO YAQUI) PROPERTY
PROPERTY LOCATION AND AVAILBILITY
The Yaqui placer gold property is located in southeastern Sonora State, Mexico,
about 160 kilometers east-southeast of Hermosillo, the state capital and the
main supply and trading centre in the State. The property consists of the
Eagle, Eagle I, Eagle II and Yaqui I claims comprising 392 hectares (Has) or
approximately 944 acres.
Nevada Star Resource Corp. (Nevada) obtained an option through an agreement
dated October 29, 1992 as amended March 16, 1993 between Nevada and Monty D.
Moore whereby Nevada obtained an option to acquire a 100% interest, subject to a
2% net smelter return royalty, in certain placer gold concessions situated in
Mexico known as the Eagle Property. Consideration is $95,000 (U.S.) as
reimbursement of the vendor's costs and issuance of 200,000 shares of Nevada in
four equal stages, of which 50,000 shares were issued upon Vancouver Stock
Exchange acceptance for filing on March 30, 1993. Further issuance's are based
on completion of phased work programs and filing of acceptable engineering
reports recommending additional work on the property. This Phase One report
details work in the form of three testing programs, carried out on the property
during June 1992 and October 1993.
The Eagle property on the Yaqui River, is located in a very extensive
gold-bearing gravel district comprising the deposits from ancient and recent
Yaqui River systems. Widespread areas of hand mining operations by generations
of Gambusinos is evidence of the potential profitability of the gravels.
Practically no well engineered modern mining methods or equipment have been used
and the deposits are still largely intact. The property is cut by and nearly
half surrounded by, the Yaqui River in its southward course from the Sierra
Madre Mountains to the Gulf of California. Hydroelectric power dams lie along
the Yaqui River and a major transmission line passes near the property. A
branch substation which taps the major line is located on the property.
Access to the claims is by good, paved, two land highway (No. 16) from
Hermosillo to the Yaqui River and then by desert road two kilometers to the
property.
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
Physiographically the property is in the Sierras and Llanurus Province, the
strip of basin and range structure which separates the Sierra Madre Mountains
from the main Sonora Desert to the west.
Because of the location of the property at the intersection of a main highway
and a major river, the Eagle property has been provided with excellent access
and hydroelectric power available for hookup in the immediate area where mining,
if proven feasible, will probably commence.
PREVIOUS WORK
In the general area of the Eagle property there is much evidence of ancient
mining, including old abandoned Spanish communities and mine structures as, for
example at El Aguaje. Mining activity dates back more than two hundred years
and most of this activity has been by labor-intensive methods. Extensive areas
of hand mining by Gambusinos can be seen, evidenced by thousands of hand-dug
shafts and the associated waste piles, throughout the district and on the
property. Gambusinos are still actively working the placer gravels of the Yaqui
River system by the traditional hand methods
GEOLOGY
REGIONAL SETTING
Evidence of three periods of Yaqui River development are represented in the
general. The earliest, assumed to be of early Tertiary age, is represented by
gold-bearing, well-indurated conglomerate gravels which are conspicuously
displayed to the north and east of the property.
The second Yaqui River development, possible of middle to late Tertiary age, is
the source of most of the terrace deposits in the broad river valley system.
Development of this broad river valley with its extensive gravel deposits, was
the product of a very long period. Several of these remnant terraces exist
upstream from the Eagle property .
The third Yaqui River development is represented by the present river, which has
cut below the base of the earlier valleys and lies in a much narrower valley.
The modern valley winds along the earlier (middle or late Tertiary valley) in a
general way, but in places leaves it for several kilometers to cut a new channel
through bedrock before re-entering the old valley.
PROPERTY SETTING
The large area of alluvial gravels that comprises the Eagle property is situated
on the eastern side of the earlier (middle to late Teriary) Yaqui valley,
immediately west of a point where the present Yaqui valley leaves the old valley
and cuts its way through a bedrock canyon for several kilometers on its
southward course. These departures of the modern river from the old valley were
probable caused by major northeast-southwest faulting at the time of the modern
river development.
The Eagle property gravels and the terrace deposit gravels 10 to 20 km north are
all well rounded and are made up primarily of granitic and volcanic rocks,
quartzites and quartz boulders, cobbles and gravel. The gravels and the
accompanying flattened gold are products of a collection process that is
regional in size and has been through at least two periods of valley development
during geologic time, hence, the widespread presence of gold values throughout
all the gravels in the Yaqui River system.
10
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
Whereas the terrace deposits ten to twenty kilometers upstream are completely
non-bedded, heterogeneous mixtures of silts, sands, gravels, cobbles and
boulders that were deposited from a flooding river, the deposits on the Eagle
property have a crude bedding. This indicates that although the main gravel
beds are not significantly different than the terrace deposits to the north,
there has been some reworking of the gravels on the property.
It seems likely that the reason such a hugh reserve of gravel has been preserved
on the Eagle property is that when the faulting occurred that forced the river
to cut a new canyon in bedrock, the property area was the downthrown side of the
fault.
TERMS OF ACQUISITION
By a Letter of Agreement dated October 29, 1992 (as amended) the Company may
earn a 100% interest (subject to a 2% net smelter returns royalty) in the rights
to extract gold from mining claims known as Eagle, Eagle I, Eagle II, and Yaqui
located in the Soyopa and Onaves mining districts, State of Sonora, Mexico.
Consideration consists of:
- - a cash payment of $95,500 U.S. for reimbursement of the vendor's
out-of-pocket costs, payable on the earliest occurrence of the following events:
(1) the Company completing a $1,000,000 financing, (2) the first positive cash
flow being generated from the project, or (3) no later than July 31, 1997.
(Paid)
- - the issuance of 200,000 shares of the Company's capital stock as follows:
50,000 shares upon the acceptance of the Agreement by regulatory authorities
(issued in fiscal 1994) and 50,000 shares each at the time of filing of the next
three engineers' reports recommending work programs of minimum $25,000 U.S. each
on the project. The first work program was completed in fiscal 1995 and 50,000
shares were issued.
LA CIENEGA
PROPERTY LOCATION AND ACCESS
The camp at la Cienega is located about 90 miles south of the Arizona
border in the State of Sonora, Mexico. The nearest accessible border town,
Nogales, Arizona, is about two and one half hours by well graded and paved
roads.
Trincheras, the nearest town, is about 50 kilometers away over a well
graded dirt road. The nearest railroad and telephone are also here. The
largest nearby city is Caborca about 75 kilometers northwest. It has a
population of approximately 50,000 people.
The area is Sonoran desert and the rainfall averages less than 10 inches
per year. Day time summer temperatures are well over 110 F and this heat is a
major cause of decreased efficiency.
The area is without electrical service, potable water, sewage disposal,
telephones, grocery or fuel stores. The nearest supply center of any size is
Caborca about one hour away.
11
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
The camp is a collection of trailers that has been set up near an old ranch
building. An old arrastrar and several concrete tanks and wells are central to
the camp site. A dug well about 30 feet deep with 5 feet of water has been set
up with a gasoline pump near the well. After several attempts at priming, the
pump will deliver about 300 gallons to the concrete pond before sucking air.
Several hours are required for recovery. the well needs cleaning and deepening.
TERMS OF ACQUISITION
By an agreement dated February 28, 1994 between the Company and Pacific Rainier
de Mexico ("PRM"), the Company can earn a 90% interest in mining claims known as
the Rainier 1 through Rainier 6 located in the Golden Triangle District, State
of Sonora, Mexico. Consideration will be repayment of substantiated costs of
$913,099 U.S. expended by PRM on the property, and the issuance of 1,400,000
shares of the Company when a mine is developed and commences production provided
that an independent valuation report confirms a net present value (net of all
costs and previous consideration) for the 90% interest of at least $1,190,000
CDN. This is a non-arm's length transaction. The out-of-pocket costs of
$913,099 U.S. were settled by the issuance of a two-year convertible debenture
bearing interest at 6% and convertible at $0.85 CDN. per share in the first year
and at $0.98 CDN. per share in the second year. Exchange in the conversion is
fixed at $1.40 CDN. for $1.00 U.S. The debenture was converted into 1,596,215
shares at $0.85 CDN. per share.
A letter of intent was signed February 16, 1994 with K.L.S. Enviro Resources
Inc. (formerly K.L.S. Gold Mining Company ("KLS")) to form a joint venture with
the Company to explore and develop the Rainier (La Cienega) Property and the
Eagle (Rio Yaqui) claims. KLS was to have earned a 55% interest in the
properties by spending a minimum of $1,000,000 U.S. on exploration of the
properties over the next 2 years.
In 1995, the agreement with KLS was renegotiated. Under the terms of the new
agreement, KLS will earn a 50% interest in the Rainier (La Cienega) Property.
The Eagle (Rio Yaqui) claims have been excluded from this new agreement. To
earn this interest, KLS must pay to PRM $90,000 U.S. in holding costs, one-half
in cash and one-half in KLS stock. In addition, KLS must pay $120,000 U.S. of
the total $150,000 U.S. advance royalty owing on the Ryan Lode project should
the pre-feasibility study prove positive. The Company will be required to pay
the remaining $30,000 U.S. at this time. Upon payment of the $120,000 U.S. for
the Ryan Lode Project and payment of the $90,000 U.S. to PRM, KLS will have
earned its 50% interest in the Rainier (La Cienega) Property claims.
The Company paid the costs of the pre-feasibility study on the Ryan Lode Project
of $117,218 CDN.
KLS did not complete their portion of the agreement to this point, consequently
they lost their interest in the Rainier (La Cienega) property.
Deferred exploration and development expenditures of $ 327,656 have been
incurred to date by the Company on the property.
The Company owns 100% right, title and interest in and to Mineral Concession
#199518 La Esperanza within the Rainier II claim, Sonora State of Mexico. The
property was acquired on June 6, 1994 by issuing 100,000 shares of the Company
(deemed value $80,000), payment of $9,809 U.S. cash and the retention by Edward
Ingham of a 2% net smelter return.
12
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
The Company owns 100% right, title and interest in and to Mineral Concession
#199397 La Japonesa within the Rainier I claim, Sonora State of Mexico. The
property was acquired on June 6, 1994 by issuing 100,000 shares of the Company
(deemed value $80,000), payment of $8,649 U.S. cash and the retention by Donald
Randolph of a 2% net smelter return.
GOLD HILL
Nevada Star Resources has recently optioned the Gold Hill property in Nye
County, Nevada. The property is located six miles north of the Round Mountain
Gold Mine, about 48 miles northeast of Tonapah, Nevada. Claims acquired from
Mr. Manly include 53 unpatented claims and in addition, NSR claimed, and is in
the process of filing, an additional 54 unpatented claims. The option agreement
has been reviewed, there has been a preliminary title search, and a
subcontractor to Mine Development Associates (MDA) helped stake the claim.
Nevada Star Resources (NSR) requested that Mine Development Associates
(MDA) conduct a resource and reserve evaluation on the Gold Hill Project, Nye
County, Nevada for Nevada Star's due diligent and to define a work program. The
property is located about six miles north of Round Mountain, Nevada. The Round
Mountain Mine is presently producing 420,000 ounces of gold per year and has a
reserve or eight million ounces.
The Gold Hill property consists of 104 unpatented claims (3 placer and 101 lode)
of which 53 were optioned from Mr. Buzz Manley of Beatty, Nevada in April, 1995.
Fifty-four claims were staked by NSR but are presently held under a different
name. Since that time NSR has been accumulating data, reviewing the data and
geology, and has performed a resource and reserve analysis on the Gold Hill gold
deposit. The object of the work was to define the needs of the project for the
next phase of work.
Production in the 1930's showed a sharp increase in the Round Mountain district,
principally reflecting production from the Gold Hill Mine. There was also some
sporadic production between 1950 and 1964. Total production at Gold Hill was
$987,000 at $35 per ounce or about 28,000 ounces. Others report production of
over 34,000 ounces of gold and 200,00 ounces of silver. Grades are estimated to
have been about 0.3 oz Au/ton. All of this production came from the Gold Hill
vein and to a lesser extent associated veins.
Gold Hill had been controlled for the last decade by the Round Mountain Gold
Company, a joint venture of Echo Bay Mining, Homestake and Case Pomeroy. They
have conducted extensive exploration including surface mapping, geochemistry
(rock, soil vegetation), geophysics (resistivity, gravity, and IP), and a
structural evaluation. Their work culminated in drilling, metallurgical test
work, and a resource and reserve evaluation. In 1988, they defined a mineral
inventory of 3.1 million tons grading 0.05 oz Au/ton at 0.025 oz Au/ton
cutoffThe mineralization is not economic to develop at current gold prices.
The host rocks at Gold Hill are densely welded rhyolite tuff of the Mount
Jefferson Caldera. The Mount Jefferson tuff lies over the Moores Creek tuff
which in turn lies over the Round Mountain tuff, the host of the Round Mountain
mine. These Tertiary volcanic rocks overlie a volcanic mega-breccia that in
turn overlies Paleozoic mestasediments. The Mount Jefferson Tuff has been
broken down by previous workers (principally L. McMasters of Homestake) into the
upper gray tuff and maroon upper tuff. There also exist quartz latite dikes, a
13
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
crystal tuff which may be a part of the Mount Jefferson tuff, lithic tuffs,
waterlain tuff and Tertiary conglomerates. Though these units were mapped by
McMasters, they were not evident in the log RVC or Core. MDA feels that if the
resource is to be well-defined, these unites must be distinguished and separated
for recognition of the structure in the areas. The youngest rock in the area is
the Quaternary-Tertiary pediments. These units are generally composed of
cobbles of the younger maroon tuff and are always completely barren.
The alteration in the area ranges from non-existent to propylitic to argillic to
advanced argillic to silicified. It appears that the gold mineralization is
related to both quartz veining in argillized rock and silicification. The
principal feature in the area is the Gold Hill vein and its sub-parallel veins.
These all strike N75W and dip variably but steeply. In general, the veins dip
southerly near the surface but dip back to the north at depth. These veins are
banded quartz, but can also be composed of crushed quartz and rhyolite. These
veins branch and coalesce and where two period of veining intersect,
higher-grade pods generally exist. The two period of quartz mineralization are
younger, grayer, dense and banded chalcedonic quartz which contains gold of
generally higher grades. The Silver vein, part of the later mineralization, is
lower-grade, dips steeply to the north at the surface and intersects the Gold
Hill vein at about 300 to 400 ft in depth. Where these veins intersect they
produce high-grades of gold and silver. The entire zone is up to 400 ft wide
and is 1,500 ft long, extending from beyond the range front fault on the west
(where it remains open) to near Toquima shaft on the east. The mineralization
extends to the west of the range front fault where one hole hit about 80 ft of
about 0.11 Au/ton.
Structurally, the area is difficult to define due to the lack of distinct
lithologic units. Aside from the prominent N75W mineralized structure there are
north-trending basin and range faults that drop the stratigraphy to the west.
The general dip of the units is difficult to determine but McMaster (oral comm.,
1995) claims that they dip westerly. Mineralization which is apparently
stratigraphically-controlled suggests a southwest dip. Previous workers have
recognized two styles of mineralization; near vertical structurally-controlled
mineralization, including veining, and shallow-dipping strata-bound
mineralization.
The principal mineralization is the Gold Hill and associated veins. These
were exploited starting in the 1930's. The vein width averages several feet and
had sharp contacts with the wall rock. In other areas, the material can best be
described as a stockwork or sheeted zone filled with quartz veinlets. It is
difficult to further define the mineralization with the available information,
though it is believed to also be disseminated at least in part. In several
locations low-temperature banded silica was encountered which may represent
at-surface deposits. These are generally barren of precious metal
mineralization. The mineralization is found in both advance argillic rock as
well as silicified material.
TERMS OF ACQUISITION
By an amended agreement dated September 26, 1997 between the Company and Everett
L. Manley (the "Vendor"), the Company has an option to purchase 53 mining claims
in the Round Mountain Mining District, Nye County, Nevada located four miles
north of Round Mountain in consideration of $1,010,000 U.S. over 10 years. As
at May 31, 1998, the Company has paid $130,000 U.S. to the Vendors.
14
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
By an agreement dated December 4, 1997 between the Company and Hagel Augen.
Hagel Augen will earn a 75% working interest in the Gold Hill Property. Hagel
Augen is committed to the following payments and investments on the property:
- - a cash payment of $10,000 U.S. (paid) upon execution of the agreement.
- - a cash payment of $43,000 U.S. (paid) within 90 days of execution of the
agreement.
- - a cash investment of $447,000 U.S. in the property which includes year
1998 property maintenance payments on or before December 31, 1998.
- - a cash investment of $500,000 U.S. in the property which includes year
1999 property maintenance payments on or before December 31, 1999.
- - a cash investment of $500,000 U.S. in the property which includes year
2000 property maintenance payments on or before December 31, 2000.
- - a cash investment of $500,000 U.S. in the property which includes year
2001 property maintenance payments on or before December 31, 2001.
- - a cash investment of $500,000 U.S. in the property which includes year
2002 property maintenance payments on or before December 31, 2002.
- - a cash investment of $500,000 U.S. in the property which includes year
2003 property maintenance payments on or before December 31, 2003.
ALASKA NICKEL-PLATINUM-COPPER PROPERTY
Nevada Star has recently acquired approximately 10,620 acres consisting of 345
mining claims in the Nicolai nickel-platinum-copper belt in the southern
Alaska Range of Alaska. The mineralization of main exploratory interest is
platinum and associated base and precious metals. All of the Company's claims
are currently in the exploration stage. No commercially mineable ore body has
been delineated on the any claims, nor have any reserves been identified.
PLATINUM GROUP METALS
Platinum group metals comprise six closely related metals, platinum, palladium,
rhodium, iridium and osmium, which commonly occur together in nature and are
among the scarcest of the metallic elements. The platinum group metals hold a
unique position in the world economy for industrial and environmental
applications. Along with gold and silver, they are known as precious or noble
metals due to their relative stability. The platinum group metals occur as
native alloys in placer (alluvial) deposits, or more commonly, in lode (hard
rock) deposits associated with nickel and copper. Nearly all of the world's
supply of these metals are being extracted from lode deposits in four countries
- - the Republic of South Africa and Russia being the largest contributors with
90% of the worlds production, and Canada and the United States producing about
8%.
Platinum group metals are critical to a number of industries because of their
extraordinary physical and chemical properties - the most important of which are
their attributes for catalysis. Since the mid-1970's and continuing today,
automotive manufacturers use increasing numbers of catalytic converters
containing platinum or platinum-rhodium alloys to reduce environmental
unfriendly automobile emissions. In addition, the chemical and petroleum-
refining industries rely upon platinum group metals catalysis to produce a
wide variety of chemical and petroleum products. The jewelry, glass, electronic,
pharmaceutical, dental and investment sectors constitute other large consumers
of platinum group metals.
15
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
LOCATION
The property is located on the south side of the central Alaska Range, Alaska,
approximately 100 miles south-southeast of Fairbanks, and approximately 160
miles northeast of Anchorage .
The Eureka Creek Project area lies in the geological entity known as the
Wrangellia Terrain, which typically forms glaciated mountainous regions that
extend to the southeast into the Wrangell Mountains and beyond. Elevations in
the project area vary between 2766 feet in piedmont along the southern edge, to
8847 feet along the glaciated northern edge.
ACCESS
The Richardson and Denali highways allow access to the perimeter of the project
area. Old, unmaintained trails do occur in the project area, but are only
accessible once the glacial runoff subsides in late summer, whereupon the rivers
are passable. Fixed-wing aircraft can access the area via two local gravel
airstrips (Maclaren River and Broxson Gulch), whereas float-equipped aircraft
could land on a few of the larger lakes (e.g., Fish Lake, Sevenmile Lake).
Helicopters offer the best means of accessing remote parts of the project area.
Snowmobiles (winter) and ATVs (summer) can also be used to access the
least-rugged areas. The nearest community is the hamlet of Paxson, which is
situated at the junction of the Denali and Richardson highways. Project field
activity is conducted from Paxson Lodge, and a camp, with cabins and a gravel
airstrip, at the entrance to the East Fork of Broxson Gulch.
PHYSIOGRAPHY
The project area is on the interior edge of the Pacific Mountain System. The
area is subject to elevation-controlled climate, where central Alaska Range
mountains and alpine valleys are typically glaciated, windy and frequently
cloudy; in contrast to piedmont valleys on the south-side of the Alaska Range
which have a more subdued topography and contain some vegetation. Extended
summer daylight hours occur from approximately the beginning of June to the end
of August. Approximate mean high and low temperatures are 80 F and 55 F in July,
and 14 F and -22 F in January. Average precipitation varies between 4 inches in
April to 20 inches in August.
The elevated part of the project area, north of Eureka Creek, contains
mountainous ridges (highest is 8847') that separate active glaciated valleys and
cirques. Sediment-laden rivers drain from the glaciers into the piedmont
valleys, and eventually into the Delta River. Conifers are sparse and confined
to the banks of larger rivers (e.g., Delta River). Smaller vegetation (e.g.,
alders, heath, grasses, moss and lichen) is more abundant, but is also
restricted to wetter piedmont valleys. Apart from bedrock, the landsurface is
covered by glacial moraine or glacio-fluvial deposits. In addition to minor
overbank or floodplain soil, there are only very thin, incipient soils in
vegetated lowland areas.
Property Geology
The geology of the Eureka Creek Property consists sedimentary, volcanic and
intrusive rocks which are variably folded and faulted. The area is separated by
the Denali Fault and Broxson Thrust Fault into two terranes. To the north of the
Denali Fault the rocks consist of strongly folded and faulted older metamorphic
rocks. To the south of the Denali Fault, the rocks consist of younger
sedimentary and volcanic rocks intruded by mafic and ultramatic rocks.
16
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
PROPERTY HISTORY
The first comprehensive geological study of the region was by Moffit (1912),
followed by a period of inactivity that ended with a regional geology series by
Rose (1965, 1966) and, in the Rainbow Mountains to the east, Hanson (1964). The
most recent mapping that includes the Eureka Creek claims is by Stout (1976).
In 1973, the Alaska Division of Geological and Geophysical Surveys released
results of an airborne magnetometer survey of the Mount Hayes Quadrangle. This
survey defined a number of positive magnetic occurrences. The aeromagnetic
survey delineated the location of mafic and ultramafic rocks which appear to be
favorable targets for massive sulfide mineralization. These positive magnetic
occurrences delineate highly magnetic and conductive areas indicate possible
mineralization. More recently, samples collected in the project area were
included in a regional geochemical study of stream sediments and heavy minerals
by Curtin et al. (1989). These studies show that nickel, chromium and cobalt
geochemical occurrences are present within the project area.
Mineral resource assessment of the Mount Hayes Quadrangle by Nokleberg et al.
(1990), rank the Eureka Creek Project area as having a moderate potential for
containing nickel, copper and chromium mineralization, and placer gold. Active
gold placer mining has not been carried out in the project area since the first
quarter of the century, and largely remains undocumented.
The project area has not previously been explored by industry for
nickel-copper-platinum group elements mineralization. However, as part of a
regional study for the State of Alaska, Rose (1965) identified more than 18
localities in the Rainy Creek area where copper mineralization was noted. Minor
amounts of Nickel were noted at five of these localities. More extensive
nickel-copper mineralization has also been documented in the Rainbow Mountain -
Canwell Glacier area immediately to the east of Eureka Creek Project area (e.g.,
Saunders, 1961; Kaufman, 1963; Barker, 1988).
EXPLORATION ACTIVITY
Monty D. Moore and Associates, in concert with Tullaree Alaska Inc., began
staking in the Eureka Creek Project area in January 1996. Starting in late
February 1997, and continuing through that summer, further ground was staked and
a reconnaissance geological and geochemical sampling exploration program was
carried out over most of the property.
The 1997 exploration program was helicopter-supported, and entailed
reconnaissance prospecting and geologic orientation, a minor amount of geologic
mapping, and rock and stream sediment geochemical sampling. Four hundred and
fifty-three samples were collected as fist-size grab samples from outcrop and
subcrop, or as chip samples over a particular outcrop distance. The rock
samples were analyzed by Chemex Labs., Inc. (Sparks, Nevada) and Acme Analytical
Laboratories Ltd. (Vancouver, British Columbia). Twenty-eight silt samples were
collected from streams in the project area and analyzed by Chemex Labs, Inc.
(Sparks, Nevada).
17
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
Monty Moore and Associates conducted a short staking and exploration program
between July 10 and September 8 1998. During the 1998 program, most of the
staking, sampling, local mapping, and ground magnetometer surveying was
conducted to the west and east of Tangle Lakes in the Amphitheatre Mountains.
Previous mapping, aeromagnetic and geochemical surveys and rock sampling
indicate that the Tangle Lakes area has the greatest potential for
nickel-copper-platinum group elements mineralization in the Eureka Creek Project
area. Following the field component of the 1998 exploration program, an
independent evaluation of the Eureka Creek Project was conducted.
EXPLORATION PROGRAM
It has been recommended that the next phase of exploration for the Eureka Creek
Project should focus on the Tangle Lakes area, and start with a
helicopter-airborne magnetic-EM (electromagnetic) survey over the area of
greatest interest west and east of Tangle Lakes. An airborne survey reveals an
area extending from the east shore of Landmark Gap Lake and from Rusty Lake
northward; and north-south flight lines at 200 m separation, with 1 or 2
east-west cross-lines. This rectangular survey area could be extended to the
north, west and south. Ultimately, if geophysical anomalies and drill targets
can be defined early in the field season, then a drilling program will be
carried out.
TERMS OF ACQUISITION
The property was acquired by way of a gift from Monty D. Moore, a shareholder,
director and president of the Company. On January 5, 1999 the Company entered
into a Memorandum of Understanding with M.A.N. Resources, Inc., ("MAN") a
private company controlled by Monty D. Moore and Robert Angrisano whereby the
claims were leased to M.A.N. for ten years on condition that M.A.N. explore and
develop minerals thereon. In return, M.A.N. will earn a net 75% working
interest in the claims upon expending U.S. $75,000 on exploration and
development costs in the first twenty-four months of the lease. To maintain its
working interest at 25%, the Company is required to pay M.A.N. 25% of all
exploration and development costs in excess of the initial U.S. $75,000 spent by
M.A.N. on the claims. Failure to contribute its share will reduce the Company's
interest but not to less than 1% of gross proceeds of sale of minerals from the
claims. The Company does not anticipate that it will be required to begin
payment of its pro rata share of exploration expenses until mid-year 2001.
Additionally, M.A.N. may acquire all right, title and interest of the Company in
the claims in consideration for 106,200 shares in the capital stock of M.A.N. if
tendered on or before the second anniversary date of the lease agreements. The
Memorandum of Understanding, provides that the Memorandum of Understanding will
be superceded and replaced by a formal Mining Lease and Sale Agreement. Until
the Mining Lease and Sale Agreement is executed the Memorandum of Understanding
remains in full force and effect.
18
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding any person known to the
Company to be the beneficial owner of more than five percent of any class of the
Company's voting securities at December 3, 1999.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- --------------- --------------------------------- --------------------- ------------
<S> <C> <C> <C>
Common Monty D. Moore (1) 4,323,395 (2) 15.16%
10735 Stone Ave.
Seattle, WA 98133
Common Grand Central Silver Mines, Inc.(3) 2,000,000 7.01%
862 South 500 West St.
Salt Lake City, Utah 84110
Common Robert Angrisano 1,738,656 (4) 6.01%
2533 - 226th Pl. NE
Redmond, WA 98053
</TABLE>
(1) Includes 713,550 shares owned by Pacific Rainier, Inc. a privately held
mineral exploration company controlled by Mr. Moore.
(2) Does not include 445,895 shares issuable upon the exercise of
outstanding options and warrants
(3) No officer, director or principal shareholder of the Company is
affiliated with Grand Central Silver Mines, Inc.
(4) Does not include 50,000 shares issuable upon the exercise of
outstanding options and warrants
(B) SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of December 3, 1999
regarding the number and percentage of shares of common Stock of the Company or
any of its parents or subsidiaries beneficially owned (as such term is defined
in Rule 13d-3 under the Exchange Act) by each director, each of the named
executive officers and directors and officers as a group
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- --------------- --------------------------------- --------------------- ------------
<S> <C> <C> <C>
Common Monty D. Moore 4,323,395(1)(2) 16.95%
Common Richard W. Graeme 100,000(3) 0.35%
Common Stuart Havenstrite ` 532,234(4) 1.87%
Common Richard S. Havenstrite 110,000(5) 0.38%
Common Robert Angrisano 1,738,656(6) 6.01%
Common Kevin Weaver 13,500 0.05%
Common Total of all officers
and directors (7 individuals): 6,817,785 23.9%
19
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
(1) Includes 713,550 shares owned by Pacific Rainier, Inc., a privately held
mining exploration company controlled by Mr. Moore.
(2) Does not include options expiring March 2, 2001 to acquire 445,895
shares of common stock at a price of $0.30 per share.
(3) Does not include options expiring March 2, 2001 to acquire 100,000
shares of common stock at a price of $0.30 per share.
(4) Does not include options expiring March 2, 2001 to acquire 200,000
shares of common stock at a price of $0.30 per share.
(5) Does not include options expiring March 2, 2001 to acquire 52,960 shares
of common stock at a price of $0.30 per share.
(6) Does not include options expiring March 2, 2001 to acquire 50,000 shares
of common stock at a price of $0.30 per share.
(c) Changes in Control
There are no arrangements known to the Registrant the operation of which may at
a subsequent time result in the change of control of the Registrant.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
</TABLE>
<TABLE>
<CAPTION>
Name Age Office with the Company Appointed to Office
- ------------------------- --- ------------------------ -------------------
<S> <C> <C> <C>
Monty D. Moore 63 Director and President 1993
Richard W. Graeme 56 Director 1994
Stuart Havenstrite 67 Director 1994
Richard S. Havenstrite 41 Director 1998
Robert Angrisano 45 Director 1999
Kevin Weaver 53 Director 1996
Beverly J. Bullock 50 Secretary 1993
</TABLE>
Monty D. Moore has been the President and a Director of the Company since 1993.
Since 1971 Mr. Moore has been the owner and President of Pacific Rainier
Roofing, Inc., Seattle, Washington. Mr. Moore is a member of the Northwest
Mining Association.
Richard W. Graeme, a Director of the Company, is graduated from the University
of Arizona with a Bachelor of Science Degree with a major in Geological
Engineering. From 1996 to the present Mr. Graeme has been the Vice-president of
Operations for Golden Queen Mining Company, Mojave, California. Mr. Graeme's
responsibilities have included permitting and bringing the Soledad Mountain
project into production. From 1993 to 1996 Mr. Graeme was employed as an
Engineer by Mine Development Associates, Reno Nevada. Mr. Graeme is a member of
the American Institute of Mining, Metallurgical and Petroleum Engineers
("AIME").
Stuart Havenstrite, a Director of the Company, has been the owner and sole
employee of HMS Company, a geological and management company located in Sandy,
Utah. Mr. Havenstrite is graduated from Stanford University with a B.S. Degree
in Geology. Mr. Havenmstrite is a member of AIME. Mr. Havenstrite is the father
of Rick Havenstrite.
20
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
Rick Havenstrite, a Director of the Company, has been the Manager of the
Company's OK copper project since joining the Company in 1997. From 1996 until
joining the Company Mr. Havenstrite was the Vice-President of Operations for
Centurion Mines Corporation and the manager of the OK copper project. From
1992-1996 Mr. Havenstrite was employed by Arimetco, Inc. as the General Manager
of the Yerington Project. Mr. Havenstrite was responsible for permitting,
geology, engineering, construction and operation of this 15 million ton per year
low grade SX/EW copper project. Mr. Havenstrite, a member of AIME is graduated
from the University of Nevada, Reno with a B.A. Degree in Mine Engineering.
Kevin Weaver, a Director of the Company since 1995, is a land developer and
since 1992 has been the President of Songhees Retirement Park and Seicam
Management, Victoria, Canada
Robert Angrisano, a Director of the Company, is graduated from Portland State
University with a degree in business. Mr. Angrisano has been employed by
Microsoft Corp. since 1993. Mr. Angrisano is currently the Director of
Technology for Microsoft. Mr. Angrisano is the president of M.A.N. Resources,
Inc., a mineral exploration company.
Beverly J. Bullock, the Corporate Secretary, has been the owner of VanWest
Administrative Services, Ltd., Surrey, B.C. since 1991. VanWest provides
administrative consulting services to private and public companies.
ITEM 6. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION
(A) EXECUTIVE OFFICERS
The following table sets forth the compensation paid by the Company to its Chief
Executive Officer and executive officers whose total annual salary and bonus
exceeded $100,000 during the past three calendar years ("Executive Officers").
Except as set forth below, no officer or Executive Officer of the Company
received compensation in excess of $100,000 during the past three calendar
years. This information includes the dollar value of base salaries, bonus awards
and number of stock options granted, and certain other compensation, if any.
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
- ---------------------------------- -------------------------------------------------
Name Other Restricted Securities
and Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Comp. Awards(1) Options/ Payouts Comp.
Position ($) ($) ($) ($) SARs(#) ($) ($)
- ------------ ---- ------- ------- ------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Monty D.
Moore 1999 $0 $0 $0 $0 445,895(1) $0 $0
President & 1998 $0 $0 $0 $0 330,885(2) $0 $0
Director 1997 $0 $0 $0 $0 115,040(2) $0 $0
</TABLE>
(1) exercisable at CDN $0.30 per share on or before March 2, 2001;
(2) re-priced on March 3, 1999
21
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
(B) DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
The Company compensates its directors for attending Directors' Meetings in the
amount of US$300.00 per meeting. In addition, the directors are compensated for
their services in their capacity as consultants, experts or for committee
participation or special assignment by the Company. During the most recently
completed financial year, compensation was paid as follows:
<TABLE>
<CAPTION>
Director Amount Paid
- ---------------------------- ----------------------------------
<S> <C>
Stuart Havenstrite US$300 (director's fee)
Kevin Weaver US$300 (director's fee)
Robert Angrisano US$300 (director's fee)
Richard W. Graeme US$300 (director's fee)
Rick Havenstrite CDN$36,558 (consulting)
</TABLE>
The Company does not have a formalized stock option plan for the granting
of incentive stock options to the officers, employees and directors. However,
the Company has granted stock options to certain of its directors. The purpose
of granting such options is to assist the Company in compensating, attracting,
retaining and motivating the directors of the Company and to closely align the
personal interests of such persons to that of the shareholders.
The following table sets forth information concerning individual grants of
options to purchase securities of the Company made during the most recently
completed financial year to some of the directors of the Company:
<TABLE>
<CAPTION>
% of total Market
Options/ Value of
SARs Securities
Granted to Exercise Underlying
Securities All or base Options
Under Employees price on the
Options/SARs In the $/ Date of
Granted Financial Securites Grant Expiration
Name # (1) Year (2) $/Security Date
- ------------------ ------------- ----------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Richard Graeme 75,000 4.1% $0.30 $0.30 March 2, 2001
Rick Havenstrite 100,000 5.4% $0.30 $0.30 March 2, 2001
Stuart Havenstrite 200,000 10.8% $0.30 $0.30 March 2, 2001
Kevin Weaver 300,000 16.3% $0.30 $0.30 March 2, 2001
Robert Angrisano 600,000 32.5% $0.30 $0.30 March 2, 2001
</TABLE>
(1) Option is for a term of two years.
(2) The exercise price of stock options is determined by the Board of
Directors but shall in no event be less than the 10-day average price of the
common shares of the Company on the Canadian Venture Exchange.
The following table sets forth information concerning the re-pricing
of options to purchase securities of the Company made during the most recently
completed financial year to some of the directors of the Company:
22
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
<TABLE>
<CAPTION>
Securities Old New Old New
Name Under Exercise Exercise Expiration Expiration
Options Price Price Date Date
- ----------------- ----------- --------- --------- ----------------- ----------
<S> <C> <C> <C> <C> <C>
Monty D. Moore 115,040 $0.55 $0.30 March 12, 1999 March 2, 2001
Monty D. Moore 330,855 $0.64 $0.30 November 20, 1999 March 2, 2001
Rick Havenstrite 100,000 $0.64 $0.30 November 20, 1999 March 2, 2001
Richard Graeme 25,000 $0.55 $0.30 March 12, 1999 March 2, 2001
</TABLE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Monty Moore, a shareholder, officer and director has made advances to the
Company which were outstanding in whole or in part at the year ended August 31,
1999 in the amount of $CDN 543,960. There is no written agreement between the
Company and Mr. Moore with regard to the repayment of the monies advanced. The
monies have been advanced on an interest free basis. The monies are expected to
be repaid at the point at which the Company has adequate revenues to make such
payments without restricting the operations of the Company. In the alternative,
upon approval of Mr. Moore and the Board of Directors, the advances may be
converted to equity. On May 17, 1999 the Company converted $CDN 232,037 of
advances to equity at a price of $.18 per share, issuing a total of 1,289,098
shares of common stock. The terms of the transaction were approved by the
Vancouver Stock Exchange.
There have been no other ransactions or series of transactions, or proposed
transactions during the last two years to which the registrant is a party in
which any director, nominee for election as a director, executive officer or
beneficial owner of five percent or more of the registrants common stock, or any
member of the immediate family of the foregoing had or is to have a direct or
indirect material interest exceeding $60,000.
The Company's Articles do not prohibit transactions in which the Company's
promoters, management, affiliates or associates directly or indirectly have an
interest. Therefore, there is (always) a "present potential" that the Company
may acquire or merge with a business or company in which the Company's
promoters, management, affiliates or associates directly or indirectly have an
interest, there is however, no present or contemplated intent that such an event
may occur. In the event that such a transaction was proposed, under the rules of
the Vancouver Stock Exchange, any such transaction would be deemed a "Major
Transaction and would be subject to prior shareholder approval and the approval
of the Vancouver Stock Exchange. In structuring any such transaction, the
directors would be bound by their fiduciary duty to act in the best interest of
the Company's shareholders. In the event that management's fiduciary duties were
compromised any available remedy under applicable law would likely be
prohibitively expensive and time consuming.
23
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company is authorized to issue an unlimited number of shares of its no par
value Common Stock. There are presently 28,511,430 shares issued and
outstanding held by approximately 121 shareholders of record. The terms and
price of any private placement of the Company's shares (including the issuance
of stock options) is subject to approval of the Vancouver Stock Exchange. Any
such private placement would be subject to a maximum discount of 25% from the
current market price with a minimum price of $0.15 per share regardless of the
current market price.
All shares of Common Stock are equal to each other with respect to voting,
liquidation, dividend and other rights. Owners of shares of Common Stock are
entitled to one vote for each share of Common Stock owned at any Shareholders'
meeting. Holders of shares of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefor; and upon liquidation, are entitled to participate pro rata
in a distribution of assets available for such a distribution to Shareholders.
There are no conversion, preemptive, or other subscription rights or privileges
with respect to any shares. The Common Stock of the Company does not cumulative
voting rights which means that the holders of more than fifty percent (50%) of
the shares voting in an election of directors may elect all of the directors if
they choose to do so. In such event, the holders of the remaining shares
aggregating less than fifty percent (50%) would not be able to elect any
directors.
The Company has never paid any dividends and does not anticipate the payment of
dividends in the foreseeable future.
STOCK OPTIONS
At the end of the last fiscal year (August 31, 1999), the following stock
options were outstanding:
Expiry Date Exercise Price Number of Shares
- ------------ --------------- ------------------
March 2, 2001 0.30 2,314,525
SHARE PURCHASE WARRANTS
At the end of the last fiscal year, the following share purchase warrants were
outstanding
Expiry Date Exercise Price Number of Shares
- ---------------------- --------------------------- ------------------
February 15, 2000 $ CDN 0.70 per share 1,013,418
June 4, 2000 $ CDN 1.00 per share 1,000,000
24
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
The Common Stock of the Company is traded on the Canadian Venture Exchange under
the symbol "NEV". The following table shows the high and low sales prices for
the Common Stock during each quarter since January 1, 1998. The sales prices are
set forth in Canadian dollars. At February 10, 2000 the U.S. dollar equivalent
as quoted in the Wall Street Journal was $.6903
<TABLE>
<CAPTION>
Calendar Year High Closing Low Closing
- -------------- ------------- ------------
<S> <C> <C>
1998:
First Quarter .70 .26
Second Quarter .52 .27
Third Quarter .43 .20
Fourth Quarter .30 .11
1999:
First Quarter .25 .12
Second Quarter .30 .09
Third Quarter .25 .13
Fourth Quarter .22 .09
2000:
February 10 .11 .09
</TABLE>
As of December 31, 1999 there were 121 shareholders of record of the Company's
common stock.
The Company intends to seek a U.S. broker-dealer to make a market in the
Company's common stock. There are no proposals, arrangements or understandings
with any person with regard to the development of a trading market in any of the
Company's securities. To date there have been no preliminary discussions or
understandings with any broker-dealer and the Company (or anyone acting on its
behalf) regarding the participation of any such market maker in the future
trading market (if any) for the company's securities. The Company may, but to
date has not, retained the services of an independent consultant to assist the
Company in obtaining market makers. There have been no preliminary discussions
or understandings with any consultants regarding providing such services for the
Company.
ITEM 2. LEGAL PROCEEDINGS.
Neither the Registrant nor its property is a party to or the subject of any
pending legal proceeding or any contemplated proceeding of a governmental
authority.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
During the Registrant's two most recent fiscal years and any later interim
periods neither the principal accountant nor a significant subsidiary's
independent accountant on whom the principal accountant expressed reliance in
its report, resigned (or declined to stand for re-election) or was dismissed.
25
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In May, 1999 the Company issued a total of 2,553,316 shares at a deemed private
of $0.18 per share to settle outstanding debt. All of the shares are restricted
from resale in the United States. The shares were issued to three U.S.
residents, each of whom was an accredited investor. The shares were issued
pursuant to a Section 4(2) exemption from registration under the Act.
Between October, 1998 and August 1999 options to acquire shares were exercised
by two individuals. Both individuals were accredited investors, one of whom is
the president and a director of the Company. An aggregate of 272,445 shares were
issued at an option exercise price of CDN$0.30 per share and 1,519,204 shares
were issued at an option exercise price of CDN$ 0.49 per share. The shares were
issued pursuant to a Section 4(2) exemption from registration under the Act.
In October, 1998 704,727 shares were issued to an unaffiliated third party at a
deemed price of $0.55 per share pursuant to a shares for debt transaction
relating to the LaVirgen property acquisition. The shares were issued pursuant
to a Section 4(2) exemption from registration under the Act.
In June 1998 3,000,000 shares were issued to two unaffiliated mining exploration
companies in exchange for the Milford District properties. The shares were
issued at a deemed price of CDN$0.65 per share. A finders fee of 225,000 was
issued in connection with these transactions. The shares were issued pursuant to
a Section 4(2) exemption from registration under the Act.
In February, 1998 the Company offered and sold 578,328 units at a price of CDN
$0.55 per unit to eleven U.S. residents. Six investors were accredited investors
and five investors were deemed to be sophisticated. Each unit consisted of one
share of Common Stock and one non-transferable share purchase warrant. Each
warrant is exercisable for a two year period to purchase one share of common
stock at a price of CDN $0.55 per share if exercised during the first year and
at a price of CDN $0.70 per share if exercised during the second year. The
shares were issued pursuant to a Section 4(2) exemption from registration under
the Act.
In April, 1998 the Company issued 497,682 shares to three accredited investors
pursuant to the exercise of options at an exercise price of CDN$0.41 per share.
The shares were issued pursuant to a Section 4(2) exemption from registration
under the Act.
In February, 1997 the Company offered and sold 550,000 units at a price of CDN
$0.50 per unit to five U. S. residents. Five of the investors were accredited
investors and one investor was deemed sophisticated. Each unit consisted of one
share of Common Stock and one non-transferable share purchase warrant. Each
warrant is exercisable for a two year period to purchase one share of common
stock at a price of CDN $0.50 per share if exercised during the first year and
at a price of CDN $0.575 per share if exercised during the second year. The
shares were issued pursuant to a Section 4(2) exemption from registration under
the Act.
In May, 1996 the Company offered and sold 224,000 units at a price of CDN $0.50
per unit to three U. S. residents, each of whom was an accredited investor. Each
unit consisted of one share of Common Stock and one non-transferable share
purchase warrant. Each warrant is exercisable for a two year period to purchase
26
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
one share of common stock at a price of CDN $0.50 per share if exercised during
the first year and at a price of CDN $0.58per share if exercised during the
second year. The President of the Company purchased 182,600 of the 224,000
shares sold to U.S. residents. The shares were issued pursuant to a Section 4(2)
exemption from registration under the Act.
Each of the above offerings was made pursuant to exemptions from registration
under the Securities Act of 1933, as amended, pursuant to Section4(2)Each of the
certificates issued in connection with the above offerings contained restrictive
language on its face and each certificate had a restrictive legend in
substantially the following form:
The securities represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act") and may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration statement
under the Act or pursuant to an exemption from registration under the Act, the
availability of which is to be established by opinion of counsel satisfactory to
the Company to the effect that in the opinion of such counsel such registration
in not required
None of the shares were offered by means of advertising or general solicitation.
No commissions were paid directly or indirectly to any person in connection with
the offer or sale of any of the securities to U.S. residents.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 68 of the Company's Articles provides that:
"The board may cause the Company to provide indemnity by way of insurance or
otherwise to any director, officer, employee or other person who has taken or is
about to undertake any liability on behalf of the Company or any corporation
controlled by it and to secure such director, officer, employee or other person
against loss by mortgage and charge upon the whole or any part of the real and
personal property of the Company and any action taken by the board under this
paragraph will not require approval or confirmation by the members."
Section 69 of the Company's Articles provides that:
"No director, officer or employee for the time being of the Company will be
liable for the acts, receipts, neglects or defaults of any other director,
officer or employee, or for joining in any receipt or act for the sake of
conformity, or for any loss, damage or expense happening to the Company through
the insufficiency of deficiency of title to any property acquired by order of
the board for or on behalf of the Company, or for the insufficiency or
deficiency of any security in or upon which any of the monies of or belonging to
the Company are placed out or invested or for any loss or damages arising from
the bankruptcy, insolvency or wrongful act of any person, firm or corporation
with whom or which any monies, securities or effects are lodged or deposited or
for any other loss, damage or misfortune whatsoever which may happen in the
execution of the duties of his respective office or trust or in relation thereto
unless the same happens by or through his own wilful neglect or default."
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions,
or otherwise, the small business issuer has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
27
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
PART FS
FINANCIAL STATEMENTS
NEVADA STAR RESOURCE CORP.
CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
PAGE
----
AUDITORS' REPORT TO THE SHAREHOLDERS 1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets 2
Consolidated Statements of Operations and Deficit 3
Consolidated Statements of Cash Flows 4
Consolidated Statements of Investments In and Expenditures
on Resource Properties 5
Notes to Consolidated Financial Statements 6-18
28
<PAGE>
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the consolidated balance sheets of Nevada Star Resource Corp. as
at August 31, 1999 and 1998 and the consolidated statements of operations and
deficit, cash flows and investments in and expenditures on resource properties
for the years ended August 31, 1999, 1998 and 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in Canada which do not differ in any material respects from auditing standards
generally accepted in the United States. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at August 31, 1999
and 1998 and the results of its operations, its cash flows and the investments
in and expenditures on resource properties for the years ended August 31, 1999,
1998 and 1997 in accordance with generally accepted accounting principles in
Canada applied on a consistent basis. Accounting principles generally accepted
in Canada differ in certain significant respects from accounting principles in
the United States and are discussed in note 11 to the consolidated financial
statements.
"Smythe Ratcliffe"
Chartered Accountants
Vancouver, British Columbia
January 6, 2000
29
<PAGE>
NEVADA STAR RESOURCE CORP.
CONSOLIDATED BALANCE SHEETS
AUGUST 31
(CANADIAN DOLLARS)
<TABLE>
1999 1998
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 5,006 $ 217,524
Accounts receivable 5,285 4,105
-------------- --------------
10,291 221,629
INVESTMENTS IN AND EXPENDITURES ON RESOURCE
PROPERTIES (notes 3 and 4) 6,764,456 5,946,032
CAPITAL ASSETS (note 5) 4,333 5,573
-------------- --------------
$ 6,779,080 $ 6,173,234
============== ==============
LIABILITIES
CURRENT
Accounts payable $ 10,810 $ 18,148
Loan payable 0 387,600
Subscriptions payable 0 381,129
Due to shareholder (note 7) 543,960 718,606
-------------- --------------
554,770 1,505,483
-------------- --------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK (note 6) 11,377,738 9,704,111
DEFICIT (5,153,428) (5,036,360)
-------------- --------------
6,224,310 4,667,751
-------------- --------------
$ 6,779,080 $ 6,173,234
============== ==============
</TABLE>
Commitments (note 8)
Approved on behalf of the Board:
/S/ Monty Moore /S/ Stuart Havenstrite
Monty Moore, Director Stuart Havenstrite, Director
See notes to consolidated financial statements.
30
<PAGE>
NEVADA STAR RESOURCE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
YEARS ENDED AUGUST 31
(CANADIAN DOLLARS)
<TABLE>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
GENERAL AND ADMINISTRATIVE EXPENSES
Professional fees $ 35,014 $ 31,852 $ 21,235
Consulting 32,702 55,155 55,398
Office and miscellaneous 15,228 21,597 15,374
Shareholder relations 10,305 11,489 15,385
Listing and filing fees 7,527 10,937 9,003
Property management 3,975 47,055 0
Directors' meetings 1,797 860 1,743
Transfer agent fees 1,250 13,771 5,250
Telephone 1,120 5,511 8,060
Bank charges and interest 1,023 1,165 983
Travel 573 7,668 19,944
Property examinations 0 8,737 3,423
Rent 0 0 23,979
Management fees 0 0 12,000
Loss on abandonment of mineral properties 0 1,459,495 439,455
Amortization 1,240 1,617 2,117
------------ ------------ ------------
111,754 1,676,909 633,349
OTHER ITEMS
Loss (gain) on translation
of foreign currencies 5,602 (7,471) 18,588
Interest income (288) (2,618) (1,276)
------------ ------------ ------------
NET LOSS FOR YEAR 117,068 1,666,820 650,661
DEFICIT, BEGINNING OF YEAR 5,036,360 3,369,540 2,718,879
------------ ------------ ------------
DEFICIT, END OF YEAR $ 5,153,428 $ 5,036,360 $ 3,369,540
============ ============ ============
LOSS PER SHARE $ 0.01 $ 0.09 $ 0.04
============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 26,072,068 19,291,567 16,410,919
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
31
<PAGE>
NEVADA STAR RESOURCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED AUGUST 31
(CANADIAN DOLLARS)
<TABLE>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss $ (117,068) $(1,666,820) $ (650,661)
------------ ------------ ------------
Net loss $ (117,068) $(1,666,820) $ (650,661)
------------ ------------ ------------
Items not involving cash
Amortization 1,240 1,617 2,117
Loss on abandonment of mineral properties 0 1,459,495 439,455
------------ ------------ ------------
(115,828) (205,708) (209,089)
------------ ------------ ------------
CHANGES IN NON-CASH WORKING CAPITAL
Accounts receivable (1,180) (2,278) 1,681
Prepaid expenses 0 313 1,750
Accounts payable (7,338) 6,490 (37,291)
Subscriptions payable 0 381,129 0
Loan payable 0 387,600 0
Due to shareholder (95,892) 318,529 338,104
------------ ------------ ------------
(104,410) 1,091,783 304,244
------------ ------------ ------------
(220,238) 886,075 95,155
------------ ------------ ------------
INVESTING ACTIVITIES
Deferred exploration and development costs (705,576) (1,912,068) (220,258)
Acquisition of mineral properties (112,848) (86,494) (765,933)
------------ ------------ ------------
(818,424) (1,998,562) (986,191)
------------ ------------ ------------
FINANCING ACTIVITY
Issuance of shares for cash 826,144 1,240,544 610,740
------------ ------------ ------------
INCREASE (DECREASE) IN CASH (212,518) 128,057 (280,296)
CASH, BEGINNING OF YEAR 217,524 89,467 369,763
------------ ------------ ------------
CASH, END OF YEAR $ 5,006 $ 217,524 $ 89,467
============ ============ ============
SUPPLEMENTAL INFORMATION FOR INVESTING AND FINANCING ACTIVITIES
Shares issued for mineral properties $ 0 $ 2,096,250 $ 0
============ ============ ============
Shares issued for loan settlement,
subscriptions payable and
advances from shareholder $ 847,483 $ 0 $ 170,928
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
32
<PAGE>
NEVADA STAR RESOURCE CORP.
CONSOLIDATED STATEMENTS OF INVESTMENTS IN AND EXPENDITURES ON RESOURCE
PROPERTIES
YEARS ENDED AUGUST 31
(CANADIAN DOLLARS)
BEGIN 8PT TYPE
<TABLE>
EAGLE RAINIER OK/
(RIO YAQUIL) (LA CIENEGA) LA VIRGEN GOLD HILL BEAVER LAKE PGM
CLAIMS PROPERTY PROPERTY, PROPERTY, PROPERTY PROPERTY,
MEXICO MEXICO MEXICO NEVADA UTAH ALASKA TOTAL
------------ -------------- ---------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
AUGUST 31, 1997 $ 197,998 $ 1,710,310 $ 959,475 $ 442,932 $ 0 $ 0 $ 3,310,715
------------ -------------- ---------- ---------- ------------- ---------- ------------
EXPENDITURES FOR 1998
Acquisition costs 0 0 0 4,739 2,178,006 0 2,182,745
Labour 0 414 70,147 0 169,135 0 239,696
Property tax 374 100,011 56,059 0 0 0 156,443
Travel 461 6,008 17,424 0 130,059 0 153,952
Accommodation
and meals 165 3,237 3,060 0 56,199 0 62,661
Recording fee 0 0 5,851 0 22,280 0 28,131
Consulting 0 57,153 74,270 0 136,615 0 268,038
Supplies 0 9,465 749 0 102,642 0 112,857
Assays 0 0 18,439 0 256,505 0 274,944
Miscellaneous 38 5,827 9,584 (745) 8,601 0 23,305
Storage 0 0 0 0 43 0 43
Drilling 0 0 244,437 0 236,056 0 480,493
Legal 0 0 0 0 111,504 0 111,504
Loss on abandonment
of property 0 0 (1,459,495) 0 0 0 (1,459,495)
------------ -------------- ---------- ---------- ------------- ---------- ------------
1,038 182,115 (959,475) 3,994 3,407,645 0 2,635,317
------------ -------------- ---------- ---------- ------------- ---------- ------------
BALANCE,
AUGUST 31, 1998 199,036 1,892,425 0 446,926 3,407,645 0 5,946,032
------------ -------------- ---------- ---------- ------------- ---------- ------------
EXPENDITURES FOR 1999
Acquisition costs 0 0 0 38,327 15,235 59,285 112,847
Labour 0 0 0 0 128,604 0 128,604
Property tax 0 0 0 0 28,479 0 28,479
Travel 0 231 0 0 4,525 0 4,756
Accommodation and meals 0 0 0 0 113 0 113
Recording fee 0 0 0 1,546 4,984 0 6,530
Consulting 0 12,045 0 0 36,558 0 48,603
Supplies 0 0 0 905 114,623 0 115,528
Assays 0 0 0 0 50,792 0 50,792
Miscellaneous 0 321 0 1,534 4,672 0 6,527
Storage 0 0 0 1,274 0 0 1,274
Equipment 0 0 0 0 113,232 0 113,232
Legal 0 0 0 0 4,355 0 4,355
Drilling 0 0 0 0 196,784 0 196,784
------------ -------------- ---------- ---------- ------------- ---------- ------------
0 12,597 0 43,586 702,956 59,285 818,424
------------ -------------- ---------- ---------- ------------- ---------- ------------
BALANCE,
AUGUST 31, 1999 $ 199,036 $ 1,905,022 $ 0 $ 490,512 $ 4,110,601 $ 59,285 $ 6,764,456
============ ============== ========== ========== ============= ========== ============
</TABLE>
END 8PT TYPE
See notes to consolidated financial statements.
33
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
1. NATURE OF OPERATIONS
The Company was incorporated under the laws of British Columbia and was
continued into the Yukon Territory of Canada in 1998. The principal business
activity is the exploration and development of natural resource properties.
These consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Nevada Star Resource Corp. (U.S.), a Nevada
corporation, and Nevada Star Resource de Mexico, S.A. de C.V., a wholly-owned
subsidiary of Nevada Star Resource Corp. (U.S.). All significant intercompany
balances and transactions have been eliminated.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Investments in and expenditures on resource properties
Acquisition costs of mineral properties, rights and options together with direct
exploration and development expenditures thereon are deferred in the accounts on
a property-by-property basis. The expenditures related to a property from which
there is production, together with the costs of production equipment, will be
depleted and depreciated using the unit-of-production method based upon the
estimated proven reserves. When there is little prospect of further work on a
property being carried out by the Company or when minerals cannot be
economically removed due to the current market price of the minerals, the costs
of the property are charged to operations.
(b) Amortization
Amortization of capital assets is calculated on a declining balance basis at the
following annual rates:
Office equipment - 20%
Computer equipment - 30%
(c) Financial instruments
The Company's financial instruments consist of cash, accounts receivable,
accounts payable and due to shareholder. It is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments. The fair value of these financial instruments
approximate their carrying value, unless otherwise noted.
(d) Loss per share
Loss per share computations are based on the weighted average number of common
shares outstanding during the year.
34
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(f) Foreign Currency Translation
Amounts recorded in foreign currency are translated into Canadian dollars as
follows:
(i) Monetary assets and liabilities at the rate of exchange in effect as at
the balance sheet date;
(ii) Non-monetary assets at the exchange rates prevailing at the time of the
acquisition of the assets; and,
(iii) Revenues and expenses (excluding amortization which is translated at
the same rate as the related asset), at the average rate of exchange for the
year.
Gains and losses arising from this translation of foreign currency are included
in net loss.
3. REALIZATION OF ASSETS
The Company's investments in and expenditures on resource properties comprise
significantly all of the Company's assets. Realization of the Company's
investments in and expenditures on these properties is dependent on the
attainment of successful commercial production or from the proceeds of their
disposal.
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES
(a) Eagle (Rio Yaqui) Claims, Sonora, Mexico
By a Letter of Agreement dated October 29, 1992 (as amended) the Company may
earn a 100% interest (subject to a 2% net smelter returns royalty) in the rights
to extract gold from mining claims known as Eagle, Eagle I, Eagle II, and Yaqui
located in the Soyopa and Onaves mining districts, State of Sonora, Mexico.
Consideration consists of
- - a cash payment of $95,500 U.S. for reimbursement of the vendor's
out-of-pocket costs (paid).
- - the issuance of 200,000 shares of the Company's capital stock as follows:
50,000 shares upon the acceptance of the Agreement by regulatory authorities
(issued in fiscal 1994) and 50,000 shares each at the time of filing of the next
three engineers reports recommending work programs of minimum $25,000 U.S. each
on the project. The first work program was completed in fiscal 1995 and 50,000
shares were issued.
35
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES (Continued)
Deferred exploration and development expenditures of $48,110 Cdn. have been
incurred to date by the Company on the property.
(b) Rainier (La Cienega) Property, Sonora, Mexico
By an agreement dated February 28, 1994 between the Company and Pacific Rainier
de Mexico ("PRM"), the Company can earn a 90% interest in mining claims known as
the Rainier 1 through Rainier 6 located in the Golden Triangle District, State
of Sonora, Mexico. Consideration will be repayment of substantiated costs of
$913,099 U.S. expended to date by PRM on the property, and the issuance of
1,400,000 shares of the Company when a mine is developed and commences
production provided that an independent valuation report confirms a net present
value (net of all costs and previous consideration) for the 90% interest of at
least $1,190,000 Cdn. This is a non-arm's length transaction. The
out-of-pocket costs of $913,099 U.S. were settled by the issuance of a two-year
convertible debenture bearing interest at 6% and convertible at $0.85 Cdn. per
share in the first year and at $0.98 Cdn. per share in the second year.
Exchange in the conversion is fixed at $1.40 Cdn. for $1.00 U.S. The debenture
was converted into 1,596,215 shares at $0.85 Cdn. per share in fiscal 1996.
By an amended agreement with K.L.S. Enviro Resources, Inc. ("KLS") in 1995, KLS
will earn a 50% interest in the Rainier (La Cienega) Property. To earn this
interest, KLS must pay to PRM $90,000 U.S. in holding costs, one-half in cash
and one-half in KLS stock. In addition, KLS must pay $120,000 U.S. of the total
$150,000 U.S. advance royalty owing on the Ryan Lode project should the
pre-feasibility study prove positive. The Company will be required to pay the
remaining $30,000 U.S. at this time. Upon payment of the $120,000 U.S. for the
Ryan Lode Project and payment of the $90,000 U.S. to PRM, KLS will have earned
its 50% interest in the Rainier (La Cienega) Property claims.
KLS did not complete their portion of the agreement to this point, consequently
they lost their interest in the Rainier (La Cienega) property.
Deferred exploration and development expenditures of $439,916 Cdn. have been
incurred to date by the Company on the property.
The Company owns 100% right, title and interest in and to Mineral Concession
#199518 La Esperanza within the Rainier II claim, Sonora State of Mexico. The
property was acquired on June 6, 1994 by issuing 100,000 shares of the Company
(deemed value $80,000), payment of $9,809 U.S. cash and the retention by Edward
Ingham of a 2% net smelter return.
The Company owns 100% right, title and interest in and to Mineral Concession
#199397 La Japonesa within the Rainier I claim, Sonora State of Mexico. The
property was acquired on June 6, 1994 by issuing 100,000 shares of the Company
(deemed value $80,000), payment of $8,649 U.S. cash and the retention by Donald
Randolph of a 2% net smelter return.
36
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES (Continued)
(c) La Virgen, Michoacan, Mexico
On June 12, 1996, the Company signed an option to acquire a copper oxide
property consisting of 1,500 acres of Mexican mining claims controlled by Minera
Virgo SA de C.V. under a renewable 25 year mining exploration license granted to
Minera Virgo in December, 1990.
The agreement provides for a total of $3 million U.S. to be paid to Minera Virgo
over a 3.5 year period and a 3% net smelter royalty on production of the first
50 million pounds of copper as follows:
PAYMENT (U.S.) DUE DATE
- ---------------- --------
$ 25,000 Paid
250,000 Paid
225,000 Paid
500,000 February 19, 1998
1,000,000 February 19, 1999
1,000,000 February 19, 2000
- ----------------
$ 3,000,000
================
The royalty escalates as additional copper is discovered and produced and is
capped at 7% after 300 million pounds of copper have been produced.
During 1996, the Company paid Minera Virgo $25,000 U.S. for an exclusive 75 day
option on the property, during which time the Company conducted its due
diligence review. Subsequent to the review, the Company transferred $250,000
U.S. into trust to be released as part of the $3 million U.S. payment after the
vendor fulfils its obligations. The $250,000 U.S. was paid from trust on
various dates during October 1996 with the remaining portion being paid in
January 1997. In addition, on February 19, 1997 an additional $225,000 U.S. was
paid to Minera Virgo.
The Company had expected to invest approximately $4.8 million U.S. in plant and
equipment on the property and spend $500,000 U.S. in exploration, reserve
certification and condemnation work on the property during and after the due
diligence period.
A finder's fee was payable as follows:
Common shares
(i) 50,000 common shares in the capital stock of the Company upon
acceptance by the Vancouver Stock Exchange of the acquisition of the property.
(Issued)
(ii) 50,000 common shares in the capital stock of the Company on February
19, 1997. (Issued)
(iii) 100,000 common shares in the capital stock of the Company on February
19, 1998.
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES (Continued)
Share Purchase Warrants
(iv) 50,000 non-transferable share purchase warrants, exercisable at a
price of $1 per share after VSE acceptance to June 4, 1997. (Issued)
(v) 50,000 non-transferable share purchase warrants, exercisable at a
price of $1 per share from February 19, 1997 to June 4, 1997. (Issued)
(vi) 100,000 non-transferable share purchase warrants, exercisable at $1.50
per share from February 19, 1998 to June 4, 1998.
In the event the Company arranged plant financing, estimated at $5 million U.S.
and the plant was 75% complete as confirmed by an independent engineer, all of
the unissued common shares and share purchase warrants were to be issued to the
finder.
The property acquisition payment due on February 19, 1998 was not paid, the
Company is in default and loses all rights to the claims. All expenditures on
this property have been charged to operations in the 1998 fiscal year.
(d) Gold Hill Property, Nevada
By an amended agreement dated September 26, 1997 between the Company and Everett
L. Manley (the "Vendor"), the Company has an option to purchase 53 mining claims
in the Round Mountain Mining District, Nye County, Nevada located four miles
north of Round Mountain in consideration of $1,010,000 U.S. over 10 years in
annual payments on October 1, $25,000 in each of 1997, 1998, 1999, $50,000 in
each of 2000 and 2001, $100,000 in each of 2002 and 2003, $140,000 in 2004 and
$200,000 in each of 2005 and 2006. As at August 31, 1998, the Company had paid
$155,000 U.S. to the Vendor.
By an amended agreement dated June 2, 1998 between the Company and Hagel Augen,
the latter will earn a 100% working interest in the Gold Hill Property. Hagel
Augen is committed to the following payments and investments on the property:
- - a cash payment of $53,000 U.S. (paid) upon execution of the agreement.
- - a cash investment of $147,000 U.S. in the property which includes 1998
property maintenance payments on or before December 31, 1998.
- - a cash investment of $400,000 U.S. in the property which includes 1999
property maintenance payments on or before December 31, 1999.
- - a cash investment of $500,000 U.S. in the property which includes year
2000 property maintenance payments on or before December 31, 2000.
38
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES (Continued)
- - a cash investment of $500,000 U.S. in the property which includes year
2001 property maintenance payments on or before December 31, 2001.
- - a cash investment of $500,000 U.S. in the property which includes year
2002 property maintenance payments on or before December 31, 2002.
- - a cash investment of $500,000 U.S. in the property which includes year
2003 property maintenance payments on or before December 31, 2003.
Deferred exploration and development expenditures of $312,026 Cdn. have been
incurred to date by the Company on the property.
(e) OK Copper Mine, Utah
By an agreement dated November 7, 1997 between the Company and Centurion Mines
Corporation (the "Vendor"), the Company purchased copper properties in four
townships in Beaver County, Utah. Consideration is the issuance of 2 million
common shares of the Company (issued). The Vendor also retains a 12% net
profits interest to apply to all copper production coming from any claims.
Deferred exploration and development expenditures of $1,917,360 have been
incurred to date by the Company on the property.
A finder's fee of 150,000 shares at a price of $0.65 Cdn. was paid in fiscal
1998.
(f) Beaver Lake, Utah
By an agreement dated November 4, 1997 between the Company and Cortex Mining &
Exploration Co. Inc. (the "Vendor"), the Company purchased mining claims in
Beaver County, Utah. Consideration is 2 million common shares of the Company
issued in two tranches: one million shares upon closing (issued) and another one
million upon the Company's successful completion of a favourable feasibility
study or upon commencement of commercial production. The Vendor also retains a
2% net smelter return royalty which will not exceed 3 million dollars (U.S.) in
aggregate. The Company also granted Cortex one million warrants for the
Company's common shares exercisable at $1.00 per share.
A finder's fee of 75,000 shares at a price of $0.65 Cdn. each was paid in fiscal
1998.
39
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
4. INVESTMENTS IN AND EXPENDITURES ON RESOURCE PROPERTIES (Continued)
(g) PGM Property, Alaska
The Company has acquired approximately 10,620 acres consisting of 345 mining
claims located near Braxon Gulch and Tangle Lakes, Alaska, by way of gift from a
shareholder, director and officer. On January 5, 1999 the Company entered into
an understanding with M.A.N. Resources Inc. ("MAN") whereby the claims were
leased to MAN for ten years on condition that MAN explore and develop minerals
thereon. In return, MAN will earn a net 75% working interest in the claims upon
expending U.S. $75,000 on exploration and development costs within the first
twenty four months of the lease. To maintain its working interest at 25%, the
Company is required to pay MAN 25% of all exploration and development costs in
excess of the initial U.S. $75,000 spent by MAN on the claims. Failure to
contribute its share will reduce the Company's interest but not to less than 1%
of gross proceeds of sale of minerals from the claims. Additionally, MAN may
acquire all right, title and interest of the Company in the claims in
consideration for 106,200 shares in the capital stock of MAN if tendered on or
before the second anniversary date of the lease agreements.
5. CAPITAL ASSETS
<TABLE>
1999
ACCUMULATED
--------------------------------------------
COST AMORTIZATION NET
------------ ------------ ------------
<S> <C> <C> <C>
Office Equipment $ 15,021 $ 11,565 $ 3,456
Computer equipment 6,234 5,357 877
------------ ------------ ------------
$ 21,255 $ 16,922 $ 4,333
============ ============ ============
1998
ACCUMULATED
--------------------------------------------
COST AMORTIZATION NET
------------ ------------ ------------
Office Equipment $ 15,021 $ 10,701 $ 4,320
Computer equipment 6,234 4,981 1,253
------------ ------------ ------------
$ 21,255 $ 15,682 $ 5,573
============ ============ ============
</TABLE>
40
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
6. CAPITAL STOCK
(a) Authorized
100,000,000 Common shares without par value
(b) Issued
<TABLE>
1999 1998
--------------------------- ---------------------------
NUMBER NUMBER
OF SHARES AMOUNT OF SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, Beginning of Year 23,461,738 $ 9,704,111 17,421,685 $ 6,367,317
Issued during year
For cash on exercise of
share purchase options 1,791,649 826,144 1,293,823 509,530
For cash, private placements 0 0 1,013,418 557,380
For cash on exercise of
share purchase warrants 0 0 507,812 189,299
For settlement of debt 3,258,043 847,483 0 0
For resource property
acquisition (note 4(e)(f)) 0 0 3,000,000 1,950,000
For finder's fee 0 0 225,000 146,250
Listing costs 0 0 0 (15,665)
------------ ------------ ------------ ------------
5,049,692 1,673,627 6,040,053 3,336,794
------------ ------------ ------------ ------------
Balance, End of Year 28,511,430 $ 11,377,738 23,461,738 $ 9,704,111
============ ============ ============ ============
</TABLE>
(c) At August 31, the following share purchase options were outstanding
<TABLE>
EXERCISE NUMBER OF SHARES
EXPIRY DATE PRICE 1999 1998
- --------------------------- ------------- ------------- ------------
<S> <C> <C> <C>
December 21, 1998 $ 0.22 0 150,000
March 12, 1999 $ 0.55 0 215,040
November 20, 1999 $ 0.64 0 430,855
July 20, 2000 $ 0.49 0 1,550,279
March 2, 2001 $ 0.30 2,314,525 0
</TABLE>
41
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
6. CAPITAL STOCK (Continued)
(d) At August 31, the following share purchase warrants were outstanding
<TABLE>
EXERCISE NUMBER OF SHARES
EXPIRY DATE PRICE 1999 1998
- --------------------------- ------------- ------------- ------------
<S> <C> <C> <C>
September 16, 1998 $ 0.55 0 135,417
February 19, 1999 $ 0.575 0 1,000,000
February 15, 2000 $ 0.70 1,013,418 1,013,418
June 4, 2000 $ 1.00 1,000,000 1,000,000
</TABLE>
7. RELATED PARTY TRANSACTIONS
Related party transactions consist of the following:
(a) Management fees of $Nil (1998 - $Nil; 1997 - $12,000) paid to directors,
officers and shareholders. Directors' fees of $2,600 were paid in 1998.
(b) Office and miscellaneous expense includes $Nil (1998 - $Nil; 1997 -
$6,000) paid to a director for secretarial services.
(c) Consulting fees of $25,000 (1998 - $32,500; 1997 - $30,000) paid to an
officer.
(d) An option to acquire a 100% interest in the Eagle (Rio Yaqui) Claims
(note 4(a)) and an agreement to acquire a 90% interest in the Rainier claims in
Mexico (note 4(b)) are both from a director and officer.
(e) The PGM property claims in Alaska were acquired from a director,
shareholder and officer (note 4(g)).
(f) Investment in and expenditures on resource properties includes $121,675
(1998 - $77,735; 1997 - $30,538) paid in the year to directors (and related
persons) and/or Companies controlled by directors for geological consulting
services and labour.
(g) A shareholder and director has made advances to the Company which were
outstanding in whole or in part at the year-end in the amount of $543,960 (1998
- - $718,606, 1997 - $400,077). These advances are non-interest bearing.
8. COMMITMENTS
The Company is committed to minimum rental payments of U.S. $189,950 under
operating equipment leases expiring in 2005. Commitments in each of the next
five years are as follows:
2000 U.S. $49,500
2001 U.S. 49,500
2002 U.S. 49,500
2003 U.S. 31,800
2004 U.S. 9,650
42
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
9. INCOME TAX LOSSES
The Company has operating losses which may be carried forward to apply against
future years' income for Canadian income tax purposes. The tax effect has not
been recorded in the financial statements. These losses expire as follows:
AVAILABLE
TO 1999 1998
- --------- ---------- ----------
1999 $ 0 $ 245,000
2000 184,000 184,000
2001 211,000 211,000
2002 338,000 338,000
2003 321,000 321,000
2004 214,000 214,000
2005 204,000 204,000
2006 115,000 0
---------- ----------
$1,587,000 $1,717,000
10. YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 Issue may be experienced before, on, or
after January 1, 2000 and, if not addressed, the impact on operations and
financial reporting may range from minor errors to significant systems failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the issue affecting the
Company, including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP)
(a) Exploration expenditures
Under Canadian GAAP acquisition costs and exploration expenditures are
capitalized (note 2(a)).
Under US GAAP, exploration costs incurred in locating areas of potential
mineralization are expensed as incurred. Commercial feasibility is established
in compliance with Industry Guide 7 which consists of identifying that part of a
mineral deposit that could be economically and legally extracted or produced at
the time of the reserve determination. After an area of interest has been
assessed as commercially feasible, expenditures specific to the area of interest
for further development are capitalized. In deciding when an area of interest
is likely to be commercially feasible, management may consider, among other
factors, the results of prefeasibility studies, detailed analysis of drilling
results, the supply and cost of required labour and equipment, and whether
necessary mining and environmental permits can be obtained.
43
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP) (Continued)
Under US GAAP, mining projects and properties are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
these assets may not be recoverable. If estimated future cash flows expected to
result from the use of the mining project or property and its eventual
disposition are less than the carrying amount of the mining project or property,
an impairment is recognized based upon the estimated fair value of the mining
project or property. Fair value generally is based on the present value of
estimated future net cash flows for each mining project or property, calculated
using estimated mineable reserves and mineral resources based on engineering
reports, projected rates of production over the estimated mine life, recovery
rates, capital requirements, remediation costs and future prices considering the
Company's hedging and marketing plans.
The effect on the statements of operations, balance sheet and loss per share
figures are set out below:
44
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
<TABLE>
1999 1998 1997
-------------- -------------- --------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS FOR THE
YEAR ENDED AUGUST 31
Reconciliation of net loss from
Canadian GAAP to US GAAP
Net loss per Canadian GAAP $ (117,068) $ (1,666,820) $ (650,661)
Acquisition of mineral properties (112,848) (2,182,744) (765,933)
Deferred exploration and
development costs (705,576) (1,912,068) (278,258)
-------------- -------------- --------------
Net loss per US GAAP $ (935,492) $ (5,761,632) $ (1,694,852)
-------------- -------------- --------------
Loss per share in accordance
with US GAAP $ (0.04) $ (0.30) $ (0.10)
-------------- -------------- --------------
BALANCE SHEET AS AT AUGUST 31
Resource properties
Canadian GAAP 6,764,456 5,946,032 3,310,715
-------------- -------------- --------------
Adjustment to U.S. GAAP (6,764,456) (5,946,032) (3,310,715)
-------------- -------------- --------------
Resource properties in
accordance with U.S. GAAP $ 0 $ 0 $ 0
-------------- -------------- --------------
Deficit
Canadian GAAP (5,153,428) (5,036,360) (3,369,540)
-------------- -------------- --------------
Adjustment to U.S. GAAP (6,764,456) (5,946,032) (3,310,715)
-------------- -------------- --------------
Deficit in accordance with
U.S. GAAP (11,917,884) (10,982,392) (6,680,255)
-------------- -------------- --------------
Shareholders' equity per
Canadian GAAP 6,224,310 4,667,751 2,997,777
-------------- -------------- --------------
Adjustment to US GAAP
Acquisition cost and exploration
costs on resource properties (6,764,456) (5,946,032) (3,310,715)
-------------- -------------- --------------
Shareholders' equity per
U.S. GAAP $ (540,146) $ (1,278,281) $ (312,938)
============== ============== ===============
45
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP) (Continued)
(b) Statements of cash flows
The statements of cash flows have been prepared in accordance with Canadian
GAAP.
Under Canadian GAAP, cash and equivalents is defined as cash net of short-term
borrowings. Under U.S. GAAP, short-term borrowings are considered a financing
activity.
(c) Recent accounting pronouncements
(i) Earnings per share
In February 1997, the Financial Accounting Standards Board issued SFAS 128,
"Earnings Per Share:, and SFAS 129, "Disclosure of Information about Capital
Structure". SFAS 128, which is effective for fiscal years ending after December
15, 1997, including interim periods, requires the presentation of basic and
diluted earnings per share ("EPS"). The Company's adoption of SFAS 128 for U.S.
GAAP purposes results in no difference in net loss disclosure.
(ii) Income tax
Under Canadian GAAP, the future tax benefit related to the non-capital loss
carry forwards have not been recorded in the accounts. Under U.S. GAAP,
companies must follow the requirements of Statement of Financial Accounting
Standards No. 109 (SFAS 109) which requires the use of the asset/liability
method for measurement of tax liabilities, wherein deferred tax assets are
recognized as well as deferred tax liabilities.
The Company has significant non-capital loss carryforwards (note 9). SFAS 109
would require the recognition of a long-term tax asset for the future benefit
expected from the application of these carryforwards to future profitable years.
If it is expected that the entire amount of non-capital loss carryforwards will
not be utilized, then a valuation allowance is applied to the asset to
reasonably state the asset at its expected value. Under SFAS 109, disclosure of
the amount of the valuation allowance is required. As at August 31, 1999, the
valuation allowance is equal to 100% of the deferred tax asset.
(iii) Other items
SFAS 130, "Reporting Comprehensive Income" and SFAS 131, "Disclosures About
Segments of an Enterprise and Related Information" were also issued in 1997.
These standards became effective in 1998, expand or modify disclosures and,
accordingly, have no effect on the Company's consolidated financial position,
results of operations or cash flows.
46
<PAGE>
NEVADA STAR RESOURCE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
(CANADIAN DOLLARS)
11. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP) (Continued)
(d) Stock based compensation
From time to time the Company grants incentive stock options to officers,
directors and consultants. For Canadian accounting purposes there is no
compensation recognition when the option is granted or exercised.
For US GAAP purposes the Company applies APB Opinion No. 25 and related
interpretations in accounting for its stock option plans and, accordingly, no
compensation cost has been recognized because stock options granted under the
plans were at exercise prices which approximate market value at date of grant.
Compensation expense will be recorded when options are granted to management at
discounts to market.
47
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
PART III
</TABLE>
<TABLE>
ITEM 1. INDEX TO EXHIBITS.
<S> <C>
(1) Underwriting agreement N/A
(2) Plan of acquisition, reorganization arrangement, liquid, or succession. N/A
(3) (i) Certificate and Memorandum of Incorporation Page 50
(ii) Articles Page 51
(iii) Certificate and Articles of Continuance Page 68
(4) Instruments defining the rights of holders, including indentures N/A
(5) Opinion re: legality N/A
(6) No exhibit required N/A
(7) [Removed and reserved] N/A
(8) Opinion re: tax matters N/A
(9) Voting trust agreement N/A
(10) Material contracts
(i) Gold Hill Project Agreements "P"
(ii) Milford District Agreements "P"
(iii) La Cienega (Rainier) Agreements "P"
(iv) Eureka Creek Memorandum of Understanding Page 72
(11) Statement re: computation of per share earnings N/A
(12) No exhibit required N/A
(13) Annual or quarterly reports, Form 10-Q N/A
(14) [Removed and reserved] N/A
(15) Letter on unaudited interim financial information N/A
(16) Letter on change in certifying accountant N/A
(17) Letter on director resignation N/A
(18) Letter on change in accounting principles N/A
(19) Reports furnished to security holders N/A
(20) Other documents or statements to security holders N/A
(21) Subsidiaries of the registrant Page 82
(22) Published report regarding matters submitted to vote N/A
(23) Consent of experts and counsel N/A
(24) Power of attorney N/A
(25) Statement of eligibility of trustee N/A
(26) Invitations for competitive bids N/A
(27) Financial Data Schedule Filed Electronically Only
(28) [Removed and reserved]
[Reserved (29) through (98)]
(99) Additional Exhibits N/A
</TABLE>
ITEM 2. DESCRIPTION OF EXHIBITS.
Not Applicable
48
<PAGE>
NEVADA STAR RESOURCE CORP.
FORM 10 SB/A
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated this 10th day of April, 2000.
NEVADA STAR RESOURCE CORP.
By: /s/ Monty D. Moore
----------------------------
Monty D. Moore, President
49
EXHIBIT 3(i)
Memorandum of Incorporation
COMPANY ACT
MEMORANDUM
NEVADA STAR RESOURCE CORP.
I wish to be formed into a Company with limited liability under the
Company Act in pursuance of this Memorandum.
1. The name of the Company "NEVADA STAR RESOURCE CORP."
2. The authorized capital of the Company consists of 100,000,000
Common shares without par value.
3. I agree to take the number of shares in the Company set opposite
my name below.
FULL NAME, RESIDENT ADDRESS NUMBER OF SHARES
AND OCCUPATION OF SUBSCRIBER TAKEN BY SUBSCRIBER
One Common Share
Jill Gamley without par value
#9 35 West 3rd Avenue
Vancouver, B.C.V6J lL4
Corporate Records Assistant
TOTAL SHARES TAKEN: One Common Share
without par value
DATED at Vancouver, British Columbia, this 24th day of April, 1987.
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EXHIBIT 3.(ii)
Articles of Nevada Star Resource Corp.
'COMPANY ACT'
ARTICLES
OF
NEVADA STAR RESOURCE CORP.
TABLE OF CONTENTS
PART ARTICLES PAGES
1 DEFINITIONS AND CONSTRUCTION 1 - 3 1
2 SHARE CAPITAL 4 - 8 2
3 REGISTRATION OF MEMBERS AND
SHARE CERTIFICATES 9 - 13 2 - 4
4 TRANSFER AND TRANSMISSION OF
SHARES AND DEBENTURES 14 - 22 4 - 7
5 GENERAL MEETINGS 23 - 41 7 - 11
6 DIRECTORS 42 - 61 11-15
7 MANAGEMENT OF THE COMPANY 62 15
8 BORROWING AND MORTGAGING 63 - 65 15
9 SAFEGUARDING, INDEMNITY, ETC.
OF DIRECTORS 66 - 69 16
10 EXECUTION OF DOCUMENTS 70 - 73 17
11 DIVIDENDS 74 - 80 17
12 NOTICES 81 - 84 18 - 19
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'COMPANY ACT'
ARTICLES
OF
NEVADA STAR RESOURCE CORP.
PART I - DEFINITIONS AND CONSTRUCTION
1. In these Articles, except as the context otherwise requires:
(a) "board" means the board of directors for the time being of
the Company;
(b) "Company Act" means the Company Act (British Columbia) and
regulations thereunder from time to time in force;
(c) "registered address" of a member means the address of the
member as recorded in the Company's register of members;
(d) "registered address" of a director means the address of the
director as recorded in the Company's register of directors;
(e) words or expressions contained in these Articles bear the
same meaning as in the Company Act or any statutory
modification thereof in force on the date on which these
Articles come into effect;
(f) expressions referring to writing include printing,
typewriting, lithography, photography and any other means of
presenting language in visible and lasting form; and
(g) words importing the singular include the plural and vice
versa, words importing a male person include a female, and
words importing an individual include a corporation.
2. If any provision of these Articles is in whole or in part void,
illegal or invalid, the remaining provisions will be construed
and take effect as if every provision or part thereof which so
offends had been omitted.
3. If there is any conflict between the provisions of these Articles
and the Memorandum of the Company, the provisions of the
Memorandum will govern.
PART 2 - SHARE CAPITAL
4. The Company may allot and issue its shares at such times, in such
manner and to such persons, or class of persons, as the directors
determine.
5. The board will determine the price or consideration at or for
which the shares are to be allotted and issued.
6. The Company may by resolution of the board purchase any of its
issued shares.
7. The Company may by ordinary resolution alter its Memorandum to
increase its authorized capital by:
(a) creating shares with par value or shares without par value
or both;
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(b) increasing the number of shares of any class with par value
or shares of any class without par value or both; or
(c) increasing the par value of a class of shares with par
value, if no shares of that class are issued.
8. The Company may, to the extent permitted by law, pay a commission
or allow a discount to any person in consideration of his
subscribing or agreeing to subscribe, whether absolutely or
conditionally, or procuring or agreeing to procure subscriptions,
whether absolute or conditional, for shares in the capital of the
Company.
PART 3 - REGISTRATION OF MEMBERS AND SHARE CERTIFICATES
9. Except as these Articles otherwise provide, the Company and its
directors, officers and agents may treat the registered holder of
a share as the absolute owner thereof, and will not, except as
required by statute or as ordered by a court of competent
jurisdiction, be bound to recognize even when having notice
thereof, any claim to, interest in, or right in respect of such
share on the part of any other person.
10. A share held in the names of two or more persons will be deemed
to be held jointly.
11. Except in the case of the personal representatives of, or
trustees of the estate of, a deceased member, the Company may
refuse to register more than three persons as joint holders of a
share.
12. A share certificate may be delivered to a member entitled thereto
by mailing it by prepaid registered post in the manner provided
in these Articles for the giving of notices, or otherwise as
directed by the member in writing, and neither the Company nor
its transfer agent will be liable for any loss occasioned to a
member or person claiming through a member by reason that a share
certificate so mailed or so otherwise sent is not received by the
addressee.
13. A certificate for a share registered in the names of two or more
persons may be delivered to or to the direction of any one of
them.
PART 4 - TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES
14. For the purpose of countersigning, issuing, registering,
transferring, canceling and certifying the shares and share
certificates of the Company, the Company may appoint
(a) a registrar;
(b) one or more transfer agents, one of whom may be the
registrar; and
(c) one or more branch transfer agencies and securities
registrars both in and outside British Columbia.
15. For the purpose of these Articles "instrument of transfer" means:
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(a) such form of transfer as may appear on the back of the share
certificate representing the share proposed to be
transferred; or
(b) such form of separate transfer document as may from time to
time be in general use.
16. (1) In order to effect a transfer of a share:
a) an instrument of transfer must be executed by the
registered holder of the share, or his attorney duly
authorized in writing;
b) unless the proposed transferee has acquired the share
through a registrant, he will, if not a member, execute
an acknowledgment that he agrees to become a member;
c) the execution of the instrument of transfer and any
acknowledgment must be attested and validated as in
either case the board from time to time reasonably
requires; and
d) the certificate representing the share to be
transferred, the instrument of transfer and the
acknowledgment, if required, will be delivered to the
Company's transfer agent or, if the Company has no
transfer agent, to the records office of the Company.
(2) There shall be a separate instrument of transfer for each
class of shares proposed to be transferred.
(3) When the transfer agent or the Company receives for the
purpose of a proposed share transfer a duly executed
instrument of transfer, the Company and its directors,
officers and agents, will:
(a) where the instrument of transfer designates the
transferee; or
(b) where the instrument of transfer was executed and is
delivered in blank, and the person by or on whose behalf
the instrument of transfer is delivered designates in
writing a transferee; be entitled to treat the person so
designated as the beneficial owner of:
(c) if the instrument of transfer is endorsed on a share
certificate, the number of shares represented by the
certificate or such lesser number as may be specified in
the instruments of transfer; or
(d) if the instrument of transfer is not so endorsed, such
number of shares registered in the name of the
transferor as are represented by every unendorsed
certificate deposited with the Company or its transfer
agent for the purpose of the transfer, or such lesser
number as may be specified in the instrument of
transfer; and upon compliance with, and subject to all
other provisions of these Articles, the Company will
cause the name of the proposed transferee to be entered
in the register of members of the Company as holder of
each such share.
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17. A share may be registered in the name of a person as executor,
administrator, guardian, committee, curator or trustee of, or
otherwise as fiduciary for, a named person, trust or estate, and
(a) where application is made to issue or transfer a share to a
fiduciary, the Company will be obliged to inquire into the
authority of the fiduciary, who will be presumed, as against
the Company, to be acting in accordance with his authority
unless, in the case of a transfer of a share, the transfer
proposed is from the person whose estate or interest is
sought to be represented;
(b) in the case of a transfer by a fiduciary, including a
transfer by a fiduciary to himself, the Company will not be
obligated to inquire into the authority of the fiduciary or
the propriety of the transaction or to ascertain whether the
fiduciary continues to occupy his office at the time of
transfer;
(c) in all cases the Company will be entitled to act on an order
of a court of record, wherever constituted or having
jurisdiction in proceedings to which the registered holder
appears from the order to have been subject, directing a
vesting or declaring the ownership of shares, as evidenced
by a copy of the order of the court certified as such in
accordance with the practice of the court;
(d) any grant of letters probate or letters of administration or
order appointing a trustee, guardian, committee, curator or
directing a vesting or declaring the ownership of shares,
dated not more than one year before the date on which a copy
of the grant or order, certified in accordance with the
practice of the authority issuing the grant or order, is
received by the Company or its transfer agent, will be
deemed to be in full force and effect and not to have been
amended, revoked or reversed, unless and until there is
delivered to the transfer agent of the Company or, if the
Company has no transfer agent, to the records office of the
Company
(i) a certificate of a court of record appearing to have
the required jurisdiction, certified in accordance
with the practice of such court, that proceedings
have been commenced by way of appeal or otherwise to
amend, revoke or reserve the grant or order, or
(ii) a copy of an order of a court of record appearing to
have the necessary jurisdiction certified as
aforesaid, by which the earlier grant or order is
amended, revoked or reversed; and
(e) any certificate or a court of record, certified as
aforesaid, and delivered to the transfer agent of the
Company or, if the Company has no transfer agent, to the
records office of the Company, to the effect that any grant
or order of that court of the nature described in clause (d)
remains in full force and effect, and has not been amended,
revoked or reversed and that there is not outstanding with
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respect to the grant or order any proceeding of the nature
referred to in subclause (d)(i), will create the same
presumption as to the validity of the grant or order as
though the grant or order bore the same date as the
certificate.
18. The Company or its registrar or transfer agent may refuse to
recognize the transfer of a share to an infant, bankrupt or
person suffering mental infirmity.
19. Where a transfer of a share is completed by registration in the
register of members of the Company, the instrument of transfer
and any accompanying acknowledgment will be retained by the
Company or its transfer agent but where the Company declines to
complete a proposed transfer of a share the instrument of
transfer, share certificate and other documentation deposited for
the purpose of the transfer will, on demand, be returned to the
person depositing the same, or other person entitled thereto.
20. There must be paid to the Company or its transfer agent in
respect of the registration of any transfer or transmission such
fee as the board determines.
21. (1) The personal representative of a deceased member (not being
one of several joint holders) will be the only person
recognized by the Company as having any title to a share
registered in the name of the deceased.
(2) On the death of one of joint registered holders of a share,
the survivor or survivors will be the only person or persons
recognized by the Company as having any title to or interest
in the share.
22. The Company may, if authorized by a debenture or any trust
indenture pursuant to which a registered debenture has been
issued, cause to be kept one or more branch registers of its
debenture holders.
PART 5 - GENERAL MEETINGS
23. General meetings of the Company will be held at such time and
place, in accordance with the Company Act and these Articles as
the board determines.
24. Notice of a meeting is sufficient if it specifies the place, the
day and the hour of the meeting and the general nature of any
business to be considered at the meeting.
25. The accidental omission to give notice of a general meeting to,
or the non-receipt of such notice by, any of the persons entitled
to receive the notice will not invalidate any proceedings of that
meeting or any meeting adjourned therefrom.
26. The quorum for the transaction of business at a general meeting
is two individuals present at the commencement of the meeting
holding or representing by proxy the holder or holders of shares
carrying not less than one-twentieth of the votes eligible to be
cast at the meeting.
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27. Unless a quorum is present at the commencement of a general
meeting, no business may be transacted other than the selection
of the chairman and the adjournment or termination of the
meeting.
28. If by half an hour after the time appointed for a general meeting
a quorumis not present, the meeting, if convened upon
requisition, will be terminated, and in any other case will stand
adjourned to the same day in the next week at the same time and
place, or to such later date, other time or other place as the
chairman specifies on the adjournment, and if at the adjourned
meeting a quorum is not present by half an hour after the time
appointed for the meeting, the meeting will then terminate.
29. The chairman of a general meeting will be:
(a) the chairman of the board, if any; or
(b) if there is no such chairman or if he is absent or unwilling
to act,the president; or
(c) so failing the president, a director present chosen by the
directors present; or
(d) if no such director is chosen and willing to act, any
individual present as a member, proxy holder, or
representative of a corporate member who is duly chosen by
the individuals so present.
30. (1) The chairman may, with the consent of the meeting at which a
quorum is present, and will in pursuance of a resolution to
that effect, adjourn the meeting from time to time and from
place to place, but no business will be transacted at an
adjourned meeting other than the business left unfinished at
the meeting from which the adjournment takes place.
(2) No notice need be given of an adjournment or of the business
to be conducted at an adjourned meeting unless the meeting
is adjourned for more than 31 days, in which case not less
than 10 days' notice of the adjourned meeting must be given.
31. (1) A member entitled to vote at a general meeting may, by means
of a proxy, appoint a proxy holder and such proxy holder
will be entitled to attend, speak, act and vote on a show of
hands and on a poll for the member and on his behalf at the
meeting subject only to any limitation imposed on the
authority of the proxy holder by the proxy.
(2) A proxy must be in writing, dated the date on which it is
executed, must be executed by the member or his attorney
authorized in writing or if the member is a corporation, by
a duly authorized officer or attorney of the corporation
and, if to apply to less than all the shares registered in
the nameof the member, must specify the number of shares to
which it is to apply.
(3) A proxy holder may be appointed to act for a member at every
annual or other general meeting, or at one or more annual or
other general meetings that may be held within such period
of time from the date of the proxy, accordingly as the proxy
specifies.
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(4) A proxy will, to the extent that it is inconsistent with
another proxy of an earlier date, be deemed to revoke such
other proxy.
(5) A vote given in accordance with the terms of a proxy is not
invalidated by the previous death, bankruptcy or mental
infirmity of the member giving the proxy unless written
notice of the death, bankruptcy or infirmity is received by
the chairman before the declaration of the result of the
vote.
(6) The board may make regulations providing for the deposit of
proxies at specified places and at specified times before
meetings and adjourned meetings of the Company, and
providing for particulars of such proxies to be cabled or
telegraphed or sent in writing before the meeting or
adjourned meeting to the Company or to any agent of the
Company appointed for the purpose of receiving such
particulars, and providing that particulars so received will
be as effective as though the proxies themselves were
deposited.
(7) Every proxy may be revoked by an instrument in writing
executed by the member or his attorney authorized in writing
or, where the member is a corporation, by a duly authorized
officer or attorney of the corporation, and delivered to the
records office of the Company at any time up to and
including the last business day preceding the day of the
meeting or any adjournment thereof at which the proxy is to
be used, or to the chairman of the meeting or any
adjournment thereof.
32. A proxy, other than one required by law to be in particular form,
will be substantially in the following form:
"The undersigned hereby appoints ___________________________________,
of ______________________(or failing him ______________________, of as
proxy holder for the undersigned to attend, speak and vote for and on
behalf of the undersigned in respect of all (or _____________________)
shares registered in the name of the undersigned at the general
meeting of the Company to be held on the ________ day of
________________________, 19___, and at any adjournment thereof.
Signed this ______________ day of _____________________________,
(Signature of Member)"
33. A corporation which is a member and is not a subsidiary of the
Company may, by instrument under the hand of its duly authorized
officer or attorney, appoint a representative who, until his
appointment is in like manner terminated, will be entitled to
attend meetings, act and vote, both on a show of hands and on a
poll, either in person or by proxy, and other wise exercise the
rights of membership of the corporation appointing him and will,
for all purposes in connection with any meeting of the Company
other than the giving of notice, be reckoned as a member holding
the shares registered in the name of such corporation.
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34. Any one of the joint holders of a share may vote in respect of
the share at a general meeting, either personally or by proxy
holder, as if he were solely entitled thereto, and if more than
one of the joint holders is present or represented by proxy
holder or corporate representative that one of them whose name
appears first on the register of members in respect of the share,
or his proxy holder or representative, will alone be entitled to
vote in respect thereof.
35. A member for whom a committee has been duly appointed may vote,
whether on a show of hands or on a poll, by his committee and the
committee may appoint a proxy holder.
36. (1) A poll demanded on the election of a chairman or on a
question of adjournment will be taken forthwith and without
an intervening adjournment.
(2) The demand for a poll and the carrying out of a poll will
not, unless the chairman so rules, prevent the continuance
of a meeting for the transaction of business other than that
on which the poll is demanded.
37. On a poll a person entitled to more than one vote need not use
all his votes or cast all the votes he uses in the same way.
38. In the case of an equality of votes, whether on a show of hands
or on a poll, the chairman may exercise a casting vote in
addition to any other vote which he may have exercised.
39. The chairman may move, propose or second a resolution.
40. The chairman of a meeting of shareholders will have regard to
accepted rules of parliamentary procedure, except that
(a) the chairman will have absolute authority over matters of
procedure and there will be no appeal from his ruling, but
if the chairman deems it advisable to dispense with the
rules of parliamentary procedure at any general meeting or
part thereof, he must so state and must state clearly the
rules under which the meeting or the appropriate part
thereof will be conducted;
(b) any dispute as to the admission or rejection of a vote will
be determined by the chairman and his determination will be
final and conclusive;
(c) if disorder arises which prevents continuation of the
business of the meeting, the chairman may quit the chair and
announce the adjournment of the meeting, and upon his so
doing, the general meeting is, notwithstanding Article 30,
immediately adjourned;
(d) the chairman may require anyone to leave the meeting who is
not a registered shareholder entitled to vote at the meeting
or proxy holder for or corporate representative of such a
shareholder;
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(e) a resolution or motion will be considered for vote only if
proposed by a shareholder, proxy holder or representative of
a corporate shareholder and (except for a nomination for
election of directors or appointment of auditors) seconded
by a shareholder, proxy holder, or representative other than
the person who proposed the resolution or motion.
41. The Company by ordinary resolution may from time to time adopt
any Rules of Order which shall, insofar as not inconsistent with
the Company Act or these Articles, govern the conduct of general
meetings.
PART 6 - DIRECTORS
42. The subscribers to the Memorandum shall be the first directors.
The directors to succeed the first directors and the number of
directors may be determined in writing by the subscribers to the
Memorandum. The number of directors may be changed from time to
time by ordinary resolution, at an annual general meeting, or by
special resolution at any other meeting at which directors are to
be elected, but shall never be less than one while the Company is
not a reporting company and three if the Company is or becomes a
reporting company.
43. (1) At each annual general meeting of the Company directors will
be elected to hold office commencing at the termination, or
earlier adjournment, of the meeting at which they have been
elected.
(2) If the number of eligible persons nominated for election as
directors is equal to or less than the number of directors
to be elected, no vote will be required and those nominated
will be deemed elected by acclamation.
(3) A retiring director is eligible for re-election.
44. The office of a director will terminate:
(a) on his resignation;
(b) on his removal from office as provided in the Company Act;
(c) on his ceasing to be qualified as a director under the
Company Act; or
(d) on the adjournment or termination of the annual general
meeting which next follows his election or appointment and
at which a director is elected but he is not elected.
45. (1) The board may appoint any individual qualified to act as a
director to the board to fill any casual vacancy in the
board.
(2) A vacancy resulting from an increase in the number of
directors will be deemed not to be a casual vacancy unless,
and will be deemed to be a casual vacancy if, the vacancy is
not filled by the shareholders at the meeting at which the
increase is authorized.
(3) Any vacancy on the board that has not been filled by an
appointment made by the board may be filled by an
appointment made by ordinary resolution.
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(4) The board may appoint one or more additional directors of
the Company but the number of additional directors so
appointed shall not exceed one-third of the number of
directors elected or appointed at the last general meeting.
46. A person who is not a member who becomes a director is deemed to
have agreed to be bound by the provisions of these Articles to
the same extent as a member.
47. (1) A director will be paid such reasonable travelling, lodging,
subsistence and other expenses as he incurs in or about the
business of the Company.
(2) The remuneration of the directors may from time to time be
fixed by the board subject to any limitations established by
ordinary resolution, and may, in the case of a director who
is also an officer or employee of the Company, be in
addition to any remuneration to which he is entitled as such
an officer or employee.
(3) If a director performs any professional or other service for
the Company that, in the opinion of the board, is outside
the ordinary duties of a director, or if he is otherwise
specially occupied in or about the Company's business, he
may be paid a special remuneration to be fixed by the board
or, at the option of the director, by the Company in general
meeting.
(4) Remuneration of a director payable on a periodic basis will
be deemed to accrue from day to day.
(5) Except as restricted by ordinary resolution, the board may
cause the Company to pay a gratuity, pension or allowance on
retirement to any director who has held any salaried office
or place of profit with the Company, or to his widow or
dependents and may make contributions to any fund for, and
pay premiums for the purchase or provision of, any such
gratuity, pension or allowance.
48. (1) A director (in this Article called "appointor") may appoint
another director as his alternate director.
(2) An appointment of an alternate will not be effective until
an instrument in writing signed by the appointor, or a
telegram, telecopy, telex or cable dispatched by the
appointor, declaring the appointment, is received by the
Company.
(3) An appointor may revoke an appointment of his alternate by
notice in writing, telegram, telecopy, telex or by cable
delivered to the Company.
(4) The appointment of an alternate terminates if the appointor
or the alternate ceases to be a director.
(5) A director may act as alternate for more than one director
and will be entitled at a meeting of the board to cast one
vote for each director for whom he is the alternate in
addition to the vote to which he is entitled as a director
in his own right.
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(6) Unless otherwise determined by the board, an alternate will
not be counted as representing his appointor in determining
whether a quorum is present.
49. The directors may meet together at such places, or convene
meetings by telephone, and adjourn and otherwise regulate their
meetings and proceedings as they see fit.
50. A director may at any time, and the secretary upon the request of
the director will, convene a meeting of the board.
51. (1) Notice of a meeting of the board must be given to each
director at least four days before the time fixed for the
meeting unless a majority of the directors reside outside of
the municipality where the meeting is to be held, in which
case notice shall be given at least seven days before the
time fixed for the meeting.
(2) Notice may be given verbally, personally or by telephone, or
in writing, personally or by delivery through the post, or
telegraph, or by any other means of communication in common
usage.
(3) When notice of A meeting is given to a director other than
personally, it will be addressed to him at his registered
address.
(4) Where the board has established a fixed time and place for
holding regular meetings of the board and holds such a
meeting accordingly, no notice of the next meeting to be so
held need be given to any director.
(5) No notice need be given to a director of a meeting of the
board at which he is appointed or which immediately follows
a general meeting at which he is elected or appointed.
52. The board may act notwithstanding any vacancy in its body, so
long as the number of directors in office is not reduced below
the number fixed as the quorum of the board.
53. The board may from time to time fix the quorum necessary for the
transaction of business and until so fixed the quorum will be a
majority of the number last determined under Article 42.
54. The chairman of the board, if any, or in his absence or if there
is no chairman of the board, the president, will be chairman of
each meeting of the board, but if at any meeting neither the
chairman of the board nor the president is, within fifteen
minutes after the time appointed for holding the meeting, present
and willing to act, the directors present may choose one of their
number to be chairman of the meeting.
55. A meeting of directors at which a quorum is present is competent
to exercise all or any of the authorities, powers and discretions
for the time being vested in or exercisable by the board
generally.
56. Questions arising at a meeting of the board will be decided by a
majority of votes.
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57. In the case of an equality of votes, the chairman will not have a
second or casting vote.
58. A director who is interested in a proposed contract or
transaction or other business to be considered or conducted at a
meeting of the board and who has disclosed his interest in
accordance with the provisions of the Company Act will be counted
in the quorum at any meeting of the board at which the proposed
contract or transaction or such other business is considered,
approved or otherwise acted upon.
59. The board may on such terms as it sees fit, delegate any of its
powers to committees each consisting of one or more directors,
which will function in such manner as the board from time to time
directs.
60. (1) The board will elect annually from among its number an audit
committee to be composed of not fewer than three directors
of whom a majority shall not be officers or employees of the
Company or its affiliates.
(2) The audit committee will review the annual audited financial
statements of the Company before, and will comment thereon
when, such statements are submitted to the board for its
approval.
61. (1) All appointments of officers will be made upon such terms
and conditions and at such remuneration, whether by way of
salary, fee, commission, participation in profits, or
otherwise as the board determines, and every such
appointment will be subject to termination at the pleasure
of the board, but without prejudice to any right that may
thereby arise under any contract.
(2) The appointment of an officer will not terminate merely by
reason that all or any of the members of the board by which
he was appointed have ceased to be directors at an annual
general meeting or otherwise, unless he has thereby ceased
to hold the qualification for his office.
PART 7 - MANAGEMENT OF THE COMPANY
62. The board may exercise all such powers and do all such acts and
things as the Company may exercise and do and which are not by
these Articles or otherwise lawfully directed or required to be
exercised or done by the Company in general meeting, but subject
nevertheless to the provision of these Articles and all laws
affecting the Company and to any rules, not inconsistent with
these Articles, made from time to time by the Company in general
meeting; but no such rule will invalidate any prior act of the
board that would have been valid if the rule had not been made.
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PART 8 - BORROWING AND MORTGAGING
63. The board may from time to time at its discretion authorize
theCompany to borrow any sum of money for the purposes of the
Company and may raise or secure the repayment of such sum or the
performance of any other obligation of the Company in such manner
and upon such terms and conditions in all respects as the board
thinks fit, and without limiting the generality of the foregoing,
by the issue of bonds, debentures, or other instruments, or any
mortgage or charge, whether specific or floating, or other
security on the undertaking of the whole or any part of the
property of the Company, both present and future.
64. The board may make any such bond, debenture, or other instrument,
mortgage or charge, or any other security by its terms assignable
free from any equity between the Company and the person to whom
it is issued, or any other person who lawfully acquires the same
by assignment, purchase or otherwise.
65. The board may authorize the issue of any such bond, debenture, or
other instrument, or mortgage or charge or other security at a
discount, premium or otherwise, and with special or other rights
or privileges as to redemption, surrender, drawings, allotment of
or conversion into or exchange for shares, attendance at general
meetings of the Company, and otherwise as the board determines at
or before the time of issue.
PART 9 - SAFEGUARDING. Indemnity, ETC, OF DIRECTORS
66. A director of the Company may be or become a director or officer
of, or otherwise interested in, any corporation promoted by the
Company or in which the Company is interested, as shareholder or
otherwise, or any corporation which owns or controls shares of
the Company, and will not be liable to account to the Company for
any remuneration or other benefit received by him as a director
or officer of, or from his interest in, such other corporation.
67. A director may hold any office or place of profit under the
Company in conjunction with his directorship for such period and
on such arrangement as toremuneration and otherwise as the board
determines, and no director or proposed director is disqualified
by that relationship from contracting with the Company either
with regard to his tenure of such other of f ice or place of
profit, or as vendor, purchaser or otherwise, nor is a director
so contracting or being so interested liable to account to the
Company for any profit realized by any such arrangement or
contract, by reason only that the director holds that office or
of the fiduciary relationship thereby established.
68. The board may cause the Company to provide indemnity by way of
insurance or otherwise to any director, officer, employee or
other person who has undertaken or is about to undertake any
liability on behalf of the Company or any corporation controlled
by it and to secure such director, officer, employee or other
person against loss by mortgage and charge upon the whole or any
part of the real and personal property of the Company and any
action taken by the board under this paragraph will not require
approval or confirmation by the members.
64
<PAGE>
69. No director, officer or employee for the time being of the
Company will beliable for the acts, receipts, neglects or
defaults of any other director, officer or employee, or for
joining in any receipt or act for the sake of conformity, or for
any loss, damage or expense happening to the Company through the
insufficiency or deficiency of title to any property acquired by
order of the board for or on behalf of the Company, or for the
insufficiency or deficiency of any security in or upon which any
of the monies of or belonging to the Company are placed out or
invested or for any loss or damages arising from the bankruptcy,
insolvency or wrongful act of any person, firm or corporation
with whom or which any monies, securities or effects are lodged
or deposited or for any other loss, damage or misfortune whatever
which may happen in the execution of the duties of his respective
office or trust or in relation thereto unless the same happens by
or through his own willful neglect or default.
PART 10 - EXECUTION OF DOCUMENTS
70. The board may adopt a common seal for the Company and may, from
time to time, adopt a new common seal and will provide for the
safe custody of the common seal.
71. The Company may have an official seal for use in any other
province, territory, state or country.
72. Neither the common seal nor an official seal will be impressed on
any document or instrument except
(a) pursuant to the authorization of a resolution of the board,
which authorization may extend to the sealing of a
particular document or instrument, one or more documents and
instruments meeting a description, or to all documents and
instruments to be executed under seal, or
(b) by the secretary or an assistant secretary for the purpose
of certifying copies of or extracts from the Memorandum or
Articles of the Company, minutes of meetings or resolutions
of the shareholders or board or committees of the board or
any instrument executed or issued by the Company.
73. The signature of any officer or director of the Company, that is,
by authority of the board, printed, lithographed, engraved or
otherwise reproducedupon any instrument or document (including
any negotiable instrument) to be signed, executed or issued by
the Company or by any of its officers or directors, and any
instrument or document on which the signature of any such person
is so reproduced, will be as valid as if the signature had been
affixed manually by such person, and will be so valid
notwithstanding that, at the time of the issue or delivery of the
instrument or document, the person whose signature is so
reproduced is deceased, has ceased to hold the office giving rise
to his authority or is otherwise incapacitated from personally
signing such instrument or document.
PART 11 - DIVIDENDS
74. Except as otherwise provided by special rights or restrictions
attached to any shares, all dividends will be declared according
to the number of shares held.
65
<PAGE>
75. Dividends may be paid out of any of the surplus accounts of the
Company.
76. No notice of the declaration of any dividend need be given to any
member, and no dividend will bear interest against the Company.
77. A resolution declaring a dividend may direct payment of the
dividend wholly or partly by the distribution of specific assets
or of paid-up shares,bonds, debentures or debenture stock of the
Company, or in any one or more such ways, and where any
difficulty arises in regard to the distribution, the board may
settle the same as it thinks expedient, and in particular may fix
the value for distribution of specific assets, and may determine
that cash payments shall be made to members upon the footing of
the values so fixed or in lieu of fractional shares, bonds,
debentures or debenture stock, in order to adjust the rights of
all parties, and may vest any such specific assets in trustees
upon such trusts for the persons entitled as may seem expedient
to the board.
78. The Company may retain the dividends payable on a share in
respect of which a fiduciary is entitled to become a member until
the fiduciary becomes the registered holder of such share.
79. Any dividend or other monies payable in cash in respect of a
share may be paid by check or warrant sent through the post to
the registered holder of the share in like manner as provided in
these Articles for the giving of notices, or to such person and
to such address as the holder or joint holders, as the case may
be, in writing direct.
80. Any one of two or more joint holders may give effectual receipts
for any dividend or other monies payable or assets distributable
in respect of a share held by them as joint holders.
PART 12 - NOTICES
81. A notice may be given or a document delivered by the Company to a
member or director, either personally or by sending it through
the post to him in a prepaid letter, envelope or wrapper
addressed to the member or director at his registered address.
82. Notice may be given or a document delivered by the Company to the
joint holders of a share by giving the notice or delivering the
document to the joint holder first named in the register of
members in respect of the share.
83. A notice may be given or a document delivered by the Company to a
person claiming entitlement to a share in consequence of the
death, bankruptcy or mental infirmity of a member, by sending it
through the post in a prepaid letter, envelope or wrapper
addressed to such person by name, or by suitable title as
representing the deceased, bankrupt or mentally infirm member, at
the address, if any, supplied to the Company for the purpose by
such person, or, until an address has been so supplied, by giving
the notice or delivering the document in any manner in which the
same might have been given or delivered if the death, bankruptcy
or mental infirmity had not occurred.
66
<PAGE>
84. A notice or document sent through the post to or left at the
registered address of a member will, notwithstanding that the
member is then deceased and whether or not the Company or its
agent has notice of his decease, be deemed tohave been duly given
or delivered in respect of any share registered in the name of
the member and will for all purposes of these Articles be deemed
sufficiently given or delivered to his personal representatives
and to any person jointly interested with the member in any such
share.
NAME, ADDRESS AND OCCUPATION OF SUBSCRIBER
JILL GAMLEY
#9 - 2035 W 3rd Avenue
Vancouver, B. C.
V6J lL4
Corporate Records Assistant
DATED the 24th day of April, 1987.
EXHIBIT 3.(iii)
Certificate and Articles of Continuance
YUKON BUSINESS CORPORATIONS ACT
Justice FORM 3
Certificate of Continuance
NEVADA STAR RESOURCE CORP.
I hereby certify that the above-mentioned corporation was continued
into Yukon, as set out in the attached Articles of Continuance, under
section 190 of the Business Corporations Act.
Corporate Access Number: 26611
Date of Continuance: 1998-06-17 /s/ M. Richard Roberts
Registrar of Corporations
YUKON BUSINESS CORPORATIONS ACT
(Section 190) Form 3-01
ARTICLES OF CONTINUANCE
1. Name of Corporation.
NEVADA STAR RESOURCE CORP.
2. The classes an any maximum number of shares that the corporation
is authorized to issue
The attached Schedule "A" is incorporated into and forms part of
the Articles of Continuance.
3. Restrictions if any on share transfers:
There are no restrictions on the share transfers.
4. Number (or minimum or maximum number) of Directors:
Not less that three (3), not more than fifteen (15)
5. Restrictions if any on business the corporation may carry on.
The Corporation is restricted from carrying on the business of a
railway, steamship, air transport, canal, telegraph, telephone or
irrigation company.
6. If change of name effected, previous name: NOT APPLICABLE
7. Details of incorporation:
Incorporated on April 29, 1987 under the laws of the Province of
British Columbia under the name Nevada Star Resource Corp.
8. Other provisions if any:
The attached Schedule "B" is incorporated into and form part of
these Articles of Continuance.
9. Date: June 1, 1998
Signature
Title:
Corporate Secretary
FILED
JUNE 17, 1998
DEPUTY REGISTRAR
OF CORPORATIONS
68
<PAGE>
SCHEDULE "A"
NEVADA STAR RESOURCES CORP.
The classes and any maximum number of share that the Corporation is
authorized to issue:
The Corporation is authorized to issue an unlimited number of shares
without nominal or par value and the authorized capital of the
Corporation is to be divided into:
1. Common shares which have attached thereto the following
preferences, rights, conditions, restrictions, limitation, or
prohibitions:
(a) Voting
Holders of Common shares shall be entitled to vote at any meeting
of the shareholders of the Corporation and have one vote in
respect of each Common share held by them.
(b) Dividends
Holders of Common shares shall be entitled to received, out of all
profits or surplus available for dividends, any dividend declared
by the Corporation on the Common shares.
(c) Participation in Assets on Dissolution
In the event of liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, holders of Common
shares shall be entitled to receive the remaining property of the
Corporation.
SCHEDULE "B"
NEVADA STAR RESOURCES CORP.
Other provisions, if any:
1. A meeting of the shareholders of the Corporation may, in the
directors' unfettered discretion, be held at any location in North
America, South America, Europe and Asia specified by the directors
in the Notice of such meeting.
2. The directors may, between annual general meetings, appoint one of
more additional directors of the Corporation to serve until the
next annual general meeting, but the number of additional
directors shall not at any time exceed one third of the number of
directors who held office at the expiration of the last annual
general meeting of the Corporation, provided that the total number
of directors shall not exceed the maximum number of directors
fixed pursuant to the Articles.
69
<PAGE>
YUKON BUSINESS CORPORATIONS ACT
(Sections 107, 114, and 290)
Form 1-03
NOTICE OF DIRECTORS AND OFFICERS OR
NOTICE OF CHANGE OF DIRECTORS AND OFFICERS
1. Name of Corporation: NEVADA STAR RESOURCES CORP.
2. Notice is given that on the day of continuance, the following
person(s) were appointed Director(s):
Name Mailing Address
SEE ATTACHED LIST
3. Notice is given that on the day of . . the following person(s)
ceased to hold office as Director(s):
Name Mailing Address
NOT APPLICABLE
4. The officers of the corporation as this date are:
Name Office(s) Held
Monty D. Moore President
Beverly Bullock Secretary
5.
Date
June 1, 1998
Signature
Title:
Corporate Secretary
FILED
JUNE 17, 1998
DEPUTY REGISTRAR
OF CORPORATIONS
NEVADA STAR RESOURCES CORP.
LIST OF DIRECTORS AS OF CONTINUANCE
Monty D. Moore 10733 Stone Avenue North
Seattle, Washington 98133
Richard W. Graeme 4619 E. Coronado Drive
Tucson, Arizona 85718
Stuart Havenstrite 8111 Malo Drive
Sandy, Utah 84093
Rich Havenstrite 2113 N. Cottontail
Cedar City, Utah 84720
Kevin Weaver 966 Lampson Place
Victoria, B.C. V7M 1P1
Gary Claytens 2404 - 144 W. 14th
North Vancouver, B.C. V7M 1P1
Bary Nimetz 402-30 Charlevoix Street
Vanier, Ontario L1L 8K5
Sashi M. Gupta 110117 Tuxedo Drive
Port Moody, B.C. V3H 1L3
Leo Berezan 11528 Bailey Crescent
Surrey, B.C. V3V 2V3
<PAGE>
YUKON BUSINESS CORPORATIONS ACT
(Section 22) Form 1-02
NOTICE OF ADDRESS OR
NOTICE OF CHANGE OF ADDRESS
1. Name of Corporation: NEVADA STAR RESOURCES CORP.
2. Address of Registered Office:
Preston, Willis & Lackowicz
Barristers & Solicitors
2093 Second Avenue
Whitehorse, Yukon
Y1A 1B5
3. Records Address:
Preston, Willis & Lackowicz
Barristers & Solicitors
2093 Second Avenue
Whitehorse, Yukon
Y1A 1B5
4. Post Office Box (address for service by mail):
Not Applicable
5. Date: June 1, 1998
Signature: Title: Corporate Secretary
FILED
JUNE 17, 1998
DEPUTY REGISTRAR
OF CORPORATIONS
71
EUREKA CREEK MEMORANDUM OF UNDERSTANDING
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding, effective this the 5th day of January, 1999,
by and between Nevada Star Resource Corporation, hereinafter referred to as
"NEV", a Nevada corporation listed on the Vancouver Stock Exchange (NEV.V) with
its principal address at 10735 Stone Ave. North, Seattle, WA. 98133, and M.A.N.
Resources Inc., hereinafter referred to as "MAN", a Washington corporation with
its principal address at PO Box 1045, Bellevue, WA 98009.
WHEREAS, NEV is the owner of, or otherwise controls, approximately 10,620 acres
of mining claims located near Broxson Gulch and Tangle Lakes, Alaska, consisting
of 327 federal lode mining claims, 7 State of Alaska mining claims and 11 Alaska
Prospecting Sites more particularly set forth in Attachment A hereto and
hereinafter referred to as "the Subject Claims", and
WHEREAS, NEV desires to convey its interests in the Subject Claims to MAN
subject to the terms and conditions set forth herein, and
WHEREAS, MAN desires to lease the Subject Claims to explore and develop minerals
thereon in conjunction with its efforts to explore and develop MAN's other
claims in the Broxson Gulch and Tangle Lakes areas, Alaska, and
WHEREAS, in and for the amount of $10.00 in cash paid and other good and
valuable consideration paid by MAN the receipt and sufficiency of which are
hereby acknowledged, then
BE IT KNOWN THAT, pursuant to the terms and conditions set forth in this
Memorandum of Understanding, the undersigned do agree as follows:
1. NEV does hereby lease the Subject Claims to MAN for a period of ten years
and for so long thereafter as commercial production is continuing, or as may be
agreed to by both parties hereto, in a formal Mining Lease and Sale Agreement to
be negotiated and entered into not later than 12 (twelve) months after the date
set forth above.
2. MAN agrees to hold and protect the Subject Claims and to make all
payments when due to the government of the United States of America and the
State of Alaska as may be required under the laws pertaining to federal and
State of Alaska mining claims.
3. MAN further agrees to explore and develop the Subject Claims in a
minerlike fashion and to abide by any and all laws and regulations pertaining to
environmental protection.
4. MAN shall be entitled to earn a net 75% (seventy-five percent) working
interest in the Subject Claims upon the expenditure of $75,000 (seventy-five
thousand dollars) in exploration and development costs during the 24
(twenty-four) month period commencing as of the date of this Memorandum of
Understanding. "Exploration and development costs" includes leasehold costs.
5. NEV shall retain a net 25% (twenty-five percent) working interest in the
Subject Claims after MAN has expended the sum of $75,000 (seventy-five thousand
dollars) in exploration and development costs pertaining to the Subject Claims.
72
<PAGE>
6. To maintain its working interest at 25% (twenty-five percent) during the
term of this lease, NEV shall be obligated to pay MAN 25% (twenty-five percent)
of all exploration and development costs in excess of the initial $75,000
(seventy- five thousand dollars) spent by MAN on the Subject Claims. If NEV
fails to provide such funds, NEV's working interest in the Subject Claims shall
be reduced by the quotient of $75,000 divided by $75,000 plus the total of
uncompensated costs of exploration and development regarding the Subject Claims
paid by MAN.
7. In the event NEV elects not to contribute its share of exploration and
development costs, or any part thereof, the interest of NEV shall be reduced,
but at no time shall NEV's interest be reduced to less than a net smelter return
royalty in the amount of one percent (1.0%) of the gross proceeds obtained from
the sale of any and all minerals, metals or valuable commodities recovered from
or sold pursuant to mining activities on the Subject Claims. Said net smelter
return shall be less deductions on a pro rata basis for the cost of
transportation, insurance, and storage fees incurred by MAN, and less a pro rata
share of any and all smelting fees and smelter penalties as may be assessed by
any smelter selected by MAN for the recovery of any and all minerals, metals or
valuable commodities produced from the Subject Properties.
8. MAN shall have the right to buy and NEV shall have the obligation to sell
to MAN all the right, title, and interest of NEV in the Subject Claims free and
clear of any and all retained net smelter return interest upon the conveyance by
MAN to NEV of 106,200 (one hundred six thousand two hundred) shares of MAN
capital stock, if said number of shares of capital stock are tendered on or
before the second anniversary of the date of this Memorandum of Understanding.
9. It is the intent of the parties hereto to commit the terms of this
Memorandum of Understanding to a formal Mining Lease and Sale Agreement within a
period not to exceed 12 (twelve) months from the date first above written. Said
formal Mining Lease and Sale Agreement shall set forth such particulars as may
be appropriate or required by the United States Securities and Exchange
Commission or the Vancouver Stock Exchange or other Board having appropriate
jurisdiction over the subject matter herein so as to promote the efficient and
expeditious exploration and development of the Subject Properties and the intent
of the parties hereto.
10. MAN shall be deemed in default if it fails to expend the initial
$75,000.00 or subsequently fails to maintain the property in good standing.
THE TERMS AND CONDITIONS OF THIS MEMORANDUM OF UNDERSTANDING are agreed to and
become binding on the respective parties whose authority are acknowledged as set
forth below:
By: /S/ Monty D. Moore By: /S/ Robert Angrisano
--------------------------- ------------------------------
Monty D. Moore, President Robert Angrisano, President
Nevada Star Resource Corp. M.A.N. Resources
73
<PAGE>
ATTACHMENT "A"
THE FOLLOWING LIST OF MINING CLAIMS, CONSTITUTING APPROXIMATELY 10,620 ACRES,
PERTAINS TO THE "MEMORANDUM OF UNDERSTANDING" BETWEEN NEVADA STAR RESOURCE
CORPORATION AND M.A.N. RESOURCES, INC.
(BEGIN 9 PT TYPE)
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BAY 1 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/365 AA80007
BAY 2 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/368 AA80008
BAY 3 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/369 AA80009
BAY 4 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/370 AA80010
BAY 5 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/371 AA80011
BAY 6 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/372 AA80012
BAY 7 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/373 AA80013
BAY 8 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/374 AA80014
BAY 9 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/375 AA80015
BAY 10 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/376 AA80016
BAY 11 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/377 AA80017
BAY 12 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/378 AA80018
3/27/97 18S 10E 31
BAY 13 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/379 AA80019
3/27/97 18S 10E 31
BAY 14 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/380 AA80020
3/27/97 18S 10E 31
BAY 15 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/381 AA80021
3/27/97 18S 10E 31
BAY 16 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/382 AA80022
3/27/97 18S 10E 31
BAY 17 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/383 AA80023
3/27/97 18S 10E 31
BAY 18 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/384 AA80024
3/27/97 18S 10E 31
BAY 19 3/27/97 18S 9E 36 Fairbanks 5/16/97 1002/385 AA80025
3/27/97 18S 10E 31
BAY 20 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/386 AA80026
BAY 21 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/387 AA80027
BAY 22 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/388 AA80028
BAY 23 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/389 AA80029
BAY 24 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/390 AA80030
BAY 25 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/391 AA80031
BAY 26 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/392 AA80032
BAY 27 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/393 AA80033
BAY 28 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/394 AA80034
BAY 29 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/395 AA80035
BAY 30 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/396 AA80036
BAY 31 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/397 AA80037
BAY 32 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/398 AA80038
BAY 33 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/399 AA80039
BAY 34 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/400 AA80040
BAY 35 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/401 AA80041
BAY 36 3/27/97 19S 10E 6 Fairbanks 5/16/97 1002/402 AA80042
3/27/97 18S 10E 31
BAY 37 3/27/97 19S 10E 6 Fairbanks 5/16/97 1002/403 AA80043
BAY 38 3/27/97 19S 10E 6 Fairbanks 5/16/97 1002/404 AA80044
BAY 39 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/405 AA80045
BAY 40 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/406 AA80046
BAY 41 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/407 AA80047
BAY 42 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/408 AA80048
BAY 43 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/409 AA80049
BAY 44 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/410 AA80050
BAY 45 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/411 AA80051
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BAY 46 3/27/97 18S 10E 31 Fairbanks 5/16/97 1002/412 AA80052
BAY 47 3/26/97 19S 10E 6 Fairbanks 5/16/97 1002/413 AA80053
18S 10E 31
BAY 48 3/26/97 19S 10E 6 Fairbanks 5/16/97 1002/414 AA80054
BAY 49 3/26/97 19S 10E 6 Fairbanks 5/16/97 1002/415 AA80055
BAY 50 3/26/97 19S 10E 6 Fairbanks 5/16/97 1002/416 AA80056
BAY 51 3/26/97 19S 10E 6 Fairbanks 5/16/97 1002/417 AA80057
BAY 52 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/418 AA80058
BAY 53 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/419 AA80059
BAY 54 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/420 AA80060
BAY 55 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/421 AA80061
BAY 56 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/422 AA80062
BAY 57 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/423 AA80063
BAY 58 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/424 AA80064
BAY 59 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/425 AA80065
BAY 60 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/426 AA80066
18S 10E 32
BAY 61 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/427 AA80067
BAY 62 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/428 AA80068
BAY 63 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/429 AA80069
BAY 64 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/430 AA80070
BAY 65 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/431 AA80071
BAY 66 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/432 AA80072
BAY 67 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/433 AA80073
BAY 68 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/434 AA80074
BAY 69 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/435 AA80075
BAY 70 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/436 AA80076
BAY 71 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/437 AA80077
BAY 72 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/438 AA80078
BAY 73 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/439 AA80079
BAY 74 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/440 AA80080
BAY 75 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/441 AA80081
BAY 76 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/442 AA80082
BAY 77 3/25/97 18S 10E 32 Fairbanks 5/16/97 1002/443 AA80083
19S 10E 5
BAY 78 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/444 AA80084
BAY 79 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/445 AA80085
BAY 80 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/446 AA80086
BAY 81 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/447 AA80087
BAY 82 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/448 AA80088
BAY 83 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/449 AA80089
BAY 84 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/450 AA80090
BAY 85 3/25/97 19S 10E 5 Fairbanks 5/16/97 1002/451 AA80091
BAY 86 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/452 AA80092
BAY 87 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/453 AA80093
BAY 88 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/454 AA80094
BAY 89 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/455 AA80095
BAY 90 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/456 AA80096
BAY 91 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/457 AA80097
BAY 92 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/458 AA80098
BAY 93 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/459 AA80099
BAY 94 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/460 AA80100
18S 10E 32
BAY 95 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/461 AA80101
BAY 96 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/462 AA80102
BAY 97 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/463 AA80103
BAY 98 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/464 AA80104
BAY 99 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/465 AA80105
BAY 100 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/466 AA80106
BAY 101 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/467 AA80107
BAY 102 3/24/97 19S 10E 5 Fairbanks 5/16/97 1002/468 AA80108
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E-1 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/334 AA78954
18S 9E 36
E-2 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/335 AA78955
18S 9E 36
E-3 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/336 AA78956
18S 9E 36
E-4 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/337 AA78957
18S 9E 36
E-5 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/338 AA78958
18S 10E 31
E-6 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/339 AA78959
18S 10E 31
E-7 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/340 AA78960
18S 10E 31
E-8 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/341 AA78961
18S 10E 31
E-9 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/342 AA78962
18S 10E 31
E-10 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/343 AA78963
18S 10E 31
E-11 8/6/96 18S 10E 30 Fairbanks 10/31/96 977/344 AA78964
18S 10E 31
E-13 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/345 AA78965
E-14 8/6/96 18S 9E 25 Fairbanks 10/31/96 977/346 AA78966
E-15 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/347 AA78967
E-16 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/348 AA78968
E-17 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/349 AA78969
E-18 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/350 AA78970
E-19 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/351 AA78971
E-20 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/352 AA78972
E-21 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/353 AA78973
E-22 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/354 AA78974
E-23 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/355 AA78975
E-24 8/5/96 18S 10E 30 Fairbanks 10/31/96 977/356 AA78976
E-25 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/357 AA78977
18S 10E 30
E-26 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/358 AA78978
E-27 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/359 AA78979
E-28 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/360 AA78980
E-29 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/361 AA78981
E-30 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/362 AA78982
E-31 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/363 AA78983
E-32 8/5/96 18S 10E 29 Fairbanks 10/31/96 977/364 AA78984
E-33 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/365 AA78985
18S 10E 29
E-34 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/366 AA78986
E-35 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/367 AA78987
E-36 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/368 AA78988
E-49 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/250 AA80503
18S 10E 32
E-50 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/252 AA80504
18S 10E 32
E-51 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/253 AA80505
18S 10E 32
E-52 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/254 AA80506
18S 10E 32
E-53 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/255 AA80507
18S 10E 32
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E-54 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/256 AA80508
18S 10E 32
E-55 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/257 AA80509
18S 10E 32
E-56 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/258 AA80510
18S 10E 32
E-57 4/13/97 18S 10E 29 Fairbanks 7/8/97 1012/259 AA80511
18S 10E 30
18S 10E 31
18S 10E 32
E-58 4/13/97 18S 10E 30 Fairbanks 7/8/97 1012/260 AA80512
18S 10E 31
E-97 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/383 AA79003
18S 9E 35
E-98 8/6/96 18S 10E 29 Fairbanks 10/31/96 977/384 AA79004
E-99 8/6/96 18S 10E 29 Fairbanks 10/31/96 977/385 AA79005
E-100 8/6/96 18S 10E 28 Fairbanks 10/31/96 977/386 AA79006
18S 10E 29
E-101 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/387 AA79007
E-102 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/388 AA79008
E-103 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/389 AA79009
E-104 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/390 AA79010
E-105 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/391 AA79011
E-106 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/392 AA79012
E-107 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/393 AA79013
E-108 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/394 AA79014
E-109 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/395 AA79015
E-110 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/396 AA79016
E-111 8/5/96 18S 10E 28 Fairbanks 10/31/96 977/397 AA79017
18S 10E 29
E-112 8/6/96 18S 10E 29 Fairbanks 10/31/96 977/398 AA79018
E-113 8/6/96 18S 10E 29 Fairbanks 10/31/96 977/399 AA79019
E-118 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/400 AA79020
E-119 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/401 AA79021
E-134 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/402 AA79022
E-135 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/403 AA79023
E-144 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/404 AA79024
E-145 8/6/96 18S 10E 21 Fairbanks 10/31/96 977/405 AA79025
E-179 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/406 AA79026
18S 9E 35
E-180 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/407 AA79027
18S 9E 35
E-181 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/408 AA79028
18S 9E 35
E-182 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/409 AA79029
18S 9E 35
E-183 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/410 AA79030
18S 9E 35
E-184 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/411 AA79031
18S 9E 35
E-185 8/11/96 18S 9E 26 Fairbanks 10/31/96 977/412 AA79032
18S 9E 35
E-186 8/11/96 18S 9E 25 Fairbanks 10/31/96 977/413 AA79033
18S 9E 26
18S 9E 35
18S 9E 36
E-187 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/414 AA79034
18S 9E 36
</TABLE>
77
<PAGE
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E-188 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/415 AA79035
E-189 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/416 AA79036
E-190 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/417 AA79037
E-191 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/418 AA79038
E-192 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/419 AA79039
E-193 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/420 AA79040
E-194 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/421 AA79041
E-195 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/422 AA79042
E-196 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/423 AA79043
E-197 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/424 AA79044
E-198 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/425 AA79045
18S 9E 36
E-199 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/426 AA79046
18S 9E 36
E-200 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/427 AA79047
E-201 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/428 AA79048
E-202 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/429 AA79049
E-203 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/430 AA79050
E-204 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/431 AA79051
E-205 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/432 AA79052
E-206 8/5/96 18S 9E 24 Fairbanks 10/31/96 977/433 AA79053
E-207 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/434 AA79054
E-208 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/435 AA79055
E-209 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/436 AA79056
E-210 8/5/96 18S 9E 25 Fairbanks 10/31/96 977/437 AA79057
18S 9E 36
P-107 8/12/97 18S 9E 27 Fairbanks 11/5/97 977/795 AA79228
18S 9E 34
P-108 8/12/97 18S 9E 27 Fairbanks 11/5/97 977/798 AA79229
18S 9E 34
P-109 8/12/97 18S 9E 27 Fairbanks 11/5/97 977/797 AA79230
18S 9E 34
P-110 8/12/97 18S 9E 27 Fairbanks 10/31/96 977/322 AA79072
18S 9E 34
P-111 8/12/97 18S 9E 27 Fairbanks 10/31/96 977/323 AA79073
18S 9E 34
P-112 8/12/97 18S 9E 27 Fairbanks 10/31/96 977/324 AA79074
18S 9E 34
P-113 8/12/97 18S 9E 27 Fairbanks 10/31/96 977/325 AA79075
18S 9E 34
P-114 8/12/97 18S 9E 26 Fairbanks 10/31/96 977/326 AA79076
18S 9E 27
18S 9E 34
18S 9E 35
SX-1 9/5/96 18S 10E 19 Fairbanks 10/31/96 977/242 AA78948
SX-2 9/5/96 18S 10E 19 Fairbanks 10/31/96 977/244 AA78949
SX-3 9/5/96 18S 10E 19 Fairbanks 10/31/96 977/245 AA78950
18S 10E 20
SX-4 9/6/96 18S 10E 21 Fairbanks 10/31/96 977/246 AA78951
SX-5 9/6/96 18S 10E 21 Fairbanks 10/31/96 977/247 AA78952
SX-6 9/6/96 18S 10E 21 Fairbanks 10/31/96 977/248 AA78953
BAY 103 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/469 AA80109
BAY 104 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/470 AA80110
BAY 105 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/471 AA80111
BAY 106 3/26/97 18S 10E 32 Fairbanks 5/16/97 1002/472 AA80112
BAY 107 3/24/97 18S 10E 32 Fairbanks 5/16/97 1002/473 AA80113
BAY 108 3/24/97 18S 10E 32 Fairbanks 5/16/97 1002/474 AA80114
BAY 109 3/24/97 18S 10E 32 Fairbanks 5/16/97 1002/475 AA80115
BAY 110 3/24/97 18S 10E 32 Fairbanks 5/16/97 1002/476 AA80116
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BAY 240 3/31/97 18S 9E 13 Fairbanks 5/16/97 1002/606 AA80244
18S 10E 18
BAY 241 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/609 AA80245
18S 10E 19
BAY 242 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/610 AA80246
18S 10E 19
BAY 243 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/611 AA80247
18S 10E 19
BAY 244 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/612 AA80248
18S 10E 19
BAY 245 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/613 AA80249
18S 10E 19
BAY 246 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/614 AA80250
18S 10E 19
BAY 247 3/31/97 18S 9E 24 Fairbanks 5/16/97 1002/615 AA80251
18S 10E 19
BAY 248 3/31/97 18S 10E 18 Fairbanks 5/16/97 1002/616 AA80252
BAY 249 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/617 AA80253
BAY 250 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/618 AA80254
BAY 251 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/619 AA80255
BAY 252 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/620 AA80256
BAY 253 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/621 AA80257
BAY 254 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/622 AA80258
BAY 255 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/623 AA80259
BAY 256 3/31/97 18S 10E 18 Fairbanks 5/16/97 1002/624 AA80260
BAY 257 3/31/97 18S 10E 18 Fairbanks 5/16/97 1002/625 AA80261
BAY 258 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/626 AA80262
BAY 259 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/627 AA80263
BAY 260 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/628 AA80264
BAY 261 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/629 AA80265
BAY 262 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/630 AA80266
BAY 263 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/631 AA80267
BAY 264 3/31/97 18S 10E 19 Fairbanks 5/16/97 1002/632 AA80268
BAY 265 3/31/97 18S 10E 17,18 Fairbanks 5/16/97 1002/633 AA80269
BAY 266 3/31/97 18S 10E 17,18 Fairbanks 5/16/97 1002/634 AA80270
BAY 267 3/31/97 18S 10E 19,20 Fairbanks 5/16/97 1002/635 AA80271
BAY 268 3/31/97 18S 10E 19,20 Fairbanks 5/16/97 1002/636 AA80272
BAY 269 3/31/97 18S 10E 19,20 Fairbanks 5/16/97 1002/637 AA80273
BAY 270 3/31/97 18S 10E 19,20 Fairbanks 5/16/97 1002/638 AA80274
BAY 271 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/639 AA80275
BAY 272 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/640 AA80276
BAY 273 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/641 AA80277
BAY 274 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/642 AA80278
BAY 275 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/643 AA80279
BAY 276 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/644 AA80280
BAY 277 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/645 AA80281
BAY 278 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/646 AA80282
BAY 279 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/647 AA80283
BAY 280 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/648 AA80284
BAY 281 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/649 AA80285
BAY 282 3/31/97 18S 10E 20,29 Fairbanks 5/16/97 1002/650 AA80286
BAY 283 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/651 AA80287
BAY 284 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/652 AA80288
BAY 285 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/653 AA80289
BAY 286 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/654 AA80290
BAY 287 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/655 AA80291
BAY 288 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/656 AA80292
BAY 289 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/657 AA80293
BAY 290 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/658 AA80294
</TABLE>
79
<PAGE>
<TABLE>
<CAPTION>
LOCATION RECORDING DATE BLM
CLAIM NAME DATE TWP RGE SEC DISTRICT RECORDED BK/PG/DOC SERIAL NO.
- ----------- --------- ----- ----- ----- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BAY 291 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/659 AA80295
BAY 292 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/660 AA80296
BAY 293 3/31/97 18S 10E 20,29 Fairbanks 5/16/97 1002/661 AA80297
BAY 294 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/662 AA80298
BAY 295 3/31/97 18S 10E 17 Fairbanks 5/16/97 1002/663 AA80299
BAY 296 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/664 AA80300
BAY 297 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/665 AA80301
BAY 298 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/666 AA80302
BAY 299 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/667 AA80303
BAY 300 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/668 AA80304
BAY 301 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/669 AA80305
BAY 302 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/670 AA80306
BAY 303 3/31/97 18S 10E 20 Fairbanks 5/16/97 1002/671 AA80307
BAY 304 3/31/97 18S 10E 20,29 Fairbanks 5/16/97 1002/672 AA80308
BAY 305 3/31/97 18S 10E 16,17 Fairbanks 5/16/97 1002/673 AA80309
BAY 306 3/31/97 18S 10E 16,17 Fairbanks 5/16/97 1002/674 AA80310
BAY 307 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/675 AA80311
BAY 308 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/676 AA80312
BAY 309 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/677 AA80313
BAY 310 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/678 AA80314
BAY 311 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/679 AA80315
BAY 312 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/680 AA80316
BAY 313 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/681 AA80317
BAY 314 3/31/97 18S 10E 20,21 Fairbanks 5/16/97 1002/682 AA80318
BAY 315 3/31/97 18S 10E 20,21
28,29 Fairbanks 5/16/97 1002/683 AA80319
BAY 316 3/31/97 18S 10E 16 Fairbanks 5/16/97 1002/684 AA80320
BAY 317 3/31/97 18S 10E 16 Fairbanks 5/16/97 1002/685 AA80321
BAY 318 3/31/97 18S 10E 21 Fairbanks 5/16/97 1002/686 AA80322
BAY 319 3/31/97 18S 10E 21 Fairbanks 5/16/97 1002/687 AA80323
BAY 320 3/31/97 18S 10E 16 Fairbanks 5/16/97 1002/688 AA80324
BAY 321 3/31/97 18S 10E 16 Fairbanks 5/16/97 1002/689 AA80325
BAY 322 3/31/97 18S 10E 21 Fairbanks 5/16/97 1002/690 AA80326
BAY 323 3/31/97 18S 10E 21 Fairbanks 5/16/97 1002/691 AA80327
BAY 324 3/31/97 18S 10E 21 Fairbanks 5/16/97 1002/692 AA80328
BAY 325 3/31/97 18S 10E 15.16 Fairbanks 5/16/97 1002/693 AA80329
BAY 326 3/31/97 18S 10E 15.16 Fairbanks 5/16/97 1002/694 AA80330
BAY 327 3/31/97 18S 10E 21,22 Fairbanks 5/16/97 1002/695 AA80331
BAY 328 3/31/97 18S 10E 21,22 Fairbanks 5/16/97 1002/696 AA80332
BAY 329 3/31/97 18S 10E 21,22 Fairbanks 5/16/97 1002/697 AA80333
BAY 330 3/31/97 18S 10E 21,22 Fairbanks 5/16/97 1002/698 AA80334
BAY 427 8/1/97 18S 10E 15 Fairbanks 9/17/97 1024/900 AA80589
BAY 428 8/1/97 18S 10E 15 Fairbanks 9/17/97 1024/902 AA80590
BAY 429 8/1/97 18S 10E 22 Fairbanks 9/17/97 1024/903 AA80591
BAY 430 8/1/97 18S 10E 22 Fairbanks 9/17/97 1024/904 AA80592
BAY 431 8/1/97 18S 10E 22 Fairbanks 9/17/97 1024/905 AA80593
BAY 432 8/1/97 18S 10E 22 Fairbanks 9/17/97 1024/906 AA80594
BAY 433 8/1/97 18S 10E 15 Fairbanks 9/17/97 1024/907 AA80595
BAY 434 8/1/97 18S 10E 15 Fairbanks 9/17/97 1024/908 AA80596
</TABLE>
(END 9 PT TYPE)
80
<PAGE>
Nevada Star Resource Corp
10735 Stone Avenue North
Seattle, WA 98133
Phone: (206) 367-2525
Fax: (206) 363-4811
December 15, 1999
M.A.N. Resources, Inc.
10735 Stone Ave. North
Seattle, WA 98133
Attention: Robert Angrisano, President
Re: Nevada Star Resource Corporation (the "Company") - M.A.N. Resources, Inc.
Dear Bob:
We refer to that certain memorandum of understanding dated January 5, 1999 (the
"Memorandum of Understanding") between the Company and M.A.N. Resources, Inc.
("M.A.N.") whereby the Company leased to M.A.N. approximately 8,580 acres of
mining claims located near the Broxson Gulch and Tangle Lakes area of Alaska.
Paragraph 9 of the Memorandum of Understanding contains a provision whereby the
parties agreed that the same would be superceded and replaced by a formal Mining
Lease and Sale Agreement (the "Formal Agreement") within a period not to exceed
twelve (12) months from the date of the Agreement.
In consideration of the sum of $1.00 now paid by the parties, each party to the
other, it is agreed that, in the event that the Formal Agreement has not been
executed by January 4, 2000, the Memorandum of Understanding will continue in
full force and effect until such time as the Formal Agreement has been executed,
subject to any default provisions contained therein. Notwithstanding this
extension, the parties agree to use their best efforts to ensure that the Formal
Agreement is prepared and executed without undue delay. The parties agree the
costs of the preparation of the Formal Agreement will be borne by M.A.N.
Resources.
The parties also confirm that all currency amounts contained in the Memorandum
of Understanding are expressed in United States dollars.
Yours truly,
NEVADA STAR RESOURCE CORPORATION
/S/ Monty D. Moore
Per: ____________________________________
Monty D. Moore
Agreed and accepted this 15th day of December 1999.
M.A.N. RESOURCES, INC.
/S/ Robert Angrisano
Per: ___________________________
Robert Angrisano, President
81
EXHIBIT 21
Subsidiaries of the Registrant
The Registrant has two wholly owned subsidiaries.
The Company conducts its operations through, Nevada Star Resource
Corp. (U.S.), a Nevada corporation and Nevada Star Resource de Mexico,
S.A. de C.V., a wholly owned subsidiary of Nevada Star Resource Corp.
(U.S.).
82
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets for Nevada Star Resource Corp. at August 31,
1999 and the Consolidated Statements of Operations and Deficit for the
fiscal year ended August 31, 1999 and is qualified in its entirety by
reference to such financial statements. The August 31, 1999 Financial
Statements for Nevada Star Resource Corp. are stated in Canadian Dollars.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<CASH> 5,006
<SECURITIES> 5,285
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,291
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,779,080
<CURRENT-LIABILITIES> 544,770
<BONDS> 0
0
0
<COMMON> 11,377,738
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,779,080
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 111,754
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (117,068)
<INCOME-TAX> 0
<INCOME-CONTINUING> (117,068)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (117,068)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
